UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
Amendment No. 1
[X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended March 31, 2016 | |
[ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from __________ to __________
Commission File Number: 000-21202
Textmunication Holdings, Inc.
(Exact name of registrant as specified in its charter)
Nevada | 58-1588291 | |
(State
or other jurisdiction of incorporation or organization) |
(IRS
Employer Identification No.) | |
1940 Contra Costa Blvd. Pleasant Hill, CA 94523 | ||
(Address of principal executive offices) |
925-777-2111
(Registrant’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
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 file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
[ ] Large accelerated filer | [ ] Accelerated filer |
[ ] Non-accelerated filer | [X] Smaller reporting company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 121,177,720 common shares as of May 24, 2016.
Explanatory Note
The purpose of this Amendment No. 1 to the registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2016, filed with the Securities and Exchange Commission on June 16, 2016 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q. Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in XBRL (Extensible Business Reporting Language).
No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, 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-Q.
Item 6. Exhibits
Exhibit Number | Description of Exhibit | |
31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101** |
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 formatted in Extensible Business Reporting Language (XBRL). | |
**Provided herewith |
SIGNATURES
Pursuant to the requirements 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.
Textmunication Holdings, Inc. | ||
Date: | June 17, 2016 | |
By: | /s/ Wais Asefi | |
Wais Asefi | ||
Title: | President, Chief Executive Officer, and Director |
CERTIFICATIONS
I, Wais Asefi, certify that;
1. | I have reviewed this quarterly report on Form 10-Q/A for the quarter ended March 31, 2016 of Textmunication Holdings, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: June 17, 2016
By: | /s/ Wais Asefi | |
Wais Asefi | ||
Title: | Chief Executive Officer |
CERTIFICATIONS
I, Wais Asefi, certify that;
1. | I have reviewed this quarterly report on Form 10-Q/A for the quarter ended March 31, 2016 of Texmunication Holdings, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: June 17, 2016
By: | /s/ Wais Asefi | |
Wais Asefi | ||
Title: | Chief Executive Officer |
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly Report of Textmunication Holdings, Inc. (the “Company”) on Form 10-Q/A for the quarter ended March 31, 2016 filed with the Securities and Exchange Commission (the “Report”), I, Wais Asefi, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented. |
By: | /s/ Wais Asefi | |
Name: | Wais Asefi | |
Title: | Chief Executive Officer | |
Date: | June 17, 2016 |
This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
May 24, 2016 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Textmunication Holdings, Inc. | |
Entity Central Index Key | 0000897078 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 121,177,720 | |
Trading Symbol | FSTW | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2016 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2016 |
Jan. 05, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 9,933,333 | 9,933,333 | |
Preferred stock, shares issued | 4,000,000 | 4,000,000 | |
Preferred stock, shares outstanding | 4,000,000 | 4,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 250,000,000 | 250,000,000 | |
Common stock, shares issued | 117,682,660 | 109,542,788 | |
Common stock, shares outstanding | 117,682,660 | 109,542,788 | |
Series B Preferred Stock [Member] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 66,667 | 66,667 | |
Preferred stock, shares issued | 66,667 | 66,667 | |
Preferred stock, shares outstanding | 66,667 | 66,667 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Income Statement [Abstract] | ||
Revenues | $ 88,410 | $ 82,278 |
Cost of revenues | 17,676 | 8,890 |
Gross profit | 70,733 | 73,388 |
Operating expenses | ||
General and administrative expenses | 193,475 | 97,859 |
Total operating expenses | 193,475 | 97,859 |
Loss from operations | (122,742) | (24,471) |
Other expense | ||
Interest expense | (66,679) | $ (6,459) |
Loss on change of derivitive liability | (918,770) | |
Amortization of debt discount | (127,348) | $ (9,542) |
Total other expense | (1,112,797) | $ (16,001) |
Income from investment in equity method investee | 5,616 | |
Net loss | $ (1,229,923) | $ (40,472) |
Basic weighted average common shares outstanding | 113,289,367 | 77,337,130 |
Net loss per common share: basic and diluted | $ (0.01) | $ (0.00) |
Basis of Presentation and Going Concern |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Going Concern |
NOTE 1 BASIS OF PRESENTATION AND GOING CONCERN
Basis of Presentation
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys most recent Annual Financial Statements filed with the SEC on Form 10-K/A. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K/A, have been omitted.
Going concern
These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of March 31, 2016, the Company has an accumulated deficit of $5,407,017. The companys ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. While the Company is expanding its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about the Companys ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might arise from this uncertainty. |
Summary of Significant Accounting Policies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At March 31, 2016 no cash balances exceeded the federally insured limit.
Accounts receivable and allowance for doubtful accounts
Accounts receivable are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of March 31, 2016 and 2015 the allowance for doubtful accounts was $0 and bad debt expense of $0 and $0, respectively.
Revenue Recognition
We recognize revenue in accordance with Accounting Standards Codification, or (ASC), 605, Revenue Recognition. We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is reasonably assured.
Thus, we recognize subscription revenue on a monthly basis, as services are provided. Customers are billed for the subscription on a monthly basis.
Fair Value of Financial Instruments
The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items.
As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The three levels of the fair value hierarchy are described below:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability;
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their value is considered fair value.
Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the period ended March 31, 2016:
Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended December 31, 2015:
The following table presents details of the Companys level 3 derivative liabilities as of March 31, 2016 and December 31, 2015:
Net income (loss) per Common Share
Basic net income (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Stock-Based Compensation
The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.
The Company follows ASC Topic 505-50, formerly EITF 96-18, Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services, for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.
Investments in Securities
Investments in securities are accounted for using the equity method if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investees Board of Directors, are considered in determining whether the equity method is appropriate.
Recent Accounting Pronouncements
No new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the financial statements. |
Related Party Transactions |
3 Months Ended |
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Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions |
NOTE 3 RELATED PARTY TRANSACTIONS
As of March 31, 2016, the Company had advances due to a related party. The loans are due on demand and have no interest. Amounts outstanding as of March 31, 2016 and December 31, 2015 were approximately $11,750 and $11,750, respectively. |
Loans Payable |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Loans Payable |
NOTE 4 LOANS PAYABLE
As of March 31, 2016 and December 31, 2015, the Company had short term loans payable of $63,841 and $98,435, respectively. During the quarter ended March 31, 2016 and 2015, the Company received proceeds of $0 and $28,825 and made payments of $34,594 and $17,890 respectively, from certain short term loans payable with interest rates ranging from 23%-28%. |
Convertible Note Payable |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Note Payable |
NOTE 5 - CONVERTIBLE NOTE PAYABLE
Convertible notes payable consist of the following as of March 31, 2016 and December 31, 2015:
On February 17, 2016, we entered into a convertible promissory note pursuant to which we borrowed $100,000. Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due on November 17, 2016. The note is convertible at any date after the issuance date at noteholders option into shares of our common stock at a variable conversion price of 50% of the lowest day market price of our common stock during the previous 20 days to the date of the notice of conversion or the date the note was executed. The Company recorded a debt discount in the amount of $100,000 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $650,708 and an initial loss of $550,708 based on the Black Scholes Merton pricing model.
Amortization of debt discount during the three-month period ended March 31, 2016 and 2015 was $15,693 and $0, respectively, and the unamortized discount at March 31, 2016 and December 31, 2015 was $84,307 and $0, respectively. Interest expense recorded on the convertible notes for the three-month period ended March 31, 2016 and 2015 was $1,447 and $0, respectively.
The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 Derivatives and Hedging; Embedded Derivatives (Topic No. 815-15). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Companys convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model.
The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note and at March 31, 2016:
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Investment in Aspire Consulting Group, LLC |
3 Months Ended | ||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||
Investments Schedule [Abstract] | |||||||||||||||||||||||||||||||
Investment in Aspire Consulting Group, LLC |
NOTE 6 INVESTMENT IN ASPIRE CONSULTING GROUP, LLC
On January 5, 2016, the Company entered into a Share Exchange Agreement with Aspire Consulting Group, LLC, a Virginia limited liability company and certain members of Aspire. Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire 49% of all of the issued and outstanding membership units of Aspire in exchange for the issuance of 66,667 shares of the Companys newly created Series B Convertible Preferred Stock to the Members valued at $460,002.
The Company has concluded that it has the ability to exercise significant influence, but not control, over Aspire through its acquired 49% equity interest and therefore has accounted for the acquisition of the interest under the equity method.
The following table presents details of the Companys investment is Aspire as of March 31, 2016 and December 31, 2015:
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies |
NOTE 7 COMMITMENTS AND CONTINGENCIES
Office Lease
On January 6, 2015 the Company signed an amendment to its lease originally signed on May 9, 2008. The amended lease commenced January 1, 2015 and expires on thirty days notice. Rent expense was approximately $5,268 and $6,800 for the three months ended March 31, 2016 and 2015, respectively.
Current month to month lease is for $2,000 a month.
Executive Employment Agreement
The Company has an employment agreement with the CEO/Chairman to perform duties and responsibilities as may be assigned by the Board of Directors. The base salary is in the amount of $100,000 per annum plus an annual discretionary bonus plus benefits commencing on December 17, 2013 and ending May 1, 2017 with an automatic renewal on each anniversary date (May 1) thereafter.
Litigations, Claims and Assessments
The Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.
There is currently a dispute over a $36,363 note secured by 59,400,000 shares of the Companys common stock held by the Companys CEO. In the view of management, there are significant issues of fact regarding the proper issuance and assumption of this note by the Company. Additionally, there are issues over the validity of the prior debt. Regardless, the Company is in discussions to settle this note, and while no guarantee can be given as to the successful resolution of this matter, the Company believes it will be resolved without litigation.
However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. |
Stockholders' Equity |
3 Months Ended |
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Mar. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity |
NOTE 8 STOCKHOLDERS EQUITY
The Company is authorized to issue an aggregate of 250,000,000 shares of common stock with a par value of $0.0001. The Company is also authorized to issue 10,000,000 shares of blank check preferred stock with a par value of $0.0001, which includes 4,000,000 shares of Series A Preferred Stock (Series A), already outstanding, and 66,667 shares of Series B Convertible Preferred Stock (Series B), already outstanding.
Under the Certificate of Designation, holders of Series A will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A are entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of three hundred (300) votes for each share held.
On January 5, 2016, pursuant to Article III of our Articles of Incorporation, the Companys Board of Directors voted to designate Series B, consisting of up 66,667 shares, par value $0.0001. Under the Certificate of Designation, holders of Series B participate on an equal basis per-share with holders of the Companys common stock and Series A in any distribution upon winding up, dissolution, or liquidation. Holders of Series B are not entitled to voting rights.
As of March 31, 2016 and December 31, 2015, 117,682,660 and 109,542,788 shares of common stock, 4,000,000 and 4,000,000 shares of Series A and 66,667 and 0 Series B, were issued and outstanding, respectively.
During the quarter ended March 31, 2016, the Company issued 66,667 shares of Series B with a fair value of $460,002 for a 49% interest in an Aspire Consulting, Inc.
During the quarter ended March 31, 2016, the Company issued 8,139,872 shares of common stock with a fair value of $45,494 for the partial conversion of convertible notes payable. The converted portion of the notes also had associated derivative liabilities with fair values on the date of conversion of $903,531. The conversion of the derivative liabilities has been recorded through additional paid-in capital. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events |
NOTE 9 SUBSEQUENT EVENTS
Subsequent to quarter end, the company issued a total of 2.3 million shares in partial settlement of convertible notes payable. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash |
Cash
The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.
The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At March 31, 2016 no cash balances exceeded the federally insured limit. |
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Accounts Receivable and Allowance for Doubtful Accounts |
Accounts receivable and allowance for doubtful accounts
Accounts receivable are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of March 31, 2016 and 2015 the allowance for doubtful accounts was $0 and bad debt expense of $0 and $0, respectively. |
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Revenue Recognition |
Revenue Recognition
We recognize revenue in accordance with Accounting Standards Codification, or (ASC), 605, Revenue Recognition. We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is reasonably assured.
Thus, we recognize subscription revenue on a monthly basis, as services are provided. Customers are billed for the subscription on a monthly basis. |
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Fair Value of Financial Instruments |
Fair Value of Financial Instruments
The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items.
As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The three levels of the fair value hierarchy are described below:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset or liability;
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their value is considered fair value.
Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the period ended March 31, 2016:
Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended December 31, 2015:
The following table presents details of the Companys level 3 derivative liabilities as of March 31, 2016 and December 31, 2015:
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Net Income (loss) Per Common Share |
Net income (loss) per Common Share
Basic net income (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. |
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Use of Estimates |
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Stock-Based Compensation |
Stock-Based Compensation
The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.
The Company follows ASC Topic 505-50, formerly EITF 96-18, Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services, for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered. |
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Investments in Securities |
Investments in Securities
Investments in securities are accounted for using the equity method if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investees Board of Directors, are considered in determining whether the equity method is appropriate. |
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Recent Accounting Pronouncements |
Recent Accounting Pronouncements
No new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the financial statements. |
Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Significant Accounting Policies Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis |
Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the period ended March 31, 2016:
Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended December 31, 2015:
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Schedule of Derivative Liabilities |
The following table presents details of the Companys level 3 derivative liabilities as of March 31, 2016 and December 31, 2015:
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Convertible Note Payable (Tables) |
3 Months Ended | |||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||
Schedule of Convertible Note Payable |
Convertible notes payable consist of the following as of March 31, 2016 and December 31, 2015:
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Schedule of Fair Value Assumption of Derivative Notes |
The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note and at March 31, 2016:
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Investment in Aspire Consulting Group, LLC (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||
Investments Schedule [Abstract] | |||||||||||||||||||||||||||||||
Schedule of investment |
The following table presents details of the Companys investment is Aspire as of March 31, 2016 and December 31, 2015:
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Basis of Presentation and Going Concern (Details Narrative) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 5,407,017 | $ 4,177,094 |
Summary of Significant Accounting Policies (Details Narrative) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
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Accounting Policies [Abstract] | |||
Allowance for doubtful accounts | $ 0 | $ 0 | |
Bad debt expense | $ 0 | $ 0 | |
Company has ownership interest | 20.00% | 50.00% |
Summary of Significant Accounting Policies - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Derivative Financial Instruments | $ 666,885 | $ 551,646 |
Level 1 [Member] | ||
Derivative Financial Instruments | ||
Level 2 [Member] | ||
Derivative Financial Instruments | ||
Level 3 [Member] | ||
Derivative Financial Instruments | $ 666,885 | $ 551,646 |
Summary of Significant Accounting Policies - Schedule of Derivative Liabilities (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Accounting Policies [Abstract] | |
Balance December 31, 2015 | $ 551,646 |
Debt discount originated from derivative liabilities | 100,000 |
Initial loss recorded | 550,708 |
Adjustment to derivative liability due to debt conversion | (903,531) |
Change in fair market value of derivative liabilities | 368,062 |
Balance March 31, 2016 | $ 666,885 |
Related Party Transactions (Details Narrative) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Related Party Transactions [Abstract] | ||
Loans payable - related party | $ 11,750 | $ 11,750 |
Loans Payable (Details Narrative) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Short term loan payable | $ 63,841 | $ 98,435 | |
Proceeds from loans payable | $ 28,825 | ||
Payments on loans payable | $ 34,594 | $ 17,890 | |
Minimum [Member] | |||
Short term loan payable interest rate | 23.00% | ||
Maximum [Member] | |||
Short term loan payable interest rate | 28.00% |
Convertible Note Payable (Details Narrative) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Feb. 17, 2016 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
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Debt Disclosure [Abstract] | ||||
Convertible promissory notes borrowed | $ 100,000 | |||
Interest under convertible promissory note | 12.00% | |||
Debt due date | Nov. 17, 2016 | |||
Debt instrument variable conversion price percentage | 50.00% | |||
Debt discount amount | $ 100,000 | $ 150,248 | $ 177,596 | |
Derivative liability | 650,708 | |||
Initial loss | $ 550,708 | |||
Amortization of debt discount | 15,693 | $ 0 | ||
Debt Instrument, unamortized discount | 84,307 | $ 0 | ||
Interest expense | $ 1,447 | $ 0 |
Convertible Note Payable - Schedule of Convertible Note Payable (Details) - USD ($) |
Mar. 31, 2016 |
Feb. 17, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Debt Disclosure [Abstract] | |||
Total convertible notes payable | $ 560,127 | $ 501,369 | |
Less discounts | (150,248) | $ (100,000) | (177,596) |
Convertible notes net of discount | $ 409,879 | $ 323,773 |
Convertible Note Payable -Schedule of Fair Value Assumption of Derivative Notes (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Risk free interest rate | 0.59% |
Expected volatility | 310.68% |
Expected dividends | 0.00% |
Minimum [Member] | |
Expected term (years) | 4 days |
Maximum [Member] | |
Expected term (years) | 1 year 7 months 10 days |
Investment In Aspire Consulting Group LLC (Details Narrative) - USD ($) |
Jan. 05, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Equity interest percentage | 20.00% | 50.00% | |
Aspire Consulting Group LLC [Member] | |||
Equity interest percentage | 49.00% | ||
Exchange Agreement [Member] | Aspire Consulting Group LLC [Member] | |||
Percentage of membership unit issued and outstanding agreed to acquire | 49.00% | ||
Exchange Agreement [Member] | Aspire Consulting Group LLC [Member] | Series B Convertible Preferred Stock [Member] | |||
Number of convertible preferred stock shares newly issued | 66,667 | ||
Number of convertible preferred stock newly issued | $ 460,002 |
Investment In Aspire Consulting Group LLC - Schedule of investment (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Investments Schedule [Abstract] | |
Balance December 31, 2015 | |
Fair value of shares issued for ownership 49% interest in Aspire | $ 460,002 |
Income from equity method investee | 5,616 |
Distributions received from Aspire | (10,149) |
Balance March 31, 2016 | $ 455,469 |
Commitments and Contingencies (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Rent expense | $ 5,268 | $ 6,800 |
Lease expense | 2,000 | |
CEO [Member] | ||
Litigation claim amount | $ 36,363 | |
Number of shares issued for litigation settlement | 59,400,000 | |
Employment Agreement [Member] | CEO/Chairman [Member] | ||
Base salary | $ 100,000 |
Subsequent Events (Details Narrative) |
3 Months Ended |
---|---|
Mar. 31, 2016
shares
| |
Number of common stock shares issued in partial settlement of convertible notes payable | 8,139,872 |
Subsequent Event [Member] | |
Number of common stock shares issued in partial settlement of convertible notes payable | 2,300,000 |
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