Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | CARDIFF INTERNATIONAL INC | |
Entity Central Index Key | 811,222 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 1,378,430 | |
Entity Common Stock, Shares Outstanding | 9,412,888 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash | $ 31,559 | $ 46,311 |
Accounts receivable | 54 | 3,782 |
Prepaid and other | 21,025 | 25,325 |
Total current assets | 52,638 | 75,418 |
Property and equipment, net of accumulated depreciation of $357,830 and $279,673, respectively | 540,024 | 534,212 |
Land | 603,000 | 603,000 |
Deposits | 6,950 | 9,725 |
Due from related party | 9,867 | 28,501 |
Total Assets | 1,212,479 | 1,250,856 |
CURRENT LIABILITIES | ||
Accounts payable | 29,080 | 73,153 |
Accrued expenses | 584,804 | 176,330 |
Accrued expenses - related parties | 502,500 | 450,000 |
Interest payable | 191,818 | 161,696 |
Accrued payroll taxes | 38,902 | 38,400 |
Due to officers and shareholders | 81,905 | 106,943 |
Common stock to be issued | 5,000 | 0 |
Notes payable, unrelated party | 60,811 | 129,032 |
Notes payable - related party | 119,500 | 0 |
Convertible notes payable, net of debt discounts of $4,750 and $0, respectively | 29,700 | 9,000 |
Convertible notes payable - related party | 165,000 | 165,000 |
Derivative Liabilities | 13,948 | 0 |
Total current liabilities | 1,822,968 | 1,309,554 |
LONG-TERM LIABILITIES | ||
Notes payable, related party, net of current portion and discount | 0 | 100,000 |
Total liabilities | 1,822,968 | 1,409,554 |
SHAREHOLDERS' EQUITY (DEFICIT): | ||
Common stock; 50,000,000 shares authorized with $0.001 par value; 9,412,888 and 4,928,682 issued and outstanding at December 31, 2015 and 2014, respectively | 9,413 | 4,929 |
Additional paid-in capital | 42,580,891 | 39,092,469 |
Retained deficit | (43,206,865) | (39,262,444) |
Total shareholders' equity (deficiency) | (610,489) | (158,698) |
Total liabilities and shareholders' equity (deficiency) | 1,212,479 | 1,250,856 |
Series A Preferred Stock [Member] | ||
SHAREHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock value | 0 | 0 |
Series B, D, E, F, F-1 [Member] | ||
SHAREHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock value | 6,072 | 6,348 |
Series C Preferred Stock [Member] | ||
SHAREHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock value | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 336,094 | $ 279,673 |
Notes payable, discount | $ 0 | $ 0 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value | $ 0.001 | $ .001 |
Common stock, shares issued | 9,412,888 | 4,928,682 |
Common stock, shares outstanding | 9,412,888 | 4,928,682 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
REVENUE | ||
Rental income | $ 168,621 | $ 56,870 |
Sales of pizza | 1,210,880 | 833,531 |
Other | 10,100 | 0 |
Total revenue | 1,389,601 | 890,401 |
COST OF SALES | ||
Rental business | 134,912 | 35,535 |
Pizza restaurants | 862,818 | 618,336 |
Other | 0 | 0 |
Total cost of sales | 997,730 | 653,871 |
GROSS MARGIN | 391,871 | 236,530 |
OPERATING EXPENSES | 4,302,247 | 12,689,311 |
GAIN (LOSS) FROM OPERATIONS | (3,910,376) | (12,452,781) |
OTHER INCOME (EXPENSE) | ||
Impairment loss on goodwill | 0 | (1,407,327) |
Gain on settlement of debt | 10,000 | 822,080 |
Change in value of derivative liability | (1,756) | (35,590) |
Interest expense | (32,096) | (61,109) |
Amortiztion of debt discounts | (22,200) | 0 |
Gain on disposal of fixed assets | 12,007 | 0 |
Other | 0 | 3,030 |
Total other income (expenses) | (34,045) | (678,916) |
NET INCOME (LOSS) FOR THE PERIOD | $ (3,944,421) | $ (13,131,697) |
INCOME (LOSS) PER COMMON SHARE - BASIC | $ (.52) | $ (11.39) |
Weighted average number of common shares - basic and diluted | 7,644,291 | 1,152,779 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Deficiency) - USD ($) | Preferred Stock Series A | Preferred Stock Series | Preferred Stock Series C | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2012 | 1 | 0 | 0 | 5,575 | |||
Beginning balance, value at Dec. 31, 2012 | $ 0 | $ 0 | $ 0 | $ 6 | $ 10,339,369 | $ (15,147,952) | $ (4,808,577) |
Common stock issued for debt conversion, shares | 21 | 1,149 | |||||
Common stock issued for debt conversion, value | $ 1 | 70,193 | 70,194 | ||||
Stock issued for cash, shares | 28,000 | 718 | |||||
Stock issued for cash, value | $ 28 | $ 1 | 207,721 | 207,750 | |||
Stock issued for financing, shares | 910 | ||||||
Stock issued for financing, value | $ 1 | 213,799 | 213,800 | ||||
Stock issued for compensation, shares | 3,316,401 | 58 | 78,234 | ||||
Stock issued for compensation, value | $ 3,317 | $ 75 | 8,415,800 | 8,419,192 | |||
Net income (loss) | (10,982,795) | ||||||
Ending balance, shares at Dec. 31, 2013 | 1 | 4,576,701 | 79 | 83,586 | |||
Ending balance, value at Dec. 31, 2013 | $ 0 | $ 4,577 | $ 0 | $ 84 | 24,317,127 | (26,130,747) | (1,808,959) |
Common stock issued for debt conversion, shares | 417,896 | ||||||
Common stock issued for debt conversion, value | $ 417 | 36,513 | 36,930 | ||||
Common stock issued for services, shares | 4,427,200 | ||||||
Common stock issued for services, value | $ 4,427 | 10,178,133 | 10,182,560 | ||||
Stock issued for cash, shares | 238,496 | 23 | |||||
Stock issued for cash, value | $ 239 | $ 0 | 596,075 | 596,303 | |||
Preferred shares issued for services, shares | 611,999 | 1 | |||||
Preferred shares issued for services, value | $ 612 | $ 0 | 1,529,388 | 1,530,000 | |||
Stock issued for acquisition, shares | 921,268 | ||||||
Stock issued for acquisition, value | $ 921 | 2,302,253 | 2,303,174 | ||||
Reclassification of derivative liability associated with debt conversion | 132,981 | 132,981 | |||||
Net income (loss) | (13,131,697) | (13,131,697) | |||||
Ending balance, shares at Dec. 31, 2014 | 1 | 6,348,464 | 113 | 4,928,682 | |||
Ending balance, value at Dec. 31, 2014 | $ 0 | $ 6,348 | $ 0 | $ 4,929 | 39,092,469 | (39,262,444) | (158,698) |
Common stock issued for debt conversion, shares | 300,000 | ||||||
Common stock issued for debt conversion, value | $ 300 | 1,300 | 1,500 | ||||
Common stock issued for services, shares | 2,512,000 | ||||||
Common stock issued for services, value | $ 2,512 | 3,133,608 | 3,136,120 | ||||
Stock issued for cash, shares | 49,445 | 250,000 | |||||
Stock issued for cash, value | $ 49 | $ 5 | $ 250 | 157,202 | 157,501 | ||
Common stock issued for conversion of preferred, common shares issued | 1,610,206 | ||||||
Common stock issued for conversion of preferred, common stock value | $ 1,610 | (1,284) | |||||
Common stock issued for conversion of preferred, preferred shares converted | (325,862) | ||||||
Common stock issued for conversion of preferred, preferred shares value | $ (326) | ||||||
Reclassification of derivative liability associated with debt conversion | 10,008 | 10,008 | |||||
Contributed capital | 187,500 | 187,500 | |||||
Cancellation of common stock, shares | (188,000) | ||||||
Cancellation of common stock, value | $ (188) | 188 | |||||
Net income (loss) | (3,944,421) | (3,944,421) | |||||
Ending balance, shares at Dec. 31, 2015 | 1 | 6,072,047 | 118 | 9,412,888 | |||
Ending balance, value at Dec. 31, 2015 | $ 0 | $ 6,072 | $ 0 | $ 9,413 | $ 42,580,891 | $ (43,206,865) | $ (610,489) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (3,944,421) | $ (13,131,697) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 84,752 | 39,992 |
Impairment loss on goodwill | 0 | 1,407,327 |
Gain from disposal of fixed assets | (12,007) | 0 |
Gain from debt forgiveness | (10,000) | (822,080) |
Amortization of loan discount | 22,200 | 0 |
Change in value of derivative liability | 1,756 | 35,590 |
Stock based compensation | 3,136,120 | 11,712,560 |
(Increase) decrease in: | ||
Accounts receivable | 3,728 | (3,782) |
Deposits | 2,775 | (9,125) |
Prepaids and other | 4,300 | (23,666) |
Increase (decrease) in: | ||
Accounts payable | (44,073) | 73,153 |
Accrued expenses | 408,474 | (58,036) |
Interest payable | 30,122 | 46,436 |
Accrued payroll taxes | 502 | 36,600 |
Accrued officers' salaries | 240,000 | 0 |
Net cash used in operating activities | (75,772) | (696,728) |
INVESTING ACTIVITIES | ||
Proceeds on sale of fixed assets | 30,902 | 0 |
Purchase of fixed assets | (109,459) | 0 |
Net cash used in investing activities | (78,557) | 0 |
FINANCING ACTIVITIES | ||
Due from/to related party | (6,402) | 28,942 |
Proceeds from sales of stock | 162,500 | 596,314 |
Proceeds from notes payable | 22,200 | 79,032 |
Proceeds from notes payable - related party | 19,500 | 25,075 |
(Repayments to) proceeds of notes payable | (58,221) | 9,000 |
Net cash provided by financing activities | 139,577 | 738,363 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (14,752) | 41,635 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 46,311 | 4,676 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 31,559 | 46,311 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Series D Preferred shares issued for acquisition | 0 | 1,000,000 |
Series E Preferred shares issued for acquistion | 0 | 603,000 |
Series F & F-1 Preferred shares issued for acquisition | 0 | 700,174 |
Common stock issued upon conversion of notes payable | $ 1,500 | $ 36,930 |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Organization and Nature of Operations Legacy Card Company (“Legacy”) was formed as a Limited Liability Company on August 29, 2001. On April 18, 2005, Legacy converted from a California Limited Liability Company to a Nevada Corporation. On November 10, 2005, Legacy merged with Cardiff International, Inc. (“Cardiff”, the “Company”), a publicly held corporation. In the first quarter of 2013, it was decided to restructure Cardiff into a holding company that adopted a new business model known as "Collaborative Governance," a form of governance enabling businesses to take advantage of the power of a public company. Cardiff began targeting the acquisition of undervalued, niche companies with high growth potential, income-producing commercial real estate properties, and high return investments, all designed to pay a dividend to the Company’s shareholders. The reason for this strategy was to protect the Company’s shareholders by acquiring profitable small- to minimum-sized businesses with little to no debt, seeking support with both financing and management that had the ability to offer a return to investors. The plan is to establish new classes of preferred stock to streamline voting rights, negate debt, and acquire new businesses. By December of 2013, the Company had negated more than 90% of all its debt; by July of 2014, the Company had completed the acquisition of three businesses: We Three, LLC; Romeo’s NY Pizza; and Edge View Properties, Inc. The Company delayed the filing of its Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2015 due to difficulty obtaining information from another acquisition, which was subsequently unwound. Description of Business Cardiff is a holding company that adopted a new business model known as "Collaborative Governance.” To date, the Company is not aware of any other domestic holding company using the same business philosophy or governing policies. The Company’s business footprint is to acquire strong companies that meet the following criteria: (1) in business for a minimum of two years; (2) profitable; (3) good management team; (4) little to no debt; and (5) assets of a minimum of $1,000,000. Cardiff continues to practice all business ethics under the Securities Exchange Act of 1934 (“1934 Act”) and acknowledges that there are more than 43 successful Business Development Companies subject to the Investment Company Act of 1940 (“1940 Act”), all of which may be considered competition to Cardiff and that are established and available to the public for investment. These companies offer experienced management, dividends and financial security. To date, Cardiff consists of three subsidiaries: We Three, LLC; Romeo’s NY Pizza; and Edge View Properties, Inc. Principles of Consolidation The consolidated financial statements include the accounts of Cardiff International, Inc., and its wholly-owned subsidiaries: We Three, LLC; Romeo’s NY Pizza; and Edge View Properties, Inc. All significant intercompany accounts and transactions are eliminated in consolidation. Certain prior period amounts may have been reclassified for consistency with the current period presentation. These reclassifications would have no material effect on the reported financial results. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Revenue Recognition In general, the Company recognizes revenue on an accrual basis. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured. Rental Income The Company’s rental income is derived from the mobile home leases. The expired leases are considered month-to-month leases. In accordance with section 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition, the cost of property held for leasing by major classes of property according to nature or function, and the amount of accumulated depreciation in total, is presented in the accompanying consolidated balance sheets as of December 31, 2015 and 2014. There are no contingent rentals included in income in the accompanying statements of operations. With the exception of the month-to-month leases, revenue is recognized on a straight-line basis and amortized into income on a monthly basis, over the lease term. Restaurant Sales Revenue from restaurant sales is recognized when food and beverage products are sold. The Company reports revenue net of sales taxes collected from customers and remitted to governmental taxing authorities. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Management uses its historical records and knowledge of its business in making estimates. Accordingly, actual results could differ from those estimates. Goodwill and Other Intangible Assets Goodwill and indefinite-lived brands are not amortized, but are evaluated for impairment annually or when indicators of a potential impairment are present. Our impairment testing of goodwill is performed separately from our impairment testing of indefinite-lived intangibles. The annual evaluation for impairment of goodwill and indefinite-lived intangibles is based on valuation models that incorporate assumptions and internal projections of expected future cash flows and operating plans. The Company believe such assumptions are also comparable to those that would be used by other marketplace participants. During the year ended December 31, 2014, goodwill of $1,707,153 resulted from the business acquisitions in 2014 was impaired in full. There was no goodwill impairment in 2015. Valuation of long-lived assets In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 360-10-5, “ Impairment or Disposal of Long-Lived Assets Valuation of Derivative Instruments Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-10, Derivatives and Hedging (“ASC 815-10”) Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: Level Input Input Definition Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The following table presents certain investments and liabilities of the Company’s financial assets measured and recorded at fair value on the Company’s Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of December 31, 2015 and 2014. Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – December 31, 2015 $ – $ – $ 13,948 $ – Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – December 31, 2014 $ – $ – $ – $ – Stock-Based Compensation – Employees The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded, the use of share prices established in the Company’s most recent private placement memorandum (based on sales to third parties), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: · Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments. Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. · Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market · Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. · Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. The expense resulting from share-based payments is recorded in general and administrative expense in the statements of operations. Stock-Based Compensation – Non Employees Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”). Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum, or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: · Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data to estimate holder’s expected exercise behavior. If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. · Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. · Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. · Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic. Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised. Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded. Property and Equipment Property and equipment are carried at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation and amortization of property and equipment is provided using the straight-line method for financial reporting purposes at rates based on the following estimated useful lives: Classification Useful Life Equipment, furniture and fixtures 5 - 7 years Leasehold improvements 10 years or lease term, if shorter During the years ended December 31, 2015 and 2014, depreciation and amortization expense was $84,752 and $39,992, respectively. Income Taxes Income taxes are determined in accordance with ASC Topic 740, “Income Taxes 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. For the years ended December 31, 2015 and 2014, the Company did not have any interest and penalties associated with tax positions. As of December 31, 2015 and 2014, the Company did not have any significant unrecognized uncertain tax positions. Earnings (Loss) per Share FASB ASC Subtopic 260, Earnings Per Share The following table sets forth the computation of basic and diluted earnings per common share for the years ended December 31, 2015 and 2014. During a period of net loss, all potentially dilutive securities are anti-dilutive. Accordingly, for the years ended December 31, 2015 and 2014, potentially dilutive securities have been excluded from the computations since they would be anti-dilutive. However, these dilutive securities could potentially dilute earnings per share in the future: For the years ended December 31, 2015 December 31, 2014 Numerator: Net (loss) $ (3,944,421 ) $ (13,131,697 ) Denominator: Weighted-average shares outstanding 7,644,291 1,152,779 Basic earnings (loss) per share $ (0.52 ) $ (11.39 ) Going Concern The accompanying consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The Company is in the development stage and, as such, has sustained operating losses since its inception and has negative working capital and an accumulated deficit. These factors raise substantial doubts about the Company’s ability to continue as a going concern. As of December 31, 2015, the Company had shareholders’ deficit of $594,557. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern. As a result, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2015 consolidated financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and the appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusions. Management has prospective investors and believes the raising of capital will allow the Company to pursue new acquisitions. There can be no assurance that the Company will be able to obtain sufficient capital from debt or equity transactions or from operations in the necessary time frame or on terms acceptable to it. Should the Company be unable to raise sufficient funds, it may be required to curtail its operating plans. In addition, increases in expenses may require cost reductions. No assurance can be given that the Company will be able to operate profitably on a consistent basis, or at all, in the future. Should the Company not be able to raise sufficient funds, it may cause cessation of operations. Recently Issued Accounting Pronouncements In September 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest—Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the Company’s financial position, results of operations or cash flows. |
2. Discontinued Operations
2. Discontinued Operations | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | In April 2015, the Company closed 2 pizza restaurants located in Alpharetta, Georgia and Lawrenceville, Georgia due to continuing losses in operations and slow traffic at these 2 locations. |
3. Plant and Equipment, Net
3. Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Plant and Equipment, Net | Plant and equipment, net as of December 31, 2015 and 2014 was $540,024 and $534,212, respectively, consisting of the following: December 31, 2015 December 31, 2014 Furniture, fixture and equipment $ 261,882 $ 268,055 Leasehold improvements 635,972 545,830 897,854 813,885 Less: accumulated depreciation (357,830 ) (279,673 ) Plant and equipment, net $ 540,024 $ 534,212 During the years ended December 31, 2015 and 2014, depreciation expense was $84,752 and $39,992, respectively. During the year ended December 31, 2015, the Company disposed 2 smart cars for cash payment of $30,902, resulting in gain of $12,007 from disposal of fixed assets. |
4. Land
4. Land | 12 Months Ended |
Dec. 31, 2015 | |
Real Estate [Abstract] | |
4. Land | As of December 31, 2015 and 2014, the Company had land of $603,000 located in Salmon, Idaho with area of approximately 30 acres, which was in connection with the acquisition of Edge View Properties, Inc. in July 2014. The Company issued 241,199 shares of Series E Preferred Stock as consideration for this acquisition. Based on the price of $2.50 per share, the acquisition consideration represents a $603,000 valuation. The land is currently vacant and is expected to be developed into residential community. The value of the land is not subject to be depreciated. |
5. Accrued Expenses
5. Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | As of December 31, 2015 and 2014, the Company had accrued expenses of $1,087,304 and $626,330, respectively, consisted of the following: December 31, 2015 December 31, 2014 Accrued salaries $ 502,500 $ 450,000 Accrued expenses - other 584,804 176,330 Total $ 1,087,304 $ 626,330 |
6. Related Party Transactions
6. Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Due to Officers and Officer Compensation The Company borrows funds from Daniel Thompson, who is a Shareholder and Officer of the Company. The terms of repayment stipulate the loans are due 24 months after the launch of the Legacy Tuition Card (or prior to such date) at an annual interest rate of six percent. As of December 31, 2015, the Company had $81,905 due to Daniel Thompson. In addition, the Company has an employment agreement, renewed May 15, 2014, with Daniel Thompson whereby the Company changed Daniel Thompson’s compensation to $20,000 per month from $25,000. Accordingly, a total salary of $240,000 and $262,500 were accrued and reflected as an expense to Daniel Thompson during the years ended December 31, 2015 and 2014, respectively. The accrued salaries payable to Daniel Thompson was $502,500 and $450,000 as of December 31, 2015 and 2014, respectively. The Company has an employment agreement with a former President, Ms. Roberton, whereby the Company provides for compensation of $25,000 per month beginning May 15, 2014. A total salary of $187,500 was reflected as an expense during the year ended December 31, 2014. On June 1, 2015, Ms. Roberton resigned from all her positions of the Company and agreed to waive all unpaid salary earned during her employment. Accordingly, the Company reclassified the accrued salaries of $187,500 into additional paid-in capital. The total balance due to Ms. Roberton for accrued salaries at December 31, 2015 and 2014 was $0 and $0, respectively. The Company had an employment agreement with a former Chief Operating Officer, Mr. Levy, whereby the Company provided for compensation of $15,000 per month. A total salary of $180,000 was accrued and reflected as an expense during the year ended December 31, 2015. The total balance due to Mr. Levy for accrued salaries at December 31, 2015 was $180,000. The Company had an employment agreement with the Chief Executive Officer, Mr. Cunningham, whereby the Company provided for compensation of $15,000 per month. A total salary of $180,000 was accrued and reflected as an expense during the year ended December 31, 2015. The total balance due to Mr. Cunningham for accrued salaries at December 31, 2015 was $180,000. Notes Payable – Related Party The Company has entered into several loan agreements with related parties (see above; Footnote 7, Notes Payable – Related Party; and Footnote 8, Convertible Notes Payable – Related Party). |
7. Notes Payable
7. Notes Payable | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes payable at December 31, 2015 and 2014 are summarized as follows: December 31, 2015 December 31, 2014 Notes Payable – Unrelated Party $ 60,811 $ 129,032 Notes Payable – Related Party 119,500 100,000 Discount on notes – – Total $ 180,311 $ 229,032 Current portion (180,311 ) (129,032 ) Long-term portion $ – $ 100,000 Notes Payable – Unrelated Party On March 12, 2009, the Company entered into a preferred debenture agreement with a shareholder for $20,000. The note bore interest at 12% per year and matured on September 12, 2009. In conjunction with the preferred debenture, the Company issued 2,000,000 warrants to purchase its Common Stock, exercisable at $0.10 per share and expired on March 12, 2014. As a result of the warrants issued, the Company recorded a $20,000 debt discount during 2009 which has been fully amortized. The Company assigned all of its receivables from consumer activations of the rewards program as collateral on this debenture. On March 24, 2011, the Company amended the note and the principal balance was reduced to $15,000. The Company was due to pay annual principal payments of $5,000 plus accrued interest beginning March 12, 2012. On July 20, 2011, the Company repaid $5,000 of the note. As of December 31, 2012, the warrants had not been exercised. As of December 31, 2015, the Company is in default on this debenture. The balance of the note was $10,989 and $10,989 at December 31, 2015 and 2014, respectively. The balance of $49,822 in notes payable to unrelated party was due to the auto loan for the vehicles used in the Pizza restaurants. Notes Payable – Related Party On September 7, 2011, the Company entered into a Promissory Note agreement (“Note 1”) with a related party for $50,000. Note 1 bears interest at 8% per year and matures on September 7, 2016. Interest is payable annually on the anniversary of Note 1, and the principal and any unpaid interest will be due upon maturity. In conjunction with Note 1, the Company issued 2,500,000 shares of its Common Stock to the lender. As a result of the shares issued in conjunction with Note 1, the Company recorded a $50,000 debt discount during 2011. The balance of Note 1, net of debt discount, was $50,000 and $50,000 at December 31, 2015 and 2014, respectively. On November 17, 2011, the Company entered into a Promissory Note agreement (“Note 2”) with a related party for $50,000. Note 2 bears interest at 8% per year and matures on November 17, 2016. Interest is payable annually on the anniversary of Note 2, and the principal and any unpaid interest will be due upon maturity. In conjunction with Note 2, the Company issued 2,500,000 shares of its Common Stock to the lender. As a result of the shares issued in conjunction with Note 2, the Company recorded a $50,000 debt discount during 2011. The balance of Note 2, net of debt discount, was $50,000 and $50,000 at December 31, 2015 and 2014, respectively. On August 4, 2015, the Company entered into a Promissory Note agreement (“Note 3”) with a related party for $19,500. Note 3 bears interest at 6% per year and matures on December 31, 2016. Interest is payable annually on the anniversary of Note 3, and the principal and any unpaid interest will be due upon maturity. The balance of Note 3 was $19,500 at December 31, 2015. The following is a schedule showing the future minimum loan payments in the future 5 years. Year ending December 31, 2015 $ 60,811 2016 119,500 Total $ 180,311 |
8. Convertible Notes Payable
8. Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Some of the Convertible Notes issued as described below included an anti-dilution provision that allowed for the adjustment of the conversion price. The Company considered the guidance provided by the FASB in “ Determining Whether an Instrument Indexed to an Entity’s Own Stock Convertible notes at December 31, 2015 and 2014 are summarized as follows: December 31, 2015 December 31, 2014 Convertible Notes Payable – Unrelated Party $ 29,700 $ 9,000 Convertible Notes Payable – Related Party 165,000 165,000 Discount on notes – – Total - Current $ 194,700 $ 174,000 Convertible Notes Payable – Unrelated Party On April 17, 2014, the Company entered into an unsecured Convertible Note (“Note 4”) in the amount of $9,000. Note 4 was convertible into Common Shares of the Company at $0.005 per share at the option of the holder. Note 4 bore interest at eight percent per year, matured on June 17, 2014, and was unsecured. All principal and unpaid accrued interest was due at maturity. The Company is currently in default on Note 4. On August 17, 2015, a portion of principal of $1,500 was converted into 300,000 shares of Common Stock of the Company upon the request of the holder. The balance of the note was $7,500 and $9,000 at December 31, 2015 and 2014, respectively. On May 6, 2015, the Company entered into a 10% convertible promissory note (“Note 5”) with an unrelated entity in the amount of $12,200. Note 5 bore interest at ten percent per year, matured on September 3, 2015, and was unsecured. Note 5 was convertible into Common Shares of the Company at the conversion ratio of 50% discount to market at the lowest traded price within 20 business days prior to “Notice of Conversion”. This gives rise to derivative liability accounting related to this Note since the conversion ratio is considered floorless. Accordingly, Note 5 has been evaluated with respect to the terms and conditions of the conversion features contained in Note 5 to determine whether they represent embedded or freestanding derivative instruments under the provisions of ASC 815. The Company determined that the conversion features contained in Note 5 for $12,200 carrying value represents a freestanding derivative instrument that meets the requirements for liability classification under ASC 815. As a result, the fair value of the derivative financial instrument in the note is reflected in the Company’s balance sheet as a liability. The fair value of the derivative financial instrument of the convertible note was measured using the Black-Scholes valuation model at the inception date of Note 5 and will do so again on each subsequent balance sheet date. Any changes in the fair value of the derivative financial instruments are recorded as non-operating, non-cash income or expense at each balance sheet date. The table below sets forth the assumptions for Black-Scholes valuation model on May 6, 2015 (inception) and December 31, 2015, respectively. For the period ended December 31, 2015, the Company had initial loss of $10,295 due to derivative liabilities, and decreased the derivative liability of $22,495 by $8,547, resulting in a derivative liability of $13,948 at December 31, 2015. Reporting Date Fair Value Term (Years) Assumed Conversion Price Market Price on Issuance Date Volatility Percentage Risk-free Rate 5/6/2015 $22,495 0.33 $0.825 $1.69 507% 0.0002 12/31/2015 $13,948 0.003 $0.035 $0.075 533% 0.0014 The Company is currently in default on Note 5. As of December 31, 2015, the carrying values of Note 5 were $12,200 and the debt discount was $0. The Company recorded interest expense related to Note 5 in amount of $799 during the year ended December 31, 2015. The accrued interest of Note 5 was $799 as of December 31, 2015. The Notes Proceeds $ 12,200 Less derivative liabilities on initial recognition (12,200 ) Value of the Notes on initial recognition 0 Add accumulated accretion expense 12,200 Balance as of December 31, 2015 $ 12,200 On July 29, 2015, the Company entered into an 8% convertible promissory note (“Note 6”) with an unrelated entity in the amount of $10,000. Note 6 bore interest at eight percent per year, matured on November 26, 2015, and was unsecured. Note 6 was convertible into Common Shares of the Company at the conversion ratio of 50% discount to market at the conversion date. However, if the closing bid price of the Company’s Common Shares falls below $0.10 per share, the conversion price will be changed to $0.01 per share and remain intact from that point forward. Since the Company’s common stock was $0.075 per share at December 31, 2015, the conversion feature contained in Note 6 no longer meets the requirements for liability classification under ASC 815. As a result, the embedded derivative liabilities of $10,008 at December 31, 2015 was reclassified as additional paid-in capital. The table below sets forth the assumptions for Black-Scholes valuation model on July 29, 2015 (inception) and December 31, 2015, respectively. For the period ended December 31, 2015, the Company had initial loss of $8,041 due to derivative liabilities, and decreased the derivative liability of $18,041 by $8,033, resulting in a derivative liability of $10,008 at December 31, 2015. Reporting Date Fair Value Term (Years) Assumed Conversion Price Market Price on Issuance Date Volatility Percentage Risk-free Rate 7/29/2015 $18,041 0.33 $0.30 $0.60 513% 0.0006 12/31/2015 $10,008 0.003 $0.038 $0.075 533% 0.0014 The Company is currently in default on Note 6 and bears default interest at ten percent per year. As of December 31, 2015, the carrying values of Note 6 were $10,000 and the debt discount was $0. The Company recorded interest expense related to Note 6 in amount of $359 during the year ended December 31, 2015. The accrued interest of Note 6 was $359 as of December 31, 2015. The Notes Proceeds $ 10,000 Less derivative liabilities on initial recognition (10,000 ) Value of the Notes on initial recognition 0 Add accumulated accretion expense 10,000 Balance as of December 31, 2015 $ 10,000 Convertible Notes Payable – Related Party On April 21, 2008, the Company entered into an unsecured Convertible Debenture (“Debenture 1”) with a shareholder in the amount of $150,000. Debenture 1 was convertible into Common Shares of the Company at $0.03 per share at the option of the holder no earlier than August 21, 2008. Debenture 1 bore interest at 12% per year, matured in August 2009, and was unsecured. All principal and unpaid accrued interest was due at maturity. In conjunction with the Debenture 1, the Company also issued warrants to purchase 5,000,000 shares of the Company’s Common Stock at $0.03 per share. The warrants expired on April 20, 2013. As a result of issued warrants, the Company recorded a $150,000 debt discount during 2008 which has been fully amortized. The Company is in default on Debenture 1, and the warrants have not been exercised. The balance of Debenture 1 was $150,000 and $150,000 at December 31, 2015 and 2014, respectively. On March 11, 2009, the Company entered into an unsecured Convertible Debenture (“Debenture 2”) with a shareholder in the amount of $15,000. Debenture 2 was convertible into Common Shares of the Company at $0.03 per share at the option of the holder. Debenture 2 bore interest at 12% per year, matured on March 11, 2014, and was unsecured. All principal and unpaid accrued interest was due at maturity. The Company is in default on Debenture 2. The balance of Debenture 2 was $15,000 and $15,000 at December 31, 2015 and 2014, respectively. The following is a schedule showing the future minimum loan payments in the future 5 years. Year ending December 31, 2015 $ 194,700 |
9. Derivative Liabilities
9. Derivative Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Derivative Liabilities | As of December 31, 2015, the Company’s derivative liabilities are embedded derivatives associated with the Company’s convertible note payable (see Footnote 8). Due to the Notes’ conversion feature, the actual number of shares of common stock that would be required if a conversion of the note as described in Footnote 8 was made through the issuance of the Company’s common stock cannot be predicted. As a result, the conversion feature requires derivative accounting treatment and will be bifurcated from the note and “marked to market” each reporting period through the statement of operations. The Company measured the fair value of the derivative liabilities as $40,536 on the inception date, and remeasured the fair value as $23,956 on December 31, 2015, of which $10,008 was reclassified as additional paid-in capital due to the change in conversion price from discounted market price to fixed price. The Company recorded the change of fair value of $1,756 in the statements of operations for the year ended December 31, 2015. There was no derivative liabilities as of December 31, 2014. |
10. Payroll Taxes
10. Payroll Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Compensation Related Costs [Abstract] | |
Payroll Taxes | The Company previously reported that it has failed to remit payroll tax payments since 2006, as required by various taxing authorities. Payroll taxes and estimated penalties were accrued in recognition of accrued salaries subsequently settled via stock issue and other agreements that did not result in reportable or taxable payroll transactions. These accruals were reversed for prior years, and a similar estimated accrual established for 2015 and 2014. As of December 31, 2015 and 2014, the Company estimated the amount of taxes, interest, and penalties that the Company could incur as a result of payroll related taxes and penalties to be $38,902 and $38,400, respectively. |
11. Net Loss Per Share
11. Net Loss Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Basic net loss per share is computed using the weighted average number of common shares outstanding during the years. There were no dilutive earnings per share for the years ended December 31, 2015 and 2014 due to net loss during the years. The following table sets forth the computation of basic net loss per share for the years indicated: For the years ended December 31, 2015 December 31, 2014 Numerator: Net (loss) $ (3,944,421 ) $ (13,131,697 ) Denominator: Weighted-average shares outstanding 7,644,291 1,152,779 Basic earnings (loss) per share $ (0.52 ) $ (11.39 ) |
12. Capital Stock
12. Capital Stock | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Capital Stock | Reverse Stock Split: In August 2014, the Board of Directors approved new Articles of Incorporation per the effectuated domicile change which authorized four classes of Preferred Stock: 4 Series A shares authorized, 5,000,000 Series B shares authorized, 250 Series C shares and 100,000,000 Blank Check Preferred shares authorized. The principal features of the Company's capital stock are as follows: In August 2014, the Board of Directors approved an amendment to the Company’s Articles of Incorporation to amend Series B Preferred Stock Authorized & Designations, Rights & Privileges and to authorize three additional classes of Preferred Stock. After this action, the Company has five classes of Common Stock and Preferred Stock. Series A Preferred Stock As of December 31, 2015 and 2014, the Company has designated four shares of preferred stock as Series A Preferred Stock (“Series A”), with a par value of $.0001 per share, of which one share of preferred stock is issued and outstanding. Series A is authorized to have four shares which do not bear dividends and converts to common shares at four times the sum of: all shares of Common Stock issued and outstanding at time of conversion plus all shares of Series B Preferred Stock issued and outstanding at time of conversion divided by the number of issued Class A shares at the time of conversion, and have voting rights four times the sum of: all shares of Common Stock issued and outstanding at time of voting plus all shares of Series B Preferred Stocks issued and outstanding at time of voting divided by the number of Class A shares issued at the time of voting. Series B Preferred Stock As of December 31, 2015 and 2014, the Company has designated 5,000,000 shares of preferred stock as Series B Preferred Stock (“Series B”), with a par value $0.001 and $2.50 price per share, of which 4,978,028 and 5,270,693 shares of preferred stock are issued and outstanding, respectively. Shares of Series B are anti-dilutive to reverse splits. The conversion rate of shares of Series B, however, would increase proportionately in the case of forward splits, and may not be diluted by a reverse split following a forward split. Each one share of Series B shall have no voting rights. The price of each share of Series B may be changed either through a majority vote of the Board of Directors through a resolution at a meeting of the Board of Directors, or through a resolution passed at an Action Without Meeting of the unanimous Board of Directors, until such time as a listed secondary and/or listed public market develops for the shares. During the year ended December 31, 2014, the Company sold 81,993 shares of Series B to various investors at a price of $2.50 per share, or totaled $204,983 in cash. During the year ended December 31, 2014, the Company issued 600,000 shares of Series B preferred stock to officers for services rendered. The fair value of this stock issuance was determined by the private placement price of $2.5 per share in the arms-length transactions. Accordingly, the Company recognized stock based compensation of $1,500,000 to employees. During the year ended December 31, 2014, the Company issued 11,999 shares of Series B preferred stock and 1 share of Series C preferred stock to certain consultants for marketing services rendered. The fair value of this stock issuance was determined by the private placement price of $2.5 per share in the arms-length transactions. Accordingly, the Company recognized stock based compensation of $30,000 to non-employees. During the year ended December 31, 2015, 325,862 shares of Series “B” Preferred Stock were converted into 1,610,206 shares of Common Stock of the Company per the preferred shareholder’s instruction. During the year ended December 31, 2015, the Company issued 33,197 shares of Series “B” Preferred stock and 3 shares of Series “C” Preferred Stock to several investors for total cash payment of $82,500 pursuant to the executed subscription agreements. Series C Preferred Stock As of December 31, 2015 and 2014, the Company has designated 250 shares of preferred stock as Series C Preferred Stock (“Series C”), with a par value of $.00001 per share, of which 118 and 113 shares are issued and outstanding, respectively. Shares of Series C are non-dilutive to reverse splits. The conversion rate of shares of Series C, however, would increase proportionately in the case of forward splits, and may not be diluted by a reverse split following a forward split. Each one share of Series C converts to 100,000 shares of Common Stock. Each share of Series C shall have one vote for any election or other vote placed before the shareholders of the Company. The price of each share of Series C may be changed either through a majority vote of the Board of Directors through a resolution at a meeting of the Board of Directors, or through a resolution passed at an Action Without Meeting of the unanimous Board of Directors, until such time as a listed secondary and/or listed public market develops for the shares. Shares of Series C may not be converted into shares of Common Stock for a period of: a) six months after purchase, if the Company voluntarily or involuntarily files public reports pursuant to Section 12 or 15 of the Securities Exchange Act of 1934; or b) 12 months if the Company does not file such public reports. During the year ended December 31, 2014, the Company sold 33 shares of Series C to various investors at a price of $2.50 per share, or totaled $83 in cash. During the year ended December 31, 2015, the Company sold 4 shares of Series C to various investors at a price of $2.50 per share and 1 share at a price of $4.00 per share, or totaled $14 in cash. Blank Check Preferred Stock As of December 31, 2015 and 2014, the Company has designated 100,000,000 shares of Blank Check Preferred Stock, of which 1,094,019 and 1,077,771 shares have been issued with Designations, Rights & Privileges. The following Series have been assigned from the inventory of Blank Check Preferred Shares. The amount of Blank Check Preferred Stock is 98,905,981 as of December 31, 2015. Series D Preferred Stock On June 30, 2014, the Company completed the acquisition of Romeo’s NY Pizza. The Company issued 400,000 shares of Series D Preferred Stock (“Series D”) as consideration for this acquisition. Based on the price of $2.50 per share, the acquisition consideration represents a $1,000,000 valuation. Shares of Series D are anti-dilutive to reverse splits. The conversion rate of shares of Series D, however, would increase proportionately in the case of forward splits, and may not be diluted by a reverse split following a forward split. Each one share of Series D shall have voting rights equal to one vote of Common Stock. With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series D shall vote together with the holders of Common Stock, without regard to class, except as to those matters on which separate class voting is required by applicable law or the Corporation’s Certificate of Incorporation or Bylaws. The initial price of each share of Series D shall be $2.50. There was no change in Series D Preferred Stock in 2015. Series E Preferred Stock On July 11, 2014, the Company completed the acquisition of Edge View Properties, Inc. The Company issued 241,199 shares of Series E Preferred Stock (“Series E”) as consideration for this acquisition. Based on the price of $2.50 per share, the acquisition consideration represents a $603,000 valuation. Shares of Series E are anti-dilutive to reverse splits. The conversion rate of shares of Series E, however, would increase proportionately in the case of forward splits, and may not be diluted by a reverse split following a forward split. Each one share of Series E shall have voting rights equal to one vote of Common Stock. With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series E shall vote together with the holders of Common Stock, without regard to class, except as to those matters on which separate class voting is required by applicable law or the Corporation’s Certificate of Incorporation or Bylaws. The initial price of each share of Series E shall be $2.50. There was no change in Series E Preferred Stock in 2015. Series F Preferred Stock On May 15, 2014, the Company completed the acquisition of We Three, LLC (d/b/a Affordable Housing Initiative) (“AHI”). The Company issued 280,069 shares of Series F Preferred Stock (“Series F”) as consideration for this acquisition. The fair value of We Three LLC was $1,000,000 (see Note 2). Based on the price of $2.50 per share for the Series F Preferred Stock, the fair value of the stock issuance of Series F Preferred Stock was $700,174, resulting in the gain of $299,826 on investment in We Three, which was offset the goodwill impairment at the end of 2014. In addition, the Company sold 156,503 shares of Series F1 Preferred Stock (Series F1”), to various investors at a price of $2.50 per share, or totaled $391,248 in cash. Shares of Series F are anti-dilutive to reverse splits. The conversion rate of shares of Series F, however, would increase proportionately in the case of forward splits, and may not be diluted by a reverse split following a forward split. Each one share of Series F shall have voting rights equal to five votes of Common Stock. With respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of the outstanding shares of Series F shall vote together with the holders of Common Stock, without regard to class, except as to those matters on which separate class voting is required by applicable law or the Corporation’s Certificate of Incorporation or Bylaws. The initial price of each share of Series F shall be $2.50. During the year ended December 31, 2015, the Company issued 6,249 shares of Series “F-1” Preferred stock and 1 share of Series “C” Preferred Stock to an investor for total cash payment of $25,000 pursuant to the executed subscription agreement. During the year ended December 31, 2015, the Company issued 9,999 shares of Series “F-1” Preferred stock and 1 share of Series “C” Preferred Stock to an investor for total cash payment of $25,000 pursuant to the executed subscription agreement. Common Stock 2014 In September 2014, the Board of Directors approved increasing the number of authorized shares of Common Stock from 250,000 to 50,000,000, par value of $0.001. On August 22, 2014, the Company effectuated a Reverse Stock Split of its outstanding and authorized shares of Common Stock at a ratio of one for twenty five thousand (1:25,000). As a result of the Reverse Stock Split, the Company’s authorized shares of Common Stock were decreased from 5,000,000,000 to 250,000 shares and it authorized four-- classes of Preferred Stock. Upon the effectiveness of the Reverse Stock Split, which occurred on September 12, 2014, the Company’s issued, outstanding and authorized shares of Common Stock was decreased from 2,516,819,560 to 100,673 issued and outstanding shares and 250,000 authorized shares, all with a par value of $0.00001. Accordingly, all share and per share information has been restated to retroactively show the effect of the Reverse Stock Split. During the year ended December 31, 2014, the Company issued 4,427,200 shares of common stock to officers for services rendered. The fair value of the common stock issuance was determined by the fair value of our common stock on the grant date, at a price of approximately $2.3 per share. Accordingly, the Company recognized stock based compensation of $10,182,560 to employees. During the year ended December 31, 2014, the Company issued 417,896 shares of common stock for note conversion in amount of $36,930 per the requests from the noteholders. 2015 On April 15, 2015, the Company entered into three consulting service agreements with three Consultants for marketing, management and financial strategies in exchange for 1,500,000 shares of Common Stock of the Company. The fair value of this stock issuance was determined by the fair value of the Company’s Common Stock on the grant date, at a price of approximately $1.78 per share. Accordingly, the Company calculated the stock based compensation of $2,670,000 at its fair value and included it in the consolidated statements of operations for the year ended December 31, 2015. On June 3, 2015, the Company entered into a consulting service agreement with a Consultant for marketing, management and financial strategies in exchange for 150,000 shares of Common Stock of the Company. The fair value of this stock issuance was determined by the fair value of the Company’s Common Stock on the grant date, at a price of approximately $0.84 per share. Accordingly, the Company calculated the stock based compensation of $126,000 at its fair value and included it in the consolidated statements of operations for the year ended December 31, 2015. On September 1, 2015, the Company entered into a consulting service agreement with a Consultant for marketing, management and financial strategies in exchange for 500,000 shares of Common Stock of the Company. The fair value of this stock issuance was determined by the fair value of the Company’s Common Stock on the grant date, at a price of approximately $0.42 per share. Accordingly, the Company calculated the stock based compensation of $210,000 at its fair value and included $209,800 in the consolidated statements of operations for the year ended December 31, 2015 due to the receipt of $200 cash from the Consultant. On October 8, 2015, the Company entered into a consulting service agreement with a Consultant for marketing, management and financial strategies in exchange for 362,000 shares of Common Stock of the Company. The fair value of this stock issuance was determined by the fair value of the Company’s Common Stock on the grant date, at a price of approximately $0.36 per share. Accordingly, the Company calculated the stock based compensation of $130,320 at its fair value and included it in the consolidated statements of operations for the year ended December 31, 2015. During the year ended December 31, 2015, the Company issued 250,000 shares of Common Stock to five investors for total cash payment of $25,000, or $0.10 per share, pursuant to the executed subscription agreements. |
13. Commitments and Contingenci
13. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Operating Leases The Company had operating leases of $255,535 and $92,351 for the years ended December 31, 2015 and 2014, respectively, consisting of the followings. For the years ended December 31, 2015 December 31, 2014 Restaurants $ 155,666 $ 90,000 Lot 62,255 0 Office 33,620 0 Equipment Rentals 3,994 2,351 Total $ 255,535 $ 92,351 There was no rent expense for office in 2014 as such office space was contributed at no cost by Daniel Thompson, the imputed effects of which are immaterial to the consolidated financial statements taken as a whole. |
14. Income Taxes
14. Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
14. Income Taxes | At December 31, 2015, the Company had federal and state net operating loss carry forwards of approximately $43,000,000 that expire in various years through the year 2035. Due to operating losses, there is no provision for current federal or state income taxes for the years ended December 31, 2015 and 2014. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes. The Company’s deferred tax asset at December 31, 2015 and 2014 consists of net operating loss carry forwards calculated using federal and state effective tax rates equating to approximately $16,770,000 and $15,210,000, respectively, less a valuation allowance in the amount of approximately $16,770,000 and $15,210,000, respectively. Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance in both 2015 and 2014. The valuation allowance increased by approximately $1,560,000 for the year ended December 31, 2015. The Company’s total deferred tax asset as of December 31, 2015 and 2014 is as follows: 2015 2014 Deferred tax assets $ 16,770,000 $ 15,210,000 Valuation allowance (16,770,000 ) (15,210,000 ) Net deferred tax asset $ – $ – The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the years ended December 31, 2015 and 2014 is as follows: 2015 2014 Income tax computed at the federal statutory rate 34% 34% Income tax computed at the state statutory rate 5% 5% Valuation allowance (39% ) (39% ) Total deferred tax asset 0% 0% |
15. Segment Reporting
15. Segment Reporting | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | The Company has two reportable operating segments as determined by management using the “management approach” as defined by the authoritative guidance on Disclosures about Segments of an Enterprise and Related Information The mobile home lease segment establishes mobile home business as an option for a homeowner wishing to avoid large down payments, expensive maintenance costs, monthly mortgage payments and high property taxes. If bad credit is an issue preventing people from purchasing a traditional house, the Company will provide a financial leasing option with "0" interest on the lease providing a "lease to own" option for their family home. The Company-owned Pizza Restaurant segment includes sales and operating results for all Company-owned restaurants. Assets for this segment include equipment, furniture and fixtures for the Company-owned restaurants. Corporate administration and other assets primarily include the deferred tax asset, cash and short-term investments, as well as furniture and fixtures located at the corporate office and trademarks and other intangible assets. All assets are located within the United States. For the years ended December 31, 2015 December 31, 2014 Revenues: We Three $ 168,621 $ 56,870 Romeo’s NY Pizza 1,210,880 833,531 Others 10,100 – Consolidated revenues $ 1,389,601 $ 890,401 Cost of Sales: We Three $ 134,912 $ 35,535 Romeo’s NY Pizza 862,818 618,336 Others – – Consolidated cost of sales $ 997,730 $ 653,871 Income (Loss) before taxes We Three $ 14,216 $ (21,373 ) Romeo’s NY Pizza 14,667 (22,156 ) Others (3,973,304 ) (13,088,168 ) Consolidated loss before taxes $ (3,944,421 ) $ (13,131,697 ) As of December 31, 2015 As of December 31, 2014 Assets: We Three $ 243,134 $ 169,417 Romeo’s NY Pizza 76,386 159,039 Others 892,959 922,400 Combined assets $ 1,212,479 $ 1,250,856 |
16. Subsequent Events
16. Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to December 31, 2015 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements other than those specified below. First Acquisition: As previously disclosed on June 30, 2016, the Company completed the acquisition of Titancare, LLC. The acquisition became effective (the “Effective day”) on June 27, 2016, a Pennsylvania At Home Care franchise. The acquisition is subject to Franchisor approval and the completion of an independent audit. In connection with the closing of the acquisition, at the Effective Time, each outstanding class of preferred shares of Titan, par value $0.17 per share ("Titan Preferred Class Stock"), was converted into $0.17 preferred shares (the "Stock Consideration") of the Company’s Preferred Class “G” Stock, par value $0.001 per share ("CDIF Preferred “G” Stock"). The preferred share Consideration was adjusted as a result of the authorization and declaration of a special distribution to the preferred Titan stockholders at $0.17 per share with a conversion rate of 1 to 1.3 Common Stock payable to Titan shareholders of record as of the close of business on June 27, 2016 (the "Special Conversion"). The Special Conversion right is granted as a result of the closing of the sale of certain interests in assets of Titan to certain parties designated the Company, which closed on June 27, 2016 (the "Asset Sale"). Pursuant to the terms of the Acquisition. Pending Franchisor approval and the completion of the independent audit, CDIF will issue approximately 977,247 shares of CDIF Preferred “G” Shares to Titancare shareholders as Stock Consideration in the Acquisition. Based on the price of CDIF’s Common stock as of June 27 and 29, 2016 at $0.17 per share, the acquisition consideration represents an approximate value of $166,132. The LLC has filed to convert to a Pennsylvania Corporation. Second Acquisition: As previously disclosed on June 29, 2016, the Company completed the acquisition of York County In Home Care, Inc. The acquisition became effective (the “Effective day”) on June 27, 2016, a Pennsylvania At Home Care franchise. The acquisition is subject to Franchisor approval and the completion of an independent audit. In connection with the closing of the acquisition, at the Effective Time, each outstanding class of preferred shares of York, par value $0.17 per share ("York Preferred Class Stock"), was converted into $0.17 preferred shares (the "Stock Consideration") of the Company’s Preferred Class “G” Stock, par value $0.001 per share ("CDIF Preferred “G” Stock"). The preferred share Consideration was adjusted as a result of the authorization and declaration of a special distribution to the preferred York stockholders at $0.17 per share with a conversion rate of 1 to 1.3 Common Stock payable to York shareholders of record as of the close of business on June 29, 2016 (the "Special Conversion"). The Special Conversion right is granted as a result of the closing of the sale of certain interests in assets of York to certain parties designated by the Company, which closed on June 29, 2016 (the "Asset Sale"). Pursuant to the terms of the Acquisition. Pending Franchisor approval and the completion of the independent audit, CDIF will issued approximately 8,235,294 shares of CDIF Preferred “G” Shares as Stock Consideration in the Acquisition. Based on the price of the Company’s Preferred “G” Class of stock on June 29, 2016. The acquisition consideration (based on the value of $0.17 in CDIF Preferred Stock, represents approximately $1,400,000.00. Third Acquisition: On August 10 th th In connection with the closing of the acquisition, at the Effective Time, each outstanding class of preferred shares of Refreshment Concepts, par value $0.20 per share ("Refreshment Concepts Preferred Class Stock"), was converted into $0.20 preferred shares (the "Stock Consideration") of CDIF’s Preferred Class “H” Stock, par value $0.001 per share ("CDIF Preferred “H” Stock"). The preferred share Consideration was adjusted as a result of the authorization and declaration of a special distribution to the preferred Refreshment Concepts stockholders at $0.20 per share with a conversion rate of 1 to 1.25 Common Stock payable to Refreshment Concepts shareholders of record as of the close of business on July 22, 2016 (the "Special Conversion"). The Special Conversion right is granted as a result of the closing of the sale of certain interests in assets of Refreshment Concepts to certain parties designated by CDIF, which closed on July 22, 2016 (the "Asset Sale"). Pursuant to the terms of the Acquisition. CDIF issued approximately 1,440,000 shares of CDIF Preferred “H” Shares as Stock Consideration in the Acquisition. Based on the price of CDIF’s Preferred “H” Class of stock on July 1 st th Fourth Acquisition: On August 10 th In connection with the closing of the acquisition, at the Effective Time, each outstanding class of preferred shares of F.D.R. Enterprises par value $0.20 per share ("F.D.R. Enterprises Preferred Class Stock"), was converted into $0.20 preferred shares (the "Stock Consideration") of CDIF’s Preferred Class “H” Stock, par value $0.001 per share ("CDIF Preferred “H” Stock"). The preferred share Consideration was adjusted as a result of the authorization and declaration of a special distribution to the preferred F.D.R. Enterprises stockholders at $0.20 per share with a conversion rate of 1 to 1.25 Common Stock payable to F.D.R. Enterprises shareholders of record as of the close of business on July 22, 2016 (the "Special Conversion"). The Special Conversion right is granted as a result of the closing of the sale of certain interests in assets of F.D.R. Enterprises to certain parties designated by CDIF, which closed on July 22, 2016 (the "Asset Sale"). Pursuant to the terms of the Acquisition. CDIF issued approximately 1,206,870 shares of CDIF Preferred “H” Shares as Stock Consideration in the Acquisition. Based on the price of CDIF’s Preferred “H” Class of stock on July 1 st th Fifth Acquisition: On August 10 th th In connection with the closing of the acquisition, at the Effective Time, each outstanding class of preferred shares of Repicci’s Franchise Group par value $0.20 per share ("Repicci’s Franchise Group Preferred Class Stock"), was converted into $0.20 preferred shares (the "Stock Consideration") of CDIF’s Preferred Class “H” Stock, par value $0.001 per share ("CDIF Preferred “H” Stock"). The preferred share Consideration was adjusted as a result of the authorization and declaration of a special distribution to the preferred Repicci’s Franchise Group stockholders at $0.20 per share with a conversion rate of 1 to 1.25 Common Stock payable to Repicci’s Franchise Group shareholders of record as of the close of business on July 22, 2016 (the "Special Conversion"). The Special Conversion right is granted as a result of the closing of the sale of certain interests in assets of Repicci’s Franchise Group to certain parties designated by CDIF, which closed on July 22, 2016 (the "Asset Sale"). Pursuant to the terms of the Acquisition. CDIF issued approximately 1,770,000 shares of CDIF Preferred “H” Shares as Stock Consideration in the Acquisition. Based on the price of CDIF’s Preferred “H” Class of stock on July 1 st th |
1. Summary of Significant Acc23
1. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Legacy Card Company (“Legacy”) was formed as a Limited Liability Company on August 29, 2001. On April 18, 2005, Legacy converted from a California Limited Liability Company to a Nevada Corporation. On November 10, 2005, Legacy merged with Cardiff International, Inc. (“Cardiff”, the “Company”), a publicly held corporation. In the first quarter of 2013, it was decided to restructure Cardiff into a holding company that adopted a new business model known as "Collaborative Governance," a form of governance enabling businesses to take advantage of the power of a public company. Cardiff began targeting the acquisition of undervalued, niche companies with high growth potential, income-producing commercial real estate properties, and high return investments, all designed to pay a dividend to the Company’s shareholders. The reason for this strategy was to protect the Company’s shareholders by acquiring profitable small- to minimum-sized businesses with little to no debt, seeking support with both financing and management that had the ability to offer a return to investors. The plan is to establish new classes of preferred stock to streamline voting rights, negate debt, and acquire new businesses. By December of 2013, the Company had negated more than 90% of all its debt; by July of 2014, the Company had completed the acquisition of three businesses: We Three, LLC; Romeo’s NY Pizza; and Edge View Properties, Inc. The Company delayed the filing of its Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2015 due to difficulty obtaining information from another acquisition, which was subsequently unwound. |
Description of Business | Description of Business Cardiff is a holding company that adopted a new business model known as "Collaborative Governance.” To date, the Company is not aware of any other domestic holding company using the same business philosophy or governing policies. The Company’s business footprint is to acquire strong companies that meet the following criteria: (1) in business for a minimum of two years; (2) profitable; (3) good management team; (4) little to no debt; and (5) assets of a minimum of $1,000,000. Cardiff continues to practice all business ethics under the Securities Exchange Act of 1934 (“1934 Act”) and acknowledges that there are more than 43 successful Business Development Companies subject to the Investment Company Act of 1940 (“1940 Act”), all of which may be considered competition to Cardiff and that are established and available to the public for investment. These companies offer experienced management, dividends and financial security. To date, Cardiff consists of three subsidiaries: We Three, LLC; Romeo’s NY Pizza; and Edge View Properties, Inc. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Cardiff International, Inc., and its wholly-owned subsidiaries: We Three, LLC; Romeo’s NY Pizza; and Edge View Properties, Inc. All significant intercompany accounts and transactions are eliminated in consolidation. Certain prior period amounts may have been reclassified for consistency with the current period presentation. These reclassifications would have no material effect on the reported financial results. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Revenue Recognition | Revenue Recognition In general, the Company recognizes revenue on an accrual basis. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured. Rental Income The Company’s rental income is derived from the mobile home leases. The expired leases are considered month-to-month leases. In accordance with section 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition, the cost of property held for leasing by major classes of property according to nature or function, and the amount of accumulated depreciation in total, is presented in the accompanying consolidated balance sheets as of December 31, 2015 and 2014. There are no contingent rentals included in income in the accompanying statements of operations. With the exception of the month-to-month leases, revenue is recognized on a straight-line basis and amortized into income on a monthly basis, over the lease term. Restaurant Sales Revenue from restaurant sales is recognized when food and beverage products are sold. The Company reports revenue net of sales taxes collected from customers and remitted to governmental taxing authorities. |
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 certain reported amounts and disclosures. Management uses its historical records and knowledge of its business in making estimates. Accordingly, actual results could differ from those estimates. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill and indefinite-lived brands are not amortized, but are evaluated for impairment annually or when indicators of a potential impairment are present. Our impairment testing of goodwill is performed separately from our impairment testing of indefinite-lived intangibles. The annual evaluation for impairment of goodwill and indefinite-lived intangibles is based on valuation models that incorporate assumptions and internal projections of expected future cash flows and operating plans. The Company believe such assumptions are also comparable to those that would be used by other marketplace participants. During the year ended December 31, 2014, goodwill of $1,707,153 resulted from the business acquisitions in 2014 was impaired in full. There was no goodwill impairment in 2015. |
Valuation of long-lived assets | Valuation of long-lived assets In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 360-10-5, “ Impairment or Disposal of Long-Lived Assets |
Valuation of Derivative Instruments | Valuation of Derivative Instruments Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-10, Derivatives and Hedging (“ASC 815-10”) |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: Level Input Input Definition Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The following table presents certain investments and liabilities of the Company’s financial assets measured and recorded at fair value on the Company’s Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of December 31, 2015 and 2014. Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – December 31, 2015 $ – $ – $ 13,948 $ – Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – December 31, 2014 $ – $ – $ – $ – |
Stock Based Compensation | Stock-Based Compensation – Employees The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded, the use of share prices established in the Company’s most recent private placement memorandum (based on sales to third parties), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: · Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments. Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. · Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market · Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. · Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. The expense resulting from share-based payments is recorded in general and administrative expense in the statements of operations. Stock-Based Compensation – Non Employees Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”). Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum, or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: · Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments. The Company uses historical data to estimate holder’s expected exercise behavior. If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. · Expected volatility of the entity’s shares and the method used to estimate it. Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index. The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility. If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. · Expected annual rate of quarterly dividends. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. · Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic. Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised. Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation and amortization of property and equipment is provided using the straight-line method for financial reporting purposes at rates based on the following estimated useful lives: Classification Useful Life Equipment, furniture and fixtures 5 - 7 years Leasehold improvements 10 years or lease term, if shorter During the years ended December 31, 2015 and 2014, depreciation and amortization expense was $84,752 and $39,992, respectively. |
Income Taxes | Income Taxes Income taxes are determined in accordance with ASC Topic 740, “Income Taxes 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. For the years ended December 31, 2015 and 2014, the Company did not have any interest and penalties associated with tax positions. As of December 31, 2015 and 2014, the Company did not have any significant unrecognized uncertain tax positions. |
Earnings (Loss) per Share | Earnings (Loss) per Share FASB ASC Subtopic 260, Earnings Per Share The following table sets forth the computation of basic and diluted earnings per common share for the years ended December 31, 2015 and 2014. During a period of net loss, all potentially dilutive securities are anti-dilutive. Accordingly, for the years ended December 31, 2015 and 2014, potentially dilutive securities have been excluded from the computations since they would be anti-dilutive. However, these dilutive securities could potentially dilute earnings per share in the future: For the years ended December 31, 2015 December 31, 2014 Numerator: Net (loss) $ (3,944,421 ) $ (13,131,697 ) Denominator: Weighted-average shares outstanding 7,644,291 1,152,779 Basic earnings (loss) per share $ (0.52 ) $ (11.39 ) |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The Company is in the development stage and, as such, has sustained operating losses since its inception and has negative working capital and an accumulated deficit. These factors raise substantial doubts about the Company’s ability to continue as a going concern. As of December 31, 2015, the Company had shareholders’ deficit of $594,557. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern. As a result, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2015 consolidated financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and the appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusions. Management has prospective investors and believes the raising of capital will allow the Company to pursue new acquisitions. There can be no assurance that the Company will be able to obtain sufficient capital from debt or equity transactions or from operations in the necessary time frame or on terms acceptable to it. Should the Company be unable to raise sufficient funds, it may be required to curtail its operating plans. In addition, increases in expenses may require cost reductions. No assurance can be given that the Company will be able to operate profitably on a consistent basis, or at all, in the future. Should the Company not be able to raise sufficient funds, it may cause cessation of operations. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In September 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest—Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the Company’s financial position, results of operations or cash flows. |
1. Summary of Significant Acc24
1. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Fair value of derivative liability | Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – December 31, 2015 $ – $ – $ 13,948 $ – Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – December 31, 2014 $ – $ – $ – $ – |
Earnings (loss) per share | For the years ended December 31, 2015 December 31, 2014 Numerator: Net (loss) $ (3,944,421 ) $ (13,131,697 ) Denominator: Weighted-average shares outstanding 7,644,291 1,152,779 Basic earnings (loss) per share $ (0.52 ) $ (11.39 ) |
3. Plant and Equipment, Net (Ta
3. Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Plant and Equipment | December 31, 2015 December 31, 2014 Furniture, fixture and equipment $ 261,882 $ 268,055 Leasehold improvements 635,972 545,830 897,854 813,885 Less: accumulated depreciation (357,830 ) (279,673 ) Plant and equipment, net $ 540,024 $ 534,212 |
5. Accrued Expenses (Tables)
5. Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accrued expenses | December 31, 2015 December 31, 2014 Accrued salaries $ 502,500 $ 450,000 Accrued expenses - other 584,804 176,330 Total $ 1,087,304 $ 626,330 |
7. Notes Payable (Tables)
7. Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | December 31, 2015 December 31, 2014 Notes Payable – Unrelated Party $ 60,811 $ 129,032 Notes Payable – Related Party 119,500 100,000 Discount on notes – – Total $ 180,311 $ 229,032 Current portion (180,311 ) (129,032 ) Long-term portion $ – $ 100,000 |
Future minimum loan payments | Year ending December 31, 2015 $ 60,811 2016 119,500 Total $ 180,311 |
8. Convertible Notes Payable (T
8. Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Convertible notes | December 31, 2015 December 31, 2014 Convertible Notes Payable – Unrelated Party $ 29,700 $ 9,000 Convertible Notes Payable – Related Party 165,000 165,000 Discount on notes – – Total - Current $ 194,700 $ 174,000 |
Note 5 Member | |
Assumptions for fair value of derivative liabilities | Reporting Date Fair Value Term (Years) Assumed Conversion Price Market Price on Issuance Date Volatility Percentage Risk-free Rate 5/6/2015 $22,495 0.33 $0.825 $1.69 507% 0.0002 12/31/2015 $13,948 0.003 $0.035 $0.075 533% 0.0014 |
Carrying Value of Notes | The Notes Proceeds $ 12,200 Less derivative liabilities on initial recognition (12,200 ) Value of the Notes on initial recognition 0 Add accumulated accretion expense 12,200 Balance as of December 31, 2015 $ 12,200 |
Note 6 Member | |
Assumptions for fair value of derivative liabilities | Reporting Date Fair Value Term (Years) Assumed Conversion Price Market Price on Issuance Date Volatility Percentage Risk-free Rate 7/29/2015 $18,041 0.33 $0.30 $0.60 513% 0.0006 12/31/2015 $10,008 0.003 $0.038 $0.075 533% 0.0014 |
Carrying Value of Notes | The Notes Proceeds $ 10,000 Less derivative liabilities on initial recognition (10,000 ) Value of the Notes on initial recognition 0 Add accumulated accretion expense 10,000 Balance as of December 31, 2015 $ 10,000 |
Convertible Debenture Related Party [Member] | |
Schedule of future minimum loan payments for convertible notes payable | Year ending December 31, 2015 $ 194,700 |
11. Net Loss Per Share (Tables)
11. Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | For the years ended December 31, 2015 December 31, 2014 Numerator: Net (loss) $ (3,944,421 ) $ (13,131,697 ) Denominator: Weighted-average shares outstanding 7,644,291 1,152,779 Basic earnings (loss) per share $ (0.52 ) $ (11.39 ) |
13. Commitments and Contingen30
13. Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Leases | For the years ended December 31, 2015 December 31, 2014 Restaurants $ 155,666 $ 90,000 Lot 62,255 0 Office 33,620 0 Equipment Rentals 3,994 2,351 Total $ 255,535 $ 92,351 |
14. Income Taxes (Tables)
14. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Deferred income taxes | 2015 2014 Deferred tax assets $ 16,770,000 $ 15,210,000 Valuation allowance (16,770,000 ) (15,210,000 ) Net deferred tax asset $ – $ – |
Income tax rate reconcilation | 2015 2014 Income tax computed at the federal statutory rate 34% 34% Income tax computed at the state statutory rate 5% 5% Valuation allowance (39% ) (39% ) Total deferred tax asset 0% 0% |
15. Segment Reporting (Tables)
15. Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment reporting | For the years ended December 31, 2015 December 31, 2014 Revenues: We Three $ 168,621 $ 56,870 Romeo’s NY Pizza 1,210,880 833,531 Others 10,100 – Consolidated revenues $ 1,389,601 $ 890,401 Cost of Sales: We Three $ 134,912 $ 35,535 Romeo’s NY Pizza 862,818 618,336 Others – – Consolidated cost of sales $ 997,730 $ 653,871 Income (Loss) before taxes We Three $ 14,216 $ (21,373 ) Romeo’s NY Pizza 14,667 (22,156 ) Others (3,973,304 ) (13,088,168 ) Consolidated loss before taxes $ (3,944,421 ) $ (13,131,697 ) As of December 31, 2015 As of December 31, 2014 Assets: We Three $ 243,134 $ 169,417 Romeo’s NY Pizza 76,386 159,039 Others 892,959 922,400 Combined assets $ 1,212,479 $ 1,250,856 |
1. Summary of Significant Acc33
1. Summary of Significant Accounting Policies (Details - Fair value) - Fair Value, Measurements, Recurring [Member] - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value of derivative liability | $ 0 | $ 0 |
Fair Value Inputs Level 1 [Member] | ||
Fair value of derivative liability | 0 | 0 |
Fair Value Inputs Level 2 [Member] | ||
Fair value of derivative liability | 0 | 0 |
Fair Value Inputs Level 3 [Member] | ||
Fair value of derivative liability | $ 13,948 | $ 0 |
1. Summary of Significant Acc34
1. Summary of Significant Accounting Policies (Details - Earnings per share) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | ||
Net income (loss) | $ (3,944,421) | $ (13,131,697) |
Denominator: | ||
Weighted-average shares outstanding | 7,644,291 | 1,152,779 |
Weighted-average diluted shares outstanding | 7,644,291 | 1,152,779 |
Basic earnings (loss) per share | $ (.52) | $ (11.39) |
Diluted earnings (loss) per share | $ (0.52) | $ (11.39) |
1. Summary of Significant Acc35
1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Shareholders' deficit | $ (610,489) | $ (158,698) | $ (1,808,959) | $ (4,808,577) |
Goodwill impaired | 0 | 1,407,327 | ||
Derivative liability reclassified as additional paid in capital | 10,008 | 132,981 | ||
Depreciation and amortization | $ 84,752 | $ 39,992 | ||
Equipment, furniture and fixtures [Member] | ||||
Property useful lives | 5-7 years | |||
Leasehold Improvements [Member] | ||||
Property useful lives | 10 years or lease term, if shorter |
3. Plant and Equipment, Net (De
3. Plant and Equipment, Net (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Furniture, fixture and equipment | $ 261,882 | $ 268,055 |
Leasehold improvements | 635,972 | 545,830 |
Plant and equipment, gross | 897,854 | 813,885 |
Less: accumulated depreciation | (357,830) | (279,673) |
Plant and equipment, net | $ 540,024 | $ 534,212 |
3. Plant and Equipment, Net (37
3. Plant and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 84,752 | $ 39,992 |
Gain on disposal of fixed assets | 12,007 | $ 0 |
Cash received for disposal of fixed assets | $ 30,902 |
4. Land (Details Narrative)
4. Land (Details Narrative) - USD ($) | 6 Months Ended | ||
Jul. 11, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Land | $ 603,000 | $ 603,000 | |
Edge View Properties [Member] | |||
Stock issued for acquisition, shares | 241,199 |
5. Accrued Expenses (Details)
5. Accrued Expenses (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued salaries | $ 502,500 | $ 450,000 |
Accrued expenses - other | 584,804 | 176,330 |
Accrued expenses | $ 1,087,304 | $ 626,330 |
6. Related Party Transactions (
6. Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Due to officer/shareholder | $ 81,905 | $ 106,943 |
Accrued salaries | 502,500 | 450,000 |
Gain on debt forgiveness | 10,000 | 822,080 |
Thompson [Member] | ||
Due to officer/shareholder | 81,905 | |
Accrued salaries | 502,500 | 450,000 |
Officer salary | 240,000 | 262,500 |
Former President [Member] | ||
Accrued salaries | 0 | 0 |
Officer salary | 187,500 | |
Gain on debt forgiveness | $ 187,500 | |
Chief Operating Officer [Member] | ||
Accrued salaries | 180,000 | |
Officer salary | 180,000 | |
Chief Executive Officer [Member] | ||
Accrued salaries | 180,000 | |
Officer salary | $ 180,000 |
7. Notes Payable (Details - Not
7. Notes Payable (Details - Notes Payable) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Notes Payable - Unrelated Party | $ 60,811 | $ 129,032 |
Notes Payable - Related Party | 119,500 | 100,000 |
Discount on notes | 0 | 0 |
Total | 180,311 | 229,032 |
Current portion | (180,311) | (129,032) |
Long-term portion | $ 0 | $ 100,000 |
7. Notes Payable (Details - Pay
7. Notes Payable (Details - Payments) - Notes Payable [Member] | Dec. 31, 2015USD ($) |
Year ended 2015 | $ 60,811 |
Year ended 2016 | 119,500 |
Total debt | $ 180,311 |
7. Notes Payable (Details Narra
7. Notes Payable (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Notes Payable - Unrelated Party | $ 60,811 | $ 129,032 |
Notes Payable - Related Party | 119,500 | 100,000 |
Auto Loan [Member] | ||
Notes Payable - Unrelated Party | 49,822 | |
Note 1 [Member] | ||
Notes Payable - Related Party | $ 50,000 | 50,000 |
Debt maturity date | Sep. 7, 2016 | |
Note 2 [Member] | ||
Notes Payable - Related Party | $ 50,000 | 50,000 |
Debt maturity date | Nov. 17, 2016 | |
Shareholder [Member] | ||
Notes Payable - Unrelated Party | $ 10,989 | $ 10,989 |
8. Convertible Notes Payable (D
8. Convertible Notes Payable (Details - Convertible notes) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Convertible notes | $ 189,950 | $ 174,000 |
Unrelated Party [Member] | ||
Convertible notes | 29,700 | 9,000 |
Related Party [Member] | ||
Convertible notes | 165,000 | 165,000 |
Convertible Debt [Member] | ||
Discount on notes | $ 0 | $ 0 |
8. Convertible Notes Payable 45
8. Convertible Notes Payable (Details - Minimum payments) - Convertible Notes Payable [Member] | Dec. 31, 2015USD ($) |
Year ended 2015 | $ 194,700 |
Total debt | $ 194,700 |
8. Convertible Notes Payable 46
8. Convertible Notes Payable (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Convertible notes payable - related party | $ 119,500 | $ 0 |
Convertible Debenture 1 [Member] | ||
Convertible notes payable - related party | 150,000 | 150,000 |
Convertible Debenture 2 [Member] | ||
Convertible notes payable - related party | 15,000 | 15,000 |
Note 5 Member | ||
Convertible debt balance | 12,200 | |
Interest expense | 799 | |
Accrued interest | 799 | |
Note 6 Member | ||
Convertible debt balance | 10,000 | |
Interest expense | 359 | |
Accrued interest | 359 | |
Note 4 [Member] | ||
Convertible debt balance | $ 7,500 | $ 9,000 |
9. Derivative Liabilities (Deta
9. Derivative Liabilities (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Notes to Financial Statements | ||
Derivative liabilities | $ 23,956 | $ 0 |
Change in fair value of derivatives | (1,756) | (35,590) |
Additional paid in capital due to change in conversion price | $ 10,008 | $ 132,981 |
10. Payroll Taxes (Details Narr
10. Payroll Taxes (Details Narrative) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Compensation Related Costs [Abstract] | ||
Accrued payroll taxes | $ 38,902 | $ 38,400 |
11. Net Loss Per Share (Details
11. Net Loss Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | ||
Net income (loss) | $ (3,944,421) | $ (13,131,697) |
Denominator: | ||
Weighted-average common shares outstanding | 7,644,291 | 1,152,779 |
Basic loss per share | $ (.52) | $ (11.39) |
12. Capital Stock (Details Narr
12. Capital Stock (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock issued for services, value | $ 3,136,120 | $ 10,182,560 |
Three Consultants [Member] | ||
Stock issued for services, shares | 1,500,000 | |
Stock issued for services, value | $ 2,670,000 | |
One Consultant [Member] | ||
Stock issued for services, shares | 150,000 | |
Stock issued for services, value | $ 126,000 | |
One Consultant [Member] | ||
Stock issued for services, shares | 500,000 | |
Stock issued for services, value | $ 210,000 | |
One Consultant [Member] | ||
Stock issued for services, shares | 362,000 | |
Stock issued for services, value | $ 130,320 | |
Five Investors [Member] | ||
Stock issued, shares issued | 250,000 | |
Proceeds from issuance of preferred stock | $ 25,000 | |
Series B Preferred Stock [Member] | ||
Preferred stock converted, shares converted | 325,862 | |
Preferred stock converted, common shares issued | 1,610,206 | |
Stock issued, shares issued | 33,197 | |
Series C Preferred Stock [Member] | ||
Stock issued, shares issued | 3 | |
Series F-1 Preferred Stock [Member] | ||
Stock issued, shares issued | 6,249 | |
Series C Preferred Stock 1 [Member] | ||
Stock issued, shares issued | 1 | |
Series C Preferred Stock 2 [Member] | ||
Stock issued, shares issued | 1 | |
Series F-1 Preferred Stock 1 [Member] | ||
Stock issued, shares issued | 9,999 | |
Series B and C Preferred Stock [Member] | Several Investors [Member] | ||
Proceeds from issuance of preferred stock | $ 82,500 | |
Series F-1 and Series C Preferred Stock [Member] | An Investor [Member] | ||
Proceeds from issuance of preferred stock | 25,000 | |
Series F-1 and Series C Preferred Stock 1 [Member] | An Investor [Member] | ||
Proceeds from issuance of preferred stock | $ 25,000 |
13. Commitments and Contingen51
13. Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Leases | $ 255,535 | $ 92,351 |
Restaurants [Member] | ||
Operating Leases | 155,666 | 90,000 |
Lot [Member] | ||
Operating Leases | 62,255 | 0 |
Office [Member] | ||
Operating Leases | 33,620 | 0 |
Equipment Rentals [Member] | ||
Operating Leases | $ 3,994 | $ 2,351 |
14. Income Taxes (Details - Def
14. Income Taxes (Details - Deferred tax) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets | $ 16,770,000 | $ 15,210,000 |
Valuation allowance | (16,770,000) | (15,210,000) |
Net deferred tax asset | $ 0 | $ 0 |
14. Income Taxes (Details - Tax
14. Income Taxes (Details - Tax reconciliation) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Income tax computed at the federal statutory rate | 34.00% | 34.00% |
Income tax computed at the state statutory rate | 5.00% | 5.00% |
Valuation allowance | (39.00%) | (39.00%) |
Total deferred tax asset | 0.00% | 0.00% |
14. Income Taxes (Details Narra
14. Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Income Tax Disclosure [Abstract] | |
Operating loss carrforward | $ 43,000,000 |
Operating loss carrforward expiration date | Dec. 31, 2035 |
Increase in valuation allowance | $ 1,560,000 |
15. Segment Reporting (Details)
15. Segment Reporting (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | $ 1,389,601 | $ 890,401 |
Cost of Sales | 997,730 | 653,871 |
Income income (loss) | (3,944,421) | (13,131,697) |
Assets | 1,212,479 | 1,250,856 |
We Three, LLC [Member] | ||
Revenues | 168,621 | 56,870 |
Cost of Sales | 134,912 | 35,535 |
Income income (loss) | 14,216 | (21,373) |
Assets | 243,134 | 169,417 |
Romeo's NY Pizza [Member] | ||
Revenues | 1,210,880 | 833,531 |
Cost of Sales | 862,818 | 618,336 |
Income income (loss) | 14,667 | (22,156) |
Assets | 76,386 | 159,039 |
Others [Member] | ||
Revenues | 10,100 | 0 |
Cost of Sales | 0 | 0 |
Income income (loss) | (3,973,304) | (13,088,168) |
Assets | $ 892,959 | $ 922,400 |