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14. STOCK HOLDERS' EQUITY
 6 Months Ended 7 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Equity [Abstract]    
STOCK HOLDERS' EQUITY

Common Stock

 

On June 30, 2013, the Company issued 12,400,000 shares of common stock to its founders for cash consideration of $0.001 per share.

 

On January 5, 2014 the Company re-acquired 1,750,000 shares of our common stock for no consideration from existing common stockholders.  The re-acquired shares were returned to our authorized but unissued share account. The $1,750 gain on the return of these shares of common stock has been charged to stockholders’ equity.

 

Warrants

 

Series A warrants

 

Between July 11, 2013 and August 8, 2013, the Company issued 707,000 shares of its common stock and 707,000 Series A Warrants for cash consideration of $1.00 per share. Each Series A warrants entitles the holder to purchase one share of our common stock at a price of $10.00 per share.  The Series A Warrants expire on the earlier of August 1, 2016, or twenty days following written notification from us that our common stock had a closing bid price at or above $12.00 for any ten consecutive trading days. This condition has been met as of April 30, 2014; however, the Company has chosen not to force this conversion feature at this time.

 

Between August 14, 2013 and September 19 2013, the Company issued a further 266,000 shares and 266,000 Series A Warrants of its common stock for cash consideration of $1.00 per share. The Series A Warrants expire on the earlier of August 1, 2016, or twenty days following written notification from us that our common stock had a closing bid price at or above $12.00 for any ten consecutive trading days. This condition has been met as of April 30, 2014; however, the Company has chosen not to force this conversion feature at this time.

 

As at June 30, 2014, there were 973,000 Series A warrants issued and outstanding.

 

Series B Warrants

 

On January 29, 2014, the Company issued 1065 series B warrants, convertible to 32,100 shares of our common stock, to a broker dealer as compensation for placement of convertible notes payable totaling $1,605,000.  Each Series B warrant allows holder to purchase 200 shares of our common stock at an exercise price of $5.00 per share at any time on or before October 31, 2018.  At the time the warrants were issued, they had an estimated fair market value of  $83,452, based on the black-scholes pricing model which has been recognized as part of the debt discount related to this note issuance and is being amortized over the life of the notes from January 29, 2014 through October 31, 2018 on a straight-line basis that approximates the effective interest method.

 

The following assumptions were used to derive the value of the warrants using the black-scholes model:

 

    June 30, 2014  
Stock Price     13.75  
Risk-free interest rate     1.81 %
Expected dividend yield     0.00 %
Expected term (in years)     4.8  
Expected volatility     171 %

 

At June 30, 2014, there were 213.5 Series B warrants issued and outstanding in respect of 42,700 shares of our common stock.

 

Series C Warrants

 

On January 21, 2014, the Company issued to Full Circle, for $500,000, warrants which allow Full Circle to purchase up to 1,000,000 shares of our common stock at any time on or prior to January 21, 2017 at a price of $5.50 per share. As part of the $500,000 proceeds from the warrant being issued to Full Circle, $100,000 was retained by Full Circle to cover legal and deal related expenses of future financing transactions.   As at June 30, 2014, there were 1,000,000 Series C warrants issued and outstanding.

 

The following table summarizes information about warrants outstanding as of June 30, 2014:

 

                Weighted Average Life of    
          Warrants     Outstanding Warrants in    
    Exercise Price     Outstanding     Months   Date of Expiration
Series A Warrants   $ 10.00       973,000       25     7/31/2016
Series B Warrants     5.00       42,700       53   10/31/2018
Series C Warrants     5.50       1,000,000       31     1/21/2017
    $ 7.77       2,015,700       29    

 

As of June 30, 2014, approximately $1,210,000 remained to be amortized to expense for the warrants.

 

The following table summarizes shares of common stock and warrants issued and outstanding for the six months ended June 30, 2014:

 

    Common Stock     Warrants  
Balance at December 31, 2013     15,137,200       983,600  
Re-acquired shares of common stock     (1,750,000)                     -  
Warrants issued to Full Circle for $500,000 consideration – Series C Warrants                    -       1,000,000  
Warrants issued to placement agent – Series B Warrants                    -       32,100  
Issued in settlement of $355,000 convertible notes payable and accrued interest of $6,308           72,140                      -  
Balance at June 30, 2014      13,459,340       2,015,700  

Preferred Stock

 

The Company is authorized to issue 5,000,000 shares of preferred stock, with no par value.  No shares of preferred stock have been issued or are outstanding, and no rights, privileges or preferences have been determined and designated by the board of directors.

 

Common Stock

 

The Company is authorized to issue 100,000,000 shares of no-par value common stock.

 

On June 30, 2013, the Company issued 12,400,000 shares of common stock to its founders for cash consideration of $0.001 per share.

 

Between July 11, 2013 and August 8, 2013, the Company sold 707,000 shares of its common stock for cash consideration of $1.00 per share.  Each of these shares has a Series A warrant attached with an exercise price of $10.00.  The company may force this exercise at any time, as the requirement for 10 days of consecutive trading at a price at or greater than $10 has already been met.

 

On August 14, 2013, following the reverse merger of ACS with the Company, existing shareholders of the Company owned 9,724,200 shares of its common shares However, 8,000,000 of these shares were then immediately purchased by the Company for cash consideration of $100,000 and cancelled.

 

Between August 14, 2013 and September 19 2013, the Company sold a further 266,000 shares of its common stock for cash consideration of $1.00 per share.  Each of these shares has a Series A warrant attached with an exercise price of $10.00.  The company may force this exercise at any time, as the requirement for 10 days of consecutive trading at a price at or greater than $10 has already been met.

 

On December 9, 2014, the Company issued 40,000 shares of stock in return for professional services.

 

On December 27, 2014, the Company issued 10,600 warrants to the placement agent for our convertible note offering. Each warrant entitles the agent to purchase a one share of our common stock at a price of$5 per share. 

 

 

At December 31, 2013, the Company had 15,137,200 shares of its common stock issued and outstanding.

 

         
    Common Stock   Warrants
June 5, 2013 (Inception)   -   -
Issued for cash proceeds of $985,400   13,373,000   973,000
Issued as part of exchange agreement   9,724,200    
Terminated as part of exchange agreement   (8,000,000)    
Issued as compensation under a consulting agreement   40,000   -
Warrants issued to placement agent   -   10,600
December 31, 2013   15,137,200   983,600

 

The following table summarizes information about warrants outstanding December 31, 2013:

 

             
Exercise Price   Warrants Outstanding   Weighted Average Life of Outstanding Warrants In Months   Date of Expiration
$5.00   10,600   58   10/31/2018
$1.00   973,000   31   7/31/2016
$1.04   983,600   31.3