Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Aug. 09, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Znergy, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 232,624,960 | |
Amendment Flag | false | |
Entity Central Index Key | 1,568,875 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 46,502 | $ 116,481 |
Accounts receivable, net | 195,515 | 112,818 |
Prepaid expenses | 41,706 | 35,365 |
Inventory | 469,868 | 444,606 |
Total current assets | 753,591 | 709,270 |
Building, equipment and furniture, net | 111,610 | 364,093 |
Intangible assets, net | 1,845 | 1,845 |
TOTAL ASSETS | 867,046 | 1,075,208 |
CURRENT LIABILITIES | ||
Accounts payable | 247,060 | 431,267 |
Accrued expenses | 147,435 | 179,628 |
Customer deposits | 43,069 | 39,453 |
Loan, building | 0 | 225,000 |
Loans from related parties | 671,337 | 171,518 |
Total current liabilities | 1,108,901 | 1,046,866 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS’ (DEFICIT) EQUITY | ||
Preferred stock, $0.0001 par value, 100,000,000 authorized shares; no shares issued and outstanding | 0 | 0 |
Common stock, $0.0001 par value; 500,000,000 shares authorized; 235,724,960 and 230,724,960 shares issued and 230,624,960 and 227,624,960 outstanding at March 31, 2018 and December 31, 2017, respectively | 23,572 | 23,072 |
Additional paid-in-capital | 13,266,358 | 12,444,488 |
Accumulated deficit | (13,531,785) | (12,439,218) |
Total Stockholders’ Equity (Deficit) | (241,855) | 28,342 |
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ 867,046 | $ 1,075,208 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Preferred stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 230,624,960 | 230,724,960 |
Common stock, shares outstanding | 230,724,960 | 227,624,960 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | $ 482,972 | $ 143,679 |
Cost of revenue | 229,628 | 58,046 |
Gross profit | 253,344 | 85,633 |
Selling, general and administrative expenses | 1,234,352 | 863,646 |
Loss from operations | (981,008) | (778,013) |
Other income (expense) | ||
Interest Expense | (111,559) | 0 |
Total other income | (111,559) | 0 |
Provision for income taxes | 0 | 0 |
Net loss | $ (1,092,567) | $ (778,013) |
Net loss per common share - basic and diluted (in Dollars per share) | $ (0.01) | $ 0 |
Weighted average number of shares outstanding - basic and diluted (in Shares) | 214,644,216 | 196,015,000 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - 3 months ended Mar. 31, 2018 - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2017 | $ 23,072 | $ 12,444,488 | $ (12,439,218) | $ 28,342 |
Balance (in Shares) at Dec. 31, 2017 | 230,724,960 | 227,624,960 | ||
Stock and warrants issued for debt conversion | $ 500 | 771,129 | $ 771,629 | |
Stock and warrants issued for debt conversion (in Shares) | 5,000,000 | |||
Warrants issued with debt | $ 0 | 50,741 | 0 | 50,741 |
Net loss | 0 | 0 | (1,092,567) | (1,092,567) |
Balance at Mar. 31, 2018 | $ 23,572 | $ 13,266,358 | $ (13,531,785) | $ (241,855) |
Balance (in Shares) at Mar. 31, 2018 | 235,724,960 | 230,724,960 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS USED IN OPERATING ACTIVITIES: | ||
Net loss | $ (1,092,567) | $ (778,013) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 7,830 | 234 |
Loss on sale of building | 29,739 | 0 |
Common stock and options issued for services | 771,629 | 784,189 |
Non-cash interest expense | 105,560 | 0 |
Accounts receivable | (82,697) | (37,078) |
Prepaid expenses | (6,341) | 1,250 |
Inventory | (25,262) | 1,411 |
Accounts payable & accrued expenses | (216,400) | (16,024) |
Customer deposits | 3,616 | (6,605) |
Net cash used in operating activities | (504,893) | (50,636) |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (10,086) | 0 |
Net cash used in investing activities | (10,086) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of advances from third parties | 0 | 20,750 |
Proceeds from advances from related parties | 445,000 | 7,873 |
Net cash provided by financing activities | 445,000 | 28,623 |
DECREASE IN CASH | (69,979) | (22,013) |
CASH, BEGINNING OF PERIOD | 116,481 | 40,507 |
CASH, END OF PERIOD | 46,502 | 18,494 |
Non-cash investing and financing activities: | ||
Transfer of building to related party in exchange for payment of loan | $ 225,000 | $ 0 |
NOTE 1 - NATURE OF BUSINESS AND
NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION Znergy, Inc., (formerly Mazzal Holding Corp., formerly Boston Investment and Development Corp.) is a Nevada corporation (the “Company”), incorporated on January 23, 2013. The original business plan of the Company was the construction and management of multi-family home developments and the subsequent sale thereof. On October 26, 2015 the Company acquired Global ITS, Inc. and its wholly owned subsidiary, Znergy, Inc. in order to expand into the Energy Efficiency (EE) marketplace, focusing on commercial lighting and green project financing. On February 9, 2016, the Company agreed to sell to the Mazzal Trust the real property which the Trust had previously sold to the Company and the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company’s common stock owned by the Trust. The Company is now focused solely on the EE marketplace with an emphasis on LED retrofitting and installing new lamps. Basis of Presentation The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these interim condensed consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”) on Form 10-K. The results of operations presented in this quarterly report are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments and accruals, consisting only of normal recurring adjustments that are necessary for a fair presentation of the results of all interim periods reported herein. Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Revenue Recognition When Znergy gets an order from a customer – either verbally or through a written purchase order for products such as individual lights or fixtures, but is not part of an installation contract, the Company recognizes the revenue when the goods are shipped, and title has passed to the customer. In these arrangements, we have determined that there is one performance obligation and that revenue should be recognized at the point in time that title passes to the customer. In the first quarter, this amounted to $24,095 or approximately 5% of the quarterly revenue. Installation contract revenue, $408,437 for the first quarter or approximately 85% of the quarterly revenue, is recognized when the contract is considered complete by the customer, through a written customer acceptance form. Each contract for installation of lighting and fixtures, consists of labor and materials, and is given a unique number in the system. Each contract is accounted for individually. The Company identifies the performance obligations, which include labor and materials and are accounted for as one contract. The transaction price is identified in advance with an agreed proposal between the Company and the customer and the price can be adjusted if, during the installation process, changes are made during the process. Under this method, contract costs are accumulated as deferred assets and billings and/or cash receipts are recorded to a deferred revenue liability account during the contract period, but no revenues, costs, or profits are recognized in operations until the completion of the contract. Costs include direct material, direct labor, subcontract labor, and allocable indirect costs. All unallocable indirect costs and corporate general and administrative costs are charged in the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. A contract is considered complete when accepted by the customer that the Company has satisfied its performance obligations. In the first quarter there was approximately $31,000 in contracts which were not complete by the end of the first quarter The Company quotes its customers the total costs of product installation and materials minus the expected rebates, if any, from a given utility. For projects larger than $10,000, rebates must be pre-approved by the utility. Rebate revenue is recognized when collectability is assured which is when payment is received by the Company. |
NOTE 2 - GOING CONCERN
NOTE 2 - GOING CONCERN | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Substantial Doubt about Going Concern [Text Block] | NOTE 2 – GOING CONCERN The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of March 31, 2018, the company had a working capital deficit of $355,310, insufficient cash resources to meet its planned business objectives, and accumulated losses of $13,531,785. The Company intends to fund operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through June 2019. As a result, the Company is seeking additional funding through debt and equity financing arrangements, or other funding opportunities. The Company’s success is dependent upon, among other things, obtaining the additional financing to continue operations and to execute its business plan. No assurances can be made that management will be successful in pursuing any of these strategies. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
NOTE 3 - BUILDING, EQUIPMENT AN
NOTE 3 - BUILDING, EQUIPMENT AND FURNITURE, NET | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE 3 – BUILDING, EQUIPMENT AND FURNITURE, NET On July 22, 2017, the Company entered into a purchase agreement for a property located at 808A South Huntington Street, Syracuse, Indiana. The purchase price was $255,000 of which $30,000 was paid on July 22, 2017 with the balance of $225,000 due 180 days after closing. There was no interest accruing on the debt. The Company closed on the property on September 1, 2017. th |
NOTE 4 - INTANGIBLE ASSETS
NOTE 4 - INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Intangible Assets Disclosure [Text Block] | NOTE 4 – INTANGIBLE ASSETS The Company was granted a federally registered trademark for “ZNERGY”. The cost of applying for and prosecuting this trademark was $1,845 which cost was accounted for as a non-amortizing intangible asset. |
NOTE 5 - LOANS FROM RELATED PAR
NOTE 5 - LOANS FROM RELATED PARTY | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Short-term Debt [Text Block] | NOTE 5 – LOANS FROM RELATED PARTIES March 31, 2018 December 31, 2017 R. Mikles $ 274,218 $ 47,248 W. Miller $ 349,711 $ 124,270 P. Ladd $ 47,408 $ 0 $ 671,337 $ 171,518 On November 15, 2017, the Company executed an unsecured promissory note in the amount of $50,000, payable to the Company’s chairman, Rick Mikles. The note was payable on December 1, 2017 with interest at 4% per annum. On December 1, 2017, the payment date was extended to June 1, 2018. The balance at March 31, 2018 was $50,745 which includes unpaid interest. As of the date of this report, the principal and interest remain unpaid. On January 8, 2018, the Company executed an unsecured promissory note in the amount of $150,000 payable to Mr. Wayne Miller, a shareholder of the Company. The note was due and payable on April 8, 2018, with interest of $6,000. Under the note agreement, the Company issued warrants to purchase 1,000,000 shares at an exercise price of $0.15 per share. The warrants expire on the first anniversary date of the initial exercise date of the warrants. The value of the warrants was calculated based on its relative fair value basis to the debt and carried as a reduction of the related debt on the balance sheet and amortized to interest expense through the maturity date of the note. The balance at March 31, 2018 was $149,244, which includes unpaid principal and interest of $153,498, reduced by the unamortized accretion of debt of $4,254. As of the date of this Report, the principal and one interest payment of $3,000 remains unpaid. Pursuant to the terms of the note, there was a 15-day grace period, which ended on April 23, 2018 at which time a 15% penalty of the unpaid balance becomes due and payable together with the unpaid principal and accrued interest. On February 15, 2018, the Company executed a promissory note in the amount of $25,000 payable to Rick Mikles, the Company’s Chairman and secured by the Company’s inventory. The note was due and payable on June 1, 2018 together with interest at 4% per annum. The balance at March 31, 2018 was $25,419 which includes unpaid interest. As of the date of this Report, the note and accrued interest remain unpaid. On March 2, 2018, the Company executed an unsecured promissory note in the amount of $200,000 payable to Rick Mikles, the Company’s Chairman. The note was due on June 1, 2018 together with interest of $2,500. The balance at March 31, 2018 was $198,054 which includes unpaid interest of $806 and an offset of $2,72 due to prior advances made to him by the Company. As of the date of this Report, the note and accrued interest remain unpaid. On March 22, 2018, the Company executed an unsecured promissory note in the amount of $50,000 payable to Paul Ladd, a shareholder. The note was due and payable on May 21, 2018 together with interest of $1,000. Under the note agreement, the Company issued warrants to purchase 50,000 shares at an exercise price of $0.15 per share. The warrants expire on the first anniversary date of the initial exercise date of the warrants. The value of the warrants was calculated based on its relative fair value basis to the debt and carried as a reduction of the related debt on the balance sheet and amortized to interest expense through the maturity date of the note. The balance at March 31, 2018 was $47,408 which includes the unpaid principal and interest of $50,073, reduced by the unamortized accretion of $2,665. As of the date of this Report, the note and accrued interest remain unpaid. On March 22, 2018, the Company also borrowed $20,000 in a non-interest bearing short-term payable to Wayne Miller. There is no formal promissory note and payment is due on demand. |
NOTE 6 - STOCKHOLDERS' EQUITY
NOTE 6 - STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 6 – STOCKHOLDERS’ EQUITY Common Stock On February 12, 2018, the Company entered into an employment agreement with Rick Mikles, the Company’s Chairman, to become Chief Marketing Officer. The agreement has a three-year term, an annual base salary of $26,000 and a quarterly payment based on 3% of the quarterly revenue recognized by the Company. Mr. Mikles was granted 5,000,000 shares of the Company’s common stock, valued at its trading price of $0.10 per share, which vested immediately. He was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest one option per every 2 dollars of revenue recognized by the Company. The Company has entered into employment agreements with their sales representatives, either as independent contractors or employees of the Company. The employees or contractors have at will contracts to provide sales and sales support services. In addition to a salary and commission, the Company has issued options to purchase common stock of the Company. The expiration periods range from 1-3 years, with options to purchase shares at $0.10 per share, vesting over three years. The options granted in the aggregate total 5,700,000 shares to a total of 8 individuals, of which 5,000,000 shares are performance-based options and 700,000 are time-based options which vest over 8 quarters, Options The Company has issued and outstanding two types of options, time vesting and performance vesting. Options - Time Vesting There were 14,400,000 options issued and outstanding as of March 31, 2018. The following table shows the stock option activity during the periods ended March 31, 2018 and March 31, 2017, respectively: March 31, 2018 Number of Options Weighted Average Exercise Price Options outstanding at beginning of year 14,400,000 $ 0.10 Changes during the period: Granted - at market price - $ 0.10 Exercised - Forfeited - $ 0.10 Options outstanding at end of period 14,400,000 $ 0.10 Options exercisable at end of period 8,150,002 $ 0.10 Weighted average fair value of options granted during the period $ - $ - Options issued were valued using the Black-Sholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.53% average risk-free rate and 265.18% average volatility. Costs incurred in respect of stock based compensation for employees, advisors and consultants for the three month period ended March 31, 2018 was $129,562. Unrecognized compensation costs related to options for the three month period ended March 31, 2018 was $563,029, which is expected to be recognized ratably over approximately 18 months. Options - Performance Vesting There were 31,341,094 options issued and outstanding as of December 31, 2017. The options vest based on Company performance with one option vesting for every two dollars of revenue, vesting quarterly. The following table shows the stock option activity during the period ended March 31, 2018 : March 31, 2018 Number of Options Weighted Average Exercise Price Options outstanding at beginning of year 31,341,094 $ 0.10 Changes during the period: Granted - at market price 5,500,000 $ 0.10 Exercised - Expired/Forfeit - $ 0.10 Options outstanding at end of period 36,841,094 $ 0.10 Options exercisable at end of period 5,492,092 $ 0.10 Weighted average fair value of options granted during the period $ 511,500 $ 0.10 Options issued were valued using the Black-Sholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 2.34% average risk-free rate and 209% average volatility. Costs incurred in respect of stock based compensation for employees, advisors and consultants for the three months ended March 31, 2018 was $142,067. Unrecognized compensation costs related to options for the three months ended March 31, 2018 was $2,871,009 which is expected to be recognized ratably over approximately 33 months. Warrants The following table shows the warrant activity during the period ended March 31, 2018: Weighted Number Average Of Exercise Warrants Price Warrants outstanding at beginning of year 16,924,960 Changes during the period: Granted 1,050,000 $ 0.15 Exercised - Expired - Warrants outstanding at end of period 17,974,960 $ 0.15 Warrants exercisable at end of period 17,974,960 $ - Warrants issued were valued using the Black-Scholes model assuming zero dividends, a $0.15 strike price, 1-year expiration, 2.09% risk-free rate and volatility of 286%. The relative fair value of warrants issued to related parties with debt was recorded as interest expense and was $50,741 for the three months ended March 31, 2018. |
NOTE 7 - LITIGATION
NOTE 7 - LITIGATION | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Legal Matters and Contingencies [Text Block] | NOTE 7 – LITIGATION On September 26, 2016, Registrant filed in the United States District Court for the Middle District of Florida a Complaint against defendants The Mazzal Trust, Nissim S. Trabelsi and Shawn Telsi (collectively the “Defendants”), seeking the disgorgement of profits obtained by Defendants and certain of their shareholder affiliates defined under Rule 16a-1(a)(1) under the Exchange Act defined below (collectively, the “Group”) through “short swing profits” in violation of Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, Registrant alleged that the Group acted under the guidance and control of the Defendants, whose individual defendants had filed forms 3 and 4 with the Securities and Exchange Commission (the “SEC”, declaring themselves to be “insiders” for the purpose of Section 16(b). The Group owned 100% of the shares of Registrant at the time that members of the group were engaged in the sale and purchase of such shares. The sales and purchases referenced all occurred with six months of other sales and purchases, subjecting Defendants to disgorge to Registrant all profits made by the Group in such sales and purchases. As detailed in paragraphs 16-22 of the Complaint, the total profits received by the Group is $1,695,689. Accordingly, Registrant has demanded the return of all such profits to Registrant plus the statutory payment of attorneys’ fees. On August 24, 2017, the Plaintiff received a Clerk’s Entry of Default against Nissim Trabelsi. The Plaintiff filed a Motion for Default Judgment for damages against Trabelsi on September 13, 2017, which to date has not been addressed by the Court. On March 5, 2018, Nissim Trabelsi filed a notice of bankruptcy. The Plaintiff is still pursuing its options in the Case and the Court has yet to address the service issues with the Mazzal Trust. On January 26, 2017, the Company received an email from its transfer agent, VStock Transfer, LLC, (“VStock”) informing the Company that it had been served with a Summons and Complaint (B2 Opportunity Fund (“B2”) v. Trabelsi et al. - Index No.:17-CV-10043, the “Claim”) and further stating that the Company was obligated to indemnify VStock for fees and expenses incurred in defending the Claim. The Company responded on February 24, 2017 stating that (1) we reviewed the Transfer Agent and Registrar Agreement between Mazzal and VStock dated May 20, 2014 and that in Article VI(c) of that agreement it states that indemnification will not be offered if the acts of VStock constitute bad faith or gross negligence, (2) we reviewed the lawsuit filed by B2 against VStock and others and find that VStock’s actions constitute gross negligence and perhaps bad faith, and we therefore deny indemnification of VStock relating to the Claim, and (3) should VStock take any action to seek indemnification by Znergy in any manner, Znergy will either join B2 in its lawsuit or will file an action on its own. The Company terminated its agreement with VStock. Management cannot at this time estimate what, if any, financial impact this matter will have on the Company. |
NOTE 8 - CUSTOMER CONCENTRATION
NOTE 8 - CUSTOMER CONCENTRATION | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 8 – CUSTOMER CONCENTRATION During the three months ended March 31, 2018, the Company recognized installation revenue of $178,898 from one customer which represented approximately 37% of revenue for the quarter. At March 31, 2018, that customer’s accounts receivable balance of $178,898 represented approximately 91% of the accounts receivable balance at March 31, 2018. |
NOTE 9 - SUBSEQUENT EVENTS
NOTE 9 - SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 9 – SUBSEQUENT EVENTS On May 11, 2018, the Company received $30,000 as a short-term advance from its Chairman, Rick Mikles and on May 18, 2018 and on May 25, 2018, the Company received an additional $50,000 and $10,000, respectively, as additional short-term advances from the Company’s Chairman, Rick Mikles. The amounts are payable on demand and do not accrue interest. On June 5, 2018, the Company received $30,000 from one of its investors and executed a promissory note which matures on June 30, 2018. The note is senior to the other notes and obligations. Under the note obligation, the Company issued warrants to purchase 1,000,000 shares at an exercise price of $0.10 per share. The warrants expire on the first anniversary date of the initial exercise date of the warrants. As of the date of this report, the note remains unpaid. The contract for William McMahon to provide interim Chief Financial Officer duties expired June 15, 2018. The Company has not replaced the position. |
NOTE 5 - LOANS FROM RELATED P16
NOTE 5 - LOANS FROM RELATED PARTY (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Schedule of Short-term Debt [Table Text Block] | March 31, 2018 December 31, 2017 R. Mikles $ 274,218 $ 47,248 W. Miller $ 349,711 $ 124,270 P. Ladd $ 47,408 $ 0 $ 671,337 $ 171,518 |
NOTE 6 - STOCKHOLDERS' EQUITY (
NOTE 6 - STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | There were 14,400,000 options issued and outstanding as of March 31, 2018. The following table shows the stock option activity during the periods ended March 31, 2018 and March 31, 2017, respectively: March 31, 2018 Number of Options Weighted Average Exercise Price Options outstanding at beginning of year 14,400,000 $ 0.10 Changes during the period: Granted - at market price - $ 0.10 Exercised - Forfeited - $ 0.10 Options outstanding at end of period 14,400,000 $ 0.10 Options exercisable at end of period 8,150,002 $ 0.10 Weighted average fair value of options granted during the period $ - $ - |
Share-based Compensation, Stock Options, Activity [Table Text Block] | The following table shows the stock option activity during the period ended March 31, 2018 : March 31, 2018 Number of Options Weighted Average Exercise Price Options outstanding at beginning of year 31,341,094 $ 0.10 Changes during the period: Granted - at market price 5,500,000 $ 0.10 Exercised - Expired/Forfeit - $ 0.10 Options outstanding at end of period 36,841,094 $ 0.10 Options exercisable at end of period 5,492,092 $ 0.10 Weighted average fair value of options granted during the period $ 511,500 $ 0.10 |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | The following table shows the warrant activity during the period ended March 31, 2018: Weighted Number Average Of Exercise Warrants Price Warrants outstanding at beginning of year 16,924,960 Changes during the period: Granted 1,050,000 $ 0.15 Exercised - Expired - Warrants outstanding at end of period 17,974,960 $ 0.15 Warrants exercisable at end of period 17,974,960 $ - |
NOTE 1 - NATURE OF BUSINESS A18
NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) | Feb. 09, 2016 | Mar. 13, 2013 | Mar. 31, 2018 |
Disclosure Text Block [Abstract] | |||
Stock Repurchased and Retired During Period, Shares (in Shares) | 149,950,000 | ||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 150,000,000 | ||
Revenue, Remaining Performance Obligation, Amount | $ 24,095 | ||
Revenue, Remaining Performance Obligation, Percentage | 5.00% | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 408,437 | ||
Revenue, Installation Contract, Percentage | 85.00% | ||
Deferred Revenue | $ 31,000 |
NOTE 2 - GOING CONCERN (Details
NOTE 2 - GOING CONCERN (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working Capital (Deficit) | $ (355,310) | |
Retained Earnings (Accumulated Deficit) | $ (13,531,785) | $ (12,439,218) |
NOTE 3 - BUILDING, EQUIPMENT 20
NOTE 3 - BUILDING, EQUIPMENT AND FURNITURE, NET (Details) - USD ($) | Mar. 09, 2018 | Jul. 22, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
NOTE 3 - BUILDING, EQUIPMENT AND FURNITURE, NET (Details) [Line Items] | ||||
Property, Plant and Equipment, Additions | $ 255,000 | |||
Payments to Acquire Property, Plant, and Equipment | 30,000 | $ 10,086 | $ 0 | |
Gain (Loss) on Disposition of Property Plant Equipment | $ 29,739 | $ (29,739) | $ 0 | |
Board of Directors Chairman [Member] | ||||
NOTE 3 - BUILDING, EQUIPMENT AND FURNITURE, NET (Details) [Line Items] | ||||
Related Party Transaction, Amounts of Transaction | $ 225,000 | |||
Payments Due 180 Days After Closing [Member] | ||||
NOTE 3 - BUILDING, EQUIPMENT AND FURNITURE, NET (Details) [Line Items] | ||||
Payments to Acquire Property, Plant, and Equipment | $ 225,000 |
NOTE 4 - INTANGIBLE ASSETS (Det
NOTE 4 - INTANGIBLE ASSETS (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disclosure Text Block [Abstract] | |
Finite-lived Intangible Assets Acquired | $ 1,845 |
NOTE 5 - LOANS FROM RELATED P22
NOTE 5 - LOANS FROM RELATED PARTY (Details) - USD ($) | Mar. 22, 2018 | Mar. 02, 2018 | Feb. 15, 2018 | Jan. 08, 2018 | Dec. 06, 2017 | Dec. 01, 2017 | Nov. 15, 2017 | Mar. 31, 2018 |
NOTE 5 - LOANS FROM RELATED PARTY (Details) [Line Items] | ||||||||
Notes Payable | $ 149,244 | |||||||
Interest Expense, Debt | 50,741 | |||||||
Long-term Debt, Gross | 153,498 | |||||||
Debt Instrument, Unamortized Discount | 4,254 | |||||||
Mr. Wayne Miller, a Shareholder [Member] | ||||||||
NOTE 5 - LOANS FROM RELATED PARTY (Details) [Line Items] | ||||||||
Debt Instrument, Face Amount | 20,000 | |||||||
Paul Ladd, a Shareholder [Member] | ||||||||
NOTE 5 - LOANS FROM RELATED PARTY (Details) [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 50,000 | |||||||
Debt Instrument, Maturity Date | May 21, 2018 | |||||||
Notes Payable | 47,408 | |||||||
Interest Expense, Debt | 50,073 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 50,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 0.15 | |||||||
Debt Instrument, Unamortized Discount | 2,665 | |||||||
Interest Payable, Current | 1,000 | |||||||
Executing Promissory Note [Member] | Board of Directors Chairman [Member] | ||||||||
NOTE 5 - LOANS FROM RELATED PARTY (Details) [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 50,000 | |||||||
Debt Instrument, Maturity Date | Jun. 1, 2018 | Dec. 1, 2017 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | |||||||
Notes Payable | 50,745 | |||||||
Note payable #1[Member] | Board of Directors Chairman [Member] | ||||||||
NOTE 5 - LOANS FROM RELATED PARTY (Details) [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 25,000 | |||||||
Debt Instrument, Maturity Date | Jun. 1, 2018 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | |||||||
Notes Payable | 25,419 | |||||||
Note payable #1[Member] | Executing Promissory Note [Member] | Mr. Wayne Miller, a Shareholder [Member] | ||||||||
NOTE 5 - LOANS FROM RELATED PARTY (Details) [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 150,000 | |||||||
Debt Instrument, Maturity Date | Mar. 12, 2018 | |||||||
Notes Payable | 180,467 | |||||||
Interest Expense, Debt | $ 6,000 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 1,000,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 0.15 | |||||||
Debt Instrument, Payment Terms | 15-day grace period granted, which expired on March 27, 2018, at which time, a 15% penalty of the unpaid balance become due | |||||||
Note payable #2 [Member] | Board of Directors Chairman [Member] | ||||||||
NOTE 5 - LOANS FROM RELATED PARTY (Details) [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 200,000 | |||||||
Debt Instrument, Maturity Date | Jun. 1, 2018 | |||||||
Notes Payable | 198,054 | |||||||
Interest Expense, Debt | 806 | |||||||
Interest Payable, Current | 2,500 | |||||||
Debt Instrument, Increase (Decrease), Other, Net | (2) | |||||||
Note payable #2 [Member] | Executing Promissory Note [Member] | Mr. Wayne Miller, a Shareholder [Member] | ||||||||
NOTE 5 - LOANS FROM RELATED PARTY (Details) [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 150,000 | |||||||
Debt Instrument, Maturity Date | Apr. 8, 2018 | |||||||
Interest Expense, Debt | $ 6,000 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 1,000,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 0.15 | |||||||
Debt Instrument, Payment Terms | there was a 15-day grace period, which ended on April 23, 2018 at which time a 15% penalty of the unpaid balance becomes due and payable together with the unpaid principal and accrued interest | |||||||
Convertible Notes Payable | $ 3,000 |
NOTE 5 - LOANS FROM RELATED P23
NOTE 5 - LOANS FROM RELATED PARTY (Details) - Schedule of Related Party Loans - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||
Due to related party | $ 671,337 | $ 171,518 |
Board of Directors Chairman [Member] | ||
Short-term Debt [Line Items] | ||
Due to related party | 274,218 | 47,248 |
Mr. Wayne Miller, a Shareholder [Member] | ||
Short-term Debt [Line Items] | ||
Due to related party | 349,711 | 124,270 |
Paul Ladd, a Shareholder [Member] | ||
Short-term Debt [Line Items] | ||
Due to related party | $ 47,408 | $ 0 |
NOTE 6 - STOCKHOLDERS' EQUITY24
NOTE 6 - STOCKHOLDERS' EQUITY (Details) - USD ($) | Feb. 12, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price (in Dollars per share) | $ 0.15 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 1 year | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.09% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 286.00% | ||
Interest Expense, Debt (in Dollars) | $ 50,741 | ||
Chief Marketing Officer [Member] | |||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Employment Agreement Base Salary (in Dollars) | $ 26,000 | ||
Percentage of Quarterly Revenue Recognized | 3.00% | ||
Stock Granted, Value, Share-based Compensation, Gross (in Dollars) | $ 5,000,000 | ||
Shares Issued, Price Per Share (in Dollars per share) | $ 0.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 5,000,000 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 0.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | vest one option per every 2 dollars of revenue recognized by the Company | ||
Time Vesting [Member] | |||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 0.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 14,400,000 | 14,400,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price (in Dollars per share) | $ 0.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.53% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 265.18% | ||
Share-based Compensation (in Dollars) | $ 129,562 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | $ 563,029 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 18 months | ||
Performance Vesting [Member] | |||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 5,500,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | The options vest based on Company performance with one option vesting for every two dollars of revenue, vesting quarterly | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares) | 31,341,094 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price (in Dollars per share) | $ 0.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.34% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 209.00% | ||
Share-based Compensation (in Dollars) | $ 142,067 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars) | $ 2,871,009 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 33 months | ||
Independent Contractors or Employees, 8 Individuals [Member] | |||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 5,700,000 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 0.10 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Independent Contractors or Employees, 8 Individuals [Member] | Time Vesting [Member] | |||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 700,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 24 months | ||
Independent Contractors or Employees, 8 Individuals [Member] | Performance Vesting [Member] | |||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares) | 5,000,000 | ||
Independent Contractors or Employees, 8 Individuals [Member] | Minimum [Member] | |||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 1 year | ||
Independent Contractors or Employees, 8 Individuals [Member] | Maximum [Member] | |||
NOTE 6 - STOCKHOLDERS' EQUITY (Details) [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 3 years |
NOTE 6 - STOCKHOLDERS' EQUITY25
NOTE 6 - STOCKHOLDERS' EQUITY (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable - Time Vesting [Member] | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
NOTE 6 - STOCKHOLDERS' EQUITY (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Line Items] | |
Options outstanding at beginning of year (in Shares) | shares | 14,400,000 |
Options outstanding at beginning of year | $ 0.10 |
Granted - at market price | 0.10 |
Forfeited | $ 0.10 |
Options outstanding at end of period (in Shares) | shares | 14,400,000 |
Options outstanding at end of period | $ 0.10 |
Options exercisable at end of period (in Shares) | shares | 8,150,002 |
Options exercisable at end of period | $ 0.10 |
Weighted average fair value of options granted during the period (in Shares) | shares | 0 |
Weighted average fair value of options granted during the period | $ 0 |
NOTE 6 - STOCKHOLDERS' EQUITY26
NOTE 6 - STOCKHOLDERS' EQUITY (Details) - Schedule of Share-based Compensation, Stock Options, Activity - Performance Vesting [Member] | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
NOTE 6 - STOCKHOLDERS' EQUITY (Details) - Schedule of Share-based Compensation, Stock Options, Activity [Line Items] | |
Options outstanding (in Shares) | shares | 31,341,094 |
Options outstanding, Weighted Average Exercise Price | $ 0.10 |
Options exercisable (in Shares) | shares | 5,492,092 |
Options exercisable, Weighted Average Exercise Price | $ 0.10 |
Options granted during the period (in Dollars) | $ | $ 511,500 |
Weighted average fair value of options granted during the period | $ 0.10 |
Options issued (in Shares) | shares | 5,500,000 |
Options issued, Weighted Average Exercise Price | $ 0.10 |
Options expired, Weighted Average Exercise Price | $ 0.10 |
Options outstanding (in Shares) | shares | 36,841,094 |
NOTE 6 - STOCKHOLDERS' EQUITY27
NOTE 6 - STOCKHOLDERS' EQUITY (Details) - Schedule of Stockholders' Equity Note, Warrants or Rights | 3 Months Ended |
Mar. 31, 2018shares | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Abstract] | |
Warrants outstanding at beginning of year | 16,924,960 |
Changes during the period: | |
Granted | 1,050,000 |
Granted | 0.15 |
Exercised | 0 |
Expired | 0 |
Warrants outstanding at end of period | 17,974,960 |
Warrants outstanding at end of period | 0.15 |
Warrants exercisable at end of period | 17,974,960 |
NOTE 7 - LITIGATION (Details)
NOTE 7 - LITIGATION (Details) | Sep. 26, 2016USD ($) |
Registrant Vs. the Group [Member] | |
NOTE 7 - LITIGATION (Details) [Line Items] | |
Loss Contingency, Damages Sought, Value | $ 1,695,689 |
The Group [Member] | |
NOTE 7 - LITIGATION (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 100.00% |
NOTE 8 - CUSTOMER CONCENTRATI29
NOTE 8 - CUSTOMER CONCENTRATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
NOTE 8 - CUSTOMER CONCENTRATION (Details) [Line Items] | ||
Revenues | $ 482,972 | $ 143,679 |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
NOTE 8 - CUSTOMER CONCENTRATION (Details) [Line Items] | ||
Revenues | $ 178,898 | |
Concentration Risk, Percentage | 37.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||
NOTE 8 - CUSTOMER CONCENTRATION (Details) [Line Items] | ||
Concentration Risk, Percentage | 91.00% | |
Accounts Receivable, Net | $ 178,898 |
NOTE 9 - SUBSEQUENT EVENTS (Det
NOTE 9 - SUBSEQUENT EVENTS (Details) - USD ($) | Jun. 05, 2018 | May 25, 2018 | May 18, 2018 | May 11, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
NOTE 9 - SUBSEQUENT EVENTS (Details) [Line Items] | ||||||
Proceeds from Related Party Debt | $ 445,000 | $ 7,873 | ||||
Subsequent Event [Member] | ||||||
NOTE 9 - SUBSEQUENT EVENTS (Details) [Line Items] | ||||||
Proceeds from Related Party Debt | $ 10,000 | $ 50,000 | $ 30,000 | |||
Debt Instrument, Face Amount | $ 30,000 | |||||
Debt Instrument, Maturity Date | Jun. 30, 2018 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares) | 1,000,000 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 0.10 |