Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 20, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Fourth Wave Energy, Inc. | |
Entity Central Index Key | 0001652958 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,307,329 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | NV | |
Entity Ex Transition Period | false | |
Entity File Number | 333-207047 |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 9,438 | $ 1,691 |
Prepaid assets | 362,008 | 24,018 |
Total currents assets | 371,446 | 25,709 |
Total assets | 371,446 | 25,709 |
Current liabilities: | ||
Accounts payable | 625,706 | 128,519 |
Accounts payable - related party | 100,137 | 104,623 |
Notes payable | 339,900 | 332,900 |
Convertible notes, net of unamortized discount of $164,186 and $83,441, respectively | 449,276 | 116,559 |
Derivative liability | 639,713 | 185,295 |
Total current liabilities | 2,154,732 | 867,896 |
Total liabilities | 2,154,732 | 867,896 |
STOCKHOLDERS' DEFICIT | ||
Common stock, $0.001 par value, 200,000,000 shares authorized, 37,307,329 and 29,288,163 shares issued and outstanding, respectively | 37,307 | 29,288 |
Additional paid in capital | 3,784,172 | 348,680 |
Accumulated deficit | (5,604,766) | (1,220,155) |
Total stockholders' deficit | (1,783,286) | (842,187) |
Total liabilities and stockholders' deficit | 371,446 | 25,709 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.001 par value, 5,0000,000 shares authorized, Series A Preferred stock, $0.001 par value, 1,000 shares authorized 1,000 and 0 shares issued and outstanding, respectively | $ 1 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Convertible notes, unamortized discount | $ 164,186 | $ 83,441 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares Issued | 37,307,329 | 29,288,163 |
Common Stock, Shares Outstanding | 37,307,329 | 29,288,163 |
Series A Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 1,000 | 1,000 |
Preferred Stock, Shares Issued | 1,000 | 0 |
Preferred Stock, Shares Outstanding | 1,000 | 0 |
STATEMENTS OF OPERATIONS (Unaud
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Operating expenses: | ||||
General and administration | $ 212,689 | $ 70,502 | $ 3,750,383 | $ 197,813 |
Total operating expenses | (212,689) | (70,502) | (3,750,383) | (197,813) |
Interest expense | (103,587) | (39,712) | (248,231) | (49,188) |
Change in fair value of derivative liability | (309,671) | (25,720) | (385,997) | (34,213) |
Total other expense | (413,258) | (65,432) | (634,228) | (83,401) |
Net loss | $ (625,947) | $ (135,934) | $ (4,384,611) | $ (281,214) |
Net loss per share: | ||||
Basic and diluted | $ (0.02) | $ 0 | $ (0.13) | $ (0.01) |
Weighted average shares outstanding: | ||||
Basic and diluted | 36,478,230 | 29,076,800 | 34,206,503 | 29,066,230 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Preferred Stock [Member]Series A Preferred Stock [Member] | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2018 | $ 29,052 | $ 189,048 | $ (640,984) | $ (422,884) | |
Beginning Balance, Shares at Dec. 31, 2018 | 29,051,800 | ||||
Net Loss | (47,655) | (47,655) | |||
Ending Balance at Mar. 31, 2019 | $ 29,052 | 189,048 | (688,639) | (470,539) | |
Ending Balance, Shares at Mar. 31, 2019 | 29,051,800 | ||||
Beginning Balance at Dec. 31, 2018 | $ 29,052 | 189,048 | (640,984) | (422,884) | |
Beginning Balance, Shares at Dec. 31, 2018 | 29,051,800 | ||||
Common shares issued for conversion of debt | 19,960 | ||||
Common shares issued for conversion of debt and accrued interest | |||||
Extinguishment of derivative liability due to conversion | |||||
Stock based compensation | |||||
Net Loss | (281,214) | ||||
Ending Balance at Sep. 30, 2019 | $ 29,077 | 208,983 | (922,198) | (684,138) | |
Ending Balance, Shares at Sep. 30, 2019 | 29,076,800 | ||||
Beginning Balance at Mar. 31, 2019 | $ 29,052 | 189,048 | (688,639) | (470,539) | |
Beginning Balance, Shares at Mar. 31, 2019 | 29,051,800 | ||||
Common shares issued for conversion of debt | $ 25 | 6,225 | 6,250 | ||
Common shares issued for conversion of debt (in shares) | 25,000 | ||||
Net Loss | (97,625) | (97,625) | |||
Ending Balance at Jun. 30, 2019 | $ 29,077 | 195,273 | (786,264) | (561,914) | |
Ending Balance, Shares at Jun. 30, 2019 | 29,076,800 | ||||
Common shares issued for conversion of debt | 13,710 | 13,710 | |||
Net Loss | (135,934) | (135,934) | |||
Ending Balance at Sep. 30, 2019 | $ 29,077 | 208,983 | (922,198) | (684,138) | |
Ending Balance, Shares at Sep. 30, 2019 | 29,076,800 | ||||
Beginning Balance at Dec. 31, 2019 | $ 29,288 | 348,680 | 1,220,155 | (842,187) | |
Beginning Balance, Shares at Dec. 31, 2019 | 29,288,163 | ||||
Stock based compensation | $ 1 | $ 6,200 | 2,908,254 | 2,914,455 | |
Stock based compensation, in shares | 1,000 | 6,200,000 | |||
Net Loss | (3,307,709) | (3,307,709) | |||
Ending Balance at Mar. 31, 2020 | $ 1 | $ 35,488 | 3,256,934 | (4,527,864) | (1,235,441) |
Ending Balance, Shares at Mar. 31, 2020 | 1,000 | 35,488,163 | |||
Beginning Balance at Dec. 31, 2019 | $ 29,288 | 348,680 | 1,220,155 | (842,187) | |
Beginning Balance, Shares at Dec. 31, 2019 | 29,288,163 | ||||
Common shares issued for conversion of debt | |||||
Common shares issued for conversion of debt and accrued interest | 206,400 | ||||
Extinguishment of derivative liability due to conversion | 222,657 | ||||
Stock based compensation | 2,914,455 | ||||
Net Loss | (4,384,611) | ||||
Ending Balance at Sep. 30, 2020 | $ 1 | $ 37,307 | 3,784,172 | 5,604,766 | (1,783,286) |
Ending Balance, Shares at Sep. 30, 2020 | 1,000 | 37,307,329 | |||
Beginning Balance at Mar. 31, 2020 | $ 1 | $ 35,488 | 3,256,934 | (4,527,864) | (1,235,441) |
Beginning Balance, Shares at Mar. 31, 2020 | 1,000 | 35,488,163 | |||
Sale of common stock | $ 200 | 49,800 | 50,000 | ||
Sale of common stock (in shares) | 200,000 | ||||
Common shares issued for conversion of debt and accrued interest | $ 438 | 32,424 | 32,862 | ||
Common shares issued for conversion of debt and accrued interest (in shares) | 438,166 | ||||
Extinguishment of derivative liability due to conversion | 166,080 | 166,080 | |||
Net Loss | (450,955) | (450,955) | |||
Ending Balance at Jun. 30, 2020 | $ 1 | $ 36,126 | 3,505,238 | (4,978,819) | (1,437,454) |
Ending Balance, Shares at Jun. 30, 2020 | 1,000 | 36,126,329 | |||
Sale of common stock | $ 200 | 49,800 | 50,000 | ||
Sale of common stock (in shares) | 200,000 | ||||
Common shares issued for conversion of debt and accrued interest | $ 981 | 172,557 | 173,538 | ||
Common shares issued for conversion of debt and accrued interest (in shares) | 981,000 | ||||
Extinguishment of derivative liability due to conversion | 56,577 | 56,577 | |||
Net Loss | (625,947) | (625,947) | |||
Ending Balance at Sep. 30, 2020 | $ 1 | $ 37,307 | $ 3,784,172 | $ 5,604,766 | $ (1,783,286) |
Ending Balance, Shares at Sep. 30, 2020 | 1,000 | 37,307,329 |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,384,611) | $ (281,214) |
Adjustment to reconcile net loss to cash used in operating activities: | ||
Stock based compensation | 2,914,455 | |
Amortization of debt discount | 219,483 | 45,995 |
Loss on change in fair value of derivative liability | 385,997 | 34,213 |
Net change in: | ||
Prepaid assets | 52,010 | (1,169) |
Accounts payable and accrued expenses | 503,049 | (1,413) |
Accounts payable - related party | (4,486) | 24,533 |
CASH FLOWS USED IN OPERATING ACTIVITIES | (314,103) | (179,055) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock | 100,000 | |
Proceeds from convertible notes | 214,850 | 100,000 |
Advances from third party | 82,900 | |
Payments on notes payable | 10,000 | |
Proceeds from notes payable | (3,000) | |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 321,850 | 182,900 |
NET CHANGE IN CASH | 7,747 | 3,845 |
Cash, beginning of period | 1,691 | 1,285 |
Cash, end of period | 9,438 | 5,130 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid on interest expenses | ||
Cash paid for income taxes | ||
NON-CASH TRANSACTIONS | ||
Common stock issued with convertible notes | 19,960 | |
Debt discount created by derivative liability | 291,078 | 63,656 |
Common shares issued for conversion of debt and accrued interest | 206,400 | |
Extinguishment of derivative liability due to conversion | 222,657 | |
Prepaid expenses financed with convertible note payable | $ 390,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The accompanying unaudited interim financial statements of Fourth Wave Energy, Inc. (formerly Pierre Corp.) (“we”, “our”, “Fourth Wave” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2019, as reported in the Form 10-K of the Company, have been omitted. On March 20, 2020, shareholders owning a majority of the Company's outstanding shares of common stock amended the Company's Articles of Incorporation to change the name of the Company from Pierre Corp. to Fourth Wave Energy, Inc. In March 2020 the Director General of the World Health Organization declared COVID-19 a pandemic. We are still assessing the impact COVID-19 may have on our business, but there can be no assurance that this analysis will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally. The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic. Significant Accounting Policies Fair Value of Financial Instruments The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. Fair value is defined 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. Valuation techniques used to measure fair value maximize the use of observable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. Level 3: inputs to the valuation methodology are unobservable and significant to the fair value Fair Value Measurements The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy. The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2020 and December 31, 2019: Fair value measured at September 30, 2020 Total carrying value at September 30, 2020 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 639,713 $ $ $ 639,713 Fair value measured at December 31, 2019 Total carrying value at December 31, 2019 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 185,295 $ $ $ 185,295 There were no transfers between Level 1, 2 or 3 during the period. The table below presents the change in the fair value of the derivative liability during the nine months ended September 30, 2020: Fair value as of December 31, 2019 $ 185,295 Fair value on the date of issuance recorded as a debt discount 291,078 Fair value on the date of issuance recorded as a loss on derivatives 23,698 Extinguishment of liability to equity due to conversions (222,657 ) Loss on change in fair value of derivatives 362,299 Fair value as of September 30, 2020 $ 639,713 Convertible debt The Company records a beneficial conversion feature related to the issuance of convertible debt that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional noncash interest expense over the expected life of the convertible notes. Beneficial Conversion Features If the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. Reclassification Certain reclassifications may have been made to our prior year’s financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Going Concern | Note 2. Going Concern These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At September 30, 2020 the Company had not yet achieved profitable operations and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3. Related Party Transactions Effective April 30, 2019, the Company agreed to increase compensation to the President of the Company to $11,500 per month for management services if funds are available or to accrue such amount if funds are not available. The agreement is verbal and can be cancelled at any time. In addition, the President of the Company advances cash to fund operations and periodically pays expenses on behalf of the Company subject to reimbursement. Fees earned during the period are as follows: Nine months ended Nine months ended Prior period balance $ 104,623 $ 68,341 Management fees 103,500 87,000 Cash advances 9,105 Expenses paid on behalf of Company 4,229 Repayments (121,320 ) (62,467 ) End of period balance $ 100,137 $ 92,874 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 4. Notes Payable On January 15, 2020, the Company converted $20,000 in advances from a third party into a promissory note. The unsecured note bears an interest rate of 8% and matures on January 15, 2021. On September 30, 2020, the Company issued a $10,000 promissory note to a third party. The unsecured note bears an interest rate of 8% and matures on September 30, 2021. During the nine months period ended September 30, 2020 and 2019, the Company received advances of $0 and $82,900, respectively, from third parties . |
Convertible Notes Payable and D
Convertible Notes Payable and Derivative Liability | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Disclosure - Convertible Notes Payable and Derivative Liability | Note 5. Convertible Notes Payable and Derivative Liability On April 25, 2019, the Company borrowed $30,000 from an unrelated third party. The loan is evidenced by an unsecured note which had an original issuance discount of $2,500 plus an additional $2,500 to pay for transaction fees of the lender, which amounts will be amortized over the life of the note. The loan bears interest at a rate of 9% and was due and payable on October 25, 2019 and became past due. If a default notice is received the interest rate will be 18%. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price of 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $28,112 which was recorded as a discount on the note payable and a day one loss on the derivative liability of $9,362. In addition, the note holder was issued 25,000 shares of common stock with a relative fair value of $6,250 which was recorded as a debt discount and will be amortized over the life of the note. On June 15, 2020, the Company converted the $30,000 note and $2,862 of accrued interest into 438,166 shares of common stock with a fair value of $32,862. As of September 30, 2020, the balance on the loan, net of unamortized discount of $0, was $0. On June 4, 2019, the Company borrowed $55,000 from an unrelated third party. The loan is evidenced by an unsecured note which had an original issuance discount of $5,000 which amount will be amortized over the life of the note. The loan bears interest at a rate of 10% and is due and payable on March 4, 2020 and is currently past due. If a default notice is received the interest rate will be 20%. At any time on or before December 1, 2019 the Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 20% to 40%. After December 1, 2019, the Company may not repay the loan without the consent of the lender. At any time after December 1, 2019, the unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $33,615 which was recorded as a discount on the note payable. As of September 30, 2020, the balance on the loan, net of unamortized discount of $0, was $55,000. On September 9, 2019, the Company borrowed $30,000 from an unrelated third party. The loan is evidenced by an unsecured note which had an original issuance discount of $2,500 plus an additional $2,500 to pay for transaction fees of the lender, which amounts will be amortized over the life of the note. The loan bears interest at a rate of 9% and is due and payable on March 9, 2020 and is currently past due. If a default notice is received the interest rate will be 18%. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $31,581, of which $20,291 was recorded as a day one loss on the derivative liability and an additional $11,290 was recorded as a discount on the notes payable. In addition, the note holder was issued 25,000 shares of common stock with a relative fair value of $13,710 which was recorded as a debt discount and will be amortized over the life of the note. As of September 30, 2020, the balance on the loan, net of unamortized discount of $0, was $30,000. On November 14, 2019, the Company entered into a debt agreement to borrow $85,000. The unsecured note had an original issuance discount of $20,000, which will be amortized over the life of the note. The loan bears interest at a rate of 9% and is due and payable on May 14, 2020 and is currently past due. If a default notice is received the interest rate will be 18%. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $89,071, of which $24,071 was recorded as a day one loss on the derivative liability and an additional $65,000 was recorded as a discount on the convertible notes payable. As of September 30, 2020, the balance on the loan, net of unamortized discount of $0, was $85,000. On January 23, 2020, the Company entered into an agreement for up to $120,000 in debt financing. The unsecured note had an original issuance discount of $10,500, which will be amortized over the life of the note. The loan bears interest at a rate of 10% and each tranche is due and payable twelve months from the date funded. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 45% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days immediately prior to the date of conversion. On January 23, 2020, the Company received $40,000 with original issuance discount of $5,000 from the first tranche of the note. On August 12, 2020, the Company received $20,000 with original issuance discount of $4,150 from the second tranche of the note. In addition, the note holder was issued 45,777 common stock warrants with a fair value of $6,249 which was recorded as a day one loss on the derivative liability. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The first tranche day one derivative liability was $50,164, of which $15,164 was recorded as a day one loss on the derivative liability and an additional $35,000 was recorded as a discount on the notes payable. The second tranche day one derivative liability was $18,135, of which $2,285 was recorded as a day one loss on the derivative liability and an additional $15,850 was recorded as a discount on the notes payable. During the nine months ended September 30, 2020, $6,538 of the unsecured convertible note principal and $3,000 of interest was converted into 325,000 shares of common stock, of which 125,000 shares at a conversion price of $0.02275 per share and 175,000 shares at $0.035 per share. As of September 30, 2020, the balance on the loan, net of unamortized discount of $29,534, was $23,928. During the nine months ended September 30, 2020, the Company issued convertible notes in the principal amount of $164,000. The notes are unsecured, bear interest at 8% per year, and are due and payable on February 15, 2021. At the option of the holder, the notes can be converted into shares of the Company’s common stock. The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.25. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $81,686 and recorded as a discount on the notes payable. In September 2020, $164,000 of unsecured convertible notes a were converted into 656,000 shares of common stock at a conversion price of $0.25 per share. As of September 30, 2020, the balance on the loans, net of unamortized discount of $0, was $0. On August 6, 2020, the Company issued a note in the principal amount of $390,000 for payment of investor relations services. The investor relations services are for a period of one year and recorded as a prepaid asset with a balance of $357,500 as of September 30, 2020. The note does not bear interest, is unsecured and is due and payable on August 6, 2023. At the option of the holder, the note is convertible into shares of the Company's common stock. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price shall be the lesser of $0.40 or 85% of the trading price of the Company’s common stock on the day immediately preceding the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $158,542, which was recorded as a discount on the convertible notes payable and will be amortized over the life of the note. As of September 30, 2020, the balance on the loan, net of unamortized discount of $134,652 was $255,348. As of September 30, 2020, the total derivative liability on the above notes was adjusted to a fair value of $639,713. During the nine months ended September 30, 2020, $219,483 of the discount was amortized leaving an unamortized balance of $164,186. The fair value of the conversion option was estimated using the Black-Scholes option pricing model and the following assumptions during the period: fair value of stock $0.12 - $0.55, volatility of 50% - 73% based on a comparable company peer group, expected term of 1.00 -5.00 years, risk-free rate of 0.12% - 1.55% and a dividend yield of 0%. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity | |
Equity | Note 6. Equity Common Stock On March 16, 2020 the Company acquired all of the outstanding shares of Fourth Wave Energy, Inc. for 6,200,000 restricted shares of the Company’s common stock. At the time of acquisition, Fourth Wave Energy, Inc. had no assets, liabilities and no current or prior operations. The fair value of the shares issues was $2,170,000 and recorded as share-based compensation. During the nine months ended September 30, 2020, the Company issued 400,000 shares of common stock for cash proceeds of $100,000. During the nine months ended September 30, 2020, the Company issued 1,419,166 shares of common stock upon the conversion of debt $200,538 of principal and $5,862 of accrued interest. See Note 5. Preferred Stock On March 26, 2020, the Company designated 1,000 shares of its original 5,000,000 authorized shares of Preferred Stock as Series A Preferred Stock (“Series A”) with a $0.001 par value. Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of our shareholders or with respect to actions that may be taken by written consent. The 1,000 shares of Series A shares have the voting power of 250% of the outstanding common shares at the time of any vote. The holders of the Series A shares are entitled to receive, when, as and if declared by the Board of Directors out of funds legally available, annual dividends payable in cash on the 31st day of December in each year, commencing on December 3l, 2020 at the rate of $0.10 per share per year. On March 26, 2020, the Company issued 1,000 shares of its Series A preferred stock with a fair value of $744,455 to the Company’s CEO, J. Jacob Isaacs. The Company recognized this fair value as compensation during the nine months ended September 30, 2020. Stock Warrants On August 7, 2020, the Company issued 45,977 common stock warrants in conjunction with a convertible note. The warrants have a 5-year life and an exercise price of $0.87. In September 2020, there was a partial conversion of debt at a conversion price of $0.035 as described in Note 5. Due to a reset provision in the warrant agreement, the exercise price reset to $0.035 and the corresponding warrants increased to 1,142,857. The following table summarizes the stock warrant activity for the nine months ended September 30, 2020: Warrants Weight-Average Exercise Price Per Share Outstanding, December 31, 2019 - Granted due to reset provision 1,142,857 $ 0.035 Exercised Forfeited Expired Outstanding, September 30, 2020 1,142,857 $ 0.035 The Company valued the warrants using the Black-Scholes model with the following key assumptions ranging from: fair value stock price, $0.15, Exercise price, $0.035, Term 5 years, Volatility 63%, and Discount rate 0.28% and a dividend yield of 0%. As of September 30, 2020, the outstanding stock warrants have a weighted average remaining term of 4.85 years and an intrinsic value of $131,429. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies In connection with the acquisition of Fourth Wave Energy, Inc., the Company entered into consulting agreements with certain members of Fourth Wave. The consulting agreements require the Company to pay $385,000 in consulting fees during the terms of the consulting agreements, all but one of which expired on June 30, 2020. One consulting agreement is for a twelve month period and expires in January 2021. As of September 30, 2020, the Company accrued $331,850 as expenses for these consulting agreements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 8. Subsequent Events Subsequent to September 30, 2020, the Company borrowed $260,000 from unrelated third parties. The loans are unsecured, bear interest at 8% per year, and are due and payable at various dates in April and May 2021. At the option of the lenders the loans may be converted into shares of the Company's common stock at a conversion price of $0.10 per share. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Basis Of Presentation | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. Fair value is defined 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. Valuation techniques used to measure fair value maximize the use of observable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows: Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. Level 3: inputs to the valuation methodology are unobservable and significant to the fair value |
Fair Value Measurements | Fair Value Measurements The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy. The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2020 and December 31, 2019: Fair value measured at September 30, 2020 Total carrying value at September 30, 2020 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 639,713 $ $ $ 639,713 Fair value measured at December 31, 2019 Total carrying value at December 31, 2019 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 185,295 $ $ $ 185,295 There were no transfers between Level 1, 2 or 3 during the period. The table below presents the change in the fair value of the derivative liability during the nine months ended September 30, 2020: Fair value as of December 31, 2019 $ 185,295 Fair value on the date of issuance recorded as a debt discount 291,078 Fair value on the date of issuance recorded as a loss on derivatives 23,698 Extinguishment of liability to equity due to conversions (222,657 ) Loss on change in fair value of derivatives 362,299 Fair value as of September 30, 2020 $ 639,713 |
Convertible debt | Convertible debt The Company records a beneficial conversion feature related to the issuance of convertible debt that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional noncash interest expense over the expected life of the convertible notes. |
Beneficial Conversion Features | Beneficial Conversion Features If the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. |
Derivative Financial Instruments | Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. |
Reclassification | Reclassification Certain reclassifications may have been made to our prior year’s financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Basis Of Presentation Policies Abstract | |
Schedule of Change in Fair Value of Derivative Liability | The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2020 and December 31, 2019: Fair value measured at September 30, 2020 Total carrying value at September 30, 2020 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 639,713 $ $ $ 639,713 Fair value measured at December 31, 2019 Total carrying value at December 31, 2019 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 185,295 $ $ $ 185,295 The table below presents the change in the fair value of the derivative liability during the nine months ended September 30, 2020: Fair value as of December 31, 2019 $ 185,295 Fair value on the date of issuance recorded as a debt discount 291,078 Fair value on the date of issuance recorded as a loss on derivatives 23,698 Extinguishment of liability to equity due to conversions (222,657 ) Loss on change in fair value of derivatives 362,299 Fair value as of September 30, 2020 $ 639,713 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Fees earned during the period are as follows: Nine months ended Nine months ended Prior period balance $ 104,623 $ 68,341 Management fees 103,500 87,000 Cash advances 9,105 Expenses paid on behalf of Company 4,229 Repayments (121,320 ) (62,467 ) End of period balance $ 100,137 $ 92,874 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Equity Tables Abstract | |
Schedule of Warrants Outstanding | The following table summarizes the stock warrant activity for the nine months ended September 30, 2020: Warrants Weight-Average Exercise Price Per Share Outstanding, December 31, 2019 - Granted due to reset provision 1,142,857 $ 0.035 Exercised Forfeited Expired Outstanding, September 30, 2020 1,142,857 $ 0.035 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative liabilities | $ 639,713 | $ 185,295 |
Fair Value, Recurring [Member] | ||
Derivative liabilities | 639,713 | 185,295 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Derivative liabilities | $ 639,713 | $ 185,295 |
Basis of Presentation (Details
Basis of Presentation (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair value, Beginning | $ 185,295 | |||
Extinguishment of liability to equity due to conversions | $ 56,577 | $ 166,080 | 222,657 | |
Fair value, Ending | 639,713 | 639,713 | ||
Fair Value, Recurring [Member] | ||||
Fair value, Beginning | 185,295 | |||
Fair value, Ending | 639,713 | 639,713 | ||
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair value, Beginning | 185,295 | |||
Fair value on the date of issuance recorded as a debt discount | 291,078 | |||
Fair value on the date of issuance recorded as a loss on derivatives | 23,698 | |||
Extinguishment of liability to equity due to conversions | (222,657) | |||
Gain on change in fair value of derivatives | 362,299 | |||
Fair value, Ending | $ 639,713 | $ 639,713 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Related Party Transactions [Abstract] | ||
Opening Balance | $ 104,623 | $ 68,341 |
Management fees | 103,500 | 87,000 |
Cash advances | 9,105 | |
Expenses paid on behalf of Company | 4,229 | |
Repayments | (121,320) | (62,467) |
End of period balance | $ 100,137 | $ 92,874 |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) | Apr. 30, 2019USD ($) |
President [Member] | Management Service [Member] | |
Management Services to President per month | $ 11,500 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Disclosure Notes Payable Details Narrative Abstract | ||
Notes Payable | $ 339,900 | $ 332,900 |
Convertible Notes Payable and_2
Convertible Notes Payable and Derivative Liability (Details Narrative) - USD ($) | Aug. 06, 2020 | Jan. 23, 2020 | Oct. 14, 2019 | Sep. 09, 2019 | Jun. 04, 2019 | Apr. 25, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Note Discount | $ 164,186 | $ 83,441 | ||||||
Debt from Unrelated third party | ||||||||
Original Note Amount | $ 30,000 | |||||||
Note, Inception Date | Apr. 25, 2019 | |||||||
Note, Maturity Date | Oct. 25, 2019 | |||||||
Note, Variable Interest Rate | 9.00% | |||||||
Note Discount | $ 2,500 | |||||||
Debt from Unrelated third party | ||||||||
Original Note Amount | $ 55,000 | |||||||
Note, Inception Date | Jun. 4, 2019 | |||||||
Note, Maturity Date | Dec. 1, 2019 | |||||||
Note, Variable Interest Rate | 10.00% | |||||||
Note Discount | $ 5,000 | |||||||
Debt from Unrelated third party | ||||||||
Original Note Amount | $ 30,000 | |||||||
Note, Inception Date | Sep. 9, 2019 | |||||||
Note, Maturity Date | Mar. 9, 2020 | |||||||
Note, Variable Interest Rate | 9.00% | |||||||
Note Discount | $ 2,500 | |||||||
Debt from Unrelated third party | ||||||||
Original Note Amount | $ 85,000 | |||||||
Note, Inception Date | Nov. 14, 2019 | |||||||
Note, Maturity Date | May 14, 2020 | |||||||
Note, Variable Interest Rate | 9.00% | |||||||
Note Discount | $ 20,000 | |||||||
Debt from Unrelated third party | ||||||||
Original Note Amount | $ 390,000 | $ 120,000 | ||||||
Note, Inception Date | Aug. 6, 2020 | Jan. 23, 2020 | ||||||
Note, Maturity Date | Aug. 6, 2023 | Jan. 22, 2021 | ||||||
Note, Variable Interest Rate | 85.00% | 10.00% | ||||||
Note Discount | $ 357,500 | $ 10,500 |
Equity (Details)
Equity (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Warrants Outstanding | |
Beginning Balance | shares | |
Granted | shares | 1,142,857 |
Exercised | shares | |
Forfeited | shares | |
Expired | shares | |
Ending Balance | shares | 1,142,857 |
Weight-Average Exercise Price Per Share | |
Beginning Balance | $ / shares | |
Granted | $ / shares | 0.035 |
Exercised | $ / shares | |
Forfeited | $ / shares | |
Expired | $ / shares | |
Ending Balance | $ / shares | $ 0.035 |
Equity (Details Narrative)
Equity (Details Narrative) - shares | Mar. 26, 2020 | Mar. 16, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Series A Preferred Stock [Member] | ||||
Preferred Stock, Shares Issued | 1,000 | 0 | ||
Preferred Stock [Member] | Series A Preferred Stock [Member] | J. Jacob Isaacs | ||||
Voting Rights | Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of our shareholders or with respect to actions that may be taken by written consent. | |||
Preferred Stock, Shares Issued | 1,000 | |||
Fourth Wave Energy, Inc. | Restricted Shares [Member] | ||||
Shares Purchased during Business Acquisition | 6,200,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Commitments And Contingencies | |
Consulting Fees | $ 331,850 |