Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2017 | |
Document and Entity Information: | ||
Entity Registrant Name | NUTRAFUELS INC | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Entity Central Index Key | 1,563,463 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 81,448,561 | |
Entity Public Float | $ 1 | |
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 | 2,017 | |
Document Fiscal Period Focus | FY | |
Trading Symbol | ntfl |
NUTRAFUELS, INC. - Balance Shee
NUTRAFUELS, INC. - Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Current Assets: | |||
Cash | $ 172,948 | $ 12,123 | |
Inventory | 162,194 | 94,404 | |
Prepaid expenses and other current assets | 332,460 | 152,040 | |
TOTAL CURRENT ASSETS | 667,602 | 258,577 | |
PROPERTY AND EQUIPMENT | |||
Furniture, fixtures and equipment | 425,005 | 296,447 | |
Leasehold improvements | 154,842 | 112,285 | |
Total Property and Equipment | 579,847 | 408,732 | |
Less accumulated depreciation | (293,317) | (214,842) | |
Property and equipment, net | 286,530 | 193,890 | |
Total Assets | 954,132 | 452,467 | |
Current Liabilities: | |||
Accounts payable | 87,504 | 19,335 | |
Accrued expenses | 206,105 | 724,492 | |
Customer deposits | 34,996 | ||
Convertible debt, net | [1] | 1,132,251 | |
Convertible debt, related party | 210,000 | ||
Notes payable, related party | 432,000 | ||
Total Current Liabilities | 293,609 | 149,013 | |
Stockholders' Equity (Deficit) | |||
Preferred stock | |||
Common stock | 8,144 | 4,589 | |
Additional paid-in capital | 33,411,300 | 7,024,608 | |
Accumulated deficit | (32,758,921) | (9,129,804) | |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 660,523 | (2,100,607) | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 954,132 | $ 452,467 | |
[1] | Net of discount of $0 and $162,160 |
Statement of Financial Position
Statement of Financial Position - Parenthetical - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 10,000 | 10,000 |
Preferred Stock, Shares Issued | 1,000 | 1,000 |
Preferred Stock, Shares Outstanding | 1,000 | 1,000 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 499,990,000 | 499,990,000 |
Common Stock, Shares Issued | 81,448,561 | 45,890,912 |
Common Stock, Shares Outstanding | 81,448,561 | 45,890,912 |
NUTRAFUELS, INC. - Statements o
NUTRAFUELS, INC. - Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement | ||
Sales | $ 1,790,168 | $ 225,293 |
Cost of sales | 1,055,042 | 195,194 |
Gross Profit | 735,126 | 30,098 |
OPERATING EXPENSES: | ||
Advertising and promotion | 81,180 | 53,619 |
Noncash compensation | 19,183,422 | 513,196 |
General and administrative expenses | 1,681,673 | 895,509 |
Depreciation expense | 78,475 | 60,501 |
Total operating expenses | 21,060,665 | 1,522,825 |
LOSS FROM OPERATIONS | (20,289,624) | (1,492,727) |
OTHER INCOME (EXPENSE) | ||
Other income | 1,951 | 5,400 |
Gain on debt extinguishment | 717 | |
Interest expense | (3,342,161) | (611,444) |
Total other income (expense) | (3,339,343) | (606,044) |
Net loss before income taxes | (23,629,117) | (2,098,771) |
Income tax expense | ||
Net loss | $ (23,629,117) | $ (2,098,771) |
Net loss per weighted average common share - basic and diluted | $ (0.33) | $ (0.06) |
Number of weighted average common shares outstanding - basic and diluted | 71,820,863 | 33,689,465 |
NUTRAFUELS, INC. - Statements 5
NUTRAFUELS, INC. - Statements of Changes in Stockholders' Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated (Deficit) | Total |
Balance, Value at Dec. 31, 2015 | $ 2,901 | $ 5,494,763 | $ (7,031,033) | $ (1,533,369) | |
Balance, Shares at Dec. 31, 2015 | 1,000 | 29,014,114 | |||
Shares issued for cash, Value | $ 562 | 560,937 | 561,499 | ||
Shares issued for cash, Shares | 5,615,000 | ||||
Shares issued for services, Value | $ 772 | 512,425 | 513,197 | ||
Shares issued for services, Shares | 7,719,513 | ||||
Shares issued for issuance of debt, Value | $ 119 | 80,569 | 80,688 | ||
Shares issued for issuance of debt, Shares | 1,195,000 | ||||
Shares issued for debt conversion, Value | $ 235 | 375,914 | 376,149 | ||
Shares issued for debt conversion, Shares | 2,347,285 | ||||
Net loss | (2,098,771) | (2,098,771) | |||
Balance, Value at Dec. 31, 2016 | $ 4,589 | 7,024,608 | (9,129,804) | (2,100,607) | |
Balance, Shares at Dec. 31, 2016 | 1,000 | 45,890,912 | |||
Shares issued for cash, Value | $ 971 | 1,323,529 | 1,324,500 | ||
Shares issued for cash, Shares | 9,707,285 | ||||
Shares issued for services, Value | $ 1,419 | 19,030,458 | 19,031,877 | ||
Shares issued for services, Shares | 14,195,422 | ||||
Shares issued for debt conversion, Value | $ 1,013 | 5,613,858 | 5,614,871 | ||
Shares issued for debt conversion, Shares | 10,129,942 | ||||
Net loss | (23,629,117) | (23,629,117) | |||
Shares issued upon exercise of options, Value | $ 27 | 54,973 | 55,000 | ||
Shares issued upon exercise of options, Shares | 275,000 | ||||
Shares issued for prepaid services, Value | $ 125 | 363,875 | 364,000 | ||
Shares issued for prepaid services, Shares | 1,250,000 | ||||
Balance, Value at Dec. 31, 2017 | $ 8,144 | $ 33,411,300 | $ (32,758,920) | $ 660,523 | |
Balance, Shares at Dec. 31, 2017 | 1,000 | 81,448,561 |
NUTRAFUELS, INC. - Statements 6
NUTRAFUELS, INC. - Statements of Changes in Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (23,629,117) | $ (2,098,771) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Stock compensation | 19,019,277 | 513,196 |
Depreciation | 78,475 | 60,501 |
Amortization of stock based comepensation | 327,691 | |
Amortization of debt discount | 531,876 | 250,128 |
Induced conversion expense | 3,116,500 | 141,300 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 162 | |
Decrease in subscription receivable | 5,000 | |
(Increase) decrease in inventory | (67,790) | 3,023 |
Increase in prepaid expenses and other assets | 90,232 | 123,230 |
Increase (decrease) in accounts payable | 68,169 | (13,707) |
(Decrease) Increase in accrued expenses | (518,387) | 289,233 |
(Decrease) in customer deposits | (34,996) | |
Net Cash used in Operating Activities | (1,018,070) | (726,705) |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | (171,115) | (16,306) |
Net Cash used in Investing Activities | (171,115) | (16,306) |
Cash Flows From Financing Activities: | ||
Common stock issued for cash | 1,324,500 | 556,500 |
Options exercised for cash | 55,000 | |
Cash proceeds from debt issuance | 345,000 | |
Cash proceeds from debt issuance, related parties | 34,500 | |
Repayment of debt | (148,000) | |
Repayment of debt, related party | (29,500) | (50,000) |
Net Cash provided by Financing Activities | 1,350,000 | 738,000 |
Net increase (decrease) in cash | 160,815 | (5,011) |
Cash, beginning of year | 12,133 | 17,144 |
Cash, end of year | 172,948 | 12,133 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid in cash | 2,043 | 11,821 |
Non-Cash Financing Activities: | ||
Shares issued for the issuance of debt | 80,688 | |
Shares issued for the conversion of debt and accrued interest | $ 5,614,871 | $ 234,849 |
(1) Nature of Operations
(1) Nature of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(1) Nature of Operations | (1) NATURE OF OPERATIONS NutraFuels, Inc. (We, or the Company) is the producer and distributor of nutritional supplements that uses micro molecular formulae and a utilization of an oral spray to provide faster and more efficient absorption. |
(2) Basis of Presentation and U
(2) Basis of Presentation and Use of Estimates | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(2) Basis of Presentation and Use of Estimates | (2) BASIS OF PRESENTATION AND USE OF ESTIMATES a) Basis of Presentation The accompanying financial statements have been prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in the United States of America ("U.S.") as promulgated by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and with the rules and regulations of the U.S Securities and Exchange Commission ("SEC"). b) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. c) Cash and Equivalents Cash equivalents are highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents at December 31, 2017 or 2016. d) Inventories Inventories are stated at cost utilizing the weighted average method of valuation and consist of raw materials and finished goods. e) Property and Equipment All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, seven and twelve years, using the straight-line method. Upon sale or retirement, the cost and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. f) Revenue Recognition The Companys financial statements are prepared under the accrual method of accounting. Revenues are recognized when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. This occurs only when the product is ordered and subsequently shipped. g) Income Taxes The Company follows the provisions of ASC 740 10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740 10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. As of December 31, 2017, the tax years 2016 and 2015 for the Company remains open for IRS audit. The Company has received no notice of audit or any notifications from the IRS for any of the open tax years. h) Net Loss Per Share Basic loss per share excludes dilution and is computed by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the Company. Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the year and dilutive potential shares outstanding unless consideration of such dilutive potential shares would result in anti-dilution. i) Financial Instruments and Fair Value Measurements FASB ASC 820 A Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying value of the Companys current financial instruments, which include cash and cash equivalents, accounts payable, accrued liabilities and indebtedness approximates their fair values because of the short term maturities and variable rates of interest of these instruments. j) Impairment of Long Lived Assets A long lived asset is tested for impairment whenever events or changes in circumstances indicate that its carrying value amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long lived assets exceeds its fair value. There were no impairments recognized during the years ended December 31, 2017 and 2016. k) Related Party Transactions All transactions with related parties are in the normal course of operations and are measured at the exchange amount. l) Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014 09, A In February 2016, the FASB issued ASU 2016 02, A |
(3) Liquidity and Going Concern
(3) Liquidity and Going Concern Considerations | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(3) Liquidity and Going Concern Considerations | (3) LIQUIDITY AND GOING CONCERN CONSIDERATIONS Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We sustained a net loss of approximately $23.6 and $2.1 million for the years ended December 31, 2017 and 2016, respectively, and have an accumulated deficit of approximately $32.8 million at December 31, 2017. These conditions raise substantial doubt about our ability to continue as a going concern. The independent auditors report on our consolidated financial statements for the years ended December 31, 2017 and 2016 contain explanatory paragraphs expressing substantial doubt as to our ability to continue as a going concern. Failure to successfully continue to grow operational revenues could harm our profitability and adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, managements potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with establishing sales channels. We are continuing our plan to further grow and expand operations and seek sources of capital to pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. |
(4) Convertible Debt
(4) Convertible Debt | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(4) Convertible Debt | (4) CONVERTIBLE DEBT On March 26, 2014, we issued a $290,000 convertible note. The note bore interest at 10%, with an initial maturity of March 26, 2015 (subsequently amended to January 15, 2016), and was convertible into shares of our common stock at $1.00 per share. The investor also received warrants to purchase 500,000 shares of our common stock at $0.50 per share with a two year exercise term. We evaluated the warrants for derivative accounting consideration under ASC Topic 815 40, Derivatives and Hedging B On June 23, 2014, we issued a $30,000 convertible note. The note bore interest at 10%, matures on June 23, 2015, and was convertible into shares of our Company at $1.00 per share. Because the market price for our common stock on the date of the note exceeded the notes conversion price of $1.00 per share, we recognized a beneficial conversion feature of $21,600 as a discount on the note. The discount was being amortized as additional interest over the life of the note. We evaluated the conversion features embedded in the two notes payable described above for derivative accounting in accordance with ASC 815 40, Derivatives and Hedging embedded in the modified notes payable for derivative accounting in accordance with the criteria for classification in shareholders equity. On August 27, 2014, we issued a $50,000 convertible note. The note bore interest at 10%, had an initial maturity of January 2, 2015 (subsequently extended to January 15, 2016), and was convertible into shares of our common stock at $1.00 per share. The investor also received 50,000 shares of our common stock. During October 2014, we issued a $60,000 convertible note. The note bore interest at 10%, had an initial maturity of November 2, 2014 (subsequently extended to January 15, 2016) and was convertible into shares of our common stock at $1.00 per share. The investor also received 150,000 shares of our common stock. In February 2015, we sold 25,000 units to an investor in exchange for $25,000. The 25,000 units consist of: (i) 25,000 shares of our common stock; (ii) 2 year options to purchase 25,000 shares of our common stock at $0.20, and (iii) a 2 year convertible promissory note in the amount of $25,000. The note is non interest bearing and was convertible into shares of our common stock at the higher of (a) twenty-five cents ($.25) or (b) fifty percent (50%) of the average closing price of our shares as reported by the OTC Markets for the 10 trading days prior to the day of conversion. The conversion rights embedded in the note are accounted for as a derivative financial instrument because of the beneficial conversion feature embedded therein. The beneficial conversion feature was valued and recorded at the date of issuance at fair value, and recorded as a debt discount. In April 2015, we sold 250,000 units to an investor in exchange for $250,000. The 250,000 units consist of: (i) 250,000 shares of our common stock; (ii) 2 year options to purchase 250,000 shares of our common stock at $0.20, and (iii) a 2 year convertible promissory note in the amount of $250,000. The note bore 10% interest and was convertible into shares of our common stock at the higher of (a) twenty-five cents ($.25) or (b) fifty percent (50%) of the average closing price of our shares as reported by the OTC Markets for the 10 trading days prior to the day of conversion. The conversion rights embedded in the note are accounted for as a derivative financial instrument because of the beneficial conversion feature embedded therein. The beneficial conversion feature was valued and recorded at the date of issuance at fair value, and recorded as a debt discount. In August 2015, we entered into convertible promissory notes with four individual investors for a total amount of $95,000. The notes were interest bearing at a fixed rate of ten percent (10%) and were convertible into shares at $0.10 per share. In August 2016, we extended the maturity of our $100,000 promissory note to August 26, 2017. In April 2016 we entered into a one year 10% note for $38,000 cash, which included the issuance of 100,000 shares of common stock, valued at $14,000. We paid this loan back in full in June 2016. In June 2016 we entered into two one year 10% notes for $47,000 cash, which included the issuance of 90,000 shares of common stock, valued at $9,900. In June 2016 we entered into a short term 10% note for $25,000 cash, which included the issuance of 70,000 shares of common stock, valued at $7,700. In July 2016 we entered into two one year 10% notes for $35,000 cash, which included the issuance of 35,000 shares of common stock, valued at $4,588. In the third quarter 2016 we entered into two short term 10% notes for $75,000 cash, which included the issuance of 350,000 shares of common stock, valued at $21,500. In the fourth quarter 2016 we entered into two short term 10% notes for $125,000 cash, which included the issuance of 400,000 shares of common stock, valued at $23,000. During 2016 we issued 2,347,285 shares of common stock for the conversion of debt and accrued interest totaling $234,849 and recorded an induced conversion expenses of $141,300 for debt that was converted at less than the stated conversion rate. In January 2017 we issued 10,129,942 shares of common stock for the conversion of debt and accrued interest totaling $2,403,343 and recorded an induced conversion charge of $3,116,500 for debt that was converted at a discount to the stated conversion rate. |
(5) Notes Payable - Related Par
(5) Notes Payable - Related Party | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(5) Notes Payable - Related Party | (5) NOTES PAYABLE - RELATED PARTY On November 15, 2012, we issued a $160,000 convertible note. The note bore interest at 10% with an initial maturity of November 15, 2014 (subsequently extended to November 15, 2017), and was convertible into shares of our common stock at $1.00 per share. On February 15, 2013 we issued a $50,000 convertible note. The note bore interest at 10%, with original maturity of May 15, 2014 (subsequently modified to November 15, 2017), and was convertible into shares of our common stock at $1.00 per share. During 2016 we received $102,500 in cash and repaid $73,000 in cash under a non interest bearing line of credit from an officer. During 2017 we repaid the remaining $29,500 in cash. In January 2017 we issued 3,367,000 shares of common stock to convert $841,750 of debt and accrued interest to a related party. |
(6) Stockholder' Equity
(6) Stockholder' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(6) Stockholder' Equity | (6) STOCKHOLDER EQUITY During the first quarter 2016 we issued 1,690,000 shares of common stock and 1,690,000 warrants for the future purchase of common stock in exchange for $169,000 in cash. During the first quarter 2016 we issued 75,000 shares of common stock in exchange for services valued at $26,000. During the second quarter 2016 we issued 850,000 shares of common stock and 850,000 warrants for the future purchase of common stock in exchange for $85,000 in cash. During the second quarter 2016 we issued 244,514 shares of common stock in exchange for services valued at $26,897. During the second quarter 2016 we issued 260,000 shares of common stock valued at $31,600 as an inducement to the $110,000 of convertible debt we received. During the third quarter 2016 we issued 1,650,000 shares of common stock and 1,650,000 warrants for the future purchase of common stock in exchange for $165,000 in cash. During the third quarter 2016 we issued 285,000 shares of common stock valued at $26,088 as an inducement to the $110,000 of convertible debt we received. During the third quarter 2016 we issued 450,000 shares of common stock for the conversion of $45,000 of convertible debt. During the third quarter 2016 we issued 25,000 shares of common stock that had not been issued as required in February 2015, these shares had already been accounted for. During the fourth quarter 2016 we issued 1,175,000 shares of common stock and 1,175,000 warrants for the future purchase of common stock in exchange for $117,500 in cash. During the fourth quarter 2016 we issued 650,000 shares of common stock valued at $23,000 as an inducement to the $125,000 of convertible debt we received. During the fourth quarter 2016 we issued 1,897,500 shares of common stock for the conversion of $191,593 of convertible debt and accrued interest. On January 13, 2017 we entered into an employment agreement with our President which includes an anti dilution provision which requires us to maintain his share ownership in our Company at 30%, reduced by any shares he sells. These shares are required to be issued on January 2 of each year. On February 13, 2017 we issued 7,220,585 shares associated with the anti dilution rights, which were valued at $10,453,315. In November 2017, we issued 6,674,837 shares associated with the anti dilution rights, which were valued at $8,464,463. This employment agreement was amended on October 10, 2017, to remove the anti dilution provision. In the first quarter 2017 we issued 6,762,942 shares of common stock to convert $1,561,593 of convertible debt and accrued interest and 3,367,000 shares of common stock to convert $841,750 of debt and accrued interest to a related party. In February 2017 we issued 25,000 shares of common stock in exchange for $5,000 in cash for the exercise of options. During the first quarter 2017 we issued 6,957,285 shares of common stock and 6,957,285 warrants to purchase our common stock in exchange for $774,500 in cash. During the second quarter 2017 we issued 1,850,000 shares of common stock and 1,850,000 warrants to purchase our common stock in exchange for $370,000 in cash. During the second quarter 2017 we issued 250,000 shares of common stock in exchange for $50,000 in cash for an option exercise. During the third quarter 2017 we issued 900,000 shares of common stock in exchange for $180,000 in cash. |
(7) Equity Options and Warrants
(7) Equity Options and Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(7) Equity Options and Warrants | (7) EQUITY OPTIONS AND WARRANTS At December 31, our warrants and options outstanding are: By Exercise Price: 2017 2016 Options - $0.20 - 275,000 Warrants - $0.35 1,850,000 - Warrants - $0.50 14,342,000 7,867,000 Warrants - $0.75 114,286 - Warrants - $1.00 124,999 - Total outstanding 16,431,285 8,142,000 The 275,000 options outstanding at December 31, 2016, were exercised in 2017 for $55,000 in cash. We issued 9,707,285 warrants during 2017 included with shares in units issued for $1,324,500 in cash. 1,143,000 warrants expired in 2017. |
(8) Income Taxes
(8) Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(8) Income Taxes | (8) INCOME TAXES We recognize deferred tax assets and liabilities for the tax effects of differences between the financial statements and tax basis of assets and liabilities. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. The components of income tax provision (benefit) related to continuing operations are as follows at December 31, 2017 and 2016: 2017 2016 Current $ - $ - Deferred $ - $ - Total tax provision $ - $ - The following is a reconciliation of the effective income tax rate with the statutory income tax rate at December 31, 2017 and 2016: 2017 2016 U.S. Federal statutory income tax rate (21.0)% (34.0)% State income tax, net of federal benefit (1.9)% (1.9)% Temporary differences, net 0.0% 0.0% Valuation allowance 22.9% 35.% Effective tax rate 0.0% 0.0% The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at December 31, 2017 and 2016: Deferred tax assets 2017 2016 Net operating loss carry forwards $ 4,194,726 $ 3,079,075 Stock based compensation 4,381,662 207,859 Other - 647 Less: valuation allowance (8,577,388) (2,872,726) Total 0 414,855 Deferred tax liabilities Stock based compensation - (414,855) Depreciation - - Net deferred tax asset $ - $ - The change in valuation allowance was $6,119,517 and $752,829 for the years ended December 31, 2017 and 2016, respectively. We recorded a 100% valuation allowance related to the deferred tax asset for the loss from operations. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which temporary differences become deductible. In accordance with the provisions of ASC 740: Income Taxes, we record a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. At December 31, 2017 and 2016, we have no liabilities for uncertain tax positions. We continually evaluate expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. |
(9) Commitments and Contingenci
(9) Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(9) Commitments and Contingencies | (9) COMMITMENTS AND CONTINGENCIES a) Real Property Lease We lease our office and warehouse facilities under an operating lease in Coconut Creek, Florida. The lease expires in February 2018. The minimum monthly lease payments required for the remaining term of the lease are $7,360. In June 2017 we entered into a new lease for a new additional facility located in Deerfield Beach, Florida. This lease begins on January 1, 2018 and expires on March 1, 2025. The minimum monthly lease payments required begin at $13,220. b) Contractual Obligations In November 2017, we entered into a six-month agreement with Lyons Capital, LLC to provide introductions to broker/dealers, private funds, Investment bankers, potential BOD members, stock research firms, market makers and business development opportunities. Lyons is to receive 1,000,000 shares of common stock, half upon signing the agreement and half three months later. These shares were valued at $191,600, or $0.1916 per share, the quoted market price on the agreement date. This amount was recorded in prepaid expenses and is being amortized over the term of the agreement. $37,236 was amortized in 2017. c) Other The Company is subject to asserted claims and liabilities that arise in the ordinary course of business. The Company maintains insurance policies to mitigate potential losses from these actions. In the opinion of management, the amount of the ultimate liability with respect to those actions will not materially affect the Companys financial position or results of operations. |
(10) Concentrations of Credit R
(10) Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
(10) Concentrations of Credit Risk | (10) CONCENTRATIONS OF CREDIT RISK a) Cash The Company maintains its cash in bank deposit accounts, which may, at times, may exceed federally insured limits. The Company had no cash balance in excess of FDIC insured limits at December 31, 2017 and 2016. b) Revenue Our principal customers are comprised of five (5) separate independent private label resellers. Should we lose one or more of these resellers our revenue would decline significantly. |
(2) Basis of Presentation and17
(2) Basis of Presentation and Use of Estimates: A) Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
A) Basis of Presentation | a) Basis of Presentation The accompanying financial statements have been prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in the United States of America ("U.S.") as promulgated by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and with the rules and regulations of the U.S Securities and Exchange Commission ("SEC"). |
(2) Basis of Presentation and18
(2) Basis of Presentation and Use of Estimates: B) Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
B) Use of Estimates | b) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
(2) Basis of Presentation and19
(2) Basis of Presentation and Use of Estimates: C) Cash and Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
C) Cash and Equivalents | c) Cash and Equivalents Cash equivalents are highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents at December 31, 2017 or 2016. |
(2) Basis of Presentation and20
(2) Basis of Presentation and Use of Estimates: D) Inventories (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
D) Inventories | d) Inventories Inventories are stated at cost utilizing the weighted average method of valuation and consist of raw materials and finished goods. |
(2) Basis of Presentation and21
(2) Basis of Presentation and Use of Estimates: E) Property and Equipment (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
E) Property and Equipment | e) Property and Equipment All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, seven and twelve years, using the straight-line method. Upon sale or retirement, the cost and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. |
(2) Basis of Presentation and22
(2) Basis of Presentation and Use of Estimates: F) Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
F) Revenue Recognition | f) Revenue Recognition The Companys financial statements are prepared under the accrual method of accounting. Revenues are recognized when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. This occurs only when the product is ordered and subsequently shipped. |
(2) Basis of Presentation and23
(2) Basis of Presentation and Use of Estimates: G) Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
G) Income Taxes | g) Income Taxes The Company follows the provisions of ASC 740 10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740 10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. As of December 31, 2017, the tax years 2016 and 2015 for the Company remains open for IRS audit. The Company has received no notice of audit or any notifications from the IRS for any of the open tax years. |
(2) Basis of Presentation and24
(2) Basis of Presentation and Use of Estimates: H) Net Loss Per Share (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
H) Net Loss Per Share | h) Net Loss Per Share Basic loss per share excludes dilution and is computed by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the Company. Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the year and dilutive potential shares outstanding unless consideration of such dilutive potential shares would result in anti-dilution. |
(2) Basis of Presentation and25
(2) Basis of Presentation and Use of Estimates: I) Financial Instruments and Fair Value Measurements (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
I) Financial Instruments and Fair Value Measurements | i) Financial Instruments and Fair Value Measurements FASB ASC 820 A Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying value of the Companys current financial instruments, which include cash and cash equivalents, accounts payable, accrued liabilities and indebtedness approximates their fair values because of the short term maturities and variable rates of interest of these instruments. |
(2) Basis of Presentation and26
(2) Basis of Presentation and Use of Estimates: J) Impairment of Long lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
J) Impairment of Long lived Assets | j) Impairment of Long Lived Assets A long lived asset is tested for impairment whenever events or changes in circumstances indicate that its carrying value amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long lived assets exceeds its fair value. There were no impairments recognized during the years ended December 31, 2017 and 2016. |
(2) Basis of Presentation and27
(2) Basis of Presentation and Use of Estimates: K) Related Party Transactions (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
K) Related Party Transactions | k) Related Party Transactions All transactions with related parties are in the normal course of operations and are measured at the exchange amount. |
(2) Basis of Presentation and28
(2) Basis of Presentation and Use of Estimates: L) Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
L) Recent Accounting Pronouncements | l) Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014 09, A In February 2016, the FASB issued ASU 2016 02, A |
(7) Equity Options and Warran29
(7) Equity Options and Warrants: Share-based Compensation, Stock Options, Activity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Share-based Compensation, Stock Options, Activity | By Exercise Price: 2017 2016 Options - $0.20 - 275,000 Warrants - $0.35 1,850,000 - Warrants - $0.50 14,342,000 7,867,000 Warrants - $0.75 114,286 - Warrants - $1.00 124,999 - Total outstanding 16,431,285 8,142,000 |
(8) Income Taxes_ Schedule of I
(8) Income Taxes: Schedule of Income Tax Provision Text Block (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Income Tax Provision Text Block | 2017 2016 Current $ - $ - Deferred $ - $ - Total tax provision $ - $ - |
(8) Income Taxes_ Schedule of E
(8) Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | 2017 2016 U.S. Federal statutory income tax rate (21.0)% (34.0)% State income tax, net of federal benefit (1.9)% (1.9)% Temporary differences, net 0.0% 0.0% Valuation allowance 22.9% 35.% Effective tax rate 0.0% 0.0% |
(8) Income Taxes_ Schedule of D
(8) Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets 2017 2016 Net operating loss carry forwards $ 4,194,726 $ 3,079,075 Stock based compensation 4,381,662 207,859 Other - 647 Less: valuation allowance (8,577,388) (2,872,726) Total 0 414,855 Deferred tax liabilities Stock based compensation - (414,855) Depreciation - - Net deferred tax asset $ - $ - |
(4) Convertible Debt (Details)
(4) Convertible Debt (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||||||||||
Jan. 31, 2017 | Apr. 30, 2015 | Feb. 28, 2015 | Dec. 31, 2016 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Aug. 31, 2015 | Oct. 31, 2014 | Aug. 27, 2014 | Jun. 24, 2014 | Mar. 26, 2014 | |||
Convertible debt, net | $ 1,132,251 | [1] | [1] | $ 95,000 | ||||||||||||||||
Common Stock, Shares Issued | 45,890,912 | 81,448,561 | 900,000 | 1,850,000 | 6,762,942 | 1,650,000 | 850,000 | 1,690,000 | ||||||||||||
Common Stock, Par Value | $ 0.0001 | $ 0.0001 | ||||||||||||||||||
Units Sold | 250,000 | 25,000 | ||||||||||||||||||
Stock Issued for Conversion of Debt | 10,129,942 | 2,347,285 | ||||||||||||||||||
March 26, 2014 | ||||||||||||||||||||
Convertible debt, net | $ 290,000 | |||||||||||||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 10.00% | |||||||||||||||||||
Common Stock, Shares Issued | 500,000 | |||||||||||||||||||
Common Stock, Par Value | $ 0.50 | |||||||||||||||||||
June 23, 2014 | ||||||||||||||||||||
Convertible debt, net | $ 30,000 | |||||||||||||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 10.00% | |||||||||||||||||||
August 27, 2014 | ||||||||||||||||||||
Convertible debt, net | $ 50,000 | |||||||||||||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 10.00% | |||||||||||||||||||
Common Stock, Shares Issued | 50,000 | |||||||||||||||||||
October, 2014 | ||||||||||||||||||||
Convertible debt, net | $ 60,000 | |||||||||||||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 10.00% | |||||||||||||||||||
Common Stock, Shares Issued | 150,000 | |||||||||||||||||||
One Year 10% Note | ||||||||||||||||||||
Convertible debt, net | $ 47,000 | $ 38,000 | ||||||||||||||||||
Short Term 10% Note | ||||||||||||||||||||
Convertible debt, net | $ 25,000 | |||||||||||||||||||
2, One Year 10% Notes | ||||||||||||||||||||
Convertible debt, net | $ 35,000 | |||||||||||||||||||
2 Short Term 10% Notes | ||||||||||||||||||||
Convertible debt, net | $ 125,000 | $ 75,000 | ||||||||||||||||||
[1] | Net of discount of $0 and $162,160 |
(5) Notes Payable - Related P34
(5) Notes Payable - Related Party (Details) - USD ($) | Dec. 31, 2017 | [1] | Dec. 31, 2016 | [1] | Aug. 31, 2015 | Feb. 15, 2013 | Nov. 15, 2012 |
Convertible debt, net | $ 1,132,251 | $ 95,000 | |||||
November 15, 2012 | |||||||
Convertible debt, net | $ 160,000 | ||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 10.00% | ||||||
February 15, 2013 | |||||||
Convertible debt, net | $ 50,000 | ||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 10.00% | ||||||
[1] | Net of discount of $0 and $162,160 |
(6) Stockholder' Equity (Detail
(6) Stockholder' Equity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Details | |||||||||
Shares of Common Stock Issued | 900,000 | 1,850,000 | 6,762,942 | 1,175,000 | 1,650,000 | 850,000 | 1,690,000 | ||
Warrants Issued for Future Purchase | 1,850,000 | 1,175,000 | 1,650,000 | 850,000 | 1,690,000 | 1,175,000 | |||
Warrants Issued in Exchange for Cash | $ 180,000 | $ 370,000 | $ 774,500 | $ 117,500 | $ 165,000 | $ 85,000 | $ 169,000 | ||
Shares issued for services, Shares | 285,000 | 244,514 | 75,000 | ||||||
Shares issued for services, Value | $ 31,600 | $ 26,000 | $ 19,031,877 | $ 513,197 |
(7) Equity Options and Warran36
(7) Equity Options and Warrants: Share-based Compensation, Stock Options, Activity (Details) - shares | Dec. 31, 2017 | Dec. 31, 2016 |
$0.20 | ||
Class of Warrant or Right, Outstanding | 275,000 | |
$0.35 | ||
Class of Warrant or Right, Outstanding | 1,850,000 | |
$0.50 | ||
Class of Warrant or Right, Outstanding | 14,342,000 | 7,867,000 |
$0.75 | ||
Class of Warrant or Right, Outstanding | 114,286 | |
$1.00 | ||
Class of Warrant or Right, Outstanding | 124,999 | |
Total Outstanding | ||
Class of Warrant or Right, Outstanding | 16,431,285 | 8,142,000 |
(8) Income Taxes_ Schedule of37
(8) Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Current Federal, State and Local, Tax Expense (Benefit) | $ (21) | $ (34) |
Current State and Local Tax Expense (Benefit) | $ (1.9) | $ 0 |
Temporary Differences, Net | 0.00% | |
Valuation Allowance | 22.90% | 35.00% |
Effective Tax Rate | 0.00% | 0.00% |
(8) Income Taxes_ Schedule of38
(8) Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 4,194,726 | $ 3,079,075 |
Stock Based Compensation Deferred Tax Assets | 4,381,662 | 207,859 |
Other Deferred Tax Assets | 647 | |
Deferred Tax Assets, Valuation Allowance | (8,577,388) | (2,872,726) |
Deferred Tax Assets, Net of Valuation Allowance, Current | $ 0 | 414,855 |
Stock Based Compensation Deferred Tax Liabilities | $ (414,855) |
(8) Income Taxes (Details)
(8) Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 6,119,517 | $ 752,829 |
(9) Commitments and Contingen40
(9) Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Operating Leases, Rent Expense | $ 13,220 | $ 7,360 |