UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
X ..ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015
OR
. .TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 000-54146
LED LIGHTING COMPANY
(Exact name of registrant as specified in its charter)
Delaware | 46-3457679 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|
|
2090 Novato Boulevard, Novato, California | 94947 |
(Address of principal executive offices) | (Zip Code) |
(415) 209-6468
Registrant's telephone number
Securities registered pursuant to Section 12(b) of the Exchange Act:
| ||
Title of Each Class None |
| Name of Each Exchange on Which Registered None |
Securities registered pursuant to Section 12(g) of the Exchange Act: None |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act
Yes . No X .
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes . No X .
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to Yes X . No .
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes . No X .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10- .
1
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | . | Accelerated filer | . |
Non-accelerated filer | . (Do not check if a smaller reporting company) | Smaller reporting company | X . |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes . No X .
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter: $0
As of April 14, 2016, there were 26,157,195 shares of the registrant's common stock outstanding. The common stock is the registrant's only class of stock currently outstanding.
2
EXPLANATORY NOTE
The purpose of this Amendment No. 1 to the Annual Report of LED Lighting Company (the Company) on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on April 14, 2016 (the Form 10-K), is to furnish Exhibit 101 to the Form 10-K in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-K formatted in XBRL (eXtensible Business Reporting Language).
Other than the aforementioned, no other changes have been made to the Form 10-K. This Amendment No. 1 to the Form 10-K speaks as of the original filing date of the Form 10-K, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-K.
Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
3
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(3) Exhibits
No. |
| Description |
|
|
|
3.1 |
| Certificate of Formation of the Company dated July 19, 2010 (1) |
3.1.1 |
| Certificate of Amendment to Certificate of Formation dated May 28, 2013 (2) |
3.2 |
| Bylaws of the Company (1) |
10.1 |
| Share Cancellation Agreement dated May 28, 2013 (2) |
10.2 |
| Consulting Agreement with George Mainas dated May 28, 2013 (2) |
10.3 |
| Consulting Agreement with Mark Wolff dated June 1, 2013 (2) |
10.4 |
| Form of Warrant Agreement with Mark Wolff dated June 1, 2013 (2) |
10.5 |
| Form of Subscription Agreement (2) |
10.6 |
| 2013 Equity Incentive Plan (2) |
10.7 |
| Non-Exclusive Distributor Agreement with Polybrite International, Inc. dated May 30, 2013 (3) |
10.8 |
| Sales Representative Agreement with Polybrite International, Inc. dated May 30, 2013 (3) |
10.9 |
| Employment Agreement dated October 17, 2013 with Kevin Kearney (4) |
10.10 |
| Amendment to Consulting Agreement dated October 17, 2013 with George Mainas (4) |
10.11 |
| Consulting Agreement dated December 9, 2013 with J. Thomas Hannan (5) |
10.12 |
| Consulting Agreement dated July 1, 2014 with Andrew Molasky (7) |
10.13 |
| Warrant Agreement dated July 1, 2014 with Andrew Molasky (7) |
10.14 |
| Debt Conversion Agreement dated August 25, 2014 with George Mainas (8) |
10.15 |
| Debt Conversion Agreement dated August 25, 2014 with J. Thomas Hannan (8) |
10.16 |
| Debt Conversion Agreement dated August 25, 2014 with Kevin Kearney (8) |
10.17 |
| Loan Agreement dated November 6, 2014 with Andrew Molasky (9) |
10.18 |
| Convertible Promissory Note dated November 6, 2014 with Andrew Molasky (9) |
10.19 |
| Settlement Agreement and Mutual Release with Mark Wolff (9) |
10.20 |
| Warrant Agreement with Mark Wolff (9) |
10.21 |
| Consulting Agreement dated March 17, 2014 with Gary Rockis (12) |
10.22 |
| Debt Conversion Agreement dated August 4, 2015 (10) |
10.23 |
| Share Issuance Agreement with Mainas Development Corporation dated December 14, 2015 (11) |
14.1 |
| Code of Ethics(6) |
21 |
| List of Subsidiaries (12) |
23.1 |
| Consent of Independent Registered Public Accounting Firm |
24 |
| Power of Attorney (12) |
31 |
| Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act, as amended, by the Chief Executive Officer and Chief Financial Officer (12) |
32 |
| Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer and Chief Financial Officer (12) |
101 |
| XBRL (eXtensible Business Reporting Language)* |
* Filed herewith
(1)
Incorporated by reference to the Companys Form 10 filed with the SEC on October 7, 2010.
(2)
Incorporated by reference to the Companys Form 8-K filed with the SEC on June 4, 2013.
(3)
Incorporated by reference to the Companys Form 8-K filed with the SEC on June 10, 2013.
(4)
Incorporated by reference to the Companys Form 8-K filed with the SEC on October 23, 2013.
(5)
Incorporated by reference to the Companys Form 8-K filed with the SEC on December 16, 2013.
(6)
Incorporated by reference to the Companys Form 8-K filed with the SEC on July 3, 2013.
(7)
Incorporated by reference to the Companys Form 8-K filed with the SEC on July 3, 2014.
(8)
Incorporated by reference to the Companys Form 8-K filed with the SEC on August 27, 2014.
(9)
Incorporated by reference to the Companys Form 8-K filed with the SEC on November 12, 2014.
(10)
Incorporated by reference to the Companys Form 8-K filed with the SEC on August 10, 2015.
(11)
Incorporated by reference to the Companys Form 8-K filed with the SEC on February 8, 2016.
(12)
Incorporated by reference to the Companys Form 10-K filed with the SEC on April 14, 2016.
4
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
| LED Lighting Company (Registrant) | ||
|
|
|
| |
Date: May 17, 2016 |
| /s/ Kevin Kearney | ||
|
| By: | Kevin Kearney | |
|
| Title: | Chief Executive Officer |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signature |
| Title |
| Date |
|
|
|
|
|
/s/ KEVIN KEARNEY |
| Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director |
| May 17, 2016 |
Kevin Kearney |
|
|
|
|
5
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Apr. 14, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information: | |||
Entity Registrant Name | LED Lighting Co | ||
Entity Trading Symbol | ledl | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001502659 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 26,157,195 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 0 |
BALANCE SHEETS - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Current Assets | ||
Cash | $ 0 | $ 27,192 |
Accounts Receivable | 0 | 0 |
Loan receivable | 0 | 84,000 |
Prepaid Expenses | 0 | 47,138 |
Total Current Assets | 0 | 158,330 |
TOTAL ASSETS | 0 | 158,330 |
Current Liabilities | ||
Accounts payable & accrued expenses | 2,925 | 125,980 |
Bank Overdraft | 37 | 0 |
Convertible promissory notes, net | 0 | 60,032 |
Shareholder Advance | 26,434 | 0 |
Note payable | 0 | 98,438 |
Total Liabilities | 29,396 | 284,450 |
Stockholders' Deficit | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; no shares issued and outstanding as of December 31, 2015 and 2014 respectively | 0 | 0 |
Common stock, $0.0001 par value, 100,000,000 shares authorized; 26,157,195 and 8,718,629 shares issued and outstanding as of December 31, 2015 and 2014 respectively | 2,616 | 872 |
Additional paid-in capital | 4,268,234 | 2,526,121 |
Accumulated deficit | (4,300,246) | (2,653,113) |
Total Stockholders' Deficit | (29,396) | (126,120) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 0 | $ 158,330 |
BALANCE SHEETS PARENTHETICALS - $ / shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Parentheticals | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 26,157,195 | 8,718,629 |
Common Stock, shares outstanding | 26,157,195 | 8,718,629 |
STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
REVENUES | ||
Revenue | $ 30,000 | $ 69,600 |
Cost of revenue | 15,000 | 64,672 |
Gross profit | 15,000 | 4,928 |
Stock based compensation | 0 | 150,590 |
Consulting expense | 87,850 | 1,425,297 |
Write-offs (A/R, Ppd Expense, Loan Rec) | 150,738 | 0 |
Operating expenses | 66,060 | 266,393 |
Loss from operations | (289,648) | (1,837,352) |
Other income (expense) | ||
Interest expense | (1,353,585) | (37,885) |
Other expense | (3,900) | (7) |
Other income | 0 | 24,005 |
Total Other income (expense) | (1,357,485) | (13,887) |
Loss before income taxes | (1,647,133) | (1,851,239) |
Income tax expense | 0 | 0 |
Net loss | $ (1,647,133) | $ (1,851,239) |
Loss per share - basic | $ (0.15) | $ (0.24) |
Weighted average shares - basic | 11,123,855 | 7,719,836 |
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) |
Common Stock Shares |
Common Stock Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders' Equity |
---|---|---|---|---|---|
Balance at Dec. 31, 2013 | 6,450,000 | 645 | 550,319 | (801,874) | (250,910) |
Shares issued for cash | 363,334 | 36 | 234,964 | 235,000 | |
Shares issued for services | 1,595,295 | 160 | 1,196,311 | 1,196,471 | |
Shares issued for debt settlement | 310,000 | 31 | 312,469 | 312,500 | |
Beneficial conversion feature. | $ 81,468 | $ 81,468 | |||
Stock based compensation. | $ 150,590 | 150,590 | |||
Net loss | $ (1,851,239) | $ (1,851,239) | |||
Balance at Dec. 31, 2014 | 8,718,629 | 872 | 2,526,121 | (2,653,113) | (126,120) |
Shares issued for cash. | 0 | ||||
Shares issued for services. | 500,000 | 50 | 49,950 | 50,000 | |
Shares issued for debt settlement. | 3,938,566 | 394 | 393,463 | 393,857 | |
Shares issued for shareholder advance cost. | 13,000,000 | 1,300 | 1,298,700 | 1,300,000 | |
Net loss | $ (1,647,133) | $ (1,647,133) | |||
Balance at Dec. 31, 2015 | 26,157,195 | 2,616 | 4,268,234 | (4,300,246) | (29,396) |
OVERVIEW |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
OVERVIEW | |
OVERVIEW | 1. OVERVIEW
Nature of Operations
LED LIGHTING COMPANY ("the Company"), formerly known as Fun Media World, Inc., was incorporated under the name of Pinewood Acquisition Corporation under the laws of the State of Delaware on July 19, 2010 and was originally formed to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.
On May 28, 2013, the Companys board of directors and stockholders approved an amendment to the Companys Certificate of Formation to change its corporate name to LED Lighting Company, and the amendment was filed with the Secretary of State of the State of Delaware on May 30, 2013. On May 28, 2013, new officers and directors were appointed and elected and the prior officers and directors resigned, resulting in the change of control of the Company.
The LED Lighting Company plans to supply LED (light-emitting diode) light bulbs and light fixtures to the commercial, industrial and consumer/retail markets. All of our products are tested and listed by UL Underwriters Laboratories (UL) or Electrical Testing Laboratories (ETL). Additionally, all products to be supplied will be tested and in compliance with industry standards such as those set up by Energy Star, and the Illuminating Engineering Society of North America (IESNA).
Effective as of October 12, 2013, the Company entered into an Agreement and amendment (the Agreement) with Goeken Group Corp. and its wholly-owned subsidiary, PolyBrite, pursuant to which the Company and PolyBrite agreed to work together to secure funding for PolyBrite, retain the management consulting services of the Catalyst Acquisition Group LLC, and complete a transaction in which PolyBrite will become a publicly traded company through an acquisition with the Company. The Company and PolyBrite initially anticipated that the completion of the acquisition transaction would occur on or before March 31, 2014. However, the completion of the transactions described in the Agreement did not occur by March 31, 2014. The Company and Polybrite extended the term of the Agreement by amendments through October 31, 2014. The Company and Polybrite did not complete the acquisition transaction and the Agreement as amended has expired as of October 31, 2014. A Standstill Agreement between the Parties dated November 17, 2014 provided that the Company could not complete any acquisition that would prevent the Company from completing a public company transaction of Polybrite between November 17, 2014 and March 1, 2015. As that date has passed, there is currently no agreement between the Company and Polybrite regarding a transaction of this nature, and no discussions are currently ongoing in that regard between the Company and Polybrite.
Going Concern
The Company has sustained operating losses and an accumulated deficit of $4,300,246 since inception of the Company on July 19, 2010 through December 31, 2015. In 2015 the Company incurred a loss of $1,647,133. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or obtain additional financing from its stockholders and/or other third parties.
These financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiate with a business entity for the combination of that target company with the Company.
The management of the Company plans to use their personal funds or seek equity or debt financing to pay all expenses incurred by the Company in 2016. There is no assurance that the Company will ever be profitable. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies presented below is designed to assist in understanding the Companys financial statements. Such financial statements and accompanying notes are the representations of the Companys management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (GAAP) in all material respects, and have been consistently applied in preparing the accompanying financial statements.
Use of Estimates
In preparing these financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to equity instruments and share based payments.
Fair Value Measurements
ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company had no assets or liabilities required to be recorded at fair value on a recurring basis as of December 31, 2015.
Cash and Cash Equivalents
The Company considers all highly-liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2015.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit.
Revenue Recognition
The Company recognizes revenue in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
Income Taxes
Under ASC 740, "Income Taxes", deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2015, there were no deferred taxes.
Share Based Compensation
The Company applies ASC 718, Share-Based Compensation to account for its service providers share-based payments. Common stock of the Company was given to service providers to retain their assistance in becoming a U.S. public company, assistance with public company regulations, investors communications and public relations with broker-dealers, market makers and other professional services.
In accordance with ASC 718, the Company determines whether a share payment should be classified and accounted for as a liability award or equity award. All grants of share-based payments to service providers classified as equity awards are recognized in the financial statements based on their grant date fair values which are calculated using historical pricing. The Company has elected to recognize compensation expense based on the criteria that the stock awards vest immediately on the issuance date. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent period if actual forfeitures differ from initial estimates. There were no forfeitures of share based compensation.
Net Loss Per Share
Under the provisions of ASC 260, Earnings per Share, basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The common stock equivalents have not been included as they are anti-dilutive. As of December 31, 2015, there were warrants outstanding for the purchase of 5,418,629 shares of common stock which could potentially dilute future earnings per share. As of December 31, 2014, there were stock options outstanding for the purchase of 300,000 common shares, warrants for the purchase of 5,418,629 common shares, and rights to convert debt into 1,090,000 shares which could potentially dilute future earnings per share.
Recent Accounting Pronouncements
Adopted
On July 18, 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Topic 740 does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The objective of the amendments in this update is to eliminate that diversity in practice. The Company adopted this ASU as of January 1, 2014. This ASU did not have an effect on our financial statements.
On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) its entirety from current accounting guidance. We have elected early adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.
Not Adopted
ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue RecognitionConstruction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, IntangiblesGoodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.
The FASB has issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial StatementsGoing Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. ASU 2014-15 is intended to define managements responsibility to evaluate whether there is substantial doubt about an organizations ability to continue as a going concern and to provide related footnote disclosures. Under Generally Accepted Accounting Principles (GAAP), financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, GAAP lacks guidance about managements responsibility to evaluate whether there is substantial doubt about the organizations ability to continue as a going concern or to provide related footnote disclosures. This ASU provides guidance to an organizations management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company did not elect for early adoption.
In January 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2015-01 Income StatementExtraordinary and Unusual Items. This Update eliminates from GAAP the concept of extraordinary items. Subtopic 225-20, Income StatementExtraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. Paragraph 225-20-45-2 contains the following criteria that must both be met for extraordinary classification:
1. Unusual nature. The underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity, taking into account the environment in which the entity operates.
2. Infrequency of occurrence. The underlying event or transaction should be of a type that would not reasonably be expected to recur in the foreseeable future, taking into account the environment in which the entity operates.
If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. The Company did not elect for early adoption.
In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2015-11 Simplifying the Measurement of Inventory. Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. An entity should measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company did not elect for early adoption.
We have evaluated the recent accounting pronouncements through the date of issuance of the report and believe that none of them will have a material effect on our financial statements.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force and the United States Securities and Exchange Commission) did not or are not believed by management to have a material impact on the Companys present or future financial statements. |
ACCOUNTS RECEIVABLE AND LOAN RECEIVABLES |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
ACCOUNTS RECEIVABLE AND LOAN RECEIVABLES | |
ACCOUNTS RECEIVABLE AND LOAN RECEIVABLES | 3. ACCOUNTS RECEIVABLE AND LOAN RECEIVABLES
Accounts receivables amounting to $30,000 as of December 31, 2015 were written off on that date. The account receivable was for a sale made in March 2015 to a Mexican customer, GEPSA. Loan receivables amounting to $84,000 as of December 31, 2015 were written off on that date. The Company remains hopeful that through ongoing negotiations it will recover the full value of these receivables. The loan receivable assets were $84,000 as of December 31, 2014. This loan receivable consisted of an advance of $70,000 made to Polybrite, a supplier, and fees of $14,000 due from Polybrite related to the December 2013 Purchase Order Financing and Distribution Agreement that was entered into with Polybrite. Prepaid credit to Polybrite amounting to $36,738 as of December 31, 2015 was written off on that date. The Company remains hopeful that through ongoing negotiations it will recover the full value of this prepaid credit item.
|
ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||||||||||||||||||||||||||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following as of December 31, 2015 and 2014:
Effective August 4, 2015, the Company and the creditors holding more than 97% of accounts payable due from the Company agreed to convert these payables to equity at a price of $0.10 per share, totaling $174,778. This resulted in the issuance of a total of 1,747,775 shares of restricted common stock to these creditors.
As of December 31, 2015, Mainas Development Corporation, a shareholder, had advanced to the Company $26,434 under a Loan Agreement.
|
CONVERTIBLE PROMISSORY NOTES, RELATED PARTY |
12 Months Ended | |||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||
CONVERTIBLE PROMISSORY NOTES, RELATED PARTY | ||||||||||||||||||||||||||||||||||||
CONVERTIBLE PROMISSORY NOTES, RELATED PARTY | 5. CONVERTIBLE PROMISSORY NOTES, RELATED PARTY
Effective November 7, 2013, the Company entered into two Secured Convertible Promissory Notes with two investors, one a related party, in the aggregate amount of $15,000. The notes accrue interest at 10% per annum and are due and payable in one year. The note holders had the right to convert all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share, and receive, upon conversion, an equal number of warrants to purchase shares of Company common stock at a $1.00 exercise price for a term of 3 years, with cashless exercise provision. The two Convertible Notes matured on November 7, 2014 and from that date forward were payable on the demand of the Note Holder.
In July 2014, the Company entered into three Convertible Promissory Notes with related party investors, and one with a Director, in the aggregate amount of $20,000. The notes accrued interest at 10% per annum and were due and payable in one year. The note holders had the right to convert all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.
In August 2014, the Company entered into two Convertible Promissory Notes with investors in the Company, both related parties, in the aggregate amount of $9,000. The notes accrued interest at 10% per annum and were due and payable in one year. The note holders had the right to convert all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.
In October 2014, the Company entered into two Convertible Promissory Notes with related party investors in the Company, and one with a Director, in the aggregate amount of $15,000. The notes accrued interest at 10% per annum and were due and payable in one year. The note holders had the right to convert all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share.
In November 2014, the Company issued a $50,000 Convertible Promissory Note with a related party investor in the Company. The note accrued interest at 10% per annum and was due March 1, 2015. The note holders had the right to convert all principal and interest outstanding under the notes into shares of Company common stock at the conversion price of $0.10 per share. The note matured March 1, 2015. From that date forward, the Note was payable on the demand of the Note Holder.
With regard to the $94,000 in notes issued in 2014, the Company recorded beneficial conversion features on the date of issuance that in the aggregate equals $81,468. This was recorded as a debt discount that is amortized over the term of the notes. During the year 2014, amortization of debt discounts amounted to $32,500. During the year 2015, amortization of debt discounts amounted to a further $45,898. These amortizations, in accord with GAAP, are recorded as interest expense. Upon conversion (see below), the remaining $3,069 discount to face value was added back to principal value.
Effective August 4, 2015, the Company and all the holders of convertible securities agreed to convert to equity at a price of $0.10 per share all outstanding convertible notes, totaling $109,000 in principal and $8,917 in accrued interest. This resulted in the issuance of a total of 1,179,174 shares of restricted common stock to these holders of these convertible notes.
A summary table of Convertible Notes issued by the Company is presented below.
|
NOTE PAYABLE, RELATED PARTIES |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
NOTE PAYABLE, RELATED PARTIES: | |
NOTE PAYABLE, RELATED PARTIES | 6. NOTES PAYABLE, RELATED PARTY
In December 2013, the Company issued an unsecured and non-interest bearing note payable for an amount of $70,000. The note payable was due on demand.
In April 2014, the Company issued an unsecured, 10% bearing note payable to Andrew Molasky, a related party, for services rendered as a consultant in the amount of $20,000. The note payable was due on demand.
In July 2014, the Company issued an unsecured and non-interest bearing note payable to Gary Rockis, a related party, for services rendered as a consultant in the amount of $8,438. The note payable was due on demand.
Effective August 4, 2015, the Company and all the holders of related party notes set forth above agreed to convert to equity at a price of $0.10 per share all outstanding notes payable, totaling $98,438 in principal and $2,724 in accrued interest. This resulted in the issuance of a total of 1,011,617 shares of restricted common stock to these noteholders.
|
STOCK BASED COMPENSATION |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK BASED COMPENSATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK BASED COMPENSATION | 7. STOCK BASED COMPENSATION
Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expenses resulting from share-based payments are recorded in operating expenses in the statement of operations.
Stock Options
On May 28, 2013, the Companys board of directors and stockholders approved the adoption of the LED Lighting Company 2013 Equity Incentive Plan (the 2013 Plan). The 2013 Plan is intended to aid the Company in recruiting and retaining key employees, directors or consultants and to motivate them by providing incentives through the granting of awards of stock options or other stock based awards. The 2013 Plan is administered by the board of directors. Directors, officers, employees and consultants of the Company and its affiliates are eligible to participate under the 2013 Plan. A total of 1,500,000 shares of common stock have been reserved for awards under the 2013 Plan.
Effective October 17, 2013, the Company granted 100,000 options to purchase Common Stock under its 2013 Equity Incentive Plan to each of three consultants for services provided to the Company. The options had an exercise price of $1.00 per share and would be exercised for a period of two years from the date of grant, and have therefore expired as of October 17, 2015.
A summary of option activity under the Plan as of December 31, 2014 and changes during 2015 is presented below:
Warrants
On various dates in 2013 and in connection with subscription agreements, the Company issued three-year warrants to purchase up to 3,350,000 shares of common stock at an exercise price of $1.00 per share. Since the warrants were issued in connection with a private placement and sale of Companys common stock, there was no accounting impact related to the issuance of warrants on the accompanying financial statements.
On various dates in 2014 and in connection with the subscription agreements, the Company issued three-year warrants to purchase up to 363,333 shares of common stock at an exercise price of $1.00 per share. Since the warrants were issued in connection with a private placement and sale of Companys common stock, there were no accounting impact related to the issuance of warrants on the accompanying financial statements Additionally, the associated warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions: risk free interest rates of 0.14%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 45%, and an expected life of 1 year. The aggregate fair value of the warrants is $31,541.
Effective June 1, 2013, the Company entered into a Consulting Agreement with Mark Wolff pursuant to which the Company has agreed to issue Mr. Wolff a Warrant to purchase up to 500,000 shares of Company common stock at an exercise price of $1.00 per share, vesting in 12 monthly increments starting on July 1, 2013 and terminating in 3 years. The Consulting Agreement was terminated as of August 1, 2013 and the vesting of the warrants terminated as of that date. These warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions: risk free interest rates of 0.14%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 103%, and an expected life of 1 year. The warrants had an aggregate fair value of $668. The Company recorded stock based compensation of $334 during the year ended December 31, 2013 related to these warrants. Due to the termination of the Agreement and settlement between the parties, no compensation was incurred in relation to these warrants in 2014 and in 2015.
Effective and vested on July 1, 2014, the Company entered into a consulting agreement with Andrew Molasky, a related party, for his provision of certain business consulting services to the Company. The consulting agreement provides for the Companys issuance of 1,255,295 shares of Company common stock to Mr. Molasky in consideration for his services. The shares were valued using the price per share used in the most recent equity sale transaction of $0.75 for a total value of $941,471 which was recorded as consulting fees. In connection with the consulting agreement, the Company also issued a common stock purchase warrant to Mr. Molasky pursuant to which he may purchase up to 1,255,295 shares of Company common stock at $1.00 per share for up to three years. The warrants were valued on the date of issuance using the Black-Scholes valuation model at $85,991 under the following assumptions: risk free interest rates of 0.10%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 48%, and an expected life of 1 year and were recorded as stock based compensation as of December 31, 2014.
Effective September 25, 2014, the Company issued a Warrant to Purchase Common Stock as stock based compensation to Mark Blackwell for services rendered, pursuant to which the Company agreed to issue him the right to purchase 300,000 shares of Company common stock for $1.00 per share for a period of 3 years. These warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions: risk free interest rates of 0.09%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 71%, and an expected life of 1 year. The warrants were valued on the date of issuance using the Black-Scholes valuation model at $41,018.
Effective October 22, 2014, the Company entered into a Settlement Agreement and Mutual Release and Warrant Agreement (the Settlement Documents) with Mark Wolff pursuant to which the Company agreed to issue Mr. Wolff 50,000 shares of Company common stock and a warrant to purchase up to 150,000 shares of Company common stock for $1.00 per share for a period of 2 years, and Mr. Wolff agreed to settle and release any and all claims pursuant to the previously entered into consulting agreement and warrant dated June 1, 2013 between Mr. Wolff and the Company. The foregoing is only a brief description of the material terms of the Settlement Documents, and does not purport to be a complete description of the rights and obligations of the parties under those agreements. These warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions: risk free interest rates of 0.11%, dividend yield of 0%, volatility factors of the expected market price of similar common stock of 78%, and an expected life of 1 year. The warrants were valued on the date of issuance using the Black-Scholes valuation model at $23,581.
As the exercise price of the warrants issued exceeded the price at which shares have been issued by the Company, the warrants have no intrinsic value.
A summary of warrant activity as of December 31, 2015 and changes during the year then ended is presented below:
|
STOCKHOLDERS' DEFICIT |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
STOCKHOLDERS' DEFICIT | |
STOCKHOLDERS' DEFICIT | 8. STOCKHOLDERS DEFICIT
The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock.
On July 19, 2010, the Company issued 20,000,000 common shares to its sole director and officer for $2,000 in cash.
On May 27, 2011, the Company redeemed from its then two shareholders an aggregate of 19,500,000 of its 20,000,000 shares of outstanding stock at a redemption price of $0.0001 per share for an aggregate redemption price of $1,950.
On June 1, 2011, the Company issued 19,500,000 shares of common stock to new unrelated third party investors in order to evoke a change in ownership.
On March 2, 2012, Mr. Yanshi (Steven) Chen, the owner of 17,000,000 shares of the Companys common stock, and DEP Group (a BVI corporation), the owner of 2,500,000 shares of the Company's common stock, transferred all such shares aggregating 19,500,000 shares of the outstanding 20,000,000 shares (97.5%) of the Company's common stock to Joseph Merhi for an aggregate purchase price of $95,000.
On May 28, 2013, the Company entered into a Share Cancellation Agreement with the then 3 existing stockholders of the Company pursuant to which the stockholders agreed to collectively cancel 18,900,000 of their issued and outstanding shares resulting in 1,100,000 shares issued and outstanding among the 3 stockholders. One of the 3 existing stockholders is Joseph Merhi, who is also a director of the Company.
On May 28, 2013, the Company entered into subscription agreement with its outside legal counsel pursuant to which the Company agreed to issue a total of 250,000 shares of common stock at $0.10 per share, and three-year warrants to purchase up to 250,000 shares of common stock at $1.00 per share, to settle legal service expenses amounted to $25,000. The Company also entered subscription agreement with an accredited investor pursuant to which the Company issued a total of 250,000 shares of common stock at $0.10 per share, and three-year warrants to purchase up to 250,000 shares of common stock at $1.00 per share, to settle expenses that investor paid on behalf of the Company.
During the period from May 28, 2013 to December 31, 2013, the Company entered into subscription agreements with 13 accredited investors pursuant to which the Company agreed to issue a total of 2,850,000 shares of common stock at $0.10 per share, and three-year warrants to purchase up to 2,850,000 shares of common stock at $1.00 per share, in exchange for cash proceeds totaling $285,000.
Effective October 17, 2013, the Company issued 500,000 shares of Company common stock to each of Kevin Kearney, George Mainas and Steven J. Davis, the Companys legal counsel, in consideration for services provided to the Company without payment of cash compensation, and for their efforts in negotiating and securing the agreement with Goeken Group Corp. and PolyBrite International, Inc. The issuance of shares was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the Securities Act) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Companys reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of recipients; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individuals and the Company; and (f) the recipients of the shares were all accredited investors.
On December 10, 2013, the Company entered into a Consulting Agreement with J. Thomas Hannan providing for certain consulting services from him in consideration for a monthly consulting fee of $5,000 dollars and the issuance of 500,000 shares of Company common stock.
Between January 17, 2014 and June 30, 2014 the Company agreed to issue to 6 accredited investors a total of 363,333 shares of Common Stock and 363,333 warrants to purchase shares of Common Stock at an exercise price of $1.00 with a 3 year term, resulting in proceeds to the Company of $235,000.
On March 17, 2014, the Company entered into a consulting agreement with Gary Rockis, a related party, for certain sales and business related consulting services in consideration for the issuance of 300,000 shares of Company common stock. The shares were valued at $225,000 using the price per share used in the most recent equity sale transaction of $0.75. On June 12, 2014, and in connection with Gary Rockis consulting agreement mentioned above, the Company issued additional 40,000 shares of Company common stock as a bonus payment. The shares were valued at $30,000 using the price per share used in the most recent equity sale transaction of $0.75.
Effective and vested on July 1, 2014, the Company entered into a consulting agreement with Andrew Molasky, a related party, for his provision of certain business consulting services to the Company. The consulting agreement provides for the Companys issuance of 1,255,295 shares of Company common stock to Mr. Molasky in consideration for his services. The shares were valued using the price per share used in the most recent equity sale transaction of $0.75 for a total value of $941,471 which was recorded as consulting fees. In connection with the consulting agreement, the Company also issued a common stock purchase warrant to Mr. Molasky pursuant to which he may purchase up to 1,255,295 shares of Company common stock at $1.00 per share for up to three years. The warrants were valued on the date of issuance using the Black-Scholes valuation model at $85,991 and were recorded as stock based compensation.
Effective August 25, 2014, the Company entered into Debt Conversion Agreements with related parties George Mainas, J. Thomas Hannan and Kevin Kearney pursuant to which each individual agreed to convert all amounts of compensation accrued and payable to such person under the terms of their respective consulting or employment agreement as of August 31, 2014 into shares of Company common stock at $1.00 per share. The Debt Conversion Agreements resulted in the conversion of an aggregate of $260,000 into 260,000 shares of Company common stock. Mr. Mainas and Mr. Hannan also agreed that their consulting agreements would be terminated as of August 31, 2014, and Mr. Kearney agreed that no future compensation will be owed to him by the Company under his employment agreement as of August 31, 2014. The foregoing is only a brief description of the material terms of the Debt Conversion Agreements, and does not purport to be a complete description of the rights and obligations of the parties under those agreements.
On September 25, 2014, the Company issued to Mark Blackwell, an individual who had provided consulting services to the Company under a Consulting Agreement dated April 1, 2014, a Warrant to Purchase Common Stock. Exercise of the Warrant would allow Mr. Blackwell to purchase up to 300,000 shares of Company common stock for $1.00 per share for a period of 2 years from the date of issuance of the Warrant. The Fair Market Value of the warrants was determined to be $41,018.
Effective October 22, 2014, the Company entered into a Settlement Agreement and Mutual Release and Warrant Agreement (the Settlement Documents) with Mark Wolff pursuant to which the Company agreed to issue Mr. Wolff 50,000 shares of Company common stock and a warrant to purchase up to 150,000 shares of Company common stock for $1.00 per share for a period of 2 years, and Mr. Wolff agreed to settle and release any and all claims pursuant to the previously entered into consulting agreement and warrant dated June 1, 2013 between Mr. Wolff and the Company. The Fair Market Value of the warrants was determined to be $23,581.
Effective August 4, 2015, the Company agreed to convert a total of $393,857 in outstanding debt and trade payables owed to 8 Company shareholders into a total of 3,938,566 shares of restricted common stock. The issuance of shares was made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the Securities Act) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Companys reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities were isolated private transactions by us which did not involve a public offering; (b) there was only 8 recipients and all recipients are Company shareholders; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individuals and the Company; and (f) the recipients of the securities are all accredited investors.
Effective August 4, 2015, the Company agreed to issue to a Company consultant 500,000 shares of restricted common stock as compensation for services provided to the Company. The issuance of shares were made in reliance on the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the Securities Act) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Companys reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the securities was an accredited investor.
Effective December 14, 2015, the Company entered into a Loan Agreement (the Loan Document) with Mainas Development Corporation (MDC) pursuant to which MDC agreed to loan the Company up to $130,000. The Loan Document provides that the loan shall accrue interest at the rate of 7% per annum and is due on December 14, 2016. The Company issued MDC 13,000,000 shares of Company common stock in consideration of extending the loan to the Company. MDC is an entity owned and controlled by George Mainas who owns greater than 10% of the outstanding shares of the Company. The foregoing is only a brief description of the material terms of the Loan Document, and does not purport to be a complete description of the rights and obligations of the parties under that agreement, and such description is qualified in its entirety by reference to the agreement which is filed as an exhibit to this Current Report.
|
INCOME TAXES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | 9. INCOME TAXES
Our provisions for income taxes for the years ended December 31, 2015 and 2014, respectively, were as follows (using our blended effective Federal and State income tax rate of 35.0%):
Deferred tax assets at December 31, 2015 and 2014 consisted of the following:
Internal Revenue Code Section 382 and similar California rules place a limitation on the amount of taxable income that can be offset in a single year by net operating loss carryforwards (NOL) after a change in control (generally greater than a 50% change in ownership). Transactions such as planned future sales of our common stock may be included in determining such a change in control. These factors give rise to uncertainty as to whether the net deferred tax assets are realizable. We have approximately $1,505,000 in NOL at December 31, 2015 that will begin to expire in 2029 for federal and state purposes and could be limited for use under IRC Section 382. We have recorded a valuation allowance against the entire net deferred tax asset balance due because we believe there exists a substantial doubt that we will be able to realize the benefits due to our lack of a history of earnings and due to possible limitations under IRC Section 382. A reconciliation of the expected tax benefit computed at the U.S. federal and state statutory income tax rates to our tax benefit for the years ended December 31, 2015 and 2014 is as follows:
We file income tax returns in the U.S. with varying statutes of limitations. Our policy is to recognize interest expense and penalties related to income tax matters as a component of our provision for income taxes. There were no accrued interest and penalties associated with uncertain tax positions as of December 31, 2015 and 2014. We have no unrecognized tax benefits and thus no interest or penalties included in the financial statements. |
SUBSEQUENT EVENT |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | 10. SUBSEQUENT EVENT
On March 18, 2016, Integrated Systems Technology, Inc., a party related to the Company through its owner Gary Rockis, advanced $30,000 to the Company. IST and its principal owner Gary Rockis collectively own 1,289,542 shares in the Company, 4.93% of the total.
|
ACCOUNTING POLICIES (Policies) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Accounting Policies (POLICIES): | |
Use of Estimates | Use of Estimates
In preparing these financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to equity instruments and share based payments. |
Fair Value Measurements | Fair Value Measurements
ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company had no assets or liabilities required to be recorded at fair value on a recurring basis as of December 31, 2015. |
Cash and Cash Equivalents | Cash and Cash Equivalents
The Company considers all highly-liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2015. |
Concentration of Credit Risk | Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit.
|
Revenue Recognition | Revenue Recognition
The Company recognizes revenue in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) No. 605, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. |
Income Taxes | Income Taxes
Under ASC 740, "Income Taxes", deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2015, there were no deferred taxes.
|
Share Based Compensation | Share Based Compensation
The Company applies ASC 718, Share-Based Compensation to account for its service providers share-based payments. Common stock of the Company was given to service providers to retain their assistance in becoming a U.S. public company, assistance with public company regulations, investors communications and public relations with broker-dealers, market makers and other professional services.
In accordance with ASC 718, the Company determines whether a share payment should be classified and accounted for as a liability award or equity award. All grants of share-based payments to service providers classified as equity awards are recognized in the financial statements based on their grant date fair values which are calculated using historical pricing. The Company has elected to recognize compensation expense based on the criteria that the stock awards vest immediately on the issuance date. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent period if actual forfeitures differ from initial estimates. There were no forfeitures of share based compensation. |
Net Loss Per Share | Net Loss Per Share
Under the provisions of ASC 260, Earnings per Share, basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The common stock equivalents have not been included as they are anti-dilutive. As of December 31, 2015, there were warrants outstanding for the purchase of 5,418,629 shares of common stock which could potentially dilute future earnings per share. As of December 31, 2014, there were stock options outstanding for the purchase of 300,000 common shares, warrants for the purchase of 5,418,629 common shares, and rights to convert debt into 1,090,000 shares which could potentially dilute future earnings per share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements
Adopted
On July 18, 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Topic 740 does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The objective of the amendments in this update is to eliminate that diversity in practice. The Company adopted this ASU as of January 1, 2014. This ASU did not have an effect on our financial statements.
On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) its entirety from current accounting guidance. We have elected early adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.
Not Adopted
ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue RecognitionConstruction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, IntangiblesGoodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.
The FASB has issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial StatementsGoing Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern. ASU 2014-15 is intended to define managements responsibility to evaluate whether there is substantial doubt about an organizations ability to continue as a going concern and to provide related footnote disclosures. Under Generally Accepted Accounting Principles (GAAP), financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. Financial reporting under this presumption is commonly referred to as the going concern basis of accounting. The going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. Currently, GAAP lacks guidance about managements responsibility to evaluate whether there is substantial doubt about the organizations ability to continue as a going concern or to provide related footnote disclosures. This ASU provides guidance to an organizations management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company did not elect for early adoption.
In January 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2015-01 Income StatementExtraordinary and Unusual Items. This Update eliminates from GAAP the concept of extraordinary items. Subtopic 225-20, Income StatementExtraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. Paragraph 225-20-45-2 contains the following criteria that must both be met for extraordinary classification:
1. Unusual nature. The underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity, taking into account the environment in which the entity operates.
2. Infrequency of occurrence. The underlying event or transaction should be of a type that would not reasonably be expected to recur in the foreseeable future, taking into account the environment in which the entity operates.
If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. The Company did not elect for early adoption.
In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2015-11 Simplifying the Measurement of Inventory. Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. An entity should measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company did not elect for early adoption.
We have evaluated the recent accounting pronouncements through the date of issuance of the report and believe that none of them will have a material effect on our financial statements.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force and the United States Securities and Exchange Commission) did not or are not believed by management to have a material impact on the Companys present or future financial statements. |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||||||||||||||||||||||||||||||||
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consist of the following as of December 31, 2015 and 2014:
|
Convertible Notes issued by the Company (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||
Convertible Notes issued by the Company | ||||||||||||||||||||||||||||||||||||
Convertible Notes issued by the Company | A summary table of Convertible Notes issued by the Company is presented below.
|
SCHEDULE OF STOCK OPTIONS AND WARRANTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE OF STOCK OPTIONS AND WARRANTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF OPTION ACTIVITY UNDER THE PLAN AS OF DECEMBER 31, 2014 AND CHANGES DURING THE THREE FISCAL QUARTERS ENDED SEPTEMBER 30, 2015 | A summary of option activity under the Plan as of December 31, 2014 and changes during 2015 is presented below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF WARRANT ACTIVITY AS OF DECEMBER 31, 2014 AND CHANGES DURING THE CURRENT YEAR | A summary of warrant activity as of December 31, 2015 and changes during the year then ended is presented below:
|
INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES (Tables): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income TAXES For The Year Ended Dec 2014 and 2015 | Our provisions for income taxes for the years ended December 31, 2015 and 2014, respectively, were as follows (using our blended effective Federal and State income tax rate of 35.0%):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Tax Assets For 2014 and 2015 | Deferred tax assets at December 31, 2015 and 2014 consisted of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Expected Tax benifit | A reconciliation of the expected tax benefit computed at the U.S. federal and state statutory income tax rates to our tax benefit for the years ended December 31, 2015 and 2014 is as follows:
|
GOING CONCERN (Details) |
Dec. 31, 2015
USD ($)
|
---|---|
GOING CONCERN DETAILS | |
Operating losses and an accumulated deficit | $ 4,300,246 |
Incurred loss amounted | $ 1,647,133 |
Net Loss Per Share (Details) - shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Net Loss Per Share Details | ||
Warrants outstanding for the purchase of shares of common stock | 5,418,629 | |
Stock options outstanding for the purchase common shares | 300,000 | |
Warrants outstanding for the purchase of shares of common shares | 5,418,629 | |
Rights to convert debt into common shares | 1,090,000 |
Loan receivable transactions (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Loan receivable transactions | ||
Loans receivable amounting | $ 84,000 | $ 84,000 |
Accounts receivables amounting | 30,000 | |
An advance made to Polybrite | 70,000 | |
Fees earned related to Purchase Order Financing and Distribution Agreement that was entered into with Polybrite. | 14,000 | |
Prepaid credit to Polybrite amounting | $ 36,738 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) |
Dec. 31, 2015 |
Aug. 04, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Accounts payable and accrued expenses consists of following | |||
Accounts payable. | $ 2,925 | $ 125,980 | |
Shareholder advance | 26,434 | 0 | |
Total Accounts payable and Accrued expenses | $ 29,359 | $ 125,980 | |
Company and the creditors holding of accounts payable due from company | 97.00% | ||
Company agreed to convert these payables to equity at a price of $0.10 per share, totaling | $ 174,778 | ||
The issuance of a total shares | 1,747,775 |
Convertible notes (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Convertible Notes details | |||
Convertible notes 10% Principal value | $ 109,000 | $ 94,000 | $ 15,000 |
Convertible notes BCF Discount | (84,168) | (84,168) | |
Convertible notes Amort of Discount | 81,468 | 81,468 | |
Convertible notes Principal balance december 31, 2015 | 0 | ||
Convertible notes principal Accured interest | $ 8,917 | $ 5,699 | 3,218 |
Convertible notes Total balance | $ 0 |
NOTE PAYABLE RELATED PARTY (Details) - USD ($) |
Aug. 04, 2015 |
Apr. 30, 2014 |
Dec. 31, 2013 |
Nov. 07, 2013 |
---|---|---|---|---|
NOTE PAYABLE, RELATED PARTY Details: | ||||
Company issued an unsecured and non-interest bearing note payable | $ 70,000 | |||
Company issued an unsecured, 10% bearing note payable to related party,for services rendered as a consultant | $ 20,000 | $ 8,438 | ||
Note holder converted the note at the conversion price | $ 0.10 | |||
Converted notes payable principle totalling | $ 98,438 | |||
Converted notes payable accrued interest totalling | $ 2,724 | |||
Company agreed to convert all these notes payable into shares of restricted common stock | 1,011,617 |
EQUITY INCENTIVE PLAN - 2013 (Details) - $ / shares |
Oct. 17, 2013 |
May. 28, 2013 |
---|---|---|
Equity Incentive plan-2013 details | ||
A total shares of common Stock reserved for awards under 2013 plan | 1,500,000 | |
Company granted number of options to purchase Common stock shares as per incentive plan | 100,000 | |
Options Exercise price per share | $ 1 |
SUMMARY OF OPTIONS ACTIVITY (Details) |
Dec. 31, 2015
$ / shares
shares
|
---|---|
Options Under the Plan | |
Outstanding December 31, 2014 | shares | 300,000 |
Granted | shares | 0 |
Exercised | 0 |
Forfeited or expired | shares | (300,000) |
Outstanding December 31, 2015 | shares | 300,000 |
Exercisable at December 31, 2015 | shares | 0 |
Weighted Average Exercise Price | |
Outstanding December 31, 2014, | $ 1.00 |
Granted, | 0 |
Exercised, | 0 |
Forfeited or expired, | 1.00 |
Outstanding at December 31, 2015, | 1.00 |
Exercisable at December 31, 2015 | $ 1.00 |
Average Remaining Contractual Life (Years) | |
Outstanding December 31, 2014. | 0.79 |
Granted. | 0 |
Exercised. | 0 |
Forfeited or expired. | 0 |
Outstanding at December 31, 2015. | 0 |
Exercisable at December 31, 2015. | 0 |
WARRANTS NARRATIVE (Details) - USD ($) |
Dec. 31, 2014 |
Sep. 25, 2014 |
Jul. 01, 2014 |
Dec. 31, 2013 |
Jun. 01, 2013 |
---|---|---|---|---|---|
WARRANTS NARRATIVE DETAILS | |||||
Warrants issued on various dates in 2013 and 2014 to purchases shares up to | 363,333 | 3,350,000 | |||
Exercise per share | $ 1.00 | $ 1.00 | |||
Agreed to issue a Warrant to Mark Wolff to purchase shares upto | 500,000 | ||||
Agreed to issue a Warrant to Mark Wolff to purchase shares at exercise price | $ 1.00 | ||||
Aggregate fair value of the warrants | $ 31,541 | $ 668 | |||
Stock based compensation related to warrants issued to Mark Wolff recorded | $ 334 | ||||
Company issued shares of common stock to Mr. Molasky in consideration for his services. | 1,255,295 | ||||
Per share value is | $ 0.75 | ||||
Total value of shares recorded as consulting fee | $ 941,471 | ||||
Company agreed to issue Mark Blackwell for services rendered | 300,000 | ||||
Common stock per share value(Mark) | $ 1.00 |
STOCK WARRANTS VALUATION ASSUMPTIONS (Details) - USD ($) |
Dec. 31, 2014 |
Oct. 22, 2014 |
Sep. 25, 2014 |
Jul. 01, 2014 |
Jun. 01, 2013 |
---|---|---|---|---|---|
Stock Warrants valuation assumptions | |||||
Stock Warrants Expected volatility | 45.00% | 78.00% | 71.00% | 48.00% | 103.00% |
Stock Warrants Expected term in years | 1 | 1 | 1 | 1 | 1 |
Stock Warrants Risk free rate | 0.14% | 0.11% | 0.09% | 0.10% | 0.14% |
The estimated fair value of the warrants and valuation Model | $ 31,541 | $ 23,581 | $ 41,018 | $ 85,991 | $ 668 |
Stock warrant dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Capital stock-2015 (Details) - USD ($) |
Dec. 14, 2015 |
Aug. 04, 2015 |
---|---|---|
Capital stock-2015 Details | ||
Company agreed to convert a total of outstanding debt and trade payable | $ 393,857 | |
Restricted shares of common stock. | 3,938,566 | |
Company entered into a Loan Agreement with MDC | $ 130,000 | |
Loan shall accure interest | 7.00% |
Expected tax benefit computed (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Current Tax Provision | ||
Federal and state | $ 0 | $ 0 |
Taxable income | 0 | 0 |
Total current tax provision | 0 | 0 |
Deferred Tax Provision | ||
Federal and state | 0 | 0 |
Net loss carryforwards | (4,300,000) | (2,653,000) |
Valuation allowance | 4,300,000 | 2,653,000 |
Total deferred tax provision | $ 0 | $ 0 |
Deferred tax assets (Details) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carryforwards1 | $ 1,505,000 | $ 929,000 |
Valuation allowance | (1,505,000) | (929,000) |
Net deferred tax assets | $ 0 | $ 0 |
Federal and state statutory income tax rates to our tax benefit - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statutory income rates benefits | ||
Federal income tax rate at 35% | $ (576,000) | $ (653,000) |
State income tax, net of federal benefit | 0 | 0 |
Change in valuation allowance | 576,000 | 653,000 |
Benefit for income taxes | $ 0 | $ 0 |
SUBSEQUENT EVENT(Details) |
Mar. 18, 2016
USD ($)
shares
|
---|---|
SUBSEQUENT EVENT Details | |
Integrated Systems Technology, Inc., a party related to the Company through its owner Gary Rockis, advanced | $ | $ 30,000 |
IST and its principal owner Gary Rockis collectively own shares | shares | 1,289,542 |
Percentage of shares | 4.93% |
4NHC S'J,E5_J#\&O9"._(I&I7^M[BPIBD2@ALU)XO
M5%=X'U3T(O4MUF?-T"<- \G:J>V[]Y[Y7U!+ P04 " #2F9\M$U'UV[%6+_R/'JJ4 OI"^Y1Q_^Y8-)"QH?DZM&>('@>26WC!;Z?>"VL
M.[ 4=OJU4(5B3MO
M#9D[1?G4&+"VB6AK08*B=I=\6!I3 YP<;3L;RPO!1S(
M:.GNE@J#KH(X2$)*BBFE98'B/!3G_2Z.9$%.DW)*RR@,8HSQ$<9_CRG*H*0S
M""U(>DW2C.9!&:4))IPBPND'! ,(IT%R0PL2):0HT_#;-$6@$0*-?I=*&!13
MUM*ZT&I#IJ3^[
M;./@VHLX962"FHZ[=T&-FSW7^>JAPF
?X+]WBN06XD9C9 ;3%1NZ
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MY[#2J#E\O;$Q':VW&=JONQD#^5I "HR
M P!8- "LGB4%C<878A(#Z4]1H]T149]4EQ;O*E-1>]_!@.V4.+WKT!NW"V*B
M.P 2UN!P[CW\R!FH9[-\09($O \4D-+F4@NET_;1;O3E_T9]O*C6_] 3C=>N
MS28=WC!SHP,CT',\& 5\N*%8[Q/@ITBD32Z!^?C;53K1PAZOXP27VS/V)EA&
M#%M9&H20XS[