Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 14, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Cardiff Lexington Corp | |
Entity Central Index Key | 811,222 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 155,195,233 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 198,833 | $ 68,986 |
Accounts receivable-net | 90,494 | 63,061 |
Inventory-net | 3,079 | 46,928 |
Prepaid and other | 46,919 | 11,631 |
Total current assets | 339,325 | 190,606 |
Property and equipment, net of accumulated depreciation of $398,433 and $838,736, respectively | 402,067 | 491,474 |
Land | 603,000 | 603,000 |
Intangible assets, net | 0 | 15,561 |
Goodwill | 2,092,048 | 0 |
Deposits | 27,817 | 16,600 |
Other assets | 3,550 | 0 |
Due from related party | 11,190 | 1,820 |
Total assets | 3,478,997 | 1,319,061 |
Current liabilities | ||
Accounts payable | 368,693 | 206,739 |
Accrued expenses | 507,461 | 245,446 |
Accrued expenses - related parties | 545,513 | 495,250 |
Interest payable | 408,230 | 312,192 |
Accrued payroll taxes | 138,017 | 2,047 |
Due to officers and shareholders | 137,816 | 77,640 |
Deferred Income | 825,616 | 0 |
Line of credit | 6,155 | 15,498 |
Common stock to be issued | 500 | 500 |
Notes payable, unrelated party | 823,308 | 215,979 |
Notes payable - related party | 171,582 | 144,189 |
Convertible notes payable, net of debt discounts of $285,860 and $245,494, respectively | 736,502 | 616,381 |
Convertible notes payable - related party | 165,000 | 165,000 |
Derivative Liability | 2,933,981 | 2,236,656 |
Income Tax payable | 11,365 | 15,865 |
Total current liabilities | 7,779,739 | 4,749,382 |
Other Liabilities | ||
Convertible notes payable | 1,040,000 | 0 |
Total liabilities | 8,819,739 | 4,749,382 |
Shareholders' (deficit) | ||
Preferred Stock all classes | 111,708 | 8,849 |
Common stock; 2,000,000,000 shares authorized with $0.001 par value; 274,745,239 and 66,029,791 shares issued and outstanding at September 30, 20187 and December 31, 2017, respectively | 274,746 | 66,031 |
Additional paid-in capital | 49,098,205 | 45,608,151 |
Accumulated deficit | (54,825,401) | (49,113,352) |
Total shareholders' (deficit) | (5,340,742) | (3,430,321) |
Total liabilities and shareholders' (deficit) | 3,478,997 | 1,319,061 |
Series A Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Preferred Stock Series B [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series C Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series D Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series E Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series F Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series F-1 Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series G Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series H Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series I Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series H-1 Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series J Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series J1 Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series K Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes | ||
Series K1 Preferred Stock [Member] | ||
Shareholders' (deficit) | ||
Preferred Stock all classes |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Accumulated depreciation | $ 398,433 | $ 838,736 |
Notes payable, discount | $ 285,860 | $ 245,494 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, par value | $ 0.001 | $ .001 |
Common stock, shares issued | 274,745,239 | 66,029,791 |
Common stock, shares outstanding | 274,745,239 | 66,029,791 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 4 | 4 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 1 | 1 |
Preferred stock, shares outstanding | 1 | 1 |
Preferred Stock Series B [Member] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 2,773,206 | 2,798,205 |
Preferred stock, shares outstanding | 2,773,206 | 2,798,205 |
Series C Preferred Stock [Member] | ||
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 119 | 117 |
Preferred stock, shares outstanding | 119 | 117 |
Series D Preferred Stock [Member] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares issued | 400,000 | 400,000 |
Preferred stock, shares outstanding | 400,000 | 400,000 |
Series E Preferred Stock [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares issued | 241,199 | 241,199 |
Preferred stock, shares outstanding | 241,199 | 241,199 |
Series F Preferred Stock [Member] | ||
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares issued | 280,069 | 280,069 |
Preferred stock, shares outstanding | 280,069 | 280,069 |
Series F-1 Preferred Stock [Member] | ||
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, par value | $ .001 | $ 0.001 |
Preferred stock, shares issued | 57,193 | 57,193 |
Preferred stock, shares outstanding | 57,193 | 57,193 |
Series G Preferred Stock [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series H Preferred Stock [Member] | ||
Preferred stock, shares authorized | 4,859,379 | 4,859,379 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 0 | 4,859,379 |
Preferred stock, shares outstanding | 0 | 4,859,379 |
Series H-1 Preferred Stock [Member] | ||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series I Preferred Stock [Member] | ||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 0 | 203,655 |
Preferred stock, shares outstanding | 0 | 203,655 |
Series J Preferred Stock [Member] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series J1 Preferred Stock [Member] | ||
Preferred stock, shares authorized | 7,500,000 | 7,500,000 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series K Preferred Stock [Member] | ||
Preferred stock, shares authorized | 10,937,500 | 10,937,500 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 8,200,562 | 0 |
Preferred stock, shares outstanding | 8,200,562 | 0 |
Series K1 Preferred Stock [Member] | ||
Preferred stock, shares authorized | 35,000,000 | 35,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 1,447,157 | 0 |
Preferred stock, shares outstanding | 1,447,157 | 0 |
Series L Preferred Stock [Member] | ||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares issued | 98,307,692 | 0 |
Preferred stock, shares outstanding | 98,307,692 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total revenue | $ 697,884 | $ 413,875 | $ 1,527,326 | $ 1,419,006 |
Total cost of sales | 591,066 | 457,394 | 1,186,988 | 1,309,398 |
GROSS MARGIN | 106,818 | (43,519) | 340,338 | 109,608 |
OPERATING EXPENSES | ||||
Depreciation and amortization expense | (9,279) | 42,151 | 15,992 | 127,637 |
Selling, general and administrative | 1,032,113 | 1,232,354 | 2,008,405 | 2,378,919 |
Total operating cost | 1,022,834 | 1,274,505 | 2,024,397 | 2,506,556 |
(LOSS) FROM OPERATIONS | (916,016) | (1,318,024) | (1,684,059) | (2,396,948) |
OTHER INCOME (EXPENSE) | ||||
Other income | 84 | 0 | 1,664 | 0 |
Bad debt expense | (23,607) | 0 | (23,607) | 0 |
(Loss) from extinguishment of debt | 0 | 0 | 0 | (45,933) |
Change in value of derivative liability | (1,898,704) | 135,166 | (1,317,018) | 154,963 |
Gain/(loss) on sale of assets | (14,196) | 0 | 874 | 0 |
Interest expense | (72,355) | (26,046) | (164,277) | (77,400) |
Impairment of asset | (300,000) | 0 | (300,000) | 0 |
Impairment on Acquisition | (1,459,725) | 0 | (1,459,725) | 0 |
Amortization of debt discounts | (330,941) | (156,694) | (765,901) | (300,333) |
Total other income (expenses) | (4,099,444) | (47,574) | (4,027,990) | (268,703) |
NET (LOSS) FOR THE PERIOD | $ (5,015,460) | $ (1,365,598) | $ (5,712,049) | $ (2,665,651) |
(LOSS) PER COMMON SHARE - BASIC AND DILUTED | $ (0.03) | $ (0.03) | $ (0.05) | $ (0.07) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES - BASIC AND DILUTED | 173,106,027 | 40,359,954 | 109,258,535 | 36,979,427 |
Rental Business [Member] | ||||
Total revenue | $ 44,740 | $ 51,193 | $ 143,403 | $ 145,890 |
Total cost of sales | 43,305 | 39,645 | 145,650 | 118,832 |
Pizza Restaurants [Member] | ||||
Total revenue | 148,540 | 155,187 | 452,555 | 440,064 |
Total cost of sales | 111,814 | 111,430 | 324,661 | 311,986 |
Ice Cream Stores [Member] | ||||
Total revenue | 68,079 | 172,209 | 275,468 | 661,161 |
Total cost of sales | 154,572 | 306,319 | 435,302 | 878,580 |
Ice Cream Franchisee Sales [Member] | ||||
Total revenue | 76,475 | 25,136 | 169,550 | 104,225 |
Franchise Fees [Member] | ||||
Total revenue | 0 | 5,000 | 120,000 | 48,321 |
Royalty Fees [Member] | ||||
Total revenue | 7,350 | 5,150 | 13,650 | 15,600 |
Tax Services [Member] | ||||
Total revenue | 229,124 | 0 | 229,124 | 0 |
Total cost of sales | 155,475 | 0 | 155,475 | 0 |
Travel Services [Member] | ||||
Total revenue | 123,576 | 0 | 123,576 | 0 |
Total cost of sales | 125,900 | 0 | 125,900 | 0 |
Other Business [Member] | ||||
Total revenue | 0 | 0 | 0 | 3,745 |
Total cost of sales | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (Loss) from continuing operations | $ (5,712,049) | $ (2,665,651) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Depreciation | 59,730 | 127,637 |
Loss (gain) from disposal of fixed assets | (874) | 0 |
Loss (gain) from impairment of goodwill | 1,459,725 | 932,529 |
Loss (gain) on extinguishment of debt | 0 | 45,933 |
Amortization of loan discount | 765,901 | 300,333 |
Change in value of derivative liability | 1,317,018 | (154,963) |
Stock based compensation | 87,472 | 398,939 |
Warrants expense | 0 | 89,779 |
Convertible note issued for conversion cost reimbursement | 18,880 | 5,000 |
Other Income | 16,338 | 0 |
Convertible note issued for services rendered | 0 | 80,000 |
(Increase) decrease in: | ||
Accounts receivable | 61,898 | (76,924) |
Inventory | 43,849 | (4,699) |
Deposits | 0 | (5,422) |
Prepaids and other | (35,288) | 10,005 |
Other assets | 345,274 | 0 |
Intangible assets | 15,561 | 0 |
Increase(decrease) in: | ||
Accounts payable | (74,993) | 29,539 |
Accrued expenses | 135,910 | (246,240) |
Accrued expenses- related party | 0 | 625,600 |
Interest payable | 169,896 | 72,774 |
Taxes payable | (4,500) | (6,079) |
Accrued payroll taxes | 39,149 | 1,140 |
Accrued officers' salaries | 290,000 | 0 |
Other liabilities - deferred revenue | 112,893 | 0 |
Net cash used in operating activities | (888,210) | (440,770) |
INVESTING ACTIVITIES | ||
Purchase of intangible | 0 | (5,000) |
Purchase of fixed assets | (852,000) | 0 |
Disposal (Purchase) of fixed assets | 91,847 | (9,468) |
Net cash provided by (used in) investing activities | (760,153) | (14,468) |
FINANCING ACTIVITIES | ||
Due from related party | 0 | 9,135 |
Due to related party | 100,806 | 0 |
Proceeds from sales of stock | 0 | 40,000 |
Due to shareholder | 0 | 0 |
Proceeds from convertible notes payable | 890,605 | 465,000 |
Proceeds from notes payable - related party | 27,393 | 0 |
Repayments of convertible notes payable | 0 | (10,000) |
Repayments of notes payable | 607,329 | (33,974) |
Proceeds from line of credit | 0 | 9,838 |
Repayments to line of credit | (9,343) | 0 |
Net cash provided by financing activities | 1,616,790 | 479,999 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (31,573) | 24,760 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 230,407 | 62,948 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 198,834 | 87,708 |
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid during the period for Interest | 73,858 | 5,140 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued upon conversion of notes payable | 575,672 | 62,199 |
Common stock issued for settlement of accrued expense | 240,000 | 1,415,600 |
Series H Preferred Stock issued for Repicci Group | 0 | 728,907 |
Conversion of preferred stock to common stock | 5,097 | 9,141 |
Derivative Resolution upon conversion | 1,295,485 | 1,211,794 |
Goodwill | 2,092,048 | 0 |
Debt discount from derivative liabilities | $ 675,792 | $ 0 |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with both generally accepted accounting principles for interim financial information, and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) that are, in the opinion of management, considered necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The unaudited condensed consolidated financial statements and related disclosures are unaudited and have been prepared with the presumption that users of the interim financial information have read or have access to the Company’s annual audited consolidated financial statements for the preceding fiscal year. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the years ended December 31, 2017 and 2016 thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2017. 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 Lexington Corp. (“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, and income-producing commercial real estate properties, 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 businesses with little to no debt, seeking support with both financing and management that had the ability to offer a return to investors. 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. To date, Cardiff consists of the following wholly-owned subsidiaries: We Three, LLC (Affordable Housing Initiative) acquired on May 15, 2014; Romeo’s NY Pizza acquired on June 30, 2014; Edge View Properties, Inc. acquired on July 16, 2014; FDR Enterprises, Inc. acquired on August 10, 2016; Refreshment Concepts, LLC acquired on August 10, 2016; Repicci’s Franchise Group, LLC acquired on August 10, 2016; Red Rock Travel Group, acquired July31, 2018 Platinum Tax Defenders, acquired July 31, 2018 |
2. Basis of Presentation, and G
2. Basis of Presentation, and Going Concern | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION, AND GOING CONCERN | 2. BASIS OF PRESENTATION, AND GOING CONCERN Basis of Presentation The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures have been omitted pursuant to such rules and regulations. In the opinion of management, the accompanying consolidated financial statements include normal recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. These financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017 included in our Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of results to be expected for the full fiscal year or any other periods. The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make a number of estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures. Actual results may differ from these estimates. Revenue Recognition Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. There was no impact to the opening balance of accumulated deficit or revenues for the nine months ended September 30, 2018, as a result of applying Topic 606. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer. The Company generates revenue from our subsidiaries primarily on a cash basis for sale of food items and monthly rentals of mobile homes. As allowed by a practical expedient in Topic 606, the entity recognizes revenue in the amount to which the entity has a right to invoice. The term between invoicing and when payment is due is not significant. Our segmented revenue is disclosed more fully in our financial statements, see footnote 10 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 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 September 30, 2018, the Company had a working capital deficit of $7,440,414 and a shareholders’ deficit of $5,340,742. As further described in Notes 5 and 6, the Company is in default with various Notes and Convertible Notes Payable. 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 previous independent registered public accounting firm, in its report on the Company’s December 31, 2017 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 a significant reduction in or cessation of operations. 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 nine months ended September 30, 2018, the Company disposed of $104,886 fixed asset and related liabilities related to a company-owned franchise, resulting in net cash flow of $91,847 and a gain on sale of $874 from disposal. Fair Value ASC 820 Fair Value Measurements and Disclosures (“ASC 820”) defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services. Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort. The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – December 31, 2017 $ – $ – $ 2,236,656 $ 2,236,656 Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – September 30, 2018 $ – $ – $ 2,933,981 $ 2,933,981 Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 ,” Leases” (Topic 842) In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”, |
3. Acquisitions
3. Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS Platinum Tax Defenders On July 31, 2018, the Company completed the acquisition of Platinum Tax Defenders. In connection with the closing of the acquisition, a Preferred “L” Class of stock with a par value of $0.001 was established and issued. The Preferred “L” Class of stock rights and privileges include voting rights, a conversion ratio of 1:1.25 and were distributed at the adjusted rate of $0.013 per share for a total of 98.307,692 representing a value of $1,278,000. These Preferred “L” shares have a lock-up/leak-out limiting the sale of stock for 12 months after which conversions and sales are limited to 20% of their portfolio per year, pursuant to the terms of the Acquisition Agreement. The preliminary purchase allocation of the net assets acquired is as follows: Platinum Fair Value Cash $ 138,906 Accounts receivable 105,669 Other assets 60,041 Property and equipment 6,010 Goodwill 2,092,048 Liabilities (272,674 ) Total $ 2,130,000 Red Rock Travel Group On July 31, 2018, the Company completed the acquisition of Red Rock Travel Group. In connection with the closing of the acquisition, on July 30 th Red Rock Fair Value Cash $ 22,515 Intangible assets* 300,000 Property and equipment 55,286 Goodwill* 1,459,725 Liabilities (1,662,526 ) Total $ 175,000 * Subsequent to the acquisition, the Company determined that the intangible assets and goodwill should be fully impaired and written off. The results of the operations for Platinum and Red Rock have been included in the consolidated financial statements since the date of the acquisitions (July 31, 2018). The following table presents the unaudited pro forma results of continuing operations for the three and nine months ended September 30, 2018 and 2017, respectively, as if the acquisitions had been consummated at the beginning of the period presented. The pro forma results of continuing operations are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisitions occurred at the beginning of the period presented or the results which may occur in the future. CARDIFF LEXINGTON CORP. AND SUBSIDIARIES PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30,2018 Cardiff Lexington Platinum Red Rock Pro Forma adjustment Pro forma total REVENUE 697,884 570,597 210,245 (352,700 ) 1,126,026 NET INCOME (LOSS) FOR THE PERIOD $ (4,141,655 ) $ 362,033 $ (496,394 ) $ – $ (4,276,016 ) CARDIFF LEXINGTON CORP. AND SUBSIDIARIES PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30,2018 Cardiff Lexington Platinum Red Rock Pro Forma adjustment Pro forma total REVENUE 1,419,006 1,553,597 483,286 – 3,211,509 NET INCOME (LOSS) FOR THE PERIOD $ (2,709,500 ) $ (44,986 ) $ (1,409,948 ) $ – $ (6,293,178 ) CARDIFF LEXINGTON CORP. AND SUBSIDIARIES PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30,2017 Cardiff Lexington Platinum Red Rock Pro Forma adjustment Pro forma total REVENUE 413,875 2,187,237 – – 2,601,111 NET INCOME (LOSS) FOR THE PERIOD $ (1,365,598 ) $ 267,071 $ (12,328 ) $ – $ (1,110,855 ) CARDIFF LEXINGTON CORP. AND SUBSIDIARIES PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30,2017 Cardiff Lexington Platinum Red Rock Pro Forma adjustment Pro forma total REVENUE 1,415,261 1,882,087 – – 3,297,348 NET INCOME (LOSS) FOR THE PERIOD $ (2,784,733 ) $ 362,033 $ (51,553 ) $ – $ (2,474,254 ) |
4. Accrued Expenses
4. Accrued Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | 4. ACCRUED EXPENSES As of September 30, 2018, and December 31, 2017, the Company had accrued expenses of $1,052,974 and $740,696, respectively, consisted of the following: September 30, 2018 December 31, 2017 Accrued salaries – related party $ 520,263 470,000 Lease payable – related party 25,250 25,250 Accrued expenses – other 507,461 245,446 Total $ 1,052,974 740,696 |
5. Notes Payable
5. Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | 5. NOTES PAYABLE For the nine months ended September 30, 2018, the company received $0 cash proceeds, from a line of credit and repaid $9,343 in cash. Notes payable at September 30, 2018 and December 31, 2017 are summarized as follows: September 30, 2018 December 31, 2017 Notes Payable – Unrelated Party $ 823,308 $ 215,979 Notes Payable – Related Party 171,582 144,189 Total 994,890 360,168 Current portion (994890 ) (360,168 ) Long-term portion $ – $ – 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. No warrants had been exercised before the expiration. As of September 30, 2018, the Company is in default on this debenture. The balance of the note was $10,989 at September 30, 2018 and December 31, 2017. As of September 30, 2018, the Company had lease payable of $48,059 in connection with two capital leases on two Mercedes Sprinter Vans for the ice cream section and two auto loans related to our pizza business. There are purchase options at the end of all lease terms that are based on the fair market value of the vans at the time. The leases are not in default at the current time. Notes payable to unrelated party of $31,820 was due to the auto loans for the vehicles used in the Pizza restaurants and Repicci’s Group and for daily operations. The loans carry interest from 0% to 6% interest and are not currently in default. The balance in notes payable to unrelated parties of $732,440, were assumed in connection the acquisition of Red Rock Travel. 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 September 30, 2018 and December 31, 2017, respectively. Note 1 is currently in default. 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 September 30, 2018 and December 31, 2017, respectively. Note 2 is currently in default. As of September 30, 2018 and December 31, 2017, the Company also had note payable of $53,902 and $44,189, respectively, to the prior owner of Repicci’s Group. During the nine months ended September 30, 2018, a related party advanced $9,713 to the Company, which is due on demand at no interest. As of September 30, 2018, the Company also had note payable of $17,680, respectively, to related party management of Romeo. During the nine months ended September 30, 2018, a related party advanced $17,680 to the Company, which is due on demand at no interest. |
6. Convertible Notes Payable
6. Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | 6. CONVERTIBLE NOTES PAYABLE Certain of the Company’s issued Convertible Notes include anti-dilution provisions that allow 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 As of September 30, 2018, the company received $1,124,200 net cash proceeds, from convertible notes. The Company recorded amortization of debt discount of $330,941 and $765,901 related to convertible notes, during the three and nine-months ended September 30, 2018, respectively. Convertible notes at September 30, 2018 and December 31, 2017 are summarized below: September 30, 2018 December 31, 2017 Convertible Notes Payable – Unrelated Party $ 2,062,362 $ 861,875 Convertible Notes Payable – Related Party 165,000 165,000 Discount on Convertible Notes Payable - Unrelated Party (285,860 ) (245,494 ) Total $ 1,941,502 $ 781,381 Current Portion 901,502 781,381 Long-Term Portion $ 1,040,000 $ – Convertible Notes Payable – Unrelated Party During the nine months ended September 30, 2018, the Company borrowed an aggregate of $1,680,766, net of original issue discounts and fees of $130,476, under convertible notes payable. As of September 30, 2018, and December 31, 2017, the Company had outstanding convertible notes payable of $1,941,502 and $781,381, net of unamortized discounts of $285,860 and $245,494, respectively. The outstanding convertible notes of the Company are unsecured, bear interest between 8% and 20% per annum and mature through January, 2021. Four of the above referenced convertible notes payable are convertible at $0.03 per share or 50% of market. Five of the above referenced convertible notes payable are convertible at $0.25 per share or 50% of market. One of the above referenced convertible notes payable are convertible at $0.30 per share or 50% of market. One of the above referenced notes is convertible at 40% of the lowest sale price of the common stock during the 10 consecutive trading days prior to the date of conversion. Four of the above referenced notes is convertible at 60% of the lowest sale price of the common stock during the 10 consecutive trading days prior to the date of conversion. One of the above referenced notes is convertible at 60% of the lowest sale price or bid (whichever is lower) of the common stock during the 20 consecutive trading days prior to the date of conversion. One of the above referenced notes is convertible at 60% of the lowest sale price of the common stock during the 20 consecutive trading days prior to the date of conversion. Two of the above referenced notes is convertible at 60% of the lowest sale price of the common stock during the 15 consecutive trading days prior to the date of conversion. One of the above referenced notes is convertible at 60% of the lowest trading price of the common stock during the 25 consecutive trading days prior to the date of conversion. One note is convertible at $0.04 per share or 40% of the lowest bid price for prior 21 days and one note is convertible at $0.004 per share or 60% of the lowest trading price for prior 21 days. The Company determined that the conversion features contained in the convertible note payable with the unrelated party carrying value represents an embedded 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 initially measured using the Binomial-Lattice valuation model at note issuance and is remeasured 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 derivative liabilities are reclassified into additional paid in capital upon conversion or expiration. See Footnote 7 for more information on derivative liabilities. As of September 30, 2018, twelve of these convertible notes are in default and have default fees and default interest ranging from 5% to 20%. During the three and nine months ended September 30, 2018, the Company received conversion notices for $392,149 and $487,434 of convertible debt and $46,336 and $88,238 in interest and fees, respectively, which were converted into 183,442,261 and 195,850,3246 shares, respectively. Convertible Notes Payable – Related Party The Company determined that the conversion features contained in convertible note payable with related party meet the requirements for liability classification as derivatives 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 Binomial-Lattice valuation model at the note issuance and is remeasured 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 derivative liabilities will be reclassified into additional paid in capital upon conversion. See Footnote 7 for more information on derivative liabilities. 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 is convertible into Common Shares of the Company at $0.03 per and interest of 12% per year, matured in August 2009, and is unsecured. The Company is currently in default on Debenture 1. The balance of Debenture 1 was $150,000 at September 30, 2018 and December 31, 2017. 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 is convertible into Common Shares of the Company at $0.03 per and interest of 12% per year, matured in August 2009, and is unsecured. The Company is currently in default on Debenture 1. The balance of Debenture 2 was $15,000 at September 30, 2018 and December 31, 2017. |
7. Fair Value Measurement
7. Fair Value Measurement | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | 7. FAIR VALUE MEASUREMENT The Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the financial statements. The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity. As of September 30, 2018 and December 31, 2017, the Company did not have any items that would be classified as level 1 or 2 disclosures. The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed are that of volatility and market price of the underlying common stock of the Company. As of September 30, 2018 and December 31, 2017, the Company did not have any derivative instruments that were designated as hedges. The derivative liability as of September 30, 2018, in the amount of $2,933,981 has a level 3 classification. The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the three and nine months ended September 30, 2018: Derivative Liability, June 30, 2018 1,983,308 Day 1 Loss 508,393 Discount from derivatives 191,200 Resolution of derivative liability upon conversion (1,139,232 ) Mark to market adjustment 1,390,313 Derivative Liability, September 30, 2018 2,933,981 Derivative Liability, December 31,2017 2,236,656 Day 1 Loss 905,202 Discount from derivatives 675,790 Resolution of derivative liability upon conversion (1,295,485 ) Mark to market adjustment 411,818 Derivative Liability, September 30, 2018 2,933,981 The above tables also include derivative liabilities related to warrants to purchase common stock of $14,657 at September 30, 2018. Net loss for the period included mark-to-market adjustments relating to the liabilities held during the three and nine month periods ended September 30, 2018 in the amounts of $1,898,704 and $1,317,018, respectively. Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. During the period ended September 30, 2018, the Company’s stock price decreased from initial valuation. As the stock price decreases for each of the related derivative instruments, the value to the holder of the instrument generally decreases. Stock price is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The valuation of the derivative liabilities attached to the convertible debt was arrived at through the use of the Lattice Bi-nominal Option Pricing Model and the following assumptions: For the period ended September 30, 2018 December 31, 2017 Volatility 612.68%-636.13% 111.09% - 220.65% Risk-free interest rate 2.13%-2.78% 0.51% - 1.76% Expected term .09-5.14 .02-1.00 Warrants The table below sets forth the assumptions for Black-Scholes valuation model for warrants on September 30, 2018. Nine Month Period Ended 2018 Volatility 617.68%- 636.13% Risk-free interest rate 2.13%-2.78% Expected term 0.09-5.14 |
8. Capital Stock
8. Capital Stock | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
CAPITAL STOCK | 8. CAPITAL STOCK Series B Preferred Stock During the nine months ended September 30, 2018, the holder of 33,999 shares of Series B Preferred Stock exercised the option to convert into 169,995 shares of Common Stock of the Company. Series C Preferred Stock During the nine months ended September 30, 2018, the Company issued 2 shares of Series C Preferred stock to the prior owners of Edgeview Properties for services provided to the Company. The fair market value of the shares on the date of issuances was $0.0036 per share, at a total cost of $720. Series H Preferred Stock During the nine months ended September 30, 2018, the holder of 4,859,469 shares of Series H Preferred Stock exercised the option to convert into 6,074,223 shares of Common Stock of the Company. Series I Preferred Stock During the nine months ended September 30, 2018, the holder of 203,655 shares of Series I Preferred Stock exercised the option to convert into 305,483 shares of Common Stock of the Company. Series K Preferred Stock During the nine months ended September 30, 2018, the Company issued 8,200,562 shares of series K Preferred Stock to the prior owners of Red Rock Travel Group. The fair market value of the shares on the date of issuances was $0.0201 per share, at a total cost of $175,000. Series K-1 Preferred Stock During the nine months ended September 30, 2018, the Company issued 1,447,457 shares of Series K-1 Preferred Stock in settlement of a note payable. The fair market value of the shares were valued at the face amount of the note of $100,000. Series L Preferred Stock During the nine months ended September 30, 2018, the Company issued 98,307,692 shares of Series L Preferred Stock to the prior owner of Platinum Tax Defenders. The fair market value of the shares on the date of issuances was $0.013 per share, at a total cost of $1,278,000. Common Stock See Note 5 for further issuance information related to conversion of indebtedness to common stock. During the nine months ended September 30, 2018, the Company canceled 1,000,000 shares previously issued and issued 3,886,930 shares to third-party consultants. The fair market value of the shares on the date of issuances was $0.0186 to $0.0247 per share, at a total cost of $86,751. The Company also issued 3,428,571 shares in settlement of $240,000 in liabilities owed to a former officer of the Company. |
9. Commitments and Contingencie
9. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES The Company has an employment agreement, renewed May 15, 2014, with the Chairman, Mr. Thompson amended on January 1, 2017, whereby we provide for compensation of $25,000 per month. The Company has an employment agreement with the Chief Executive Officer, Mr. Cunningham, amended on January 1, 2017, whereby we provide for compensation of $25,000 per month. The Company has an employment agreement with the Chief Operating Officer, Mr. Roberts, effective June 2016, whereby we provide for compensation of $10,000 per month. There are no other stock option plans, retirement, pension, or profit-sharing plans for the benefit of our sole officers and directors other than as described above. |
10. Segment Reporting
10. Segment Reporting | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 10. SEGMENT REPORTING The Company has six 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. Repicci’s Group offers franchisees for the operation of “Repicci’s Italian Ice” franchises. These franchised stores specialize in the distribution of nonfat frozen confections. The number of franchise agreements in force as of December 31, 20186 was forty-five (45), seven (7) new state of the art “mobile” units. The Company obligates itself to each franchisee to perform the following services: 1. Designate an exclusive territory; 2. Provide guidance and approval for selection and location of site; 3. Provide initial training of franchisee and employees; 4. Provide a company manual and other training aids. The Company has developed a new “Mobile Franchise Opportunity”. The total investment for the new opportunity ranges from $185,000 to $165,000, as follows: $195,000 for a new Mercedes Sprinter Van, customized for the franchisee, $36,000 for the franchise fee, the balance for product. The Company’s obligation is as above, except for Item #3, training is specific to the new opportunity. Red Rock Travel Group offers travel related services. With 28 years of experience in the industry of tourism and marketing of resorts and hotels, Redrock Travel Group has established a company dedicated to the operation of luxury travel based in Orlando, Florida. Our services are distinguished from other tour operators in the market by our commitment to provide our guests with personalized service, within their respective travel packages. Platinum Tax Defenders is a reliable tax resolution service that offers assistance for struggling taxpayers. We will be up front and honest with you regarding your situation and we will never make promises that we can’t keep. Our tax attorneys in Los Angeles are here to negotiate on your behalf and bring the tax relief to our clients that they need in today’s troubled economy. You can count on Platinum Tax Defenders to honestly guide you through the negotiation and settlement process so you can get your taxes paid off and breathe a sigh of relief that your financial future will be a positive one. For the three months ended September 30, 2018 September 30, 2017 Revenues: We Three $ 44,740 $ 51,193 Romeo’s NY Pizza 148,540 155,187 Repicci's Group 151,904 207,495 Platinum Tax 229,124 – Red Rock Travel 123,576 – Other – – Consolidated revenues $ 697,884 $ 413,875 Cost of Sales: We Three $ 43,305 $ 39,645 Romeo’s NY Pizza 111,814 111,430 Repicci's Group 154,572 306,319 Platinum Tax 155,475 – Red Rock Travel 125,900 – Other – – Consolidated cost of sales $ 591,066 $ 457,394 Income (Loss) before taxes We Three $ (23,281 ) $ 10,379 Romeo’s NY Pizza 3,325 (7,053 ) Repicci’s Group (213,683 ) (23,330 ) Platinum Tax (249,134 ) – Red Rock Travel (601,064 ) – Others (3,932,023 ) (1,345,594 ) Consolidated income/(loss) before taxes $ (5,015,460 ) $ (1,365,598 ) For the nine months ended September 30, 2018 September 30, 2017 Revenues: We Three $ 143,403 $ 145,890 Romeo’s NY Pizza 452,555 440,064 Repicci’s Group 578,668 829,307 Platinum Tax 229,124 – Red Rock Travel 123,576 – Others – 3,745 Consolidated revenues $ 1,527,326 $ 1,419,006 Cost of Sales: We Three $ 145,650 $ 118,832 Romeo’s NY Pizza 324,661 311,986 Repicci’s Group 435,302 878,580 Platinum Tax 155,475 – Red Rock Travel 125,900 – Others – – Consolidated cost of sales $ 1,186,988 $ 1,309,398 Income (Loss) before taxes We Three $ (29,357 ) $ 52,682 Romeo’s NY Pizza 29,048 (34,527 ) Repicci’s Group (83,816 ) (77,696 ) Platinum Tax (249,134 ) – Red Rock Travel (601,064 ) – Others (4777,724 ) (2,606,110 ) Consolidated income/(loss) before taxes $ (5,712,049) $ (2,665,651 ) As of September 30, 2018 As of December 31, 2017 Assets: We Three $ 314,003 $ 235,532 Romeo’s NY Pizza 121,339 158,551 Repicci’s Group 258,649 293,216 Platinum Tax 108,569 – Red Rock Travel 49,808 – Others 2,626,627 631,762 Combined assets $ 3,478,997 $ 1,319,061 |
11. Related Party Transactions
11. Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. RELATED PARTY TRANSACTIONS Due to Officers During the nine-months ended September 30, 2018, the Company borrowed a total of $60,176 from officers and shareholders. |
12. Subsequent Events
12. Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS Stock Issuances: Subsequent to September 30, 2018 the Company issued 225,541,983 shares of common stock, in connection with debt conversion. |
1. Summary of Significant Acc_2
1. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures have been omitted pursuant to such rules and regulations. In the opinion of management, the accompanying consolidated financial statements include normal recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. These financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017 included in our Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of results to be expected for the full fiscal year or any other periods. The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make a number of estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures. Actual results may differ from these estimates. |
Revenue Recognition | Revenue Recognition Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. There was no impact to the opening balance of accumulated deficit or revenues for the nine months ended September 30, 2018, as a result of applying Topic 606. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer. The Company generates revenue from our subsidiaries primarily on a cash basis for sale of food items and monthly rentals of mobile homes. As allowed by a practical expedient in Topic 606, the entity recognizes revenue in the amount to which the entity has a right to invoice. The term between invoicing and when payment is due is not significant. Our segmented revenue is disclosed more fully in our financial statements, see footnote 10 |
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 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 September 30, 2018, the Company had a working capital deficit of $7,440,414 and a shareholders’ deficit of $5,340,742. As further described in Notes 5 and 6, the Company is in default with various Notes and Convertible Notes Payable. 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 previous independent registered public accounting firm, in its report on the Company’s December 31, 2017 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 a significant reduction in or cessation of operations. |
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 nine months ended September 30, 2018, the Company disposed of $104,886 fixed asset and related liabilities related to a company-owned franchise, resulting in net cash flow of $91,847 and a gain on sale of $874 from disposal. |
Fair Value | Fair Value ASC 820 Fair Value Measurements and Disclosures (“ASC 820”) defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services. Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort. The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – December 31, 2017 $ – $ – $ 2,236,656 $ 2,236,656 Level 1 Level 2 Level 3 Total Fair Value of Derivative Liability – September 30, 2018 $ – $ – $ 2,933,981 $ 2,933,981 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 ,” Leases” (Topic 842) In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”, |
2. Basis of Presentation, and_2
2. Basis of Presentation, and Going Concern (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Basis Of Presentation And Going Concern | |
Schedule of estimated useful lives | Classification Useful Life Equipment, furniture and fixtures 5 - 7 years Leasehold improvements 10 years or lease term, if shorter |
3. Acquisitions (Tables)
3. Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Proforma information | CARDIFF LEXINGTON CORP. AND SUBSIDIARIES PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30,2018 Cardiff Lexington Platinum Red Rock Pro Forma adjustment Pro forma total REVENUE 697,884 570,597 210,245 (352,700 ) 1,126,026 NET INCOME (LOSS) FOR THE PERIOD $ (4,141,655 ) $ 362,033 $ (496,394 ) $ – $ (4,276,016 ) CARDIFF LEXINGTON CORP. AND SUBSIDIARIES PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30,2018 Cardiff Lexington Platinum Red Rock Pro Forma adjustment Pro forma total REVENUE 1,419,006 1,553,597 483,286 – 3,211,509 NET INCOME (LOSS) FOR THE PERIOD $ (2,709,500 ) $ (44,986 ) $ (1,409,948 ) $ – $ (6,293,178 ) CARDIFF LEXINGTON CORP. AND SUBSIDIARIES PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30,2017 Cardiff Lexington Platinum Red Rock Pro Forma adjustment Pro forma total REVENUE 413,875 2,187,237 – – 2,601,111 NET INCOME (LOSS) FOR THE PERIOD $ (1,365,598 ) $ 267,071 $ (12,328 ) $ – $ (1,110,855 ) CARDIFF LEXINGTON CORP. AND SUBSIDIARIES PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30,2017 Cardiff Lexington Platinum Red Rock Pro Forma adjustment Pro forma total REVENUE 1,415,261 1,882,087 – – 3,297,348 NET INCOME (LOSS) FOR THE PERIOD $ (2,784,733 ) $ 362,033 $ (51,553 ) $ – $ (2,474,254 ) |
Platinum Tax Defenders [Member] | |
Net assets acquired | Platinum Fair Value Cash $ 138,906 Accounts receivable 105,669 Other assets 60,041 Property and equipment 6,010 Goodwill 2,092,048 Liabilities (272,674 ) Total $ 2,130,000 |
Red Rock Travel Group [Member] | |
Net assets acquired | Red Rock Fair Value Cash $ 22,515 Intangible assets* 300,000 Property and equipment 55,286 Goodwill* 1,459,725 Liabilities (1,662,526 ) Total $ 175,000 |
4. Accrued Expenses (Tables)
4. Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | September 30, 2018 December 31, 2017 Accrued salaries – related party $ 520,263 470,000 Lease payable – related party 25,250 25,250 Accrued expenses – other 507,461 245,446 Total $ 1,052,974 740,696 |
5. Notes Payable (Tables)
5. Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | September 30, 2018 December 31, 2017 Notes Payable – Unrelated Party $ 823,308 $ 215,979 Notes Payable – Related Party 171,582 144,189 Total 994,890 360,168 Current portion (994890 ) (360,168 ) Long-term portion $ – $ – |
6. Convertible Notes Payable (T
6. Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible notes | September 30, 2018 December 31, 2017 Convertible Notes Payable – Unrelated Party $ 2,062,362 $ 861,875 Convertible Notes Payable – Related Party 165,000 165,000 Discount on Convertible Notes Payable - Unrelated Party (285,860 ) (245,494 ) Total $ 1,941,502 $ 781,381 Current Portion 901,502 781,381 Long-Term Portion $ 1,040,000 $ – |
7. Fair Value Measurement (Tabl
7. Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of changes in fair value | Derivative Liability, June 30, 2018 1,983,308 Day 1 Loss 508,393 Discount from derivatives 191,200 Resolution of derivative liability upon conversion (1,139,232 ) Mark to market adjustment 1,390,313 Derivative Liability, September 30, 2018 2,933,981 Derivative Liability, December 31,2017 2,236,656 Day 1 Loss 905,202 Discount from derivatives 675,790 Resolution of derivative liability upon conversion (1,295,485 ) Mark to market adjustment 411,818 Derivative Liability, September 30, 2018 2,933,981 |
Assumptions for fair value of derivative liabilities | For the period ended September 30, 2018 December 31, 2017 Volatility 612.68%-636.13% 111.09% - 220.65% Risk-free interest rate 2.13%-2.78% 0.51% - 1.76% Expected term .09-5.14 .02-1.00 |
Schedule of Assumptions Used warrants | Nine Month Period Ended 2018 Volatility 617.68%- 636.13% Risk-free interest rate 2.13%-2.78% Expected term 0.09-5.14 |
10. Segment Reporting (Tables)
10. Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting | For the three months ended September 30, 2018 September 30, 2017 Revenues: We Three $ 44,740 $ 51,193 Romeo’s NY Pizza 148,540 155,187 Repicci's Group 151,904 207,495 Platinum Tax 229,124 – Red Rock Travel 123,576 – Other – – Consolidated revenues $ 697,884 $ 413,875 Cost of Sales: We Three $ 43,305 $ 39,645 Romeo’s NY Pizza 111,814 111,430 Repicci's Group 154,572 306,319 Platinum Tax 155,475 – Red Rock Travel 125,900 – Other – – Consolidated cost of sales $ 591,066 $ 457,394 Income (Loss) before taxes We Three $ (23,281 ) $ 10,379 Romeo’s NY Pizza 3,325 (7,053 ) Repicci’s Group (213,683 ) (23,330 ) Platinum Tax (249,134 ) – Red Rock Travel (601,064 ) – Others (3,932,023 ) (1,345,594 ) Consolidated income/(loss) before taxes $ (5,015,460 ) $ (1,365,598 ) For the nine months ended September 30, 2018 September 30, 2017 Revenues: We Three $ 143,403 $ 145,890 Romeo’s NY Pizza 452,555 440,064 Repicci’s Group 578,668 829,307 Platinum Tax 229,124 – Red Rock Travel 123,576 – Others – 3,745 Consolidated revenues $ 1,527,326 $ 1,419,006 Cost of Sales: We Three $ 145,650 $ 118,832 Romeo’s NY Pizza 324,661 311,986 Repicci’s Group 435,302 878,580 Platinum Tax 155,475 – Red Rock Travel 125,900 – Others – – Consolidated cost of sales $ 1,186,988 $ 1,309,398 Income (Loss) before taxes We Three $ (29,357 ) $ 52,682 Romeo’s NY Pizza 29,048 (34,527 ) Repicci’s Group (83,816 ) (77,696 ) Platinum Tax (249,134 ) – Red Rock Travel (601,064 ) – Others (4777,724 ) (2,606,110 ) Consolidated income/(loss) before taxes $ (5,712,049) $ (2,665,651 ) As of September 30, 2018 As of December 31, 2017 Assets: We Three $ 314,003 $ 235,532 Romeo’s NY Pizza 121,339 158,551 Repicci’s Group 258,649 293,216 Platinum Tax 108,569 – Red Rock Travel 49,808 – Others 2,626,627 631,762 Combined assets $ 3,478,997 $ 1,319,061 |
2. Basis of Presentation, and_3
2. Basis of Presentation, and Going Concern (Details - Property useful lives) | 9 Months Ended |
Sep. 30, 2018 | |
Equipment, furniture and fixtures [Member] | |
Property and equipment useful lives | 5 - 7 years |
Leasehold Improvements [Member] | |
Property and equipment useful lives | 10 years or lease term, if shorter |
2. Basis of Presentation, and_4
2. Basis of Presentation, and Going Concern (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair value of derivative liability | $ 2,933,981 | $ 2,236,656 |
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 | $ 2,933,981 | $ 2,236,656 |
2. Basis of Presentation, and_5
2. Basis of Presentation, and Going Concern (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Working capital deficit | $ (7,440,414) | ||
Stockholders deficit | (5,340,742) | $ (3,430,321) | |
Disposal of fixed assets | 104,886 | ||
Disposal (Purchase) of fixed assets | 91,847 | $ (9,468) | |
Loss (gain) from disposal of fixed assets | $ 874 | $ 0 |
3. Acquisitions (Details - Acqu
3. Acquisitions (Details - Acquisitions Platinum Tax Defenders) - USD ($) | Sep. 30, 2018 | Jul. 31, 2018 | Dec. 31, 2017 |
Goodwill | $ 2,092,048 | $ 0 | |
Platinum Tax Defenders [Member] | |||
Cash | $ 138,906 | ||
Accounts receivable | 105,669 | ||
Other assets | 60,041 | ||
Property and equipment | 6,010 | ||
Goodwill | 2,092,048 | ||
Liabilities | (272,674) | ||
Total | $ 2,130,000 |
3. Acquisitions (Details - Ac_2
3. Acquisitions (Details - Acquisitions Red Rock Travel Group) - USD ($) | Sep. 30, 2018 | Jul. 31, 2018 | Dec. 31, 2017 | |
Goodwill | $ 2,092,048 | $ 0 | ||
Red Rock Travel Group [Member] | ||||
Cash | $ 22,515 | |||
Intangible assets | [1] | 300,000 | ||
Property and equipment | 55,286 | |||
Goodwill | [1] | 1,459,725 | ||
Liabilities | (1,662,526) | |||
Total | $ 175,000 | |||
[1] | Subsequent to the acquisition, the Company determined that the intangible assets and goodwill should be fully impaired and written off. |
3. Acquisitions (Details - Prof
3. Acquisitions (Details - Proforma Information) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
REVENUE | $ 1,126,026 | $ 2,601,111 | $ 3,211,509 | $ 3,297,348 |
NET INCOME (LOSS) FOR THE PERIOD | (4,276,016) | (1,110,855) | (6,293,178) | (2,474,254) |
Cardiff Lexington [Member] | ||||
REVENUE | 697,884 | 413,875 | 1,419,006 | 1,415,261 |
NET INCOME (LOSS) FOR THE PERIOD | (4,141,655) | (1,365,598) | (2,709,500) | (2,784,733) |
Platinum Tax Defenders [Member] | ||||
REVENUE | 570,597 | 2,187,237 | 1,553,597 | 1,882,087 |
NET INCOME (LOSS) FOR THE PERIOD | 362,033 | 267,071 | (44,986) | 362,033 |
Red Rock Travel Group [Member] | ||||
REVENUE | 210,245 | 0 | 483,286 | 0 |
NET INCOME (LOSS) FOR THE PERIOD | (496,394) | (12,328) | (1,409,948) | (51,553) |
Pro Forma adjustment [Member] | ||||
REVENUE | (352,700) | 0 | 0 | 0 |
NET INCOME (LOSS) FOR THE PERIOD | $ 0 | $ 0 | $ 0 | $ 0 |
4. Accrued Expenses (Details)
4. Accrued Expenses (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued salaries - related party | $ 520,263 | $ 470,000 |
Lease payable - related party | 25,250 | 25,250 |
Accrued expenses - other | 507,461 | 245,446 |
Accrued expenses | $ 1,052,974 | $ 740,696 |
5. Notes Payable (Details)
5. Notes Payable (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Notes Payable - Unrelated Party | $ 823,308 | $ 215,979 |
Notes payable - related party | 171,582 | 144,189 |
Total | 994,890 | 360,168 |
Current portion | (994,890) | (360,168) |
Long-term portion | $ 0 | $ 0 |
5. Notes Payable (Details Narra
5. Notes Payable (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Proceeds from line credit | $ 0 | $ 9,838 | |
Repayment of line of credit | 9,343 | 0 | |
Advance from related party | 27,393 | $ 0 | |
Auto Loan [Member] | |||
Notes Payable - Unrelated Party | $ 31,820 | ||
Note 1 [Member] | |||
Notes Payable - Related Party | $ 50,000 | 50,000 | |
Debt maturity date | Sep. 7, 2016 | ||
Debt stated interest rate | 8.00% | ||
Note 2 [Member] | |||
Notes Payable - Related Party | $ 50,000 | 50,000 | |
Debt maturity date | Nov. 17, 2016 | ||
Debt stated interest rate | 8.00% | ||
Note payable [Member] | Repicci's Franchise Group [Member] | |||
Notes Payable - Related Party | $ 53,902 | 44,189 | |
Advance from related party | 9,713 | ||
Note payable [Member] | Romeo's NY Pizza [Member] | |||
Notes Payable - Related Party | 17,680 | ||
Advance from related party | 17,680 | ||
Red Rock Travel Group [Member] | |||
Notes Payable - Unrelated Party | 732,440 | ||
Shareholder [Member] | |||
Notes Payable - Unrelated Party | $ 10,989 | $ 10,989 |
6. Convertible Notes Payable (D
6. Convertible Notes Payable (Details - Convertible notes) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Convertible notes | $ 1,941,502 | $ 781,381 |
Current Portion | 901,502 | 781,381 |
Long-Term Portion | 1,040,000 | 0 |
Unrelated Party [Member] | ||
Convertible notes | 2,062,362 | 861,875 |
Discount on notes | (285,860) | (245,494) |
Related Party [Member] | ||
Convertible notes | $ 165,000 | $ 165,000 |
6. Convertible Notes Payable _2
6. Convertible Notes Payable (Details Narrative) - USD ($) | Mar. 11, 2009 | Apr. 21, 2008 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Proceeds from convertible notes payable | $ 1,124,200 | |||||
Convertible note payable | $ 736,502 | 736,502 | $ 616,381 | |||
Amortization of debt discount | 330,941 | 765,901 | $ 300,333 | |||
Unrelated Party [Member] | ||||||
Agreegate borrowed amount | 1,680,766 | 1,680,766 | ||||
Original issue discounts | 130,476 | |||||
Convertible note payable | 1,941,502 | 1,941,502 | 781,381 | |||
Unamortized discount | $ 285,860 | $ 285,860 | 245,494 | |||
Convertible Debt [Member] | ||||||
Stock issued for conversion of debt, shares issued | 183,442,261 | 1,958,503,246 | ||||
Stock issued for conversion of debt, amount converted | $ 392,149 | $ 487,434 | ||||
Stock issued for conversion of debt, interest converted | 46,336 | 88,238 | ||||
Debenture 1 [Member] | ||||||
Unsecured Convertible Debenture | $ 150,000 | |||||
Share price | $ 0.03 | |||||
Interest rate | 12.00% | |||||
Maturity date | Aug. 31, 2009 | |||||
Convertible Notes Payable - Related Party | 150,000 | 150,000 | 150,000 | |||
Debenture 2 [Member] | ||||||
Unsecured Convertible Debenture | $ 15,000 | |||||
Share price | $ 0.03 | |||||
Interest rate | 12.00% | |||||
Maturity date | Aug. 31, 2009 | |||||
Convertible Notes Payable - Related Party | $ 15,000 | $ 15,000 | $ 15,000 |
7. Fair Value Measurement (Deta
7. Fair Value Measurement (Details - Changes in fair value) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | ||
Derivative liability, beginning balance | $ 1,983,308 | $ 2,236,656 |
Day 1 Loss | 508,393 | 905,202 |
Discount from derivatives | 191,200 | 675,790 |
Resolution of derivative liability upon conversion | (1,139,232) | (1,295,485) |
Mark to market adjustment | 1,390,313 | 411,818 |
Derivative liability, ending balance | $ 2,933,981 | $ 2,933,981 |
7. Fair Value Measurement (De_2
7. Fair Value Measurement (Details - Convertible debt assumptions) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Minimum [Member] | ||
Volatility | 617.68% | |
Risk-free interest rate | 2.13% | |
Expected term | 1 month 2 days | |
Maximum [Member] | ||
Volatility | 636.13% | |
Risk-free interest rate | 2.78% | |
Expected term | 5 years 1 month 20 days | |
Convertible Debt [Member] | Minimum [Member] | ||
Volatility | 612.68% | 111.09% |
Risk-free interest rate | 2.13% | 0.51% |
Expected term | 1 month 2 days | 7 days |
Convertible Debt [Member] | Maximum [Member] | ||
Volatility | 636.13% | 220.65% |
Risk-free interest rate | 2.78% | 1.76% |
Expected term | 5 years 1 month 20 days | 1 year |
7. Fair Value Measurement (De_3
7. Fair Value Measurement (Details - Assumptions) | 9 Months Ended |
Sep. 30, 2018 | |
Minimum [Member] | |
Volatility | 617.68% |
Risk-free interest rate | 2.13% |
Expected term | 1 month 2 days |
Maximum [Member] | |
Volatility | 636.13% |
Risk-free interest rate | 2.78% |
Expected term | 5 years 1 month 20 days |
8. Capital Stock (Details Narra
8. Capital Stock (Details Narrative) | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
Third-party consultant [Member] | |
Stock issued new, share | 3,886,930 |
Stock issued new, value | $ | $ 86,751 |
Cancellation of common stock | 1,000,000 |
Former officer [Member] | |
Stock issued for settlement of liabilities, Shares | 3,428,571 |
Stock issued for settlement of liabilities, Value | $ | $ 240,000 |
Preferred Stock Series B [Member] | |
Preferred stock converted, shares converted | 33,999 |
Preferred stock converted, common shares issued | 169,995 |
Series H Preferred Stock [Member] | |
Preferred stock converted, shares converted | 4,859,469 |
Preferred stock converted, common shares issued | 6,074,223 |
Series I Preferred Stock [Member] | |
Preferred stock converted, shares converted | 203,655 |
Preferred stock converted, common shares issued | 305,483 |
Series C Preferred Stock [Member] | EdgeviewProperties | |
Stock Issued During Period, Shares, Issued for Services | 2 |
Stock Issued During Period, Value, Issued for Services | $ | $ 720 |
Series K Preferred Stock [Member] | Red Rock Travel Group [Member] | |
Stock issued new, share | 8,200,562 |
Stock issued new, value | $ | $ 175,000 |
Series L Preferred Stock [Member] | Platinum Tax Defenders [Member] | |
Stock issued new, share | 98,307,692 |
Stock issued new, value | $ | $ 1,278,000 |
Series K1 Preferred Stock [Member] | |
Stock issued for settlement of note payable, Shares | 1,447,457 |
Stock issued for settlement of note payable, Value | $ | $ 100,000 |
9. Commitments and Contingenc_2
9. Commitments and Contingencies (Details Narrative)) - Employment Agreement [Member] | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Chief Executive Officer [Member] | |
Monthly compensation | $ 25,000 |
Chief Operating Officer [Member] | |
Monthly compensation | 10,000 |
Thompson [Member] | |
Monthly compensation | $ 25,000 |
10. Segment Reporting (Details)
10. Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenues | $ 697,884 | $ 413,875 | $ 1,527,326 | $ 1,419,006 | |
Cost of Sales | 591,066 | 457,394 | 1,186,988 | 1,309,398 | |
Net (loss) | (5,015,460) | (1,365,598) | (5,712,049) | (2,665,651) | |
Assets | 3,478,997 | 3,478,997 | $ 1,319,061 | ||
We Three, LLC [Member] | |||||
Revenues | 44,740 | 51,193 | 143,403 | 145,890 | |
Cost of Sales | 43,305 | 39,645 | 145,650 | 118,832 | |
Net (loss) | (23,281) | 10,379 | (29,357) | 52,682 | |
Assets | 314,003 | 314,003 | 235,532 | ||
Romeo's NY Pizza [Member] | |||||
Revenues | 148,540 | 155,187 | 452,555 | 440,064 | |
Cost of Sales | 111,814 | 111,430 | 324,661 | 311,986 | |
Net (loss) | 3,325 | (7,053) | 29,048 | (34,527) | |
Assets | 121,339 | 121,339 | 158,551 | ||
Repicci's Franchise Group [Member] | |||||
Revenues | 151,904 | 207,495 | 578,668 | 829,307 | |
Cost of Sales | 154,572 | 306,319 | 435,302 | 878,580 | |
Net (loss) | (213,683) | (23,330) | (83,816) | (77,696) | |
Assets | 258,649 | 258,649 | 293,216 | ||
Platinum Tax Defenders [Member] | |||||
Revenues | 229,124 | 0 | 229,124 | 0 | |
Cost of Sales | 155,475 | 0 | 155,475 | 0 | |
Net (loss) | (249,134) | 0 | (249,134) | 0 | |
Assets | 108,569 | 108,569 | 0 | ||
Red Rock Travel Group [Member] | |||||
Revenues | 123,576 | 0 | 123,576 | 0 | |
Cost of Sales | 125,900 | 0 | 125,900 | 0 | |
Net (loss) | (601,064) | 0 | (601,064) | 0 | |
Assets | 49,808 | 49,808 | 0 | ||
Others [Member] | |||||
Revenues | 0 | 0 | 0 | 3,745 | |
Cost of Sales | 0 | 0 | 0 | 0 | |
Net (loss) | (3,932,023) | $ (1,345,594) | (4,777,724) | $ (2,606,110) | |
Assets | $ 2,626,627 | $ 2,626,627 | $ 631,762 |
11. Related Party Transactions
11. Related Party Transactions (Details Narrative) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Related Party Transactions [Abstract] | |
Loan from related party | $ 60,176 |