Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | May. 12, 2016 | Jun. 30, 2015 | |
Document and Entity Information: | |||
Entity Registrant Name | Apptigo International, Inc. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,562,738 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 1,239,428,192 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Public Float | $ 469,755 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Assets, Current | ||
Cash | $ 334,227 | $ 9,513 |
Total current assets | 334,227 | 9,513 |
Furniture and Fixtures net accumulated depreciation $10,046 and $4,019 | 46,201 | 45,702 |
Deposits | 5,592 | 5,592 |
Total Assets | 386,020 | 60,807 |
Liabilities and Stockholders' Deficit | ||
Accounts payable and accrued liabilities | 162,157 | 38,937 |
Payroll liabilities | 142,743 | 29,925 |
Convertible debenture - related party, net of discount $625,154 and $4,411 | 384,051 | 15,589 |
Convertible debenture - current portion, net of discounts of $522,587 and $38,105 | 258,782 | 21,895 |
Derivative liability | 8,746,651 | 324,826 |
Total current liabilities | 9,694,384 | 431,172 |
Convertible debenture - long term, net of discounts of $82,845 and $0 | 137,119 | 100,000 |
Total liabilities | $ 9,831,503 | $ 531,172 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred stock, $0.001 par value: 10,000,000 authorized 0 and 145,000 shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively | $ 0 | $ 1,450 |
Common stock, $0.001 par value: 2,000,000,000 authorized; 129,487,298 and 29,225,000 shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively | 129,487 | 29,225 |
Common stock payable | 0 | 1,033 |
Additional paid-in-capital | 1,398,491 | 1,637,841 |
Accumulated deficit | (10,973,461) | (2,139,914) |
Total stockholders' deficit | (9,445,483) | (470,365) |
Total liability and stockholders' deficit | $ 386,020 | $ 60,807 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 10,046 | $ 4,019 |
Discount on convertible debenture related party | 625,154 | 4,411 |
Discount on convertible debenture | $ 522,587 | $ 38,105 |
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 145,000 |
Preferred stock, shares outstanding | 0 | 145,000 |
Common stock, par value | $ .001 | $ 0.001 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 129,487,298 | 29,225,000 |
Common stock, shares outstanding | 129,487,298 | 29,225,000 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Revenue | $ 0 | $ 0 |
Operating expenses | ||
Selling, general and administrative expenses | 1,159,219 | 887,236 |
Research and development expense | 34,116 | 857,503 |
Depreciation Expense | 6,027 | 4,019 |
Total operating expenses | 1,199,362 | 1,748,758 |
Loss from operations | (1,199,362) | (1,748,758) |
Other expense | ||
Interest expense - related party | (428,149) | (819) |
Interest expense | (553,195) | (6,218) |
Change in fair value of derivative liabilities | (6,652,841) | (324,826) |
Loss before income tax | (8,833,547) | (2,080,621) |
Provision for income tax | 0 | 0 |
Net loss | $ (8,833,547) | $ (2,080,621) |
Net loss per share: basic | $ (.17) | $ (.10) |
Net loss per share: diluted | $ (.17) | $ (.10) |
Weighted Averages shares outstanding: basic | 51,109,071 | 21,285,901 |
Weighted Averages shares outstanding: diluted | 51,109,071 | 21,285,901 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Stock Subscription | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2013 | 145,000 | 7,450,000 | ||||
Beginning balance, value at Dec. 31, 2013 | $ 1,450 | $ 7,450 | $ 172,283 | $ (22,100) | $ (59,293) | $ 99,790 |
Proceeds from stock sale, shares | 21,775,000 | |||||
Proceeds from stock sale, value | $ 21,775 | 577,625 | 600 | 600,000 | ||
Purchase of intellectual property | 643,600 | 400 | 644,000 | |||
Stock Options | 200,531 | 200,531 | ||||
Receipt of funds for stock subscription receivable | 22,100 | 22,100 | ||||
Discount on warrant and beneficial conversion feature | 35,502 | 35,502 | ||||
Stock to be issued for service | 8,300 | 33 | 8,333 | |||
Derivative liability extinguished upon conversion of debt | 0 | |||||
Net loss | (2,080,621) | (2,080,621) | ||||
Ending balance, shares at Dec. 31, 2014 | 145,000 | 29,225,000 | ||||
Ending balance, value at Dec. 31, 2014 | $ 1,450 | $ 29,225 | 1,637,841 | 1,033 | (2,139,914) | (470,365) |
Common stock issued for conversion, shares | 96,367,715 | |||||
Common stock issued for conversion, value | $ 96,368 | 44,456 | 140,824 | |||
Stock issued for services, shares | 2,861,250 | |||||
Stock issued for services, value | $ 2,861 | 98,955 | 101,816 | |||
Exchange of convertible note for preferred stock, shares | (145,000) | |||||
Exchange of convertible note for preferred stock, value | $ (1,450) | (807,755) | (809,205) | |||
Common stock issued for stock payable, shares | 1,033,333 | |||||
Common stock issued for stock payable, value | $ 1,033 | (1,033) | ||||
Derivative liability extinguished upon conversion of debt | 176,030 | 176,030 | ||||
Share-based compensation | 248,964 | 248,964 | ||||
Net loss | (8,833,547) | (8,833,547) | ||||
Ending balance, shares at Dec. 31, 2015 | 0 | 129,487,298 | ||||
Ending balance, value at Dec. 31, 2015 | $ 0 | $ 129,487 | $ 1,398,491 | $ 0 | $ (10,973,461) | $ (9,445,483) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (8,833,547) | $ (2,080,621) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Discount on convertible note | 0 | (38,105) |
Discount on Warrants and BCF | 0 | 35,502 |
Discount on convertible debenture - related party | 0 | 589 |
Shares issued for R&D cost | 0 | 644,000 |
Depreciation | 6,027 | 4,019 |
Write off of application design | 0 | 92,500 |
Amortization of loan discount | 792,043 | 0 |
Change in fair value of derivative liabilities | 6,652,841 | 324,826 |
True-up of convertible debt | 56,201 | 0 |
Shares issued for services | 101,816 | 8,333 |
Stock-based compensation | 248,964 | 200,531 |
Changes in operating assets and liabilities | ||
Accounts payable and accrued liabilities | 17,404 | 34,563 |
Accrued interest expense | 111,623 | 1,950 |
Payroll liabilities | 112,818 | 29,925 |
Prepaid expenses | 0 | 6,000 |
Deposits | 0 | (5,592) |
Net cash used in operating activities | (733,810) | (741,580) |
Cash flows from Investing activities | ||
Furniture and Fixtures | (6,526) | (49,721) |
Net cash used in investing activities | (6,526) | (49,721) |
Cash flow from financing activities | ||
Proceeds from convertible debenture - related party | 200,000 | 50,000 |
Repayment of convertible debenture - related party | (20,000) | (35,000) |
Proceeds from convertible debenture | 885,050 | 160,000 |
Proceeds from issuance of common stock | 0 | 622,100 |
Net cash provided by financing activities | 1,065,050 | 797,100 |
Net increase in cash and equivalents | 324,714 | 5,799 |
Cash and cash equivalents at beginning of the period | 9,513 | 3,714 |
Cash and cash equivalents at end of the period | 334,227 | 9,513 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Noncash Investing and Financing Activities | ||
Conversion of convertible debenture and accrued interest into common stock | 140,824 | 0 |
Common stock issued for intangible property | 0 | 644,000 |
Convertible note - related party exchanged for preferred shares | 809,205 | 0 |
Resolution of derivative liabilities | 176,030 | 0 |
Discount from derivative liabilities | 1,906,491 | 0 |
Discount from warrants | 38,523 | 0 |
Common stock issued for stock payable | $ 1,033 | $ 0 |
1. SUMMARY OF SIGNIFICANT ACCOU
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
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 intends to sell its products worldwide through online stores. Basis of Presentation The accompanying 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. Nature of Business Operations 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 financial statements have been prepared contemplating a continuation of the Company as a going concern. The Company has reported a net loss of $8,833,547 for the year ended December 31, 2015. The Company has a net negative working capital of $9,360,157 as of December 31, 2015. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company's ability to obtain additional financing depends on the success of its growth strategy and its future performance, each of which is subject to general economic, financial, competitive, legislative, regulatory, and other factors beyond the Company's control. 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. The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below as of December 31, 2015 and 2014: Fair Value Measurements Level 1 Level 2 Level 3 Total December 31, 2015: Derivative liabilities $ $ $ 8,746,651 8,746,651 Total $ $ $ 8,746,651 8,746,651 December 31, 2014: Derivative liabilities $ $ $ 324,826 324,826 Total $ $ $ 324,826 324,826 Derivative liability for convertible notes as of December 31, 2015 is $8,746,651, compared to $324,826 as of December 31, 2014. The table below presents the change in the fair value of the derivative liabilities during the year ended December 31, 2015: Fair value as of December 31, 2014 $ 324,826 Additions recognized as derivative expense 1,925,071 Additions recognized as debt discounts 1,945,014 Resolution upon conversion of debt (176,030 ) Change in fair value 4,727,770 Fair value as of December 31, 2015 $ 8,746,651 Share-based Compensation The Company recognizes share-based compensation to employees, 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 upon the earlier of a commitment date or completion of services. 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 year ended December 31, 2015 the Company expensed $34,116 compared to $857,503 for the year ended December 31, 2014, for research and development. 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. During 2015 and 2014, all common stock equivalents were excluded as they would have been anti-dilutive. 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 $6,027 and $4,019 for the year ended December 31, 2015 and 2014, respectively. Impairment of Long-lived Assets In accordance with Accounting Standards Codification (ASC) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. ASC 360-10 relates to assets that can be amortized and the life can be determinable. The Company reviews property and equipment and other long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the assets carrying amount to future undiscounted net cash flows the assets are expected to generate. Cash flow forecasts are based on trends of historical performance and management's estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the assets or their fair values, whichever is more determinable. Recently Issued Accounting Pronouncements None |
2. INTANGIBLE PROPERTIES
2. INTANGIBLE PROPERTIES | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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. |
3. CONVERTIBLE DEBENTURES
3. CONVERTIBLE DEBENTURES | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBENTURE | On November 18, 2014, the Company entered into a 12% Secured Convertible Debenture with a related party. The debenture is convertible into shares of the Companys common stock at $0.18 per share. 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 which 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. This note was paid off on September 17, 2015 with funds received from a new note. See below for additional information. December 31, 2015 December 31, 2014 Convertible debenture $ 20,000 $ 55,000 Unamortized original issue discount (4,411 ) Less: Payment (20,000 ) (35,000 ) Convertible debenture, net of unamortized discount $ $ 15,589 On November 21, 2014, the Company entered into a 10% Secured Convertible Debenture. The debenture carries a term of 15 months. 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 the lower of $0.25 or 70% of the average of the three lowest closing prices in a 20 day period prior to the conversion. During the year ended, December 31, 2015 the lender converted $90,288 of the convertible note and accrued interest of $4,178 in exchange for 29,002,687 shares of common stock. In addition, the lender exercised true up features on the debt for an additional $56,201 in non-cash borrowing. December 31, 2015 December 31, 2014 Convertible debenture $ 60,000 $ 60,000 Additional amount due to true-up feature 56,201 Conversion of debt to common stock (90,288 ) Original issue discount (137 ) (4,520 ) Discount warrant (2,345 ) (17,364 ) Discount derivative (19,026 ) (16,221 ) Convertible debenture, net of unamortized discount $ 4,405 $ 21,895 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 had received $100,000, with the remaining $100,000 received on January 7, 2015. The conversion price of the outstanding balance is the lower of $0.15 or 60% of the 30 day trading average. December 31, 2015 December 31, 2014 Convertible debenture $ 100,000 $ 100,000 Additional amount received 100,000 Discount derivative (66,226 ) Convertible debenture, net of unamortized discount $ 133,774 $ 100,000 On February 9, 2015, the Company executed a $59,000 Convertible Promissory Note. The note has an 8% interest rate and a term of nine months. The conversion price for the amount to be converted of 58% of the average of the three lowest trading price for the previous 10 days at date of conversion. During the year ended December 31, 2015, the lender converted $30,340 of the convertible debt for 33,949,803 shares of common stock. There was an additional interest accrued as a default on the note in the amount of $29,500. December 31, 2015 Convertible debenture $ 59,000 Conversion of debt to common stock (30,340 ) Convertible debenture, net of unamortized discount $ 28,660 On March 4, 2015, the Company executed a $50,000 Convertible Promissory Note. The note has a 12% interest rate and a term of six months. 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 55% of the lowest trading price for the previous 20 days at date of conversion or 55% of the lowest trading price for the previous 20 days before the effective date of the note. During the year ended December 31, 2015, the Company converted $8,204 of the convertible debt for 21,394,225 shares of common stock. December 31, 2015 Convertible debenture $ 50,000 Conversion of debt to common stock (8,204 ) Convertible debenture, net of unamortized discount $ 41,796 On March 25, 2015, the Company executed and sold a $250,000 Convertible Promissory Note. The note has a one-time 12% interest rate and a term of one year. The Company received $25,000 along with an original issue discount of $2,778 upon closing of the transaction. 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 prior to conversion. During the year ended December 31, 2015, the Company converted $7,814 of the convertible debt for 12,021,000 share of common stock. December 31, 2015 Convertible debenture $ 27,778 Conversion of debt to common stock (7,814 ) Original issue discount (1,229 ) Discount derivative (15,390 ) Convertible debenture, net of unamortized discount $ 3,345 On May 20, 2015, the Company executed a $31,500 Convertible Promissory Note. The note has an 8% interest rate and a term of one year. The Company received $30,000 upon closing of the transaction with $1,500 paid to the lender for legal fees. The conversion price of the outstanding balance is the 55% of the lowest trading price for the previous 18 days at date of conversion. December 31, 2015 Convertible debenture $ 31,500 Discount (578 ) Discount derivative (11,557 ) Convertible debenture, net of unamortized discount $ 19,365 On May 21, 2015, the Company executed a $55,000 Convertible Promissory Note. The note has a 10% interest rate and a term of nine months. The Company received $49,250 upon closing of the transaction with $5,750 paid to the lender for legal and service fees. The conversion price of the outstanding balance is 50% of the average of the two lowest trading price for the previous 25 days at date of conversion. December 31, 2015 Convertible debenture $ 55,000 Discount (1,083 ) Discount derivative (9,279 ) Convertible debenture, net of unamortized discount $ 44,638 On May 22, 2015, the Company executed a $55,000 Convertible Promissory Note. The note has an 8% interest rate and a term of one year. The note includes an original issue discount of $5,000 and the Company paid $5,000 in legal fees to the lender upon execution of this loan. The conversion price of the outstanding balance is 50% of the average of the three lowest trading price for the previous 20 days at date of conversion. December 31, 2015 Convertible debenture $ 55,000 Original issue discount (1,954 ) Discount (1,953 ) Discount derivative (17,582 ) Convertible debenture, net of unamortized discount $ 33,511 On June 3, 2015, the Company executed a $43,500 Convertible Promissory Note. The note has an 8% interest rate and a term of nine months. As consideration for entering into this transaction, the Company granted 543,750 warrants to the lender. See Note 5. The conversion price of the outstanding balance is 51% of the average of the three lowest trading price for the previous 15 days at date of conversion. December 31, 2015 Convertible debenture $ 43,500 Discount warrants (9,072 ) Discount derivative (1,172 ) Convertible debenture, net of unamortized discount $ 33,256 On August 10, 2015, the Company executed a $809,205 Convertible Debenture with a related party in exchange for 145,000 shares of Preferred Stock held by the related party lender. The note has a 10% interest rate and a term of one year. The conversion price of the outstanding balance is 45% of the lowest trading price for the previous 10 days at date of conversion. December 31, 2015 Convertible debenture $ 809,205 Discount derivative (485,070 ) Convertible debenture, net of unamortized discount $ 324,135 On August 10, 2015, the Company entered into a $50,000 Convertible Debenture with a related party. The note has a 10% interest rate and a term of one year. Additionally, the Company entered into three additional notes, each for principal of $50,000, consisting of two notes in September and one in October, with the same party and under the same terms as the note on August 10, 2015. The conversion price of the outstanding balance is 40% of the lowest trading price for the previous 10 days at date of conversion. A portion of the proceeds were used to repay in full the note dated December 18, 2014. December 31, 2015 Convertible debenture $ 200,000 Discount derivative (140,084 ) Convertible debenture, net of unamortized discount $ 59,916 On November 18, 2015, the Company entered into a 10% Secured Convertible Debenture. The debenture carries a one year term. The debenture was issued in the amount of $200,000. The conversion price of the outstanding balance is 50% of the lowest closing price in a 10 day period prior to conversion. December 31, 2015 Convertible debenture $ 200,000 Discount derivative (176,438 ) Convertible debenture, net of unamortized discount $ 23,562 On November 25, 2015, the Company executed a $300,000 Convertible Debenture. The note has a 10% interest rate and a term of one year. The conversion price of the outstanding balance is 50% of the lowest trading price for the previous 10 days at date of conversion. December 31, 2015 Convertible debenture $ 300,000 Discount (270,411 ) Convertible debenture, net of unamortized discount $ 29,589 |
4. DERIVATIVE LIABILITIES
4. DERIVATIVE LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | Due to the variable conversion prices in the convertible notes described above, the Company treats the convertible debenture and outstanding warrants as derivative liabilities 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. The Company assesses the fair value of the convertible debentures and warrants using the Black Scholes pricing model and records a derivative liability for the value. The Company then assesses the fair value 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 instruments. The risk-free interest rate is based on U.S. Treasury securities rates. The following table describes the significant assumptions used in the Black Scholes pricing model: December 31, 2015 December 31, 2014 Risk-free interest rate at grant date .08 - .65% .25 1.59% Expected stock price volatility 218 - 465% 139% Expected dividend payout Expected option in life-years .1 - .65 1.25 - 3 The table below presents the change in the fair value of the derivative liabilities during the years ended December 31, 2015 and 2014: Fair Value as of December 31, 2013 $ Additions recognized as derivative expense 307,462 Additions recognized as debt discount 17,364 Change in fair value Fair value as of December 31, 2014 $ 324,826 Additions recognized as derivative expense 1,925,071 Additions recognized as debt discounts 1,945,014 Resolution upon conversion of debt (176,030 ) Change in fair value 4,727,770 Fair value as of December 31, 2015 $ 8,746,651 |
5. WARRANTS AND OPTIONS
5. WARRANTS AND OPTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
WARRANT AND OPTIONS | As of December 31, 2015, these warrants include the following: Warrants granted on November 21, 2014 in connection with the a 12% convertible debenture, the right to purchase up to 282,575 shares of the Companys common stock with an original exercise price of $0.0005. The warrants carry a provision for the adjustment based on the terms of the contract, wherein the number of warrants is adjusted to equal $30,000. As a result of this provision, the lender has the right to purchase up to 128,571,429 shares of the Companys common stock as of December 31, 2015. A derivative liability on the fair value of the warrants as of December 31, 2015 amounted to $89,986. Fair value was determined using the following variables: Grant Date December 31, 2015 Risk-free interest rate at grant date 1.63% 1.15% Expected stock price volatility 139% 129% Expected dividend payout Expected option in life-years 5 4 The following table summarizes the warrant activity during the years ended December 31, 2015 and 2014: Number of Weighted-Average Outstanding at December 31, 2013 Granted 282,575 $ .11 Adjusted for variable conversion 721,889 Exercised Canceled or expired Outstanding at December 31, 2014 1,004,464 $ .03 Granted 543,750 .08 Adjusted for variable conversion 127,566,965 Canceled or expired Outstanding at December 31, 2015 128,571,429 $ .0006 On June 17, 2014, the Company granted 550,000 options to six employees for services. As of December 31, 2015, a total of 235,000 options have been vested for a total of 340,000 options vested. No options have been exercised and 140,000 options have been canceled due to termination of service contracts. Stock based compensation for the years ended December 31, 2015 and 2014, amounted to $248,964 and $200,531, respectively. The following table summarizes the option activity during the years ended December 31, 2015 and 2014: Number of Option Price Per Share Outstanding at December 31, 2013 Granted 550,000 1.00 Exercised Canceled or expired (100,000 ) 1.00 Outstanding at December 31, 2014 450,000 $ 1.00 Granted Canceled or expired (40,000 ) 1.00 Outstanding at December 31, 2015 410,000 $ 1.00 |
6. EQUITY
6. EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
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 A 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 the event of conversion. On October 6, 2015, the Company filed with the Secretary of State of the State of Nevada an Amendment to Articles of Incorporation to increase the authorized shares of Common Stock of the Company. The Amendment authorizes the Company to issue 2,000,000,000 shares of Common Stock, par value $0.001 per share, and 10,000,000 shares of Preferred Stock. The Preferred Stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. 2014 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 year ended December 31, 2015 an additional 235,000 options have vested for a total of 340,000 vested, additional compensation expense for the year ended December 31, 2015 totaled $248,964. During the year ended December 31, 2014, the Company sold 22,375,000 shares of common stock pursuant to stock purchase agreements in the amount of $600,000. 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. During the year ended December 31, 2014, the Company received $22,100 from subscription receivable. The Company issued warrant in connection with convertible debentures as described in Note 5. 2015 The Company issued 96,367,715 shares of common stock for the conversion of debt in the amount of $140,824, consisting of principal of $136,646 and accrued interest of $4,178. The Company issued 2,861,250 shares of common stock to consultants and employees for their services totaling $101,816. During 2015, the Company issued 1,033,333 common shares for a stock payable. 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. On August 10, 2015, the Company and The Vantage Group, Ltd. entered into an Exchange Agreement. Under the terms of the Exchange Agreement the Holder, who was the owner of a 145,000 shares of the Companys Series A Convertible Preferred stock, exchanged the Preferred Shares for a 10% Convertible Debenture in the amount of $809,205. The principal amount of the Debenture represented the principal price paid for the Preferred Shares and any dividends which the Holder was entitled under the terms of the Preferred Shares. On October 6, 2015, the Company filed with the Secretary of State of the State of Nevada an Amendment to Articles of Incorporation to increase the authorized shares of Common Stock of the Company. The Amendment authorizes the Company to issue 10,000,000 shares of Preferred Stock. The Preferred Stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. 2014 Stock Incentive Plan On June 19, 2014 (the Effective Date Plan |
7. INCOME TAXES
7. INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company's assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company's tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company is subject to US taxes. Historically, the Company has had no net taxable income, and therefore has paid no income tax. As of December 31, 2015 and 2014, the Company had cumulative net operating loss (NOL) carryforwards of approximately $2,640,000 and $1,520,000, respectively. The NOL carryforward begin to expire in 2032. Because management is unable to determine that it is more likely than not that the Company will realize the tax benefit related to the NOL carryforward, by having future taxable income, a full valuation allowance has been established at December 31, 2015 to reduce the tax benefit asset value to zero. Components of net deferred tax assets, including a valuation allowance, are as follows at December 31st: 2015 2014 Deferred tax assets: Federal deferred tax assets 898,687 595,834 Valuation allowance (898,687 ) (595,834 ) Total deferred tax assets $ $ The valuation allowance for deferred tax assets as of December 31, 2015 and 2014 was $898,687 and $595,834, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2015 and 2014, and recorded a full valuation allowance. |
8. RELATED PARTY TRANSACTIONS
8. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | On November 18, 2014, the Company entered into a 12% Secured Convertible Debenture with a related party in the principal amount of $50,000. The note was paid off in September 2015. See Note 3. Between August and October 2015, the Company entered into four separate 10% Secured Convertible Debentures with a related party. The outstanding balance of these notes, net of unamortized discount, is $59,916 as of December 31, 2015. See Note 3. The Company entered into an Exchange Agreement on August 10, 2015. Under the terms of the Exchange Agreement the Holder, who was the owner of a 145,000 shares of the Companys Series A Convertible Preferred stock, exchanged the Preferred Shares for a 10% Convertible Debenture in the amount of $809,205. See Note 3. |
9. SUBSEQUENT EVENTS
9. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | During April 2016, the Company entered into a 10% Secured Convertible Debenture in the amount of $30,000 with a related party. The term of the note is 6 months. The conversion price of the outstanding balance is 40% of the lowest trading price for the previous 10 days at date of conversion. Between January and May 2016, the Company has converted a total of $62,278 in convertible debt and accrued interest of $5,752 for 1,109,940,894 shares of common stock. On January 7, 2016, the Company filed with the Secretary of State of the State of Nevada an Amendment to Articles of Incorporation to increase the authorized shares of Common Stock of the Company. The Amendment authorizes the Company to issue 5,000,000,000 shares of Common Stock, par value $0.001 per share, and 10,000,000 shares of Preferred Stock. The Preferred Stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. |
1. SUMMARY OF SIGNIFICANT ACC16
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying 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. |
Nature of Business Operations | Nature of Business Operations 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 financial statements have been prepared contemplating a continuation of the Company as a going concern. The Company has reported a net loss of $8,833,547 for the year ended December 31, 2015. The Company has a net negative working capital of $9,360,157 as of December 31, 2015. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company's ability to obtain additional financing depends on the success of its growth strategy and its future performance, each of which is subject to general economic, financial, competitive, legislative, regulatory, and other factors beyond the Company's control. |
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. The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below as of December 31, 2015 and 2014: Fair Value Measurements Level 1 Level 2 Level 3 Total December 31, 2015: Derivative liabilities $ $ $ 8,746,651 8,746,651 Total $ $ $ 8,746,651 8,746,651 December 31, 2014: Derivative liabilities $ $ $ 324,826 324,826 Total $ $ $ 324,826 324,826 Derivative liability for convertible notes as of December 31, 2015 is $8,746,651, compared to $324,826 as of December 31, 2014. The table below presents the change in the fair value of the derivative liabilities during the year ended December 31, 2015: Fair value as of December 31, 2014 $ 324,826 Additions recognized as derivative expense 1,925,071 Additions recognized as debt discounts 1,945,014 Resolution upon conversion of debt (176,030 ) Change in fair value 4,727,770 Fair value as of December 31, 2015 $ 8,746,651 |
Share-based Compensation | Share-based Compensation The Company recognizes share-based compensation to employees, 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 upon the earlier of a commitment date or completion of services. 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 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 | 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 year ended December 31, 2015 the Company expensed $34,116 compared to $857,503 for the year ended December 31, 2014, for research and development. |
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. During 2015 and 2014, all common stock equivalents were excluded as they would have been anti-dilutive. |
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 $6,027 and $4,019 for the year ended December 31, 2015 and 2014, respectively. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets In accordance with Accounting Standards Codification (ASC) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. ASC 360-10 relates to assets that can be amortized and the life can be determinable. The Company reviews property and equipment and other long-lived assets for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the assets carrying amount to future undiscounted net cash flows the assets are expected to generate. Cash flow forecasts are based on trends of historical performance and management's estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the assets or their fair values, whichever is more determinable. |
Recent Accounting Pronouncements | Recently Issued Accounting Pronouncements None |
1. SUMMARY OF SIGNIFICANT ACC17
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of fair value measurements | Fair Value Measurements Level 1 Level 2 Level 3 Total December 31, 2015: Derivative liabilities $ $ $ 8,746,651 8,746,651 Total $ $ $ 8,746,651 8,746,651 December 31, 2014: Derivative liabilities $ $ $ 324,826 324,826 Total $ $ $ 324,826 324,826 |
Changes in fair value of derivative liabilities | Fair Value as of December 31, 2013 $ Additions recognized as derivative expense 307,462 Additions recognized as debt discount 17,364 Change in fair value Fair value as of December 31, 2014 $ 324,826 Additions recognized as derivative expense 1,925,071 Additions recognized as debt discounts 1,945,014 Resolution upon conversion of debt (176,030 ) Change in fair value 4,727,770 Fair value as of December 31, 2015 $ 8,746,651 |
3. CONVERTIBLE DEBENTURES (Tabl
3. CONVERTIBLE DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Secured Convertible Debenture 11/18/14 | |
Convertible debt table | December 31, 2015 December 31, 2014 Convertible debenture $ 20,000 $ 55,000 Unamortized original issue discount (4,411 ) Less: Payment (20,000 ) (35,000 ) Convertible debenture, net of unamortized discount $ $ 15,589 |
Secured Convertible Debenture 11/21/14 | |
Convertible debt table | December 31, 2015 December 31, 2014 Convertible debenture $ 60,000 $ 60,000 Additional amount due to true-up feature 56,201 Conversion of debt to common stock (90,288 ) Original issue discount (137 ) (4,520 ) Discount warrant (2,345 ) (17,364 ) Discount derivative (19,026 ) (16,221 ) Convertible debenture, net of unamortized discount $ 4,405 $ 21,895 |
Secured Convertible Debenture 12/02/14 | |
Convertible debt table | December 31, 2015 December 31, 2014 Convertible debenture $ 100,000 $ 100,000 Additional amount received 100,000 Discount derivative (66,226 ) Convertible debenture, net of unamortized discount $ 133,774 $ 100,000 |
Convertible Promissory Note 2/9/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 59,000 Conversion of debt to common stock (30,340 ) Convertible debenture, net of unamortized discount $ 28,660 |
Convertible Promissory Note 3/4/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 50,000 Conversion of debt to common stock (8,204 ) Convertible debenture, net of unamortized discount $ 41,796 |
Convertible Promissory Note 3/25/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 27,778 Conversion of debt to common stock (7,814 ) Original issue discount (1,229 ) Discount derivative (15,390 ) Convertible debenture, net of unamortized discount $ 3,345 |
Convertible Promissory Note 5/20/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 31,500 Discount (578 ) Discount derivative (11,557 ) Convertible debenture, net of unamortized discount $ 19,365 |
Convertible Promissory Note 5/21/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 55,000 Discount (1,083 ) Discount derivative (9,279 ) Convertible debenture, net of unamortized discount $ 44,638 |
Convertible Promissory Note 5/22/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 55,000 Original issue discount (1,954 ) Discount (1,953 ) Discount derivative (17,582 ) Convertible debenture, net of unamortized discount $ 33,511 |
Convertible Promissory Note 6/03/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 43,500 Discount warrants (9,072 ) Discount derivative (1,172 ) Convertible debenture, net of unamortized discount $ 33,256 |
Convertible Debenture 8/10/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 809,205 Discount derivative (485,070 ) Convertible debenture, net of unamortized discount $ 324,135 |
Convertible Debenture 8/10/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 200,000 Discount derivative (140,084 ) Convertible debenture, net of unamortized discount $ 59,916 |
Convertible Debenture 11/18/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 200,000 Discount derivative (176,438 ) Convertible debenture, net of unamortized discount $ 23,562 |
Convertible Debenture 11/25/15 | |
Convertible debt table | December 31, 2015 Convertible debenture $ 300,000 Discount (270,411 ) Convertible debenture, net of unamortized discount $ 29,589 |
4. DERIVATIVE LIABILITIES (Tabl
4. DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Assumptions | December 31, 2015 December 31, 2014 Risk-free interest rate at grant date .08 - .65% .25 1.59% Expected stock price volatility 218 - 465% 139% Expected dividend payout Expected option in life-years .1 - .65 1.25 - 3 |
Fair value of derivative liabilities | Fair Value as of December 31, 2013 $ Additions recognized as derivative expense 307,462 Additions recognized as debt discount 17,364 Change in fair value Fair value as of December 31, 2014 $ 324,826 Additions recognized as derivative expense 1,925,071 Additions recognized as debt discounts 1,945,014 Resolution upon conversion of debt (176,030 ) Change in fair value 4,727,770 Fair value as of December 31, 2015 $ 8,746,651 |
5. WARRANTS AND OPTIONS (Tables
5. WARRANTS AND OPTIONS (Tables) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2015 | |
Assumptions used | Grant Date December 31, 2015 Risk-free interest rate at grant date 1.63% 1.15% Expected stock price volatility 139% 129% Expected dividend payout Expected option in life-years 5 4 |
Warrant activity | Number of Weighted-Average Outstanding at December 31, 2013 Granted 282,575 $ .11 Adjusted for variable conversion 721,889 Exercised Canceled or expired Outstanding at December 31, 2014 1,004,464 $ .03 Granted 543,750 .08 Adjusted for variable conversion 127,566,965 Canceled or expired Outstanding at December 31, 2015 128,571,429 $ .0006 |
Option activity | Number of Option Price Per Share Outstanding at December 31, 2013 Granted 550,000 1.00 Exercised Canceled or expired (100,000 ) 1.00 Outstanding at December 31, 2014 450,000 $ 1.00 Granted Canceled or expired (40,000 ) 1.00 Outstanding at December 31, 2015 410,000 $ 1.00 |
7. INCOME TAXES (Tables)
7. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Deferred tax assets | 2015 2014 Deferred tax assets: Federal deferred tax assets 898,687 595,834 Valuation allowance (898,687 ) (595,834 ) Total deferred tax assets $ $ |
1. Summary of Significant Acc22
1. Summary of Significant Accounting Policies (Details - Fair Value) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative liability - current | $ 8,746,651 | $ 324,826 |
Total derivative liabilities | 8,746,651 | 342,826 |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative liability - current | 0 | 0 |
Total derivative liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Derivative liability - current | 0 | 0 |
Total derivative liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability - current | 8,746,651 | 324,826 |
Total derivative liabilities | $ 8,746,651 | $ 324,826 |
1. Summary of Significant Acc23
1. Summary of Significant Accounting Policies (Details - Derivative Rollforward) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative liability rollforward | ||
Derivative liabilities, beginning balance | $ 324,826 | $ 0 |
Additions recognized as derivative expense | 1,925,071 | 307,462 |
Addtions recognized as debt discounts | 1,945,014 | 17,364 |
Resolution upon conversion of debt | (176,030) | 0 |
Change in fair value | 4,727,770 | |
Derivative liabilities, ending balance | $ 8,746,651 | $ 324,826 |
1. Summary of Significant Acc24
1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
Net loss | $ (8,833,547) | $ (2,080,621) |
Working capital | (9,360,157) | |
Total derivative liabilities | 8,746,651 | 342,826 |
Research and development expense | 34,116 | 857,503 |
Depreciation expense | $ 6,027 | $ 4,019 |
2. Intangible Properties (Detai
2. Intangible Properties (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Common stock issued for intellectual property rights, shares issued | 400,000 | |
Common stock issued for intellectual property rights, value | $ 644,000 | |
Stock to be issued | 400,000 |
3. Convertible Debentures (Deta
3. Convertible Debentures (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Discount - Warrant | $ (38,523) | $ 0 |
Discount - derivative | (1,906,491) | 0 |
Discount on convertible debenture related party | (625,154) | (4,411) |
Convertible debenture - related party | 384,051 | 15,589 |
Secured Convertible Debenture 11/18/14 | ||
Convertible debenture - related party | 20,000 | 55,000 |
Discount on convertible debenture related party | (4,411) | |
Less: payment | (20,000) | (35,000) |
Convertible debenture - related party | 0 | 15,589 |
Secured Convertible Debenture 11/21/14 | ||
Convertible debentures, current and noncurrent | 60,000 | 60,000 |
Additional amount due to true-up feature | 56,201 | 0 |
Conversion of debt to common stock | (90,288) | |
Amortization of original issue discount | (137) | (450) |
Discount - Warrant | (2,345) | (17,364) |
Discount - derivative | (19,026) | (16,221) |
Convertible debenture, net of unamortized discount | 4,405 | 21,895 |
Secured Convertible Debenture 12/02/14 | ||
Convertible debentures, current and noncurrent | 100,000 | 100,000 |
Add: Additional amounts received | 100,000 | |
Discount - derivative | (66,226) | |
Convertible debenture, net of unamortized discount | 133,774 | $ 100,000 |
Convertible Promissory Note 2/9/15 | ||
Convertible debentures, current and noncurrent | 59,000 | |
Conversion of debt to common stock | (30,340) | |
Convertible debenture, net of unamortized discount | 28,660 | |
Convertible Promissory Note 3/4/15 | ||
Convertible debentures, current and noncurrent | 50,000 | |
Conversion of debt to common stock | (8,204) | |
Convertible debenture, net of unamortized discount | 41,796 | |
Convertible Promissory Note 3/25/15 | ||
Convertible debentures, current and noncurrent | 27,778 | |
Conversion of debt to common stock | (7,814) | |
Amortization of original issue discount | (1,229) | |
Discount - derivative | (15,390) | |
Convertible debenture, net of unamortized discount | 3,345 | |
Convertible Promissory Note 5/20/15 | ||
Convertible debentures, current and noncurrent | 31,500 | |
Amortization of discount | (578) | |
Discount - derivative | (11,557) | |
Convertible debenture, net of unamortized discount | 19,365 | |
Convertible Promissory Note 5/21/15 | ||
Convertible debentures, current and noncurrent | 55,000 | |
Amortization of discount | (1,083) | |
Discount - derivative | (9,279) | |
Convertible debenture, net of unamortized discount | 44,638 | |
Convertible Promissory Note 5/22/15 | ||
Convertible debentures, current and noncurrent | 55,000 | |
Amortization of original issue discount | (1,954) | |
Amortization of discount | (1,953) | |
Discount - derivative | (17,582) | |
Convertible debenture, net of unamortized discount | 335,511 | |
Convertible Debenture 6/03/15 | ||
Convertible debentures, current and noncurrent | 43,500 | |
Discount - Warrant | (9,072) | |
Discount - derivative | (1,172) | |
Convertible debenture, net of unamortized discount | 33,256 | |
Convertible Debenture 8/10/15 | ||
Convertible debenture - related party | 809,205 | |
Discount - derivative | (485,070) | |
Convertible debenture - related party | 324,135 | |
Convertible Debenture 8/10/15 | ||
Convertible debenture - related party | 200,000 | |
Discount - derivative | (140,084) | |
Convertible debenture - related party | 59,916 | |
Convertible Debenture 11/18/15 | ||
Convertible debentures, current and noncurrent | 200,000 | |
Discount - derivative | (176,438) | |
Convertible debenture, net of unamortized discount | 23,562 | |
Convertible Debenture 11/25/15 | ||
Convertible debentures, current and noncurrent | 300,000 | |
Amortization of discount | (270,411) | |
Convertible debenture, net of unamortized discount | $ 29,589 |
3. Convertible Debentures (De27
3. Convertible Debentures (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Proceeds from convertible debt | $ 885,050 | $ 160,000 |
Secured Convertible Debenture 11/18/14 | ||
Debt issuance date | Nov. 18, 2014 | |
Debt stated interest rate | 12.00% | |
Original issue discount | $ 5,000 | |
Secured Convertible Debenture 11/21/14 | ||
Debt issuance date | Nov. 21, 2014 | |
Debt stated interest rate | 10.00% | |
Original issue discount | $ 5,000 | |
Debt issuance costs | $ 5,000 | |
Debt maturity date | Feb. 21, 2015 | |
Debt converted, amount converted | $ 90,288 | |
Debt converted, accrued interest converted | $ 4,178 | |
Debt converted, shares issued | 29,002,687 | |
Secured Convertible Debenture 12/02/14 | ||
Debt issuance date | Dec. 2, 2014 | |
Original issue discount | $ 0 | |
Debt maturity date | Dec. 2, 2015 | |
Convertible Promissory Note 2/9/15 | ||
Debt issuance date | Feb. 9, 2015 | |
Debt stated interest rate | 8.00% | |
Debt maturity date | Nov. 9, 2015 | |
Debt converted, amount converted | $ 30,340 | |
Debt converted, shares issued | 33,949,803 | |
Interest accrued | $ 29,500 | |
Convertible Promissory Note 3/4/15 | ||
Debt issuance date | Mar. 4, 2015 | |
Debt stated interest rate | 12.00% | |
Debt maturity date | Sep. 4, 2015 | |
Debt converted, amount converted | $ 8,204 | |
Debt converted, shares issued | 21,394,225 | |
Convertible Promissory Note 3/25/15 | ||
Debt issuance date | Mar. 25, 2015 | |
Debt stated interest rate | 12.00% | |
Original issue discount | $ 2,778 | |
Debt maturity date | Mar. 25, 2016 | |
Debt converted, amount converted | $ 7,814 | |
Debt converted, shares issued | 12,021,000 | |
Proceeds from convertible debt | $ 25,000 | |
Convertible Promissory Note 5/20/15 | ||
Debt issuance date | May 20, 2015 | |
Debt maturity date | May 20, 2016 | |
Proceeds from convertible debt | $ 30,000 | |
Legal fees | $ 1,500 | |
Convertible Promissory Note 5/21/15 | ||
Debt issuance date | May 21, 2015 | |
Debt stated interest rate | 10.00% | |
Debt maturity date | Feb. 21, 2016 | |
Proceeds from convertible debt | $ 49,250 | |
Legal fees | $ 5,750 | |
Convertible Promissory Note 5/22/15 | ||
Debt issuance date | May 22, 2015 | |
Debt stated interest rate | 8.00% | |
Original issue discount | $ 5,000 | |
Debt maturity date | May 22, 2016 | |
Legal fees | $ 5,000 | |
Convertible Debenture 6/03/15 | ||
Debt issuance date | Jun. 3, 2015 | |
Debt stated interest rate | 8.00% | |
Debt maturity date | Feb. 3, 2016 | |
Warrants granted with debt | 543,750 | |
Convertible Debenture 8/10/15 | ||
Debt issuance date | Aug. 10, 2015 | |
Debt stated interest rate | 10.00% | |
Debt maturity date | Aug. 10, 2016 | |
Convertible Debenture 8/10/15 | ||
Debt issuance date | Aug. 10, 2015 | |
Debt stated interest rate | 10.00% | |
Convertible Debenture 11/18/15 | ||
Debt issuance date | Nov. 18, 2015 | |
Debt stated interest rate | 10.00% | |
Debt maturity date | Nov. 18, 2016 | |
Convertible Debenture 11/25/15 | ||
Debt issuance date | Nov. 25, 2015 | |
Debt stated interest rate | 10.00% | |
Debt maturity date | Nov. 25, 2016 |
4. Derivative Liabilities (Deta
4. Derivative Liabilities (Details - Assumptions) - Convertible notes [Member] | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Expected dividend payout | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free interest rate | 0.80% | 0.25% |
Expected stock price volatility | 218.00% | |
Expected option in life-years | 1 month 6 days | 1 year 3 months |
Maximum [Member] | ||
Risk-free interest rate | 0.65% | 1.59% |
Expected stock price volatility | 465.00% | |
Expected option in life-years | 7 months 24 days | 3 years |
4. Derivative Liabilities (De29
4. Derivative Liabilities (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative liability rollforward | ||
Derivative liabilities, beginning balance | $ 324,826 | $ 0 |
Additions recognized as derivative expense | 1,925,071 | 307,462 |
Addtions recognized as debt discounts | 1,945,014 | 17,364 |
Resolution upon conversion of debt | (176,030) | 0 |
Change in fair value | 4,727,770 | |
Derivative liabilities, ending balance | $ 8,746,651 | $ 324,826 |
5. Warrants and Options (Detail
5. Warrants and Options (Details - Assumptions) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2015 | |
Risk-free interest rate | 1.15% |
Expected stock price volatility | 129.00% |
Expected dividend payout | 0.00% |
Expected option in life-years | 4 years |
5. Warrants and Options (Deta31
5. Warrants and Options (Details - Warrant activity) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Warrants outstanding, beginning balance | 1,004,464 | 0 |
Warrants granted | 543,750 | 282,575 |
Warrants adjusted for variable conversion | 127,566,965 | 721,889 |
Warrants outstanding, ending balance | 128,571,429 | 1,004,464 |
Weighted average price per share, warrants outstanding beginning price | $ .03 | |
Weighted average price per share, warrants granted | .08 | $ .11 |
Weighted average price per share, warrants outstanding ending price | $ .0006 | $ .03 |
5. Warrants and Options (Deta32
5. Warrants and Options (Details - Option activity) - Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Options | ||
Options outstanding, beginning balance | 450,000 | 0 |
Options granted | 550,000 | |
Options exercised | ||
Options cancelled or expired | (40,000) | (100,000) |
Options outstanding, ending balance | 410,000 | 450,000 |
Option Price Per Share | ||
Options price outstanding, beginning balance, price per share | $ 1 | |
Options granted, price per share | $ 1 | |
Options cancelled or expired, price per share | 1 | 1 |
Options outstanding, ending balance, price per share | $ 1 | $ 1 |
5. Warrants and Options (Deta33
5. Warrants and Options (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Derivative fair value of warrants | $ 89,986 | |
Options vested | 340,000 | |
Share based compensation | $ 248,964 | $ 200,531 |
6. Equity (Details Narrative)
6. Equity (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($)shares | |
Stock issued for services, value | $ 101,816 |
Convertible debt holders [Member] | |
Stock issued in conversion of debt | shares | 96,367,715 |
Debt converted | $ 136,646 |
Debt converted, accrued interest converted | $ 4,178 |
Consultants and Employees [Member] | |
Stock issued for services, shares | shares | 2,861,250 |
Stock issued for services, value | $ 101,816 |
Stock payable [Member] | |
Common stock issued for stock payable, shares | shares | 1,033,333 |
7. INCOME TAXES (Details)
7. INCOME TAXES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Federal deferred tax assets | $ 898,687 | $ 595,834 |
Valuation allowance | (898,687) | (595,834) |
Total deferred tax assets | $ 0 | $ 0 |
7. INCOME TAXES (Details Narrat
7. INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 2,640,000 | $ 1,520,000 |
Carryforward expiration date | Dec. 31, 2032 |
8. Related Party Transactions (
8. Related Party Transactions (Details Narrative) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Convertible debt - related party | $ 384,051 | $ 15,589 |
Convertible notes [Member] | ||
Convertible debt - related party | $ 59,916 |