Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2015 | May. 18, 2015 | |
Document and Entity Information: | ||
Entity Registrant Name | Apptigo International, Inc. | |
Document Type | 10-Q/A | |
Document Period End Date | Mar. 31, 2015 | |
Amendment Flag | true | |
Entity Central Index Key | 1,562,738 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 29,225,000 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Description | This amendment is being filed solely to restate the financial statements as of and for the quarter ended March 31, 2015 for failure to properly account for the derivative liability on convertible notes. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Assets, Current | ||||
Cash | $ 2,060 | $ 9,513 | $ 2,514 | $ 2,776 |
Due from related party | 7,618 | 0 | ||
Total current assets | 9,678 | 9,513 | ||
Furniture and Fixtures net accumulated depreciation $6,028 and $4,019 | 43,692 | 45,702 | ||
Deposits | 5,592 | 5,592 | ||
Total Assets | 58,962 | 60,807 | ||
Liabilities and Stockholders' Deficit | ||||
Accounts payable and accrued liabilities | 14,270 | 36,987 | ||
Payroll liabilities | 26,876 | 29,925 | ||
Convertible debenture - related party - net of discount $3,178 and $4,419 | 8,350 | 16,408 | ||
Convertible debenture - net of discount $152,215 and $38,105 | 19,719 | 22,470 | ||
Derivative liability - short term | 591,974 | 324,826 | ||
Total current liabilities | 661,189 | 430,616 | ||
Long term convertible debenture | 56,415 | 100,556 | ||
Derivative liability - long term | 715,732 | 0 | ||
Total liabilities | $ 1,433,336 | 531,172 | ||
Commitments and Contingencies | ||||
Stockholders' Deficit | ||||
Preferred stock, $0.001 par value: 1,000,000 authorized 145,000 and 145,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | $ 1,450 | 1,450 | ||
Common stock, $0.001 par value: 100,000,000 authorized; 29,225,000 and 29,225,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | 29,225 | 29,225 | ||
Common stock payable | 1,033 | 1,033 | ||
Additional paid-in-capital | 1,686,305 | 1,637,841 | ||
Accumulated deficit | (3,092,387) | (2,139,914) | ||
Total stockholders' deficit | (1,374,374) | (470,365) | ||
Total liability and stockholders' deficit | $ 58,962 | $ 60,807 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 6,028 | $ 4,019 |
Discount on convertible debenture related party | 3,178 | 4,419 |
Discount on convertible debenture | $ 152,215 | $ 38,105 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 145,000 | 145,000 |
Preferred stock, shares outstanding | 145,000 | 145,000 |
Common stock, par value | $ 0.001 | $ .001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 29,225,000 | 29,225,000 |
Common stock, shares outstanding | 29,225,000 | 29,225,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Revenue | $ 0 | $ 0 |
Operating expenses: | ||
Selling, general and administrative expenses | 248,257 | 6,762 |
Research and development expense | 33,779 | 0 |
Depreciation Expense | 2,009 | 0 |
Total operating expenses | 284,045 | 6,762 |
Loss from operations | (284,045) | (6,762) |
Other income/expense | ||
Interest expense - related party | (9,329) | 0 |
Interest expense | (17,501) | 0 |
Derivative expense | (641,598) | 0 |
Loss before income tax | (952,473) | (6,762) |
Provision for income tax | 0 | 0 |
Net loss | $ (952,473) | $ (6,762) |
Net loss per share: basic and diluted | $ (.03) | $ 0 |
Weighted Averages shares outstanding: basic and diluted | 30,258,000 | 12,550,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (952,473) | $ (6,762) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 2,009 | 0 |
Stock-based compensation | 83,967 | 0 |
Loss on derivative liability | 641,598 | 0 |
Changes in operating assets and liabilities | ||
Accrued interest - related party | 9,329 | 0 |
Accrued interest | 17,501 | 0 |
Accounts payable and accrued liabilities | (22,717) | 1,000 |
Payroll liabilities | (3,049) | 0 |
Due from related party | (7,618) | 4,000 |
Net cash used in operating activities | (231,453) | (1,762) |
Cash flows from Investing activities | ||
Proceeds from loan from shareholder | 0 | 1,500 |
Net cash used in investing activities | 0 | 1,500 |
Cash flow from financing activities | ||
Repayment of convertible debenture - related party | (10,000) | 0 |
Proceeds from convertible debenture | 234,000 | 0 |
Net cash provided by financing activities | 224,000 | 0 |
Net decrease in cash and equivalents | (7,453) | (262) |
Cash and cash equivalents at beginning of the period | 9,513 | 2,776 |
Cash and cash equivalents at end of the period | 2,060 | 2,514 |
Supplemental cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | $ 0 | $ 0 |
1. SUMMARY OF SIGNIFICANT ACCOU
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Apptigo International Inc. and its wholly-owned subsidiary (collectively Apptigo or the Company) designs, develops, markets and sells software applications. The Company sells its products worldwide through online stores. Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. The Companys year ends on December 31. Restatement The Company entered into Secured Convertible Debentures detailed in Note 3. The company assessed the fair value of the conversion option using the Black Scholes pricing model and recorded a derivative liability for the value. The adjustment for this valuation to the derivative liability is $831,706. An adjustment to change in fair value of derivative liability is a loss of $490,424 for the quarter ended March 31, 2015. During the first quarter 2015, the company recognized a change in derivative for the convertible debenture in amount of $641,598, the resulting derivative liability balance at March 31, 2015 of $1,307,706. During the first quarter 2015, there was a change in selling general and administrative expense in the amount of $11,998 related to stock based compensation recalculation. Additionally, there are changes to interest expense related party in the amount of $8,620 and interest expense in the amount of $1,342 based on recalculations related to the secured convertible debentures. The following table provides additional details regarding the changes to the balance sheet, statement of operations and statement of cash flows for the three months ended March 31, 2015. As Reported Change Restated March 31, March 31, Assets 2015 2015 Cash $ 2,060 2,060 Due from related party 7,618 7,618 Total current assets 9,678 9,678 Furniture and Fixtures net accumulated depreciation $6,028 and $4,019 43,692 43,692 Deposits 5,592 5,592 Total assets $ 58,962 58,962 Liabilities and Stockholders' Deficit Accounts payable and accrued liabilities $ 14,270 14,270 Payroll liabilities 26,876 26,876 Convertible debenture - related party - net of discount $3,178 and $4,419 8,350 8,350 Convertible debenture - net of discount $103,963 and $38,105 95,749 (76,030 ) 19,719 Derivative liability - short term 476,000 115,974 591,974 Total current liabilities 621,245 661,189 Long term convertible debenture 203,886 (147,471 ) 56,415 Derivative liability - long term 715,732 715,732 Total liabilities 825,131 1,433,336 Commitments and contingencies Stockholders' Deficit Preferred stock, $0.001 par value: 1,000,000 authorized 145,000 and 145,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively Common stock, $0.001 par value: 100,000,000 authorized; 29,225,000 and 29,225,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively Common stock payable 1,033 1,033 Additional paid in capital 1,808,806 (122,501 ) 1,686,305 Accumulated deficit (2,625,526 ) (466,861 ) (3,092,387 ) Total stockholders' deficit (785,012 ) (1,374,374 ) Total liability and stockholders' deficit $ 40,119 58,962 As Reported Change Restated For the For the three months three months ended ended March 31, March 31, 2015 2015 Revenue $ Operating expenses Selling, general and administrative expenses 260,255 (11,998 ) 248,257 Research and development expense 33,779 33,779 Depreciation expense 2,009 2,009 Total operating expenses 296,043 284,045 Loss from operation (296,043 ) (284,045 ) Other income (expense) Interest expense - related party (709 ) (8,620 ) (9,329 ) Interest expense (18,843 ) 1,342 (17,501 ) Derivative expense (151,174 ) (490,424 ) (641,598 ) Loss before income tax (466,769 ) (952,473 ) Provision for income tax Net Loss $ (466,769 ) $ (952,473 ) Net loss per share: basic and diluted $ (0.02 ) $ (0.03 ) Weighted averages shares outstanding: basic and diluted 30,258,000 30,258,000 As Reported Change Restated For the For the three months three months ended ended March 31, March 31, 2015 2015 Cash flows from operating activities Net loss $ (466,769 ) (485,704 ) (952,473 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation 2,009 2,009 Stock-based compensation 95,965 (11,998 ) 83,967 Changes in operating assets and liabilities Accrued interest - related party 709 8,620 9,329 Accrued interest 18,843 (1,342 ) 17,501 Accounts payable and accrued liabilities (22,717 ) (22,717 ) Payroll liabilities (3,049 ) (3,049 ) Derivative Liability 151,174 490,424 641,598 Due from related party (7,618 ) (7,618 ) Net cash used in operating activities (231,453 ) (231,453 ) Cash flows from investing activities Proceeds from loan from shareholder Net cash provided by investing activities Cash flow from financing activities Repayment of convertible debenture - related party (10,000 ) (10,000 ) Proceeds from convertible debenture 234,000 234,000 Net cash provided by financing activities 224,000 224,000 Net decrease in cash and cash equivalents (7,453 ) (7,453 ) Cash and cash equivalents at beginning of period 9,513 9,513 Cash and cash equivalents at end of period $ 2,060 $ 2,060 Supplemental disclosure of cash flow information Cash paid during period for Cash paid for interest $ $ Cash paid for income taxes $ $ Nature of Business Operations Organization and Description of Business The Company was originally incorporated under the laws of the State of Nevada on October 23, 2012 under the name of Balius Corp. (Inception). Effective April 15, 2014, we acquired Apptigo Inc., a Nevada corporation incorporated on October 31, 2012 ( Apptigo At closing of the acquisition transaction, Apptigo became the Companys wholly-owned subsidiary and the Company became Apptigos parent. Thereafter, the principal shareholder of the Company cancelled 10,000,000 shares of the Companys common stock owned by him. As a result of the closing of the acquisition transaction, the Company had 8,250,000 shares of common stock outstanding and 145,000 Series A Preferred Shares outstanding, which preferred shares are convertible into 4,550,000 common shares. Following the acquisition transaction, the Company filed Amended and Restated Articles of Incorporation to change its name to Apptigo International, Inc., increase the number of authorized common shares, authorize preferred shares, and approved a 3.5-for-1 forward split of the outstanding shares, including the shares issued at the closing of the acquisition transaction. The forward stock split was effective at the opening of business on April 30, 2014. The effect of the stock split has been applied retroactively. Also, in connection with the acquisition transaction the Company filed a Certificate of Designations, Preferences and Rights for Series A Convertible Preferred Stock. Going Concern The accompanying condensed consolidated financial statements have been prepared contemplating the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported a net loss of $952,473 for the three months ended March 31, 2015. The Company has a net negative working capital of $651,511 as of March 31 2015. We will need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. The trading price of our common stock could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, we may incur unexpected costs and expenses, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations. The ability to successfully resolve these factors raise substantial doubt about the Companys ability to continue as a going concern. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of the aforementioned uncertainties. Fair Value of Financial Instruments The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard 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. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The recorded values of long-term debt approximate their fair values, as interest approximates market rates. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows. · Level 1: Observable inputs such as quoted prices in active markets; · Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and · Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Share-based Compensation The Company recognizes share-based compensation, including stock option grants, warrants, restricted stock grants and stock appreciation rights, at their fair value on the grant date. Share based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. Compensation expense is generally recognized on a straight-line basis over the service period. Dividends The payment of dividends by the Company in the future will be at the discretion of the Board of Directors and will depend on earnings, capital requirements and financial condition, as well as other relevant factors. The Company does not intend to pay any cash dividends in the foreseeable future but intend to retain all earnings, if any, for use in the business. Cash and Cash Equivalents For purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Intellectual Property Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized. Amortization is recorded over the estimated useful lives of the assets, generally, 3 to 15 years. Software Development Costs Research and development costs are expensed as incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a products technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Companys products are released soon after technological feasibility has been established. Costs incurred for development are capitalized. Amortization is recorded over the estimated useful lives of the assets, generally, 5 years. For the three months ended March 31, 2015 the company expensed $33,779 compared to $0 for the three months ended March 31, 2014, for research and development. Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (ASU) 2014-15 requiring an entitys management to evaluate whether there are conditions or events, considered in aggregate, that raise substantial doubt about entitys ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. On June 10, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting statement that reduces some of disclosures and reporting requirements for development stage companies. The change will be in effect for the interim and annual reporting periods beginning after December 15, 2014. As of such date, among other things development stage entities will no longer be required to report inception-to-date information. The Company has elected early adoption of this pronouncement and will no longer be reporting inception-to-date information. In January 2014, the FASB issued ASU 2014-04, an update to ASC 310, "Receivables." The ASU clarifies that an in substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The amendments may be adopted using either a modified retrospective transition method or a prospective transition method. Early adoption of the guidance is permitted. The impact of this guidance is currently being evaluated by the Company, but is not expected to have a significant impact on the Company's financial position, results of operations or disclosures. Net Loss per Share Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the "if converted" method. Management Estimates The presentation of financial statements in conformity with generally accepted accounting principles 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 reported period. Actual results could differ from those estimates. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is computed by use of the straight-line method over the estimated useful lives of the assets, which for leasehold improvements is 15 years; 10 years for furniture and equipment; and 5 years for computer equipment. The Company capitalizes eligible costs to acquire or develop internal-use software that are incurred subsequent to the preliminary project stage. Capitalized costs related to internal-use software are amortized using the straight-line method over the estimated useful lives of the assets, which range from 5 to 7 years. Depreciation and amortization expense on property and equipment was $2,009 and $0 for the three months ended March 31, 2015 and 2014, respectively. |
2. INTANGIBLE PROPERTIES
2. INTANGIBLE PROPERTIES | 3 Months Ended |
Mar. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2. Intangible Properties | On August 4, 2014, Apptigo entered into an Intellectual Property Purchase Agreement with the Companys head designer and acquired certain intellectual property assets and rights used in connection with four games developed by him prior to his employment with the Company. The Company authorized to issue 400,000 shares of common stock as full consideration for the purchase of the assets. The closing stock price on August 4, 2014 was $1.61 per share resulting in a total price of $644,000. The total cost has been expensed. As of March 31, 2015, common shares have not been issued. |
3. CONVERTIBLE DEBENTURES
3. CONVERTIBLE DEBENTURES | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
3. CONVERTIBLE DEBENTURES | On November 18, 2014 the Company entered into a 12% Secured Convertible Debenture with a related party. The debenture carries a one month term. The debenture was issued in the amount of $50,000. Upon maturity of the Note, the Company issued a promissory note in the amount of $55,000 to cover the balance of the note and included an Original Issue Discount (OID) of $5,000. The conversion feature of the note did not change. The new note has a term of one year. March 31, 2015 December 31, 2014 Convertible debenture $ 20,000 $ 55,000 Original issue discount (3,178 ) (4,411 ) Less: Payment (10,000 ) (35,000 ) Accumulated interest 1,528 819 Convertible debenture, net of OID $ 8,350 $ 16,408 On November 21, 2014 the Company entered into a 10% Secured Convertible Debenture. The debenture carries a fifteen month term. The debenture was issued in the amount of $225,000. The company has received one tranche from this convertible note in the amount of $60,000, which included $5,000 in fees and an OID of $5,000. The debenture has a conversion feature at a share price of 70% of the average of the three lowest closing prices in a 20 day period prior to the conversion. The debenture has a true up feature in the note which permits the note holder to acquire additional shares after a conversion, in the event the proceeds from the sale of the shares is not equal to or greater than the value of the shares on the date of conversion. March 31, 2015 December 31, 2014 Convertible debenture $ 60,000 $ 60,000 Discount Warrant (17,364 ) Discount (59,873 ) (16,221 ) Accumulated interest 2055 575 Convertible debenture, net of OID $ 2,182 $ 22,470 On December 2, 2014 the Company entered into a 7% Secured Convertible Debenture. The debenture carries a three year term. The debenture was issued in the amount of $200,000. As of December 31, 2014 the Company has received $100,000. As of March 31, 2015 the Company has received $200,000 in total. March 31, 2015 December 31, 2014 Convertible debenture $ 100,000 $ 100,000 Additional amount received 100,000 Discount (147,493 ) Accumulated interest 3,886 556 Convertible debenture, net of OID and discount $ 56,393 $ 100,556 On February 9, 2015, the Company executed a $59,000 Secured Convertible Promissory Note. The note has an 8% interest rate and a term of 9 months. March 31, 2015 Convertible debenture $ 59,000 Discount (48,487 ) Accumulated interest 517 Convertible debenture net of discount $ 11,030 On March 9, 2015, the Company executed a $50,000 12% Secured Convertible Promissory Note. The note has a 12% interest rate and a term of 6 months. March 31, 2015 Convertible debenture $ 50,000 Discount (43,855 ) Accumulated interest 361 Convertible debenture $ 6,507 On March 25, 2015, the Company executed and sold a $250,000 Secured Convertible Promissory Note. The note has a 12% interest rate and for a term of 1 year. The company received $25,000 which includes an original issue discount of $2,778, upon closing of the transaction. March 31, 2015 Convertible debenture $ 27,778 Discount (2,755 ) Discount (25,000 ) Convertible debenture, net of OID and discount $ 23 |
4. DERIVATIVE LIABILITY
4. DERIVATIVE LIABILITY | 3 Months Ended |
Mar. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
4. DERIVATIVE LIABILITY | In connection with Secured Convertible Debentures, the convertible debentures, contain ratchet provisions regarding the conversion of debt into shares. The Company entered into a 10% Secured Convertible Debenture entered into on November 21, 2014, for a term of 15 months. The debenture is in the amount of $225,000 with funding to be received in four tranches of $50,000. The note includes an Original Issue Discount in the amount of $20,000 and legal fees of $5,000. The original issue discount is prorated over the tranches and the legal fees are applied to the first tranche. The company has received one tranche as of the year ended December 31, 2014 which included $5,000 legal fees and other loan costs and $5,000 original issue discount for a total liability on the convertible note of $60,000 at year end plus accrued interest. Conversion of the note is based on a comparison between a fixed conversion price and the lesser of the variable conversion price. The conversion of outstanding debt to shares of common stock is based on the market capitalization of the companys common stock. The conversion price of the outstanding balance is fixed at $0.25 unless the market of capitalization of the company is less than $3,000,000. In the event the market capitalization is less than $3,000,000, the conversion factor is 70% of the three lowest closing prices in a the previous 20 trading days. The convertible debenture also includes a True up feature, whereas the conversion price is recalculated 20 trading days after the conversion. If the conversion amount on the true up date is less than the conversion amount on the previous conversion, then additional shares would be issued as if the true up conversion amount was applicable on the original conversion. The Company assesses the fair value of the convertible debenture using the Black Scholes pricing model and records a derivative expense for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility using daily pricing observations for recent periods that correspond to the expected life of the warrants. The risk-free interest rate is based on U.S. Treasury securities rates. Due to the ratchet provisions, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 Derivatives and Hedging (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entitys own common stock. March 31, December 31, Risk-free interest rate at grant date .28% .25% Expected stock price volatility 252% 139% Expected dividend payout Expected option in life-years 1.0 1.25 As of March 31, 2015, derivative liability for this note is $38,206 and the change of derivative liability for the three months ended March 31, 2015 was $(28,973). An additional derivative liability is recognized for the warrants in connection with the note in the amount of $108,176. The Company entered into a 7% Secured Convertible Debenture entered into on December 2, 2014, for a term of 3 years. The debenture is in the amount of $200,000 with funding to be received in two tranches of $100,000. Conversion of the note is based on a comparison between a fixed conversion price and the lesser of the variable conversion price. The conversion price of the outstanding balance is the lower of $0.15 or 40% of the 30 day trading average. The Company assesses the fair value of the convertible debenture using the Black Scholes pricing model and records a derivative expense for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility using daily pricing observations for recent periods that correspond to the expected life of the warrants. The risk-free interest rate is based on U.S. Treasury securities rates. Due to the ratchet provisions, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 Derivatives and Hedging (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entitys own common stock. March 31, December 31, Risk-free interest rate at grant date .89% 1.59% Expected stock price volatility 252% 139% Expected dividend payout Expected option in life-years 2.75 3 As of March 31, 2015, total derivative liability for this note is $587,632 and the loss in change of derivative liability for the three months ended March 31, 2015 was $502,954. The Company entered into a 12% Secured Convertible Debenture entered into on February 9, 2015, for a term of 9 months. The debenture is in the amount of $59,000. The conversion price for the amount to be converted of 52% of the average of the three lowest trading price for the previous 10 days at date of conversion, The Company assesses the fair value of the convertible debenture using the Black Scholes pricing model and records a derivative expense for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility using weekly pricing observations for recent periods that correspond to the expected life of the warrants. The risk-free interest rate is based on U.S. Treasury securities rates. Due to the ratchet provisions, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 Derivatives and Hedging (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entitys own common stock. March 31, 2015 Risk-free interest rate at grant date .64% Expected stock price volatility 269% Expected dividend payout Expected option in life-years .62 As of March 31, 2015, total derivative liability for this note is $213,447 and the derivative expense for the note was $213,447 for the three months ended March 31, 2015. The Company entered into a 12% Secured Convertible Debenture entered into on March 9, 2015, for a term of 6 months. The debenture is in the amount of $50,000. Conversion of the note is based on a comparison between the lesser of two variable conversion prices. The conversion price of the outstanding balance is the lower of 45% of the lowest trading price for the previous 20 days at date of conversion or 45% of the lowest trading price for the previous 20 days before the date of the note. The Company assesses the fair value of the convertible debenture using the Black Scholes pricing model and records a derivative expense for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility using weekly pricing observations for recent periods that correspond to the expected life of the warrants. The risk-free interest rate is based on U.S. Treasury securities rates. Due to the ratchet provisions, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 Derivatives and Hedging (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entitys own common stock. March 31, 2015 Risk-free interest rate at grant date .14% Expected stock price volatility 291% Expected dividend payout Expected option in life-years .75 As of March 31, 2015, total derivative liability for this note is $232,145 and the derivative expense for the note was $232,145 for the three months ended March 31, 2015. The Company entered into a 12% Secured Convertible Debenture entered into on March 25, 2015, for a term of 2 years. The debenture is in the amount of $250,000 which includes a $25,000 original issue discount. At closing the company received $25,000 and an original issue discount of $2,778 for a total liability of $27,778. Conversion of the note is based on a comparison between a fixed conversion price and the lesser of the variable conversion price. The conversion price of the outstanding balance is the lower of $0.087 or 60% of the lowest trading price for the previous 25 days at date of conversion. The Company assesses the fair value of the convertible debenture using the Black Scholes pricing model and records a derivative expense for the value. The Company then assesses the fair value of the warrants quarterly based on the Black Scholes Model and increases or decreases the liability to the new value, and records a corresponding gain or loss. The Company uses expected volatility based primarily on historical volatility using weekly pricing observations for recent periods that correspond to the expected life of the warrants. The risk-free interest rate is based on U.S. Treasury securities rates. Due to the ratchet provisions, the Company treats the convertible debenture as a derivative liability in accordance with the provisions of ASC 815 Derivatives and Hedging (ASC 815). ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that potentially settle in an entitys own common stock. March 31, 2015 Risk-free interest rate at grant date .56% Expected stock price volatility 252% Expected dividend payout Expected option in life-years 2.0 As of March 31, 2015, total derivative liability for this note is $128,100 and the derivative expense for the note was $128,100 for the three months ended March 31, 2015. |
5. WARRANT AND OPTION LIABILITY
5. WARRANT AND OPTION LIABILITY | 3 Months Ended |
Mar. 31, 2015 | |
Warrants and Rights Note Disclosure [Abstract] | |
5. WARRANT AND OPTION LIABILITY | As of March 31, 2015, these warrants include the following: Warrants granted on November 18, 2014 in connection with the a 12% convertible debenture, the right to purchase up to 200,000 shares of the Companys common stock with an original exercise price of $0.05. Warrants granted in connection with the convertible debenture entered into on November 21, 2014, the investor has the right to purchase up to 282,575 shares of the Companys common stock with an initial conversion price of $0.32. The warrants carry a provision for the adjustment based on the terms of the contract. Fair value was determined using the following variables: A discount based on the fair value of the warrants as of March 31, 2015 amounted to $16,493. Grant Date March 31, 2015 Risk-free interest rate at grant date 1.63 % 1.63 % Expected stock price volatility 139 % 139 % Expected dividend payout Expected option in life-years 5 4.88 Number of Weighted-Average Outstanding at December 31, 2014 282,575 $ .21 Granted Exercised Canceled or expired Outstanding at March 31, 2015 282,575 $ .21 On June 17, 2014, the Company granted 550,000 options to six employees for services. As of March 31, 2015, a total of 360,000 options have been vested. No options have been exercised and 180,000 options have been canceled due to termination of service contracts. For the three months ended March 31, 2015, a total of $83,966 share-based compensation was recorded. |
6. EQUITY
6. EQUITY | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
6. EQUITY | Common Stock The Company was formed in the state of Nevada on October 31, 2012. The Company had authorized capital of 75,000 shares of common stock with a par value of $0.01. On April 17, 2014, the Company filed Amended and Restated Articles of Incorporation with the state of Nevada, increasing its authorized shares from 75,000,000 to 100,000,000 shares of common stock. On April 14, 2014, the Company, entered into an a reverse acquisition transaction with Apptigo Inc., a Nevada corporation incorporated on October 31, 2012, and its shareholders, pursuant to an Agreement and Plan of Reorganization Agreement, dated April 14, 2014 between the Company, its principal shareholder, and Apptigo and its shareholders. Under the terms of the Agreement the shareholders of Apptigo agreed to exchange all of the outstanding common and preferred shares of Apptigo for common and preferred shares of the Company. The closing of the Transaction was completed effective April 15, 2014 (the Closing Date The 3.5-for-1 forward stock split of the Companys outstanding common shares became effective at the open of business on April 30, 2014. As a result of the forward stock split, the number of outstanding shares of common stock was increased from 8,250,000 to 29,225,000, and the 145,000 outstanding shares of Series A Convertible Preferred Stock will be convertible into 15,925,000 rather than 4,550,000. In May 2014, the Company entered into an agreement for services which included the issuance of 50,000 shares of common stock. As of December 31, 2014 the shares remain unissued. On June 17, 2014, the Company issued 550,000 options for service by six employees for stock based compensation in the amount of $200,531. As of December 31, 2014, 105,000 options have vested. For the three months ended March 31, 2015 and additional 75,000 options have vested for a total of 180,000 vested, additional compensation expense for the three months ended March 31, 2015 totaled $95,965. During the nine months ended September 30, 2014, the Company sold 22,375,000 shares of common stock pursuant to stock purchase agreements in the amount of $600,000. Of the 22,375,000 shares, 600,000 have not been issued as of March 31, 2015. In addition, the Company purchased Intellectual Property from the Companys head designer for 400,000 shares of common stock at a price of $644,000. None of the 400,000 shares have been issued as of March 31, 2015. During the nine months ended September 30, 2014, the Company received $22,100 from subscription receivable. The Company issued warrants in connection with convertible debentures as described in Note 5. Preferred Stock On April 17, 2014, the Company filed Amended and Restated Articles of Incorporation with the state of Nevada, authorizing 1,000,000 shares of preferred stock with a par value of $0.001. On April 17, 2014, the Company converted the outstanding balance of the Convertible Promissory Note of $80,000 including accrued interest of $4,933 and the balance of the stock purchase of $60,000 from the same note holder in exchange for 145,000 shares of Series A Preferred Stock. The promissory note conversion was retrospectively recorded as of December 31, 2013 due to the reverse acquisition transaction with Apptigo. 2014 Stock Incentive Plan On June 19, 2014 (the Effective Date Plan |
7. RELATED PARTY TRANSACTIONS
7. RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
7. RELATED PARTY TRANSACTIONS | On November 18, 2014 the Company entered into a 12% Secured Convertible Debenture with a related party. See note 3 |
8. SUBSEQUENT EVENTS
8. SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
8. SUBSEQUENT EVENTS | Management has evaluated all subsequent events through the date of filing and there are no reportable events. |
1. SUMMARY OF SIGNIFICANT ACC14
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. The Companys year ends on December 31. |
Restatement | Restatement The Company entered into Secured Convertible Debentures detailed in Note 3. The company assessed the fair value of the conversion option using the Black Scholes pricing model and recorded a derivative liability for the value. The adjustment for this valuation to the derivative liability is $831,706. An adjustment to change in fair value of derivative liability is a loss of $490,424 for the quarter ended March 31, 2015. During the first quarter 2015, the company recognized a change in derivative for the convertible debenture in amount of $641,598, the resulting derivative liability balance at March 31, 2015 of $1,307,706. During the first quarter 2015, there was a change in selling general and administrative expense in the amount of $11,998 related to stock based compensation recalculation. Additionally, there are changes to interest expense related party in the amount of $8,620 and interest expense in the amount of $1,342 based on recalculations related to the secured convertible debentures. The following table provides additional details regarding the changes to the balance sheet, statement of operations and statement of cash flows for the three months ended March 31, 2015. As Reported Change Restated March 31, March 31, Assets 2015 2015 Cash $ 2,060 2,060 Due from related party 7,618 7,618 Total current assets 9,678 9,678 Furniture and Fixtures net accumulated depreciation $6,028 and $4,019 43,692 43,692 Deposits 5,592 5,592 Total assets $ 58,962 58,962 Liabilities and Stockholders' Deficit Accounts payable and accrued liabilities $ 14,270 14,270 Payroll liabilities 26,876 26,876 Convertible debenture - related party - net of discount $3,178 and $4,419 8,350 8,350 Convertible debenture - net of discount $103,963 and $38,105 95,749 (76,030 ) 19,719 Derivative liability - short term 476,000 115,974 591,974 Total current liabilities 621,245 661,189 Long term convertible debenture 203,886 (147,471 ) 56,415 Derivative liability - long term 715,732 715,732 Total liabilities 825,131 1,433,336 Commitments and contingencies Stockholders' Deficit Preferred stock, $0.001 par value: 1,000,000 authorized 145,000 and 145,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively Common stock, $0.001 par value: 100,000,000 authorized; 29,225,000 and 29,225,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively Common stock payable 1,033 1,033 Additional paid in capital 1,808,806 (122,501 ) 1,686,305 Accumulated deficit (2,625,526 ) (466,861 ) (3,092,387 ) Total stockholders' deficit (785,012 ) (1,374,374 ) Total liability and stockholders' deficit $ 40,119 58,962 As Reported Change Restated For the For the three months three months ended ended March 31, March 31, 2015 2015 Revenue $ Operating expenses Selling, general and administrative expenses 260,255 (11,998 ) 248,257 Research and development expense 33,779 33,779 Depreciation expense 2,009 2,009 Total operating expenses 296,043 284,045 Loss from operation (296,043 ) (284,045 ) Other income (expense) Interest expense - related party (709 ) (8,620 ) (9,329 ) Interest expense (18,843 ) 1,342 (17,501 ) Derivative expense (151,174 ) (490,424 ) (641,598 ) Loss before income tax (466,769 ) (952,473 ) Provision for income tax Net Loss $ (466,769 ) $ (952,473 ) Net loss per share: basic and diluted $ (0.02 ) $ (0.03 ) Weighted averages shares outstanding: basic and diluted 30,258,000 30,258,000 As Reported Change Restated For the For the three months three months ended ended March 31, March 31, 2015 2015 Cash flows from operating activities Net loss $ (466,769 ) (485,704 ) (952,473 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation 2,009 2,009 Stock-based compensation 95,965 (11,998 ) 83,967 Changes in operating assets and liabilities Accrued interest - related party 709 8,620 9,329 Accrued interest 18,843 (1,342 ) 17,501 Accounts payable and accrued liabilities (22,717 ) (22,717 ) Payroll liabilities (3,049 ) (3,049 ) Derivative Liability 151,174 490,424 641,598 Due from related party (7,618 ) (7,618 ) Net cash used in operating activities (231,453 ) (231,453 ) Cash flows from investing activities Proceeds from loan from shareholder Net cash provided by investing activities Cash flow from financing activities Repayment of convertible debenture - related party (10,000 ) (10,000 ) Proceeds from convertible debenture 234,000 234,000 Net cash provided by financing activities 224,000 224,000 Net decrease in cash and cash equivalents (7,453 ) (7,453 ) Cash and cash equivalents at beginning of period 9,513 9,513 Cash and cash equivalents at end of period $ 2,060 $ 2,060 Supplemental disclosure of cash flow information Cash paid during period for Cash paid for interest $ $ Cash paid for income taxes $ $ |
Nature of Business Operations | Nature of Business Operations Organization and Description of Business The Company was originally incorporated under the laws of the State of Nevada on October 23, 2012 under the name of Balius Corp. (Inception). Effective April 15, 2014, we acquired Apptigo Inc., a Nevada corporation incorporated on October 31, 2012 ( Apptigo At closing of the acquisition transaction, Apptigo became the Companys wholly-owned subsidiary and the Company became Apptigos parent. Thereafter, the principal shareholder of the Company cancelled 10,000,000 shares of the Companys common stock owned by him. As a result of the closing of the acquisition transaction, the Company had 8,250,000 shares of common stock outstanding and 145,000 Series A Preferred Shares outstanding, which preferred shares are convertible into 4,550,000 common shares. Following the acquisition transaction, the Company filed Amended and Restated Articles of Incorporation to change its name to Apptigo International, Inc., increase the number of authorized common shares, authorize preferred shares, and approved a 3.5-for-1 forward split of the outstanding shares, including the shares issued at the closing of the acquisition transaction. The forward stock split was effective at the opening of business on April 30, 2014. The effect of the stock split has been applied retroactively. Also, in connection with the acquisition transaction the Company filed a Certificate of Designations, Preferences and Rights for Series A Convertible Preferred Stock. |
Going Concern | Going Concern The accompanying condensed consolidated financial statements have been prepared contemplating the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported a net loss of $952,473 for the three months ended March 31, 2015. The Company has a net negative working capital of $651,511 as of March 31 2015. We will need additional investments in order to continue operations. Additional investments are being sought, but we cannot guarantee that we will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. The trading price of our common stock could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, we may incur unexpected costs and expenses, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations. The ability to successfully resolve these factors raise substantial doubt about the Companys ability to continue as a going concern. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of the aforementioned uncertainties. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard 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. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The recorded values of long-term debt approximate their fair values, as interest approximates market rates. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows. · Level 1: Observable inputs such as quoted prices in active markets; · Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and · Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Share-based Compensation | Share-based Compensation The Company recognizes share-based compensation, including stock option grants, warrants, restricted stock grants and stock appreciation rights, at their fair value on the grant date. Share based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. Compensation expense is generally recognized on a straight-line basis over the service period. |
Dividends | Dividends The payment of dividends by the Company in the future will be at the discretion of the Board of Directors and will depend on earnings, capital requirements and financial condition, as well as other relevant factors. The Company does not intend to pay any cash dividends in the foreseeable future but intend to retain all earnings, if any, for use in the business. |
Cash and Cash Equivalents | Cash Equivalents For purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. |
Intellectual Property | Intellectual Property Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized. Amortization is recorded over the estimated useful lives of the assets, generally, 3 to 15 years. |
Software Development Costs | Software Development Costs Research and development costs are expensed as incurred. Development costs of computer software to be sold, leased, or otherwise marketed are subject to capitalization beginning when a products technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Companys products are released soon after technological feasibility has been established. Costs incurred for development are capitalized. Amortization is recorded over the estimated useful lives of the assets, generally, 5 years. For the three months ended March 31, 2015 the company expensed $33,779 compared to $0 for the three months ended March 31, 2014, for research and development. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (ASU) 2014-15 requiring an entitys management to evaluate whether there are conditions or events, considered in aggregate, that raise substantial doubt about entitys ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. On June 10, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting statement that reduces some of disclosures and reporting requirements for development stage companies. The change will be in effect for the interim and annual reporting periods beginning after December 15, 2014. As of such date, among other things development stage entities will no longer be required to report inception-to-date information. The Company has elected early adoption of this pronouncement and will no longer be reporting inception-to-date information. In January 2014, the FASB issued ASU 2014-04, an update to ASC 310, "Receivables." The ASU clarifies that an in substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments are effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The amendments may be adopted using either a modified retrospective transition method or a prospective transition method. Early adoption of the guidance is permitted. The impact of this guidance is currently being evaluated by the Company, but is not expected to have a significant impact on the Company's financial position, results of operations or disclosures. |
Net Loss per Share | Net Loss per Share Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the "if converted" method. |
Management Estimates | Management Estimates The presentation of financial statements in conformity with generally accepted accounting principles 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 reported period. Actual results could differ from those estimates. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is computed by use of the straight-line method over the estimated useful lives of the assets, which for leasehold improvements is 15 years; 10 years for furniture and equipment; and 5 years for computer equipment. The Company capitalizes eligible costs to acquire or develop internal-use software that are incurred subsequent to the preliminary project stage. Capitalized costs related to internal-use software are amortized using the straight-line method over the estimated useful lives of the assets, which range from 5 to 7 years. Depreciation and amortization expense on property and equipment was $2,009 and $0 for the three months ended March 31, 2015 and 2014, respectively. |
1. SUMMARY OF SIGNIFICANT ACC15
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Restated financial statements | As Reported Change Restated March 31, March 31, Assets 2015 2015 Cash $ 2,060 2,060 Due from related party 7,618 7,618 Total current assets 9,678 9,678 Furniture and Fixtures net accumulated depreciation $6,028 and $4,019 43,692 43,692 Deposits 5,592 5,592 Total assets $ 58,962 58,962 Liabilities and Stockholders' Deficit Accounts payable and accrued liabilities $ 14,270 14,270 Payroll liabilities 26,876 26,876 Convertible debenture - related party - net of discount $3,178 and $4,419 8,350 8,350 Convertible debenture - net of discount $103,963 and $38,105 95,749 (76,030 ) 19,719 Derivative liability - short term 476,000 115,974 591,974 Total current liabilities 621,245 661,189 Long term convertible debenture 203,886 (147,471 ) 56,415 Derivative liability - long term 715,732 715,732 Total liabilities 825,131 1,433,336 Commitments and contingencies Stockholders' Deficit Preferred stock, $0.001 par value: 1,000,000 authorized 145,000 and 145,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively Common stock, $0.001 par value: 100,000,000 authorized; 29,225,000 and 29,225,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively Common stock payable 1,033 1,033 Additional paid in capital 1,808,806 (122,501 ) 1,686,305 Accumulated deficit (2,625,526 ) (466,861 ) (3,092,387 ) Total stockholders' deficit (785,012 ) (1,374,374 ) Total liability and stockholders' deficit $ 40,119 58,962 As Reported Change Restated For the For the three months three months ended ended March 31, March 31, 2015 2015 Revenue $ Operating expenses Selling, general and administrative expenses 260,255 (11,998 ) 248,257 Research and development expense 33,779 33,779 Depreciation expense 2,009 2,009 Total operating expenses 296,043 284,045 Loss from operation (296,043 ) (284,045 ) Other income (expense) Interest expense - related party (709 ) (8,620 ) (9,329 ) Interest expense (18,843 ) 1,342 (17,501 ) Derivative expense (151,174 ) (490,424 ) (641,598 ) Loss before income tax (466,769 ) (952,473 ) Provision for income tax Net Loss $ (466,769 ) $ (952,473 ) Net loss per share: basic and diluted $ (0.02 ) $ (0.03 ) Weighted averages shares outstanding: basic and diluted 30,258,000 30,258,000 As Reported Change Restated For the For the three months three months ended ended March 31, March 31, 2015 2015 Cash flows from operating activities Net loss $ (466,769 ) (485,704 ) (952,473 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation 2,009 2,009 Stock-based compensation 95,965 (11,998 ) 83,967 Changes in operating assets and liabilities Accrued interest - related party 709 8,620 9,329 Accrued interest 18,843 (1,342 ) 17,501 Accounts payable and accrued liabilities (22,717 ) (22,717 ) Payroll liabilities (3,049 ) (3,049 ) Derivative Liability 151,174 490,424 641,598 Due from related party (7,618 ) (7,618 ) Net cash used in operating activities (231,453 ) (231,453 ) Cash flows from investing activities Proceeds from loan from shareholder Net cash provided by investing activities Cash flow from financing activities Repayment of convertible debenture - related party (10,000 ) (10,000 ) Proceeds from convertible debenture 234,000 234,000 Net cash provided by financing activities 224,000 224,000 Net decrease in cash and cash equivalents (7,453 ) (7,453 ) Cash and cash equivalents at beginning of period 9,513 9,513 Cash and cash equivalents at end of period $ 2,060 $ 2,060 Supplemental disclosure of cash flow information Cash paid during period for Cash paid for interest $ $ Cash paid for income taxes $ $ |
3. CONVERTIBLE DEBENTURE (Table
3. CONVERTIBLE DEBENTURE (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
12% Secured Convertible Debenture | |
Convertible debenture table | March 31, 2015 December 31, 2014 Convertible debenture $ 20,000 $ 55,000 Original issue discount (3,178 ) (4,411 ) Less: Payment (10,000 ) (35,000 ) Accumulated interest 1,528 819 Convertible debenture, net of OID $ 8,350 $ 16,408 |
10% Secured Convertible Debenture | |
Convertible debenture table | March 31, 2015 December 31, 2014 Convertible debenture $ 60,000 $ 60,000 Discount Warrant (17,364 ) Discount (59,873 ) (16,221 ) Accumulated interest 2055 575 Convertible debenture, net of OID $ 2,182 $ 22,470 |
7% Secured Convertible Debenture | |
Convertible debenture table | March 31, 2015 December 31, 2014 Convertible debenture $ 100,000 $ 100,000 Additional amount received 100,000 Discount (147,493 ) Accumulated interest 3,886 556 Convertible debenture, net of OID and discount $ 56,393 $ 100,556 |
$59,000 Convertible Promissory Note | |
Convertible debenture table | March 31, 2015 Convertible debenture $ 59,000 Discount (48,487 ) Accumulated interest 517 Convertible debenture net of discount $ 11,030 |
$50,000 12% Convertible Promissory Note | |
Convertible debenture table | March 31, 2015 Convertible debenture $ 50,000 Discount (43,855 ) Accumulated interest 361 Convertible debenture $ 6,507 |
$250,000 12% Convertible Promissory Note | |
Convertible debenture table | March 31, 2015 Convertible debenture $ 27,778 Discount (2,755 ) Discount (25,000 ) Convertible debenture, net of OID and discount $ 23 |
4. DERIVATIVE LIABILITY (Tables
4. DERIVATIVE LIABILITY (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
10% Secured Convertible Debenture | |
Assumptions | March 31, December 31, Risk-free interest rate at grant date .28% .25% Expected stock price volatility 252% 139% Expected dividend payout Expected option in life-years 1.0 1.25 |
7% Secured Convertible Debenture | |
Assumptions | March 31, December 31, Risk-free interest rate at grant date .89% 1.59% Expected stock price volatility 252% 139% Expected dividend payout Expected option in life-years 2.75 3 |
$59,000 Convertible Promissory Note | |
Assumptions | March 31, 2015 Risk-free interest rate at grant date .64% Expected stock price volatility 269% Expected dividend payout Expected option in life-years .62 |
$50,000 12% Convertible Promissory Note | |
Assumptions | March 31, 2015 Risk-free interest rate at grant date .14% Expected stock price volatility 291% Expected dividend payout Expected option in life-years .75 |
$250,000 12% Convertible Promissory Note | |
Assumptions | March 31, 2015 Risk-free interest rate at grant date .56% Expected stock price volatility 252% Expected dividend payout Expected option in life-years 2.0 |
5. WARRANT LIABILITY (Tables)
5. WARRANT LIABILITY (Tables) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2015 | |
Assumptions used | Grant Date March 31, 2015 Risk-free interest rate at grant date 1.63 % 1.63 % Expected stock price volatility 139 % 139 % Expected dividend payout Expected option in life-years 5 4.88 |
Warrant activity | Number of Weighted-Average Outstanding at December 31, 2014 282,575 $ .21 Granted Exercised Canceled or expired Outstanding at March 31, 2015 282,575 $ .21 |
1. Restatement (Details - Resta
1. Restatement (Details - Restatement Balance Sheet) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Assets | ||||
Cash | $ 2,060 | $ 9,513 | $ 2,514 | $ 2,776 |
Due from related party | 7,618 | 0 | ||
Total current assets | 9,678 | 9,513 | ||
Furniture and Fixtures net accumulated depreciation $6,028 and $4,019 | 43,692 | 45,702 | ||
Deposits | 5,592 | 5,592 | ||
Total assets | 58,962 | 60,807 | ||
Liabilities and Stockholders' Deficit | ||||
Accounts payable and accrued liabilities | 14,270 | 36,987 | ||
Payroll liabilities | 26,876 | 29,925 | ||
Convertible debenture - related party - net of discount $3,178 and $4,419 | 8,350 | 16,408 | ||
Convertible debenture - net of discount $103,963 and $38,105 | 19,719 | 22,470 | ||
Derivative liability - short term | 591,974 | 324,826 | ||
Total current liabilities | 661,189 | 430,616 | ||
Long term convertible debenture | 56,415 | 100,556 | ||
Derivative liability - long term | 715,732 | 0 | ||
Total liabilities | $ 1,433,336 | 531,172 | ||
Commitments and contingencies | ||||
Stockholders' Deficit | ||||
Preferred stock, $0.001 par value: 1,000,000 authorized 145,000 and 145,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | $ 1,450 | 1,450 | ||
Common stock, $0.001 par value: 100,000,000 authorized; 29,225,000 and 29,225,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | 29,225 | 29,225 | ||
Common stock payable | 1,033 | 1,033 | ||
Additional paid in capital | 1,686,305 | 1,637,841 | ||
Accumulated deficit | (3,092,387) | (2,139,914) | ||
Total stockholders' deficit | (1,374,374) | (470,365) | ||
Total liability and stockholders' deficit | 58,962 | $ 60,807 | ||
Scenario, Previously Reported [Member] | ||||
Assets | ||||
Cash | 2,060 | |||
Due from related party | 7,618 | |||
Total current assets | 9,678 | |||
Furniture and Fixtures net accumulated depreciation $6,028 and $4,019 | 43,692 | |||
Deposits | 5,592 | |||
Total assets | 58,962 | |||
Liabilities and Stockholders' Deficit | ||||
Accounts payable and accrued liabilities | 14,270 | |||
Payroll liabilities | 26,876 | |||
Convertible debenture - related party - net of discount $3,178 and $4,419 | 8,350 | |||
Convertible debenture - net of discount $103,963 and $38,105 | 95,749 | |||
Derivative liability - short term | 476,000 | |||
Total current liabilities | 621,245 | |||
Long term convertible debenture | 203,886 | |||
Derivative liability - long term | 0 | |||
Total liabilities | $ 825,131 | |||
Commitments and contingencies | ||||
Stockholders' Deficit | ||||
Preferred stock, $0.001 par value: 1,000,000 authorized 145,000 and 145,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | $ 1,450 | |||
Common stock, $0.001 par value: 100,000,000 authorized; 29,225,000 and 29,225,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | 29,225 | |||
Common stock payable | 1,033 | |||
Additional paid in capital | 1,808,806 | |||
Accumulated deficit | (2,625,526) | |||
Total stockholders' deficit | (785,012) | |||
Total liability and stockholders' deficit | 40,119 | |||
Restatement Adjustment [Member] | ||||
Liabilities and Stockholders' Deficit | ||||
Convertible debenture - net of discount $103,963 and $38,105 | (76,030) | |||
Derivative liability - short term | 115,974 | |||
Long term convertible debenture | (147,471) | |||
Derivative liability - long term | 715,732 | |||
Stockholders' Deficit | ||||
Additional paid in capital | (122,501) | |||
Accumulated deficit | $ (466,861) |
1. Restatement (Details - Incom
1. Restatement (Details - Income Statement) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue | $ 0 | $ 0 |
Operating expenses | ||
Selling, general and administrative expenses | 248,257 | 6,762 |
Research and development expense | 33,779 | 0 |
Depreciation expense | 2,009 | 0 |
Total operating expenses | 284,045 | 6,762 |
Loss from operation | (284,045) | (6,762) |
Other income (expense) | ||
Interest expense - related party | (9,329) | 0 |
Interest expense | (17,501) | 0 |
Derivative expense | (641,598) | 0 |
Loss before income tax | (952,473) | (6,762) |
Provision for income tax | 0 | 0 |
Net Loss | $ (952,473) | $ (6,762) |
Net loss per share: basic and diluted | $ (.03) | $ 0 |
Weighted averages shares outstanding: basic and diluted | 30,258,000 | 12,550,000 |
Scenario, Previously Reported [Member] | ||
Revenue | $ 0 | |
Operating expenses | ||
Selling, general and administrative expenses | 260,255 | |
Research and development expense | 33,779 | |
Depreciation expense | 2,009 | |
Total operating expenses | 296,043 | |
Loss from operation | (296,043) | |
Other income (expense) | ||
Interest expense - related party | (709) | |
Interest expense | (18,843) | |
Derivative expense | (151,174) | |
Loss before income tax | $ (466,769) | |
Provision for income tax | ||
Net Loss | $ (466,769) | |
Net loss per share: basic and diluted | $ (0.02) | |
Weighted averages shares outstanding: basic and diluted | 30,258,000 | |
Restatement Adjustment [Member] | ||
Operating expenses | ||
Selling, general and administrative expenses | $ (11,998) | |
Research and development expense | ||
Other income (expense) | ||
Interest expense - related party | $ (8,620) | |
Interest expense | 1,342 | |
Derivative expense | 490,424 | |
Net Loss | $ (485,704) |
1. Restatement (Details - Cash
1. Restatement (Details - Cash Flows) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (952,473) | $ (6,762) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 2,009 | 0 |
Stock-based compensation | 83,967 | 0 |
Changes in operating assets and liabilities | ||
Accrued interest - related party | 9,329 | 0 |
Accrued interest | 17,501 | 0 |
Accounts payable and accrued liabilities | (22,717) | 1,000 |
Payroll liabilities | (3,049) | 0 |
Derivative Liability | 641,598 | 0 |
Due from related party | (7,618) | 4,000 |
Net cash used in operating activities | (231,453) | (1,762) |
Cash flows from investing activities | ||
Proceeds from loan from shareholder | 0 | 1,500 |
Net cash provided by investing activities | 0 | 1,500 |
Cash flow from financing activities | ||
Repayment of convertible debenture - related party | (10,000) | 0 |
Proceeds from convertible debenture | 234,000 | 0 |
Net cash provided by financing activities | 224,000 | 0 |
Net decrease in cash and cash equivalents | (7,453) | (262) |
Cash and cash equivalents, beginning of period | 9,513 | |
Cash and cash equivalents, end of period | 2,060 | |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | $ 0 |
Scenario, Previously Reported [Member] | ||
Cash flows from operating activities | ||
Net loss | (466,769) | |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 2,009 | |
Stock-based compensation | 95,965 | |
Changes in operating assets and liabilities | ||
Accrued interest - related party | 709 | |
Accrued interest | 18,843 | |
Accounts payable and accrued liabilities | (22,717) | |
Payroll liabilities | (3,049) | |
Derivative Liability | 151,174 | |
Due from related party | (7,618) | |
Net cash used in operating activities | (231,453) | |
Cash flows from investing activities | ||
Proceeds from loan from shareholder | 0 | |
Net cash provided by investing activities | 0 | |
Cash flow from financing activities | ||
Repayment of convertible debenture - related party | (10,000) | |
Proceeds from convertible debenture | 234,000 | |
Net cash provided by financing activities | 224,000 | |
Net decrease in cash and cash equivalents | (7,453) | |
Cash and cash equivalents, beginning of period | 9,513 | |
Cash and cash equivalents, end of period | 2,060 | |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 0 | |
Cash paid for income taxes | 0 | |
Restatement Adjustment [Member] | ||
Cash flows from operating activities | ||
Net loss | (485,704) | |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Stock-based compensation | (11,998) | |
Changes in operating assets and liabilities | ||
Accrued interest - related party | 8,620 | |
Accrued interest | (1,342) | |
Derivative Liability | $ (490,424) |
1. Summary of Significant Acc22
1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working capital | $ (651,511) | |
Research and development costs | 33,779 | $ 0 |
Depreciation expense | $ 2,009 | $ 0 |
2. Intangible Properties (Detai
2. Intangible Properties (Details Narrative) | 12 Months Ended |
Dec. 31, 2014USD ($)shares | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Common stock issued for intellectual property rights, shares issued | shares | 400,000 |
Common stock issued for intellectual property rights, value | $ | $ 644,000 |
3. Convertible Debenture (Detai
3. Convertible Debenture (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Original issue discount | $ (152,215) | $ (38,105) | |
Add: Additional amounts received | 234,000 | $ 0 | |
12% Secured Convertible Debenture | |||
Convertible debenture | 20,000 | 55,000 | |
Original issue discount | (3,178) | (4,411) | |
Less: payment | (10,000) | (35,000) | |
Accumulated interest | 1,528 | 819 | |
Convertible debenture, net of OID | 8,250 | 16,408 | |
10% Secured Convertible Debenture | |||
Convertible debenture | 60,000 | 60,000 | |
Discount - Warrant | 0 | (17,364) | |
Beneficial conversion feature | (12,777) | (16,221) | |
Original issue discount | (59,873) | (16,221) | |
Accumulated interest | 2,055 | 575 | |
Convertible debenture, net of OID | 2,182 | 22,470 | |
Interest expense | 4,315 | ||
7% Secured Convertible Debenture | |||
Convertible debenture | 100,000 | 100,000 | |
Original issue discount | (147,493) | 0 | |
Add: Additional amounts received | 100,000 | ||
Accumulated interest | 3,886 | 556 | |
Convertible debenture, net of OID | 56,393 | $ 100,556 | |
$59,000 Convertible Promissory Note | |||
Convertible debenture | 59,000 | ||
Beneficial conversion feature | (48,487) | ||
Accumulated interest | 517 | ||
Convertible debenture, net of OID | 11,030 | ||
$50,000 12% Convertible Promissory Note | |||
Convertible debenture | 50,000 | ||
Beneficial conversion feature | (43,855) | ||
Accumulated interest | 361 | ||
Convertible debenture, net of OID | 6,507 | ||
$250,000 12% Convertible Promissory Note | |||
Convertible debenture | 27,778 | ||
Beneficial conversion feature | (27,755) | ||
Convertible debenture, net of OID | $ 23 |
4. Derivative Liability (Detail
4. Derivative Liability (Details - Assumptions) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
10% Secured Convertible Debenture | ||
Risk-free interest rate | 0.28% | 0.25% |
Expected stock price volatility | 252.00% | 139.00% |
Expected dividend payout | 0.00% | 0.00% |
Expected option in life-years | 1 year | 1 year 3 months |
7% Secured Convertible Debenture | ||
Risk-free interest rate | 0.89% | 1.59% |
Expected stock price volatility | 252.00% | 139.00% |
Expected dividend payout | 0.00% | 0.00% |
Expected option in life-years | 2 years 9 months | 3 years |
$59,000 Convertible Promissory Note | ||
Risk-free interest rate | 0.64% | |
Expected stock price volatility | 269.00% | |
Expected dividend payout | 0.00% | |
Expected option in life-years | 7 months 13 days | |
$50,000 12% Convertible Promissory Note | ||
Risk-free interest rate | 0.14% | |
Expected stock price volatility | 291.00% | |
Expected dividend payout | 0.00% | |
Expected option in life-years | 9 months | |
$250,000 12% Convertible Promissory Note | ||
Risk-free interest rate | 0.56% | |
Expected stock price volatility | 252.00% | |
Expected dividend payout | 0.00% | |
Expected option in life-years | 2 years |
4. Derivative Liability (Deta26
4. Derivative Liability (Details Narrative) | 3 Months Ended |
Mar. 31, 2015USD ($) | |
$50,000 12% Convertible Promissory Note | |
Gain in change of derivative liability | $ 232,145 |
10% Secured Convertible Debenture | |
Derivative liability | 38,206 |
Gain in change of derivative liability | (28,973) |
7% Secured Convertible Debenture | |
Derivative liability | 587,632 |
Gain in change of derivative liability | 502,954 |
$59,000 Convertible Promissory Note | |
Derivative liability | 213,447 |
Gain in change of derivative liability | 213,447 |
$50,000 12% Convertible Promissory Note | |
Derivative liability | 232,145 |
$250,000 12% Convertible Promissory Note | |
Derivative liability | 128,100 |
Derivative expense | $ 128,100 |
5. Warrant Liability (Details -
5. Warrant Liability (Details - Assumptions) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2015 | |
Risk-free interest rate | 1.63% |
Expected stock price volatility | 139.00% |
Expected dividend payout | 0.00% |
Expected option in life-years | 4 years 10 months 17 days |
Expected option in life, grant date | 5 years |
5. Warrant Liability (Details28
5. Warrant Liability (Details - Warrant activity) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2015$ / sharesshares | |
Warrants outstanding, beginning balance | 282,575 |
Warrants granted | 0 |
Warrants outstanding, ending balance | 282,575 |
Weighted-average price per share warrants outstanding, beginning | $ / shares | $ .21 |
Weighted-average price per share warrants outstanding, ending | $ / shares | $ .21 |
5. Warrant and Option Liabili29
5. Warrant and Option Liability (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Share based compensation | $ 83,967 | $ 0 | |
Employee Stock Option [Member] | |||
Options granted | 550,000 | ||
Options vested | 360,000 | ||
Options exercised | 0 | ||
Options cancelled/terminated | 180,000 | ||
Share based compensation | $ 83,966 |
6. Equity (Details Narrative)
6. Equity (Details Narrative) | 12 Months Ended |
Dec. 31, 2014USD ($)shares | |
Common stock issued for intellectual property rights, shares issued | 400,000 |
Common stock issued for intellectual property rights, value | $ | $ 644,000 |
Proceeds from subscription receivable | $ | $ 22,100 |
Stock Purchase Agreements | |
Stock sold for cash, shares issued | 22,375,000 |
Proceeds from common stock sold | $ | $ 600,000 |
Stock unissued | 600,000 |
Intellectual property | |
Stock unissued | 400,000 |
Common stock issued for intellectual property rights, shares issued | 400,000 |
Common stock issued for intellectual property rights, value | $ | $ 644,000 |
Six employees | |
Options issued, shares | 550,000 |
Options vested | 105,000 |
Stock issued for services, value | $ | $ 200,531 |