Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jun. 18, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | GREY CLOAK TECH INC. | ||
Entity Central Index Key | 0001630176 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 2,482,647 | ||
Entity Common Stock, Shares Outstanding | 264,059,759 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | true | ||
Entity Ex Transition Period | false | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation, State or Country Code | NV | ||
Entity File Number | 000-55572 | ||
Document Annual Report | true |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash | $ 133,451 | $ 485 |
Accounts receivable | 26,473 | |
Inventory | 3,081,158 | 500 |
Accrued interest receivable | 4,762 | |
Total current assets | 3,241,083 | 5,747 |
Fixed assets, net of accumulated depreciation of $6,282 and $1,582, respectively | 15,183 | 726 |
Note receivable | 79,295 | |
Goodwill | 193,260 | |
Total other assets | 208,443 | 80,021 |
TOTAL ASSETS | 3,449,526 | 85,768 |
CURRENT LIABILITIES | ||
Accounts payable | 21,125 | 57,340 |
Accounts payable - related party | 15,000 | |
Accrued liabilities | 53,341 | |
Notes payable | 79,667 | 63,000 |
Notes payable - related party | 1,050,866 | |
Convertible debt, net of discount of $0.00 and $15,960, respectively | 166,750 | 654,453 |
Convertible debt - related party, net of discount of $0.00 and $30,853, respectively | 1,341,876 | 61,223 |
Accrued interest payable | 49,902 | 83,899 |
Accrued interest payable - related party | 491,221 | 1,750 |
Derivative liabilities | 1,060,388 | 2,713,319 |
Total current liabilities | 4,315,136 | 3,649,984 |
Total liabilities | 4,315,136 | 3,649,984 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.001 par value, 75,000,000 shares authorized, none and 1,333,334 shares issued and outstanding, respectively | 1,333 | |
Common stock, $0.001 par value, 2,500,000,000 shares authorized, 121,040,150 and 3,028,030 shares issued and outstanding, respectively | 121,610 | 6,455 |
Additional paid-in capital | 9,542,603 | 7,440,895 |
Accumulated deficit | (10,529,823) | (11,012,899) |
Total stockholders' equity | (865,610) | (3,564,216) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 3,449,526 | $ 85,768 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Fixed Assets, net of accumulated depreciation | $ 6,282 | $ 1,582 |
Website, net of accumulated depreciation | $ 2,800 | $ 2,800 |
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Preferred Stock, Shares Issued | 1,333,334 | |
Preferred Stock, Shares Outstanding | 1,333,334 | |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 2,500,000,000 | 2,500,000,000 |
Common Stock, Shares Issued | 121,040,150 | 3,028,030 |
Common Stock, Shares Outstanding | 121,040,150 | 3,028,030 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statement Of Operations | ||
REVENUE | $ 748,377 | $ 67,131 |
COST OF REVENUE | 524,494 | 28,590 |
GROSS PROFIT | 223,882 | 38,541 |
OPERATING EXPENSES | ||
General and administrative | 1,031,745 | 306,944 |
General and administrative - related party | 132,000 | 239,081 |
Total operating expenses | 1,163,745 | 546,025 |
OTHER INCOME | ||
Interest expense, net of interest income | (16,745) | (1,266,470) |
Interest expense - related party | (70,738) | (1,500) |
Change in fair value of derivative | 1,652,931 | (184,643) |
Loss on extinguishment of debt | 53,038 | 526,481 |
Impairment of goodwill | (843,632) | |
Gain on sale of asset | 6,951 | |
Total other income (expense) | 1,572,639 | (2,815,775) |
Net loss before income tax provision | 632,776 | (3,323,259) |
Income tax provision | ||
Net income/loss from continuing operations | 632,776 | (3,323,259) |
Income (loss) from discountiinued operations - (net of tax benefit) | (6,258) | |
NET INCOME/(LOSS) | $ 632,776 | $ (3,329,517) |
Loss per share - basic and diluted | $ 0 | $ (1.21) |
Weighted average number of shares outstanding - basic and diluted | 110,612,376 | 2,747,890 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2017 | $ 1,333 | $ 900 | $ 6,502,022 | $ (7,683,382) | $ (1,179,127) |
Beginning Balance, Shares at Dec. 31, 2017 | 1,333,334 | 898,422 | |||
Issuance of common stock for debt conversion | $ 5,555 | 920,453 | 926,008 | ||
Issuance of common stock for debt conversion, Shares | 5,556,932 | ||||
Debt Forgiveness | 18,420 | 18,420 | |||
Net loss for the period | (3,329,517) | (3,329,517) | |||
Ending Balance at Dec. 31, 2018 | $ 1,333 | $ 6,455 | 7,440,895 | (11,012,899) | (3,564,216) |
Ending Balance, Shares at Dec. 31, 2018 | 1,333,334 | 6,455,354 | |||
Adjustment to issuance of common stock for debt conversion | 149,700 | 149,700 | |||
Cashless exercise of warrants | $ 996 | 1,921 | 2,917 | ||
Cashless exercise of warrants, Shares | 996,052 | ||||
Issuance of share acquisition of BergaMet | $ 97,410 | 1,850,784 | 1,948,194 | ||
Issuance of share acquisition of BergaMet, Shares | 97,409,678 | ||||
Issuance of common stock for preferred stock conversion | $ (1,333) | $ 15,593 | (14,260) | ||
Issuance of common stock for preferred stock conversion, Shares | (1,333,334) | 15,592,986 | |||
Issuance of common stock for debt conversion | $ 806 | 106,912 | 107,718 | ||
Issuance of common stock for debt conversion, Shares | 806,015 | ||||
Issuance of common stock for consulting fees | $ 350 | 6,650 | 7,000 | ||
Issuance of common stock for consulting fees, Shares | 350,000 | ||||
Debt Forgiveness | |||||
Net loss for the period | 632,776 | 632,776 | |||
Ending Balance at Dec. 31, 2019 | $ 121,610 | $ 9,542,603 | $ (10,529,823) | $ (865,610) | |
Ending Balance, Shares at Dec. 31, 2019 | 121,610,085 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities: | ||
Net Income / (Loss) | $ 632,776 | $ (3,329,517) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deprecation and amortization | 8,527 | 8,332 |
Warrants issued for services | 7,000 | |
Non-cash interest | 1,296,056 | |
Non-cash compensation | 108,260 | |
Change in fair value on derivative liability | (1,652,931) | 184,643 |
Loss on extinguishment of debt | 53,038 | 526,481 |
Gain on sale of asset | (6,951) | |
Impairment of asset | 843,632 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (26,473) | 16,000 |
Inventory | (3,080,658) | 47,966 |
Prepaid expenses | ||
Accrued interest receivable | 4,762 | (3,172) |
Deposits | ||
Accounts payable | (36,215) | (10,024) |
Accounts payable - related party | (15,000) | 29,420 |
Accrued liabilities | 53,341 | |
Accrued interest payable | (33,997) | 67,792 |
Accrued interest payable - related party | 489,471 | 591 |
Net Cash used in Operating Activities | (3,488,099) | (328,751) |
Cash Flows from Investing Activities: | ||
Purchase of fixed assets | (22,985) | |
Cash received from sale of asset | 50,000 | |
Purchase of BergaMet | 1,757,310 | |
Purchse of note receivable | 79,295 | |
Net Cash used in Investing Activities | 1,813,621 | 50,000 |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of convertible debt | 1,104,241 | 194,583 |
Payments for repayment of convertible debt | (349,330) | |
Proceds from issuance of noted payable | 16,667 | 3,000 |
Proceeds from issuance of noted payable - related party | 1,050,866 | |
Payments for repayment of notes payable - related party | (15,000) | |
Net Cash provided by Financing Activities | 1,807,444 | 197,583 |
Increase in cash | 132,966 | (81,168) |
Cash at beginning of period | 485 | 81,653 |
Cash at end of period | 133,451 | 485 |
Supplemental disclosure of cash flow information of non-cash financing activities: | ||
Common stock issued in connection with debt conversions | 107,718 | 926,008 |
Conversion of debt for shares of common stock | $ 18,420 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Grey Cloak Tech Inc. (the “Company”) was incorporated in the State of Nevada on December 19, 2014. The Company has additionally acquired BergaMet NA, LLC which markets and sells heath supplemental products. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of December 31, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the year ended December 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s form 10-K for the year ended December 31, 2018 filed with the SEC on April 1, 2020. Use of Estimates The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Cash includes cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. Accounts Receivables Accounts receivables are recorded at the invoice amount and do not bear interest. Sharerails Note Receivable and Accrued Interest The Company decided to write off the money loaned to Sharerails as being not collectible. The amount written off was $84,057.06. Inventory Inventories consist of health supplements held for sale in the ordinary course of business. The Company uses the weighted average cost method to value its inventories at the lower of cost or market. An allowance for inventory was established in 2018 and is evaluated each quarter to determine if all items are still sellable due to expiration dates. As of December 31, 2019 and 2018, the total of inventory which was written off as an inventory allowance was $424,958 and $324,01 Property and Equipment The Company’s property and equipment are recorded at cost and depreciated using the straight-line method over the useful lives of the assets, generally from three to seven years. Upon sale or disposal of property and equipment, the related asset cost and accumulated depreciation or amortization are removed from the respective accounts and any gain or loss is reflected in current operations. Goodwill In accordance with Goodwill and Other Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned to individual assets acquired and liabilities assumed and is tested for impairment at the reporting unit level on an annual basis in the Company's fourth fiscal quarter or more frequently if indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair value of the Company's reporting units with each respective reporting unit's carrying amount, including goodwill. The fair value of reporting units is generally determined using the income approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the second step of the goodwill impairment test is performed to determine the amount of any impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. The Company sees the goodwill to have a ten-year useful life. No goodwill impairment indicators were present after working through our analysis of goodwill during the year ending December 31, 2019. The Company has determined that the method applied represents the fair value of the asset group principally because the valuation of the intangibles with the asset group is based on the anticipated cash flows related to the revenue stream from its customers. The asset group excludes goodwill, long term non-operational assets and liabilities and cash. As such, the principal value from the asset group relates to the cash inflows from its customers and the cash outflows required to service these customers. The fair value for the asset group consists of the following: · Fair value of net revenues: computed using the income approach. The key input to these computations is the anticipated cash inflows from customers. These valuations include 100% of the cash inflows related to the customer base, and taking cash outflows into consideration. · Fair value of working capital (including accounts receivable, inventory, accrued expenses, and accounts payables). Due to the short-term nature of the working capital, book value has been determined to be fair value. These accounts represent either avoided future outflows (inventory, prepaids) or future cash flows (accrued expense, AP and AR) related to customer sales. · Fair value of five years of revenue (2019 to 2023): we discounted our cash flows to the anticipated cash projected to be received. We also projected the anticipated cash outflows required to service these customers. If the asset group was to be valued as a whole, we would expect an income approach based on the revenues being generated from the customers and expenses required to service those customers, appropriately adjusted for the working capital position. The sum of these values reasonably approximates this approach. The Company’s revenue streams align directly with the intangibles, which were recorded as a result of the BergaMet acquisition in fiscal 2019. For purposes of the Step 2 recoverability test under ASC 360 subsection 2.3., the net revenues from BergaMet customers base were used. The revenue stream fairly reflects anticipated future cash flows; accordingly, the intangibles associated with these revenue streams have been tested with the expected cash flows. Revenue Recognition Beginning January 1, 2019, the Company implemented ASC 606, Revenue from Contracts with Customers. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures The Company recognizes revenue and cost of goods sold from product sales or services rendered when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. The Company records revenue upon shipment of the products to the customers. Concentration There is no concentration of revenue for the year ended December 31, 2018 and the year ended December 31, 2019. Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. As of December 31, 2019, the Company did not have any amounts recorded pertaining to uncertain tax positions. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The derivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure at fair value on a recurring basis. The change in Level 3 financial instrument is as follows: Balance, January 1, 2018 $ 1,822,568 Issued during the year ended December 31, 2018 868,591 Change in fair value recognized in operations 184,643 Converted during the year ended December 31, 2018 (162,483 ) Balance, December 31, 2018 $ 2,713,319 Balance, January 1, 2019 $ 2,713,319 Issued during the year ended December 31, 2019 638,419 Change in fair value recognized in operations (613,662 ) Converted during the year ended December 31, 2019 (1,677,688 ) Balance, December 31, 2019 $ 1,060,388 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements of five–step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract cost, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting period beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company’s revenues are recognized when control of the promised goods or services is transferred to our clients (upon shipment of goods) in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: (1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the Company satisfies a performance obligation. We adopted ASC 2014-09 on January 1, 2019. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities with them. Convertible Instruments The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “ Derivatives and Hedging Activities Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. During the year ended December 31, 2019, the Company recognized a gain on extinguishment of $394,208 from the conversion of convertible debt with a bifurcated conversion option. Common Stock Purchase Warrants The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification is required. Gain on Extinguishment of debt Note Satisfaction Agreements Prior to the Exchange, the Company entered into a Note Satisfaction Agreement with each of Auctus Fund, Crown Bridge Partners, LLC, Power Up Lending Group Ltd., GS Capital Partners LLC, Oakmore Opportunity Fund I LP, and Adar Bays, LLC. All of these entities were holders of the Company’s convertible debt, and these Note Satisfaction Agreements terminate their convertible notes unless the Company fails to perform its payment obligations. The Company agreed to pay these note holders an aggregate of $518,486 plus interest. The Company paid an aggregate of $353,908 on or before February 15, 2019, and it will pay another $164,578 plus interest in approximately one (1) year. Various other holders of Convertible Promissory Notes agreed to convert their notes for an aggregate of 806,015 shares of common stock prior to the Exchange. As a result of these transactions, no convertible promissory notes remain outstanding, except for those convertible notes subject to revival if the Company fails to make payments pursuant to the Note Satisfaction Agreements. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
GOING CONCERN | NOTE 3 – GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated minimal revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and incurring startup costs and expenses. As a result, the Company incurred accumulated net losses from Inception (December 19, 2014) through the period ended December 31, 2019 of $10,529,823. In addition, the Company’s development activities since inception have been financially sustained through equity financing. Management plans to seek funding through debt and equity financing and has recently acquired a new company as a wholly owned subsidiary. |
RELATED PARTY
RELATED PARTY | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY | NOTE 4 – RELATED PARTY For the year ended December 31, 2019 and 2018, the Company had expenses totaling $40,194 and $239,081, respectively, to an officer and director for salaries, which is included in general and administrative expenses on the accompanying statement of operations As of December 31, 2019, there was convertible debt of $1,341,876 and accrued interest payable of $32,115 due to an officer and director, employees, and shareholders. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
NOTES RECEIVABLE | NOTE 5 – NOTES RECEIVABLE As of December 31, 2019 and 2018, the Company had the following: 2019 2018 Unsecured note receivable, due 02/04/2020, 4% interest. 0 79,295 |
CONVERTIBLE DEBT - RELATED PART
CONVERTIBLE DEBT - RELATED PARTY | 12 Months Ended |
Dec. 31, 2019 | |
Convertible Debt - Related Party | |
CONVERTIBLE DEBT - RELATED PARTY | NOTE 5 – CONVERTIBLE DEBT – RELATED PARTY As of December 31, 2019 and 2018, the Company had the following: 2019 2018 Unsecured convertible debt, due 10/17/18, 5% interest, converts at a 50% discount to market price based on the last 3 days trading price $ 0 $ 30,000 Unsecured convertible debt, due 04/13/20, 4% interest, converts at a 30% discount to market price based on the last 20 days trading price 61,876 62,076 Unsecured convertible debt, due 04/13/20, ranging between 4% and 8% interest, converts at $0.03 for a total of 19,333,333 shares 580,000 0 Unsecured convertible debt, due 04/13/20, 8% interest, converts at $0.05 for a total of 14,000,000 shares 700,000 0 Less: Discount 0 (30,853 ) TOTAL $ 1,341,876 $ 61,223 As of December 31, 2019 and 2018, the Company has an outstanding total of $32,115 and $0 in accrued interest for the above convertible notes. Below represent the Black-Scholes Option Pricing Model calculations, as of December 31, 2019, for the above convertible note payables: Payee Number of options valued Value of Convertible Option Unsecured Convertible debt #1 7,144,712 $180,416 Unsecured Convertible debt #2 20,083,056 $398,805 Unsecured Convertible debt #3 14,120,666 $239,614 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
NOTES PAYABLE | NOTE 7 – NOTES PAYABLE As of December 31, 2019 and 2018, the Company had the following: 2019 2018 Unsecured debt with shareholders of the Company, due 01/17/2024, 4% interest. $ 1,050,000 $ 0 Unsecured debt with shareholders of the Company, due 02/04/2020, 4% interest, interest due quarterly. 79,667 0 Unsecured debt with shareholders of the Company, no due date, 0% interest, 866 0 Unsecured debt with shareholders of the Company, due 08/20/18, 15% interest, interest due quarterly, convertible into shares of Eqova 0 60,000 Unsecured debt with a shareholder of the Company, due 03/25/19, 10% interest, interest due at maturity 0 3,000 Less: Discount 0 0 TOTAL $ 1,130,533 $ 142,295 As of December 31, 2019 and 2018, the Company has an outstanding total of $461,888 and $6,807 in accrued interest for the above note and past obligations which are unpaid. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | NOTE 8 – CONVERTIBLE DEBT As of December 31, 2019 and 2018, the Company had the following: 2019 2018 Unsecured convertible debt, due 8/24/18, 12% interest, converts at a 50% discount to market price based on the last 25 days trading price $ 0 $ 110,000 Unsecured convertible debt, due 11/01/18, 12% interest, converts at a 50% discount to market price based on the last 25 days trading price 110,000 110,000 Unsecured convertible debt, due 10/04/18, 8% interest, converts at a 55% discount to market price based on the last 20 days trading price 50,000 50,000 Unsecured convertible debt, due 02/02/19, 8% interest, converts at a 55% discount to market price based on the last 20 days trading price 50,000 50,000 Unsecured convertible debt, may borrow up to $300,000, due 10/04/18, 8% interest, converts at a 44% discount to market price based on the last 20 days trading price 0 24,883 Unsecured convertible debt, may borrow up to $300,000, due 11/09/18, 8% interest, converts at a 44% discount to market price based on the last 20 days trading price 0 45,000 Unsecured convertible debt, may borrow up to $300,000, due 01/08/19, 8% interest, converts at a 44% discount to market price based on the last 20 days trading price 0 40,000 Unsecured convertible debt, due 08/17/17, 12% interest, converts at a 45% discount to market price based on the last 20 days trading price 0 9,500 Unsecured convertible debt, due 01/23/18, 8% interest, converts at the lower of $0.04 or a 40% discount to market price based on the last 20 days trading price 0 17,000 Unsecured convertible debt, due 10/26/18, 8% interest, converts at a 45% discount to market price based on the last 20 days trading price 0 10,000 Unsecured convertible debt, due 06/26/18, 9% interest, converts at a 42% discount to market price based on the last 15 days trading price 0 22,095 Unsecured convertible debt, due 03/31/19, 10% interest, converts at a 30% discount to market price based on the last 20 days trading price 0 22,250 Unsecured convertible debt, due 12/01/17, 12% interest, converts at a 50% discount to market price based on the last 20 days trading price 0 66,000 Unsecured convertible debt, due 06/30/18, 12% interest, converts at a 39% discount to market price based on the average of the lowest 2 trading prices in the last 15 days trading price 0 8,935 Unsecured convertible debt, due 07/30/18, 12% interest, converts at a 39% discount to market price based on the average of the lowest 2 trading prices in the last 15 days trading price 0 43,000 Unsecured convertible debt, due 10/10/18, 12% interest, converts at a 39% discount to market price based on the average of the lowest 2 trading prices in the last 15 days trading price 0 35,000 Unsecured convertible debt, due 01/19/17, 8% interest, default interest at 18%, converts at a 54% discount to market price based on the lowest trading prices in the last 20 days trading price 6,750 6,750 Less: Discount 0 (15,960 ) TOTAL $ 166,750 $ 654,453 Below represent the Black-Scholes Option Pricing Model calculations, as of December 31, 2019, for the above convertible note payables: Payee Number of options valued Value of Convertible Option Unsecured Convertible debt #1 9,658,494 $175,636 Unsecured Convertible debt #2 3,410,757 $ 59,098 Unsecured Convertible debt #3 500,676 $ 6,819 As of December 31, 2019 and 2018, the Company has an outstanding total of $48,891 and $78,842 in accrued interest for the above convertible notes. One of the convertible promissory notes is in default but management has not been able to make contact with this party, due to them living out of the country. We have calculated the derivative liability as if it is in default (but the note’s default interest rate stays the same at 8%) and will still accrue appropriate interest until the note is fully satisfied or converted into the Company’s common stock. The Company has determined that the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes a derivative which has been bifurcated from the note and recorded as a derivative liability, with a corresponding discount recorded to the associated debt. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders Equity | |
STOCKHOLDERS' EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY Authorized Stock The Company has authorized 75,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote on any matter on which action of the stockholders of the corporation is sought. During February 2017, the Company increased the authorized number of shares to 500,000,000. Also, the Company increased the authorized preferred stock to 75,000,000 shares and designated 25,000,000 shares of preferred stock to Series A Convertible Preferred Stock. During January 2018, the Company increased its authorized number of common shares to 1,000,000,000. During April 2018, the Company increased its authorized number of common shares to 2,500,000,000. The Board of Directors, in the future, has the authority to increase the authorized capital up to 4,000,000,000 shares based on shareholder approval. The shareholders of the Company approved a reverse stock split at a ratio of between 1-for-100 and 1-for 250. The Company received approval from FINRA for a reverse stock split of 1-for-250, which was effective as of July 23, 2018. On October 16, 2017, the Company filed an Amended and Restated Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of the Series A Convertible Preferred Stock (the “Amended Certificate”) with the Secretary of State of the State of Nevada. The Amended Certificate reduces the number of preferred shares designated as Series A Preferred Stock from 25,000,000 shares to 1,333,334 shares. The Amended Certificate also changes the conversion and voting rights of the Series A Preferred Stock. The Series A Preferred Stock is now convertible into the number of shares of our common stock equal to 0.00006% of our outstanding common stock upon conversion. The voting rights of the Series A Preferred Stock are now equal to the number of shares of common stock into which the Series A Preferred Stock may convert. As of December 31, 2019, there are no outstanding shares of preferred stock. All the preferred stock was converted in common stock on February 4, 2019. See recent developments for details. Common Share Issuances During the year ended December 31, 2019, the Company issued a total of 1,802,067 shares of common stock for the conversion of debt totaling $270,300 including interest of $31,774. During the year ended December 31, 2018, the Company issued a total of 5,556,932 shares of common stock for the conversion of debt totaling $926,008 including interest of $9,118 and fees of $18.915, which result in loss on extinguishment of debt of $526,481. Warrant Issuances As of December 31, 2019, there were 16,800 warrants outstanding, of which 8,800 warrants are fully vested. Adjustment to Additional Paid in Capital (APIC) On January 1, 2019, the Company made an adjustment to APIC of $149,699.40 due to preferred stock conversions back in 2017 and 2018. Stock Issued for Services On January 28, 2019, the Company entered into a marketing and sales consulting agreement with an individual for a period of six months. The Company issued 350,000 shares of common stock as the compensation for this agreement. Share Conversion Agreements All of the holders of the Company’s Series A Convertible Preferred Stock (the “ Preferred Holders As of December 31, 2018, the preferred stock is convertible into 2,422,425 shares of common stock. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 10 – ACQUISITIONS Acquisition of BergaMet and the Share Exchange Agreement On February 4, 2019, the Company entered into a Share Exchange Agreement with BergaMet NA, LLC, a Delaware limited liability company (“ BergaMet Exchange The assets acquired and liabilities assumed as part of our acquisition were recognized at their fair values as of the effective acquisition date, February 4, 2019. The following table summarizes the fair values assigned to the assets acquired and liabilities assumed. Cash $ 437,826 Current assets 2,801,317 Current liabilities (1,484,210 ) Net assets acquired $ 1,754,934 The purchase price method was used when calculating the fair market value of the BergaMet purchase. On February 4, 2019 the closing stock price for GRCK was $0.02. The total number of shares exchanged multiplied by the closing stock price equaled a purchase value of $1,948,194. The difference between the net assets acquired and the purchase value was recorded as $193,260 of goodwill for the purchase. The Company viewed BergaMet’s balance sheet as being fairly valued as of February 4, 2019 so no adjustment was needed under the purchase price method of valuation. |
DISCONTINED OPERATIONS
DISCONTINED OPERATIONS | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
DISCONTINED OPERATIONS | NOTE 11 – DISCOUNTINUED OPERATIONS Healthy Extracts On January 1, 2019, the Company decided to discontinue operating the Healthy Extracts division and did not operate in 2019. At the time of the closure, the Company incurred a loss for the year of $714 which eliminated all carrying values of assets and liabilities for the division. Eqova Life Science On June 1, 2019, the Company decided to discontinue operating the Eqova Life Science division which ceased all activities in May 2019. Due to the closure, the Company incurred a loss for the year of $92,609 which eliminated all carrying values of assets and liabilities for the division. Advertising Business During the year ended December 31, 2018, the management determined to discontinue operations related to its advertising business segment. There were no significant assets or liabilities associated with the components of discontinued operations. The loss from discontinued operations is comprised of revenue and expenses related to the advertising business. Components of discontinued operations are as follows: 2018 Revenue – (net of tax) 0 Cost of revenue – (net of tax) (6,258 ) Income (loss) from discontinued operations – (net of tax benefits) $ (6,258 ) |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Business Segment Information | |
BUSINESS SEGMENT INFORMATION | NOTE 12 – BUSINESS SEGMENT INFORMATION As of December 31, 2019, the Company operated in three reportable segments (Corporate, CBD, Health Supplements) supported by a corporate group which conducts activities that are non-segment specific. The following table presents selected financial information about the Company’s reportable segments for the year ended December 31, 2019. CONSOLIDATED HEALTH SUPPLEMENTS CBD CORPORATE Revenue 748,377 748,377 — — Cost of Revenue 524,494 523,994 500 — Long-lived Assets 193,260 — — 193,260 Gain Before Income Tax 632,776 (779,801 ) 92,609 1,170,268 Identifiable Assets 3,256,266 3,255,216 — 1,050 Depreciation and Amortization 8,527 7,999 — 528 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS Note Conversion Agreements and Advance Conversion Agreements Effective April 13, 2020, we entered into a total of eighteen (18) agreements (16 Note Conversion Agreements and 2 Advance Conversion Agreements) whereby an aggregate of $1,508,407.84 in outstanding principal and accrued interest was converted into an aggregate of 39,248,714 shares of our common stock. The conversion price was either $0.03 per share or $0.05 per share, depending on the individual agreement. The conversions included notes and advances held by our officers and directors and our largest shareholder, as follows: Name Aggregate Principal and Interest Aggregate Shares Jay W. Decker $ 1,282,231.11 33,418,004 William Bossung $ 65,677.84 2,189,262 First Capital Properties LLC $ 16,180.00 539,334 Shelton S. Decker $ 33,717.78 782,223 Logan B. Decker $ 33,717.78 782,223 Kevin Pitts $ 51,255.56 1,025,112 Innovation Group Holdings, LLC $ 25,627.78 512,556 Acquisition of Ultimate Brain Nutrients, LLC On April 3, 2020, we entered into a Share Exchange Agreement by and among Grey Cloak Tech Inc., Ultimate Brain Nutrients, LLC, a Delaware limited liability company (“ UBN On May 30, 2020, the Company proposed a stock options agreement in the amount of 10,550,000 shares with a strike price of $0.05 to sixteen individuals. During June 2020, the Company received a total of $660,000 in exchange for 13,200,000 of common stock restricted shares through subscription agreements at $0.05 cents per share. COVID-19 The COVID-19 outbreak in early 2020 has adversely affected, and may continue to adversely affect economic activity globally, nationally and locally. These economic and market conditions and other effects of the COVID-19 outbreak may adversely affect the Company. At this point, the extent to which COVID-19 may impact the Company's business is uncertain. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of December 31, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the year ended December 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s form 10-K for the year ended December 31, 2018 filed with the SEC on April 1, 2020. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash | Cash Cash includes cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. |
Accounts Receivable | Accounts Receivables Accounts receivables are recorded at the invoice amount and do not bear interest. Sharerails Note Receivable and Accrued Interest The Company decided to write off the money loaned to Sharerails as being not collectible. The amount written off was $84,057.06. |
Inventory | Inventory Inventories consist of health supplements held for sale in the ordinary course of business. The Company uses the weighted average cost method to value its inventories at the lower of cost or market. An allowance for inventory was established in 2018 and is evaluated each quarter to determine if all items are still sellable due to expiration dates. As of December 31, 2019 and 2018, the total of inventory which was written off as an inventory allowance was $424,958 and $324,01 |
Property and Equipment | Property and Equipment The Company’s property and equipment are recorded at cost and depreciated using the straight-line method over the useful lives of the assets, generally from three to seven years. Upon sale or disposal of property and equipment, the related asset cost and accumulated depreciation or amortization are removed from the respective accounts and any gain or loss is reflected in current operations. |
Goodwill | Goodwill In accordance with Goodwill and Other Intangible Assets, goodwill is defined as the excess of the purchase price over the fair value assigned to individual assets acquired and liabilities assumed and is tested for impairment at the reporting unit level on an annual basis in the Company's fourth fiscal quarter or more frequently if indicators of impairment exist. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair value of the Company's reporting units with each respective reporting unit's carrying amount, including goodwill. The fair value of reporting units is generally determined using the income approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the second step of the goodwill impairment test is performed to determine the amount of any impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. The Company sees the goodwill to have a ten-year useful life. No goodwill impairment indicators were present after working through our analysis of goodwill during the year ending December 31, 2019. The Company has determined that the method applied represents the fair value of the asset group principally because the valuation of the intangibles with the asset group is based on the anticipated cash flows related to the revenue stream from its customers. The asset group excludes goodwill, long term non-operational assets and liabilities and cash. As such, the principal value from the asset group relates to the cash inflows from its customers and the cash outflows required to service these customers. The fair value for the asset group consists of the following: · Fair value of net revenues: computed using the income approach. The key input to these computations is the anticipated cash inflows from customers. These valuations include 100% of the cash inflows related to the customer base, and taking cash outflows into consideration. · Fair value of working capital (including accounts receivable, inventory, accrued expenses, and accounts payables). Due to the short-term nature of the working capital, book value has been determined to be fair value. These accounts represent either avoided future outflows (inventory, prepaids) or future cash flows (accrued expense, AP and AR) related to customer sales. · Fair value of five years of revenue (2019 to 2023): we discounted our cash flows to the anticipated cash projected to be received. We also projected the anticipated cash outflows required to service these customers. If the asset group was to be valued as a whole, we would expect an income approach based on the revenues being generated from the customers and expenses required to service those customers, appropriately adjusted for the working capital position. The sum of these values reasonably approximates this approach. The Company’s revenue streams align directly with the intangibles, which were recorded as a result of the BergaMet acquisition in fiscal 2019. For purposes of the Step 2 recoverability test under ASC 360 subsection 2.3., the net revenues from BergaMet customers base were used. The revenue stream fairly reflects anticipated future cash flows; accordingly, the intangibles associated with these revenue streams have been tested with the expected cash flows. |
Revenue Recognition | Revenue Recognition Beginning January 1, 2019, the Company implemented ASC 606, Revenue from Contracts with Customers. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures The Company recognizes revenue and cost of goods sold from product sales or services rendered when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation. The Company records revenue upon shipment of the products to the customers. |
Concentration | Concentration There is no concentration of revenue for the year ended December 31, 2018 and the year ended December 31, 2019. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. As of December 31, 2019, the Company did not have any amounts recorded pertaining to uncertain tax positions. |
Fair Value Measurements | Fair Value Measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The derivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is the only financial liability measure at fair value on a recurring basis. The change in Level 3 financial instrument is as follows: Balance, January 1, 2018 $ 1,822,568 Issued during the year ended December 31, 2018 868,591 Change in fair value recognized in operations 184,643 Converted during the year ended December 31, 2018 (162,483 ) Balance, December 31, 2018 $ 2,713,319 Balance, January 1, 2019 $ 2,713,319 Issued during the year ended December 31, 2019 638,419 Change in fair value recognized in operations (613,662 ) Converted during the year ended December 31, 2019 (1,677,688 ) Balance, December 31, 2019 $ 1,060,388 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements of five–step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract cost, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting period beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company’s revenues are recognized when control of the promised goods or services is transferred to our clients (upon shipment of goods) in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: (1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the Company satisfies a performance obligation. We adopted ASC 2014-09 on January 1, 2019. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities with them. |
Convertible Instruments | Convertible Instruments The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “ Derivatives and Hedging Activities Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. During the year ended December 31, 2019, the Company recognized a gain on extinguishment of $394,208 from the conversion of convertible debt with a bifurcated conversion option. |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification is required. |
Gain on Extinguishment of debt | Gain on Extinguishment of debt Note Satisfaction Agreements Prior to the Exchange, the Company entered into a Note Satisfaction Agreement with each of Auctus Fund, Crown Bridge Partners, LLC, Power Up Lending Group Ltd., GS Capital Partners LLC, Oakmore Opportunity Fund I LP, and Adar Bays, LLC. All of these entities were holders of the Company’s convertible debt, and these Note Satisfaction Agreements terminate their convertible notes unless the Company fails to perform its payment obligations. The Company agreed to pay these note holders an aggregate of $518,486 plus interest. The Company paid an aggregate of $353,908 on or before February 15, 2019, and it will pay another $164,578 plus interest in approximately one (1) year. Various other holders of Convertible Promissory Notes agreed to convert their notes for an aggregate of 806,015 shares of common stock prior to the Exchange. As a result of these transactions, no convertible promissory notes remain outstanding, except for those convertible notes subject to revival if the Company fails to make payments pursuant to the Note Satisfaction Agreements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value of Financial Liability on Recurring Basis | The change in Level 3 financial instrument is as follows: Balance, January 1, 2018 $ 1,822,568 Issued during the year ended December 31, 2018 868,591 Change in fair value recognized in operations 184,643 Converted during the year ended December 31, 2018 (162,483 ) Balance, December 31, 2018 $ 2,713,319 Balance, January 1, 2019 $ 2,713,319 Issued during the year ended December 31, 2019 638,419 Change in fair value recognized in operations (613,662 ) Converted during the year ended December 31, 2019 (1,677,688 ) Balance, December 31, 2019 $ 1,060,388 |
NOTES RECEIVABLE (Tables)
NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
Schedule of Notes Receivable | As of December 31, 2019 and 2018, the Company had the following: 2019 2018 Unsecured note receivable, due 02/04/2020, 4% interest. 0 79,295 |
CONVERTIBLE DEBT - RELATED PA_2
CONVERTIBLE DEBT - RELATED PARTY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Convertible Debt Related Party Tables Abstract | |
Schedule of Convertible Notes - Related Party | As of December 31, 2019 and 2018, the Company had the following: 2019 2018 Unsecured note receivable, due 02/04/2020, 4% interest. $ 0 $ 30,000 Unsecured convertible debt, due 04/13/20, 4% interest, converts at a 30% discount to market price based on the last 20 days trading price 61,876 62,076 Unsecured convertible debt, due 04/13/20, ranging between 4% and 8% interest, converts at $0.03 for a total of 19,333,333 shares 580,000 0 Unsecured convertible debt, due 04/13/20, 8% interest, converts at $0.05 for a total of 14,000,000 shares 700,000 0 Less: Discount 0 (30,853 ) TOTAL $ 1,341,876 $ 61,223 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable | |
Schedule of Notes Payable | As of December 31, 2019 and 2018, the Company had the following: 2019 2018 Unsecured debt with shareholders of the Company, due 01/17/2024, 4% interest. $ 1,050,000 $ 0 Unsecured debt with shareholders of the Company, due 02/04/2020, 4% interest, interest due quarterly. 79,667 0 Unsecured debt with shareholders of the Company, no due date, 0% interest, 866 0 Unsecured debt with shareholders of the Company, due 08/20/18, 15% interest, interest due quarterly, convertible into shares of Eqova 0 60,000 Unsecured debt with a shareholder of the Company, due 03/25/19, 10% interest, interest due at maturity 0 3,000 Less: Discount 0 0 TOTAL $ 1,130,533 $ 142,295 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Convertible Debt | |
Schedule of Convertible Debt | As of December 31, 2019 and 2018, the Company had the following: 2019 2018 Unsecured note receivable, due 02/04/2020, 4% interest. $ 0 $ 30,000 Unsecured convertible debt, due 04/13/20, 4% interest, converts at a 30% discount to market price based on the last 20 days trading price 61,876 62,076 Unsecured convertible debt, due 04/13/20, ranging between 4% and 8% interest, converts at $0.03 for a total of 19,333,333 shares 580,000 0 Unsecured convertible debt, due 04/13/20, 8% interest, converts at $0.05 for a total of 14,000,000 shares 700,000 0 Less: Discount 0 (30,853 ) TOTAL $ 1,341,876 $ 61,223 Below represent the Black-Scholes Option Pricing Model calculations, as of December 31, 2019, for the above convertible note payables: Payee Number of options valued Value of Convertible Option Unsecured Convertible debt #1 7,144,712 $180,416 Unsecured Convertible debt #2 20,083,056 $398,805 Unsecured Convertible debt #3 14,120,666 $239,614 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions | |
Schedule of fair value of Assets Acquired and Fair value Assumed | The following table summarizes the fair values assigned to the assets acquired and liabilities assumed. Cash $ 437,826 Current assets 2,801,317 Current liabilities (1,484,210 ) Net assets acquired $ 1,754,934 |
DISCOUNTINUED OPERATIONS (Table
DISCOUNTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discountinued Operations | |
Schedule of Discontinued Operations | There were no significant assets or liabilities associated with the components of discontinued operations which are as follows: 2018 Revenue – (net of tax) 0 Cost of revenue – (net of tax) (6,258 ) Income (loss) from discontinued operations – (net of tax benefits) $ (6,258 ) |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Business Segment Informationition Tables Abstract | |
Schedule of Reportable segments | The following table presents selected financial information about the Company’s reportable segments for the year ended December 31, 2019. CONSOLIDATED HEALTH SUPPLEMENTS CBD CORPORATE Revenue 748,377 748,377 — — Cost of Revenue 524,494 523,994 500 — Long-lived Assets 193,260 — — 193,260 Gain Before Income Tax 632,776 (779,801 ) 92,609 1,170,268 Identifiable Assets 3,256,266 3,255,216 — 1,050 Depreciation and Amortization 8,527 7,999 — 528 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Beginning Balance | $ 2,713,319 | |
Ending Balance | 1,060,388 | $ 2,713,319 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Liability [Member] | ||
Beginning Balance | 2,713,319 | 1,822,568 |
Issued During the Period | 638,419 | 868,591 |
Change in fair value recognized in operations | (613,662) | 184,643 |
Converted During the Period | (1,677,688) | (162,483) |
Ending Balance | $ 1,060,388 | $ 2,713,319 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Notes to Financial Statements | ||
Accumulated Net Loss | $ 10,529,823 | $ 11,012,899 |
RELATED PARTY (Details Narrativ
RELATED PARTY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Convertible Debt | $ 1,341,876 | $ 61,223 |
Accured Interest Payable | 491,221 | 1,750 |
Officer and Director [Member] | ||
General and administrative - Salaries | 40,194 | $ 239,081 |
Convertible Debt | 1,341,876 | |
Accured Interest Payable | $ 32,115 |
NOTES RECEIVABLE (Details)
NOTES RECEIVABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Notes Receivable | $ 79,295 | |
Unsecured convertible debt, due 02/02/19 [Member] | ||
Notes Receivable | $ 79,295 | |
Interest rate | 4.00% | |
Due date of Loan | Feb. 4, 2020 |
CONVERTIBLE DEBT - RELATED PA_3
CONVERTIBLE DEBT - RELATED PARTY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Convertible debt - related party | $ 1,341,876 | $ 61,223 |
Unsecured convertible debt, due 10/17/18 [Member] | ||
Convertible debt - related party | $ 30,000 | |
Interest rate | 5.00% | |
Due date of Loan | Oct. 17, 2018 | |
Debt Instrument, Interest Rate, Increase (Decrease) | 50.00% | |
Unsecured convertible debt, due 04/13/20 [Member] | ||
Convertible debt - related party | $ 61,876 | $ 62,076 |
Interest rate | 4.00% | 4.00% |
Due date of Loan | Apr. 13, 2020 | |
Debt Instrument, Interest Rate, Increase (Decrease) | 30.00% | |
Unsecured convertible debt, due 04/13/20 [Member] | ||
Convertible debt - related party | $ 580,000 | |
Due date of Loan | Apr. 13, 2020 | |
Unsecured convertible debt, due 04/13/20 [Member] | Minimum [Member] | ||
Interest rate | 4.00% | |
Unsecured convertible debt, due 04/13/20 [Member] | Maximum [Member] | ||
Interest rate | 8.00% | |
Unsecured convertible debt, due 04/13/20 [Member] | ||
Convertible debt - related party | $ 700,000 | |
Interest rate | 8.00% | |
Due date of Loan | Apr. 13, 2020 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Notes Payable | $ 1,130,533 | $ 63,000 |
Unsecured convertible debt, due 01/17/2024 [Member] | ||
Notes Payable | $ 1,050,000 | |
Interest rate | 4.00% | |
Due date of Loan | Jan. 17, 2024 | |
Unsecured convertible debt, due 02/04/2020 [Member] | ||
Notes Payable | $ 79,667 | |
Interest rate | 4.00% | |
Due date of Loan | Feb. 4, 2020 | |
Unsecured convertible debt, no due date [Member] | ||
Notes Payable | $ 866 | $ 60,000 |
Interest rate | 0.00% | 15.00% |
Unsecured convertible debt, due 03/25/19 [Member] | ||
Notes Payable | $ 3,000 | |
Interest rate | 10.00% |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Convertible promissory note | $ 166,750 | |
TOTAL | 166,750 | $ 654,453 |
Unsecured convertible debt, due 10/04/18 [Member] | ||
Convertible promissory note | $ 110,000 | |
Interest rate | 12.00% | |
Due date of Loan | Nov. 1, 2018 | |
Debt Instrument, Interest Rate, Increase (Decrease) | 50.00% | |
Unsecured convertible debt, due 11/09/18 [Member] | ||
Convertible promissory note | $ 50,000 | |
Interest rate | 8.00% | |
Due date of Loan | Feb. 2, 2019 | |
Debt Instrument, Interest Rate, Increase (Decrease) | 55.00% | |
Unsecured convertible debt, due 01/08/19 [Member] | ||
Convertible promissory note | $ 6,750 | |
Interest rate | 8.00% | |
Due date of Loan | Jan. 19, 2017 | |
Debt Instrument, Interest Rate, Increase (Decrease) | 18.00% | |
Unsecured convertible debt, due 02/02/19 [Member] | ||
Convertible promissory note | $ 50,000 | |
Interest rate | 8.00% | |
Due date of Loan | Feb. 2, 2019 | |
Debt Instrument, Interest Rate, Increase (Decrease) | 55.00% |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - shares | Dec. 31, 2019 | Feb. 04, 2019 | Dec. 31, 2018 |
Preferred Shares Issued, Shares | 1,333,334 | ||
BergaMet [Member] | |||
Preferred Shares Issued, Shares | 97,409,678 |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - BergaMet [Member] | Feb. 04, 2019USD ($) |
Cash | $ 437,826 |
Current assets | 2,801,317 |
Current liabilities | (1,484,210) |
Net assets acquired | $ 1,754,934 |
DISCOUNTINUED OPERATIONS (Detai
DISCOUNTINUED OPERATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Discountinued Operations Details Abstract | ||
Revenue - (net of tax) | $ 0 | |
Cost of revenue - (net of tax) | (6,258) | |
Income (loss) from discontinued operations - (net of tax benefits) | $ (6,258) |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 748,377 | $ 67,131 |
Cost of Revenue | 524,494 | 28,590 |
Long-lived Assets | 193,260 | |
Loss Before Income Tax | 632,776 | (3,323,259) |
Identifiable Assets | 3,256,266 | |
Depreciation and Amortization | 8,527 | $ 8,332 |
Health Supplements [Member] | ||
Revenue | 748,377 | |
Cost of Revenue | 523,994 | |
Long-lived Assets | 193,260 | |
Loss Before Income Tax | (779,801) | |
Identifiable Assets | 3,255,216 | |
Depreciation and Amortization | 7,999 | |
CBD [Member] | ||
Revenue | ||
Cost of Revenue | 500 | |
Long-lived Assets | ||
Loss Before Income Tax | 92,609 | |
Identifiable Assets | ||
Depreciation and Amortization | ||
Corporate Segment [Member] | ||
Revenue | ||
Cost of Revenue | ||
Long-lived Assets | ||
Loss Before Income Tax | 1,170,268 | |
Identifiable Assets | 1,050 | |
Depreciation and Amortization | $ 528 |