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Change of Control
12 Months Ended
Dec. 31, 2016
Accounting Changes and Error Corrections [Abstract]  
Change of Control

7.  Change of Control

 

On December 14, 2016 two shareholders of the Company entered into an agreement to sell 475,679 (11,891,976 pre-split) shares of the Company's common stock, which they owned, to an unrelated party, and ceded control of the Company.  As part of this transaction they assigned the related party debt and related accrued interest totaling $318,696.

 

In conjunction with this transaction, an unrelated third party provided $25,000 to the Company for the change of control transaction, by acquiring and agreeing to forgive the $318,696 debt, and in exchange the Company agreed to issue the unrelated third party 500,000 post-split restricted common shares, after the 1-for-25 reverse stock split.  The stock price on the date of the agreement was $0.05 and the fair value of this stock adjusted for post-split pricing would be $1.25, with a total fair value of $625,000. This amount was recognized as stock issuance liability at December 31, 2016 since the stock was not issued until March 2017. Based on the substance of the nature of the transactions being interrelated, the gain on the settlement of debt of $318,696 was offset with the issuance expense of $625,000 to provide for the net expense, shown as financing expense, of $306,304.