Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 22, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Blow & Drive Interlock Corp | |
Entity Central Index Key | 1,586,495 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 16,327,167 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | $ 40,075 | $ 9,103 |
Accounts receivable, net | 31,075 | 1,591 |
Prepaid expenses | 486 | 2,573 |
Inventories | 10,650 | 10,365 |
Total Current Assets | 82,286 | 23,632 |
Other Assets | ||
Deposits | 20,825 | 6,225 |
Furniture and equipment | 167,364 | 45,647 |
Total Assets | 270,475 | 75,504 |
Current Liabilities | ||
Accounts payable | 33,823 | 10,367 |
Accrued expenses | 49,619 | 53,881 |
Accrued interest | 1,760 | 2,000 |
Income taxes payable | 5,700 | 4,100 |
Deferred revenue | 120,673 | 81,674 |
Derivative liability | 70,937 | 51,325 |
Notes payable, current portion | 12,844 | 10,200 |
Notes payable - related party, current portion | 47,431 | 54,341 |
Total Current Liabilities | 342,787 | 267,888 |
Long term liabilities | ||
Notes payable, net of current portion and discount | 3,819 | |
Notes payable - related party, net of current portion and discount | 78,740 | 86,066 |
Convertible note payable, net of current portion and discount | 19,445 | 12,614 |
Royalty notes payable, net of current portion and discount | 14,793 | |
Accrued royalties payable | 120,000 | |
Total Liabilities | 579,584 | 366,568 |
Stockholders' Equity (Deficit) | ||
Preferred stock, $0.001 par value, 20,000,000 shares authorized; none outstanding | ||
Common stock, $0.001 par value, 100,000,000 shares authorized; 16,260,500 and 15,006,750 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 1,626 | 1,500 |
Additional paid-in capital | 762,733 | 438,547 |
Accumulated deficit | (1,073,468) | (731,111) |
Total Stockholders' Deficit | (309,109) | (291,064) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 270,475 | $ 75,504 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 16,260,500 | 15,006,750 |
Common stock, shares outstanding | 16,260,500 | 15,006,750 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Monitoring revenues | $ 95,176 | $ 134,655 | ||
Monitoring cost of revenue | 11,163 | 17,718 | ||
Gross Profit | 84,013 | 116,937 | ||
Operating expenses: | ||||
Payroll | 31,518 | 40,318 | 65,247 | 92,494 |
Professional fees | 36,985 | 22,138 | 61,621 | 47,000 |
General and administrative expenses | 125,402 | 30,438 | 191,959 | 50,662 |
Research and development | 45,130 | 57,630 | ||
Depreciation | 6,675 | 16,930 | ||
Common stock issued for services | 17,000 | 34,000 | ||
Total operating expenses | 217,580 | 138,024 | 369,757 | 247,786 |
Loss from operations | (133,567) | (138,024) | (252,820) | (247,786) |
Other income (expense): | ||||
Interest expense | (42,507) | (3,001) | (69,925) | (6,044) |
Change in fair value of derivative liability | 15,122 | (19,612) | ||
Total other income (expense) | (27,385) | (3,001) | (89,537) | (6,044) |
Net income (loss) | $ (160,952) | $ (141,025) | $ (342,357) | $ (253,830) |
Basic and dilutive loss per common share | $ (0.01) | $ 0 | $ (0.02) | $ 0 |
Weighted average number of common shares outstanding - basic and diluted | 15,407,687 | 14,978,198 | 15,407,687 | 14,932,453 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Deficit) (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning Balance at Dec. 31, 2015 | $ 1,500 | $ 438,547 | $ (731,111) | $ (291,064) |
Beginning Balance , shares at Dec. 31, 2015 | 15,006,750 | |||
Shares issued for services | $ 15 | 117,347 | 117,362 | |
Shares issued for services, shares | 147,750 | |||
Shares issued for cash | $ 103 | 157,397 | 157,500 | |
Shares issued for cash, shares | 1,026,000 | |||
Shares issued related to debt | $ 8 | 49,442 | 49,450 | |
Shares issued related to debt, shares | 80,000 | |||
Net loss | (342,357) | (342,357) | ||
Ending Balance at Jun. 30, 2016 | $ 1,626 | $ 762,733 | $ (1,073,468) | $ (309,109) |
Ending Balance , shares at Jun. 30, 2016 | 16,260,500 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (342,357) | $ (253,830) |
Adjustments to reconcile from net loss to net cash used in operating activities: | ||
Depreciation and amortization | 16,930 | 240 |
Shares issues for services | 117,362 | |
Amortization of debt discount | 54,005 | |
Change in fair value of derivative liability | 19,612 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (29,484) | |
Prepaid expenses | 2,087 | (924) |
Deposits | (14,600) | (6,225) |
Accounts payable | 23,456 | |
Accrued expenses | (2,662) | (5,115) |
Accrued interest | (240) | (9,412) |
Deferred revenue | 38,999 | |
Net cash used in operating activities | (116,892) | (275,266) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (138,932) | (2,398) |
Net cash used in investing activities | (138,932) | (2,398) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 209,099 | |
Repayments of notes payable | (78,761) | (3,719) |
Proceeds from issuance of common stock | 157,500 | 85,000 |
Net cash provided by financing activities | 287,838 | 81,281 |
Net increase (decrease) in cash | 32,014 | (196,383) |
Cash, beginning of period | 9,103 | 272,692 |
Cash, end of period | 40,075 | 76,309 |
Supplemental disclosure of cash flow information: | ||
Interest | 15,351 | 15,308 |
Income taxes | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued for services | 117,362 | |
Establishment of debt discount for royalty notes | $ 120,000 |
Organization and Nature of Busi
Organization and Nature of Business | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization and Nature of Business | Note 1 - Organization and Nature of Business Blow& Drive Interlock (the Company) was incorporated on July 2, 2013 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company markets and rents alcohol ignition interlock devices to DUI/DWI offenders as part of their mandatory court or motor vehicle department programs. The Company has approval for its device in the following states: California, Arizona, Oregon, Kentucky, Tennessee and Texas. In 2015, The Company formed BDI Manufacturing, Inc., an Arizona corporation, which is a 100% wholly owned subsidiary of Blow & Drive Interlock Corporation. The Company markets, installs and monitors a breath alcohol ignition interlock device (BAIID) called the BDI-747/1, which is a mechanism that is installed on the steering column of an automobile and into which a driver exhales. The device in turn provides a blood-alcohol concentration analysis. If the drivers blood-alcohol content is higher than a certain pre-programmed limit, the device prevents the ignition from engaging and the automobile from starting. These devices are often required for use by DUI or DWI (driving under the influence or driving while intoxicated) offenders as part of a mandatory court or motor vehicle department program. During the year ended December 31, 2015, the Company began to license others to distribute the BDI-747/1 and provide services related to the device. The distributorships are for specific geographical areas (either entire states or certain counties within states). The Company currently has entered into four distributorship agreements. Under the distribution agreements the Company typically receives a onetime fee, and then is entitled to receive a per unit registration fee and a per unit monthly fee for each BDI-747/1 unit the distributor has in inventory or on the road beginning thirty (30) days after the distributor receives the unit. Since December 31, 2015, the Company has received the monthly fees related to one distributor. In addition, the company has begun recognizing monthly fee income from units the Company has installed into customers vehicles |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2 Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company. Going Concern The Companys unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of June 30, 2016, the Company had an accumulated deficit of $1,073,468. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt to secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern. Based on the Companys current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of convertible notes, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Companys plans with respect to its liquidity issues include, but are not limited to, the following: 1) Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and 2) Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. Reclassifications Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Revenue Recognition The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials Distributorships Revenue is recognized pursuant to ASC Topic 605, Revenue Recognition (ASC 605). Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured. The Company enters into arrangements that include multiple deliverables, which typically consist of the sale of exclusive distributorship territory rights, startup supplies package, promotional material, three weeks of onsite training and an ongoing monthly support services. The Company accounts for each material element within an arrangement with multiple deliverables as separate units of accounting. Revenue is allocated to each unit of accounting under the guidance of ASC Topic 605-25, Multiple-Element Revenue Arrangements, which provides criteria for separating consideration in multiple-deliverable arrangements by establishing a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable is based on vendor-specific objective evidence (VSOE) if available, third-party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third-party evidence is available. The Company is required to determine the best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. The Company generally does not separately sell distributorships or training on a standalone basis. Therefore, the Company does not have VSOE for the selling price of these units nor is third party evidence available and thus management uses its best estimate of selling prices in our allocation of revenue to each deliverable in the multiple element arrangement. Monitoring fees on Company installed units The Company rents units directly to customers and installs the units in the customers vehicles. The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company. Revenue is recognized from these companies on the straight line basis over the term of the agreement. Amounts collected in excess of those earned are classified as deferred revenue in the balance sheet, and amounts earned in excess of amounts collected are reflected in accounts receivable in the balance sheet at June 30, 2016. Accounts Receivable and Allowance for Doubtful Accounts The Companys accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with managements estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of June 30, 2016 and December 31, 2015 is adequate, but actual write-offs could exceed the recorded allowance. Convertible Debt and Warrants Issued with Convertible Debt Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options Beneficial Conversion Features The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation Stock Compensation For modifications of convertible debt, the Company records the modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which we amortize to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss. Fair Value of Financial Instruments We utilize ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Companys assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. As of June 30, 2016 and December 31, 2015, we did not have any level 3 assets or liabilities. As of June 30, 2016 and December 31, 2015, the derivative liabilities are considered level 2 items. Net Income (Loss) Per Share Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Stock Based Compensation The Company recognizes stock-based compensation in accordance with FASB ASC Topic 718 Stock Compensation For non-employee stock-based compensation, the Company applies FASB ASC Topic 505 Equity-Based Payments to Non-Employees Concentrations All of the Companys ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Companys ability to timely obtain additional units. Income Taxes The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprises financial statements in accordance with ASC Topic 740, Accounting for Income Taxes Recently Issued Accounting Pronouncements In May 2014, the FASB and the International Accounting Standards Board jointly issued ASU No. 2014-9, Revenue from Contracts with Customers In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statement-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In November 2015, the FASB issued guidance related to the presentation of deferred income taxes. The guidance requires that deferred tax assets and liabilities are classified as non-current in a consolidated balance sheet. This guidance is effective in the first quarter of 2017 and is not expected to materially impact financial position or net earnings. In February 2016, the FASB issued a new accounting standard on leasing. The new standard will require companies to record most leased assets and liabilities on the balance sheet, and also proposes a dual model for recognizing expense. This guidance will be effective in the first quarter of 2019 with early adoption permitted. The Company is evaluating the impact that adopting this guidance will have on consolidated financial statements. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 3 Property and Equipment Property and equipment consist of the following: June 30, 2016 December 31, 2015 Monitoring Units $ 182,398 $ 46,150 Furniture, Fixtures, and Equipment 4,798 2,398 Total Assets 187,196 48,548 Less: accumulated depreciation (19,832 ) (2,901 ) Furniture and Equipment, net 167,364 45,647 Depreciation expense for the three and six months ended June 30, 2016 and 2015 amounted to $6,675 and $120, and $16,930 and $240, respectively. |
Accrued Expense
Accrued Expense | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expense | Note 4 Accrued Expense Other current liabilities consist of the following: June 30, 2016 December 31, 2015 Accrued professional fees $ 750 $ 27,013 Accrued wages 8,840 1,949 Accrued payroll taxes 22,529 7,419 Refundable distributorship deposit 17,500 17,500 Total $ 49,619 $ 53,881 |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Jun. 30, 2016 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue | Note 5 Deferred revenue The Company classifies income as deferred until the terms of the contract or time frame have been met within the Companys revenue recognition policy. As of June 30, 2016 and December 31, 2015 deferred revenue totaled $120,673 and 81,674, with $50,000, and $50,000, respectively, related to distributorship agreements. The remaining deferred revenue relates to Company serviced ignition interlock monitoring customers. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 6 Notes Payable Notes payable consist of the following: June 30, 2016 December 31, 2015 Principal Accrued Interest Principal Accrued Interest Convertible notes Convertible note #1 7,500 93 15,000 - Debt Discount (5,765 ) - (8,426 ) Convertible note #2 50,000 1,667 50,000 1,667 Debt Discount (32,290 ) - (43,960 ) Subtotal convertible notes net 19,445 1,760 12,614 1,667 Promissory notes Promissory note #1 6,509 - 10,200 333 Promissory note #2 9,290 - - - Debt Discount (2,955 ) - - Promissory note #3 50,000 - - - Debt Discount (46,181 ) - - Subtotal promissory notes 16,663 - 10,200 333 Royalty notes Royalty note #1 60,938 - - - Debt Discount (46,979 ) - - Royalty note #2 50,938 - - - Debt Discount (50,104 ) - - Subtotal royalty notes 14,793 - - - Related party promissory note Related party promissory note 126,171 - 140,407 - Total 177,072 1,760 163,221 2,000 Current portion 60,275 1,760 66,541 2,000 Long-term portion $ 116,797 $ - $ 96,680 $ - Convertible notes On August 7, 2015, the Company entered into an agreement with a third party non-affiliate and issued a 7.5% interest bearing convertible debenture for $15,000 due on August 7, 2017, with conversion features commencing after 180 days following the date of the note. Payments of interest only are due monthly beginning September 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date. In connection with this Convertible note payable, the Company recorded a $5,770 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 8). On May 6, 2016 the note holder elected to convert $7,500 in principal into 30,000 shares of common stock. In connection with the issuance of the August Convertible Note Payable, the Company issued a warrant on August 7, 2015 to purchase 30,000 shares of the Companys common stock at a purchase price of $0.50 per share. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term 3 years, Expected Dividend Rate 0%, Volatility 100%, Risk Free Interest Rate -1.08%. The Company recorded an additional $4,873 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note. On November 24, 2015, the Company entered into an agreement with an existing non-affiliated shareholder, and issued a 10% interest bearing convertible debenture for $50,000 due on November 19, 2017. Payments of interest only are due monthly beginning December 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date, but may not be converted if such conversion would cause the holder to own more than 9.9% of outstanding common stock after giving effect to the conversion (which limitation may be removed by the holder upon 61 days advanced notice to the company). In connection with this Convertible Note Payable, the Company recorded a $32,897 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 7). As of June 30, 2016 this note has not been converted. In connection with the issuance of the November convertible note payable, the Company issued a warrant to purchase 80,000 shares of our common stock at an exercise price of $0.80 per share. The warrant has an exercise period of two years from the date of issuance. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term 2 years, Expected Dividend Rate 0%, Volatility 100%, Risk Free Interest Rate -.61%. The Company recorded an additional $13,783 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note. Promissory notes On December 18, 2015, the Company entered into a note payable agreement with a third party. The note was for a principal balance of $10,200. The interest due is dependent on a cost schedule that is tied to the date of repayment of the principle. The note is due by June 16, 2016. On January 29, 2016, the Company entered into a note payable agreement with a third party. The note was for a principal balance of $44,850 in exchange for $29,505 in cash. The note will be paid back via daily ACH debits for $320 per business day with an estimated payback date of August 2016. On March 30, 2016, the Company provided an agreement to a third party under which the Company would issue a $50,000 promissory note and 50,000 restricted common shares in exchange for $50,000 in cash. The promissory note has a maturity date of June 30, 2018, and bears interest at 18% per annum. The purchaser did not sign the agreement nor deliver the proper consideration prior to March 31, 2016. The exchange of the $50,000 in cash consideration by the purchaser and the issuance of the 50,000 restricted common shares by the Company was made in conjunction with delivery of the signed purchase agreement and promissory note on April 5, 2016. The Company recorded a debt discount of $50,000 related to the relative fair value of the issued shares and services provided associated with the note to be amortized over the life of the note. Royalty notes On January 20, 2016 the company entered into a non-interest bearing note payable and royalty agreement with a third party. Under the note, the Company borrowed $65,000 and begin to repay the principal amount at a rate of approximately $937 per month with escalations to approximately $3,531 per month as of February 2017 until the note is paid in full. In addition, starting in February 2018, the Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. On March 29, 2016 the Company consummated a non-interest bearing note payable and royalty agreement with a relative of our CEO with terms almost identical to the note referenced above. Under the note, the Company borrowed $55,000 and begin to repay the principal amount at a rate of approximately $937 per month with escalations to approximately $3,531 per month as of April 2017 until the note is paid in full. In addition, starting in February 2018, the Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. In connection with these two notes, the Company recorded a debt discount of $120,000 relating to the future royalty payments Related party promissory notes On February 16, 2014, the Company entered into a note payable agreement with Laurence Wainer, the director, President and sole officer of the Company. The note was for a principal balance of $160,000 and bears interest at 7.75% per annum. Principal and interest payments are due in 60 equal monthly installments beginning in March 2014 of $3,205. The Company and Laurence Wainer entered into an additional agreement effective April 2014 suspending loan repayments until January 2015. As of January 2015, the payments have resumed. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 7 Derivative Financial Instruments The Company applies the provisions of ASC Topic 815-40, Contracts in Entitys Own Equity (ASC Topic 815-40), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. The Company has a $7,500 and a $50,000 convertible note with variable conversion pricing outstanding at June 30, 2016. The Company calculates the estimated fair values of the liabilities for derivative instruments using the Black Scholes option pricing model and revalues them each quarter. The change in valuation is accounted for as a gain or loss in derivative liability. For the period ending June 30, 2016 the Company expensed $19,612 in connection with the revaluation. The Black Scholes model was used in determining the relative fair value of the notes using the following inputs: Expected Term 1.35 and 1.58 years, Expected Dividend Rate 0%, Volatility 281%, Risk Free Interest Rate - 0.77%. The following table describes the Derivative liability as of June 30, 2016 and December 31, 2015. Balance December 31, 2015 51,325 Change in fair market value of derivative 19,612 Balance June 30, 2016 70,937 |
Accrued Royalties Payable
Accrued Royalties Payable | 6 Months Ended |
Jun. 30, 2016 | |
Accrued Royalties Payable | |
Accrued Royalties Payable | Note 8 Accrued Royalties Payable In connection with the Royalty Notes as discussed in Note 6 above the company has estimated that a value equal to the face value of the notes should be booked as a debt discount with the corresponding entry to estimated royalties to be paid out in perpetuity. No payments are due for royalties until February 2018 unless the Company hits certain sales milestones as set forth in the royalty agreements earlier. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9 Stockholders Equity Preferred Stock The Companys articles of incorporation authorize the Company to issue up to 50,000,000 preferred shares of $0.001 par value, having preferences to be determined by the Board of Directors for dividends, and liquidation of the Companys assets. As of June 30, 2016 and December 31, 2015, the Company had no preferred shares outstanding. Common Stock Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Companys ability to pay dividends on its common stock, subject to the requirements of the Delaware Revised Statutes. The Company has not declared any dividends since incorporation. During the six months ended June 30, 2016, the Company issued the 147,750 shares of $0.001 par value common stock for services with a value of $107,362. |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2016 | |
Warrants | |
Warrants | Note 10 Warrants The following table reflects warrant activity during the six months ended June 30, 2016: Warrants for Weighted Common Average Shares Exercise Price Outstanding as of December 31, 2015 110,000 $ 0.72 Granted - - Exercised - - Forfeited, cancelled, expired - - Outstanding as of June 30, 2016 110,000 $ 0.72 |
Income (Loss) Per Share
Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Note 11 Income (Loss) Per Share Net income (loss) per share is provided in accordance with FASB ASC 260-10, Earnings per Share. Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Numerator for income (loss) per share: Net income (loss attributable to common shareholders $ (160,952 ) $ (141,025 ) $ (342,357 ) $ (253,830 ) Interest savings on convertible notes - - - - Numerator for diluted income (loss) per share $ 3,183,983 $ 531,780 $ (342,357 ) $ (253,830 ) Denominator for income (loss) per share: Weighted average common shares 15,407,687 14,978,198 15,407,687 14,932,453 Weighted average preferred shares - - Convertible notes - - - Warrants - - - - Denominator for diluted income (loss) per share 15,407,687 14,978,198 15,407,687 14,932,453 The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Preferred shares - - Convertible notes 19,038 - 19,751 - Warrants 110,000 - 110,000 - Options - - - - Total anti-dilutive weighted average shares 129,038 - 129,751 - If all dilutive securities had been exercised at June 30, 2016 the total number of common shares outstanding would be as follows: June 30, 2016 Common Shares 16,260,500 Preferred Shares - Convertible notes 18,104 Warrants 110,000 Options - Total potential shares 16,388,604 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12 Commitments and Contingencies On January 21, 2015, the Company and Mr. Wainer entered into a two-year lease with Marsel Plaza LLC for a storefront location at 1080 South La Cienega Boulevard, Suite 304, Los Angeles, California 90035. Base rent under the lease is $1,450 per month. The lease began on February 1, 2015. Legal Proceedings In the ordinary course of business, the Company is, from time to time, involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Companys financial condition and/or results of operations. However, in the opinion of the Companys management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on the Companys financial position or results of operations. In April 2016, the Company was sued in the District Court of Sedgwick County, State of Kansas (Case No. 16CV0822) by Theenk, Inc., a company it sold an independent distributorship. According to the Complaint, Theenk, Inc. alleges the Company failed to perform under the Exclusive Distribution Agreement the Company entered into with them on September 4, 2015 by failing to obtain approval for the Companys BDI-747 breathalyzer interlock device from the State of Kansas within 60 days from the execution of the Agreement, and further, that the Company failed to compensate Theenk, Inc. for certain engineering hours and manufacturing and testing costs related to a potential add-on component to the BDI-747 device. The Complaint seeks damages of $64,726.06. The Company originally received an extension of time to file its Answer from Theenk, Inc. On June 2, 2016, prior to the time an Answer was due by the Company, it entered into a Settlement Agreement with Theenk, Inc., whereby the Company agreed to pay Theenk, Inc. $17,500 in full settlement of the lawsuit, including a dismissal of the lawsuit. The Company has tendered the check for $17,500 and Theenk, Inc. states it will deposit the funds around August 30, 2016, after which it is obligated to dismiss the lawsuit. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 Subsequent Events The Company follows the guidance in FASB ASC Topic 855, Subsequent Events None |
Basis of Presentation and Sum20
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company. |
Going Concern | Going Concern The Companys unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of June 30, 2016, the Company had an accumulated deficit of $1,073,468. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt to secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern. Based on the Companys current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of convertible notes, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Companys plans with respect to its liquidity issues include, but are not limited to, the following: 1) Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and 2) Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
Reclassifications | Reclassifications Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials Distributorships Revenue is recognized pursuant to ASC Topic 605, Revenue Recognition (ASC 605). Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured. The Company enters into arrangements that include multiple deliverables, which typically consist of the sale of exclusive distributorship territory rights, startup supplies package, promotional material, three weeks of onsite training and an ongoing monthly support services. The Company accounts for each material element within an arrangement with multiple deliverables as separate units of accounting. Revenue is allocated to each unit of accounting under the guidance of ASC Topic 605-25, Multiple-Element Revenue Arrangements, which provides criteria for separating consideration in multiple-deliverable arrangements by establishing a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable is based on vendor-specific objective evidence (VSOE) if available, third-party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third-party evidence is available. The Company is required to determine the best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. The Company generally does not separately sell distributorships or training on a standalone basis. Therefore, the Company does not have VSOE for the selling price of these units nor is third party evidence available and thus management uses its best estimate of selling prices in our allocation of revenue to each deliverable in the multiple element arrangement. Monitoring fees on Company installed units The Company rents units directly to customers and installs the units in the customers vehicles. The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company. Revenue is recognized from these companies on the straight line basis over the term of the agreement. Amounts collected in excess of those earned are classified as deferred revenue in the balance sheet, and amounts earned in excess of amounts collected are reflected in accounts receivable in the balance sheet at June 30, 2016. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Companys accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with managements estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of June 30, 2016 and December 31, 2015 is adequate, but actual write-offs could exceed the recorded allowance. |
Convertible Debt and Warrants Issued with Convertible Debt | Convertible Debt and Warrants Issued with Convertible Debt Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options Beneficial Conversion Features The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation Stock Compensation For modifications of convertible debt, the Company records the modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which we amortize to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We utilize ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Companys assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. As of June 30, 2016 and December 31, 2015, we did not have any level 3 assets or liabilities. As of June 30, 2016 and December 31, 2015, the derivative liabilities are considered level 2 items. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. |
Stock Based Compensation | Stock Based Compensation The Company recognizes stock-based compensation in accordance with FASB ASC Topic 718 Stock Compensation For non-employee stock-based compensation, the Company applies FASB ASC Topic 505 Equity-Based Payments to Non-Employees |
Concentrations | Concentrations All of the Companys ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Companys ability to timely obtain additional units. |
Income Taxes | Income Taxes The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprises financial statements in accordance with ASC Topic 740, Accounting for Income Taxes |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB and the International Accounting Standards Board jointly issued ASU No. 2014-9, Revenue from Contracts with Customers In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statement-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In November 2015, the FASB issued guidance related to the presentation of deferred income taxes. The guidance requires that deferred tax assets and liabilities are classified as non-current in a consolidated balance sheet. This guidance is effective in the first quarter of 2017 and is not expected to materially impact financial position or net earnings. In February 2016, the FASB issued a new accounting standard on leasing. The new standard will require companies to record most leased assets and liabilities on the balance sheet, and also proposes a dual model for recognizing expense. This guidance will be effective in the first quarter of 2019 with early adoption permitted. The Company is evaluating the impact that adopting this guidance will have on consolidated financial statements. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property And Equipment Tables | |
Schedule of Property and Equipment | Property and equipment consist of the following: June 30, 2016 December 31, 2015 Monitoring Units $ 182,398 $ 46,150 Furniture, Fixtures, and Equipment 4,798 2,398 Total Assets 187,196 48,548 Less: accumulated depreciation (19,832 ) (2,901 ) Furniture and Equipment, net 167,364 45,647 |
Accrued Expense (Tables)
Accrued Expense (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consist of the following: June 30, 2016 December 31, 2015 Accrued professional fees $ 750 $ 27,013 Accrued wages 8,840 1,949 Accrued payroll taxes 22,529 7,419 Refundable distributorship deposit 17,500 17,500 Total $ 49,619 $ 53,881 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consist of the following: June 30, 2016 December 31, 2015 Principal Accrued Interest Principal Accrued Interest Convertible notes Convertible note #1 7,500 93 15,000 - Debt Discount (5,765 ) - (8,426 ) Convertible note #2 50,000 1,667 50,000 1,667 Debt Discount (32,290 ) - (43,960 ) Subtotal convertible notes net 19,445 1,760 12,614 1,667 Promissory notes Promissory note #1 6,509 - 10,200 333 Promissory note #2 9,290 - - - Debt Discount (2,955 ) - - Promissory note #3 50,000 - - - Debt Discount (46,181 ) - - Subtotal promissory notes 16,663 - 10,200 333 Royalty notes Royalty note #1 60,938 - - - Debt Discount (46,979 ) - - Royalty note #2 50,938 - - - Debt Discount (50,104 ) - - Subtotal royalty notes 14,793 - - - Related party promissory note Related party promissory note 126,171 - 140,407 - Total 177,072 1,760 163,221 2,000 Current portion 60,275 1,760 66,541 2,000 Long-term portion $ 116,797 $ - $ 96,680 $ - |
Derivative Financial Instrume24
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liability | The following table describes the Derivative liability as of June 30, 2016 and December 31, 2015. Balance December 31, 2015 51,325 Change in fair market value of derivative 19,612 Balance June 30, 2016 70,937 |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Schedule of Warrant Activity | The following table reflects warrant activity during the six months ended June 30, 2016: Warrants for Weighted Common Average Shares Exercise Price Outstanding as of December 31, 2015 110,000 $ 0.72 Granted - - Exercised - - Forfeited, cancelled, expired - - Outstanding as of June 30, 2016 110,000 $ 0.72 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Income (loss) Per Share | The numerators and denominators used to calculate basic and diluted income (loss) per share are as follows for the three and six months ended June 30, 2016 and 2015: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Numerator for income (loss) per share: Net income (loss attributable to common shareholders $ (160,952 ) $ (141,025 ) $ (342,357 ) $ (253,830 ) Interest savings on convertible notes - - - - Numerator for diluted income (loss) per share $ 3,183,983 $ 531,780 $ (342,357 ) $ (253,830 ) Denominator for income (loss) per share: Weighted average common shares 15,407,687 14,978,198 15,407,687 14,932,453 Weighted average preferred shares - - Convertible notes - - - Warrants - - - - Denominator for diluted income (loss) per share 15,407,687 14,978,198 15,407,687 14,932,453 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Preferred shares - - Convertible notes 19,038 - 19,751 - Warrants 110,000 - 110,000 - Options - - - - Total anti-dilutive weighted average shares 129,038 - 129,751 - |
Schedule of Dilutive Securities of Common Shares Outstanding | If all dilutive securities had been exercised at June 30, 2016 the total number of common shares outstanding would be as follows: June 30, 2016 Common Shares 16,260,500 Preferred Shares - Convertible notes 18,104 Warrants 110,000 Options - Total potential shares 16,388,604 |
Organization and Nature of Bu27
Organization and Nature of Business (Details Narrative) | Dec. 31, 2015 |
Arizona corporation [Member] | |
Ownership percent | 100.00% |
Basis of Presentation and Sum28
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Basis Of Presentation And Summary Of Significant Accounting Policies Details Narrative | ||
Accumulated deficit | $ 1,073,468 | $ 731,111 |
Maximum percentage of carrying value of debt | 10.00% |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 6,675 | $ 120 | $ 16,930 | $ 240 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Total assets | $ 187,196 | $ 48,548 |
Less: accumulated depreciation | (19,832) | (2,901) |
Furnitue and equipment, net | 167,364 | 45,647 |
Monitoring Units [Member] | ||
Total assets | 182,398 | 46,150 |
Furniture, Fixtures, And Equipment [Member] | ||
Total assets | $ 4,798 | $ 2,398 |
Accrued Expense - Schedule of O
Accrued Expense - Schedule of Other Current Liabilities (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Accrued Expense - Schedule Of Other Current Liabilities Details | ||
Accrued professional fees | $ 750 | $ 27,013 |
Accrued wages | 8,840 | 1,949 |
Accrued payroll taxes | 22,529 | 7,419 |
Refundable distributorship deposit | 17,500 | 17,500 |
Total | $ 49,619 | $ 53,881 |
Deferred Revenue (Details Narra
Deferred Revenue (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Deferred revenue | $ 120,673 | $ 81,674 |
Distributorship Agreements [Member] | ||
Deferred revenue | $ 50,000 | $ 50,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | May 06, 2016USD ($)shares | Apr. 05, 2016USD ($)shares | Mar. 30, 2016USD ($)shares | Mar. 29, 2016USD ($) | Jan. 29, 2016USD ($) | Jan. 20, 2016USD ($) | Dec. 18, 2015USD ($) | Nov. 24, 2015USD ($)$ / sharesshares | Aug. 07, 2015USD ($)$ / sharesshares | Jun. 30, 2016USD ($)Installments | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Convertible debenture | $ 7,500 | $ 50,000 | ||||||||||
Conversion of debt value | $ 49,450 | |||||||||||
Expected dividend rate | 0.00% | |||||||||||
Volatility | 281.00% | |||||||||||
Risk free interest rate | 0.77% | |||||||||||
Amortization of debt discount | $ 54,005 | |||||||||||
Exchange in cash | 157,500 | |||||||||||
Convertible Notes [Member] | ||||||||||||
Interest bearing percentage | 10.00% | 7.50% | ||||||||||
Convertible debenture | $ 50,000 | $ 15,000 | ||||||||||
Convertible debt due date | Nov. 19, 2017 | Aug. 7, 2017 | ||||||||||
Percent of loan convertible on trading days | 70.00% | 70.00% | ||||||||||
Debt conversion of convertible percentage | 9.90% | |||||||||||
Discount on convertible debenture | $ 32,897 | $ 5,770 | ||||||||||
Conversion of debt value | $ 7,500 | |||||||||||
Conversion of debt into shares | shares | 30,000 | |||||||||||
Warrants outstanding | shares | 80,000 | 30,000 | ||||||||||
Warrants exercise price | $ / shares | $ 0.80 | $ 0.50 | ||||||||||
Expected term | 2 years | 3 years | ||||||||||
Expected dividend rate | 0.00% | 0.00% | ||||||||||
Volatility | 100.00% | 100.00% | ||||||||||
Risk free interest rate | 0.61% | 1.08% | ||||||||||
Amortization of debt discount | $ 13,783 | $ 4,873 | ||||||||||
Promissory Notes [Member] | ||||||||||||
Interest bearing percentage | 18.00% | |||||||||||
Convertible debt due date | Jun. 30, 2018 | Jun. 16, 2016 | ||||||||||
Amortization of debt discount | $ 50,000 | |||||||||||
Note for principal balance | $ 44,850 | $ 10,200 | ||||||||||
Exchange in cash | 29,505 | |||||||||||
Note paid back via daily each debits | $ 320 | |||||||||||
Notes payable | $ 50,000 | |||||||||||
Number of restricted shares issued for exchange | shares | 50,000 | 50,000 | ||||||||||
Number of restricted shares issued for exchange for cash | $ 50,000 | $ 50,000 | ||||||||||
Royalty Notes [Member] | ||||||||||||
Net discount | $ 120,000 | |||||||||||
Royalty Notes [Member] | Royalty Agreement [Member] | CEO [Member] | ||||||||||||
Company borrowed | $ 55,000 | |||||||||||
Royalty Notes [Member] | Royalty Agreement [Member] | April 2017 [Member] | CEO [Member] | ||||||||||||
Repay the principal amount | 3,531 | |||||||||||
Per month amount | 937 | |||||||||||
Pay to lender royalty fee per month | $ 5 | |||||||||||
Royalty note, description | The Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. | |||||||||||
Royalty Notes [Member] | Royalty Agreement [Member] | Third Party [Member] | ||||||||||||
Company borrowed | $ 65,000 | |||||||||||
Royalty Notes [Member] | Royalty Agreement [Member] | Third Party [Member] | February 2017 [Member] | ||||||||||||
Repay the principal amount | 3,531 | |||||||||||
Per month amount | 937 | |||||||||||
Pay to lender royalty fee per month | $ 5 | |||||||||||
Royalty note, description | The Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. | |||||||||||
Related Party Promissory Notes [Member] | Laurence Wainer [Member] | ||||||||||||
Interest bearing percentage | 7.75% | |||||||||||
Note for principal balance | $ 160,000 | |||||||||||
Per month amount | $ 3,205 | |||||||||||
Interest payable monthly installments | Installments | 60 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current portion | $ 12,844 | $ 10,200 |
Long-term portion | 3,819 | |
Principal [Member] | ||
Total | 177,072 | 163,221 |
Current portion | 60,275 | 66,541 |
Long-term portion | 116,797 | 96,680 |
Accrued Interest [Member] | ||
Total | 1,760 | 2,000 |
Current portion | 1,760 | 2,000 |
Long-term portion | ||
Convertible Notes [Member] | Principal [Member] | ||
Total | 19,445 | 12,614 |
Convertible Notes [Member] | Accrued Interest [Member] | ||
Total | 1,760 | 1,667 |
Convertible Notes [Member] | Convetible note #1 [Member] | Principal [Member] | ||
Debt discount | (5,765) | (8,426) |
Total | 7,500 | 15,000 |
Convertible Notes [Member] | Convetible note #1 [Member] | Accrued Interest [Member] | ||
Debt discount | ||
Total | 93 | |
Convertible Notes [Member] | Convertible note #2 [Member] | Principal [Member] | ||
Debt discount | (32,290) | (43,960) |
Total | 50,000 | 50,000 |
Convertible Notes [Member] | Convertible note #2 [Member] | Accrued Interest [Member] | ||
Debt discount | ||
Total | 1,667 | 1,667 |
Promissory Notes [Member] | Principal [Member] | ||
Total | 16,663 | 10,200 |
Promissory Notes [Member] | Accrued Interest [Member] | ||
Total | 333 | |
Promissory Notes [Member] | Promissory note #1 [Member] | Principal [Member] | ||
Total | 6,509 | 10,200 |
Promissory Notes [Member] | Promissory note #1 [Member] | Accrued Interest [Member] | ||
Total | 333 | |
Promissory Notes [Member] | Promissory note #2 [Member] | Principal [Member] | ||
Debt discount | (2,955) | |
Total | 9,290 | |
Promissory Notes [Member] | Promissory note #2 [Member] | Accrued Interest [Member] | ||
Debt discount | ||
Total | ||
Promissory Notes [Member] | Promissory note #3 [Member] | Principal [Member] | ||
Debt discount | (46,181) | |
Total | 50,000 | |
Promissory Notes [Member] | Promissory note #3 [Member] | Accrued Interest [Member] | ||
Debt discount | ||
Total | ||
Royalty Notes [Member] | ||
Debt discount | 120,000 | |
Royalty Notes [Member] | Principal [Member] | ||
Total | 14,793 | |
Royalty Notes [Member] | Accrued Interest [Member] | ||
Total | ||
Royalty Notes [Member] | Royalty Note #1 [Member] | Principal [Member] | ||
Debt discount | (46,979) | |
Total | 60,938 | |
Royalty Notes [Member] | Royalty Note #1 [Member] | Accrued Interest [Member] | ||
Debt discount | ||
Total | ||
Royalty Notes [Member] | Royalty note #2 [Member] | Principal [Member] | ||
Debt discount | (50,104) | |
Total | 50,938 | |
Royalty Notes [Member] | Royalty note #2 [Member] | Accrued Interest [Member] | ||
Debt discount | ||
Total | ||
Related Party Promissory Notes [Member] | Principal [Member] | ||
Total | 126,171 | 140,407 |
Related Party Promissory Notes [Member] | Accrued Interest [Member] | ||
Total |
Derivative Financial Instrume35
Derivative Financial Instruments (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Convertible debt outstanding | $ 7,500 | $ 50,000 |
Gain/loss in derivative liability | $ 19,612 | |
Expected dividend rate | 0.00% | |
Volatility | 281.00% | |
Risk free interest rate | 0.77% | |
Minimum [Member] | ||
Expected term | 1 year 4 months 6 days | |
Maximum [Member] | ||
Expected term | 1 year 6 months 29 days |
Derivative Financial Instrume36
Derivative Financial Instruments - Schedule of Derivative Liability (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Derivative financial instruments | $ 51,325 | |||
Change in fair market value of derivative | $ (15,122) | 19,612 | ||
Derivative financial instruments | $ 70,937 | $ 70,937 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares outstanding | |||
Shares issued for services | $ 117,362 | ||
Conversion of debt value | $ 49,450 | ||
Common stock, shares outstanding | 16,260,500 | 15,006,750 | |
Common StockHolders [Member] | |||
Common stock voting rights | Holders of common stock are entitled to one vote for each share held | ||
Shares issued for services, shares | 147,750 | ||
Shares issued for services | $ 107,362 | ||
Per share price | $ 0.001 | ||
Conversion of debt into shares | 80,000 | ||
Conversion of debt value | $ 59,450 | ||
Investors [Member] | |||
Number of stock sold during period | 1,026,000 | ||
Number of stock sold during period, value | $ 157,500 | ||
Maximum [Member] | |||
Preferred stock, shares authorized | 50,000,000 |
Warrants - Schedule of Warrant
Warrants - Schedule of Warrant Activity (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Warrants for common shares, outstanding, beginning balance | shares | 110,000 |
Warrants for common shares, granted | shares | |
Warrants for common shares, exercised | shares | |
Warrants for common shares, forfeited, cancelled, expired | shares | |
Warrants for common shares, outstanding, ending balance | shares | 110,000 |
Weighted average exercise price, beginning balance | $ / shares | $ 0.72 |
Weighted average exercise price, granted | $ / shares | |
Weighted average exercise price, exercised | $ / shares | |
Weighted average exercise price, forfeited, cancelled, expired | $ / shares | |
Weighted average exercise price, ending balance | $ / shares | $ 0.72 |
Income (Loss) Per Share - Sched
Income (Loss) Per Share - Schedule of Basic and Diluted Income (loss) Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Numerator for income (loss) per share: net income (loss) attributable to common shareholders | $ (160,952) | $ (141,025) | $ (342,357) | $ (253,830) |
Numerator for income (loss) per share: interest savings on convertible notes | ||||
Numerator for income (loss) per share: numerator for diluted income (loss) per share | $ 3,183,983 | $ 531,780 | $ (342,357) | $ (253,830) |
Denominator for income (loss) per share: weighted average common shares | 15,407,687 | 14,978,198 | 15,407,687 | 14,932,453 |
Denominator for income (loss) per share: weighted average preferred shares | ||||
Convertible notes | ||||
Warrants | ||||
Denominator for dilutedincome (loss) per share | 15,407,687 | 14,978,198 | 15,407,687 | 14,932,453 |
Income (Loss) Per Share - Sch40
Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Total anti-dilutive weighted average shares | 129,038 | 129,751 | ||
Preferred Shares [Member] | ||||
Total anti-dilutive weighted average shares | ||||
Convertible Notes [Member] | ||||
Total anti-dilutive weighted average shares | 19,038 | 19,751 | ||
Warrant [Member] | ||||
Total anti-dilutive weighted average shares | 110,000 | 110,000 | ||
Options [Member] | ||||
Total anti-dilutive weighted average shares |
Income (Loss) Per Share - Sch41
Income (Loss) Per Share - Schedule of Dilutive Securities of Common Shares Outstanding (Details) | 6 Months Ended |
Jun. 30, 2016shares | |
Total potential shares | 16,388,604 |
Common Shares [Member] | |
Total potential shares | 16,260,500 |
Preferred Shares [Member] | |
Total potential shares | |
Convertible Notes [Member] | |
Total potential shares | 18,404 |
Warrants [Member] | |
Total potential shares | 110,000 |
Options [Member] | |
Total potential shares |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Jun. 02, 2016 | Jan. 21, 2015 | Apr. 30, 2016 |
Commitments and Contingencies Disclosure [Abstract] | |||
Lese term | 2 years | ||
Lease amount for per month | $ 1,450 | ||
Complaint seeks damages | $ 64,726 | ||
Settlement amount | $ 17,500 | ||
Refundable distributor deposit | $ 17,500 |