Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 08, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Worlds Inc. | |
Entity Central Index Key | 1,961 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 210,156,148 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 26,298 | |
Total Current Assets | 26,298 | |
Total Assets | 26,298 | |
Current Liabilities | ||
Accounts payable | 797,908 | |
Accrued expenses | 2,249,523 | |
Due to related party | $ 8,296 | 36,310 |
Derivative liability | 415,706 | |
Notes payable | 773,279 | 773,279 |
Notes payables | 460,000 | |
Convertible notes payable | 349,500 | |
Total Current Liabilities | 5,082,226 | |
Stockholders (Deficit) | ||
Common stock (Par value $0.001 authorized 250,000,000 shares, issued and outstanding 154,359,714 and 120,193,050 at June 30, 2016 and December 31, 2015, respectively) | 120,193 | |
Common stock subscribed but not yet issued 750,000 at June 30, 2016 and December 31, 2015, respectively) | 750 | |
Additional paid in capital | 34,885,535 | |
Common stock-warrants | 97,869 | |
Accumulated deficit | (40,160,275) | |
Total stockholders deficit | (5,055,927) | |
Total Liabilities and stockholders deficit | $ 26,298 | |
Unaudited | ||
Current Assets | ||
Cash and cash equivalents | 16,642 | |
Total Current Assets | 16,642 | |
Total Assets | 16,642 | |
Current Liabilities | ||
Accounts payable | 797,908 | |
Accrued expenses | 2,395,577 | |
Due to related party | 8,296 | |
Derivative liability | 446,972 | |
Notes payable | 773,279 | |
Notes payables | 750,000 | |
Convertible notes payable | 185,174 | |
Total Current Liabilities | 5,357,207 | |
Stockholders (Deficit) | ||
Common stock (Par value $0.001 authorized 250,000,000 shares, issued and outstanding 154,359,714 and 120,193,050 at June 30, 2016 and December 31, 2015, respectively) | 154,360 | |
Common stock subscribed but not yet issued 750,000 at June 30, 2016 and December 31, 2015, respectively) | 750 | |
Additional paid in capital | 35,576,313 | |
Common stock-warrants | 97,869 | |
Accumulated deficit | (41,169,856) | |
Total stockholders deficit | (5,340,564) | |
Total Liabilities and stockholders deficit | $ 16,642 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Common Stock, par value | $ 0.001 | |
Common Stock, shares authorized | 150,000,000 | |
Common Stock, shares issued | 120,193,050 | |
Common Stock, shares outstanding | 120,193,050 | |
Common stock subscribed not yet issued | 750,000 | |
Unaudited | ||
Common Stock, par value | $ 0.001 | |
Common Stock, shares authorized | 250,000,000 | |
Common Stock, shares issued | 154,359,714 | |
Common Stock, shares outstanding | 154,359,714 | |
Common stock subscribed not yet issued | 750,000 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues | ||||
Revenue | ||||
Total Revenue | ||||
Cost and Expenses | ||||
Cost of Revenue | ||||
Gross Profit/(Loss) | ||||
Option Expense | 62,629 | 62,629 | ||
Common Stock issued for services rendered | 80,400 | 80,400 | ||
Selling, General & Admin. | 223,351 | 60,993 | 402,808 | 136,401 |
Salaries and related | 58,231 | 59,154 | 116,463 | 112,092 |
Operating (loss) | (281,583) | (263,177) | (519,271) | (391,522) |
Other Income Expense | ||||
Loss on settlement of convertible notes | (2,336,035) | |||
Gain (Loss) on change in fair value of derivative liability | (547,365) | (197,982) | (436,051) | (309,931) |
Derivative liabilities expense | (31,434) | |||
Interest Expense | (43,298) | (124,894) | (54,259) | (143,844) |
Net Income/ (Loss) | $ (872,246) | $ (586,053) | $ (1,009,581) | $ (3,212,766) |
Weighted Average (Loss) per share | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.03) |
Weighted Average Common Shares Outstanding | 149,814,259 | 112,537,208 | 132,186,582 | 108,775,858 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net (loss) | $ (1,009,581) | $ (3,212,766) |
Adjustments to reconcile net (loss) to net cash (used in) operating activities | ||
Loss on settlement of covertible notes | 2,336,035 | |
Fair value of stock options issued | $ 62,629 | |
Common stock issued for services rendered | 80,400 | |
Amortization of discount to note payable | $ 29,333 | $ 102,155 |
Changes in fair value of derivative liabilities | 436,051 | 309,931 |
Derivative liabilities expense | 31,434 | |
Other receivables | (90,000) | |
Accounts payable and accrued expenses | 146,053 | (20,124) |
Due from/to related party | (33,015) | 36,499 |
Net cash (used in) operating activities: | (431,158) | (363,807) |
Cash flows from financing activities | ||
Proceeds from issuance of note payable | 290,000 | 135,000 |
Proceeds from issuance of convertible note payable | 131,500 | 300,000 |
Net cash provided by financing activities | 421,500 | 435,000 |
Net increase/(decrease) in cash and cash equivalents | (9,658) | 71,194 |
Cash and cash equivalents, including restricted, beginning of year | 26,298 | 27,661 |
Cash and cash equivalents, including restricted, end of period | 16,642 | 98,856 |
Non-cash financing activities | ||
Issuance of 34,166,664 shares of common stock to retire convertible notes payable | 275,159 | |
Issuance of common stocks to reitre notes payable and warrant | 629,181 | |
Supplemental disclosure of cash flow information: | ||
Interest | ||
Income taxes |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) (Unaudited) - shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Cash Flows [Abstract] | ||
Common stock issued, retire convertible notes payable | 34,166,664 |
NOTE 1 - DESCRIPTION OF BUSINES
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF ACCTING POLICIES | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF ACCTING POLICIES | NOTE 1 DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES Description of Business On May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc., the majority of its operations and related operational assets. The Company retained its patent portfolio which it intends to continue to increase and to more aggressively enforce against alleged infringers. The Company also entered into a License Agreement with Worlds Online Inc. to sublicense its patented technologies. Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP"), which contemplates continuation of the Company as a going concern. The Company has always been considered a developmental stage business, has incurred significant losses since its inception and has had minimal revenues from operations. The Company will require substantial additional funds for development and enforcement of its patent portfolio. There can be no assurance that the Company will be able to obtain the substantial additional capital resources to pursue its business plan or that any assumptions relating to its business plan will prove to be accurate. The Company has not been able to generate sufficient revenue or obtain sufficient financing which has had a material adverse effect on the Company, including requiring the Company to reduce operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. As the company has focused its attention on increasing its patent portfolio and enforcing it, the Company has been operating at a significantly reduced capacity, with only one full time employee and using consultants to perform any additional work that may be required. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Cash and Cash Equivalents Cash and cash equivalents includes highly liquid money market instruments, which have original maturities of three months or less at the time of purchase. Due to Related Party Due to related party is comprised of cash payments made by Worlds Online Inc. on behalf of Worlds Inc. for shared operating expenses. Revenue Recognition Effective for the second quarter of 2011, the Company spun off its online businesses to Worlds Online Inc. The Companys sources of revenue after the spin off will be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated from enforcing its patents. The Company recognizes revenue when all of the following criteria are met: evidence of an arrangement exists such as a signed contract, delivery has occurred, the price is fixed or determinable, and collectability is reasonable assured. This will usually be in the form of a receipt of a customers acceptance indicating the product has been completed to their satisfaction except for development work and service revenue which is recognized when the services have been performed. Research and Development Costs Research and development costs are charged to operations as incurred. Property and Equipment Property and equipment are stated at cost. Depreciation is provided on a straight line basis over the estimated useful lives of the assets ranging from three to five years. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Maintenance and repairs are charged to expense in the period incurred. Impairment of Long Lived Assets The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during 2016 and 2015. Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Income Taxes The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. Notes Payable The Company has $773,279 in short term notes outstanding at June 30, 2016 and 2015. These are old notes payable for which the statute of limitations has passed and therefore the Company does not expect it will ever have to repay those notes. The Company has an additional $750,000 and $460,000 in notes, and $185,174 and $349,500 (net of $21,000 discount) in convertible notes outstanding at June 30, 2016 and December 31, 2015, respectively. The convertible notes were prepaid in August 2016. Comprehensive Income (Loss) The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements. Loss Per Share Net loss per common share is computed pursuant to section 260-10-45 of the FASB ASC. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. As of June 30, 2016, there were 9,050,000 options and no warrants, whose effect is anti-dilutive and not included in diluted net loss per share for June 30, 2016. The options and warrants may dilute future earnings per share. Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Companys financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Companys business, financial position, and results of operations or cash flows. During 2000 the Company was involved in a lawsuit relating to unpaid consulting services. In April, 2001 a judgment against the Company was rendered for approximately $205,000. As of June 30, 2016, and 2015 the Company recorded a reserve of $205,000 for this lawsuit, which is included in accrued expenses in the accompanying balance sheets. Risk and Uncertainties The Company is subject to risks common to companies in the technology industries, including, but not limited to, litigation, development of new technological innovations and dependence on key personnel. Off Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements. Uncertain Tax Positions The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the six months ended June 30, 2016 or 2015. Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: Level 1 Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. Level 2 Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Unobservable inputs reflecting the Companys assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Companys financial assets and liabilities, such as cash, other receivables, accounts payable & accrued expenses, due to related party, notes payable and notes payables, approximate their fair values because of the short maturity of these instruments. The Company's convertible notes payable are measured at amortized cost. The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. See Note 5. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion feature. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Subsequent Events The Company evaluated for subsequent events through the issuance date of the Companys financial statements. One of the convertible note holders converted $109,000 worth of debentures for 20,796,434 shares of common stock during July of 2016. The Company paid the balance on the convertible notes in August after raising $350,000 through issuing units totaling 35,000,000 common shares and warrants. Recent Accounting Pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements up to ASU 2015-16, and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
NOTE 2 - GOING CONCERNS
NOTE 2 - GOING CONCERNS | 6 Months Ended |
Jun. 30, 2016 | |
Note 2 - Going Concerns | |
NOTE 2 - GOING CONCERNS | NOTE 2 - GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Since its inception, the Company has had periods where it had only minimal revenues from operations. There can be no assurance that the Company will be able to obtain the additional capital resources to fully implement its business plan or that any assumptions relating to its business plan will prove to be accurate. The Company is pursuing sources of additional financing and there can be no assurance that any such financing will be available to the Company on commercially reasonable terms, or at all. Any inability to obtain additional financing will likely have a material adverse effect on the Company, including possibly requiring the Company to completely reduce and/or cease operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
NOTE 3 - EQUITY
NOTE 3 - EQUITY | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
NOTE 3 -EQUITY | NOTE 3 - EQUITY During the six months ended June 30, 2016, the Company issued 34,166,664 shares of common stock by converting $275,159 of the principal of convertible notes payable. During the six months ended June 30, 2015, the company issued 15,608,696 common shares to the Class C Note holders in order to terminate the litigation between us, terminate all agreements between us, cancel all warrants we have previously issued to them as well as the outstanding balance of the Class C Notes. |
NOTE 4 - NOTES PAYABLE
NOTE 4 - NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
NOTE 4 - NOTES PAYABLE | NOTE 4 - NOTES PAYABLE The Notes are classified as a derivative liability and not a note payable, see Note 9 below. Notes payable at June 30, 2016 consist of the following: Unsecured note payable to a shareholder bearing 8% interest. Entire balance of principal and unpaid interest due on demand $ 124,230 Unsecured note payable to a shareholder bearing 10% interest Entire balance of principal and unpaid interest due on demand $ 649,049 Promissory notes $ 700,000 Notes Payable - related party $ 50,000 Total notes $ 1,523,279 2016 $ 863,279 2017 $ 660,000 2018 $ -0- 2019 $ -0- 2020 $ -0- $ 1,523,279 We issued promissory notes in the amount of $290,000 during the six months ended June 30, 2016. The promissory notes carry a 6% annual interest rate and are payable upon the earlier of (a) 24 months from the date of the promissory note or (b) the Company reaching a settlement(s) on a patent infringement claim(s) and receiving an aggregate of at least $2 million net proceeds from such settlement(s). The holders of the promissory notes shall receive repayment in the full face amount of the note from the initial $500,000 the Company actually receives from the net proceeds of its patent infringement claim(s) or from the net proceeds of a public offering. In addition the holder shall receive a preferred return (i) in an amount equal to up to 200% of the initial face amount of the note out of available cash by sharing with all other investors in this series of notes in the allocation of 50% of the available cash received by the Company from $2M - $4M and (ii) in an amount equal to up to 100% of the initial face amount of the note out of available cash by sharing with all other investors in this series of notes in the allocation of 25% of the available cash received by the Company from $4M - $6M. In other words, if the Company collects $6M in the net proceeds of available cash, the holder will receive a return equal to 400% of its investment. We issued promissory notes in the amount of $135,000 during the year ended December 31, 2015. One of the promissory notes in the amount of $25,000 was in lieu of payment of cash for an outstanding balance due to a consultant of the Company. The notes carry the same terms as those issued in 2016. |
NOTE 5 - CONVERTIBLE DEBENTURES
NOTE 5 - CONVERTIBLE DEBENTURES | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
NOTE 5 - CONVERTIBLE DEBENTURES | NOTE 5 - CONVERTIBLE DEBENTURES On May 8, 2015, the Company issued convertible debentures to certain accredited investors. The total principal amount of the debentures was $300,000 with a maturity date of November 8, 2015 with a zero percent interest rate. The debentures are convertible into shares of the Companys common stock at the lower of the fixed price ($0.89) or fifty five percent (55%) of the average of the three lower trading price for 20 trading days prior to conversion. The Company signed a Forbearance Agreement on October 26, 2015 for the 10% convertible debenture with the principal amount of $300,000 that was due November 8, 2015. The new maturity date of the debenture is May 8, 2016. As of June 30, 2016, the convertible debenture was completely converted into common stock of the Company. On October 30, 2015, the company entered into a new Debenture with the same Lender, with a face amount of $405,000 having similar terms as the first Convertible Debenture with a maturity date of April 30, 2016. The debenture included a forbearance fee of $90,000 and had an original issue discount of 10%. During the six months ended June 30, 2016, the Company issued 34,166,664 shares of common stock by converting $275,159 of the principal of convertible notes payable. On June 1, 2016, the company entered into a new Debenture with an accredited investor, with a face amount of $50,000. The debenture is convertible into shares of the Companys common stock at the lower of the fixed price ($0.005) or fifty five percent (55%) of the average of the three lowest closing trading prices for 20 trading days prior to conversion. The Debenture has a maturity date of December 1, 2016. The debenture had an original issue discount of 10%. During the year ended December 31, 2015, the Company issued 6,746,356 shares of common stock by converting $150,000 of the principal of convertible notes payable. As of June 30, 2016, the aggregate carrying value of the debentures was $226,841. As of December 31, 2015, the aggregate carrying value of the debentures was $370,500. |
NOTE 6 - DERIVATIVE LIABILITIES
NOTE 6 - DERIVATIVE LIABILITIES | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
NOTE 6 - DERIVATIVE LIABILITIES | NOTE 6 - DERIVATIVE LIABILITIES (A) Convertible Notes Issued in May 8, 2015 The Company identified conversion features embedded within convertible debt issued in May 8, 2015. The Company has determined that the features associated with the embedded conversion option, in the form a ratchet provision, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. The convertible debt was completely converted as of June 30, 2016. As a result of the application of ASC No. 815, the fair value of the ratchet feature related to convertible debt is summarized as follow: Derivative Liabilities Balances as of December 31, 2015 $ 224,951 Reclassified to Additional paid in capital due to conversion (224,951 ) Balances as of June 30, 2016 0 (B) Convertible Notes Issued in October 30, 2015 The Company identified conversion features embedded within convertible debt issued on October 30, 2015. The Company has determined that the features associated with the embedded conversion option, in the form a ratchet provision, should be accounted for at fair value, as a derivative liability as of the maturity date of April 30, 2016. As a result of the application of ASC No. 815, the fair value of the ratchet feature related to convertible debt is summarized as follow: Derivative Liabilities Fair Value at re-measurement date of April 30, 2016 $ 340,614 Changes in derivative liabilities 118,840 Reclassified to Additional paid in capital due to conversion (265,873 ) Balances as of June 30, 2016 193,581 The fair value at the re-measurement date for the Companys derivative liabilities were based upon the following management assumptions as of June 30, 2016: Remeasurement Date Expected dividends 0 % Expected volatility 235 % Expected term 0.25 years Risk free interest rate 0.20 % On August 5, 2016 this note was paid in full. (C) Convertible Notes Issued in June 1, 2016 The Company identified conversion features embedded within convertible debt issued on June 1, 2016. The Company has determined that the features associated with the embedded conversion option, in the form a ratchet provision, should be accounted for at fair value, as a derivative liability at June 1, 2016. As a result of the application of ASC No. 815, the fair value of the ratchet feature related to convertible debt is summarized as follow: Derivative Liabilities Fair Value at re-measurement date of June 1, 2016 $ 116,540 Changes in derivative liabilities (23,549) Balances as of June 30, 2016 92,991 The fair value at the re-measurement date for the Companys derivative liabilities were based upon the following management assumptions as of June 30, 2016: Remeasurement Date Expected dividends 0 % Expected volatility 235 % Expected term 0.42 years Risk free interest rate 0.38 % On August 10, 2016 this note was paid in full. (D) Settlement of Derivative Liabilities During the six month ended June 30, 2015 the Company settled a lawsuit brought forth by the note holders, effectively terminating and canceling all remaining agreements, warrants and notes. As a result of the settlement, the company recorded a loss on settlement of convertible notes of $2,336,035 during the year ended December 31, 2015. As of the date of the settlement with the noteholders, the Company revalued the embedded derivative liability and recorded a loss on change in fair value of derivative liability of $143,383. (E) Options identified as derivative liability The Company identified options issued to directors and officers are a derivative liability due to a lack of number of authorized shares to cover all the options issued by the Company if they are all exercised as of June 30, 2016 and December 31, 2015. Therefore, the fair value of the options have been recorded as liabilities on the balance sheet. The change in the fair value of the derivative liabilities will be recorded in other income or expenses in the statement of operations at the end of each period, with the offset to the derivative liabilities on the balance sheet. The fair value of the embedded derivative liabilities was determined using the Black-Scholes valuation model on the issuance dates with the assumptions in the table below. As a result of the application of ASC No. 815, the fair value of the options is summarized as follow: Derivative Liabilities Balances as of December 31, 2015 $ 190,755 Fair value mark to market adjustment (30,356 ) Balances as of June 30, 2016 160,399 The fair value at the re-measurement date for the Companys derivative liabilities were based upon the following management assumptions as of June 30, 2016: Remeasurement Date Expected dividends 0 % Expected volatility 235 % Expected term 1.25 - 4.00 years Risk free interest rate 0.38 % The fair value at the commitment and re-measurement dates for the Companys derivative liabilities as of December 31, 2015 were: Derivative Liabilities Fair value at the commitment date - November 8, 2015 $ 468,814 Fair value mark to market adjustment (278,059 ) Balances as of December 31, 2015 190,755 The fair value at the commitment and re-measurement dates for the Companys derivative liabilities were based upon the following management assumptions as of December 31, 2015: Commitment Date Remeasurement Date Expected dividends 0 % 0 % Expected volatility 183 % 208 % Expected term 1.89 - 4.64 years 1.75 - 4.5 years Risk free interest rate 0.89 1.75 % 1.06% - 1.76 % |
NOTE 7 - STOCK OPTIONS
NOTE 7 - STOCK OPTIONS | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
NOTE 7 - STOCK OPTIONS | NOTE 7 STOCK OPTIONS On June 30, 2016, the Company had convertible promissory notes entitled to be converted at a discount to market price. As a result, the existing 9,050,000 exercisable options shall be reclassified from equity to liabilities. Please refer to Note 6 for further discussion. No stock options were issued during the six months ended June 30, 2016 and no stock options were exercised during the six months ended June 30, 2016. No stock options were issued during the six months ended June 30, 2015 and no stock options were exercised during the six months ended June 30, 2015. On January 23, 2015 we entered into an agreement with the Class C note holders who held four million five hundred thirty five thousand seven hundred and fourteen warrants to purchase our common stock. The settlement agreement, among other things, cancelled all warrants we have previously issued to them. Stock Warrants and Options Stock warrants/options outstanding and exercisable on June 30, 2016 are as follows: Exercise Price per Share Shares Under Option/warrant Remaining Life in Years Outstanding and Exercisable $ 0.19 200,000 1.50 $ 0.155 200,000 2.50 $ 0.14 250,000 2.50 $ 0.115 300,000 1.25 $ 0.11 300,000 4.00 $ 0.03 300,000 4.00 $ 0.070 7,500,000 1.25 |
NOTE 8 - COMMITMENTS AND CONTIN
NOTE 8 - COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 8 - COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES The Company is committed to an employment agreement with its President and CEO, Thom Kidrin. The agreement, dated as of August 30, 2012, is for five years with a one-year renewal option held by Mr. Kidrin. The agreement provides for a base salary of $175,000, which increases 10% on September 1 of each year; a monthly car allowance of $500; an annual bonus equal to 2.5% of Pre-Tax Income (as defined in the agreement); an additional bonus as follows: $75,000, if Pre-Tax Income for the year is between 150% and 200% of the prior fiscal years Pre-Tax Income or (B) $100,000, if Pre-Tax Income for the year is between 201% and 250% of the prior fiscal years Pre-Tax Income or (C) $200,000, if Pre-Tax Income for the year is 251% or greater than the prior fiscal years Pre-Tax Income, but in no event shall this additional bonus exceed five (5%) percent of Pre-Tax Income for such year; payment of up to $10,000 in life insurance premiums; options to purchase 7.5 million shares of Worlds Inc. common stock at an exercise price of $0.076 per share, all of which vested on August 30, 2012; a death benefit of at least $2 million dollars; and a payment equal to 2.99 times his base amount (as defined in the agreement) in the event of a Change of Control (as defined in the agreement). The agreement also provides that Mr. Kidrin can be terminated for cause (as defined in the agreement) and that he is subject to restrictive covenants for 12 months after termination. |
NOTE 9 - RELATED PARTY TRANSACT
NOTE 9 - RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
NOTE 9 - RELATED PARTY TRANSACTIONS | NOTE 9 - RELATED PARTY TRANSACTIONS On May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc., the majority of its operations and related operational assets. The Company retained its patent portfolio which it intends to continue to increase and to more aggressively enforce against alleged infringers. The Company also entered into a License Agreement with Worlds Online Inc. to sublicense its patented technologies. Due to related party is comprised of cash payments for operating expenses made by Worlds Online Inc. on behalf of Worlds Inc. The balance at June 30, 2016 is $8,296 and the balance on December 31, 2015 is $36,310. |
NOTE 10 - PATENTS
NOTE 10 - PATENTS | 6 Months Ended |
Jun. 30, 2016 | |
Text Block [Abstract] | |
NOTE 10 - PATENTS | NOTE 10 - PATENTS Worlds Inc. currently has nine patents, 6,219,045 - 7,181,690 - 7,493,558 7,945,856, - 8,082,501, 8,145,998 8,161,383, 8,407,592 and 8,640,028. On March 30, 2012, the Company filed a patent infringement lawsuit against Activision Bizzard Inc., Blizzard Entertainment Inc. and Activision Publishing Inc. in the United States District Court for the District of Massachusetts. Susman Godfrey LLP is lead counsel for the Company. The costs to prosecute those parties that the Company and our legal counsel believe to be infringing on said patents are capitalized under patents until a resolution is reached. There can be no assurance that the Company will be successful in its ability to prosecute its IP portfolio or that we will be able to acquire additional patents. |
NOTE 11 - SUBSEQUENT EVENT
NOTE 11 - SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
NOTE 11 - SUBSEQUENT EVENT | NOTE 11 - SUBSEQUENT EVENT The convertible debt holder converted $109,000 worth of debentures for 20,796,434 shares of common stock during July of 2016. The Company paid the balance on the convertible notes in August after raising $350,000 through issuing units totaling 35,000,000 common shares and warrants. |
NOTE 1 - DESCRIPTION OF BUSIN18
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF ACCTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business On May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc., the majority of its operations and related operational assets. The Company retained its patent portfolio which it intends to continue to increase and to more aggressively enforce against alleged infringers. The Company also entered into a License Agreement with Worlds Online Inc. to sublicense its patented technologies. |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP"), which contemplates continuation of the Company as a going concern. The Company has always been considered a developmental stage business, has incurred significant losses since its inception and has had minimal revenues from operations. The Company will require substantial additional funds for development and enforcement of its patent portfolio. There can be no assurance that the Company will be able to obtain the substantial additional capital resources to pursue its business plan or that any assumptions relating to its business plan will prove to be accurate. The Company has not been able to generate sufficient revenue or obtain sufficient financing which has had a material adverse effect on the Company, including requiring the Company to reduce operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. As the Company has focused its attention on increasing its patent portfolio and enforcing it, the Company has been operating at a significantly reduced capacity, with only one full time employee and using consultants to perform any additional work that may be required. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes highly liquid money market instruments, which have original maturities of three months or less at the time of purchase. |
Due to Related Party | Due to Related Party Due to related party is comprised of cash payments made by Worlds Online Inc. on behalf of Worlds Inc. for shared operating expenses. |
Revenue Recognition | Revenue Recognition Effective for the second quarter of 2011, the Company spun off its online businesses to Worlds Online Inc. The Companys sources of revenue after the spin off will be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated from enforcing its patents. The Company recognizes revenue when all of the following criteria are met: evidence of an arrangement exists such as a signed contract, delivery has occurred, the price is fixed or determinable, and collectability is reasonable assured. This will usually be in the form of a receipt of a customers acceptance indicating the product has been completed to their satisfaction except for development work and service revenue which is recognized when the services have been performed. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to operations as incurred. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is provided on a straight line basis over the estimated useful lives of the assets ranging from three to five years. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Maintenance and repairs are charged to expense in the period incurred. |
Impairment of Long Lived Assets | Impairment of Long Lived Assets The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during 2016 and 2015. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. |
Income Taxes | Income Taxes The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. |
Notes Payable | Notes Payable The Company has $773,279 in short term notes outstanding at June 30, 2016 and 2015. These are old notes payable for which the statute of limitations has passed and therefore the Company does not expect it will ever have to repay those notes. The Company has an additional $750,000 and $460,000 in notes, and $185,174 and $349,500 (net of $21,000 discount) in convertible notes outstanding at June 30, 2016 and December 31, 2015, respectively. The convertible notes were prepaid in August 2016. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements. |
Loss Per Share | Loss Per Share Net loss per common share is computed pursuant to section 260-10-45 of the FASB ASC. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. As of June 30, 2016, there were 9,050,000 options and no warrants, whose effect is anti-dilutive and not included in diluted net loss per share for June 30, 2016. The options and warrants may dilute future earnings per share. |
Commitments and Contingencies | Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Companys financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Companys financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Companys business, financial position, and results of operations or cash flows. During 2000 the Company was involved in a lawsuit relating to unpaid consulting services. In April, 2001 a judgment against the Company was rendered for approximately $205,000. As of June 30, 2016, and 2015 the Company recorded a reserve of $205,000 for this lawsuit, which is included in accrued expenses in the accompanying balance sheets. |
Risk and Uncertainties | Risk and Uncertainties The Company is subject to risks common to companies in the technology industries, including, but not limited to, litigation, development of new technological innovations and dependence on key personnel. |
Off Balance Sheet Arrangements | Off Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements. |
Uncertain Tax Positions | Uncertain Tax Positions The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the six months ended June 30, 2016 or 2015. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: Level 1 Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. Level 2 Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Unobservable inputs reflecting the Companys assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Companys financial assets and liabilities, such as cash, other receivables, accounts payable & accrued expenses, due to related party, notes payable and notes payables, approximate their fair values because of the short maturity of these instruments. The Company's convertible notes payable are measured at amortized cost. The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. See Note 5. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 Debt with Conversion and Other Options for consideration of any beneficial conversion feature. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. |
Subsequent Events | Subsequent Events The Company evaluated for subsequent events through the issuance date of the Companys financial statements. One of the convertible note holders converted $109,000 worth of debentures for 20,796,434 shares of common stock during July of 2016. The Company paid the balance on the convertible notes in August after raising $350,000 through issuing units totaling 35,000,000 common shares and warrants. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements up to ASU 2015-16, and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
NOTE 4 - NOTES PAYABLE (Tables)
NOTE 4 - NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes payable | Notes payable at June 30, 2016 consist of the following: Unsecured note payable to a shareholder bearing 8% interest. Entire balance of principal and unpaid interest due on demand $ 124,230 Unsecured note payable to a shareholder bearing 10% interest Entire balance of principal and unpaid interest due on demand $ 649,049 Promissory notes $ 700,000 Notes Payable - related party $ 50,000 Total notes $ 1,523,279 2016 $ 863,279 2017 $ 660,000 2018 $ -0- 2019 $ -0- 2020 $ -0- $ 1,523,279 |
NOTE 6 - DERIVATIVE LIABILITI20
NOTE 6 - DERIVATIVE LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value ratchet feature - convertible debt | Derivative Liabilities Balances as of December 31, 2015 $ 224,951 Reclassified to Additional paid in capital due to conversion (224,951 ) Balances as of June 30, 2016 0 Derivative Liabilities Fair Value at re-measurement date of April 30, 2016 $ 340,614 Changes in derivative liabilities 118,840 Reclassified to Additional paid in capital due to conversion (265,873 ) Balances as of June 30, 2016 193,581 Derivative Liabilities Fair Value at re-measurement date of June 1, 2016 $ 116,540 Changes in derivative liabilities (23,549) Balances as of June 30, 2016 92,991 |
Fair value remeasurment - convertible debt | Remeasurement Date Expected dividends 0 % Expected volatility 235 % Expected term 0.25 years Risk free interest rate 0.20 % Remeasurement Date Expected dividends 0 % Expected volatility 235 % Expected term 0.42 years Risk free interest rate 0.38 % |
Fair value options | Derivative Liabilities Balances as of December 31, 2015 $ 190,755 Fair value mark to market adjustment (30,356 ) Balances as of June 30, 2016 160,399 |
Fair value commitment and remeasurment - options | Remeasurement Date Expected dividends 0 % Expected volatility 235 % Expected term 1.25 - 4.00 years Risk free interest rate 0.38 % Derivative Liabilities Fair value at the commitment date - November 8, 2015 $ 468,814 Fair value mark to market adjustment (278,059 ) Balances as of December 31, 2015 190,755 Commitment Date Remeasurement Date Expected dividends 0 % 0 % Expected volatility 183 % 208 % Expected term 1.89 - 4.64 years 1.75 - 4.5 years Risk free interest rate 0.89 1.75 % 1.06% - 1.76 % |
NOTE 7 - STOCK OPTIONS (Tables)
NOTE 7 - STOCK OPTIONS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option table | Stock Warrants and Options Stock warrants/options outstanding and exercisable on June 30, 2016 are as follows: Exercise Price per Share Shares Under Option/warrant Remaining Life in Years Outstanding and Exercisable $ 0.19 200,000 1.50 $ 0.155 200,000 2.50 $ 0.14 250,000 2.50 $ 0.115 300,000 1.25 $ 0.11 300,000 4.00 $ 0.03 300,000 4.00 $ 0.070 7,500,000 1.25 |
NOTE 1 - DESCRIPTION OF BUSIN22
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF ACCTING POLICIES (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Short term notes outstanding | $ 773,279 | $ 773,279 | $ 773,279 |
Additional Notes | 750,000 | 460,000 | |
Convertible Notes outstanding | 185,174 | 349,500 | |
Note discount, net | 21,000 | $ 21,000 | |
Options | 9,050,000 | ||
Reserve for litigation | $ 205,000 | $ 205,000 |
NOTE 3 - EQUITY (Details Narrat
NOTE 3 - EQUITY (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Equity [Abstract] | ||
Issued shares from convertible notes | 34,166,664 | |
Convertible notes amount | $ 275,159 | |
Common shares issued for litigation | 15,608,696 |
NOTE 4 - NOTES PAYABLE (Details
NOTE 4 - NOTES PAYABLE (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | ||
Promissory notes | $ 290,000 | $ 135,000 |
Promissory note in lieu of payment to consultant of the Company | $ 25,000 | |
Promissory note - annual interest | 60.00% | |
Net proceeds from settlements | $ 2,000,000 | |
Holder of promissory note shall receive payment of | $ 500,000 | |
Holder shall receive a preferred return | 20.00% |
NOTE 5 - CONVERTIBLE DEBENTUR25
NOTE 5 - CONVERTIBLE DEBENTURES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Dec. 31, 2015 | Jun. 02, 2016 | Oct. 30, 2015 | Oct. 26, 2015 | May 08, 2015 | |
Debt Disclosure [Abstract] | ||||||
Principal | $ 50,000 | $ 300,000 | $ 300,000 | |||
Fixed price of common stock | $ 0.005 | $ 0.89 | ||||
Average percent of stock price | 55.00% | 55.00% | ||||
Forbearance percent of convertible debt | 10.00% | |||||
Face amount of new debenture | $ 405,000 | |||||
Forbearance fee | $ 90,000 | |||||
Original issue discount | 10.00% | 10.00% | ||||
Issued shares for conversion | 34,166,664 | 6,746,356 | ||||
Principal amount converted | $ 275,159 | $ 150,000 | ||||
Aggregated carrying value of debentures | $ 226,841 | $ 370,500 |
NOTE 6 - DERIVATIVE LIABILITI26
NOTE 6 - DERIVATIVE LIABILITIES (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Loss on settlement of convertible notes | $ 2,336,035 |
Loss on change in derivative | $ 143,383 |
NOTE 8 - COMMITMENTS AND CONT27
NOTE 8 - COMMITMENTS AND CONTINGENCIES (Details Narrative) | Aug. 30, 2012USD ($)shareholders$ / sharesshares |
Term of employment agreement | shareholders | 5 |
Officer compensation | $ 175,000 |
Yearly increase | 10.00% |
Car allowance | $ 500 |
Annual bonus | 0.025 |
Additional bonus | $ 75,000 |
Pre-tax income range | 1.50 |
Pre-tax income range | 2 |
Llife insurance premium | $ 10,000 |
Option to purchase stock | shares | 7,500,000 |
Exercise price per share | $ / shares | $ 0.076 |
Death benefit | $ 2,000,000 |
Payment of base amount | 2.99 |
Restrictive convenants time | shareholders | 12 |
Additional bonus 1 | |
Additional bonus | $ 100,000 |
Pre-tax income range | 2.01 |
Pre-tax income range | 2.50 |
Additional bonus 2 | |
Annual bonus | 0.05 |
Additional bonus | $ 200,000 |
Pre-tax income | 2.51 |
NOTE 9 - RELATED PARTY TRANSA28
NOTE 9 - RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Related Party Transactions [Abstract] | ||
Due to related party | $ 8,296 | $ 36,310 |
NOTE 11 - SUBSEQUENT EVENT (Det
NOTE 11 - SUBSEQUENT EVENT (Details Narrative) | 1 Months Ended |
Jul. 31, 2016USD ($)shares | |
Subsequent Events [Abstract] | |
Converted amount of Note | $ | $ 109,000 |
Shares for conversion | shares | 20,796,434 |
NOTE 4 - NOTES PAYABLE (Detail
NOTE 4 - NOTES PAYABLE (Details) | Jun. 30, 2016USD ($) |
Debt Disclosure [Abstract] | |
Entire balance of principal and unpaid interest due on demand 1 | $ 124,230 |
Entire balance of principal and unpaid interest due on demand 2 | 649,049 |
Promissory notes | 700,000 |
Notes payable - related party | 50,000 |
Total current | 1,523,279 |
Notes payable due within 2016 | 863,279 |
Notes payable due within 2017 | 660,000 |
Notes payable due within 2018 | 0 |
Notes payable due within 2019 | 0 |
Notes payable due within 2020 | 0 |
Notes Payable Total | $ 1,523,279 |
NOTE 6 - DERIVATIVE LIABILITI31
NOTE 6 - DERIVATIVE LIABILITIES - Fair value ratchet feature (Details) - USD ($) | Jun. 30, 2016 | Jun. 02, 2016 | Apr. 30, 2016 | Dec. 31, 2015 |
Note 1 | ||||
Reclassified to Additional paid in capital | $ (224,951) | |||
Balance of convertible debt | $ 0 | $ 224,951 | ||
Note 2 | ||||
Fair value at re-measurment date | $ 340,614 | |||
Changes in derivative liabilities | 118,840 | |||
Reclassified to Additional paid in capital | $ (265,873) | |||
Balance of convertible debt | 193,581 | |||
Note 3 | ||||
Fair value at re-measurment date | $ 116,540 | |||
Changes in derivative liabilities | $ (23,549) | |||
Balance of convertible debt | $ 92,991 |
NOTE 6 - DERIVATIVE LIABILITI32
NOTE 6 - DERIVATIVE LIABILITIES - Fair value of Options (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Nov. 08, 2015 |
Options 1 | |||
Fair value market adjustment | $ (30,356) | ||
Balance of convertible debt | $ 160,399 | 190,755 | |
Options 2 | |||
Fair value at commitment date | $ 468,814 | ||
Fair value market adjustment | $ (278,059) | ||
Balance of convertible debt | $ 190,755 |
NOTE 7 - STOCK OPTIONS - Stock
NOTE 7 - STOCK OPTIONS - Stock option table (Details) | Jun. 30, 2016$ / sharesshares |
Outstanding (1) | |
Shares under options | shares | 200,000 |
Price per shares | $ / shares | $ 0.19 |
Remaining life in years | 1.50 |
Outstanding (2) | |
Shares under options | shares | 200,000 |
Price per shares | $ / shares | $ 0.155 |
Remaining life in years | 2.50 |
Outstanding (3) | |
Shares under options | shares | 250,000 |
Price per shares | $ / shares | $ 0.14 |
Remaining life in years | 2.75 |
Outstanding (4) | |
Shares under options | shares | 300,000 |
Price per shares | $ / shares | $ 0.115 |
Remaining life in years | 1.25 |
Outstanding (5) | |
Shares under options | shares | 300,000 |
Price per shares | $ / shares | $ 0.11 |
Remaining life in years | 4 |
Outstanding (6) | |
Shares under options | shares | 300,000 |
Price per shares | $ / shares | $ 0.03 |
Remaining life in years | 4 |
Outstanding (7) | |
Shares under options | shares | 7,500,000 |
Price per shares | $ / shares | $ 0.070 |
Remaining life in years | 1.25 |
Exercisable (1) | |
Shares under options | shares | 200,000 |
Price per shares | $ / shares | $ 0.19 |
Remaining life in years | 1.50 |
Exercisable (2) | |
Shares under options | shares | 200,000 |
Price per shares | $ / shares | $ 0.155 |
Remaining life in years | 2.50 |
Exercisable (3) | |
Shares under options | shares | 250,000 |
Price per shares | $ / shares | $ 0.14 |
Remaining life in years | 2.50 |
Exercisable (4) | |
Shares under options | shares | 300,000 |
Price per shares | $ / shares | $ 0.115 |
Remaining life in years | 1.25 |
Exercisable (5) | |
Shares under options | shares | 300,000 |
Price per shares | $ / shares | $ 0.11 |
Remaining life in years | 4 |
Exercisable (6) | |
Shares under options | shares | 300,000 |
Price per shares | $ / shares | $ 0.03 |
Remaining life in years | 4 |
Exercisable (7) | |
Shares under options | shares | 7,500,000 |
Price per shares | $ / shares | $ 0.070 |
Remaining life in years | 1.25 |