Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 20-May-15 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Intelligent Highway Solutions, Inc. | |
Entity Central Index Key | 1549719 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | IHSI | |
Entity Common Stock, Shares Outstanding | 51,465,589 |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash | $37,832 | $95,251 |
Contracts receivable, net | 139,483 | 139,908 |
Costs and estimated earnings in excess of billings | 0 | 115,801 |
Prepaid expenses | 76,924 | 77,161 |
Deferred loan costs, current | 49,101 | 96,705 |
Total current assets | 303,340 | 524,826 |
Property and equipment, net of accumulated depreciation of $11,226 and $8,731 | 12,445 | 14,940 |
Deferred loan costs, net | 0 | 1,904 |
Prepaid expenses, net | 52,237 | 69,371 |
Total assets | 368,022 | 611,041 |
Current liabilities | ||
Bank overdraft | 40 | 40 |
Accounts payable | 110,336 | 170,529 |
Accrued expenses and other liabilities | 1,044,769 | 1,002,854 |
Notes payable, current portion | 185,000 | 185,000 |
Convertible notes payable, current portion, net of discounts of $79,466 and $95,571 | 566,034 | 528,929 |
Notes payable, related party, current portion | 10,000 | 10,000 |
Derivative liability | 223,171 | 167,970 |
Accrued interest | 89,252 | 76,671 |
Total current liabilities | 2,228,602 | 2,141,993 |
Notes payable, net of current portion | 100,000 | 100,000 |
Convertible notes payable, net of discounts of $7,993 and $49,829 | 7,007 | 30,171 |
Total liabilities | 2,335,609 | 2,272,164 |
Stockholders' deficit | ||
Common stock, $0.00001 par value; 100,000,000 shares authorized; 35,571,134 and 30,589,839 issued; 35,521,134 and 30,539,839 outstanding at March 31, 2015 and December 31, 2014 | 356 | 306 |
Additional paid-in capital | 5,379,870 | 5,247,786 |
Treasury stock, 50,000 shares at $.084 per share | -4,200 | -4,200 |
Accumulated deficit | -7,343,613 | -6,905,015 |
Total stockholders' deficit | -1,967,587 | -1,661,123 |
Total liabilities and stockholders' deficit | $368,022 | $611,041 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Net accumulated depreciation (in dollars) | $11,226 | $8,731 |
Debt Discount, unamortized Net of Discounts (in dollars) | 79,466 | 95,571 |
Debt Discount, unamortized (in dollars) | $7,993 | $49,829 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 35,571,134 | 30,589,839 |
Common stock, shares outstanding | 35,521,134 | 30,539,839 |
Treasury Stock, Shares | 50,000 | 50,000 |
Treasury Stock, Par Value | $0.08 | $0.08 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue | $183,274 | $64,152 |
Cost of sales | 138,971 | 58,015 |
Gross profit | 44,303 | 6,137 |
Operating expenses | ||
Salaries and wages | 39,274 | 53,752 |
General and administrative | 161,345 | 372,921 |
Total operating expenses | 200,619 | 426,673 |
Loss from operations | -156,316 | -420,536 |
Other income (expense) | ||
Gain on extinguishment of debt | 0 | 84,073 |
Change in derivative liability fair value | -137,037 | -55,854 |
Penalties | -15,562 | 0 |
Interest expense | -129,683 | -252,340 |
Total other expense | -282,282 | -224,121 |
Loss before income taxes | -438,598 | -644,657 |
Provision for income taxes | 0 | 0 |
Net loss | ($438,598) | ($644,657) |
Basic and diluted loss per common share (in dollars per share) | ($0.01) | ($0.05) |
Basic and diluted weighted average shares outstanding (in shares) | 32,501,015 | 12,254,099 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Operating activities | ||
Net loss | ($438,598) | ($644,657) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Common stock issued for services | 2,553 | 82,250 |
Common stock issued for penalties | 13,745 | 0 |
Gain on forgiveness of debt | 0 | -84,073 |
Depreciation | 2,495 | 271 |
Change in derivative liability fair value | 137,037 | 55,854 |
Amortization of deferred loan costs | 49,508 | 34,226 |
Amortization of debt discount | 57,941 | 190,503 |
Amortization of prepaid expenses | 17,371 | 0 |
Expenses paid on behalf of company | 6,000 | 0 |
Changes in operating assets and liabilities | ||
Contracts receivable | 425 | -64,153 |
Earnings in excess of billings | 115,801 | 0 |
Prepaid expenses | 0 | 147,356 |
Accounts payable | -60,193 | 7,332 |
Accrued interest | 12,581 | -13,214 |
Accrued expenses and other liabilities | 41,915 | 63,635 |
Net cash used in operating activities | -41,419 | -224,670 |
Investing activities | ||
Purchase of equipment | 0 | -5,063 |
Net cash used in investing activities | 0 | -5,063 |
Financing activities | ||
Proceeds from convertible notes payable | 0 | 230,000 |
Repayments of convertible notes payable | -10,000 | 0 |
Repayment of related party notes payable | -6,000 | 0 |
Net cash provided by (used in) financing activities | -16,000 | 230,000 |
Change in cash | -57,419 | 267 |
Cash at beginning of period | 95,251 | 28,664 |
Cash at end of period | 37,832 | 28,931 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 9,000 | 25,271 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash financing activities: | ||
Common stock issued for note conversion | 34,000 | 147,526 |
Common stock issued for accrued interest conversion | 0 | 7,447 |
Exchange of note payable and accrued interest for convertible note payable | 0 | 212,526 |
Debt discount on convertible notes | 0 | 367,128 |
Initial measurements of derivative liabilities | $0 | $312,130 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Organization, Nature of Business and Trade Name | |
Intelligent Highway Solutions, Inc. (the “Company” or “IHS”) was formed on April 22, 2011. IHS is a technology based intelligent highway solutions contractor. Through June 30, 2013, the Company’s primary focus was in the California transportation market providing services that range from providing labor, materials, and related equipment for corrective service and maintenance services for the State’s transportation infrastructure. Since that time, the Company has devoted its time to electrical service contracts. Additionally, the Company intends to develop transportation technology services that enable vehicles, roads, traffic lights, message signs, and other elements to become “intelligent” by embedding them with microchips and sensors and by empowering them to communicate with each other via wireless technologies. The acceleration of data collection and communication will allow state governments to improve transportation system performance by reducing congestion and increasing both traveler safety and convenience. | |
CONDENSED_FINANCIAL_STATEMENTS
CONDENSED FINANCIAL STATEMENTS | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONDENSED FINANCIAL STATEMENTS | NOTE 2 – CONDENSED FINANCIAL STATEMENTS |
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the period ended March 31, 2015 and for all periods presented herein, have been made. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2014 audited financial statements. The results of operations for the period ended March 31, 2015 are not necessarily indicative of the operating results for the full year. | |
GOING_CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2015 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN |
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. | |
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. | |
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accounting Policies [Abstract] | ||||||||
SIGNIFICANT ACCOUNTING POLICIES | NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES | |||||||
Use of Estimates | ||||||||
The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred. | ||||||||
Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented. | ||||||||
Cash | ||||||||
The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The company does not have cash equivalents as of March 31, 2015. | ||||||||
Contracts Receivable | ||||||||
Contracts receivable from construction, operations and maintenance are based on amounts billed to customers. The Company provides an allowance for doubtful collections which is based upon a review of outstanding receivable, historical collection information, and existing economic conditions. Normal contracts receivable are due 30 days after issuance of the invoice. Contract retentions are usually due 30 days after completion of the project and acceptance by the owner. Contracts receivable past due more than 60 days are considered delinquent. Delinquent contracts receivable are written off based on individual credit evaluation and specific circumstances of the customer. The Company had bad debt expense of $0 during the three months ended March 31, 2015 and 2014, respectively. The allowance for doubtful accounts is $0 as of March 31, 2015 and December 31, 2014. | ||||||||
Property, Plant and Equipment | ||||||||
Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. | ||||||||
Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: | ||||||||
Estimated | ||||||||
Useful Life | ||||||||
Furniture and fixtures | 3 - 5 years | |||||||
Machinery and equipment | 5 years | |||||||
Vehicles | 5 years | |||||||
For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of March 31, 2015 and December 31, 2014 were: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 6,273 | ||||||
Vehicles | 15,249 | 15,249 | ||||||
Sub Total | $ | 23,671 | $ | 23,671 | ||||
Accumulated depreciation | -11,226 | -8,731 | ||||||
Total | $ | 12,445 | $ | 14,940 | ||||
Depreciation expense for the three months ended March 31, 2015 and 2014 was $2,495 and $271, respectively. | ||||||||
Accrued Expenses and Other Liabilities | ||||||||
Accrued expenses and other liabilities consisted of the following at March 31, 2015 and December 31, 2014: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Deferred rent payable | $ | - | $ | -51 | ||||
Payroll tax liabilities | 762,827 | 767,109 | ||||||
Other payroll accruals | 19,352 | 25,234 | ||||||
Other | 262,590 | 210,562 | ||||||
Total | $ | 1,044,769 | $ | 1,002,854 | ||||
Revenues and Cost of Revenues | ||||||||
Revenues from fixed-price and cost-plus contracts are recognized on the percentage of completion method, whereby revenues on long-term contracts are recorded on the basis of the Company’s estimates of the percentage of completion of contracts based on the ratio of the actual cost incurred to total estimated costs. This cost-to-cost method is used because management considers it to be the best available measure of progress on these contracts. Revenues from cost-plus-fee contracts are recognized on the basis of costs incurred during the period plus the fee earned, measured on the cost-to-cost method. | ||||||||
Cost of revenues include all direct material, sub-contract, labor, and certain other direct costs, as well as those indirect costs related to contract performance, such as indirect labor and fringe benefits. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changed in job performance, job conditions and estimated profitability may result in revisions to cost and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period. Claims for additional contract revenue are recognized when realization of the claim in probable and the amount can be reasonably determined. | ||||||||
The asset, “cost and estimated earnings in excess of billings on uncompleted contracts” represents revenues recognized in excess of amounts billed. The liability, “billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized. | ||||||||
Cost of sales totaled $138,971 and $58,015 during the three months ended March 31, 2015 and 2014, respectively. | ||||||||
Reclassifications | ||||||||
Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. These reclassifications related to notes payable where prior periods had incorrectly shown certain notes as being related party, when in fact they were not. | ||||||||
Fair Value Measurements | ||||||||
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: | ||||||||
Level 1: Quoted market prices in active markets for identical assets or liabilities. | ||||||||
Level 2: Observable market-based inputs or inputs that are corroborated by market data. | ||||||||
Level 3: Unobservable inputs that are not corroborated by market data. | ||||||||
Convertible debt | ||||||||
The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes. | ||||||||
Net Loss Per Share | ||||||||
Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the three months ended March 31, 2015 and 2014 potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 22,492,820 such potentially dilutive shares excluded for the three months ended March 31, 2015. | ||||||||
Recent Accounting Pronouncements | ||||||||
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements. | ||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
FAIR VALUE MEASUREMENTS | NOTE 5 - FAIR VALUE MEASUREMENTS | |||||||||||||
On a recurring basis, we measure certain financial assets and liabilities based upon the fair value hierarchy. The following table presents information about the Company’s liabilities measured at fair value as of March 31, 2015 and December 31, 2014: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at | |||||||||||
March 31, 2015 | ||||||||||||||
Liabilities | ||||||||||||||
Derivative Liability | - | $ | 223,717 | - | $ | 223,171 | ||||||||
Level 1 | Level 2 | Level 3 | Fair Value at | |||||||||||
December 31, 2014 | ||||||||||||||
Liabilities | ||||||||||||||
Derivative Liability | - | 167,970 | - | 167,970 | ||||||||||
The changes in the fair value of recurring fair value measurements are measured using the Black Scholes valuation model, and relate solely to the derivative liability as follows: | ||||||||||||||
Balance at December 31, 2014 | $ | 167,970 | ||||||||||||
Derivative liabilities recorded | - | |||||||||||||
Change due to note conversion | -81,836 | |||||||||||||
Fair value adjustment | 137,037 | |||||||||||||
Balance at March 31, 2015 | $ | 223,171 | ||||||||||||
CONCENTRATIONS_OF_RISK
CONCENTRATIONS OF RISK | 3 Months Ended |
Mar. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | NOTE 6 – CONCENTRATIONS OF RISK |
Our revenues during the three months ended March 31, 2015 and 2014 were generated completely from a single client. Additionally, 100 percent of our contracts receivable as of March 31, 2015 and December 31, 2014 were due from the same client. | |
NOTES_PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 7 – NOTES PAYABLE |
On April 14, 2014, the Company received a loan in the amount of $90,000 from Innovest, LLC. The loan was due on August 14, 2014 with a $30,000 payment due on each June 14, 2014; July 14, 2014 and August 14, 2014. The loan is unsecured and non-interest bearing. In the event of default, the note shall bear interest at 18% per annum. Additionally, the Company was obligated to issue 50,000 shares of common stock in the event of late payments. The note holder was also issued 75,000 shares of common stock as an incentive to enter into the note. The Company did not make the required principal payment on July 17, 2014 resulting in 50,000 shares of common stock being issued to Innovest and the note beginning to accrue interest at the rate of 18% per annum. Additionally, the Company did not make the required principal payment on August 17, 2014 resulting in an additional 50,000 shares of common stock being issued to Innovest. There was $60,000 of principal as of March 31, 2015 and December 31, 2014 plus accrued interest of $3,563 and $900 outstanding as of March 31, 2015 and December 31, 2014. | |
On August 5, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). The notes carried a fixed interest amount of $800 and are due on October 4, 2014. If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. The Company has not yet repaid the notes as of March 31, 2015 resulting in 650,000 common shares being issued to each note holder (1,300,000 total common shares) as penalties. Additionally, the note holders each received 125,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 50,000 shares of common stock to the Company for $4,200. There was a total of $100,000 in principal and $1,600 of accrued interest due at March 31, 2015 and December 31, 2014. | |
On April 17, 2014, the Company received a loan in the amount of $20,000 from Seton Securities. An additional $5,000 was received on July 15, 2014. The loans are unsecured, due on demand and non-interest bearing. There was $25,000 in principal and no accrued interest due at March 31, 2015 and December 31, 2014. | |
On October 22, 2014, the Company received a loan from an unrelated party totaling $100,000. The note carries an interest rate of 12% per annum and is due on October 22, 2016. During the three months ended March 31, 2015, the note was amended retroactively to October 22, 2014 to adjust the interest rate to 15% per annum. Additionally, the note is secured by the vehicles owned by the company. There was $100,000 of principal and accrued interest of $0 and $2,301 due as of March 31, 2015 and December 31, 2014. | |
CONVERTIBLE_NOTES_PAYABLE
CONVERTIBLE NOTES PAYABLE | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
CONVERTIBLE NOTES PAYABLE | NOTE 8 – CONVERTIBLE NOTES PAYABLE | ||||||||||||||||||
On October 26, 2012, the Company received a loan totaling $30,000 from an unrelated party. The note bears interest at 10% per annum and had an original maturity date of April 26, 2013; however, the Company is in negotiations to extend the maturity date. There was $30,000 in principal plus accrued interest of $7,282 and $6,542 at March 31, 2015 and December 31, 2014. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30. | |||||||||||||||||||
On February 27, 2014, the Company received a loan totaling $339,026 from an unrelated party. The note bears interest at 10% per annum and matured on February 27, 2015. Of the $339,026 total note, $212,526 was paid to former note holders on our behalf and $1,500 was withheld as debt issue costs resulting in net cash proceeds to the company of $125,000. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. On various dates during the year ended December 31, 2014, the Company accepted twenty separate partial conversions of the note resulting in a total of 4,063,247 shares of common stock being issued in exchange for $242,526 of principal. On various dates during the three months ended March 31, 2015, the Company accepted five separate partial conversions of the note resulting in 4,256,295 shares of common stock being issued in exchange for $34,000 of principal. Additionally, the Company accepted a single conversion of accrued interest during the year ended December 31, 2014 resulting in 408,727 shares being issued in exchange for $8,369 of accrued interest. There was $62,500 and $96,500 in principal plus $12,544 and $10,165 in accrued interest due at March 31, 2015 and December 31, 2014. | |||||||||||||||||||
On November 13, 2014, the Company received a loan totaling $104,000 from an unrelated party. The note carries interest at 8% per annum and is due on August 17, 2015 with a default interest rate of 22% should the note not be repaid by the maturity date. The holder has the right to convert the principal and accrued but unpaid interest to common stock at any time after 180 days from the note date at a 52% discount from the average of the lowest three trading prices of the Company’s common stock during the preceding ten trading days. There was $104,000 of principal and $3,146 and $1,094 of accrued interest payable at March 31, 2015 and December 31, 2014. | |||||||||||||||||||
On December 16, 2014, the Company received a loan totaling $54,000 from an unrelated party. The note carries interest at 8% per annum and is due on September 18, 2015 with a default interest rate of 22% should the note not be repaid by the maturity date. The holder has the right to convert the principal and accrued but unpaid interest to common stock at any time after 180 days from the note date at a 52% discount from the average of the lowest three trading prices of the Company’s common stock during the preceding ten trading days. There was $54,000 of principal and $1,243 and $178 of accrued interest payable at March 31, 2015 and December 31, 2014. | |||||||||||||||||||
On December 12, 2014, the Company received a loan totaling $50,000 from an unrelated party. The note carries interest at 10% per annum and is due on December 12, 2015. The holder has the right to convert the principal and accrued but unpaid interest to common stock at any time after 180 days from the note date at a 40% discount from the lowest closing bid price for the Company’s common stock for the fifteen prior trading days. There was $50,000 of principal and $1,493 and $260 of accrued interest payable at March 31, 2015 and December 31, 2014. | |||||||||||||||||||
During the year ended December 31, 2014, the Company entered into debt agreements with various individuals to borrow a total of $80,000 which was $75,000 in cash and $5,000 as a reduction of accounts payable. The notes accrue interest at 10% per annum and are due in are due in full between March and April 2016 with no repayments due before maturity. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30. The intrinsic value of the conversion feature in these notes resulted in debt discounts totaling $80,000 which will be amortized over the lives of the notes. $30,171 of the debt discounts were recognized in interest expense during the year ended December 31, 2014 leaving an unamortized discount of $49,829 at December 31, 2014. Additionally, during the year ended December 31, 2014, the Company accepted the full conversion of nine notes and the partial conversion of another to common stock at $0.30 per share resulting in 1,733,332 shares of common stock being issued in consideration of $610,000 of principal plus 174,201 shares of common stock being issued in consideration of $55,358 of accrued interest. | |||||||||||||||||||
The following table depicts the amounts due for each convertible note as of December 31, 2014: | |||||||||||||||||||
Maturity Date | Principal | Debt Discount | Carrying | Carrying | Accrued Interest | ||||||||||||||
Amount, Current | Amount, | ||||||||||||||||||
Portion | Long Term | ||||||||||||||||||
Portion | |||||||||||||||||||
Note holder 1 | 1/24/15 | $ | 50,000 | $ | - | $ | 50,000 | $ | - | $ | 14,124 | ||||||||
Note holder 1 | 4/28/16 | 15,000 | -9,842 | - | 5,158 | 732 | |||||||||||||
Note holder 4 | 3/21/16 | 30,000 | -18,288 | - | 11,712 | 2,342 | |||||||||||||
Note holder 7 | 5/9/15 | 50,000 | -8,836 | 41,164 | - | 8,233 | |||||||||||||
Note holder 10 | 11/4/15 | 25,000 | -10,548 | 14,452 | - | 2,890 | |||||||||||||
Note holder 11 | 7/15/24 | 50,000 | -13,425 | 36,575 | - | 7,315 | |||||||||||||
Note holder 12 | 9/3/15 | 25,000 | -8,425 | 16,575 | - | 3,315 | |||||||||||||
Note holder 12 | 10/31/15 | 25,000 | -10,411 | 14,589 | - | 2,918 | |||||||||||||
Note holder 13 | 10/21/15 | 20,000 | -8,055 | 11,945 | - | 2,389 | |||||||||||||
Note holder 16 | 12/30/15 | 45,000 | -22,438 | 22,562 | - | 4,512 | |||||||||||||
Note holder 17 | 3/26/16 | 25,000 | -15,411 | - | 9,589 | 1,918 | |||||||||||||
Note holder 18 | 4/4/16 | 10,000 | -6,288 | - | 3,712 | 742 | |||||||||||||
Note holder 19 | 4/26/13 | 30,000 | - | 30,000 | - | 6,542 | |||||||||||||
Note holder 20 | 2/27/15 | 96,500 | -13,434 | 83,066 | - | 10,165 | |||||||||||||
Note holder 21 | 8/17/15 | 104,000 | - | 104,000 | - | 1,094 | |||||||||||||
Note holder 21 | 9/18/15 | 54,000 | - | 54,000 | - | 178 | |||||||||||||
Note holder 22 | 12/12/15 | 50,000 | - | 50,000 | - | 260 | |||||||||||||
Total | $ | 704,500 | $ | -145,400 | $ | 528,929 | $ | 30,171 | $ | 69,669 | |||||||||
During the three months ended March 31, 2015, the Company made repayments on convertible notes payable of $10,000. Additionally, $44,507 of the debt discounts were recognized in interest expense during the three months ended March 31, 2015 leaving an unamortized discount of $87,459 at March 31, 2015. | |||||||||||||||||||
The following table depicts the amounts due for each convertible note as of March 31, 2015: | |||||||||||||||||||
Title | Maturity Date | Principal | Debt Discount | Carrying Amount | Accrued Interest | ||||||||||||||
Note holder 1 | 1/24/15 | $ | 50,000 | $ | - | $ | 50,000 | $ | 15,357 | ||||||||||
Note holder 1 | 4/28/16 | 15,000 | -7,993 | 7,007 | 1,102 | ||||||||||||||
Note holder 4 | 3/21/16 | 30,000 | -14,589 | 15,411 | 3,082 | ||||||||||||||
Note holder 7 | 5/9/15 | 50,000 | -2,671 | 47,329 | 9,466 | ||||||||||||||
Note holder 10 | 11/4/15 | 25,000 | -7,466 | 17,534 | 3,506 | ||||||||||||||
Note holder 11 | 7/15/24 | 50,000 | -7,260 | 42,740 | 8,548 | ||||||||||||||
Note holder 12 | 9/3/15 | 25,000 | -5,342 | 19,658 | 3,931 | ||||||||||||||
Note holder 12 | 10/31/15 | 25,000 | -7,329 | 17,671 | 3,534 | ||||||||||||||
Note holder 13 | 10/21/15 | 20,000 | -5,589 | 14,411 | 2,882 | ||||||||||||||
Note holder 16 | 12/30/15 | 45,000 | -16,890 | 28,110 | 5,622 | ||||||||||||||
Note holder 17 | 3/26/16 | 25,000 | -12,330 | 12,670 | 2,534 | ||||||||||||||
Note holder 19 | 4/26/13 | 30,000 | - | 30,000 | 7,282 | ||||||||||||||
Note holder 20 | 2/27/15 | 62,500 | - | 62,500 | 12,544 | ||||||||||||||
Note holder 21 | 8/17/15 | 104,000 | - | 104,000 | 3,146 | ||||||||||||||
Note holder 21 | 9/18/15 | 54,000 | - | 54,000 | 1,243 | ||||||||||||||
Note holder 22 | 12/12/15 | 50,000 | - | 50,000 | 1,493 | ||||||||||||||
Total | $ | 660,500 | $ | -87,459 | $ | 573,041 | $ | 85,272 | |||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS |
We have engaged an entity controlled by the director of the Company to perform consulting services related to the development of new technologies. Payments to this party totaled $1,509 and $1,850 during the three months ended March 31, 2015 and 2014, respectively. | |
During the year ended December 31, 2014, the Company received an interest free $8,000 loan from a related party to fund operations. The loan is unsecured, due on demand and as such is included in current liabilities. There was $8,000 due as of March 31, 2015 and December 31, 2014, respectively. | |
During the three months ended March 31, 2015, the Company received two separate $3,000 loans from a related party to fund operations. Each loan was entered into by the lender paying expenses on behalf of the company. The loans plus fixed interest of $500 were repaid in March 2015. | |
STOCKHOLDERS_DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 10 – STOCKHOLDERS’ DEFICIT |
The Company is authorized to issue up to 100,000,000 shares of $0.00001 par value common stock. During the three months ended March 31, 2015, the Company issued a total of 75,000 common shares for services provided by consultants; 4,256,295 common shares for total note conversions of $34,000 and 650,000 common shares valued at $13,745 for default penalties on notes payable. | |
There was 35,571,134 shares issued and 35,521,134 outstanding as of March 31, 2015. | |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES | ||||
The Company could become a party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. | |||||
As of the date of this report, except as described below, there are no material pending legal proceedings to which the Company is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities. | |||||
Payroll Tax Liabilities | |||||
As of March 31, 2015 and December 31, 2014, the Company had accrued $762,827 and $767,109 in payroll tax liabilities. The payment of these liabilities has not been made due to our limited profitability. Due to the uncertainty regarding our future profitability, it is difficult to predict our ability to pay these liabilities. As a result, a federal tax lien has been levied that will have to be satisfied. | |||||
Federal Income Tax Liability | |||||
On January 29, 2015, we received a notification from the Internal Revenue Service (the “IRS”) regarding deficiencies in our tax return for the year ended December 31, 2011. The notice was the result of not filing our tax return for the year then ended and included the results of an IRS examination which yielded an income tax amount due of $92,804 plus penalties and interest totaling $34,337 for a total amount due of $127,141. While we believe we will be able to successfully reduce the tax liability and assessed penalties to zero or near zero due to our net loss sustained during the year ended December 31, 2011, the possibility exists we will be unsuccessful and could face an assessment for the full amount of $127,141. There is no accrued liability for this potential payout as of March 31, 2015 or December 31, 2014 given the inestimable nature of the outcome at this point. | |||||
Office and Warehouse Lease | |||||
The Company is required under the terms of the rental lease to make monthly lease payments. | |||||
The Company’s property lease is for an initial period of thirteen months from October 2011 and may be extended in two separate thirteen-month increments for up to a total term of 39 months. The lease was extended for an additional twelve month period commencing on January 9, 2015 requiring monthly rental payments of $3,700. The Company may not terminate this lease prior to the agreed upon termination date. The minimum future annual rental commitments are as follows: | |||||
2015 | 33,300 | ||||
Total annual lease commitments | $ | 33,300 | |||
DERIVATIVE_LIABILITY
DERIVATIVE LIABILITY | 3 Months Ended |
Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | NOTE 12 – DERIVATIVE LIABILITY |
As of March 31, 2015 the Company had a $223,171 derivative liability balance on the balance sheet and recorded a loss from derivative liability fair value adjustment of $137,037. The derivative liability activity comes from convertible notes payable as follows: | |
As discussed in Note 7 – “Convertible Notes Payable”, during 2012, the Company issued an aggregate of $30,000 Convertible Promissory Notes to an unrelated party that matured on April 26, 2013. The Company is currently negotiating an extension of the maturity date and anticipates to successfully do so. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares, at the holder’s option, at the conversion rate of $0.30 per share. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. | |
The embedded derivative for the note is carried on the Company’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. The Company fair values the embedded derivative using the Black-Scholes option pricing model. The aggregate fair value of the derivative at the inception date of the note was $73,451. Of the total, $30,000 was recorded as a debt discount, which is up to but not more than the net proceeds of the notes. $43,451 was charged to operations as non-cash interest expense. The fair value of $73,451 was recorded as a derivative liability on the balance sheet on the inception date. | |
The debt discount for the note was amortized over the term of our stock’s opening trading day to the original maturity, or two days. On March 31, 2015, the Company marked-to-market the fair value of the derivative liabilities related to note and determined an aggregate fair value of $1,317 and recorded a gain of $277 from change in fair value of derivatives for three months ended March 31, 2015. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 559%, (3) risk-free interest rate of .03%, (4) expected life of 0.25 of a year, and (5) estimated fair value of the Company’s common stock of $0.02 per share. | |
As discussed in Note 7 – “Convertible Notes Payable”, on February 27, 2014, the Company issued an aggregate of $339,026 Convertible Promissory Notes to an unrelated party that mature on February 27, 2015. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares, at the holder’s option, at the conversion rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. | |
The embedded derivative for the note is carried on the Company’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change. The Company fair values the embedded derivative using the Black-Scholes option pricing model. The aggregate fair value of the derivative at the inception date of the note was $312,128 which was recorded as a debt discount, which is up to but not more than the net proceeds of the notes. The fair value of $368,056 was recorded as a derivative liability on the balance sheet on the inception date. | |
The debt discount for the notes will be amortized over the term of the note, or one year. On March 31, 2015, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $221,854 and recorded a $137,314 loss from change in fair value of derivatives for three months ended March 31, 2015. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 559%, (3) risk-free interest rate of .03%, (4) expected life of 0.25 of a year, and (5) estimated fair value of the Company’s common stock of $0.02 per share. | |
STOCK_OPTIONS_AND_WARRANTS
STOCK OPTIONS AND WARRANTS | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
Stock Options And Warrants [Abstract] | ||||||||||||||||||
STOCK OPTIONS AND WARRANTS | NOTE 13 – STOCK OPTIONS AND WARRANTS | |||||||||||||||||
The following table summarizes all stock option and warrant activity for the three month period ended March 31, 2015: | ||||||||||||||||||
Shares | Weighted- | |||||||||||||||||
Average | ||||||||||||||||||
Exercise Price | ||||||||||||||||||
Per Share | ||||||||||||||||||
Outstanding, December 31, 2014 | 631,905 | $ | 0.3 | |||||||||||||||
Granted | - | - | ||||||||||||||||
Exercised | - | - | ||||||||||||||||
Forfeited | - | - | ||||||||||||||||
Expired | - | - | ||||||||||||||||
Outstanding, March 31, 2015 | 631,905 | $ | 0.3 | |||||||||||||||
The following table discloses information regarding outstanding and exercisable options and warrants at March 31, 2015: | ||||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||
Exercise | Number of | Weighted | Weighted | Number of | Weighted | |||||||||||||
Prices | Option Shares | Average | Average | Option Shares | Average | |||||||||||||
Exercise | Remaining Life | Exercise | ||||||||||||||||
Price | (Years) | Price | ||||||||||||||||
$ | 0.3 | 631,905 | $ | 0.3 | 2.24 | 631,905 | $ | 0.3 | ||||||||||
631,905 | $ | 0.3 | 2.24 | 631,905 | $ | 0.3 | ||||||||||||
In determining the compensation cost of the stock options granted, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in these calculations are summarized as follows: | ||||||||||||||||||
31-Mar-15 | ||||||||||||||||||
Expected term of options granted | 2 - 5 years | |||||||||||||||||
Expected volatility range | 394 - 408 | % | ||||||||||||||||
Range of risk-free interest rates | 1.70 – 1.73 | % | ||||||||||||||||
Expected dividend yield | 0 | % | ||||||||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS |
On April 13, 2015, the Company accepted the partial conversion of an existing convertible note payable resulting in 894,455 common shares being issued in exchange of $5,000 of principal. | |
The Company issued a total of 50,000 common shares valued at $613 pursuant to an existing consulting agreement requiring 25,000 common shares to be issued monthly. | |
On May 12, 2015, the Company issued 7,500,000 common shares to each of Devon Jones and Philip Kirkland (15,000,000 shares total) as a bonus for services performed on behalf of the Company. | |
On May 14, 2015, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada to increase the number of authorized shares of common stock, par value $0.00001 per share, from one hundred thirty million (130,000,000) shares to five hundred million (500,000,000) shares. A true and correct copy of the Amendment is filed as Exhibit 3.1 to the 8K filed with the Securities Exchange Commission on May 18, 2015. | |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accounting Policies [Abstract] | ||||||||
Use of Estimates | Use of Estimates | |||||||
The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred. | ||||||||
Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented. | ||||||||
Cash | Cash | |||||||
The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The company does not have cash equivalents as of March 31, 2015. | ||||||||
Contracts Receivable | Contracts Receivable | |||||||
Contracts receivable from construction, operations and maintenance are based on amounts billed to customers. The Company provides an allowance for doubtful collections which is based upon a review of outstanding receivable, historical collection information, and existing economic conditions. Normal contracts receivable are due 30 days after issuance of the invoice. Contract retentions are usually due 30 days after completion of the project and acceptance by the owner. Contracts receivable past due more than 60 days are considered delinquent. Delinquent contracts receivable are written off based on individual credit evaluation and specific circumstances of the customer. The Company had bad debt expense of $0 during the three months ended March 31, 2015 and 2014, respectively. The allowance for doubtful accounts is $0 as of March 31, 2015 and December 31, 2014. | ||||||||
Property, Plant and Equipment | Property, Plant and Equipment | |||||||
Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. | ||||||||
Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: | ||||||||
Estimated | ||||||||
Useful Life | ||||||||
Furniture and fixtures | 3 - 5 years | |||||||
Machinery and equipment | 5 years | |||||||
Vehicles | 5 years | |||||||
For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of March 31, 2015 and December 31, 2014 were: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 6,273 | ||||||
Vehicles | 15,249 | 15,249 | ||||||
Sub Total | $ | 23,671 | $ | 23,671 | ||||
Accumulated depreciation | -11,226 | -8,731 | ||||||
Total | $ | 12,445 | $ | 14,940 | ||||
Depreciation expense for the three months ended March 31, 2015 and 2014 was $2,495 and $271, respectively. | ||||||||
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities | |||||||
Accrued expenses and other liabilities consisted of the following at March 31, 2015 and December 31, 2014: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Deferred rent payable | $ | - | $ | -51 | ||||
Payroll tax liabilities | 762,827 | 767,109 | ||||||
Other payroll accruals | 19,352 | 25,234 | ||||||
Other | 262,590 | 210,562 | ||||||
Total | $ | 1,044,769 | $ | 1,002,854 | ||||
Revenues and Cost of Revenues | Revenues and Cost of Revenues | |||||||
Revenues from fixed-price and cost-plus contracts are recognized on the percentage of completion method, whereby revenues on long-term contracts are recorded on the basis of the Company’s estimates of the percentage of completion of contracts based on the ratio of the actual cost incurred to total estimated costs. This cost-to-cost method is used because management considers it to be the best available measure of progress on these contracts. Revenues from cost-plus-fee contracts are recognized on the basis of costs incurred during the period plus the fee earned, measured on the cost-to-cost method. | ||||||||
Cost of revenues include all direct material, sub-contract, labor, and certain other direct costs, as well as those indirect costs related to contract performance, such as indirect labor and fringe benefits. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changed in job performance, job conditions and estimated profitability may result in revisions to cost and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period. Claims for additional contract revenue are recognized when realization of the claim in probable and the amount can be reasonably determined. | ||||||||
The asset, “cost and estimated earnings in excess of billings on uncompleted contracts” represents revenues recognized in excess of amounts billed. The liability, “billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized. | ||||||||
Cost of sales totaled $138,971 and $58,015 during the three months ended March 31, 2015 and 2014, respectively. | ||||||||
Reclassifications | Reclassifications | |||||||
Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. These reclassifications related to notes payable where prior periods had incorrectly shown certain notes as being related party, when in fact they were not. | ||||||||
Fair Value Measurements | Fair Value Measurements | |||||||
The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: | ||||||||
Level 1: Quoted market prices in active markets for identical assets or liabilities. | ||||||||
Level 2: Observable market-based inputs or inputs that are corroborated by market data. | ||||||||
Level 3: Unobservable inputs that are not corroborated by market data. | ||||||||
Convertible debt | Convertible debt | |||||||
The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes. | ||||||||
Net Loss Per Share | Net Loss Per Share | |||||||
Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the three months ended March 31, 2015 and 2014 potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 22,492,820 such potentially dilutive shares excluded for the three months ended March 31, 2015. | ||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||||||
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements. | ||||||||
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accounting Policies [Abstract] | ||||||||
Schedule of estimated useful lives of depreciable assets | Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: | |||||||
Estimated | ||||||||
Useful Life | ||||||||
Furniture and fixtures | 3 - 5 years | |||||||
Machinery and equipment | 5 years | |||||||
Vehicles | 5 years | |||||||
Summary of property, plant and equipment | For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of March 31, 2015 and December 31, 2014 were: | |||||||
March 31, 2015 | December 31, 2014 | |||||||
Machinery and equipment | $ | 2,149 | $ | 2,149 | ||||
Furniture and fixtures | 6,273 | 6,273 | ||||||
Vehicles | 15,249 | 15,249 | ||||||
Sub Total | $ | 23,671 | $ | 23,671 | ||||
Accumulated depreciation | -11,226 | -8,731 | ||||||
Total | $ | 12,445 | $ | 14,940 | ||||
Schedule of Accrued expenses and other liabilities | Accrued expenses and other liabilities consisted of the following at March 31, 2015 and December 31, 2014: | |||||||
March 31, 2015 | December 31, 2014 | |||||||
Deferred rent payable | $ | - | $ | -51 | ||||
Payroll tax liabilities | 762,827 | 767,109 | ||||||
Other payroll accruals | 19,352 | 25,234 | ||||||
Other | 262,590 | 210,562 | ||||||
Total | $ | 1,044,769 | $ | 1,002,854 | ||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
Summary of liabilities measured at fair value on recurring basis | The following table presents information about the Company’s liabilities measured at fair value as of March 31, 2015 and December 31, 2014: | |||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at | |||||||||||
March 31, 2015 | ||||||||||||||
Liabilities | ||||||||||||||
Derivative Liability | - | $ | 223,717 | - | $ | 223,171 | ||||||||
Level 1 | Level 2 | Level 3 | Fair Value at | |||||||||||
December 31, 2014 | ||||||||||||||
Liabilities | ||||||||||||||
Derivative Liability | - | 167,970 | - | 167,970 | ||||||||||
Shedule of changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3) | The changes in the fair value of recurring fair value measurements are measured using the Black Scholes valuation model, and relate solely to the derivative liability as follows: | |||||||||||||
Balance at December 31, 2014 | $ | 167,970 | ||||||||||||
Derivative liabilities recorded | - | |||||||||||||
Change due to note conversion | -81,836 | |||||||||||||
Fair value adjustment | 137,037 | |||||||||||||
Balance at March 31, 2015 | $ | 223,171 | ||||||||||||
CONVERTIBLE_NOTES_PAYABLE_Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
Summary of amounts due for convertible notes payable | The following table depicts the amounts due for each convertible note as of December 31, 2014: | ||||||||||||||||||
Maturity Date | Principal | Debt Discount | Carrying | Carrying | Accrued Interest | ||||||||||||||
Amount, Current | Amount, | ||||||||||||||||||
Portion | Long Term | ||||||||||||||||||
Portion | |||||||||||||||||||
Note holder 1 | 1/24/15 | $ | 50,000 | $ | - | $ | 50,000 | $ | - | $ | 14,124 | ||||||||
Note holder 1 | 4/28/16 | 15,000 | -9,842 | - | 5,158 | 732 | |||||||||||||
Note holder 4 | 3/21/16 | 30,000 | -18,288 | - | 11,712 | 2,342 | |||||||||||||
Note holder 7 | 5/9/15 | 50,000 | -8,836 | 41,164 | - | 8,233 | |||||||||||||
Note holder 10 | 11/4/15 | 25,000 | -10,548 | 14,452 | - | 2,890 | |||||||||||||
Note holder 11 | 7/15/24 | 50,000 | -13,425 | 36,575 | - | 7,315 | |||||||||||||
Note holder 12 | 9/3/15 | 25,000 | -8,425 | 16,575 | - | 3,315 | |||||||||||||
Note holder 12 | 10/31/15 | 25,000 | -10,411 | 14,589 | - | 2,918 | |||||||||||||
Note holder 13 | 10/21/15 | 20,000 | -8,055 | 11,945 | - | 2,389 | |||||||||||||
Note holder 16 | 12/30/15 | 45,000 | -22,438 | 22,562 | - | 4,512 | |||||||||||||
Note holder 17 | 3/26/16 | 25,000 | -15,411 | - | 9,589 | 1,918 | |||||||||||||
Note holder 18 | 4/4/16 | 10,000 | -6,288 | - | 3,712 | 742 | |||||||||||||
Note holder 19 | 4/26/13 | 30,000 | - | 30,000 | - | 6,542 | |||||||||||||
Note holder 20 | 2/27/15 | 96,500 | -13,434 | 83,066 | - | 10,165 | |||||||||||||
Note holder 21 | 8/17/15 | 104,000 | - | 104,000 | - | 1,094 | |||||||||||||
Note holder 21 | 9/18/15 | 54,000 | - | 54,000 | - | 178 | |||||||||||||
Note holder 22 | 12/12/15 | 50,000 | - | 50,000 | - | 260 | |||||||||||||
Total | $ | 704,500 | $ | -145,400 | $ | 528,929 | $ | 30,171 | $ | 69,669 | |||||||||
The following table depicts the amounts due for each convertible note as of March 31, 2015: | |||||||||||||||||||
Title | Maturity Date | Principal | Debt Discount | Carrying Amount | Accrued Interest | ||||||||||||||
Note holder 1 | 1/24/15 | $ | 50,000 | $ | - | $ | 50,000 | $ | 15,357 | ||||||||||
Note holder 1 | 4/28/16 | 15,000 | -7,993 | 7,007 | 1,102 | ||||||||||||||
Note holder 4 | 3/21/16 | 30,000 | -14,589 | 15,411 | 3,082 | ||||||||||||||
Note holder 7 | 5/9/15 | 50,000 | -2,671 | 47,329 | 9,466 | ||||||||||||||
Note holder 10 | 11/4/15 | 25,000 | -7,466 | 17,534 | 3,506 | ||||||||||||||
Note holder 11 | 7/15/24 | 50,000 | -7,260 | 42,740 | 8,548 | ||||||||||||||
Note holder 12 | 9/3/15 | 25,000 | -5,342 | 19,658 | 3,931 | ||||||||||||||
Note holder 12 | 10/31/15 | 25,000 | -7,329 | 17,671 | 3,534 | ||||||||||||||
Note holder 13 | 10/21/15 | 20,000 | -5,589 | 14,411 | 2,882 | ||||||||||||||
Note holder 16 | 12/30/15 | 45,000 | -16,890 | 28,110 | 5,622 | ||||||||||||||
Note holder 17 | 3/26/16 | 25,000 | -12,330 | 12,670 | 2,534 | ||||||||||||||
Note holder 19 | 4/26/13 | 30,000 | - | 30,000 | 7,282 | ||||||||||||||
Note holder 20 | 2/27/15 | 62,500 | - | 62,500 | 12,544 | ||||||||||||||
Note holder 21 | 8/17/15 | 104,000 | - | 104,000 | 3,146 | ||||||||||||||
Note holder 21 | 9/18/15 | 54,000 | - | 54,000 | 1,243 | ||||||||||||||
Note holder 22 | 12/12/15 | 50,000 | - | 50,000 | 1,493 | ||||||||||||||
Total | $ | 660,500 | $ | -87,459 | $ | 573,041 | $ | 85,272 | |||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Schedule of minimum future annual rental commitments of office and warehouse lease | The minimum future annual rental commitments are as follows: | ||||
2015 | 33,300 | ||||
Total annual lease commitments | $ | 33,300 | |||
STOCK_OPTIONS_AND_WARRANTS_Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
Stock Options And Warrants [Abstract] | ||||||||||||||||||
Summarizes Of stock option and warrant activity | The following table summarizes all stock option and warrant activity for the three month period ended March 31, 2015: | |||||||||||||||||
Shares | Weighted- | |||||||||||||||||
Average | ||||||||||||||||||
Exercise Price | ||||||||||||||||||
Per Share | ||||||||||||||||||
Outstanding, December 31, 2014 | 631,905 | $ | 0.3 | |||||||||||||||
Granted | - | - | ||||||||||||||||
Exercised | - | - | ||||||||||||||||
Forfeited | - | - | ||||||||||||||||
Expired | - | - | ||||||||||||||||
Outstanding, March 31, 2015 | 631,905 | $ | 0.3 | |||||||||||||||
Outstanding and exercisable options and warrants | The following table discloses information regarding outstanding and exercisable options and warrants at March 31, 2015: | |||||||||||||||||
Outstanding | Exercisable | |||||||||||||||||
Exercise | Number of | Weighted | Weighted | Number of | Weighted | |||||||||||||
Prices | Option Shares | Average | Average | Option Shares | Average | |||||||||||||
Exercise | Remaining Life | Exercise | ||||||||||||||||
Price | (Years) | Price | ||||||||||||||||
$ | 0.3 | 631,905 | $ | 0.3 | 2.24 | 631,905 | $ | 0.3 | ||||||||||
631,905 | $ | 0.3 | 2.24 | 631,905 | $ | 0.3 | ||||||||||||
Estimated of the date of grant using the Black-Scholes option pricing model | The assumptions used in these calculations are summarized as follows: | |||||||||||||||||
31-Mar-15 | ||||||||||||||||||
Expected term of options granted | 2 - 5 years | |||||||||||||||||
Expected volatility range | 394 - 408 | % | ||||||||||||||||
Range of risk-free interest rates | 1.70 – 1.73 | % | ||||||||||||||||
Expected dividend yield | 0 | % | ||||||||||||||||
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Furniture and fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Machinery and equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $23,671 | $23,671 |
Accumulated depreciation | -11,226 | -8,731 |
Total | 12,445 | 14,940 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,149 | 2,149 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 6,273 | 6,273 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $15,249 | $15,249 |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Other Payables [Line Items] | ||
Deferred rent payable | $0 | ($51) |
Payroll tax liabilities | 762,827 | 767,109 |
Other payroll accruals | 19,352 | 25,234 |
Other | 262,590 | 210,562 |
Total | $1,044,769 | $1,002,854 |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | |||
Allowance for Loan and Lease Losses, Write-offs | $0 | $0 | |
Earnings Per Share, Potentially Dilutive Securities | For the three months ended March 31, 2015 and 2014 potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 22,492,820 such potentially dilutive shares excluded for the three months ended March 31, 2015. | ||
Depreciation | 2,495 | 271 | |
Cost of Goods Sold | 138,971 | 58,015 | |
Provision for Doubtful Accounts | $0 | $0 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Liabilities | ||
Derivative Liability | $223,171 | $167,970 |
Fair Value, Inputs, Level 1 [Member] | ||
Liabilities | ||
Derivative Liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Liabilities | ||
Derivative Liability | 223,717 | 167,970 |
Fair Value, Inputs, Level 3 [Member] | ||
Liabilities | ||
Derivative Liability | $0 | $0 |
FAIR_VALUE_MEASUREMENTS_Detail1
FAIR VALUE MEASUREMENTS (Details 1) (Fair Value, Inputs, Level 3 [Member], USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance | $167,970 |
Derivative liabilities recorded | 0 |
Change due to note conversion | -81,836 |
Fair value adjustment | 137,037 |
Balance | $223,171 |
CONCENTRATIONS_OF_RISK_Details
CONCENTRATIONS OF RISK (Details Textual) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 100.00% | 100.00% |
NOTES_PAYABLE_Details_Textual
NOTES PAYABLE (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||
Oct. 22, 2014 | Mar. 31, 2015 | Aug. 05, 2014 | Apr. 14, 2014 | Jul. 15, 2014 | Dec. 31, 2014 | Apr. 17, 2014 | |
Short-term Debt [Line Items] | |||||||
Borrowed amount | $100,000 | $174,201 | |||||
Interest rate per month | 10.00% | ||||||
Notes Payable principal outstanding | 100,000 | 100,000 | |||||
Accrued Interest | 0 | 2,301 | |||||
Debt Instrument, Maturity Date, Description | The note carries an interest rate of 12% per annum and is due on October 22, 2016 | ||||||
Stock Issued During Period, Shares, Other | 50,000 | ||||||
Debt Instrument, Interest Rate During Period | 15.00% | ||||||
Note Agreements [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Borrowed amount | 100,000 | ||||||
Notes Payable principal outstanding | 100,000 | 100,000 | |||||
Accrued Interest | 1,600 | 1,600 | |||||
Debt Instrument, Maturity Date, Description | The notes carried a fixed interest amount of $800 and are due on October 4, 2014. | ||||||
Common stock incentive and right to sell description | Additionally, the note holders each received 125,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 50,000 shares of common stock to the Company for $4,200. | ||||||
Stock Issued During Period, Shares, Other | 25,000 | ||||||
Stock Issued During Period Shares For Penalties | 1,300,000 | ||||||
Note Agreements One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Borrowed amount | 50,000 | ||||||
Stock Issued During Period Shares For Penalties | 650,000 | ||||||
Innovest LLC [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Common stock incentive and right to sell description | The note holder was also issued 75,000 shares of common stock as an incentive to enter into the note. The Company did not make the required principal payment on July 17, 2014 resulting in 50,000 shares of common stock being issued to Innovest and the note beginning to accrue interest at the rate of 18% per annum. Additionally, the Company did not make the required principal payment on August 17, 2014 resulting in an additional 50,000 shares of common stock being issued to Innovest. | ||||||
Seton Securities [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Borrowed amount | 20,000 | ||||||
Notes Payable principal outstanding | 25,000 | 25,000 | |||||
Proceeds from Loans | 5,000 | ||||||
Notes Payable [Member] | Innovest LLC [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Borrowed amount | 90,000 | ||||||
Interest rate per month | 18.00% | ||||||
Notes Payable principal outstanding | 60,000 | 60,000 | |||||
Accrued Interest | $3,563 | $900 | |||||
Debt Instrument, Maturity Date, Description | The loan was due on August 14, 2014 with a $30,000 payment due on each June 14, 2014; July 14, 2014 and August 14, 2014. | ||||||
Additional shares issued for late penalties yielded | 50,000 |
CONVERTIBLE_NOTES_PAYABLE_Deta
CONVERTIBLE NOTES PAYABLE (Details) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Dec. 16, 2014 | Dec. 12, 2014 | Nov. 13, 2014 | Feb. 27, 2014 | Oct. 26, 2012 | Mar. 31, 2015 | Dec. 31, 2014 | Oct. 22, 2014 | |
Debt Instrument [Line Items] | ||||||||
Maturity Date | 18-Sep-15 | 12-Dec-15 | 17-Aug-15 | 27-Feb-15 | 26-Apr-13 | |||
Principal | $174,201 | $100,000 | ||||||
Debt Discount | -7,993 | -49,829 | ||||||
Accrued Interest | 0 | 2,301 | ||||||
Convertible Notes Payable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | 54,000 | 50,000 | 104,000 | 339,026 | 30,000 | 660,500 | 704,500 | |
Debt Discount | -87,459 | -145,400 | ||||||
Carrying Amount | 573,041 | |||||||
Accrued Interest | 85,272 | 69,669 | ||||||
Carrying Amount, Current Portion | 528,929 | |||||||
Carrying Amount, Long Term Poriton | 30,171 | |||||||
Convertible Notes Payable [Member] | Note holder 7 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 9-May-15 | 9-May-15 | ||||||
Principal | 50,000 | 50,000 | ||||||
Debt Discount | -2,671 | -8,836 | ||||||
Carrying Amount | 47,329 | |||||||
Accrued Interest | 9,466 | 8,233 | ||||||
Carrying Amount, Current Portion | 41,164 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note holder 11 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 15-Jul-24 | 15-Jul-24 | ||||||
Principal | 50,000 | 50,000 | ||||||
Debt Discount | -7,260 | -13,425 | ||||||
Carrying Amount | 42,740 | |||||||
Accrued Interest | 8,548 | 7,315 | ||||||
Carrying Amount, Current Portion | 36,575 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note holder 12 i [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 3-Sep-15 | 3-Sep-15 | ||||||
Principal | 25,000 | 25,000 | ||||||
Debt Discount | -5,342 | -8,425 | ||||||
Carrying Amount | 19,658 | |||||||
Accrued Interest | 3,931 | 3,315 | ||||||
Carrying Amount, Current Portion | 16,575 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note holder 12 ii [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 31-Oct-15 | 31-Oct-15 | ||||||
Principal | 25,000 | 25,000 | ||||||
Debt Discount | -7,329 | -10,411 | ||||||
Carrying Amount | 17,671 | |||||||
Accrued Interest | 3,534 | 2,918 | ||||||
Carrying Amount, Current Portion | 14,589 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note holder 13 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 21-Oct-15 | 21-Oct-15 | ||||||
Principal | 20,000 | 20,000 | ||||||
Debt Discount | -5,589 | -8,055 | ||||||
Carrying Amount | 14,411 | |||||||
Accrued Interest | 2,882 | 2,389 | ||||||
Carrying Amount, Current Portion | 11,945 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note holder 16 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 30-Dec-15 | 30-Dec-15 | ||||||
Principal | 45,000 | 45,000 | ||||||
Debt Discount | -16,890 | -22,438 | ||||||
Carrying Amount | 28,110 | |||||||
Accrued Interest | 5,622 | 4,512 | ||||||
Carrying Amount, Current Portion | 22,562 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note holder 17 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 26-Mar-16 | 26-Mar-16 | ||||||
Principal | 25,000 | 25,000 | ||||||
Debt Discount | -12,330 | -15,411 | ||||||
Carrying Amount | 12,670 | |||||||
Accrued Interest | 2,534 | 1,918 | ||||||
Carrying Amount, Current Portion | 0 | |||||||
Carrying Amount, Long Term Poriton | 9,589 | |||||||
Convertible Notes Payable [Member] | Note Holder 18 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 4-Apr-16 | |||||||
Principal | 10,000 | |||||||
Debt Discount | -6,288 | |||||||
Accrued Interest | 742 | |||||||
Carrying Amount, Current Portion | 0 | |||||||
Carrying Amount, Long Term Poriton | 3,712 | |||||||
Convertible Notes Payable [Member] | Note Holder 19 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 26-Apr-13 | 26-Apr-13 | ||||||
Principal | 30,000 | 30,000 | ||||||
Debt Discount | 0 | 0 | ||||||
Carrying Amount | 30,000 | |||||||
Accrued Interest | 7,282 | 6,542 | ||||||
Carrying Amount, Current Portion | 30,000 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note holder 20 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 27-Feb-15 | 27-Feb-15 | ||||||
Principal | 62,500 | 96,500 | ||||||
Debt Discount | 0 | -13,434 | ||||||
Carrying Amount | 62,500 | |||||||
Accrued Interest | 12,544 | 10,165 | ||||||
Carrying Amount, Current Portion | 83,066 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note holder 4 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 21-Mar-16 | 21-Mar-16 | ||||||
Principal | 30,000 | 30,000 | ||||||
Debt Discount | -14,589 | -18,288 | ||||||
Carrying Amount | 15,411 | |||||||
Accrued Interest | 3,082 | 2,342 | ||||||
Carrying Amount, Current Portion | 0 | |||||||
Carrying Amount, Long Term Poriton | 11,712 | |||||||
Convertible Notes Payable [Member] | Note Holder 1 i [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 24-Jan-15 | 24-Jan-15 | ||||||
Principal | 50,000 | 50,000 | ||||||
Debt Discount | 0 | 0 | ||||||
Carrying Amount | 50,000 | |||||||
Accrued Interest | 15,357 | 14,124 | ||||||
Carrying Amount, Current Portion | 50,000 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note Holder 1 ii [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 28-Apr-16 | 28-Apr-16 | ||||||
Principal | 15,000 | 15,000 | ||||||
Debt Discount | -7,993 | -9,842 | ||||||
Carrying Amount | 7,007 | |||||||
Accrued Interest | 1,102 | 732 | ||||||
Carrying Amount, Current Portion | 0 | |||||||
Carrying Amount, Long Term Poriton | 5,158 | |||||||
Convertible Notes Payable [Member] | Note Holder 10 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 4-Nov-15 | 4-Nov-15 | ||||||
Principal | 25,000 | 25,000 | ||||||
Debt Discount | -7,466 | -10,548 | ||||||
Carrying Amount | 17,534 | |||||||
Accrued Interest | 3,506 | 2,890 | ||||||
Carrying Amount, Current Portion | 14,452 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note Holder 22 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 12-Dec-15 | 12-Dec-15 | ||||||
Principal | 50,000 | 50,000 | ||||||
Debt Discount | 0 | 0 | ||||||
Carrying Amount | 50,000 | |||||||
Accrued Interest | 1,493 | 260 | ||||||
Carrying Amount, Current Portion | 50,000 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note Holder 21 i [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 17-Aug-15 | 17-Aug-15 | ||||||
Principal | 104,000 | 104,000 | ||||||
Debt Discount | 0 | 0 | ||||||
Carrying Amount | 104,000 | |||||||
Accrued Interest | 3,146 | 1,094 | ||||||
Carrying Amount, Current Portion | 104,000 | |||||||
Carrying Amount, Long Term Poriton | 0 | |||||||
Convertible Notes Payable [Member] | Note Holder 21 ii [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity Date | 18-Sep-15 | 18-Sep-15 | ||||||
Principal | 54,000 | 54,000 | ||||||
Debt Discount | 0 | 0 | ||||||
Carrying Amount | 54,000 | |||||||
Accrued Interest | 1,243 | 178 | ||||||
Carrying Amount, Current Portion | 54,000 | |||||||
Carrying Amount, Long Term Poriton | $0 |
CONVERTIBLE_NOTES_PAYABLE_Deta1
CONVERTIBLE NOTES PAYABLE (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Dec. 16, 2014 | Dec. 12, 2014 | Nov. 13, 2014 | Feb. 27, 2014 | Oct. 26, 2012 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Oct. 22, 2014 | |
Debt Instrument [Line Items] | |||||||||
Principal | $174,201 | $100,000 | |||||||
Interest rate | 10.00% | ||||||||
Notes Payable principal outstanding | 100,000 | 100,000 | |||||||
Amortization of Debt Discount (Premium) | 57,941 | 190,503 | |||||||
Debt Instrument, Unamortized Discount | 7,993 | 49,829 | |||||||
Debt Instrument, Maturity Date | 18-Sep-15 | 12-Dec-15 | 17-Aug-15 | 27-Feb-15 | 26-Apr-13 | ||||
Debt Instrument Cash Amount | 75,000 | ||||||||
Debt Instrument Reduction Of Accounts Payable | 5,000 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | 408,727 | ||||||||
Debt Conversion Converted Instrument Accrued Interest Amount | 8,369 | ||||||||
Debt Conversion, Converted Instrument, Amount | 34,000 | 147,526 | |||||||
Repayments of Convertible Debt | 10,000 | 0 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||||
Common Stock [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion rates | $0.30 | ||||||||
Debt One [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 104,000 | 104,000 | |||||||
Debt Instrument, Periodic Payment, Interest | 3,146 | 1,094 | |||||||
Debt Two [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 54,000 | 54,000 | |||||||
Debt Instrument, Periodic Payment, Interest | 1,243 | 178 | |||||||
Debt Three [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 50,000 | 50,000 | |||||||
Debt Instrument, Periodic Payment, Interest | 1,493 | 260 | |||||||
Additional Debt [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Amortization of Debt Discount (Premium) | 44,507 | ||||||||
Debt Instrument, Unamortized Discount | 87,459 | ||||||||
Repayments of Convertible Debt | 10,000 | ||||||||
Convertible Notes Payable [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal | 54,000 | 50,000 | 104,000 | 339,026 | 30,000 | 660,500 | 704,500 | ||
Interest rate | 8.00% | 10.00% | 8.00% | 10.00% | 10.00% | ||||
Debt Instrument, Increase, Accrued Interest | 7,282 | 6,542 | |||||||
Conversion rates | 0.3 | ||||||||
Amortization of Debt Discount (Premium) | 80,000 | ||||||||
Debt Instrument, Unamortized Discount | 87,459 | 145,400 | |||||||
Repayments of Debt | 212,526 | ||||||||
Debt Issuance Cost | 1,500 | ||||||||
Proceeds from Issuance of Debt | 125,000 | ||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | The holder has the right to convert the principal and accrued but unpaid interest to common stock at any time after 180 days from the note date at a 52% discount from the average of the lowest three trading prices of the Companys common stock during the preceding ten trading days. | The holder has the right to convert the principal and accrued but unpaid interest to common stock at any time after 180 days from the note date at a 40% discount from the lowest closing bid price for the Companys common stock for the fifteen prior trading days. | The holder has the right to convert the principal and accrued but unpaid interest to common stock at any time after 180 days from the note date at a 52% discount from the average of the lowest three trading prices of the Companys common stock during the preceding ten trading days | the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. | |||||
Debt Instrument, Periodic Payment, Principal | 62,500 | 96,500 | |||||||
Debt Instrument, Periodic Payment, Interest | 12,544 | 10,165 | |||||||
Common Stock Shares Issued One | 1,733,332 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | 4,256,295 | 4,063,247 | |||||||
Debt Conversion, Converted Instrument, Amount | 34,000 | 242,526 | |||||||
Debt Instrument Default Percentage | 22.00% | 22.00% | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 10.00% | 8.00% | 10.00% | 10.00% | ||||
Convertible Notes Payable [Member] | Common Stock [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Periodic Payment, Principal | 610,000 | ||||||||
Debt Instrument, Periodic Payment, Interest | 55,358 | ||||||||
Convertible Notes Payable [Member] | Debt Two [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Periodic Payment, Principal | 54,000 | ||||||||
Convertible Notes Payable [Member] | Debt Three [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Periodic Payment, Principal | 50,000 | ||||||||
Interest Expense [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Amortization of Debt Discount (Premium) | 30,171 | ||||||||
Convertible Notes Payable One [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, Unamortized Discount | $49,829 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Consulting Charges To Related Party | $1,509 | $1,850 | |
Related Party One [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Due from (to) Related Party | 8,000 | 8,000 | |
Proceeds from Related Party Debt | 8,000 | ||
Related Party Two [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Due from (to) Related Party | 500 | ||
Proceeds from Related Party Debt | $3,000 |
STOCKHOLDERS_DEFICIT_Details_T
STOCKHOLDERS' DEFICIT (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Stockholders Equity Note [Line Items] | |||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | |
Debt Conversion, Converted Instrument, Shares Issued | 408,727 | ||
Debt Conversion, Converted Instrument, Amount | $34,000 | $147,526 | |
Common Stock, Shares, Issued | 35,571,134 | 30,589,839 | |
Common Stock, Shares, Outstanding, Ending Balance | 35,521,134 | 30,539,839 | |
Common Stock [Member] | |||
Stockholders Equity Note [Line Items] | |||
Stock Issued During Period, Shares, Issued for Services | 75,000 | ||
Debt Conversion, Converted Instrument, Shares Issued | 4,256,295 | ||
Debt Conversion, Converted Instrument, Amount | 34,000 | ||
Notes Payable [Member] | |||
Stockholders Equity Note [Line Items] | |||
Debt Conversion, Converted Instrument, Amount | 650,000 | ||
Stock Issued During Period Value Penalties On Notes Payable | $13,745 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (Office and Warehouse [Member], USD $) | Mar. 31, 2015 |
Office and Warehouse [Member] | |
Operating Leased Assets [Line Items] | |
2015 | $33,300 |
Total annual lease commitments | $33,300 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | ||
Jan. 09, 2015 | Mar. 31, 2015 | Jan. 29, 2015 | Dec. 31, 2014 | |
Loss Contingencies [Line Items] | ||||
Accrued payroll tax liabilities | 762,827 | $767,109 | ||
Operating Leases, Rent Expense | 3,700 | |||
Yielded Income Tax Amount Due | 92,804 | |||
Penalties And Interest Total | 34,337 | |||
Accrued Income Taxes, Current | $127,141 | |||
Office and Warehouse [Member] | ||||
Loss Contingencies [Line Items] | ||||
Term of lease | 13 months | |||
Description of term of lease | The Companys property lease is for an initial period of thirteen months from October 2011 and may be extended in two separate thirteen-month increments for up to a total term of 39 months. |
DERIVATIVE_LIABILITY_Details_T
DERIVATIVE LIABILITY (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | |||||||
Dec. 16, 2014 | Dec. 12, 2014 | Nov. 13, 2014 | Feb. 27, 2014 | Oct. 26, 2012 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Oct. 22, 2014 | |
DERIVATIVE LIABILITY [Line Items] | |||||||||
Loss on derivative fair value adjustment | ($137,037) | ($55,854) | |||||||
Interest rate per month | 10.00% | ||||||||
Derivative Liability, Current | 223,171 | 167,970 | |||||||
Debt Instrument, Face Amount | 174,201 | 100,000 | |||||||
Debt Instrument, Unamortized Discount | 7,993 | 49,829 | |||||||
Proceeds from Convertible Debt | 0 | 230,000 | |||||||
Debt Instrument, Maturity Date | 18-Sep-15 | 12-Dec-15 | 17-Aug-15 | 27-Feb-15 | 26-Apr-13 | ||||
Embedded Derivative Financial Instruments [Member] | |||||||||
DERIVATIVE LIABILITY [Line Items] | |||||||||
Dividend yield | 0.00% | ||||||||
Expected volatility | 559.00% | ||||||||
Risk-free interest rate | 0.03% | ||||||||
Expected life | 3 months | ||||||||
Common stock price, per share | $0.02 | ||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 221,854 | ||||||||
Derivative, Gain (Loss) on Derivative, Net | 137,314 | ||||||||
Convertible Notes Payable [Member] | |||||||||
DERIVATIVE LIABILITY [Line Items] | |||||||||
Derivative Liability | 223,171 | ||||||||
Loss on derivative fair value adjustment | 137,037 | ||||||||
Debt one | |||||||||
DERIVATIVE LIABILITY [Line Items] | |||||||||
Convertible Promissory Notes to unrelated party | 30,000 | ||||||||
Interest rate per month | 10.00% | ||||||||
Conversion rates | $0.30 | ||||||||
Fair value of derivative liability | 73,451 | ||||||||
Dividend yield | 0.00% | ||||||||
Expected volatility | 559.00% | ||||||||
Risk-free interest rate | 0.03% | ||||||||
Expected life | 3 months | ||||||||
Common stock price, per share | $0.02 | ||||||||
Derivative Liability, Current | 1,317 | ||||||||
Unrealized Gain (Loss) on Derivatives | 277 | ||||||||
Derivative Fair Value Of Derivative Liability Inception Date Value | 73,451 | ||||||||
Debt Instrument, Unamortized Discount | 30,000 | ||||||||
Proceeds from Convertible Debt | 43,451 | ||||||||
Debt Instrument, Maturity Date | 26-Apr-13 | ||||||||
Debt two | |||||||||
DERIVATIVE LIABILITY [Line Items] | |||||||||
Interest rate per month | 10.00% | ||||||||
Fair value of derivative liability | 368,056 | ||||||||
Debt Instrument, Face Amount | 339,026 | ||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | conversion rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004 | ||||||||
Embedded Derivative, Fair Value of Embedded Derivative Liability | $312,128 | ||||||||
Debt Instrument, Maturity Date | 27-Feb-15 |
STOCK_OPTIONS_AND_WARRANTS_Det
STOCK OPTIONS AND WARRANTS (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Stock Options And Warrants [Line Items] | |
Shares Outstanding Beginning Balance | 631,905 |
Shares, Granted | 0 |
Shares, Exercised | 0 |
Shares, Forfeited | 0 |
Shares, Expired | 0 |
Shares Outstanding Ending Balance | 631,905 |
Weighted Average Exercise Price Per Share, Beginning Balance | $0.30 |
Weighted Average Exercise Price Per Share, Granted | $0 |
Weighted Average Exercise Price Per Share, Exercised | $0 |
Weighted Average Exercise Price Per Share, Forfeited | $0 |
Weighted Average Exercise Price Per Share, Expired | $0 |
Weighted Average Exercise Price Per Share, Ending Balance | $0.30 |
STOCK_OPTIONS_AND_WARRANTS_Det1
STOCK OPTIONS AND WARRANTS (Details 1) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Stock Options And Warrants [Line Items] | |||
Outstanding, Number of Option Shares | 631,905 | 631,905 | |
Outstanding, Weighted Average Exercise Price | $0.30 | $0.30 | |
Outstanding, Weighted Average Remaining Life (Years) | 2 years 2 months 26 days | ||
Exercisable, Number of Option Shares | 631,905 | ||
Exercisable, Weighted Average Exercise Price | $0.30 | ||
Exercise Price $0.30 | |||
Stock Options And Warrants [Line Items] | |||
Weighted Average Exercise Price | $0.30 | ||
Outstanding, Number of Option Shares | 631,905 | ||
Outstanding, Weighted Average Exercise Price | $0.30 | ||
Outstanding, Weighted Average Remaining Life (Years) | 2 years 2 months 26 days | ||
Exercisable, Number of Option Shares | 631,905 | ||
Exercisable, Weighted Average Exercise Price | $0.30 |
STOCK_OPTIONS_AND_WARRANTS_Det2
STOCK OPTIONS AND WARRANTS (Details 2) | 3 Months Ended |
Mar. 31, 2015 | |
Stock Options And Warrants [Line Items] | |
Expected volatility range, Minimum | 394.00% |
Expected volatility range, Maximum | 408.00% |
Range of risk-free interest rates, Minimum | 1.70% |
Range of risk-free interest rates, Maximum | 1.73% |
Expected dividend yield | 0.00% |
Maximum | |
Stock Options And Warrants [Line Items] | |
Expected term of options granted | 5 years |
Minimum | |
Stock Options And Warrants [Line Items] | |
Expected term of options granted | 2 years |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | 12-May-15 | Apr. 13, 2015 | 14-May-15 | 13-May-15 | |
Subsequent Event [Line Items] | |||||||
Debt Conversion, Converted Instrument, Shares Issued | 408,727 | ||||||
Debt Conversion, Converted Instrument, Amount | $34,000 | $147,526 | |||||
Stock Issued During Period, Value, Issued for Services | -2,553 | -82,250 | |||||
Stock Issued During Period, Shares, Other | 50,000 | ||||||
Stock Issued During Period, Value, Other | 613 | ||||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | |||||
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | |||||
Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock Issued During Period, Value, Issued for Services | 613 | ||||||
Common Shares To Be Issued Monthly | 25,000 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 7,500,000 | ||||||
Common Stock, Shares Authorized | 500,000,000 | 130,000,000 | |||||
Common Stock, Par or Stated Value Per Share | $0.00 | ||||||
Subsequent Event [Member] | Devon Jones [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 7,500,000 | ||||||
Subsequent Event [Member] | Philip Kirkland [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 15,000,000 | ||||||
Subsequent Event [Member] | Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt Conversion, Converted Instrument, Shares Issued | 894,455 | ||||||
Debt Conversion, Converted Instrument, Amount | $5,000 | ||||||
Stock Issued During Period, Shares, Issued for Services | 50,000 |