Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document and Entity Information: | ||
Entity Registrant Name | X Rail Entertainment, Inc. | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Trading Symbol | xree | |
Amendment Flag | false | |
Entity Central Index Key | 1,697,935 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 568,197,993 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
BALANCE SHEET
BALANCE SHEET - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 4,700 | $ 202,169 |
Prepaid Expenses | 11,725 | |
Deposits | 235 | |
Total Current assets | 16,660 | 202,169 |
Property and equipment, net of accumulated depreciation | 125,000 | 833,160 |
Total Assets | 141,660 | 1,035,329 |
Current Liabilities | ||
Accounts payable | 44,800 | 78,890 |
Accrued expenses | 292,977 | 76,234 |
Unearned revenue | 1,107 | |
Notes payable to related parties | 440,753 | 348,825 |
Current portion of convertible notes payable, net of debt discount | 304,376 | 210,946 |
Derivative liability | 26,889 | |
Total Current Liabilities | 1,110,902 | 714,895 |
Total Liabilities | 1,110,902 | 714,895 |
Commitments and Contingencies | ||
Stockholders' equity (deficit) | ||
Preferred stock, $0.00001 par value, 2,011,000 shares authorized, 98,880 and 98,798 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 1 | 1 |
Common stock, $0.00001 par value, 1,000,000,000 shares authorized, 246,226,161 and 208,353,303 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 2,463 | 2,084 |
Additional Paid-In Capital | 9,602,722 | 8,284,510 |
Accumulated (deficit) | (10,574,428) | (7,966,161) |
Total stockholders' equity | (969,242) | 320,434 |
Total liabilities and stockholders' equity | $ 141,660 | $ 1,035,329 |
BALANCE SHEET PARENTHETICAL
BALANCE SHEET PARENTHETICAL - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
BALANCE SHEET PARENTHETICAL | ||
Preferred stock par value | $ 0.00001 | $ 0.00001 |
Preferred stock shares authorized | 2,011,000 | 2,011,000 |
Preferred stock shares issued | 98,880 | 98,798 |
Preferred stock shares outstanding | 98,880 | 98,798 |
Common stock par value | $ 0.00001 | $ 0.00001 |
Common stock shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock shares issued | 246,226,161 | 208,353,303 |
Common stock shares outstanding | 246,226,161 | 208,353,303 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
STATEMENTS OF OPERATIONS | ||||
Revenues | $ 32,259 | |||
Cost of sales | (46,051) | |||
Gross loss | (13,792) | |||
Operating Expenses: | ||||
Compensation and payroll taxes | $ 137,569 | $ 210,842 | 391,274 | $ 1,702,480 |
Selling, general and administrative | 72,429 | 56,213 | 272,977 | 162,238 |
Professional fees | 101,313 | 48,094 | 565,438 | 188,681 |
Total expenses | 311,311 | 315,149 | 1,229,689 | 2,053,399 |
Loss From Operations | (311,311) | (315,149) | (1,243,481) | (2,053,399) |
Other Income (Expense) | ||||
Interest Expense | (133,630) | (70,121) | (727,727) | (89,019) |
Derivative gain (expense) | 1,764 | (7,789) | ||
Loss on disposition of assets | (629,270) | (629,270) | ||
Total other income (expense) | (761,136) | (70,121) | (1,364,786) | (89,019) |
Net income (loss) from operations before provision for income taxes | (1,072,447) | (385,270) | (2,608,267) | (2,142,418) |
Provision for income taxes | ||||
Net income (loss) | $ (1,072,447) | $ (385,270) | $ (2,608,267) | $ (2,142,418) |
Net income (loss) per share, basic and diluted | $ (0.0048) | $ (0.002) | $ (0.012) | $ (0.013) |
Weighted average shares outstanding - Weighted average number of common shares outstanding, basic and diluted | 223,173,591 | 194,251,646 | 218,006,563 | 169,407,177 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities | ||
Net Loss | $ (2,608,267) | $ (2,142,418) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Conversion of notes payable and accrued interest to capital | 88,395 | |
Common stock issued for services | 130,000 | 1,263,702 |
Derivative expense related to convertible note payable | 26,889 | |
Warrant expense | 499,196 | |
Amortization of debt discount on convertible notes payable | 156,330 | 45,639 |
Changes in operating assets and liabilities: | ||
Change in accounts payable and accrued expenses | 182,653 | 58,680 |
Change in unearned revenue | 1,107 | |
Change in prepaid expenses and deposits | (11,960) | |
Net Cash Used in Operating Activities | (1,535,657) | (774,397) |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (19,240) | |
Write off property and equipment | 708,160 | |
Net Cash Used in Investing Activities | 708,160 | (19,240) |
Cash Flows From Financing Activities | ||
Repayments on convertible notes payable | (82,000) | |
Proceeds from convertible notes payable | 19,100 | 490,000 |
Repayments on related party notes payable | (53,344) | (164,716) |
Proceeds from related party notes payable | 145,272 | |
Proceeds from stock purchases | 421,000 | 237,500 |
Proceeds from exercise of warrant | 180,000 | |
Net Cash Provided by Financing Activities | 630,028 | 562,784 |
Net change in cash | (197,469) | (230,853) |
Cash, beginning of the period | 202,169 | 325,057 |
Cash, end of the period | 4,700 | 94,204 |
Supplemental Disclosure of Cash Flow Information: | ||
Income taxes paid | ||
Supplemental disclosure of non-cash investing and financing transactions: | ||
Conversion of notes payable and accrued interest to capital - non-cash | 88,395 | 5,000 |
Debt discount on convertible notes | $ 205,224 | $ 490,000 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Preferred Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2015 | $ 46 | $ 1 | $ 5,835,346 | $ (5,398,691) | $ 436,702 |
Balance - Shares at Dec. 31, 2015 | 4,557,784 | 98,798 | |||
Stock issued for employees compensation | $ 168 | 1,185,243 | 1,185,411 | ||
Stock issued for employees compensation - shares | 16,791,611 | ||||
Stock issued for notes conversion | $ 2 | 4,998 | 5,000 | ||
Stock issued for notes conversion - shares | 200,000 | ||||
Stock issued per Share Exchange Agreement | $ 1,519 | (1,519) | |||
Stock issued per Share Exchange Agreement - shares | 151,885,189 | ||||
Stock issued for cash | $ 339 | 738,772 | 739,111 | ||
Stock issued for cash - shares | 33,894,719 | ||||
Common stock issued for services | $ 10 | 71,670 | 71,680 | ||
Common stock issued for services - shares | 1,024,000 | ||||
Value of warrants allocated to notes | 450,000 | 450,000 | |||
Net income (loss) | (2,567,470) | (2,567,470) | |||
Balance at Dec. 31, 2016 | $ 2,084 | $ 1 | 8,284,510 | (7,966,161) | 320,434 |
Balance - Shares at Dec. 31, 2016 | 208,353,303 | 98,798 | |||
Stock issued for notes conversion | $ 216 | 81,784 | 82,000 | ||
Stock issued for notes conversion - shares | 21,600,000 | ||||
Stock issued for cash | $ 116 | 420,884 | 421,000 | ||
Stock issued for cash - shares | 11,620,000 | ||||
Common stock issued for services | $ 15 | 129,985 | 130,000 | ||
Common stock issued for services - shares | 1,460,000 | 4 | |||
Stock issued for interest conversion | $ 1 | 6,394 | 6,395 | ||
Stock issued for interest conversion - shares | 127,889 | ||||
Stock issued for warrant exercise | $ 12 | 179,988 | 180,000 | ||
Stock issued for warrant exercise - shares | 1,200,000 | ||||
Stock issued for shares exchange | $ 19 | (19) | |||
Stock issued for shares exchange - shares | 1,880,969 | ||||
Stock cancelled - shares | (16,000) | (2) | |||
Warrant expense | 499,196 | 499,196 | |||
Net income (loss) | (2,608,267) | (2,608,267) | |||
Balance at Sep. 30, 2017 | $ 2,463 | $ 1 | $ 9,602,722 | $ (10,574,428) | $ (969,242) |
Balance - Shares at Sep. 30, 2017 | 246,226,161 | 98,800 |
(1) Organization and Basis of P
(1) Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(1) Organization and Basis of Presentation | (1) Organization and basis of presentation Basis of Financial Statement Presentation: The accompanying unaudited interim financial statements of X Rail Entertainment, Inc. (the "Company") have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. However, the results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or any other future period. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. Going Concern: The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has net losses of $2,608,267 for the nine months ended September 30, 2017. The Company also has an accumulated deficit of $10,574,428, and a negative working capital of $1,094,242 as of September 30, 2017, as well as outstanding convertible notes payable of $509,600, before debt discount of $205,224. Management believes that it will need additional equity or debt financing to be able to implement its business plan. Given the lack of revenue, capital deficiency and negative working capital, there is substantial doubt about the Companys ability to continue as a going concern. Management is attempting to raise additional equity and debt to sustain operations until it can market its services and achieves profitability. The successful outcome of future activities cannot be determined at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
(2) Summary of Significant Acco
(2) Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(2) Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Risks and Uncertainties: The Company operates in an industry that is subject to intense competition and potential government regulations. Significant changes in regulations and the inability of the Company to establish contracts with rail services providers could have a materially adverse impact on the Companys operations. Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Property and Equipment: Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years once the individual assets are placed in service. The Company expenses all purchases of equipment with individual costs of under $500, and these amounts are not material to the financial statements. As of September 30, 2017, we recorded the rail cars on the balance sheet at $125,000 with no accumulated depreciation. The rail cars are currently not depreciated as they are not in service and not ready to run. The rail cars require substantial investment to retrofit. The Company expensed the carrying value of 10 rail cars as they were exchanged for unpaid storage charges. The amount written off was $629,270 as of September 30, 2017. Long-Lived Assets: In accordance with FASB ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Companys management believes there has been no impairment of its long-lived assets during the nine months ended September 30, 2017, or 2016. There can be no assurance, however, that market conditions will not change or demand for the Companys business model will continue. Either of these could result in future impairment of long-lived assets. Income Taxes: Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of September 30, 2017, and December 31, 2016, the Company has not established a liability for uncertain tax positions. Basic and Diluted Loss per Share: In accordance with Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 260, Earnings per Share, the basic income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. Common stock equivalents have not been included in the earnings per share computation for the three and nine months ended September 30, 2017, and 2016 as the amounts are anti-dilutive. As of September 30, 2017, the Company had 14,978,000 outstanding warrants and convertible debt of $509,600, before debt discount of $205,224, which were all excluded from the computation as they were anti-dilutive. As of December 31, 2016, the Company had 9,000,000 outstanding warrants and convertible debt of $572,500, before debt discount of $361,554, which were all excluded from the computation as they were anti-dilutive. Share Based Payment: The Company issues stock, options, and warrants as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance FASB ASC 718. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The Company accounts for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: ( a b The Company values stock compensation based on the market price on the measurement date. As described above, for employees this is the date of grant, and for non-employees, this is the date of performance completion. The Company values warrants using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options and warrants issued during the nine months ended September 30, 2017 were as follows. Variables Values Exercise Price $0.15 Risk Free Rate .92% to 1.07% Discount rate 0.25% Volatility 666.26% - 634.49% New Accounting Pronouncements: There are no new significant accounting standards applicable to the Company that have been issued but not yet adopted by the Company as of September 30, 2017, and through the date of this filing. |
(3) Property and Equipment
(3) Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(3) Property and Equipment | (3) Property and Equipment Property and equipment consisted of the following. September 30, December 31, 2017 2016 Rail cars (not in service) $ 125,000 $ 833,160 Less: accumulated depreciation - - $ 125,000 $ 833,160 |
(4) Related Party Notes Payable
(4) Related Party Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(4) Related Party Notes Payable | (4) Related Party Notes Payable A summary of outstanding notes payable is as follows: September 30, December 31, 2017 2016 Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand $ 49,910 $ 55,994 Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand 39,101 52,240 Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand 74,044 78,359 Promissory note, dated September 30, 2015, bearing no interest, payable on demand 155,798 162,232 Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand 53,700 - Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand 49,800 - Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand 18,400 - $ $ 440,753 $ 348,825 |
(5) Convertible Notes Payable
(5) Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(5) Convertible Notes Payable | (5) Convertible Notes Payable The following summarizes the book value of the convertible notes payable outstanding as of September 30, 2017 and December 31, 2016: September 30, December 31, 2017 2016 Promissory note, dated April 30, 2008, bearing interest ** at 10% annually, payable on demand, convertible to $ 80,500 $ 82,500 shares of common stock at $.05 per share Promissory note, dated May 12, 2016, bearing interest at 10% annually, payable within a year, convertible to - 60,000 shares of common stock at $.05 per share Promissory note, dated May 19, 2016, bearing interest at 10% annually, payable within a year, convertible to - 20,000 shares of common stock at $.05 per share Promissory note, dated May 20, 2016, bearing interest * at 10% annually, payable within a year, convertible to 20,000 20,000 shares of common stock at $.05 per share Promissory note, dated May 31, 2016, bearing interest * at 10% annually, payable within a year, convertible to 40,000 40,000 shares of common stock at $.05 per share Promissory note, dated June 3, 2016, bearing interest * at 10% annually, payable within a year, convertible to 350,000 350,000 shares of common stock at $.05 per share Promissory note, dated June 2, 2017, bearing interest at 4% annually, payable within a year, convertible to common stock at a discount of 40% off the lowest traded price of the common stock during 45 trading days prior the conversion date. 19,100 - Convertible notes before debt discount 509,600 572,500 Less debt discount (205,224) (361,554) Total outstanding convertible notes payable $ 304,376 $ 210,946 *These promissory notes were converted on November 8, 2017. The company issued total 66,967,499 shares of restricted common stock for conversion of promissory notes of $410,000 and corresponding interest of $59,675. ** The promissory note conversion was executed on November 13, 2017. 8,050,000 shares of common stock to be issued for conversion of promissory note and 3,438,112 shares of common stock to be issued for accrued interest. Fair Value of Financial Instruments: The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, notes payable and derivative liabilities. Derivative liabilities are recorded at fair value. The principal balance of notes payable approximates fair value because current interest rates and terms offered to the Company for similar debt are substantially the same. FASB ASC 820 defines fair value, establishes a framework for measuring fair value, in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. |
(6) Derivative Instruments
(6) Derivative Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(6) Derivative Instruments | (6) Derivative Instruments The Company has a convertible note payable with elements that qualify as derivatives as the convertible note payable has variable conversion features (see note 5). The September 30, 2017 derivative liability was valued using the Black-Scholes model. Stock Price $ 0.045 Exercise Price $ 0.027 Life in Years 0.7 Annualized Volatility 310.72% Annual Rate of Quarterly Dividends 0.00% Discount Rate Bond Equivalent Yield 0.120% |
(7) Equity
(7) Equity | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(7) Equity | (7) Equity Common and Preferred Stock The Company is authorized to issue 1,000,000,000 shares of common stock and 2,011,000 During the nine months ended September 30, 2017, the Company issued an aggregate of 21,727,889 shares of common stock for the conversion of $88,395 in convertible notes payable and accrued interest. During the nine months ended September 30, 2016 the Company issued an aggregate of 200,000 of common stock for the conversion of $5,000 of outstanding note payable. During the nine months ended September 30, 2017, the Company issued an aggregate of 1,460,000 shares of common stock as payment for services resulting in total expense of $130,000. During the nine months ended September 30, 2016, the Company issued an aggregate of 1,024,000 shares of common stock for services and 16,791,611 shares of common stock for directors and employee compensation resulting in an expense of $1,257,091. During the nine months ended September 30, 2017, the Company issued 1,200,000 shares of common stock for the exercise of warrants. There were no warrants exercised during the nine months ended September 30, 2016. During the nine months ended September 30, 2017, the Company issued 11,620,000 shares of common stock for cash of $421,000. During the nine months ended September 30, 2016, the Company issued 23,894,719 shares of common stock for $337,500. During the nine months ended September 30, 2017, the Company issued 1,880,969 shares of common stock for share exchange with certain shareholders of Las Vegas Railway Express, Inc. (LVRE). During the nine months ended September 30, 2016, the Company issued 151,885,189 shares of common stock for the shares of LVRE. During the nine months ended September 30, 2017, the Company cancelled 2 shares of preferred stock series A-2 issued to Michael Barron and issued to him 4 shares of preferred stock series C. Each share of preferred stock series C is not convertible into common stock shares. Total aggregate issued shares of series C preferred stock, at any given time, have voting rights equal to four times the sum of the total number of shares of common stock and total number of shares of preferred stock series A, A-2 and B which are issued and outstanding at the time of voting. Warrants During the nine months ended September 30, 2017, the Company issued an aggregate of 7,178,000 warrants in connection with the stock purchases during the period. During the nine months ended September 30, 2016, the Company issued 9,000,000 warrants in connection with issuances of convertible notes payable. |
(8) Related Party Transactions
(8) Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(8) Related Party Transactions | (8) Related Party Transactions During the nine months ended September 30, 2017, the Company entered into short-term borrowings with the Allegheny Nevada Holdings Corporation (Michael A. Barron, the CEO and President of the Company, is a 100% owner and President of Allegheny Nevada Holdings Corporation), Cardio Infrared Technologies, Inc. (Wayne Bailey, the CFO of the Company, is a 100% owner and President of Cardio Infrared Technologies, Inc.) and Wanda Witoslawski ( the Chief Financial Officer of the Company) amounting to a total of $121,900. The outstanding amounts accrue interest at a rate of 10% per month and are payable on demand. During the nine months ended September 30, 2017, the Company accrued travel and office expenses of $11,716 advanced and paid by Allegheny Nevada Holdings Corporation. The amount due is to be paid in the short term and does not accrue interest. |
(9) Subsequent Events
(9) Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
(9) Subsequent Events | (9) Subsequent Events During the month of October of 2017, the Company issued total of 255,004,333 shares of common stock as follows: · 235,000,000 shares of common stock to management for compensation · 5,000,000 shares of common stock for cash of $50,000 · 15,000,000 shares of common stock for consulting services · 4,333 shares of common stock for share exchange On November 8, 2017, the company issued total 66,967,499 shares of common stock as follows: · · On November 1, 2017, the Company entered into a convertible promissory note agreement with Power Lending Group LTD. for total principal borrowings of $45,000. The amounts are due nine months after the issuance of the note on August 10, 2018, and bear interest at a rate of 12% per annum. At the option of the debt holder, beginning 180 days after the issuance of the note, the debt holder may convert the outstanding balance of the note into shares of the Companys common stock at a conversion rate equal to 58% of the average of the lowest two closing trading prices during the 15 trading day period prior to the conversion election date. On November 13, 2017, the Company and the note holder of a promissory note dated April 30, 2008 with outstanding principal balance of $80,500, executed conversion of said note into 8,050,000 shares of common stock. The Company is to issue 3,438,112 shares of common stock for interest accrued on this note. |
(1) Organization and Basis of16
(1) Organization and Basis of Presentation: Going Concern (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Going Concern: | Going Concern: The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has net losses of $2,608,267 for the nine months ended September 30, 2017. The Company also has an accumulated deficit of $10,574,428, and a negative working capital of $1,094,242 as of September 30, 2017, as well as outstanding convertible notes payable of $509,600, before debt discount of $205,224. Management believes that it will need additional equity or debt financing to be able to implement its business plan. Given the lack of revenue, capital deficiency and negative working capital, there is substantial doubt about the Companys ability to continue as a going concern. Management is attempting to raise additional equity and debt to sustain operations until it can market its services and achieves profitability. The successful outcome of future activities cannot be determined at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
(2) Summary of Significant Ac17
(2) Summary of Significant Accounting Policies: Use of Estimates (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. |
(2) Summary of Significant Ac18
(2) Summary of Significant Accounting Policies: Property and Equipment (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Property and Equipment: | Property and Equipment: Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years once the individual assets are placed in service. The Company expenses all purchases of equipment with individual costs of under $500, and these amounts are not material to the financial statements. As of September 30, 2017, we recorded the rail cars on the balance sheet at $125,000 with no accumulated depreciation. The rail cars are currently not depreciated as they are not in service and not ready to run. The rail cars require substantial investment to retrofit. The Company expensed the carrying value of 10 rail cars as they were exchanged for unpaid storage charges. The amount written off was $629,270 as of September 30, 2017. |
(2) Summary of Significant Ac19
(2) Summary of Significant Accounting Policies: Long-lived Assets (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Long-lived Assets: | Long-Lived Assets: In accordance with FASB ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Companys management believes there has been no impairment of its long-lived assets during the nine months ended September 30, 2017, or 2016. There can be no assurance, however, that market conditions will not change or demand for the Companys business model will continue. Either of these could result in future impairment of long-lived assets. |
(2) Summary of Significant Ac20
(2) Summary of Significant Accounting Policies: Income Taxes (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Income Taxes: | Income Taxes: Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of September 30, 2017, and December 31, 2016, the Company has not established a liability for uncertain tax positions. |
(2) Summary of Significant Ac21
(2) Summary of Significant Accounting Policies: Basic and Diluted Loss Per Share (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Basic and Diluted Loss Per Share: | Basic and Diluted Loss per Share: In accordance with Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 260, Earnings per Share, the basic income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. Common stock equivalents have not been included in the earnings per share computation for the three and nine months ended September 30, 2017, and 2016 as the amounts are anti-dilutive. As of September 30, 2017, the Company had 14,978,000 outstanding warrants and convertible debt of $509,600, before debt discount of $205,224, which were all excluded from the computation as they were anti-dilutive. As of December 31, 2016, the Company had 9,000,000 outstanding warrants and convertible debt of $572,500, before debt discount of $361,554, which were all excluded from the computation as they were anti-dilutive. |
(2) Summary of Significant Ac22
(2) Summary of Significant Accounting Policies: Share Based Payment (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Share Based Payment: | Share Based Payment: The Company issues stock, options, and warrants as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance FASB ASC 718. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The Company accounts for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: ( a b The Company values stock compensation based on the market price on the measurement date. As described above, for employees this is the date of grant, and for non-employees, this is the date of performance completion. The Company values warrants using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options and warrants issued during the nine months ended September 30, 2017 were as follows. Variables Values Exercise Price $0.15 Risk Free Rate .92% to 1.07% Discount rate 0.25% Volatility 666.26% - 634.49% |
(2) Summary of Significant Ac23
(2) Summary of Significant Accounting Policies: New Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
New Accounting Pronouncements: | New Accounting Pronouncements: There are no new significant accounting standards applicable to the Company that have been issued but not yet adopted by the Company as of September 30, 2017, and through the date of this filing. |
(5) Convertible Notes Payable_
(5) Convertible Notes Payable: Fair Value of Financial Instruments (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Fair Value of Financial Instruments: | Fair Value of Financial Instruments: The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, notes payable and derivative liabilities. Derivative liabilities are recorded at fair value. The principal balance of notes payable approximates fair value because current interest rates and terms offered to the Company for similar debt are substantially the same. FASB ASC 820 defines fair value, establishes a framework for measuring fair value, in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions. |
(2) Summary of Significant Ac25
(2) Summary of Significant Accounting Policies: Share Based Payment: Schedule of Assumptions Used (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Assumptions Used | Variables Values Exercise Price $0.15 Risk Free Rate .92% to 1.07% Discount rate 0.25% Volatility 666.26% - 634.49% |
(3) Property and Equipment_ Pro
(3) Property and Equipment: Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Property, Plant and Equipment | September 30, December 31, 2017 2016 Rail cars (not in service) $ 125,000 $ 833,160 Less: accumulated depreciation - - $ 125,000 $ 833,160 |
(4) Related Party Notes Payab27
(4) Related Party Notes Payable: Schedule of Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Related Party Transactions | September 30, December 31, 2017 2016 Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand $ 49,910 $ 55,994 Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand 39,101 52,240 Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand 74,044 78,359 Promissory note, dated September 30, 2015, bearing no interest, payable on demand 155,798 162,232 Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand 53,700 - Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand 49,800 - Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand 18,400 - $ $ 440,753 $ 348,825 |
(5) Convertible Notes Payable28
(5) Convertible Notes Payable: Schedule of Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Convertible Notes Payable | September 30, December 31, 2017 2016 Promissory note, dated April 30, 2008, bearing interest ** at 10% annually, payable on demand, convertible to $ 80,500 $ 82,500 shares of common stock at $.05 per share Promissory note, dated May 12, 2016, bearing interest at 10% annually, payable within a year, convertible to - 60,000 shares of common stock at $.05 per share Promissory note, dated May 19, 2016, bearing interest at 10% annually, payable within a year, convertible to - 20,000 shares of common stock at $.05 per share Promissory note, dated May 20, 2016, bearing interest * at 10% annually, payable within a year, convertible to 20,000 20,000 shares of common stock at $.05 per share Promissory note, dated May 31, 2016, bearing interest * at 10% annually, payable within a year, convertible to 40,000 40,000 shares of common stock at $.05 per share Promissory note, dated June 3, 2016, bearing interest * at 10% annually, payable within a year, convertible to 350,000 350,000 shares of common stock at $.05 per share Promissory note, dated June 2, 2017, bearing interest at 4% annually, payable within a year, convertible to common stock at a discount of 40% off the lowest traded price of the common stock during 45 trading days prior the conversion date. 19,100 - Convertible notes before debt discount 509,600 572,500 Less debt discount (205,224) (361,554) Total outstanding convertible notes payable $ 304,376 $ 210,946 |
(6) Derivative Instruments_ Der
(6) Derivative Instruments: Derivative Liability Assumptions Used (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Derivative Liability Assumptions Used | Stock Price $ 0.045 Exercise Price $ 0.027 Life in Years 0.7 Annualized Volatility 310.72% Annual Rate of Quarterly Dividends 0.00% Discount Rate Bond Equivalent Yield 0.120% |
(1) Organization and Basis of30
(1) Organization and Basis of Presentation: Going Concern (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Details | |||||
Net income (loss) | $ 1,072,447 | $ 385,270 | $ 2,608,267 | $ 2,142,418 | $ 2,567,470 |
Accumulated (deficit) | 10,574,428 | 10,574,428 | 7,966,161 | ||
Negative Working Capital | 1,094,242 | 1,094,242 | |||
Convertible Debt, Gross | 509,600 | 509,600 | 572,500 | ||
Debt Instrument, Unamortized Discount, Current | $ 205,224 | $ 205,224 | $ 361,554 |
(2) Summary of Significant Ac31
(2) Summary of Significant Accounting Policies: Property and Equipment (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property and equipment, net of accumulated depreciation | $ 125,000 | $ 833,160 |
Write off property and equipment | 708,160 | |
Railroad Transportation Equipment | ||
Property and equipment, net of accumulated depreciation | 125,000 | $ 833,160 |
Write off property and equipment | $ 629,270 |
(2) Summary of Significant Ac32
(2) Summary of Significant Accounting Policies: Basic and Diluted Loss Per Share (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Details | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 14,978,000 | 9,000,000 |
Class of Warrant or Right, Outstanding | 14,978,000 | 9,000,000 |
Convertible Debt, Gross | $ 509,600 | $ 572,500 |
Debt Instrument, Unamortized Discount, Current | $ 205,224 | $ 361,554 |
(2) Summary of Significant Ac33
(2) Summary of Significant Accounting Policies: Share Based Payment: Schedule of Assumptions Used (Details) | 9 Months Ended |
Sep. 30, 2017$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $ 0.15 |
Share-based Compensation Arrangement By Share- based Payment Award, Fair Value Assumptions, Discount Rate | 0.25% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.92% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 666.26% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.07% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 634.49% |
(3) Property and Equipment_ P34
(3) Property and Equipment: Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property and equipment, net of accumulated depreciation | $ 125,000 | $ 833,160 |
Railroad Transportation Equipment | ||
Property and equipment, net of accumulated depreciation | $ 125,000 | $ 833,160 |
(4) Related Party Notes Payab35
(4) Related Party Notes Payable: Schedule of Related Party Transactions (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Notes Payable, Related Parties, Current | $ 440,753 | $ 348,825 |
Related Party Notes Payable 1 | ||
Notes Payable, Related Parties, Current | 49,910 | 55,994 |
Related Party Notes Payable 2 | ||
Notes Payable, Related Parties, Current | 39,101 | 52,240 |
Related Party Notes Payable 3 | ||
Notes Payable, Related Parties, Current | 74,044 | 78,359 |
Related Party Notes Payable 4 | ||
Notes Payable, Related Parties, Current | 155,798 | $ 162,232 |
Related Party Notes Payable 5 | ||
Notes Payable, Related Parties, Current | 53,700 | |
Related Party Notes Payable 6 | ||
Notes Payable, Related Parties, Current | 49,800 | |
Related Party Notes Payable 7 | ||
Notes Payable, Related Parties, Current | $ 18,400 |
(5) Convertible Notes Payable36
(5) Convertible Notes Payable: Schedule of Convertible Notes Payable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Convertible Debt, Gross | $ 509,600 | $ 572,500 |
Debt Instrument, Unamortized Discount, Current | (205,224) | (361,554) |
Current portion of convertible notes payable, net of debt discount | 304,376 | 210,946 |
Convertible Notes Payable 1 | ||
Convertible Debt, Gross | 80,500 | 82,500 |
Convertible Notes Payable 2 | ||
Convertible Debt, Gross | 60,000 | |
Convertible Notes Payable 3 | ||
Convertible Debt, Gross | 20,000 | |
Convertible Notes Payable 4 | ||
Convertible Debt, Gross | 20,000 | 20,000 |
Convertible Notes Payable 5 | ||
Convertible Debt, Gross | 40,000 | 40,000 |
Convertible Notes Payable 6 | ||
Convertible Debt, Gross | 350,000 | $ 350,000 |
Convertible Notes Payable 7 | ||
Convertible Debt, Gross | $ 19,100 |
(6) Derivative Instruments_ D37
(6) Derivative Instruments: Derivative Liability Assumptions Used (Details) | 9 Months Ended |
Sep. 30, 2017$ / shares | |
Details | |
Fair Value Assumptions, Stock Price | $ 0.045 |
Fair Value Assumptions, Exercise Price | $ 0.027 |
Fair Value Assumptions, Expected Term | 8 months 12 days |
Fair Value Assumptions, Expected Volatility Rate | 310.72% |
Fair Value Assumptions, Discount Rate - Bond Equivalent Yield | 0.12% |
(7) Equity (Details)
(7) Equity (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Common stock shares authorized | 1,000,000,000 | 1,000,000,000 |
Preferred stock shares authorized | 2,011,000 | 2,011,000 |
(8) Related Party Transactions
(8) Related Party Transactions (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Proceeds from related party notes payable | $ 145,272 |
Travel and office expenses | 11,716 |
Officers | |
Proceeds from related party notes payable | $ 121,900 |