Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 14, 2021 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 333-207047 | |
Entity Registrant Name | FOURTH WAVE ENERGY, INC. | |
Entity Central Index Key | 0001652958 | |
Entity Tax Identification Number | 47-4046237 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 75 E. Santa Clara St. | |
Entity Address, Address Line Two | 6th Floor | |
Entity Address, Address Line Three | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95113 | |
Country Region | (818) | |
City Area Code | 855-8199 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 42,773,776 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 23,075 | $ 25,786 |
Prepaid assets | 176,313 | 264,667 |
Total currents assets | 199,388 | 290,453 |
Deposits | 25,000 | 25,000 |
Total assets | 224,388 | 315,453 |
Current liabilities: | ||
Accounts payable and accrued expenses | 285,043 | 657,806 |
Accounts payable - related party | 21,837 | 21,837 |
Notes payable | 215,900 | 235,900 |
Convertible notes, net of unamortized discount of $317,106 and $341,856, respectively | 637,894 | 608,144 |
Derivative liability | 1,521,846 | 676,022 |
Total current liabilities | 2,682,520 | 2,199,709 |
Total liabilities | 2,682,520 | 2,199,709 |
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 | 1 |
Common stock, $0.001 par value, 200,000,000 shares authorized, 38,764,776 and 40,647,329 shares issued and outstanding, respectively | 38,765 | 40,647 |
Additional paid in capital | 5,264,382 | 4,379,732 |
Accumulated deficit | (7,761,280) | (6,304,636) |
Total stockholders' deficit | (2,458,132) | (1,884,256) |
Total liabilities and stockholders' deficit | $ 224,388 | $ 315,453 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Convertible notes, unamortized discount | $ 317,106 | $ 341,856 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares Issued | 38,764,776 | 40,647,329 |
Common Stock, Shares Outstanding | 38,764,776 | 40,647,329 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating expenses: | ||
General and administration | $ 456,043 | $ 3,203,521 |
Total operating expenses | (456,043) | (3,203,521) |
Other expenses | ||
Interest expense | (216,784) | (85,973) |
Loss on conversion of debt | (76,107) | |
Change in fair value of derivative liability | (707,710) | (18,215) |
Total other expense | (1,000,601) | (104,188) |
Net loss | $ (1,456,644) | $ (3,307,709) |
Net loss per share: | ||
Basic and diluted | $ (0.04) | $ (0.11) |
Weighted average shares outstanding: | ||
Basic and diluted | 40,919,803 | 30,321,496 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Deficit (Equity) (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
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 | |||
Extinguishment of derivative liability due to conversion | |||||
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, 2020 | $ 1 | $ 40,647 | 4,379,732 | (6,304,636) | (1,884,256) |
Beginning Balance, Shares at Dec. 31, 2020 | 1,000 | 40,647,329 | |||
Stock based compensation | $ 800 | 181,200 | 182,000 | ||
Stock based compensation, in shares | 800,000 | ||||
Common shares issued for conversion of liabilities | $ 100 | 9,900 | 10,000 | ||
Common shares issued for conversion of liabilities, in shares | 100,000 | ||||
Common shares issued for settlement of debt and accrued interest | $ 218 | 97,634 | 97,852 | ||
Common shares issued for settlement of debt and accrued interest, in shares | 217,447 | ||||
Common shares issued for cash | $ 1,700 | 202,300 | 204,000 | ||
Common shares issued for cash, in shares | 1,700,000 | ||||
Returned common shares and liability extinguishment related to GeoSolar | $ (4,700) | 384,550 | 379,850 | ||
Returned common shares and liability extinguishment related to GeoSolar, in shares | (4,700,000) | ||||
Extinguishment of derivative liability due to conversion | 9,066 | 9,066 | |||
Net Loss | (1,456,644) | (1,456,644) | |||
Ending Balance at Mar. 31, 2021 | $ 1 | $ 38,765 | $ 5,264,382 | $ (7,761,280) | $ (2,458,132) |
Ending Balance, Shares at Mar. 31, 2021 | 1,000 | 38,764,776 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,456,644) | $ (3,307,709) |
Adjustment to reconcile net loss to cash used in operating activities: | ||
Stock based compensation | 182,000 | 2,914,455 |
Amortization of debt discount | 171,930 | 79,967 |
Loss on change in fair value of derivative liability | 707,710 | 18,215 |
Loss on settlement of liabilities | (76,107) | |
Net change in: | ||
Prepaid assets | 88,354 | 2,676 |
Accounts payable and accrued expenses | 8,832 | 140,588 |
Accounts payable - related party | (33,710) | |
CASH FLOWS USED IN OPERATING ACTIVITIES | (221,711) | (185,518) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Sale of common stock | 204,000 | |
Proceeds from convertible notes | 150,000 | 199,000 |
Payments on convertible notes | (135,000) | |
Payments on notes payable | (3,000) | |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 219,000 | 196,000 |
NET CHANGE IN CASH | (2,711) | 10,482 |
Cash, beginning of period | 25,786 | 1,691 |
Cash, end of period | 23,075 | 12,173 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid on interest expenses | ||
Cash paid for income taxes | ||
NON-CASH TRANSACTIONS | ||
Debt discount created by derivative liability | 147,180 | 116,686 |
Common stock issued with convertible notes | 10,000 | |
Common shares issued for conversion of debt and accrued interest | 21,745 | |
Extinguishment of liability related to Geosolar | 379,850 | |
Extinguishment of derivative liability due to conversion | $ 9,066 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The accompanying unaudited interim financial statements of Fourth Wave Energy, Inc. (“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 2020, 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 connection with the acquisition of Fourth Wave, Inc. (“FWAV”) in March 2020, the Company entered into consulting agreements with certain founders of FWAV. The consulting agreements require the Company to collectively pay $379,850 in consulting fees during the terms of the consulting agreements. In March 2021 the Company agreed to sell the FWAV technologies and business plan to GeoSolar Technologies, Inc. (“GST”) in exchange for 10,000,000 common shares of GST. In exchange, the consultants agreed to release the Company from any liability for any consulting fees owed to the them by the Company and return a portion of the common shares they held. During the three months ended March 31, 2021, 4,700,000 shares of the Company's common stock were returned to the Company and cancelled. 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 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 March 31, 2021 and December 31, 2020: Fair value measured at March 31, 2021 Total carrying value at March 31, 2021 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 1,521,846 $ - $ - $ 1,521,846 Fair value measured at December 31, 2020 Total carrying value at December 31, 2020 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 676,022 $ - $ - $ 676,022 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 three months ended March 31, 2021: Fair value as of December 31, 2020 $ 676,022 Fair value on the date of issuance recorded as a debt discount 147,180 Fair value on the date of issuance recorded as a loss on derivatives 213,495 Extinguishment of liability to equity due to conversions (9,066) Extinguishment of liability to payoff of debt (513,961) Loss on change in fair value of derivatives 1,008,176 Fair value as of March 31, 2021 $ 1,521,846 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 | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 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 | 3 Months Ended |
Mar. 31, 2021 | |
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: Three months ended March 31, 2021 Three months ended March 31, 2020 Prior period balance $ 21,837 $ 104,623 Management fees 34,500 34,500 Management fee advances 7,060 355 Expenses paid on behalf of Company 1,600 1,529 Repayments (43,160) (70,094) End of period balance $ 21,837 $ 70,913 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 4. Notes Payable 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 February 16, 2021, the Company settled the $20,000 promissory note and $1,745 of accrued interest and issued 217,447 shares of common stock as consideration for the debt settlement. As a result, the Company recognized a loss on settlement of debt of $76,107. As of March 31, 2021 and December 31, 2020 the combined advances and notes payable totaled $215,900 and $235,900, respectively. |
Convertible Notes Payable
Convertible Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Convertible Notes Payable | Note 5. Convertible Notes Payable and Derivative Liability 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 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 March 31, 2021, 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 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. On February 11, 2021, the Company repaid $30,000 in principal, $3,854 in accrued interest and $11,146 additional interest expense on the convertible note payable. As of , 2021, the balance on the loan, net of unamortized discount of $0, was $0. 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 March 31, 2021, 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 year ended December 31, 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. On November 20, 2020, the Company paid $33,463 in principal payments, $2,765 of accrued expense and $50,772 of additional interest expense on the note. On January 15, 2021, the Company repaid $20,000 in principal, $882 in accrued interest and $12,118 additional interest expense on the convertible note payable. As of March 31, 2021, the balance on the loan, net of unamortized discount of $0, was $0. In 2020, the Company issued convertible notes in the principal amount of $285,000. The notes are unsecured, have a six-month maturity, bear interest at 8% per year, and are due and payable at various dates from April through June 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 $0.10. 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 $254,317, of which $10,317 was recorded as a day one loss on the derivative liability and an additional $244,000 was recorded as a discount on the convertible notes payable. On January 15, 2021, the Company converted a $10,000 promissory note into 100,000 shares of common stock at a conversion price of $0.10. As of March 31, 2021, the balance on the loans, net of unamortized discount of $137,590, was $137,410. 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 $162,500 as of March 31, 2021. 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 March 31, 2021, the balance on the loan, net of unamortized discount of $55,598 was $334,402. On November 17, 2020, the Company entered into a debt agreement to borrow $85,000. The unsecured note had an original issuance discount of $3,500, which will be amortized over the life of the note. The loan bears interest at a rate of 8% and is due and payable on November 17, 2021. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 65% of the average two lowest trading price of the Company’s common stock during the 15 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 $130,303, of which $48,803 was recorded as a day one loss on the derivative liability and an additional $81,500 was recorded as a discount on the convertible notes payable On February 3, 2021, the Company repaid $85,000 in principal, $1,453 in accrued interest and $21,590 additional interest expense on the convertible note payable. As of March 31, 2021, the balance on the loan, net of unamortized discount of $0, was $0. During the three months ended March 31, 2021, the Company issued convertible notes in the principal amount of $150,000. The notes are unsecured, have a six-month maturity, bear interest at 8% per year, and are due and payable at various dates from July through August 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 $0.10. 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 $360,675, of which $213,495 was recorded as a day one loss on the derivative liability and an additional $147,180 was recorded as a discount on the convertible notes payable. As of March 31, 2021, the balance on the loans, net of unamortized discount of $123,918, was $26,082. As of March 31, 2021, the total derivative liability on the above notes was adjusted to a fair value of $1,521,846. During the three months ended March 31, 2021, $171,930 of the discount was amortized leaving an unamortized balance of $317,106. 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 $0.188 - $0.48, volatility of 43.17% - 58.56% based on a comparable company peer group, expected term of 0.50 - 5.00 years, risk-free rate of 0.05% - 0.92% and a dividend yield of 0%. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity | |
Equity | Note 6. Equity Common Stock On January 28, 2021, the Company entered into a purchase agreement with an investor, Tysadco Partners LLC, (the “Investor”) providing for the purchase of up to $10,000,000 of the Company’s common stock (“the Equity Line”) over a 24-month-term that commenced on January 28, 2021. In February 2021, the Investor purchased 1,700,000 restricted shares of the Company’s common stock for $204,000 ($0.12 per share). There are no registration rights with respect to these shares. On December 1, 2020, the Company entered into a three month consulting agreement for investor relation services. Upon signing the agreement, the Company agrees to compensate the Consultant a monthly fee of $10,000 plus 400,000 shares of common stock. In December 2020, 400,000 shares of common stock were issued for services. The shares were valued at $0.23, the closing price of the Company’s stock on December 1, 2020. During the three months ended March 31, 2021, the Company issued the remaining 800,000 shares related to the agreement and recognized $182,000 of expense. During the three months ended March 31, 2021, the Company issued 100,000 shares of common stock upon the conversion of a $10,000 promissory note. See Note 5. On February 16, 2021, the Company settled a $20,000 promissory note and $1,745 of accrued interest and issued 217,447 shares of common stock as consideration for the debt settlement. See Note 4. During the three months ended March 31, 2021, 4,700,000 shares of the Company's common stock were returned to the Company and cancelled. See Note 1. 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. Stock Warrants The following table summarizes the stock warrant activity for the three months ended March 31, 2021: Weight-Average Warrants Exercise Price Per Share Outstanding, December 31, 2020 1,142,857 $ 0.035 Granted due to reset provision - Exercised - Forfeited - Expired - Outstanding, March 31, 2021 1,142,857 $ 0.035 As of March 31, 2021, the outstanding stock warrants have a weighted average remaining term of 4.35 years and an intrinsic value of $325,714. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 7. Subsequent Events On April 6, 2021, the Company converted $180,900 of promissory notes into 1,809,000 shares of common stock at a conversion price of $0.10. On April 16, 2021, Tysadco Partners LLC purchased 1,700,000 restricted shares of the Company’s common stock for $204,000 at a value of $0.12 per share. The Company issued Tysadco Partners LLC an additional 500,000 shares of its common stock to Tysadco as consideration for providing the Company with the Equity Line referred to in Note 6. There are no registration rights with respect to these shares. On May 13, 2021, the Company converted a $25,000 promissory note into 250,000 shares of common stock at a conversion price of $0.10. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Proceeds from notes payable, related party | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of short-term instruments, including cash, accounts payable 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 March 31, 2021 and December 31, 2020: Fair value measured at March 31, 2021 Total carrying value at March 31, 2021 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 1,521,846 $ - $ - $ 1,521,846 Fair value measured at December 31, 2020 Total carrying value at December 31, 2020 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 676,022 $ - $ - $ 676,022 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 three months ended March 31, 2021: Fair value as of December 31, 2020 $ 676,022 Fair value on the date of issuance recorded as a debt discount 147,180 Fair value on the date of issuance recorded as a loss on derivatives 213,495 Extinguishment of liability to equity due to conversions (9,066) Extinguishment of liability to payoff of debt (513,961) Loss on change in fair value of derivatives 1,008,176 Fair value as of March 31, 2021 $ 1,521,846 |
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) | 3 Months Ended |
Mar. 31, 2021 | |
Basis Of Presentation | |
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 December 31, 2020 and 2019: Fair value measured at December 31, 2020 Total carrying value at December 31, 2020 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant Unobservable inputs (Level 3) Liabilities: Derivative liabilities $ 676,022 $ $ $ 676,022 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 year ended December 31, 2020: Fair value as of December 31, 2018 $- Fair value on the date of issuance recorded as a debt discount 128,655 Fair value on the date of issuance recorded as a loss on derivatives 56,280 Gain on change in fair value of derivatives 360 Fair value as of December 31, 2019 185,295 Fair value on the date of issuance recorded as a debt discount 616,580 Fair value on the date of issuance recorded as a loss on derivatives 82,818 Extinguishment of liability to equity due to conversions (222,657 ) Extinguishment of liability due to payoff of debt (69,097 ) Loss on change in fair value of derivatives 83,083 Fair value as of December 31, 2020 $ 676,022 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Fees earned during the period are as follows: Three months ended March 31, 2021 Three months ended March 31, 2020 Prior period balance $ 21,837 $ 104,623 Management fees 34,500 34,500 Management fee advances 7,060 355 Expenses paid on behalf of Company 1,600 1,529 Repayments (43,160) (70,094) End of period balance $ 21,837 $ 70,913 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Equity Tables Abstract | |
Schedule of stock warrant activity | The following table summarizes the stock warrant activity for the three months ended March 31, 2021: Weight-Average Warrants Exercise Price Per Share Outstanding, December 31, 2020 1,142,857 $ 0.035 Granted due to reset provision - Exercised - Forfeited - Expired - Outstanding, March 31, 2021 1,142,857 $ 0.035 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Derivative liabilities | $ 1,521,846 | $ 676,022 |
Fair Value, Recurring [Member] | ||
Derivative liabilities | 1,521,846 | 676,022 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Derivative liabilities | $ 1,521,846 | $ 676,022 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Fair value, Beginning | $ 676,022 | |
Extinguishment of liability to equity due to conversions | 9,066 | |
Fair value, Ending | 1,521,846 | |
Fair Value, Recurring [Member] | ||
Fair value, Beginning | 676,022 | |
Fair value, Ending | 1,521,846 | |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair value, Beginning | 676,022 | |
Fair value on the date of issuance recorded as a debt discount | 147,180 | |
Fair value on the date of issuance recorded as a loss on derivatives | 213,495 | |
Extinguishment of liability to equity due to conversions | (9,066) | |
Extinguishment of liability due to payoff of debt | (513,961) | |
Gain on change in fair value of derivatives | 1,008,176 | |
Fair value, Ending | $ 1,521,846 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Related Party, Beginning Balance | $ 21,837 | $ 104,623 |
Management fees | 34,500 | 34,500 |
Management fee advances | 7,060 | 355 |
Expenses paid on behalf of Company | 1,600 | 1,529 |
Repayments | (43,160) | (70,094) |
Related Party, Ending Balance | $ 21,837 | $ 70,913 |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) | 1 Months Ended |
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 ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Disclosure Notes Payable Details Narrative Abstract | ||
Notes Payable | $ 215,900 | $ 235,900 |
Convertible Notes Payable and D
Convertible Notes Payable and Derivative Liability (Details Narrative) - USD ($) | Jan. 23, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Nov. 14, 2019 | Sep. 09, 2019 | Jun. 04, 2019 |
NotesPayableCurrent | $ 215,900 | $ 235,900 | ||||
Note Discount | $ 317,106 | $ 341,856 | ||||
Preferred Stock, Shares Issued | 0 | 0 | ||||
Promissory Note from Unrelated Third Party | ||||||
Original Note Amount | $ 55,000 | |||||
NotesPayableCurrent | $ 55,000 | |||||
Promissory Note from Unrelated Third Party | ||||||
Original Note Amount | $ 30,000 | |||||
NotesPayableCurrent | 0 | |||||
Promissory Note from Unrelated Third Party | ||||||
Original Note Amount | $ 85,000 | |||||
NotesPayableCurrent | $ 85,000 | |||||
Promissory Note from Unrelated Third Party | ||||||
Original Note Amount | $ 120,000 | |||||
Note, Inception Date | Jan. 23, 2020 | |||||
Note, Maturity Date | Jan. 22, 2021 | |||||
Note, Variable Interest Rate | 10.00% | |||||
Note Discount | $ 10,500 |
Equity Transactions (Details)
Equity Transactions (Details) - $ / shares | Mar. 26, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Weight-Average Exercise Price Per Share | |||
Preferred Stock, Shares Issued | 0 | 0 | |
Warrant [Member] | |||
Warrants Outstanding | |||
Beginning Balance | 1,142,857 | ||
Granted due to reset provision | |||
Exercised | |||
Forfeited | |||
Expired | |||
Ending Balance | 1,142,857 | ||
Weight-Average Exercise Price Per Share | |||
Granted due to reset provision | $ 0.035 | ||
Exercised | |||
Forfeited | |||
Expired | |||
Ending Balance | $ 0.035 | ||
Preferred Stock [Member] | Series A Preferred Stock [Member] | J. Jacob Isaacs | |||
Weight-Average Exercise Price Per Share | |||
Preferred Stock, Shares Issued | 1,000 | ||
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. |