Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jul. 07, 2020 | |
FIXED ASSETS [Abstract] | ||
Entity Registrant Name | WEST COAST VENTURES GROUP CORP. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 3,109,519,939 | |
Amendment Flag | false | |
Entity Central Index Key | 0001551906 | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash | $ 0 | $ 0 |
Receivables | 82,828 | 71,045 |
Inventory | 30,513 | 35,663 |
Prepaid expenses | 35,055 | 31,268 |
Assets of discontinued operations | 2,462 | 2,462 |
Total current assets | 150,858 | 140,438 |
FIXED ASSETS | ||
Equipment | 569,715 | 569,715 |
Leasehold improvements | 231,493 | 231,493 |
Total fixed assets | 801,208 | 801,208 |
Less: accumulated depreciation | (375,019) | (342,249) |
Net total fixed assets | 426,189 | 458,959 |
OTHER ASSETS | ||
Lease right of use asset | 1,419,457 | 1,489,737 |
Deposits and other assets | 43,642 | 43,374 |
Intangibles assets, net | 156,432 | 163,154 |
Total other assets | 1,619,531 | 1,696,265 |
Total assets | 2,196,578 | 2,295,662 |
CURRENT LIABILITIES | ||
Accounts payable | 216,911 | 157,556 |
Accrued expenses | 580,623 | 511,812 |
Operating leases, current portion | 306,616 | 295,214 |
Stockholders loan | 257,623 | 0 |
Notes payable to third parties | 1,116,501 | 1,154,855 |
Convertible notes payable to third parties, net of discounts | 1,198,719 | 879,849 |
Fair value of derivative liabilities | 774,965 | 2,740,054 |
Common stock issuable | 538,218 | 533,218 |
Liabilities of discontinued operations | 481,558 | 481,558 |
Total Current Liabilities | 5,471,734 | 6,754,116 |
LONG TERM LIABILITIES | ||
Operating leases, net of current portion | 1,163,183 | 1,243,129 |
Total long-term liabilities | 1,163,183 | 1,243,129 |
Total Liabilities | 6,634,917 | 7,997,245 |
Stockholders' Deficit: | ||
Series A Preferred stock, $0.001 par value, 10,000,000 shares authorized, 500,000 shares issued and outstanding | 500 | 500 |
Common stock, $0.001 par value, authorized 250,000,000 shares; 3,009,519,939 and 918,470,359 shares issued and outstanding | 3,009,520 | 918,470 |
Additional paid-in capital | 444,596 | 2,334,634 |
Common stock subscription receivable | (39,200) | 0 |
Accumulated deficit | (7,853,755) | (8,955,187) |
Total Stockholders' Deficit | (4,438,339) | (5,701,583) |
Total Liabilities and Stockholders' Deficit | $ 2,196,578 | $ 2,295,662 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred Stock | ||
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in Shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in Shares) | 500,000 | 500,000 |
Preferred stock, shares outstanding (in Shares) | 500,000 | 500,000 |
Common Stock | ||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in Shares) | 10,000,000,000 | 10,000,000,000 |
Common stock, shares issued (in Shares) | 3,009,519,939 | 918,470,359 |
Common stock, shares outstanding (in Shares) | 3,009,519,939 | 918,470,359 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
REVENUES | ||
Restaurant revenue, net of discounts | $ 789,444 | $ 839,615 |
Restaurant operating costs: | ||
Cost of sale - food and beverage | 252,892 | 300,392 |
Wages and payroll taxes | 284,184 | 269,281 |
Occupancy | 195,542 | 135,956 |
Other restaurant costs | 90,935 | 112,583 |
Depreciation and amortization | 38,617 | 18,778 |
General & administrative expenses | 240,073 | 346,832 |
Total costs and expenses | 1,102,243 | 1,183,822 |
Loss from operations | (312,799) | (344,207) |
Other (income) expense | ||
(Gain) on debt conversion and extinguishment | 0 | (17,775) |
Initial and change in fair value of derivative | (1,917,936) | 535,343 |
Interest expense | 503,705 | 260,706 |
Total other (income) expense | (1,414,231) | 778,274 |
Income (loss) before income taxes | 1,101,432 | (1,122,481) |
Provision for income taxes | 0 | 0 |
Net income (loss) | $ 1,101,432 | $ (1,122,481) |
Basic net income (loss) per share | $ 0 | $ (0.03) |
Diluted net income (loss) per share | $ 0 | $ (.03) |
Weighted average shares outstanding, basic | 2,369,181,415 | 38,051,004 |
Weighted average shares outstanding, diluted | 9,884,633,318 | 38,051,004 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Deficiency in Stockholders' Equity (unaudited) - USD ($) | Common Stock | Preferred Stock | Additional Paid in Capital (Capital Deficiency) | Stock Subscription Receivable | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2018 | 33,906,532 | 500,000 | ||||
Beginning Balance, Amount at Dec. 31, 2018 | $ 33,907 | $ 500 | $ 1,256,827 | $ 0 | $ (3,661,874) | $ (2,370,640) |
Shares issued as debt inducement, Shares | 1,713,307 | |||||
Shares issued as debt inducement, Amount | $ 1,713 | 88,287 | 0 | 0 | 90,000 | |
Shares issued in settlement of debt, Shares | 5,305,000 | |||||
Shares issued in settlement of debt, Amount | $ 5,305 | 13,262 | 0 | 0 | 18,567 | |
Net income | 0 | (1,122,481) | (1,122,481) | |||
Ending Balance, Shares at Mar. 31, 2019 | 40,924,389 | 500,000 | ||||
Ending Balance, Amount at Mar. 31, 2019 | $ 40,925 | $ 500 | 1,358,376 | 0 | (4,784,355) | (3,384,554) |
Beginning Balance, Shares at Dec. 31, 2019 | 918,470,359 | 500,000 | ||||
Beginning Balance, Amount at Dec. 31, 2019 | $ 918,470 | $ 500 | 2,334,634 | 0 | (8,955,187) | (5,701,583) |
Shares issued for cash, Shares | 56,000,000 | 0 | ||||
Shares issued for cash, Amount | $ 56,000 | $ 0 | (16,800) | (39,200) | 0 | 0 |
Shares issued as debt inducement, Amount | 0 | |||||
Shares issued in settlement of debt, Shares | 2,035,049,580 | 0 | ||||
Shares issued in settlement of debt, Amount | $ 2,035,050 | $ 0 | (1,873,238) | 0 | 0 | 161,812 |
Net income | 0 | 1,101,432 | 1,101,432 | |||
Ending Balance, Shares at Mar. 31, 2020 | 3,009,519,939 | 500,000 | ||||
Ending Balance, Amount at Mar. 31, 2020 | $ 3,009,520 | $ 500 | $ 444,596 | $ (39,200) | $ (7,853,755) | $ (4,438,339) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income (loss) | $ 1,101,432 | $ (1,122,481) | ||
Adjustments to reconcile net loss to net cash provided by operations: | ||||
Share based compensation for inducement fee | 0 | 90,000 | ||
Depreciation and amortization | 38,617 | 18,778 | ||
Amortization of debt discounts | 336,458 | 155,341 | ||
Gain on debt conversion and extinguishment | 0 | (17,775) | ||
Initial and change in fair value of derivative | (1,917,936) | 535,343 | ||
Cumulative change from implementing new accounting standard | 0 | (22,178) | ||
Changes in operating assets: | ||||
(Increase) in receivables | (11,783) | (14,059) | ||
Decrease in inventory | 5,150 | 158 | ||
(Increase) in prepaid expenses | (3,787) | 0 | ||
(Increase) in deposits and other assets | (268) | (11,754) | ||
Changes in operating liabilities: | ||||
Increase in accounts payable | 59,355 | 25,656 | ||
Increase in accrued expenses | 35,035 | (8,770) | ||
Increase in accrued interest | 117,006 | 97,621 | ||
Net cash used in operating activities | (240,721) | (274,120) | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Net cash used in investing activities | 0 | 0 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of convertible notes payable for cash | 0 | 424,000 | ||
Repayment of convertible notes payable | 0 | (100,181) | ||
Proceeds from third party advances | 0 | 200,000 | ||
Proceeds from stockholder advances | 247,548 | 0 | ||
Repayments on stockholder advances | 0 | (81,984) | ||
Proceeds from third party notes payable | 97,036 | 0 | ||
Payments on third party notes payable | (103,863) | (46,378) | ||
Net cash provided by financing activities | 240,721 | 395,457 | ||
Net increase in cash | 0 | 121,337 | ||
CASH, beginning of period | 0 | 9,635 | ||
CASH, end of period | 0 | $ 0 | 130,972 | $ 9,635 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||
Cash paid for interest | 50,241 | 7,744 | ||
Cash paid for income taxes | 0 | 0 | ||
Non-Cash Financing Activities: | ||||
Issuance of common stock as inducement fee | 0 | $ 157,500 | 90,000 | |
Issuance of common stock in settlement of debt | $ 161,812 | $ 18,567 | $ 30,000 |
NOTE 1 - NATURE OF OPERATIONS
NOTE 1 - NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
(1) NATURE OF OPERATIONS | (1) NATURE OF OPERATIONS West Coast Ventures Group Corp. (“our”, “us”, “we”, ”WCVC” or the “Company”) was originally incorporated as Energizer Tennis, Corp. on June 16, 2011 in the State of Nevada. On October 4, 2017, effective for accounting purposes on June 30, 2017, WCVC entered into an agreement to acquire Nixon Restaurant Group, Inc. in a transaction accounted for as a reverse acquisition. Nixon Restaurant Group, Inc. (“NRG”) was formed on October 12, 2015, under the laws of the State of Florida. On October 19, 2015, NRG issued 20 million shares of common stock to acquire 100% of the ownership interests in J&F Restaurants, LLC, Illegal Burger, LLC and Illegal Burger Writer Square LLC, Colorado Limited Liability Companies, under common ownership. The transaction was accounted for as a corporate reorganization between entities under common control. The Company operates 6 restaurants in the Denver, Colorado metro area and 1 restaurant in the Ft. Lauderdale, Florida metro area. Kalaka Mexican Kitchen (f/k/a El Senor Sol) - Evergreen is a Mexican restaurant which was opened in 2011. The Company opened the first Illegal Burger restaurant in August 2013. It is co-located with the El Senor Sol restaurant. The second Illegal Burger was opened in Arvada in April 2014. The third Illegal Burger is located in Writer Square in downtown Denver and opened in January 2016. The fourth Illegal Burger is located in the Capital Hill area of Denver and opened in June 2016.The fifth Illegal Burger is located in Glendale area of Denver and opened in October 2018. The first of the Company’s newest concept - Illegal Pizza - opened in Lauderhill, Florida in June 2019. The Company plans to continue opening Illegal Burger and Illegal Pizza restaurants, a quick casual high end restaurant with full liquor licenses. The Company expects to locate in other areas of the country over time. The Company completed its Illegal Burger Franchise Offering documents in May 2019. Illegal Burger Franchising has retained a marketing group to assist with the start-up of its offering of franchises and to pre-qualify potential franchisees. The Company hopes to have its first franchise sales in the third quarter 2020. The Company began its operations of Illegal Brands in June 2019, offering its own branded CBD infused water and CBD powder packets, first through its restaurant locations. Illegal Brands expects to offer these products to third parties on a wholesale basis. The accompanying condensed consolidated financial statements include the activities of West Coast Ventures Group Corp., Nixon Restaurant Group, Inc., J&F Restaurant, LLC (Kalaka and Illegal Burger Evergreen), Illegal Burger, LLC (Arvada), Illegal Burger Writer Square, LLC, Illegal Burger Capital Hill, LLC, Illegal Burger CitiSet, LLC, Illegal Pizza, LLC, Illegal Brands, LLC, Illegal Burger Franchising, LLC and Illegal Brands IP, LLC, its wholly owned subsidiaries. |
NOTE 2 - SUMMARY OF SIGNIFICANT
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Basis of Presentation The comparative amounts presented in these condensed consolidated financial statements are the historical results of West Coast Ventures Group, Corp. inclusive of its wholly owned subsidiaries Nixon Restaurant Group, Inc.; J&F Restaurant, LLC; Illegal Burger, LLC; Illegal Burger Writer Square, LLC; Illegal Burger Capital Hill, LLC, Illegal Burger CitiSet, LLC, Illegal Pizza Lauderhill, LLC, Illegal Brands, LLC, Illegal Burger Franchising, LLC and Illegal Brands IP, LLC. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in the United States of America ("U.S.") as promulgated by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). In our opinion, the accompanying unaudited condensed consolidated interim financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. b) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. Actual results could differ from these estimates. Significant estimates in the accompanying condensed consolidated financial statements involved the valuation of share-based compensation and derivatives. c) Property and Equipment All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, five or seven years, using the straight-line method. Upon sale or retirement, the cost and related accumulated depreciation are removed from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. d) Pre-opening Expenses The Company accumulates the non-capitalizable expenses, such as rent, staffing and training, prior to opening a new location and reports them on a separate line item in the Consolidated Statement of Operations such that these costs do not skew results from ongoing restaurant operations. Beginning in the month in which a new location opens all ongoing expenses are then included with ongoing restaurant operations. e) Operating Leases Effective January 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) which superseded the lease accounting requirements in Accounting Standards Codification (ASC) 840, Leases (Topic 840). Please refer to Recent Accounting Pronouncements below for additional information on the adoption of Topic 842 and the impact upon adoption to the Company’s condensed consolidated financial statements. Under Topic 842, we applied a dual approach to all leases whereby we are a lessee and classify leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the Company. Lease classification is evaluated at the inception of the lease agreement. Regardless of classification, we record a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Our leases, for the premises we occupy for the Illegal Burger Arvada, Illegal Burger Writer Square, Illegal Burger Capital Hill, Illegal Burger CitiSet, Illegal Pizza Lauderhill and the corporate office were classified as operating leases. Operating lease expense is recognized on a straight-line basis over the term of the lease. We identify leases in our contracts if the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. We do not allocate lease consideration between lease and non-lease components and record a lease liability equal to the present value of the remaining fixed consideration under the lease. Any interest rate implicit in our leases are generally not readily determinable. Accordingly, we use our estimated incremental borrowing rate at the commencement date of the lease to determine the present value discount of the lease liability. We estimate the incremental borrowing rate for each lease based on an evaluation of our expected credit rating and the prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the term of the lease. The right-of-use asset for each lease is equal to the lease liability, adjusted for unamortized initial direct costs and lease incentives. We exclude options to extend or terminate leases from the calculation of the lease liability unless it is reasonably certain the option will be exercised. Basic income (loss) per share excludes dilution and is computed by dividing the income (loss) attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the Company. Diluted income (loss) per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless consideration of such dilutive potential shares would result in anti-dilution. g) Income Taxes The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The tax years 2018, 2017 and 2016 for the Company remain open for IRS audit. The Company has received no notice of audit or any notifications from the IRS for any of the open tax years. h) Cash and Cash Equivalents The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. The Company had no financial instruments that qualified as cash equivalents. i) Financial Instruments and Fair Value Measurements ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. ASC 825 also requires disclosures of the fair value of financial instruments. The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts payable and accrued liabilities approximates their fair values because of the short-term maturities of these instruments. FASB ASC 820 “Fair Value Measurement” clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. j) Derivatives The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or expense. Upon conversion, payment or exercise of a convertible note containing an embedded derivative instrument, the instrument is marked to fair value at the conversion date and the debt and derivative are removed from the balance sheet, The shares issued upon conversion of the note are recorded at their fair value and any gain or loss on extinguishment is recognized in earnings. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date. k) Impairment of Long-Lived Assets A long-lived asset is tested for impairment whenever events or changes in circumstances indicate that its carrying value amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long-lived assets exceeds its fair value. l) Related Party Transactions All transactions with related parties are in the normal course of operations and are measured at the exchange amount. m) Revenue Recognition The Company adopted Accounting Standards Codification, (“ASC”), 606, “Revenue from Contracts with Customer” on January 1, 2018. This revenue recognition standard has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; e) Recognize revenue when (or as) performance obligations are satisfied. The Company’s principal operations are the operation of quick casual restaurants wherein the customer pays for their food upon placing the order. The Illegal Brands operations are the sale of CBD infused water and CBD soluble packets which at present are only sold in the Company’s restaurants. The franchise operations have yet to sell a franchise, but upon such sales will follow the appropriate revenue recognition procedures. The Company’s financial statements are prepared under the accrual method of accounting. Revenues are recognized when pervasive evidence of an arrangement exists, services have been rendered (product delivered), the sales price is fixed or determinable, and collectability is reasonably assured. This occurs only when the product(s) is ordered and subsequently delivered. n) Inventories Inventories consist of food, beverages, and supplies valued at the lower of cost (first-in, first-out method) or net realizable value. o) Intangible Assets Intangible assets are being amortized using the straight line method over the remaining life of the asset, generally the remaining life of the location lease, generally three, five, seven or ten years. |
NOTE 3 - LIQUIDITY AND GOING CO
NOTE 3 - LIQUIDITY AND GOING CONCERN CONSIDERATIONS | 3 Months Ended |
Mar. 31, 2020 | |
Note 3 - Liquidity And Going Concern Considerations | |
(3) LIQUIDITY AND GOING CONCERN CONSIDERATIONS | (3) LIQUIDITY AND GOING CONCERN CONSIDERATIONS Our condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have an accumulated deficit of approximately $7.8 million and a negative working capital of approximately $5.3 million at March 31, 2020, inclusive of current indebtedness. We also are in default on certain outstanding indebtedness. These conditions raise substantial doubt about our ability to continue as a going concern. Failure to successfully continue to grow restaurant operation revenues could harm our profitability and materially adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, management’s potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing and opening restaurant operations. We are continuing our plan to further grow and expand restaurant operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. The independent auditors’ report on our consolidated financial statements for the years ended December 31, 2019 contained an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern. |
NOTE 4 - FIXED ASSETS
NOTE 4 - FIXED ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
(4) FIXED ASSETS | (4) FIXED ASSETS Fixed assets consisted of the following: March 31, 2020 December 31, 2019 Equipment $ 569,715 $ 569,715 Leasehold improvements 231,493 231,493 Total $ 801,208 $ 801,208 Accumulated depreciation (375,019) (342,249) Ending Balance $ 426,189 $ 458,959 Depreciation expense was $32,770 and $15,306 for the three months ended March 31, 2020 and 2019, respectively. |
NOTE 5 - INTANGIBLE ASSETS
NOTE 5 - INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
(5) INTANGIBLE ASSETS | (5) INTANGIBLE ASSETS Intangible assets consisted of the following: March 31, 2020 December 31, 2019 Leasehold rights $ 175,000 $ 175,000 Liquor licenses 12,789 12,789 Franchise offering documents 16,000 16,000 Franchise sales website 16,500 16,500 Trademarks 9,100 9,100 Total 229,389 229,389 Accumulated amortization (72,957) (66,235) Ending Balance $ 156,432 $ 163,154 Amortization expense was $5,848 and $3,472 for the three months ended March 31, 2020 and 2019, respectively. The following table presents the estimated aggregate future amortization expense of intangible assets: 2020 (nine months) $ 15,135 2021 21,140 2022 20,997 2023 20,997 2024 20,997 Thereafter 57,166 $ 156,432 |
NOTE 6 - NET ACQUIRED LIABILITI
NOTE 6 - NET ACQUIRED LIABILITIES OF DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
(6) NET ACQUIRED LIABILITIES OF DISCONTINUED OPERATIONS | (6) NET ACQUIRED LIABILITIES OF DISCONTINUED OPERATIONS As a result of the reverse acquisition on October 4, 2017, we acquired approximately $0.5 million of liabilities, net of assets, of the former operations of West Coast Ventures Group Corp. (which have been discontinued). During 2017 we issued 3,000,000 shares of our common stock to extinguish $30,000 of indebtedness. We are evaluating the means to relieve the Company of these liabilities. |
NOTE 7 - STOCKHOLDER LOAN
NOTE 7 - STOCKHOLDER LOAN | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
(7) STOCKHOLDER LOAN | (7) STOCKHOLDER LOAN From time to time the principal stockholder of the Company has loaned funds to the Company on an undocumented basis with no stated interest rate. These loans were made principally to complete the conversion of the Illegal Burger - Arvada (2014), Illegal Burger - Writer Square (2015 and 2016), Illegal Burger Capital Hill (2016) and Illegal Burger CitiSet (2018) locations. This stockholder loan balance was $257,623 and $0 at March 31, 2020 and December 31, 2019, respectively. |
NOTE 8 - DERIVATIVES
NOTE 8 - DERIVATIVES | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
NOTE 8 - DERIVATIVES | (8) DERIVATIVES The following is the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis at March 31, 2020 and December 31, 2019, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3): March 31, 2020 December 31, 2019 Level 3 - Embedded Derivative Liabilities $ 774,965 $ 2,740,054 Changes in Level 3 assets measured at fair value for the three months ended March 31, 2020 were as follows: Balance, December 31, 2019 $ 2,740,054 Portion of initial valuation recorded as debt discount - Change upon conversion or settlement (47,153) Change in fair value of derivative (1,917,936) Balance, December 31, 2019 $ 774,965 |
NOTE 9 - NOTES PAYABLE TO THIRD
NOTE 9 - NOTES PAYABLE TO THIRD PARTIES | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
(9) NOTES PAYABLE TO THIRD PARTIES | (9) NOTES PAYABLE TO THIRD PARTIES Notes Payable consists of: Look Balance Inception Issue Maturity Interest Conversion Back March 31, December Amount Date Date OID Rate Price Period 2020 31, 2019 a) Sale of Future Receivables various various - - - - $ 254,433 $ 309,311 b) Notes $ 25,903 10/1/18 6/4/20 - 17% - - - 3,372 $ 4,100 10/22/18 10/22/20 - - - - 2,327 2,327 $ 14,800 6/5/18 - - - - 9,362 10,219 $ 100,000 4/10/19 4/10/20 - 20% - - 119,616 114,630 $ 131,305 $ 130,548 c) Convertible Notes - Variable Conversion Rate $ 30,000 6/14/17 12/14/17 - 10% 35% 3 days 34,099 33,600 $ 50,000 4/16/19 1/16/20 10% 12% 45% 20 days 330 330 $ 153,000 5/28/19 5/24/20 - 12% 45% 20 days 44,623 72,105 $ 118,750 6/24/19 3/17/20 - 12% 50% 25 days 102,345 123,868 $ 50,000 6/28/19 3/27/20 10% 12% 45% 20 days 46,477 49,427 $ 50,000 6/28/19 3/27/20 10% 12% 45% 20 days 50,741 57,652 $ 50,000 6/28/19 3/27/20 10% 12% 45% 20 days 59,804 57,779 $ 103,000 7/1/19 6/27/20 - 12% 45% 20 days 112,312 109,197 Look Balance Inception Issue Maturity Interest Conversion Back March 31, December Amount Date Date OID Rate Price Period 2020 31, 2019 c) Convertible Notes - Variable Conversion Rate $ 108,000 7/5/19 6/30/20 11.11% 12% 45% 20 days 126,050 132,699 $ 103,000 7/10/19 7/10/20 10% 8% 45% 20 days 94,555 121,862 $ 75,000 8/7/19 5/7/20 - 12% 50% 10 days 73,399 73,600 $ 70,000 8/7/19 5/7/20 12% 12% 40% 20 days 80,844 77,172 $ 90,000 8/8/19 8/8/20 - 10% 43% 20 days 97,681 96,914 $ 135,000 8/12/19 7/10/20 11% 8% 45% 20 days 159,360 160,160 $ 53,000 10/31/19 8/15/20 - 12% 45% 20 days 54,765 53,709 $ 18,235 12/13/19 12/13/20 9% 10% 35% 25 days 19,241 18,394 Subtotal Convertible Notes - Variable Conversion Rate 1,156,626 1,238,468 Less unamortized discounts (262,882) (553,646) Net Convertible Notes - Variable Conversion Rate $ 893,744 $ 684,822 d) Convertible Notes - Fixed Conversion Rate $ 87,522 7/3/18 12/31/20 - 12% $ 0.0035 - 22,698 22,039 $ 54,445 7/10/18 12/31/21 - 8% $ 0.0035 - 60,453 59,406 $ 33,504 8/10/18 12/31/21 - 12% $ 0.0035 - 38,508 37,551 $ 80,044 8/7/19 12/31/21 - 12% $ 0.0035 - 38,765 37,866 $ 100,000 4/10/19 4/10/20 - 20% $ .05 - 119,616 114,630 Subtotal Convertible Notes - Fixed Conversion Rate 280,040 271,492 Less unamortized discounts (7,777) (76,465) Net Convertible Notes - Fixed Conversion Rate $ 272,263 $ 195,027 e) Note of Wholly Owned Subsidiary $ 375,000 3/5/15 12/5/15 - 18% - - $ 729,926 $ 714,996 a) Future Receivables Sale Agreements The Company, through Nixon Restaurant Group, Inc, J&F Restaurants, LLC, Illegal Burger, LLC, Illegal Burger Writer Square, LLC, Illegal Burger Capitol Hill, LLC and Illegal Burger CitiSet, LLC entered into several agreements at various times to obtain advances against future restaurant credit/debit card sales. The agreements provide for funding of various percentages of future qualified credit/debit merchant card receivables. Proceeds received from sales of future receivables during 2019 and 2018 totaled $415,000 and $140,000, respectively. At March 31, 2020 and December 31, 2019, the total payable balances inclusive of interest under the factoring agreements were $504,395 and $450,258, respectively. b) One Year Notes In April 2019, the Company entered into a one year note for $100,000 with a third party. This note carries a 20% interest rate and is collateralized by a second mortgage on the founder and CEO’s residence. The loan balance, including interest, was $119,616 at March 31, 2020. c) Convertible Notes - Variable Conversion Rates The loan balances, including accrued interest, at March 31, 2020 are $1,156,626. In the fourth quarter 2019, the Company entered into two convertible notes in exchange for $73,000 in cash with a principal amount of $73,000. Based on the variable conversion terms the beneficial conversion rights embedded in these convertible notes were recorded as a derivative liability in the amount of $73,000 with a related debt discount of $73,000. In the third quarter 2019, the Company entered into six convertible notes in exchange for $567,000 in cash with a principal amount of $609,400. Based on the variable conversion terms the beneficial conversion rights embedded in these convertible notes were recorded as a derivative liability in the amount of $960,354 with a related debt discount of $609,400, and an immediate loss of $281,945. In the third quarter 2019, the Company paid off three convertible notes in cash in the amount of $472,093. In the second quarter 2019, the Company entered into nine convertible notes in exchange for $591,000 in cash with a principal amount of $669,000. Based on the variable conversion terms the beneficial conversion rights embedded in these convertible notes were recorded as a derivative liability in the amount of $891,345 with a related debt discount of $602,580, and an immediate loss of $291,355. In the second quarter 2019, the Company paid off three convertible notes in cash in the amount of $504,812. In the first quarter 2019, the Company entered into five convertible notes in exchange for $424,000 in cash. Based on the variable conversion terms the beneficial conversion rights embedded in these convertible notes were recorded as a derivative liability in the amount of $467,348 with a related debt discount of $432,166, and an immediate loss of $35,182. In the first quarter 2019, the Company paid off two convertible notes in cash in the amount of $101,181. In the fourth quarter 2018, the Company entered into two convertible notes in exchange for $238,000 in cash. Based on the variable conversion terms the beneficial conversion rights embedded in these convertible notes has been recorded as a derivative liability in the amount of $189,380, with a related debt discount of $138,000, and an immediate loss of $51,380. These notes were settled in 2019. In the third quarter 2018, the Company entered into two convertible notes in exchange for $68,000 in cash. Based on the variable conversion terms the beneficial conversion rights embedded in these convertible notes has been recorded as a derivative liability in the amount of $151,769, with a related debt discount of $68,000, and an immediate loss of $83,763. These notes were settled in 2019. In the first quarter 2018, the Company entered into three convertible notes in exchange for $280,000 in cash. Based on the variable conversion terms the beneficial conversion rights embedded in these convertible notes has been recorded as a derivative liability in the amount of $306,000, with a related debt discount of $306,000. These notes were settled in 2018, and which included a penalty of $40,528. d) Convertible Notes - Fixed Conversion Rates The loan balances, including accrued interest, at March 31, 2020 are $280,040. In the third quarter 2019, the Company entered into one convertible note in exchange for $108,000 in cash with a note amount of $120,000. Based on the conversion terms the beneficial conversion rights embedded in this convertible note was recorded as a debt discount in the amount of $28,800. In the second quarter 2019, the Company entered into one convertible note in exchange for $100,000 in cash. This note matures in one year and carries a 20% interest rates. The note converts into shares of the Company’s common stock at a price of $0.04 per share of Common Stock from October 10, 2019 to maturity. At maturity it is convertible at $0.05 per share as long as Company’s Volume Weighted Average Price, (“VWAP”) for the ten trading days prior to the conversion notice is greater than $0.07 per share. If the VWAP is below $0.07, then the conversion formula is $0.05xVWAP/$0.07. Based on the conversion terms the beneficial conversion rights embedded in this convertible note was recorded as a debt discount in the amount of $56,250 and is being amortized over the life of the loan. During the third quarter of 2018, two parties related to each other purchased, through assignment, three of the variable conversion price convertible notes then outstanding. These parties immediately amended the notes into four notes to replace the variable conversion rate with a fixed conversion rate of $0.0035 per share of the Company’s common stock. The maturity dates of the three notes were extended to December 31, 2020 and 2021. During 2019, $82,831 of these notes were converted into 23,665,964 shares of common stock. The aggregate remaining balance outstanding of these note at December 31, 2019 is $156,862. During the fourth quarter of 2018, one of the parties that purchased one of the variable conversion price convertible notes assigned $50,000 of their note to a third party for $50,000 in cash. This new party immediately amended the assigned note portion to a fixed conversion rate of $0.01 per share of the Company’s common stock. The maturity date of this note was extended to December 31, 2021. During the second and third quarters of 2019 this note was converted into 5,000,000 shares of common stock, and the balance of this note is $0 at December 31, 2019. In the fourth quarter 2018, the Company entered into a convertible note in exchange for $100,000 in cash. This note matures in two years and carries a 10% Original Issue Discount (OID). The note converts into shares of the Company’s common stock at a price of $0.05 per share. In the second quarter 2019, this note was paid in full in cash. The balance of this note is $0 at December 31, 2019. e) Third Party Note Payable with Subsidiary In March 2015, the Company entered into an agreement with a third party lender, who extended a $3,000,000 Senior Secured Note. Under the terms of this agreement a first draw was entered into in the amount of $375,000 as a Revolving Note. The lender retained $59,713 of this draw as fees. Under the terms of this Note, the Company was required to replace their credit card/debit card merchant processing to the lender. The lender retained 100% of the credit card/debit card transactions, and forwarded four wire transfers to the Company over a six week period. The credit card/debit card transactions for this six week period amounted to $84,534. The lender remitted $42,379 of this amount to the Company. Of the $42,155 retained by the lender, $14,861 was applied as principal reduction, $7,088 was applied to interest expense and the remaining $20,206 was charged as fees. The Senior Secured Note also called for the payment of a $75,000 investment banking fee. In May 2015, when it was determined that this repayment structure was not practical for a restaurant operation, the lender agreed to restructure the Revolving Note into a Replacement Promissory Note. This Replacement Promissory Note carries interest at a stated rate of 18% with a maturity of June 1, 2016. The lender charged the Company a $25,000 penalty to convert the Revolving Note into a Replacement Promissory Note. The Replacement Promissory Note called for interest only payments in June, July and August 2015. Starting in September the terms called for the payment of interest, principal starting at $33,649 increasing monthly to $38,474 in June 2016, as the interest on the then outstanding balance fell. In addition the Replacement Promissory Note called for the payment of a $106,000 Redemption Premium as part of the total monthly payment of $49,651. As a direct result of delays in opening the new Writer Square location, the lender agreed to interest only payments via ACH draft every Monday. In June 2015, the Company paid $1,080 per week, which was increased to $1,200 per week for July 1 through October 15, 2015. It was then increased to $1,500 per week from October 16, 2015 through the third week of March 2016, when it was increased to $2,000 per week. At both March 31, 2020 and December 31, 2019, the principal balance of the loan was $322,220. The Company also accrued the $25,000 conversion penalty, the $75,000 investment banking fee and the $106,000 redemption premiums as accrued interest because the Replacement Promissory Note allows for prepayment but all these “fees” are due upon prepayment. At March 31, 2020 and December 31, 2019, the balance of this note, including fees and accrued interest was $729,946 and $714,996, respectively. In October 2018, the lender filed a claim demanding repayment of all amounts outstanding in the total amount of $565,267 plus asserted costs. (See Note 16a) f) Third Party Notes Payable Certain third parties have advanced funds to WCVC to fund its ongoing operations. These advances have been formalized into demand notes payable, which, at September 30, 2017, amount to $54,039 and carry a 5% interest rate. WCVC has a $250,000 note payable which is due in April 2018 and carries a 5% interest rate. These liabilities have been incorporated into liabilities from discontinued operations. |
NOTE 10 - OPERATING LEASES
NOTE 10 - OPERATING LEASES | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
(10) OPERATING LEASES | (10) OPERATING LEASES a) Adoption of ASC Topic 842, Leases On January 1, 2019, the Company adopted Topic 842 using the modified retrospective method applied to leases that were in place as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 840. The Company’s leases consist of operating leases that relate to real estate rental agreements. All of the value of the Company’s lease portfolio relates to real estate lease agreements that were entered into starting in May 2014. b) Practical Expedients and Elections The Company elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We also elected the short-term lease recognition exemption for all leases that qualify. c) Discount Rate Applied to Property Operating Lease To determine the present value of the minimum future lease payments for operating leases at January 1, 2019, the Company was required to estimate a rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment (the “incremental borrowing rate” or “IBR”). The Company determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the interest rate average for its latest borrowings. e) Right of Use Assets Right of use assets are included in the condensed consolidated Balance Sheet as follows: f) Non-current assets Right of use assets, net of amortization - $1,419,457. g) Total operating lease cost Individual components of the total lease cost incurred by the Company is as follows: Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Operating lease expense $ 159,672 $ 113,682 Minimum rental payments under operating leases are recognized on a straight line basis over the term of the lease. h) Maturity of operating leases The amount of future minimum lease payments under operating leases at March 31, 2020 are as follows: Operating Lease Undiscounted future minimum lease payments: 2020 (nine months) $ 325,371 2021 307,419 2022 241,002 2023 252,891 2024 256,264 Thereafter 540,491 Total 1,923,438 Amount representing imputed interest (453,639) Total operating lease liability $ 1,469,799 Current portion of operating lease liability $ 306,616 Operating lease liability, non-current $ 1,163,183 |
NOTE 11 - LIABILITY TO ISSUE CO
NOTE 11 - LIABILITY TO ISSUE COMMON STOCK | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
(11) LIABILITY TO ISSUE COMMON STOCK | (11) LIABILITY TO ISSUE COMMON STOCK During the fourth quarter 2018 and second quarter 2019 the Company entered into four (4) Securities Purchase Agreements, (SPAs), with three parties, two of whom are related to each other. All four of these SPAs have language prohibiting the holder to own more than 4.99% of the issued and outstanding shares of the Company at any time. In connection with these SPAs the Company was entitled to receive $906,500 in cash for the issuance of common stock, issuable at per share prices ranging between $0.0035 and $0.06 per share subject to downward adjustment based on volume weighted average price as defined at the date of issuance notice. The Company received $249,000 in 2018 and $310,000 in 2019 under these SPAs. The Company has not received the final September 2019 tranche of $347,500 as required under one of the SPAs. Contractually, under the SPAs, the Company is required to issue 88,619,381 shares. During the third quarter of 2019, 1,537,246 shares were issued under one of these SPAs. (See Note 16a) |
NOTE 12 - DEFICIENCY IN STOCKHO
NOTE 12 - DEFICIENCY IN STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
(12) DEFICIENCY IN STOCKHOLDERS' EQUITY | (12) DEFICIENCY IN STOCKHOLDERS’ EQUITY At March 31, 2020 and December 31, 2019, the Company had 10,000,000,000 shares of par value $0.001 common stock authorized and 3,009,519,939 and 918,470,359 issued and outstanding, respectively. At March 31, 2020 and December 31, 2019, the Company has 10,000,000 shares of par value $0.001 preferred stock authorized and 500,000 issued and outstanding, Common Stock On February 18, 2020, the Company (through an affirmative vote of the Company’s Board of Directors and the holders of a majority of the shares of the Company entitled to vote) adopted a plan to effect a reverse stock split in the ratio of 1:1,000. This reverse spit will be instituted upon approval by the Financial Industry Regulatory Agency, (FINRA). In the first quarter 2020, the Company issued 2,035,059,580 shares of common stock valued at $491,504 to settle $114,658 of convertible debt. In addition, the Company issued 56,000,000 shares of common stock in exchange a subscription of $39,200 in cash. In the fourth quarter 2019, the Company issued 2,500,000 shares of common stock as an inducement for the extension of convertible debt, valued at $157,500. The Company issued 3,997,266 shares of common stock valued at $286,044 to settle $13,990 of convertible debt pursuant to the modification of terms to fixed conversion rate. The Company issued 798,519,055 shares of common stock valued at $1,200,597 to settle $445,367 of convertible debt. The Company issued 36,348,494 shares of common stock in exchange for $41,053 in cash. In the third quarter 2019, the Company issued 100,000 shares of common stock as an inducement for the extension of convertible debt, valued at $5,460. The Company issued 10,838,698 shares of common stock valued at $322,344 to settle $46,894 of convertible debt pursuant to the modification of terms to fixed conversion rate. In the third quarter 2019, the Company issued 1,500,000 shares of common stock valued at $77,250 to settle $25,500 of convertible debt. The Company issued 1,537,246 shares of common stock valued at $57,647 for $32,282 of a Securities Purchase Agreement (SPA) funded in October 2018. The Company issued 6,404,057 shares of common stock in exchange for $120,423 in cash. In the second quarter 2019, the Company issued 1,933,333 shares of common stock as an inducement for the extension of convertible debt, valued at $94,730. The Company issued 3,900,000 shares of common stock valued at $316,500 to settle $39,000 of convertible debt pursuant to the modification of terms to fixed conversion rate. The Company issued 3,333,333 shares of common stock in exchange for services valued at $239,333. The Company issued 5,000,000 shares of common stock in exchange for $50,000 in cash and $279,990 in fixed assets. The Company issued 386,589 shares of common stock in exchange for one-half of the first year rent on the Company’s corporate office, valued at $26,520. The Company issued 1,247,449 shares of common stock in exchange for $67,124 in cash. In the first quarter 2019, the Company issued 1,713,307 shares of common stock as a commitment fee for its equity line of credit, valued at $90,000. The Company issued 5,305,000 shares of common stock valued at $300,885 to settle $18,568 of convertible debt pursuant to the modification of terms to fixed conversion rate. Preferred stock The rights and privileges of the Series A preferred stock are solely as a “super voting” stock, whereby each one share of Series A holds votes amounting to the equivalent of 100,000 shares of common stock. Therefore, the 500,000 shares of Series A issued and outstanding hold an aggregate votes equal to 500,000,000 common shares. The Series A shares have no dividend rights, no liquidation preferences, are not transferable and can be redeemed by the holder for $5,000 in cash from the Company for the entire 500,000 share block at the holder’s option. |
NOTE 13 - EARNINGS PER SHARE (E
NOTE 13 - EARNINGS PER SHARE (EPS) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
NOTE 13 - EARNINGS PER SHARE (EPS) | (13) EARNINGS PER SHARE (EPS) For the Three Months Ended March 31, 2020 Income (Numerator) Shares (Denominator) Per Share Amount Income from continuing operations $ 1,101,432 Basic EPS Income available to common stockholders 1,101,432 2,369,181,415 $ 0.00 Effect of dilutive securities Change in embedded derivative value (1,917,936) Convertible notes payable (509,213) 7,431,530,120 Common stock issuable 83,921,783 Diluted EPS Income available to common stockholders + assumed conversions $ (1,325,717) 9,884,633,318 $ (0.00) |
NOTE 14 - COMMITMENTS AND CONTI
NOTE 14 - COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
(14) - COMMITMENTS AND CONTINGENCIES | (14) COMMITMENTS AND CONTINGENCIES a) Real Property Leases The Company leases seven (7) restaurant spaces and its corporate office from unrelated parties. Rent expense paid was $159,672 and $113,682 for the three months ended March 31, 2020 and 2019. Future minimum lease payments under these real property lease agreements are as follows: For the Year Ending December 31, ESSE* IBE* IBA* IBWS* IBCH* IBCS* IPL* 2020 (9 months) $ - $ - $ 58,156 $ 76,982 $ 52,456 $ 49,200 $ 48,786 2021 $ - $ - $ 25,931 $ 102,643 $ 23,394 $ 67,200 $ 66,151 2022 $ - $ - $ - $ 104,354 $ - $ 69,000 $ 67,648 2023 $ - $ - $ - $ 112,908 $ - $ 70,800 $ 69,183 2024 $ - $ - $ - $ 112,908 $ - $ 72,600 $ 70,756 Thereafter $ - $ - $ - $ 94,090 $ - $ 281,400 $ 165,001 Total minimum lease payments $ - $ - $ 84,088 $ 603,885 $ 75,860 $ 610,200 $ 487,525 WCVC* Total 2020 (9 months) $ 39,780 $ 325,371 2021 $ 22,100 $ 307,419 2022 $ - $ 241,002 2023 $ - $ 252,891 2024 $ - $ 256,264 Thereafter $ - $ 540,491 Total minimum lease payments $ 61,880 $ 1,923,438 * ESSE: El Senor Sol - Evergreen; IBE: Illegal Burger - Evergreen; IBA: Illegal Burger - Arvada; IBWS - Illegal Burger - Writer Square; IBCH - Illegal Burger - Capital Hill; IBCS - Illegal Burger - CitiSet; IPL - Illegal Pizza - Lauderhill; WCVC - corporate office. The Company’s leases for the Evergreen locations expired on August 31, 2019, and are currently operating on a month to month basis. b) Other The Company is subject to asserted claims and liabilities that arise in the ordinary course of business. The Company maintains insurance policies to mitigate potential losses from these actions. In the opinion of management, the amount of the ultimate liability with respect to those actions will not materially affect the Company’s financial position or results of operations. c) Litigation On October 8, 2018, the creditor holding the First Amended Senior Secured Note from Illegal Burger, LLC filed suit in Broward County, Florida. The creditor is demanding $565,267, including interest and fees plus attorney’s fees and costs. The Company expects to either negotiate a settlement agreement or to vigorously defend this action. |
NOTE 15 - CONCENTRATIONS OF CRE
NOTE 15 - CONCENTRATIONS OF CREDIT RISK | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
(15) CONCENTRATIONS OF CREDIT RISK | (15) CONCENTRATIONS OF CREDIT RISK a) Cash The Company maintains its cash in bank deposit accounts, which may, at times, may exceed federally insured limits. The Company had no cash balance in excess of FDIC insured limits at March 31, 2020 and December 31, 2019. |
NOTE 16 - SUBSEQUENT EVENTS
NOTE 16 - SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
(16) SUBSEQUENT EVENTS | (16) SUBSEQUENT EVENTS a) Litigation and threatened litigation The two related party holders of four fixed rate convertible notes and two of the SPAs for the purchase of common shares has threatened litigation relating to these securities, based on a claim that the Company does not have sufficient shares reserved for issuance under these notes and SPAs as required. The Company claims that these holders have defaulted under the SPA that required a $347,500 tranche to be invested in September 2019, and that the failure to provide these funds directly caused the circumstances causing the claimed shortfall in reserved shares. In May 2020 the U.S. Securities and Exchange Commission, (SEC), filed a civil action alleging fraud against the creditor in Note 14c above. The SEC also appointed a court supervised receiver of this creditor, who has stayed all current litigation involving this creditor. The Company expects to reach a settlement with this receiver when they lift the stay. b) Deficiency in Stockholders’ Equity In the second quarter 2020, the Company issued 100,000,000 shares of common stock valued at $10,000 to settle $6,000 of convertible debt. c) COVID-19 pandemic The short term impact of COVID-19 are the result of government directives, first from the City of Denver, CO, and subsequently from the States of Colorado and Florida requiring only pick-up and delivery orders of food and beverages. Under these directives we were required to close our dining areas in all our restaurants. This has caused a fall-off in business, which has been somewhat offset by an increase in pick-up and delivery orders. We have been able to keep our restaurants open for pick-up and delivery orders. This in turn has allowed us to continue to employ our staff at the restaurants. We intend to continue to pay our employees through this crisis in the hopes that once the crisis has passed and we will be allowed to return to more normal operations we can do so quickly by bringing our existing staff back in without having to train a large number of new staff. Our Denver area locations were allowed to resume 50% of dining facilities beginning on May 29. The Company has had to develop and implement new policies and procedures for use in all of it restaurants to foster continued customer confidence when they purchase food from us during this crisis. The Company has had to develop and implement procedures for “drive through” pick up orders as none of our restaurants are equipped with drive through windows. We have expended considerable time and effort developing multiple means to get the information out to the buying public that all our restaurants are open for pick-up and delivery orders. The Company temporarily closed our El Senor Sol - Evergreen, CO location because it was not receiving sufficient take out/delivery orders to remain open. The Company elected to re-brand this location during this time. The Company had been seeking to complete a re-branding in a way that would cause the least financial harm. The pandemic provided a perfect opportunity. The location’s new brand is Kalaka Mexican Kitchen. The State of Colorado required all restaurants to cease seating patrons and go to only pick up/delivery orders only beginning in mid-March 2020. This requirement caused a 6% drop in revenue in the three months ended March 31, 2020 over the same period in 2019. This reduction in revenue is greater in the six months ended June 30, 2020. d) US Small Business Administration Paycheck Protection Program (PPP) In April 2020, the Company received a loan of $298,700 under the SBA’s PPP. Depending upon the final determination of the requirements for forgiveness under this program, the Company expects its PPP loan to be substantially to wholly forgiven. Any amount not forgiven becomes a two year loan at 1% interest. e) US Small Business Administration Economic Injury Disaster Loans (EIDL) In May 2020, the Company, through one of its operating LLC subsidiaries, received a SBA EIDL in the amount of $21,900. In June 2020, the Company, through five of its operating LLC subsidiaries received five SBA EIDL in the total amount of $747,500 and EIDL Grants totaling $36,000. The EIDL are 30 year loans carrying a 3.25% interest rate with the first payment due in June 2021. The Grants do not get repaid. f) Notes Payable to Third Parties During the State imposed pandemic requirement to reduce operations, the lenders of the Future Receivable Sales Agreements agreed to lower the payments due to them. Also the party holding the remaining One Year Note and one of the Fixed Rate Convertible Notes agreed to a 90 day extension to the maturity and a subsequent 90 day extension upon payment of the initial one year interest in the amount of $40,000. Several holders of Variable Rate Convertible Notes have also agreed to 90 day extensions to the maturity of their notes. The Company has requested extensions on the balance of the Variable Rate Convertible Notes, but has not received a response from the lenders. |
NOTE 2 - BASIS OF PRESENTATION
NOTE 2 - BASIS OF PRESENTATION AND USE OF ESTIMATES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | a) Basis of Presentation The comparative amounts presented in these condensed consolidated financial statements are the historical results of West Coast Ventures Group, Corp. inclusive of its wholly owned subsidiaries Nixon Restaurant Group, Inc.; J&F Restaurant, LLC; Illegal Burger, LLC; Illegal Burger Writer Square, LLC; Illegal Burger Capital Hill, LLC, Illegal Burger CitiSet, LLC, Illegal Pizza Lauderhill, LLC, Illegal Brands, LLC, Illegal Burger Franchising, LLC and Illegal Brands IP, LLC. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in the United States of America ("U.S.") as promulgated by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). In our opinion, the accompanying unaudited condensed consolidated interim financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. |
Use of Estimates | b) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. Actual results could differ from these estimates. Significant estimates in the accompanying condensed consolidated financial statements involved the valuation of share-based compensation and derivatives. |
Property and Equipment | c) Property and Equipment All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, five or seven years, using the straight-line method. Upon sale or retirement, the cost and related accumulated depreciation are removed from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. |
Pre-opening Expenses | d) Pre-opening Expenses The Company accumulates the non-capitalizable expenses, such as rent, staffing and training, prior to opening a new location and reports them on a separate line item in the Consolidated Statement of Operations such that these costs do not skew results from ongoing restaurant operations. Beginning in the month in which a new location opens all ongoing expenses are then included with ongoing restaurant operations. |
Operating Leases | e) Operating Leases Effective January 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) which superseded the lease accounting requirements in Accounting Standards Codification (ASC) 840, Leases (Topic 840). Please refer to Recent Accounting Pronouncements below for additional information on the adoption of Topic 842 and the impact upon adoption to the Company’s condensed consolidated financial statements. Under Topic 842, we applied a dual approach to all leases whereby we are a lessee and classify leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the Company. Lease classification is evaluated at the inception of the lease agreement. Regardless of classification, we record a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Our leases, for the premises we occupy for the Illegal Burger Arvada, Illegal Burger Writer Square, Illegal Burger Capital Hill, Illegal Burger CitiSet, Illegal Pizza Lauderhill and the corporate office were classified as operating leases. Operating lease expense is recognized on a straight-line basis over the term of the lease. We identify leases in our contracts if the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. We do not allocate lease consideration between lease and non-lease components and record a lease liability equal to the present value of the remaining fixed consideration under the lease. Any interest rate implicit in our leases are generally not readily determinable. Accordingly, we use our estimated incremental borrowing rate at the commencement date of the lease to determine the present value discount of the lease liability. We estimate the incremental borrowing rate for each lease based on an evaluation of our expected credit rating and the prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the term of the lease. The right-of-use asset for each lease is equal to the lease liability, adjusted for unamortized initial direct costs and lease incentives. We exclude options to extend or terminate leases from the calculation of the lease liability unless it is reasonably certain the option will be exercised. |
Net Income (Loss) Per Share | f) Net Income (Loss) Per Share Basic income (loss) per share excludes dilution and is computed by dividing the income (loss) attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the Company. Diluted income (loss) per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless consideration of such dilutive potential shares would result in anti-dilution. |
Income Taxes | g) Income Taxes The Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The tax years 2018, 2017 and 2016 for the Company remain open for IRS audit. The Company has received no notice of audit or any notifications from the IRS for any of the open tax years. |
Cash and Cash Equivalents | h) Cash and Cash Equivalents The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. The Company had no financial instruments that qualified as cash equivalents. |
Financial Instruments and Fair Value Measurements | i) Financial Instruments and Fair Value Measurements ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. ASC 825 also requires disclosures of the fair value of financial instruments. The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts payable and accrued liabilities approximates their fair values because of the short-term maturities of these instruments. FASB ASC 820 “Fair Value Measurement” clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Derivatives | j) Derivatives The Company evaluates its convertible debt, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for. The result of this accounting treatment is that under certain circumstances the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or expense. Upon conversion, payment or exercise of a convertible note containing an embedded derivative instrument, the instrument is marked to fair value at the conversion date and the debt and derivative are removed from the balance sheet, The shares issued upon conversion of the note are recorded at their fair value and any gain or loss on extinguishment is recognized in earnings. Equity instruments that are initially classified as equity that become subject to reclassification under this accounting standard are reclassified to liability at the fair value of the instrument on the reclassification date. |
Impairment of Long-Lived Assets | k) Impairment of Long-Lived Assets A long-lived asset is tested for impairment whenever events or changes in circumstances indicate that its carrying value amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long-lived assets exceeds its fair value. |
Related Party Transactions | l) Related Party Transactions All transactions with related parties are in the normal course of operations and are measured at the exchange amount. |
Revenue Recognition | m) Revenue Recognition The Company adopted Accounting Standards Codification, (“ASC”), 606, “Revenue from Contracts with Customer” on January 1, 2018. This revenue recognition standard has a five step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; e) Recognize revenue when (or as) performance obligations are satisfied. The Company’s principal operations are the operation of quick casual restaurants wherein the customer pays for their food upon placing the order. The Illegal Brands operations are the sale of CBD infused water and CBD soluble packets which at present are only sold in the Company’s restaurants. The franchise operations have yet to sell a franchise, but upon such sales will follow the appropriate revenue recognition procedures. The Company’s financial statements are prepared under the accrual method of accounting. Revenues are recognized when pervasive evidence of an arrangement exists, services have been rendered (product delivered), the sales price is fixed or determinable, and collectability is reasonably assured. This occurs only when the product(s) is ordered and subsequently delivered. |
Inventories | n) Inventories Inventories consist of food, beverages, and supplies valued at the lower of cost (first-in, first-out method) or net realizable value. |
Intangible Assets | o) Intangible Assets Intangible assets are being amortized using the straight line method over the remaining life of the asset, generally the remaining life of the location lease, generally three, five, seven or ten years. |
NOTE 2 - BASIS OF PRESENTATIO_2
NOTE 2 - BASIS OF PRESENTATION AND USE OF ESTIMATES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Assets and liabilities measured at fair value | September 30, 2019 December 31, 2018 Level 3 - Embedded Derivative Liability $ 2,113,616 $ 201,891 |
Changes in Level 3 assets measured at fair value | Balance, December 31, 2018 $ 201,891 Initial valuation of new embedded derivatives 2,319,047 Extinguishment upon conversion or settlement (739,933) Change in fair value of derivatives 332,611 Balance, September 30, 2019 $ 2,113,616 |
NOTE 4 - FIXED ASSETS (Tables)
NOTE 4 - FIXED ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Fixed assets | March 31, 2020 December 31, 2019 Equipment $ 569,715 $ 569,715 Leasehold improvements 231,493 231,493 Total $ 801,208 $ 801,208 Accumulated depreciation (375,019) (342,249) Ending Balance $ 426,189 $ 458,959 |
NOTE 5 - INTANGIBLE ASSETS (Tab
NOTE 5 - INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible assets | March 31, 2020 December 31, 2019 Leasehold rights $ 175,000 $ 175,000 Liquor licenses 12,789 12,789 Franchise offering documents 16,000 16,000 Franchise sales website 16,500 16,500 Trademarks 9,100 9,100 Total 229,389 229,389 Accumulated amortization (72,957) (66,235) Ending Balance $ 156,432 $ 163,154 |
Estimated aggregate future amortization expense of intangible assets | 2020 (nine months) $ 15,135 2021 21,140 2022 20,997 2023 20,997 2024 20,997 Thereafter 57,166 $ 156,432 |
NOTE 8 - DERIVATIVES (Tables)
NOTE 8 - DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
Embedded Derivative Liabilities | March 31, 2020 December 31, 2019 Level 3 - Embedded Derivative Liabilities $ 774,965 $ 2,740,054 |
Changes in assets measured at fair value | Balance, December 31, 2019 $ 2,740,054 Portion of initial valuation recorded as debt discount - Change upon conversion or settlement (47,153) Change in fair value of derivative (1,917,936) Balance, March 31, 2020 $ 774,965 |
NOTE 9 - NOTES PAYABLE TO THI_2
NOTE 9 - NOTES PAYABLE TO THIRD PARTIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | Look Balance Inception Issue Maturity Interest Conversion Back March 31, December Amount Date Date OID Rate Price Period 2020 31, 2019 a) Sale of Future Receivables various various - - - - $ 254,433 $ 309,311 b) Notes $ 25,903 10/1/18 6/4/20 - 17% - - - 3,372 $ 4,100 10/22/18 10/22/20 - - - - 2,327 2,327 $ 14,800 6/5/18 - - - - 9,362 10,219 $ 100,000 4/10/19 4/10/20 - 20% - - 119,616 114,630 $ 131,305 $ 130,548 c) Convertible Notes - Variable Conversion Rate $ 30,000 6/14/17 12/14/17 - 10% 35% 3 days 34,099 33,600 $ 50,000 4/16/19 1/16/20 10% 12% 45% 20 days 330 330 $ 153,000 5/28/19 5/24/20 - 12% 45% 20 days 44,623 72,105 $ 118,750 6/24/19 3/17/20 - 12% 50% 25 days 102,345 123,868 $ 50,000 6/28/19 3/27/20 10% 12% 45% 20 days 46,477 49,427 $ 50,000 6/28/19 3/27/20 10% 12% 45% 20 days 50,741 57,652 $ 50,000 6/28/19 3/27/20 10% 12% 45% 20 days 59,804 57,779 $ 103,000 7/1/19 6/27/20 - 12% 45% 20 days 112,312 109,197 Look Balance Inception Issue Maturity Interest Conversion Back March 31, December Amount Date Date OID Rate Price Period 2020 31, 2019 c) Convertible Notes - Variable Conversion Rate $ 108,000 7/5/19 6/30/20 11.11% 12% 45% 20 days 126,050 132,699 $ 103,000 7/10/19 7/10/20 10% 8% 45% 20 days 94,555 121,862 $ 75,000 8/7/19 5/7/20 - 12% 50% 10 days 73,399 73,600 $ 70,000 8/7/19 5/7/20 12% 12% 40% 20 days 80,844 77,172 $ 90,000 8/8/19 8/8/20 - 10% 43% 20 days 97,681 96,914 $ 135,000 8/12/19 7/10/20 11% 8% 45% 20 days 159,360 160,160 $ 53,000 10/31/19 8/15/20 - 12% 45% 20 days 54,765 53,709 $ 18,235 12/13/19 12/13/20 9% 10% 35% 25 days 19,241 18,394 Subtotal Convertible Notes - Variable Conversion Rate 1,156,626 1,238,468 Less unamortized discounts (262,882) (553,646) Net Convertible Notes - Variable Conversion Rate $ 893,744 $ 684,822 d) Convertible Notes - Fixed Conversion Rate $ 87,522 7/3/18 12/31/20 - 12% $ 0.0035 - 22,698 22,039 $ 54,445 7/10/18 12/31/21 - 8% $ 0.0035 - 60,453 59,406 $ 33,504 8/10/18 12/31/21 - 12% $ 0.0035 - 38,508 37,551 $ 80,044 8/7/19 12/31/21 - 12% $ 0.0035 - 38,765 37,866 $ 100,000 4/10/19 4/10/20 - 20% $ .05 - 119,616 114,630 Subtotal Convertible Notes - Fixed Conversion Rate 280,040 271,492 Less unamortized discounts (7,777) (76,465) Net Convertible Notes - Variable Conversion Rate $ 272,263 $ 195,027 e) Note of Wholly Owned Subsidiary $ 375,000 3/5/15 12/5/15 - 18% - - $ 729,926 $ 714,996 |
NOTE 10 - OPERATING LEASES (Tab
NOTE 10 - OPERATING LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Operating Lease Expense | Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Operating lease expense $ 159,672 $ 113,682 |
Future Minimum Lease Payments | Operating Lease Undiscounted future minimum lease payments: 2020 (nine months) $ 325,371 2021 307,419 2022 241,002 2023 252,891 2024 256,264 Thereafter 540,491 Total 1,923,438 Amount representing imputed interest (453,639) Total operating lease liability $ 1,469,799 Current portion of operating lease liability $ 306,616 Operating lease liability, non-current $ 1,163,183 |
NOTE 12 - COMMITMENTS AND CONTI
NOTE 12 - COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | Operating Lease Undiscounted future minimum lease payments: 2020 (nine months) $ 325,371 2021 307,419 2022 241,002 2023 252,891 2024 256,264 Thereafter 540,491 Total 1,923,438 Amount representing imputed interest (453,639) Total operating lease liability $ 1,469,799 Current portion of operating lease liability $ 306,616 Operating lease liability, non-current $ 1,163,183 |
NOTE 13 - EARNINGS PER SHARE _2
NOTE 13 - EARNINGS PER SHARE (EPS) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | For the Three Months Ended March 31, 2020 Income (Numerator) Shares (Denominator) Per Share Amount Income from continuing operations $ 1,101,432 Basic EPS Income available to common stockholders 1,101,432 2,369,181,415 $ 0.00 Effect of dilutive securities Change in embedded derivative value (1,917,936) Convertible notes payable (509,213) 7,431,530,120 Common stock issuable 83,921,783 Diluted EPS Income available to common stockholders + assumed conversions $ (1,325,717) 9,884,633,318 $ (0.00) |
NOTE 14 - COMMITMENTS AND CON_2
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments under these real property lease agreements | For the Year Ending December 31, ESSE* IBE* IBA* IBWS* IBCH* IBCS* IPL* 2020 (9 months) $ - $ - $ 58,156 $ 76,982 $ 52,456 $ 49,200 $ 48,786 2021 $ - $ - $ 25,931 $ 102,643 $ 23,394 $ 67,200 $ 66,151 2022 $ - $ - $ - $ 104,354 $ - $ 69,000 $ 67,648 2023 $ - $ - $ - $ 112,908 $ - $ 70,800 $ 69,183 2024 $ - $ - $ - $ 112,908 $ - $ 72,600 $ 70,756 Thereafter $ - $ - $ - $ 94,090 $ - $ 281,400 $ 165,001 Total minimum lease payments $ - $ - $ 84,088 $ 603,885 $ 75,860 $ 610,200 $ 487,525 WCVC* Total 2020 (9 months) $ 39,780 $ 325,371 2021 $ 22,100 $ 307,419 2022 $ - $ 241,002 2023 $ - $ 252,891 2024 $ - $ 256,264 Thereafter $ - $ 540,491 Total minimum lease payments $ 61,880 $ 1,923,438 * ESSE: El Senor Sol - Evergreen; IBE: Illegal Burger - Evergreen; IBA: Illegal Burger - Arvada; IBWS - Illegal Burger - Writer Square; IBCH - Illegal Burger - Capital Hill; IBCS - Illegal Burger - CitiSet; IPL - Illegal Pizza - Lauderhill; WCVC - corporate office. The Company’s leases for the Evergreen locations expired on August 31, 2019, and are currently operating on a month to month basis. |
NOTE 1 - NATURE OF OPERATIONS (
NOTE 1 - NATURE OF OPERATIONS (Details Narrative) | Oct. 04, 2017shares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Shares issued to acquire NRG assets | 20,000,000 |
NOTE 2 - BASIS OF PRESENTATIO_3
NOTE 2 - BASIS OF PRESENTATION AND USE OF ESTIMATES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Level 3 - Embedded Derivative Liability | $ 2,113,616 | $ 201,891 |
Initial valuation of new embedded derivatives | 2,319,047 | |
Extinguishment upon conversion or settlement | (739,933) | |
Change in fair value of derivative | $ 332,611 |
NOTE 2 - BASIS OF PRESENTATIO_4
NOTE 2 - BASIS OF PRESENTATION AND USE OF ESTIMATES (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Common stock equivalents | $ 0 | $ 0 |
Cash equivalent instruments | $ 0 | $ 0 |
NOTE 3 - LIQUIDITY AND GOING _2
NOTE 3 - LIQUIDITY AND GOING CONCERN CONSIDERATIONS (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Note 3 - Liquidity And Going Concern Considerations | |||
Net loss | $ 1,101,432 | $ (1,122,481) | |
Accumulated deficit | (7,853,755) | $ (8,955,187) | |
Negative working capital | $ 4,600,000 |
NOTE 4 - FIXED ASSETS (Details)
NOTE 4 - FIXED ASSETS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Cost | $ 484,842 | $ 408,325 |
Additions: Equipment | 95,558 | |
Additions: Leasehold improvements | 34,959 | |
Landlord reimbursement | (54,000) | |
Accumulated Depreciation | (375,019) | (342,249) |
Ending Balance | $ 426,189 | $ 458,959 |
NOTE 4 - FIXED ASSETS (Details
NOTE 4 - FIXED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2018 | Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 29,827 | $ 15,126 | $ 30,857 |
NOTE 5 - INTANGIBLE ASSETS (Det
NOTE 5 - INTANGIBLE ASSETS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Jun. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2016 | Mar. 31, 2020 | Mar. 31, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Final franchise fee payment | $ 16,000 | ||||
Trademark applicaiton fee | 2,025 | ||||
Liquor license purchase | $ 1,698 | $ 5,286 | $ 4,300 | ||
Amortization expenses of intangibles | $ 5,848 | $ 3,472 |
NOTE 6 - NET ACQUIRED LIABILI_2
NOTE 6 - NET ACQUIRED LIABILITIES OF DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Common stock issued for settlement of discontinued operations liabilities | $ 161,812 | $ 18,567 | $ 30,000 |
Common stock issued for settlement of discontinued operations liabilities, shares | 3,000,000 |
NOTE 7 - STOCKHOLDER LOAN (Deta
NOTE 7 - STOCKHOLDER LOAN (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Stockholder loan balance | $ 24,082 | $ 206,434 |
NOTE 9 - NOTES PAYABLE TO THI_3
NOTE 9 - NOTES PAYABLE TO THIRD PARTIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2018 | Feb. 28, 2016 | Jan. 31, 2016 | Mar. 31, 2020 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | |
Note 9 - Notes Payable To Third Parties | ||||||||
Future receivables sale agreements | $ 140,000 | $ 166,082 | ||||||
Total payable balance under factoring agreement for future receivables | 333,488 | $ 154,770 | ||||||
Settlement agreements | $ 35,000 | |||||||
Due on Settlement agreement | 3,644 | |||||||
Less current portion of Note payable | 1,116,501 | 1,154,855 | ||||||
Monthly payment due on sale of future agreement | 12,000 | |||||||
Shares issued for settlement of convertible debt, shares | 3,000,000 | |||||||
Shares issued for settlement of convertible debt, value | $ 30,000 | |||||||
Convertible Note Payable | ||||||||
Interest rate of convertible note | 4.00% | 10.00% | ||||||
Convertible Notes | 1,198,719 | 879,849 | ||||||
Convertible notes issued | $ 51,221 | 280,000 | $ 150,000 | $ 130,000 | ||||
Promissory Note | ||||||||
Third party note payable | $ 88,000 | $ 68,000 | $ 68,000 | $ 280,000 | ||||
Total outstanding on unrelated party advance | $ 42,217 | $ 28,038 | ||||||
Interest rate on unrelated party advance | 7.00% |
NOTE 10 - OPERATING LEASES - Fu
NOTE 10 - OPERATING LEASES - Future Minimum Lease Payments (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Total | $ 1,923,438 | |
Amount representing imputed interest | (453,639) | |
Total operating lease liability | 1,469,799 | |
Current portion of operating lease liability | 306,616 | |
Operating lease liability, non-current | $ 1,163,183 | $ 1,243,129 |
NOTE 10 - OPERATING LEASES - Op
NOTE 10 - OPERATING LEASES - Operating Lease Expense (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 189,487 |
NOTE 10 - OPERATING LEASES (Det
NOTE 10 - OPERATING LEASES (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Right of use assets, net of amortization | $ 1,419,457 | $ 1,489,737 |
NOTE 10 - LIABILITY TO ISSUE CO
NOTE 10 - LIABILITY TO ISSUE COMMON STOCK (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Cash for stock through Stock Purchase Agreements | $ 300,000 | $ 265,500 |
NOTE 11 - STOCKHOLDERS' DEFICIT
NOTE 11 - STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | |
Preferred Stock | |||||
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized (in Shares) | 10,000,000 | 10,000,000 | |||
Preferred stock, shares issued (in Shares) | 500,000 | 500,000 | |||
Preferred stock, shares outstanding (in Shares) | 500,000 | 500,000 | |||
Common Stock | |||||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (in Shares) | 10,000,000,000 | 10,000,000,000 | |||
Common stock, shares issued (in Shares) | 3,009,519,939 | 918,470,359 | |||
Common stock, shares outstanding (in Shares) | 3,009,519,939 | 918,470,359 | |||
Shares issued for cash, shares | 2,348,494 | ||||
Shares issued for cash, amount | $ 0 | $ 27,919 | |||
Preferred stock issued in acquisition of Nixon | 500,000 | ||||
Shares issued as debt inducement, Amount | 0 | $ 157,500 | $ 90,000 | $ 90,000 | |
Shares issued as debt inducement, Shares | 2,500,000 | ||||
Shares issued in settlement of debt, Amount | $ 161,812 | $ 18,567 |
NOTE 14 - COMMITMENTS AND CON_3
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 36 Months Ended | 93 Months Ended | ||||||
Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2025 | Dec. 31, 2025 | |
Commitments and Contingencies Disclosure [Abstract] | |||||||||||
Rent expense | $ 442,132 | $ 233,094 | $ 118,571 | $ 329,865 | |||||||
Future minimum lease payment totals | $ 252,891 | $ 241,002 | $ 298,579 | $ 405,792 | $ 99,662 | $ 796,754 | $ 2,094,680 |
NOTE 16 - SUBSEQUENT EVENTS (De
NOTE 16 - SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Oct. 04, 2017 | Jan. 31, 2016 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Subsequent Events [Abstract] | ||||||||
Authorized Common Stock | 10,000,000,000 | 10,000,000,000 | ||||||
Shares issued for cash, shares | 2,348,494 | |||||||
Shares issued for cash, amount | $ 0 | $ 27,919 | ||||||
Preferred stock issued in acquisition of Nixon | 500,000 | |||||||
Shares issued as debt inducement, Amount | 0 | $ 157,500 | $ 90,000 | $ 90,000 | ||||
Shares issued as debt inducement, Shares | 2,500,000 | |||||||
Shares issued in settlement of debt, debt amount settled | $ 13,990 | |||||||
Shares of common stock to purchase existing fixed assets, amount | 20,000,000 | |||||||
Convertible Note Payable | ||||||||
Interest rate of convertible note | 4.00% | 10.00% | ||||||
Convertible Notes | 1,198,719 | $ 879,849 | ||||||
Convertible notes issued | $ 51,221 | $ 280,000 | $ 150,000 | $ 130,000 |