Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Gulf West Security Network, Inc. | |
Entity Central Index Key | 0001592603 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Common Stock Shares Outstanding | 4,518,250 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 29,340 | $ 64,798 |
Accounts receivable | 1,748 | 1,906 |
Prepaid expenses | 31,255 | 85,560 |
Total current assets | 62,343 | 152,264 |
Total assets | 62,343 | 152,264 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 140,945 | 110,393 |
Accounts payable - related party | 26,166 | 22,359 |
Accrued wages - related party | 196,859 | 43,859 |
Bridge Loan | 951,000 | 671,000 |
Liabilities of discontinued operations | 610,438 | 636,561 |
Total liabilities | 1,925,408 | 1,484,172 |
Deficiency in Stockholders' equity | ||
Common stock, $0.001 par value; 475,000,000 shares authorized; 4,518,250 shares issued and outstanding | 4,518 | 4,518 |
Preferred Stock, $0.001 par value, 25,000,000 shares authorized | ||
Additional paid in capital | 177,210 | 177,210 |
Accumulated deficit | (2,045,537) | (1,514,380) |
Total deficiency in stockholders' equity | (1,863,065) | (1,331,908) |
Total liabilities and deficiency in stockholders' equity | 62,343 | 152,264 |
Series A Preferred Stock [Member] | ||
Deficiency in Stockholders' equity | ||
Preferred Stock, $0.001 par value, 25,000,000 shares authorized | 743 | 743 |
Total deficiency in stockholders' equity | 743 | |
Series B Preferred Stock [Member] | ||
Deficiency in Stockholders' equity | ||
Preferred Stock, $0.001 par value, 25,000,000 shares authorized | ||
Total deficiency in stockholders' equity | ||
Series C Preferred Stock [Member] | ||
Deficiency in Stockholders' equity | ||
Preferred Stock, $0.001 par value, 25,000,000 shares authorized | ||
Total deficiency in stockholders' equity | ||
Series D Preferred Stock [Member] | ||
Deficiency in Stockholders' equity | ||
Preferred Stock, $0.001 par value, 25,000,000 shares authorized | 1 | $ 1 |
Total deficiency in stockholders' equity | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common Stock; Par Value | $ 0.001 | $ 0.001 |
Common Stock; Shares Authorized | 475,000,000 | 475,000,000 |
Common Stock; Shares Issued | 4,518,250 | 4,518,250 |
Common Stock; Shares Outstanding | 4,518,250 | 4,518,250 |
Preferred stock; Shares Par Value | $ 0.001 | $ 0.001 |
Preferred stock; Shares Authorized | 25,000,000 | 25,000,000 |
Series A Preferred Stock [Member] | ||
Preferred stock; Shares Par Value | $ 0.001 | $ 0.001 |
Preferred stock; Shares Authorized | 25,000,000 | 25,000,000 |
Preferred stock; Shares Issued | 742,500 | 742,500 |
Preferred stock; Shares Outstanding | 742,500 | 742,500 |
Series B Preferred Stock [Member] | ||
Preferred stock; Shares Par Value | $ 0.001 | $ 0.001 |
Preferred stock; Shares Authorized | 25,000,000 | 25,000,000 |
Preferred stock; Shares Issued | ||
Preferred stock; Shares Outstanding | ||
Series C Preferred Stock Member | ||
Preferred stock; Shares Par Value | $ 0.001 | $ 0.001 |
Preferred stock; Shares Authorized | 25,000,000 | 25,000,000 |
Preferred stock; Shares Issued | 1 | 1 |
Preferred stock; Shares Outstanding | 1 | 1 |
Series D Preferred Stock Member | ||
Preferred stock; Shares Par Value | $ 0.001 | $ 0.001 |
Preferred stock; Shares Authorized | 25,000,000 | 25,000,000 |
Preferred stock; Shares Issued | 1,000 | 1,000 |
Preferred stock; Shares Outstanding | 1,000 | 10,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Monitoring and related services | $ 3,562 | $ 3,940 | $ 9,769 | $ 13,108 |
Product sales and installation | 1,025 | |||
Total Revenue | 3,562 | 3,940 | 10,794 | 13,108 |
Cost of Revenue | 7,142 | 975 | 11,733 | 4,437 |
Gross Profit (Loss) | (3,562) | 2,965 | (939) | 8,671 |
Operating Expenses | ||||
General and administrative | 127,580 | 188,081 | 546,941 | 381,486 |
Sales and martketing | 5,193 | 15,124 | 20,281 | 34,732 |
Total Operating Expenses | 132,773 | 203,205 | 567,222 | 416,218 |
Operating Loss | (136,335) | (200,240) | (568,161) | (407,547) |
Loss from continuing operations before provision for income taxes | (136,335) | (200,240) | (568,161) | (407,547) |
Provision for income taxes | ||||
Loss from continuing operations | (136,335) | (200,240) | (568,161) | (407,547) |
Income from discontinued operations | 37,237 | 37,004 | ||
Net loss | $ (99,098) | $ (200,240) | $ (531,157) | $ (407,547) |
Basic and diluted net loss per common share, continuing operations | $ (0.03) | $ (0.05) | $ (0.13) | $ (0.10) |
Basic and diluted net loss per common share, discontinued operations | $ 0.01 | $ 0.01 | ||
Weighted average shares outstanding | 4,518,250 | 4,050,439 | 4,518,250 | 4,050,439 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Total | Common Stock Number of Shares | Additional Paid-In Capital | Accumulated Deficit | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Series D Preferred Stock [Member] |
Balance, Shares at Jan. 01, 2018 | 4,050,439 | 117,500 | ||||||
Balance, Amount at Jan. 01, 2018 | $ 12,440 | $ 4,050 | $ 164,102 | $ (155,830) | $ 118 | |||
Shares issued for debt settlement, Shares | 15,385 | 25,000 | ||||||
Net loss | (83,507) | (83,507) | ||||||
Shares issued for debt settlement, Amount | (1,796) | $ 15 | (1,836) | $ 25 | ||||
Balance, Shares at Mar. 31, 2018 | 4,065,824 | 142,500 | ||||||
Balance, Amount at Mar. 31, 2018 | (72,863) | $ 4,065 | 162,266 | (239,337) | $ 143 | |||
Net loss | (123,800) | (123,800) | ||||||
Balance, Shares at Jun. 30, 2018 | 4,065,824 | 142,500 | ||||||
Balance, Amount at Jun. 30, 2018 | (196,663) | $ 4,065 | 162,266 | (363,137) | $ 143 | |||
Net loss | (200,240) | (200,240) | ||||||
Shares issued in connection with reverse merger, Shares | 452,426 | 600,000 | 1 | 1,000 | ||||
Shares issued in connection with reverse merger, Amount | 11,844 | $ 452 | 10,791 | $ 600 | $ 1 | |||
Balance, Shares at Sep. 30, 2018 | 4,518,250 | 742,500 | 1 | 1,000 | ||||
Balance, Amount at Sep. 30, 2018 | (385,059) | $ 4,517 | 173,057 | (563,377) | $ 743 | $ 1 | ||
Balance, Shares at Jan. 01, 2019 | 4,518,250 | 742,500 | 1 | 1,000 | ||||
Balance, Amount at Jan. 01, 2019 | (1,331,908) | $ 4,518 | 177,210 | (1,514,380) | $ 743 | $ 1 | ||
Net loss | (221,167) | (221,167) | ||||||
Balance, Shares at Mar. 31, 2019 | 4,518,250 | 742,500 | 1 | 1,000 | ||||
Balance, Amount at Mar. 31, 2019 | (1,553,075) | $ 4,518 | 177,210 | (1,735,547) | $ 743 | $ 1 | ||
Net loss | (210,892) | (210,892) | ||||||
Balance, Shares at Jun. 30, 2019 | 4,518,250 | 742,500 | 1 | 1,000 | ||||
Balance, Amount at Jun. 30, 2019 | (1,763,967) | $ 4,518 | 177,210 | (1,946,439) | $ 743 | $ 1 | ||
Net loss | (99,098) | (99,098) | ||||||
Balance, Shares at Sep. 30, 2019 | 4,518,250 | 742,500 | 1 | 1,000 | ||||
Balance, Amount at Sep. 30, 2019 | $ (1,863,065) | $ 4,518 | $ 177,210 | $ (2,045,537) | $ 743 | $ 1 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (531,157) | $ (407,547) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss from discontinued operations | (37,004) | |
Depreciation | 1,320 | |
Changes in operating assets and liabilities | ||
Accounts receivable | 158 | (2,748) |
Prepaid expenses | 54,305 | (91,816) |
Other current assets | (4,871) | |
Accounts payable and accrued liabilities | 30,552 | 57,078 |
Accrued wages - related party | 153,000 | |
Net cash used in operating activities - continuing operations | (330,146) | (448,584) |
Net cash provided by operating activities - discontinued operations | 10,881 | |
Cash Flows from Investing Activities | ||
Cash Flows from Financing Activities | ||
Contributions, net | 10,049 | |
Proceeds from bridge loan | 280,000 | 471,000 |
Proceeds from advances from related party, net | 3,807 | 4,561 |
Cash flow provided by financing activities | 283,807 | 485,610 |
Net Change in Cash | (35,458) | 37,026 |
Cash at Beginning of Period | 64,798 | 6,137 |
Cash at End of Period | 29,340 | 43,163 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Net assets acquired via stock issued | $ 612,774 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 9 Months Ended |
Sep. 30, 2019 | |
NATURE OF THE BUSINESS | |
NOTE 1 - NATURE OF THE BUSINESS | Gulf West Security Network, Inc. (a Nevada Corporation), and its wholly-owned subsidiaries, formerly known as “NuLife Sciences, Inc.” (“we”, “us”, “our”, “Gulf West”, “GWSN”, or the “Company”), are principally engaged in providing residential and commercial electronic security, home automation, and systems integration services on both a retail and wholesale basis. The Company’s retail division, which includes its wholly-owned subsidiary LJR Security Services, Inc. (a Louisiana Corporation) (“LJR”), is actively engaged in the hands-on design, engineering, sales, installation, after-market servicing, inspection and remote electronic monitoring of home (residential) burglar, fire and medical alarm systems as well as fully-integrated business (commercial) security and automation systems in the United States. The Company’s wholesale division, which operates under the name Gulf West Security Network (or “Gulf West”), is further engaged in the development and expansion of a proprietary coalition (alliance or network) of independently-branded life safety and property protection providers, fire alert and suppression system installers, electronic remote monitoring and video surveillance specialists, smart home designers, commercial systems integrators, structured wiring professionals and electrical contractors. Merger On August 9, 2018, the Board of Directors of the Company through its wholly-owned subsidiary NuLife Acquisition Corp. (“NuLife Sub”) approved and executed an agreement of merger and plan of reorganization (the “Merger Agreement”), to become effective at such time as the articles of merger have been filed with the Secretary of State of Louisiana (the “Effective Time”), and after the satisfaction or waiver by the parties thereto of the conditions set forth in Article VI of the Merger Agreement. Pursuant to the terms of the Merger Agreement, and in exchange for all one hundred (100) issued and outstanding shares of LJR Security Services, Inc. (“LJR”), LJR received one thousand (1,000) shares of series D senior convertible preferred stock, par value $.001 per share (the “Series D Preferred Stock”) of the Company, convertible into fifty million two hundred thirty-nine thousand five hundred forty-one (50,239,541) shares of common stock of the Company. In addition, the LJR shareholder received one share of series C super-voting preferred stock of NuLife which granted the holder 50.1% of the votes of NuLife at all times. The merger was accounted for as a reverse merger, whereby LJR was considered the accounting acquirer and became our wholly-owned subsidiary. In accordance with the accounting treatment for a “reverse merger”, the Company’s historical financial statements prior to the reverse merger has been replaced with the historical financial statements of LJR prior to the reverse merger. The financial statements after completion of the reverse merger include the assets, liabilities, and results of operations of the combined company from and after the closing date of the reverse merger, with only certain aspects of pre-consummation stockholders’ equity remaining in the consolidated financial statements. Restatement of Articles of Incorporation On September 19, 2018, LJR Security Services, Inc. amended and restated its articles of incorporation providing for a change in the Company’s name to “Gulf West Security Network, Inc.” The Company’s authorized shares of common stock, preferred stock and the par value of the stock will remain unchanged. The Company also amended and restated its bylaws to reflect the name change. On September 20, 2018, the Board of Directors of the Company designated one (1) share of Series C Preferred Stock (the “Series C Stock”) and one thousand (1,000) shares of Series D Preferred Stock (the “Series D Stock”). The classes of Series C Stock and Series D Stock were created in anticipation of the closing of the Merger Agreement. Change of Fiscal Year On September 28, 2018, the Company’s Board approved a change in fiscal year end from September 30th to December 31st. The decision to change the fiscal year end was related to the recent merger of the Company with LJR to closely align its operations and internal controls with that of its wholly owned subsidiary LJR. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management makes estimates that affect certain accounts including deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined. Principles of Consolidation The Company’s condensed consolidated financial statements include all accounts of Gulf West Security Network, Inc., LJR, and NuLife Sciences, Inc. from September 28, 2018, the consummation of the Merger Agreement. All inter-company balances and transactions have been eliminated in consolidation. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (“U.S.”) as promulgated by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and with the rules and regulations of the U.S Securities and Exchange Commission (“SEC”). In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year. Therefore, the interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K. Cash and Cash Equivalents The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of one year or less, when purchased, to be cash. As of September 30, 2019 and December 31, 2018, the Company had no cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. Capitalization of Fixed Assets The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. Revenue Recognition The Company retrospectively adopted FASB Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers”, on January 1, 2018, which did not have a material impact on the Company’s condensed consolidated financial statements. The Company generates revenue primarily through contractual monthly recurring fees received for monitoring and related services provided to customers. In transactions involving security systems that are sold outright to the customer, or where equipment is already owned by the customer, the Company’s performance obligations include monitoring, related services, and the sale and installation, or refurbish and repair, of the security systems. Revenue associated with the sale and installation of security systems is recognized once installation is complete and is reflected in installation and repair revenue in the consolidated statements of operations. Revenue associated with monitoring and related services is recognized as those services are provided and is reflected in monitoring and related services revenue in the consolidated statements of operations. Early termination of the contract by the customer results in a termination charge in accordance with the contract terms. Contract termination charges are recognized in revenue when collectability is probable and are reflected in monitoring and related revenue in the consolidated statements of operations. Amounts collected from customers for sales and other taxes are reported net of the related amounts remitted. Barter Transactions The Company conducts certain barter sales through trade organizations for which it is a member, as are some of its customers. The barter transactions are generally related to the Company providing its security services, and the value of these services is recorded at fair value which is the contracted for value of the services with the customer, which is the more readily available measure as to its valuation. Fair Value Measurements Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in its balance sheet, where it is practicable to estimate that value. In accordance with ASC Topic 820, “Fair Value Measurements and Disclosures,” the Company measures certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: · Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; · Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and · Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Fair Value Measurement at September 30, 2019 Carrying Value Level 1 Level 2 Level 3 Derivative liabilities, debt and equity instruments $ 68,969 — — $ 68,969 Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Changes in Level 3 assets measured at fair value for the nine months ended September 30, 2019 were as follows: Balance, December 31, 2018 $ 111,291 Change in fair value of derivative (42,322 ) Balance, September 30, 2019 $ 68,969 Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company estimates the fair value of these instruments using the Black-Scholes option pricing model and the intrinsic value if the convertible notes are due on demand. The Company determined that certain convertible debt instruments outstanding as of the date of these condensed consolidated financial statements include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible notes payable have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period is recorded in earnings as “Income (loss) from discontinued operations.” Please refer to Note 3 below. Going Concern The Company’s condensed consolidated financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has limited commercial experience and had a net loss from continuing operations of $568,161 for the nine months ended September 30, 2019, and an accumulated deficit of $2,045,537, and a working capital deficit of $1,863,065 at September 30, 2019. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The accompanying condensed consolidated financial statements for the nine months ended September 30, 2019, have been prepared assuming the Company will continue as a going concern. The Company’s cash resources will likely be insufficient to meet its anticipated needs during the next twelve months. The Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund its operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 was effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest period presented in the consolidated financial statements. The Company adopted the provisions of this standard in the first quarter of fiscal 2019 but did not have any impact since all leases are short-term in nature. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation and may require the services of valuation experts. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its condensed consolidated financial statements. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future condensed consolidated financial statements. |
ACQUIRED ASSETS AND ASSUMED LIA
ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2019 | |
ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS | |
NOTE 3 - ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS | Assets Acquired and Liabilities Assumed through Reverse Merger Pursuant to the terms of the Merger Agreement, and in exchange for all one hundred (100) issued and outstanding shares of LJR Security Services, Inc., LJR received one thousand (1,000) shares of series D senior convertible preferred stock, par value $.001 per share (the “Series D Preferred Stock”) of the Company, convertible into fifty million two hundred thirty-nine thousand five hundred forty-one (50,239,541) shares of common stock of the Company. In addition, the LJR shareholder received one (1) share of series C super-voting preferred stock of the Company which granted the holder 50.1% of the votes of the Company at all times. As a result of the Reverse Merger, the Company has acquired the following assets and liabilities which were recorded at fair value. The fair values of assets acquired and liabilities assumed are as follows: Security deposit $ 4,871 Goodwill 612,771 Accrued expenses (125,647 ) Accrued interest (49,261 ) Notes payable (117,500 ) Convertible notes (138,500 ) Derivative liability (172,532 ) Total identified net assets $ 14,202 As a result of the Reverse Merger, we acquired approximately $0.6 million of liabilities of the former operations of NuLife Sciences, Inc., which have been discontinued. We are evaluating the means to relieve the Company of these liabilities. The assets and liabilities described below have been classified as discontinued operations in the condensed consolidated financial statements. Goodwill The Company acquired goodwill through the Reverse Merger described above. The carrying value of $612,771 was impaired and written down to $0 as of December 31, 2018. Notes Payable As a result of the Reverse Merger the Company assumed notes payable with total outstanding principal of $117,500 and accrued interest of $36,304, detailed as follows: · Demand note payable with outstanding principal of $25,000, and accrued interest of $17,400. The note matured on June 30, 2015 and carries an interest rate of 12%. This note is in default. · Demand notes payable to East West Secured Developments, LLC, with a combined outstanding principal of $74,500, and accrued interest of $18,061. These notes matured on October 31, 2016 and carry an interest rate of 12%. These notes are in default. · Term note payable with outstanding principal of $18,000, and accrued interest of $843. The note matured on July 31, 2019 and carries an interest at the rate of 3%. This note is in default. As of September 30, 2019, notes payable had total outstanding principal of $117,500 and accrued interest of $49,194. These liabilities have been incorporated into liabilities from discontinued operations. Convertible Notes As a result of the Reverse Merger the Company assumed convertible notes with total outstanding principal of $138,500 and accrued interest of $11,078, detailed as follows: September 30, 2019 (A) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.11 per share and is due December 2019 $ 5,000 (B) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.11 per share and is due August 2020 50,000 (C) Convertible note payable, annual interest rate of 5%, convertible into common stock at a variable rate per share and was due September 2018 (in default) 63,500 (D) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.30 per share and is due October 13, 2020 20,000 Total convertible debt $ 138,500 A. Originally issued in 2017, outstanding principal of $5,000, and accrued interest of $715. B. Hayden note was issued on August 23, 2017, outstanding principal of $50,000, and accrued interest of $4,538. C. Current holder acquired the note in May 2018. Current outstanding principal of $63,500, and accrued interest of $4,295. D. Escala note was issued October 13, 2017, outstanding principal of $20,000, and accrued interest of $1,530. As of September 30, 2019, convertible notes had total outstanding principal of $138,500 and accrued interest of $21,856. These liabilities have been incorporated into liabilities from discontinued operations. Derivative Liability As of September 30, 2019, the derivative liabilities were valued at $68,969, related to a convertible note [(C) above] due September 2018. This derivative liability has been incorporated into liabilities from discontinued operations. The fair value of the embedded derivative was determined using the Black-Scholes Model with the following assumptions: September 30, 2019 (1) dividend yield of 0 %; (2) expected volatility of 259 %; (3) risk-free interest rate of 1.88 %; (4) expected life of 0.33 year; (5) fair value of the Company’s common stock of $ 0.06 per share. |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended |
Sep. 30, 2019 | |
PREPAID EXPENSES | |
NOTE 4 - PREPAID EXPENSES | The Company has available to its credit through certain trade organizations as a result of barter transactions for services. These amounts are available for use with certain vendors and establishments who are part of the same trade organization. These balances do not represent cash available to the Company, and as such are recorded as the prepaid expenses account as incurred. As of September 30, 2019 and December 31, 2018, the available barter credit balances were $26,255 and $22,760, respectively. As of September 30, 2019, this account also includes prepaid expense for legal expenses amounting to $5,000. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 9 Months Ended |
Sep. 30, 2019 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
NOTE 5 - RELATED PARTY TRANSACTIONS AND BALANCES | An officer of the Company agreed to defer portions of his salaries annually since inception. The balances due under this arrangement were $196,859 and $43,859 as of September 30, 2019 and December 31, 2018, respectively. This balance has no formal repayment terms or interest. The same officer of the Company advances funds to the Company and receives repayments on such advances throughout the year in the form of allowing Company use of personal credit cards. The balances due under this arrangement as of September 30, 2019 and December 31, 2018 were $26,166 and $22,359, respectively. |
BRIDGE LOAN
BRIDGE LOAN | 9 Months Ended |
Sep. 30, 2019 | |
BRIDGE LOAN | |
NOTE 6 - BRIDGE LOAN | As of September 30, 2019, the Company has received advances totaling $951,000 from certain unrelated third parties. The formal structure and payment terms of these advances have not yet been determined by the Company and the third parties. |
CAPITAL STOCK
CAPITAL STOCK | 9 Months Ended |
Sep. 30, 2019 | |
CAPITAL STOCK | |
NOTE 7 - CAPITAL STOCK | The Company is authorized to issue 475,000,000 shares of $0.001 par value common stock and 25,000,000 shares of $0.001 par value preferred stock. As of September 30, 2019, the Company had 4,518,250 shares of its common stock issued and outstanding, with 742,500 shares of its Series A Convertible Preferred Stock issued and outstanding, 0 shares of its Series B Convertible Preferred Stock issued and outstanding, 1 share of its Series C Super-Voting Preferred Stock issued and outstanding, and 1,000 shares of its Series D Senior Convertible Preferred Stock issued and outstanding. Description of Preferred Stock: Series A Preferred Stock The Company has 742,500 shares of Preferred Stock designated as Series A Preferred Stock with the following characteristics: · Holders of the Series A Stock are entitled to receive dividends or other distributions with the holders of the common stock on an “as converted” basis when, as, and if declared by the Board of Directors of the Company. · Holders of shares of Series A Stock, upon Board of Directors approval, may convert at any time following the issuance upon sixty-one (61) day written notice to the Company. Each share of Series A Stock shall be convertible into such number of fully paid and non-assessable shares of common stock as is determined by multiplying the number of issued and outstanding shares of the Company’s common stock together with all other derivative securities, including securities convertible into or exchangeable for common stock, whether or not then convertible or exchangeable (b) subscriptions, rights, options and warrants to purchase shares of common stock, whether or not then exercisable, but entitled to vote on matters submitted to the shareholders, issued by the Company and outstanding as of the date of conversion, by .000001, then multiplying that number of shares of Series A Stock to be converted. · In case of any consolidation, merger of the Company, or a change of control of the Company’s Board, the holders are entitled, without any further action required or permission by the Board, to exercise their conversions rights. In the case of any consolidation, merger of the Company, the Board shall mail to each holder of Series A Stock at least thirty (30) days prior to the consummation of such event, a notice thereof and each such holder shall have the option to either (i) convert such holder’s shares of Series A Stock into shares of common stock pursuant to this paragraph and thereafter receive the number of shares of common stock or other securities or property, or cash, as the case may be, to which a holder of the number of shares of common stock of the Company deliverable upon conversion of such Series A Stock would have been entitled upon conversion immediately preceding such consolidation, merger or conveyance, or (ii) exercise such holder’s rights pursuant to Section 8.1(a) hereof; provided however that the Series A Stock shall not be subject to or affected as to the number of conversion shares or the redemption or liquidation price by reason of any reverse stock split affected prior or as a result of any reorganization. · In the event of a liquidation, the holders of shares of the Series A Stock shall be entitled to receive, prior to the holders of the other series of preferred stock and prior and in preference to any distribution of the assets or surplus funds of the Company to the holders of any other shares of stock of the Company by reason of their ownership of such stock, an amount equal to five dollars ($5.00) per share with respect to each share of Series B Stock owned as of the date of Liquidation, plus all declared but unpaid dividends with respect to such shares, and thereafter they shall share in the net Liquidation proceeds on an “as converted basis” on the same basis as the holders of the common stock. · The holders of each share of Series A Stock shall have that number of votes as determined by multiplying the number of issued and outstanding shares of the Company’s common Stock together with all other derivative securities issued by the Company and outstanding as of the date of conversion, whether or not then convertible or exchangeable, entitled to vote on matters submitted to the shareholders, by .000001, then multiplying that number of shares of Series A Stock to be converted. · The Corporation shall have the option to redeem all of the outstanding shares of Series A Stock at any time on an “all or nothing” basis, unless otherwise mutually agreed in writing between the Corporation and the holders of shares of Series A Stock holding at least 51% of such Series A Stock, beginning ten (10) business days following notice by the Company, at a redemption price the higher of (a) five dollars ($5.00) per share, or (b) fifty percent (50%) of the trailing average highest closing bid price of the Company’s common stock as quoted on www.OTCMarkets.com or the Company’s primary listing exchange on the date of notice of redemption, unless otherwise modified by mutual written consent between the Company and the holders of the Series A Stock (the “Conversion Price”). Redemption payments shall only be made in cash within sixty (60) days of notice by the Company to redeem. · The shares of Series A Stock acquired by the Company by reason of conversion or otherwise can be reissued, but only as an amended class, not as shares of Series A Stock. Series C Preferred Stock · The Company has 1 share of Preferred Stock designated as Series C Preferred Stock. Although the Series C Preferred Stock carries no dividend, distribution, liquidation or conversion rights, each share of Series C Preferred Stock grants the holder 50.1% of the total votes of all classes of capital stock of the Company and are able to vote together with the common stockholders on all matters. Consequently, the holder of the Company’s Series C Preferred Stock is able to unilaterally control the election of its board of directors and, ultimately, the direction of the Company. Series D Preferred Stock · The Company has 1,000 shares of Preferred Stock designated as Series D Preferred Stock. Although the Series D Preferred Stock have no voting rights, shares of Series D Preferred Stock in the aggregate are convertible into fifty million two hundred thirty-nine thousand five hundred forty-one (50,239,541) shares of common stock of the Company. Additionally, the Series D Preferred Stock has pari passu dividend, distribution and liquidation rights with the common stock. Stock Options As a result of the Reverse Merger the Company has outstanding the following stock options as of September 30, 2019 Shares Weighted Average Exercise Price Weighted Average Remaining Term Aggregate Intrinsic Value Outstanding, September 30, 2019 2,120,000 $ 0.17 0.26 $ 355,200 Exercisable, September 30, 2019 2,120,000 $ 0.17 0.26 $ 355,200 |
COMMITMENT AND CONTINGENCIES
COMMITMENT AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
COMMITMENT AND CONTINGENCIES | |
NOTE 8 - COMMITMENT AND CONTINGENCIES | Office Lease During the nine months ended September 30, 2019, the Company rented space on a month-to-month basis in a Class 1 office in Lafayette, LA. The monthly rent is $3,000. For the nine months ended September 30, 2019 and 2018, the Company incurred $18,000 and $20,500 in rent expense, respectively. Laboratory Lease During 2017, the Company executed a 5-year lease for a laboratory located at NOVA Southeastern University to be used by NuLife for conducting bench research. The lease calls for monthly payments of base rent of $1,925 along with applicable taxes and shared operating expenses. The lease required a security deposit in the amount of $4,871 and requires a 4% increase in base rent annually. During the year ended December 31, 2018, the agreement was terminated, with rent declared due and payable immediately in the amount of $142,944, including $46,052 past due rent, $92,850 estimated future rent payments, and $4,042 brokerage fees. These liabilities have been incorporated into liabilities from discontinued operations. Litigation From time to time the Company may become a party to litigation in the normal course of business. Management believes that there are no current legal matters that would have a material effect on the Company’s financial position or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management makes estimates that affect certain accounts including deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined. |
Principles of Consolidation | The Company’s condensed consolidated financial statements include all accounts of Gulf West Security Network, Inc., LJR, and NuLife Sciences, Inc. from September 28, 2018, the consummation of the Merger Agreement. All inter-company balances and transactions have been eliminated in consolidation. |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (“U.S.”) as promulgated by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and with the rules and regulations of the U.S Securities and Exchange Commission (“SEC”). In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year. Therefore, the interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K. |
Cash and Cash Equivalents | The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of one year or less, when purchased, to be cash. As of September 30, 2019 and December 31, 2018, the Company had no cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. |
Capitalization of Fixed Assets | The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. |
Revenue Recognition | The Company retrospectively adopted FASB Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers”, on January 1, 2018, which did not have a material impact on the Company’s condensed consolidated financial statements. The Company generates revenue primarily through contractual monthly recurring fees received for monitoring and related services provided to customers. In transactions involving security systems that are sold outright to the customer, or where equipment is already owned by the customer, the Company’s performance obligations include monitoring, related services, and the sale and installation, or refurbish and repair, of the security systems. Revenue associated with the sale and installation of security systems is recognized once installation is complete and is reflected in installation and repair revenue in the consolidated statements of operations. Revenue associated with monitoring and related services is recognized as those services are provided and is reflected in monitoring and related services revenue in the consolidated statements of operations. Early termination of the contract by the customer results in a termination charge in accordance with the contract terms. Contract termination charges are recognized in revenue when collectability is probable and are reflected in monitoring and related revenue in the consolidated statements of operations. Amounts collected from customers for sales and other taxes are reported net of the related amounts remitted. |
Barter Transactions | The Company conducts certain barter sales through trade organizations for which it is a member, as are some of its customers. The barter transactions are generally related to the Company providing its security services, and the value of these services is recorded at fair value which is the contracted for value of the services with the customer, which is the more readily available measure as to its valuation. |
Fair Value Measurements | Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in its balance sheet, where it is practicable to estimate that value. In accordance with ASC Topic 820, “Fair Value Measurements and Disclosures,” the Company measures certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: · Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; · Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and · Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Fair Value Measurement at September 30, 2019 Carrying Value Level 1 Level 2 Level 3 Derivative liabilities, debt and equity instruments $ 68,969 — — $ 68,969 Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Changes in Level 3 assets measured at fair value for the nine months ended September 30, 2019 were as follows: Balance, December 31, 2018 $ 111,291 Change in fair value of derivative (42,322 ) Balance, September 30, 2019 $ 68,969 |
Derivative Financial Instruments | The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company estimates the fair value of these instruments using the Black-Scholes option pricing model and the intrinsic value if the convertible notes are due on demand. The Company determined that certain convertible debt instruments outstanding as of the date of these condensed consolidated financial statements include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible notes payable have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period is recorded in earnings as “Income (loss) from discontinued operations.” Please refer to Note 3 below. |
Going Concern | The Company’s condensed consolidated financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has limited commercial experience and had a net loss from continuing operations of $568,161 for the nine months ended September 30, 2019, and an accumulated deficit of $2,045,537, and a working capital deficit of $1,863,065 at September 30, 2019. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The accompanying condensed consolidated financial statements for the nine months ended September 30, 2019, have been prepared assuming the Company will continue as a going concern. The Company’s cash resources will likely be insufficient to meet its anticipated needs during the next twelve months. The Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund its operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 was effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest period presented in the consolidated financial statements. The Company adopted the provisions of this standard in the first quarter of fiscal 2019 but did not have any impact since all leases are short-term in nature. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation and may require the services of valuation experts. ASU 2017-04 is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its condensed consolidated financial statements. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of fair value measurements | Fair Value Measurement at September 30, 2019 Carrying Value Level 1 Level 2 Level 3 Derivative liabilities, debt and equity instruments $ 68,969 — — $ 68,969 |
Schedule of Level 3 assets measured at fair value | Balance, December 31, 2018 $ 111,291 Change in fair value of derivative (42,322 ) Balance, September 30, 2019 $ 68,969 |
ACQUIRED ASSETS AND ASSUMED L_2
ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS (Tables) | |
Schedule of total identified net assets | Security deposit $ 4,871 Goodwill 612,771 Accrued expenses (125,647 ) Accrued interest (49,261 ) Notes payable (117,500 ) Convertible notes (138,500 ) Derivative liability (172,532 ) Total identified net assets $ 14,202 |
Schedule of Convertible notes | September 30, 2019 (A) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.11 per share and is due December 2019 $ 5,000 (B) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.11 per share and is due August 2020 50,000 (C) Convertible note payable, annual interest rate of 5%, convertible into common stock at a variable rate per share and was due September 2018 (in default) 63,500 (D) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.30 per share and is due October 13, 2020 20,000 Total convertible debt $ 138,500 |
Schedule of fair value of derivatives | September 30, 2019 (1) dividend yield of 0 %; (2) expected volatility of 259 %; (3) risk-free interest rate of 1.88 %; (4) expected life of 0.33 year; (5) fair value of the Company’s common stock of $ 0.06 per share. |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
CAPITAL STOCK | |
Schedule of outstanding stock options | Shares Weighted Average Exercise Price Weighted Average Remaining Term Aggregate Intrinsic Value Outstanding, September 30, 2019 2,120,000 $ 0.17 0.26 $ 355,200 Exercisable, September 30, 2019 2,120,000 $ 0.17 0.26 $ 355,200 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (Details) | Sep. 30, 2019USD ($) |
Derivative liabilities, debt and equity instruments | $ 68,969 |
Level 1 | |
Derivative liabilities, debt and equity instruments | |
Level 2 | |
Derivative liabilities, debt and equity instruments | |
Level 3 | |
Derivative liabilities, debt and equity instruments | $ 68,969 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Balance, December 31, 2018 | $ 111,291 |
Change in fair value of derivative | (42,322) |
Balance, September 30, 2019 | $ 68,969 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Loss from continuing operations | $ (136,335) | $ (200,240) | $ (568,161) | $ (407,547) | |
Accumulated deficit | (2,045,537) | (2,045,537) | $ (1,514,380) | ||
Working capital deficit | $ (1,863,065) | $ (1,863,065) |
ACQUIRED ASSETS AND ASSUMED L_3
ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill | $ 612,771 | |
Fair value of assets andliabilities [Member] | ||
Security deposit | 4,871 | |
Goodwill | 612,771 | |
Accrued expenses | (125,647) | |
Accrued interest | (49,261) | |
Notes payable | (117,500) | |
Convertible notes | (138,500) | |
Derivative liability | (172,532) | |
Total identified net assets | $ 14,202 |
ACQUIRED ASSETS AND ASSUMED L_4
ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS (Details 1) | 1 Months Ended |
Sep. 30, 2019USD ($)$ / shares | |
Convertible Note A | |
Total Convertible notes | $ 5,000 |
Interest rate | 8.00% |
Convertible price per share | $ / shares | $ 0.11 |
Convertible Note D | |
Total Convertible notes | $ 20,000 |
Interest rate | 8.00% |
Convertible price per share | $ / shares | $ 0.30 |
Convertible Note C | |
Total Convertible notes | $ 63,500 |
Interest rate | 5.00% |
Convertible Note B | |
Total Convertible notes | $ 50,000 |
Interest rate | 8.00% |
Convertible price per share | $ / shares | $ 0.11 |
ACQUIREDASSETS AND ASSUMED LIAB
ACQUIREDASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS (Details 2) - Black-Scholes Model [Member] - Fair value of embedded derivative [Member] | 9 Months Ended |
Sep. 30, 2019$ / shares | |
Dividend yield of | 0.00% |
Expected volatility of | 259.00% |
Risk-free interest rate of | 1.88% |
Expected life of | 3 months 29 days |
Fair value of the Company?s common stock of | $ 0.06 |
ACQUIRED ASSETS AND ASSUMED L_5
ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Goodwill | $ 612,771 | |
Accrued interest | 21,856 | |
Outstanding principal | $ 138,500 | |
Merger Agreement | ||
Convertible Note A | ||
Accrued interest | $ 715 | |
Outstanding principal | 5,000 | |
Convertible Note D | ||
Accrued interest | 1,530 | |
Outstanding principal | 20,000 | |
Convertible Note C | ||
Accrued interest | 4,295 | |
Outstanding principal in default | 63,500 | |
Derivative liability | 68,969 | |
Convertible Note B | ||
Accrued interest | 4,538 | |
Outstanding principal | 50,000 | |
Reverse Merger | ||
Outstanding principal | $ 117,500 | |
Merger Agreement | Pursuant to the terms of the Merger Agreement, and in exchange for all one hundred (100) issued and outstanding shares of LJR Security Services, Inc., LJR received one thousand (1,000) shares of series D senior convertible preferred stock, par value $.001 per share (the Series D Preferred Stock) of the Company, convertible into fifty million two hundred thirty-nine thousand five hundred forty-one (50,239,541) shares of common stock of the Company. In addition, the LJR shareholder received one (1) share of series C super-voting preferred stock of the Company which granted the holder 50.1% of the votes of the Company at all times. | |
Note payable (1) | ||
Accrued interest | $ 17,400 | |
Outstanding principal in default | 25,000 | |
Note payable (2) | ||
Accrued interest | 18,061 | |
Outstanding principal in default | 74,500 | |
Convertible Note | ||
Accrued interest | 11,078 | |
Outstanding principal | 138,500 | |
Note payable | ||
Accrued interest | 49,194 | 36,304 |
Outstanding principal | 117,500 | $ 117,500 |
Note payable (3) | ||
Accrued interest | 843 | |
Outstanding principal | $ 18,000 |
PREPAID EXPENSES (Details Narra
PREPAID EXPENSES (Details Narrative) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
PREPAID EXPENSES (Details Narrative) | ||
Barter credit balances | $ 26,255 | $ 22,760 |
Prepaid expenses | $ 5,000 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
RELATED PARTY TRANSACTIONS AND BALANCES | ||
Balance due under arrangements | $ 196,859 | $ 43,859 |
Accounts payable - related party | $ 26,166 | $ 22,359 |
BRIDGE LOAN (Details Narrative)
BRIDGE LOAN (Details Narrative) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS (Tables) | |
Advances received from unrelated third parties | $ 951,000 |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
CAPITAL STOCK | |
Outstanding, shares | shares | 2,120,000 |
Outstanding, weighted average exercise price | $ / shares | $ 0.17 |
Outstanding, weighted average remaining term | 3 months 4 days |
Outstanding, aggregate intrinsic value | $ | $ 355,200 |
Exercisable, shares | shares | 2,120,000 |
Exercisable, weighted average exercise price | $ / shares | $ 0.17 |
Exercisable, wighted average remaining term | 3 months 4 days |
Exercisable, aggregate intrinsic value | $ | $ 355,200 |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Common Stock, authorized | 475,000,000 | 475,000,000 |
Common Stock, issued | 4,518,250 | 4,518,250 |
Common Stock, outstanding | 4,518,250 | 4,518,250 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, authorized | 25,000,000 | 25,000,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Series A Preferred Stock [Member] | ||
Preferred Stock, authorized | 25,000,000 | 25,000,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, issued | 742,500 | 742,500 |
Preferr Stock, outstanding | 742,500 | 742,500 |
Series B Preferred Stock [Member] | ||
Preferred Stock, authorized | 25,000,000 | 25,000,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, issued | ||
Preferr Stock, outstanding | ||
Series C Preferred Stock Member | ||
Preferred Stock, authorized | 25,000,000 | 25,000,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, issued | 1 | 1 |
Preferr Stock, outstanding | 1 | 1 |
Preferred Stock characteristics | In the event of a liquidation, the holders of shares of the Series A Stock shall be entitled to receive, prior to the holders of the other series of preferred stock and prior and in preference to any distribution of the assets or surplus funds of the Company to the holders of any other shares of stock of the Company by reason of their ownership of such stock, an amount equal to five dollars ($5.00) per share with respect to each share of Series B Stock owned as of the date of Liquidation, plus all declared but unpaid dividends with respect to such shares, and thereafter they shall share in the net Liquidation proceeds on an “as converted basis” on the same basis as the holders of the common stock. | |
Series D Preferred Stock Member | ||
Preferred Stock, authorized | 25,000,000 | 25,000,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, issued | 1,000 | 1,000 |
Preferr Stock, outstanding | 1,000 | 10,000 |
Preferred Stock characteristics | The Company has 1 share of Preferred Stock designated as Series C Preferred Stock. Although the Series C Preferred Stock carries no dividend, distribution, liquidation or conversion rights, each share of Series C Preferred Stock grants the holder 50.1% of the total votes of all classes of capital stock of the Company and are able to vote together with the common stockholders on all matters. Consequently, the holder of the Company’s Series C Preferred Stock is able to unilaterally control the election of its board of directors and, ultimately, the direction of the Company. | |
Series A Preferred Stock | ||
Preferred Stock, authorized | 2,000,000 | |
Preferred Stock, issued | 742,000 | |
Preferr Stock, outstanding | 742,000 | |
Preferred Stock characteristics | The Corporation shall have the option to redeem all of the outstanding shares of Series A Stock at any time on an “all or nothing” basis, unless otherwise mutually agreed in writing between the Corporation and the holders of shares of Series A Stock holding at least 51% of such Series A Stock, beginning ten (10) business days following notice by the Company, at a redemption price the higher of (a) five dollars ($5.00) per share, or (b) fifty percent (50%) of the trailing average highest closing bid price of the Company’s common stock as quoted on www.OTCMarkets.com or the Company’s primary listing exchange on the date of notice of redemption, unless otherwise modified by mutual written consent between the Company and the holders of the Series A Stock (the “Conversion Price”). Redemption payments shall only be made in cash within sixty (60) days of notice by the Company to redeem. | |
Series C Preferred Stock | ||
Preferred Stock, issued | 1 | 1 |
Preferr Stock, outstanding | 1 | 1 |
Series D Preferred Stock | ||
Preferred Stock, issued | 1,000 | 1,000 |
Preferr Stock, outstanding | 1,000 | 1,000 |
COMMITMENT AND CONTINGENCIES (D
COMMITMENT AND CONTINGENCIES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Laboratory Lease | ||
Security deposit | $ 4,871 | |
Monthly payments | 1,925 | |
Rent expenses | $ 142,944 | |
Lease commitments | During 2017, the Company executed a 5-year lease for a laboratory located at NOVA Southeastern University to be used by NuLife for conducting bench research. The lease calls for monthly payments of base rent of $1,925 along with applicable taxes and shared operating expenses. The lease required a security deposit in the amount of $4,871 and requires a 4% increase in base rent annually. During the year ended December 31, 2018, the agreement was terminated, with rent declared due and payable immediately in the amount of $142,944, including $46,052 past due rent, $92,850 estimated future rent payments, and $4,042 brokerage fees. These liabilities have been incorporated into liabilities from discontinued operations. | |
Office Lease | ||
Monthly payments | $ 3,000 | |
Rent expenses | $ 18,000 | $ 20,500 |