Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Apr. 13, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | NUTRA PHARMA CORP. | |
Entity Central Index Key | 1,119,643 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 106,894,580 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,015 | |
Entity Public Float | $ 3,698,590 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 6,890 | $ 15,530 |
Accounts receivable | 21,990 | 127,368 |
Inventory | 54,034 | 46,945 |
Prepaid expenses and other current assets | 266,579 | 151,968 |
Total current assets | 349,493 | 341,811 |
Property and equipment, net | 18,986 | 29,490 |
Other assets | 19,164 | 15,955 |
Total assets | 387,643 | 387,256 |
Current liabilities: | ||
Accounts payable | 842,024 | 1,243,997 |
Accrued expenses | 1,130,271 | 1,019,673 |
Due to officers | 146,770 | 540,877 |
Derivative warrant liability | 142,556 | 186,549 |
Other debt, net of debt discount of $46,523 and $2,611, respectively | 1,492,369 | 960,921 |
Total current liabilities | 3,753,990 | 3,952,017 |
Convertible debts | 60,870 | $ 30,000 |
Legal settlement liability, long term portion | 147,179 | |
Total liabilities | $ 3,962,039 | $ 3,982,017 |
Commitments and Contingencies (See Note 8) | ||
Stockholders' deficit: | ||
Common stock, $0.001 par value, 2,000,000,000 shares authorized:79,770,782 and 36,765,781 shares issued and | $ 79,771 | $ 36,766 |
Additional paid-in capital | 46,257,619 | 40,888,278 |
Accumulated deficit | (49,911,786) | (44,519,805) |
Total stockholders' deficit | (3,574,396) | (3,594,761) |
Total liabilities and stockholders' deficit | $ 387,643 | $ 387,256 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 79,770,782 | 36,765,781 |
Common stock, shares outstanding | 79,770,782 | 36,765,781 |
Other debt, net of discounts | $ 46,523 | $ 2,611 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Net sales | $ 291,302 | $ 594,505 |
Cost of sales | 65,805 | 114,300 |
Gross profit | 225,497 | 480,205 |
Operating expenses: | ||
Selling, general and administrative - including stock based compensation of $2,742,441 and $511,668, respectively | 5,991,630 | 2,682,479 |
Total other costs and expenses | 5,991,630 | 2,682,479 |
Net Loss from Operations | (5,766,133) | $ (2,202,274) |
Other Expenses | ||
Rental Income | 27,564 | |
Interest expense | (434,547) | $ (128,104) |
Change in fair value of derivatives | (250,121) | (208,190) |
Gain (loss) on settlement of debt, net | 1,031,256 | 5,583 |
Other expense | 374,152 | (330,711) |
Net loss before income taxes | $ (5,391,981) | $ (2,532,985) |
Provision for income taxes | ||
Net loss | $ (5,391,981) | $ (2,532,985) |
Net loss per share - basic and diluted | $ (0.1) | $ (0.08) |
Weighted average number of shares outstanding during the period - basic and diluted | 55,598,355 | 30,642,813 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Stock based compensation | $ 2,742,441 | $ 511,668 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Cash collected from customers | $ 862,661 | $ 1,558,124 |
Cash paid for commission | (481,978) | (748,376) |
Cash paid to suppliers | (79,116) | (107,747) |
Cash paid to employees | (131,284) | (100,095) |
Interest paid | (50,358) | (34,497) |
Loan origination fees paid | (14,350) | |
Other operating cash payments | (1,165,677) | $ (701,188) |
Cash collected from rental income | 27,564 | |
Net cash used in operating activities | (1,018,188) | $ (148,129) |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (718) | (21,550) |
Net cash used in investing activities: | (718) | (21,550) |
Cash flows from financing activities: | ||
Common stock sold for cash | 786,300 | 60,000 |
Loans from officers | 70,821 | 86,464 |
Repayment of officers loans | (261,583) | (161,969) |
Repayments of notes payable-related party | (85,000) | (60,000) |
Proceeds from convertible notes, net of debt discount and loan issuance cost of $69,560 | 518,729 | 50,000 |
Proceeds from other notes payable, net of debt discount of $71,500 and loan issuance cost of $22,505 | 347,495 | 225,000 |
Repayments of other notes payable | (366,496) | (18,926) |
Net cash provided by financing activities | 1,010,266 | 180,569 |
Net increase(decrease) in cash | (8,640) | 10,890 |
Cash - beginning of period | 15,530 | 4,640 |
Cash - end of period | 6,890 | 15,530 |
Cash flows from operating activities: | ||
Net loss | (5,391,981) | (2,532,985) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on settlement of debt | (1,031,256) | 1,158,417 |
Depreciation | 11,222 | 16,594 |
Stock-based compensation | 2,742,441 | 511,668 |
Stock issued for loan extension and accounts payable | 1,484,238 | 42,325 |
Change in fair value of derivative | 250,121 | 208,190 |
Amortization of loan discount | 321,804 | 15,254 |
Changes in operating assets and liabilities | ||
Decrease (increase) in accounts receivables | 105,378 | (116,227) |
Increase in inventory | (7,089) | (41,945) |
Increase in prepaid expenses and other assets | (57,206) | (76,645) |
Increase in accounts payable | 27,661 | 558,628 |
Increase in accrued expenses | 526,479 | 108,597 |
Net cash used in operating activities | (1,018,188) | (148,129) |
Supplemental Cash Flow Information: | ||
Cash paid for interest | $ (50,358) | $ (34,497) |
Cash paid for income taxes | ||
Non cash Financing and Investing: | ||
Note issued in settlement of notes and accounts payable | $ 151,000 | $ 320,000 |
Shares issued to satisfy debt | 870,640 | 943,904 |
Shares issued to satisfy debt-related party | 10,000 | |
Discounts on notes payable | 239,208 | $ 15,665 |
Note payable issued satisfy note payable-related party | 80,000 | |
Stock issued for cashless exercise of warrants | 33,440 | |
Stock issued for additional consideration of convertible notes payable | 15,810 | |
Write-off of notes payable to a relate party due to passing of statute of limitation | $ 129,466 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Statement of Cash Flows [Abstract] | |
Loan issuance cost of convertible notes | $ 69,560 |
Debt discount of other notes payable | 71,500 |
Loan issuance cost | $ 22,505 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, Shares at Dec. 31, 2013 | 25,107,825 | |||
Beginning balance, Amount at Dec. 31, 2013 | $ 25,108 | $ 37,742,263 | $ (41,986,820) | $ (4,219,449) |
Issuance of common stock in exchange for services to consultants, Amount | $ 694 | 195,854 | 196,548 | |
Issuance of common stock in exchange for services to consultants, Shares | 694,375 | |||
Issuance of common stock in exchange for services to directors and employees, Amount | $ 1,352 | 323,200 | 324,552 | |
Issuance of common stock in exchange for services to directors and employees, Shares | 1,352,300 | |||
Common stock issued in private placement, Amount | $ 300 | 59,700 | 60,000 | |
Common stock issued in private placement, Shares | 300,000 | |||
Common stock issued in exchange for related party debt,Amount | $ 1,250 | 98,750 | 100,000 | |
Common stock issued in exchange for related party debt, Shares | 1,250,000 | |||
Common stock issued for modification of debt, Amount | $ 63 | 42,262 | 42,325 | |
Common stock issued for modification of debt, Shares | 62,500 | |||
Common stock issued for conversion of debt, Amount | $ 3,390 | 940,514 | 943,904 | |
Common stock issued for conversion of debt, Shares | 3,389,452 | |||
Common stock issued for settlement of AP, Amount | $ 4,559 | 1,470,120 | 1,474,679 | |
Common stock issued for settlement of AP, Shares | 4,559,329 | |||
Common stock issued to note holder, Amount | $ 50 | 15,615 | 15,665 | |
Common stock issued to note holder, Shares | 50,000 | |||
Net loss | (2,532,985) | (2,532,985) | ||
Ending balance, Shares at Dec. 31, 2014 | 36,765,781 | |||
Ending balance, Amount at Dec. 31, 2014 | $ 36,766 | 40,888,278 | (44,519,805) | (3,594,761) |
Issuance of common stock in exchange for services to consultants, Amount | $ 4,960 | 587,745 | 592,705 | |
Issuance of common stock in exchange for services to consultants, Shares | 4,960,000 | |||
Issuance of common stock in exchange for services to directors and employees, Amount | $ 10,900 | 2,005,600 | 2,016,500 | |
Issuance of common stock in exchange for services to directors and employees, Shares | 10,900,000 | |||
Common stock issued in private placement, Amount | $ 13,085 | 773,215 | 786,300 | |
Common stock issued in private placement, Shares | 13,085,000 | |||
Common stock issued in exchange for related party debt,Amount | $ 125 | 9,875 | 10,000 | |
Common stock issued in exchange for related party debt, Shares | 125,000 | |||
Common stock issued for modification of debt, Amount | $ 75 | 16,675 | 16,750 | |
Common stock issued for modification of debt, Shares | 75,000 | |||
Common stock issued for conversion of debt, Amount | $ 6,284 | 864,355 | 870,639 | |
Common stock issued for conversion of debt, Shares | 6,284,830 | |||
Common stock issued for settlement of AP and Debt, Amount | $ 6,750 | 1,063,450 | 10,000 | |
Common stock issued for settlement of AP and Debt, Shares | 6,750,000 | |||
Debt discount, Amount | $ 826 | 48,426 | 49,252 | |
Debt discount, Shares | 825,171 | |||
Net loss | (5,391,981) | (5,391,981) | ||
Ending balance, Shares at Dec. 31, 2015 | 79,770,782 | |||
Ending balance, Amount at Dec. 31, 2015 | $ 79,771 | $ 46,257,619 | $ (49,911,786) | $ (3,574,396) |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Nutra Pharma Corp. (Nutra Pharma), is a holding company that owns intellectual property and operates in the biotechnology industry. Nutra Pharma incorporated under the laws of the state of California on February 1, 2000, under the original name of Exotic-Bird.com. Through its wholly-owned subsidiary, ReceptoPharm, Inc. (ReceptoPharm), Nutra Pharma conducts drug discovery research and development activities. In October 2009, Nutra Pharma launched its first consumer product called Cobroxin ® ® ® Basis of Presentation and Consolidation The accompanying consolidated financial statements include the results of Nutra Pharma and its wholly-owned subsidiaries Designer Diagnostics Inc. and ReceptoPharm (collectively the Company, us, we or our). We operate as one reportable segment. All intercompany transactions and balances have been eliminated in consolidation. Liquidity and Going Concern Our Consolidated Financial Statements are presented on a going concern basis, which contemplate the realization of assets and satisfaction of liabilities in the normal course of business. We have experienced recurring, significant losses from operations, and have an accumulated deficit of $49,911,786 at December 31, 2015. In addition, we had respective working capital and stockholders deficits at December 31, 2015 of $3,404,497 and $3,574,396, respectively. There is substantial doubt regarding our ability to continue as a going concern which is contingent upon our ability to secure additional financing, increase ownership equity and attain profitable operations. In addition, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered in established markets and the competitive environment in which we operate. As of December 31, 2015, we do not have sufficient cash to sustain our operations for the next year and will require additional financing in order to execute our operating plan and continue as a going concern. Since our sales are not currently adequate to fund our operations, we continue to rely principally on debt and equity funding; however proceeds from such funding have not been sufficient to execute our business plan. Our plan is to attempt to secure adequate funding until sales of our pain products are adequate to fund our operations. We cannot predict whether additional financing will be available, and/or whether any such funding will be in the form of equity, debt, or another form. In the event that these financing sources do not materialize, or if we are unsuccessful in increasing our revenues and profits, we will be unable to implement our current plans for expansion, repay our obligations as they become due and continue as a going concern. The accompanying Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. Use of Estimates The accompanying Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America which require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense. Significant estimates include our ability to continue as going concern, the recoverability of inventories and long-lived assets, and the valuation of stock-based compensation and certain debt and warrant liabilities. Actual results could differ from those estimates. Changes in facts and circumstances may result in revised estimates, which would be recorded in the period in which they become known. Revenue Recognition In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Provision for sales returns is estimated based on our historical return experience. Revenue is presented net of returns and allowances for returns. The Company collects 100% of the cash proceeds from the sale of its product by its distributor, remits a portion of the cash proceeds received back to the distributor and records the sale on a net basis. In the years ended December 31, 2015 and 2014, the Company collected $862,661 and $1,558,124 in gross receipts and recorded $291,302 and $594,505 as net sales. Accounting for Shipping and Handling Costs The Company records shipping and handling costs incurred in cost of sales. Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts The Company grants credit without collateral to its customers based on the Companys evaluation of a particular customers credit worthiness. In addition, allowances for doubtful accounts are maintained for potential credit losses based on the age of the accounts receivable and the results of the Companys periodic credit evaluations of its customers financial condition. Accounts receivable are written off after collection efforts have been deemed to be unsuccessful. Accounts written off as uncollectible are deducted from the allowance for doubtful accounts, while subsequent recoveries are netted against the provision for doubtful accounts expense. The Company generally does not charge interest on accounts receivable. Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. Inventories Inventories, which are stated at the lower of average cost or market, and consist of packaging materials, finished products, and raw venom that is utilized to make the API (active pharmaceutical ingredient). The raw unprocessed venom has an indefinite life for use. The Company regularly reviews inventory quantities on hand. If necessary it records a provision for excess and obsolete inventory based primarily on its estimates of component obsolescence, product demand and production requirements. Write-downs are charged to cost of goods sold. We performed evaluations of our inventory during the years ended December 31, 2015 and 2014 and determined no allowances need to be recorded. Financial Instruments and Concentration of Credit Risk Our financial instruments include cash, accounts receivable, accounts payable, accrued expenses, loans payable, due to officers and derivative financial instruments. Other than certain warrant and convertible instruments (derivative financial instruments) and liabilities to related parties (for which it was impracticable to estimate fair value due to uncertainty as to when they will be satisfied and a lack of similar type transactions in the marketplace), we believe the carrying values of our financial instruments approximate their fair values because they are short term in nature or payable on demand. Our derivative financial instruments are carried at a measured fair value. Balances in various cash accounts may at times exceed federally insured limits. We have not experienced any losses in such accounts. We do not hold or issue financial instruments for trading purposes. In addition, for the years ended December 31, 2015 and 2014, no customers accounted for more than 10% of the Companys total revenues. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Management evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. For embedded derivatives, the Company uses a Dilution-Adjusted Black-Scholes method to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Convertible Debt The Company bifurcates the embedded derivative element in convertible debt which contain conversion features which are not considered to be conventional convertible debt. The convertible debt is recorded at the bifurcated amount after reducing the proceeds for the liability related to the embedded call provision which is accounted for separately in the accompanying balance sheets. After recording the initial amount of the debt, the discount related to the bifurcated embedded derivative is amortized as additional interest expense over the term of the debt with the resulting debt discount being accreted over the term of the note. Property and Equipment and Long-Lived Assets Property and equipment is recorded at cost. Expenditures for major improvements and additions are added to property and equipment, while replacements, maintenance and repairs which do not extend the useful lives are expensed. Depreciation is computed using the straight-line method over the estimated useful lives of the assets of 3 7 years. Property and equipment consists of the following at December 31, 2015 and 2014: 2015 2014 Computer equipment $ 24,208 $ 24,208 Furniture and fixtures 34,757 34,757 Lab equipment 42,129 42,129 Telephone equipment 12,421 12,421 Office equipment other 16,856 16,138 Leasehold improvements 73,168 73,168 Total 203,539 202,821 Less: Accumulated depreciation (184,553) (173,331) Property and equipment, net $ 18,986 $ 29,490 We review our long-lived assets for recoverability if events or changes in circumstances indicate the assets may be impaired. At December 31, 2015, we believe the carrying values of our long-lived assets are recoverable. Depreciation expense for the year ended December 31, 2015 and 2014 was $11,222 and $16,594, respectively. Advertising All advertising costs are expensed as incurred. Advertising costs were approximately $2,138 and $6,156 for the year ended December 31, 2015 and 2014, respectively. Income Taxes We compute income taxes in accordance with Financial Accounting Standard Board (FASB) Accounting Standard Codification (ASC) Topic 740, Income Taxes On an annual basis, we evaluate tax positions that have been taken or are expected to be taken in our tax returns to determine if they are more than likely to be sustained if the taxing authority examines the respective position. As of December 31, 2015, we do not believe we have a need to record any liabilities for uncertain tax positions or provisions for interest or penalties related to such positions. Since inception, we have been subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire (which may be as much as 20 years while we have unused net operation losses), we are subject to income tax audits in the jurisdictions in which we operate. The Companys 2012 to 2015 tax returns are subject to examination by Internal Revenue Services and State Taxing Agencys. On July 18, 2015, the Company received a notice of penalty charge of $35,296 from IRS for failure to file Forms W-2 for tax period ended at December 31, 2011. During February 2016, the Company signed a payment agreement to pay the penalty. Stock-Based Compensation We account for stock-based compensation in accordance with FASB ASC Topic 718, Stock Compensation Net Loss Per Share Net loss per share is calculated in accordance with ASC Topic 260, Earnings per Share December 31, 2015 December 31, 2014 Options and warrants 21,700,000 1,606,667 Convertible notes payable 15,871,102 1,420,434 Total 37,571,102 3,027,101 Reclassifications Certain amounts in the 2014 Consolidated Financial Statements have been reclassified to conform to the current period presentation. Stock Split On April 20, 2015, the Company declared a 1 for 40 reverse common stock split to stockholders. The Stock Split was effectuated on May 18, 2015 based upon filing the appropriate documentation with FINRA. Per share and weighted average amounts have been retroactively restated in the accompanying financial statements and related notes to reflect this stock split (See Note 7). Recent Accounting Pronouncements In April 2015, FASB issued Accounting Standards Update (ASU) No. 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In May 2015, FASB issued Accounting Standards Update (ASU) No. 2015-07, F air Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) In June 2015, Technical Corrections and Improvements covers a wide range of Topics in the Codification. The amendments represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, some of the amendments will make the Codification easier to understand and easier to apply by eliminating inconsistencies, providing needed clarifications, and improving the presentation of guidance in the Codification. In August 2015, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In September 2015, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 2. FAIR VALUE MEASUREMENTS Certain assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015are measured in accordance with FASB ASC Topic 820-10-05, Fair Value Measurements The statement requires fair value measurement be classified and disclosed in one of the following three categories: 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 which are observable either directly or indirectly for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The following table summarizes our financial instruments measured at fair value as of December 31, 2015 and 2014: Fair Value Measurements at December 31, 2015 Liabilities: Total Level 1 Level 2 Level 3 Warrant liability $ 142,556 $ - $ - $ 142,556 Convertible notes at fair value $ 1,021,501 $ - $ - $ 1,021,501 Fair Value Measurements at December 31, 2014 Liabilities: Total Level 1 Level 2 Level 3 Warrant liability $ 186,549 $ - $ - $ 186,549 Convertible notes at fair value $ 330,277 $ - $ - $ 330,277 The following table shows the changes in fair value measurements using significant unobservable inputs (Level 3) during the years ended December 31, 2015 and 2014: Description 2015 2014 Beginning balance $ 186,549 $ 323,172 Purchases, issuances, and settlements (782,239) 18,551 Day one loss on value of hybrid instrument - - Total gain included in earnings (1) 738,246 (155,174) Ending balance $ 142,556 $ 186,549 (1) The gain or loss related to the revaluation of our warrant liability is included in Change in fair value of derivatives in the accompanying consolidated statement of operations. The Company values its warrants using a Dilution-Adjusted Black-Scholes Model. Assumptions used include (1) 0.49% to 1.31% risk-free rate, (2) warrant life is the remaining contractual life of the warrants, (3) expected volatility of 187% (4) zero expected dividends (5) exercise price set forth in the agreements (6) common stock price of the underlying share on the valuation date, and (7) number of shares to be issued if the instrument is converted. The following table summarizes the significant terms of each of the debentures for which the entire hybrid instrument is recorded at fair value as of December 31, 2015 and 2014: Conversion Price - Lower of Fixed Price or Percentage of VWAP for Look-back Period Debenture Issuance Year Face Amount Interest Rate Default Interest Rate Anti-Dilution Adjusted Price % Look-back Period 2015 $729,871 4%-20% n/a $0.03-$0.20 50%-85% 10 to 20 Days 2014 215,386 8%-20% n/a $0.0028-$0.0050 50%-85% 10 to 30 Days The following table shows the changes in fair value measurements using significant unobservable inputs (Level 3) during the years ended December 31, 2015 and 2014 for the Convertible Notes: Years Ended December 31, 2015 2014 Description Beginning balance $ 330,277 $ 767,057 Purchases, issuances, and settlements 1,012,145 162,311 Day one loss on value of hybrid instrument 779,035 423,340 (Gain) loss from change in fair value (229,316) (78,527) Conversion to common stock (870,640) (943,904) Ending balance $ 1,021,501 $ 330,277 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 3. INVENTORIES Inventories are valued at the lower of cost or market on an average cost basis. At December 31, 2015 and 2014, inventories were as follows: December 31, 2015 December 31, 2014 Raw Materials $ 29,216 $ 16,805 Finished Goods 24,818 30,140 Total Inventories $ 54,034 $ 46,945 The Company regularly reviews inventory quantities on hand. If necessary, the Company records a provision for excess and obsolete inventory based primarily on its estimates of component obsolescence, product demand and production requirements. Write-downs and write-offs are charged to cost of goods sold. We performed evaluations of our inventory at December 31, 2015 and 2014, the Company did not experience any write downs or write offs. |
SETTLEMENT OF ACCOUNTS AND NOTE
SETTLEMENT OF ACCOUNTS AND NOTE PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Brokers and Dealers [Abstract] | |
SETTLEMENT OF ACCOUNTS AND NOTE PAYABLE | 4. SETTLEMENT OF ACCOUNTS AND NOTE PAYABLE During October 2015, the Company issued 2,200,000 shares of the companys restricted stock and 2,200,000 warrants (See Note 7) to settle the outstanding commissions payable in aggregate of $77,000 with TCN. The shares were valued at $0.1035 per share and the warrants were valued at $0.0475 per share. The Company recorded a loss of $255,215 as a selling expense during the year ended December 31, 2015. During July 2015, the Company issued 4,400,000 shares of the companys restricted stock and 4,400,000 warrants (See Note 7) to settle the outstanding commissions payable in aggregate of $59,000 with TCN. The shares were valued at $0.185 per share and the warrants were valued at $0.1009 per share. The Company recorded a loss of $1,198,773 as a selling expense during the year ended December 31, 2015. During June 2015, the Company issued a total of 150,000 shares of the companys restricted stock to settle the outstanding legal fees in aggregate of $15,000 with a vendor. The shares were recorded at a fair value of $28,500 or $0.19 per share (See Note 7). During June, August and October 2014, the Company issued a total of 4,500,000 shares of the companys restricted stock to settle the outstanding commissions payable in aggregate of $300,000 with TCN. The shares were valued at a range from $0.224 to $0.396 per share. The Company recorded a loss of $1,164,000 as a selling expense during the year ended December 31, 2014(See Note 7). At December 31, 2015,certain accruals and notes payable for former ReceptoPharm employees, officer and consultants for a total of $1,085,468 that have passed the statute of limitation were written off, included in the amount was the accrued salary of $815,747, officers loan and accrued interest for $129,466, salary and payroll tax payable of $140,255. Since the Petitioners can only reinforce the settlement amount due to passing of statute of limitation, the Company has accrued the settlement for $315,000 and recorded the gain on settlement of $770,968 in other income (See Note 5 and 10). |
DUE TO OFFICERS
DUE TO OFFICERS | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
DUE TO OFFICERS | 5. DUE TO OFFICERS At December 31, 2015 and 2014, the balance due to officers consisted of the following: December 31, 2015 December 31, 2014 An unsecured demand loan from our President and CEO, Rik Deitsch. The loan bears interest at 4%. The loan balance at December 31, 2015and 2014, respectively, includes accrued interest payable of $279,020 and $369,983. $ 146,770 $ 411,411 A loan from Paul Reid, the former President of ReceptoPharm bearing interest at a rate of 5% per annum, due on demand and secured by certain intellectual property of ReceptoPharm having a zero cost at December 31, 2015and 2014. The accrued interest at December 31, 2015and 2014 was $0 and $49,638, respectively. As of December 31, 2015, the loan and accrued interest were written off due to passing the statute of limitation (See Note 4 and 10) - 129,466 Ending balances $ 146,770 $ 540,877 During the year ended December 31, 2015, we borrowed $70,821 and repaid $351,583 to Mr. Deitsch. Included in the repayment is $80,000 that was assigned to a non-related party in the form of a Convertible Redeemable Note on December 7, 2015. The note carries interest at 4% and is due on December 7, 2016, unless previously converted into shares of restricted common stock. The convertible notes holder has the right to convert the note, until is no longer outstanding into shares of Common Stock at eighty-five percent (85%) of the average of the three lowest VWAP prices of the Companys Common Stock for the five trading days preceding the conversion date including the day upon which the notice of conversion is received by the Company (See Note 6). In addition, Mr. Deitsch accepted a total of 125,000 shares of the Companys restricted common stock as a repayment to discharge $10,000 of his outstanding loan in January 2015(See Note 7). During the year ended December 31, 2014, we borrowed $86,464 and repaid $161,969 to Mr. Deitsch. In addition, Mr. Deitsch accepted a total of 1,250,000 shares of the Companys restricted common stock as a repayment to discharge $100,000 of his outstanding loan on April 10, 2014(See Note 7). |
OTHER DEBT
OTHER DEBT | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
OTHER DEBT | 6. OTHER DEBT Other debt (Both short-term and long term) consists of the following at December 31, 2015 and 2014: December 31, 2015 December 31, 2014 Note payable Related Party (1) $ 35,000 $ 120,000 Notes payable Non Related Parties (Net of discount of $24,602 and $2,611, respectively) (2) 518,659 540,644 Convertible notes payable, at fair value (Net of discount of $21,921 and $0, respectively) (3) 999,580 330,277 Ending balances $ 1,553,239 $ 990,921 (1) During 2010 we borrowed $200,000 from one of our directors. Under the terms of the loan agreement, this loan was expected to be repaid in nine months to a year from the date of the loan along with interest calculated at 10% for the first month plus 12% after 30 days from funding. We are in default regarding this loan. The loan is under personal guarantee by our President and CEO, Rik Deitsch. We repaid $40, 000 and $85,000, respectively during 2014 and 2015. At December 31, 2015 and 2014, we owed this director principal balance of $35,000 and $120,000, respectively. At December 31, 2015 and 2014, we owed this director accrued interest of $187,576 and $157,128, respectively. (2) At December 31, 2015 and 2014, the balance of $518,659 and $540,644, respectively, consisted of the following loans: · In August 2014, the Company issued a promissory note to the Michael McDonald Trust in the amount of $75,000 bearing monthly interest at a rate of 2%. The note is due in six months from the execution and funding of the note. In connection with the issuance of this promissory note, the Company issued 50,000 shares of the Company's common stocks (See Note 7). The Company has recorded a debt discount in the amount of $15,665 to reflect the value of the common stocks as a reduction to the carrying amount of the convertible debt and a corresponding increase to common stocks and additional paid-in capital. The total discount of $15,665 was amortized over the term of the debt. Amortization for the years ended December 31, 2015 and 2014 was $2,611and $13,054, respectively. An additional 25,000 shares were issued in February 2015 with a fair value at $6,000 (See Note 7) due to the default. During the year ended December 31, 2015, the total amount of $84,666 including the accrued interest of $9,666 was assigned and sold to Coventry Enterprises, LLC (Coventry) in the form of a Convertible Redeemable Note. Coventry made the conversions of total 1,324,341 shares of the companys restricted stock satisfying the notes in full (See Note 6(3)). · On August 2, 2011 under a settlement agreement with Liquid Packaging Resources, Inc. (LPR), the Company agreed to pay LPR a total of $350,000 in monthly installments of $50,000 beginning August 15, 2011 and ending on February 15, 2012. This settlement amount was recorded as general and administrative expenses on the date of the settlement. We did not make the December 2011 or January 2012 payments and on January 26, 2012, we signed the first amendment to the settlement agreement where under we agreed to pay $175,000 which was the balance outstanding at December 31, 2011(this includes a $25,000 penalty for non-payment). The Company repaid $25,000 during the six months ended March 31, 2012. The Company did not make all of the payments under such amendment and as a result pursuant to the original settlement agreement, LPR had the right to sell 142,858 shares of the Companys free trading stock held in escrow by their attorney and receive cash settlements for a total amount of $450,000 (the initial $350,000 plus total default penalties of $100,000). The $100,000 default was expensed during 2012. LPR sold the note to Southridge Partners, LLP (Southridge) for consideration of $281,772 in October 2012. The debt has reverted back to the Company. · As of December 31, 2015, the Company owed University Centre West Ltd. approximately $55,410, which was assigned and sold to Southridge and subsequently reverted back to the Company. · On November 5, 2014, the Company received a loan for a total of $150,000 from a non-related party. The loan was repaid through scheduled payments through November 6, 2015 along with interest on average 15% annum. The Company has recorded loan costs in the amount of $14,350 for the loan origination fees paid at inception date. The total loan cost of $14,350 was amortized over the term of the loan. Amortization for the years ended December 31, 2015 and 2014 was $12,150 and $2,200, respectively. On November 6, 2015, the loan was repaid in full. The interest expense for the years ended December 31, 2015 and 2014 is $16,157 and $5,862, respectively · On November 5, 2015, the Company received a loan for a total of $150,000 from a non-related party. The loan is repaid through scheduled payments through November 2, 2016 along with interest on average 15% annum. The Company has recorded loan costs in the amount of $12,375 for the loan origination fees paid at inception date. The total loan cost of $12,375 was amortized over the term of the loan. Amortization for the year ended December 31, 2015 was $2,060. As of December 31, 2015, repayment of $19,030 was made. The interest expense for the year ended December 31, 2015 is $7,261. As of December 31, 2015, the principal balance of the loan net of discount is $120,655. · During January, 2015, the Company entered a Payment Rights Purchase and Sale Agreement with EBF Partners LLC (EBF). EBF purchased $204,000 of the merchant sales for $150,000. In exchange for the purchased amount, the Company agreed to enter into a credit card processing agreement with preapproval by EBF with credit card processor. The Company authorized credit card processor to pay to EBF the cash attributable to 23% of each credit card receivable due to the Company, until EBF has received the purchase amount of $204,000. In the event of default, 100% instead of 23% of each credit card receivable will be paid. The loan is under personal guarantee by our President and CEO, Rik Deitsch and Director, Garry Pottruck. The Company has recorded debt discount of $54,000, and loan issuance cost of $10,130 for the loan origination fees paid at inception date. The total debt discount and loan issuance cost of $64,130 was amortized over the term of the loan. Amortization for the debt discount and loan issuance cost for the year ended December 31, 2015 was $54,000 and $10,130, respectively. On November 6, 2015, the loan was repaid in full. · During November, 2015, the Company entered a Revenue Based Factoring Agreement with Qualified Merchant Group, Inc. (QMG). QMG purchased $67,500 of the Companys future receipts for $50,000. In exchange for the purchased amount, the Company authorized QMG to ACH debit $459 daily from the Companys bank account until QMG has received the purchase amount of $67,500. The loan is under personal guarantee by our President and CEO, Rik Deitsch. The Company has recorded debt discount of $17,500 at inception date. The debt discount was amortized over the term of the loan. Amortization for the debt discount for the year ended December 31, 2015 was $3,211. At December 31, 2015, the principal balance of the loan net of discount is $40,822. · In August 2015, the Company issued a promissory note to a non-related party in the amount of $10,000 bearing monthly interest at a rate of 2%. The note is due in six months from the execution and funding of the note. In the event of the Company's failure to pay the Note in a timely fashion, the Noteholder will receive 100,000 shares restricted, common stock on the date that is 15 business days after the maturity date. The interest expense for the year ended December 31, 2015 is $871. During March 2016, the Company issued a total of 1,000,000 shares of the companys restricted stock to settle the outstanding debt of $10,000 with accrued interest of $1,262 with the Note holder. The shares were recorded at a fair value of $12,600 or $0.02 per share (See Note 11). · In December 2015, the Company issued a promissory note to a non-related party in the amount of $10,000 bearing monthly interest at a rate of 2%. The note is due in six months from the execution and funding of the note. In the event of the Company's failure to pay the Note in a timely fashion, the Noteholder will receive 100,000 shares restricted, common stock on the date that is 15 business days after the maturity date. The interest expense for the year ended December 31, 2015 is $90. (3) At December 31, 2015 and 2014, the balance of $999,580 and $330,277 consisted of the following convertible loans: · In September 2011, the Company borrowed $250,000 from a non-related party. The principal of this loan were to be repaid with a balloon payment on or before October 1, 2012. On October 19, 2012 the parties amended the notes to extend the due date to May 1, 2013 and include a conversion feature that would allow the holders to convert some or all of their outstanding notes into restricted Company stock at a 15% discount to the average closing market price of the Company's stock traded over the previous 10 days. Interest on these loans is payable monthly beginning in November 2011 with interest calculated at 20%. At December 31, 2015 and 2014, the accrued interest payable was $0 and $4,163, respectively. During year ended December 31, 2014, the Company issued a total of 33,226,382 shares of the companys restricted stock satisfying principal of the notes in the amounts of $92,000. The fair value of the shares issued was $177,093 on the dates of conversion. During year ended 2014, $33,000 of the debt was assigned to non-related parties in the form of a Convertible Redeemable Note bearing interest of 8% annum with a conversion price for each share of Common Stock equal to 55% of the average of the daily volume weighted average prices of the Common Stock for the 3 trading days with the lowest volume weighted average prices during the 15 to 20 trading days immediately preceding the Conversion Date. Following the assignments, the conversions for a total of 9,600,000 shares of the companys restricted stock were made at the fair value of $65,982 (See Note 7). With the above conversions, at December 31, 2014, one of the Notes was satisfied in full and the remaining balance of the other Note was $100,000 with a fair value of $125,980 at December 31, 2014 and matured on February 3, 2015. On August 3, 2014 and April 30, 2014, the Company issued 1,000,000 and 500,000 restricted shares, respectively, to each note holder in connection with the amendment of maturity date at a fair value of $9,100 and $1,950, respectively (See note 7). During June 2015, the conversion for a total of 196,850 shares of the companys restricted stock was made in satisfying the note in the amount of $25,000 with a fair value of $43,716 (See Note 7). With the conversions during 2013, 2014 and 2015, the remaining balance of the Note was $75,000 with a fair value of $95,998 at December 31, 2015and matured on February 3, 2016. On February 1, 2015 and August 1, 2015, the Company issued a total of 50,000 restricted shares with a fair value of $10,750 to the note holder in connection with the amendment of maturity date to February 3, 2016 (See Note 7). On February 10, 2016, the balance of $75,000 of was assigned and sold to a non-related party in the form of a Convertible Redeemable Note. The note carries interest at 8% and is due on February 10, 2017, unless previously converted into shares of restricted common stock. The convertible notes holder has the right to convert the note, until is no longer outstanding into shares of Common Stock at fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the fifteen trading days preceding the conversion date (See Note 11). · On July 10, 2013, the Company issued a Convertible Debentures in the amount of $30,000 to Christopher Castaldo in connection with the agreement for investor relation services. The note carries interest at 8% and is due on January 10, 2014. The notes holder has the right to convert the note and accrued interest into shares of Common Stock at a price of $0.005. The Company continued to accrue the interest at 8% after the note was in default. On February 26, 2014, the conversion for a total of 6,000,000 shares of the companys restricted stock was made in satisfying the note in full with a fair value of $51,060 (See Note 7). · On October 10, 2013, the Company issued a Convertible Debentures in the amount of $30,000 to Christopher Castaldo in connection with the agreement for investor relation services. The note carries interest at 8% and is due on April 10, 2014. The notes holder has the right to convert the note into shares of Common Stock at a price of $0.005. The Company continued to accrue the interest at 8% after the note was in default. On April 15, 2014, the conversion for a total of 6,000,000 shares of the companys restricted stock was made in satisfying the note in full with a fair value of $28,107 (See Note 7). · On June 2, 2014, the Company issued a Convertible Debenture in the amount of $10,000 to Christopher Castaldo in connection with an agreement for investor relation services (See Note 7). The note carries interest at 8% and is due on December 2, 2014. The note holder has the right to convert the note, until it is no longer outstanding into shares of Common Stock at a price of $.0035. On December 2, 2014, the conversion for a total of 2,857,143 shares of the companys restricted stock was made in satisfying the note in full with a fair value of $14,286 (See Note 7). · On July 8, 2014, the Company issued a Convertible Debenture in the amount of $10,000 to Christopher Castaldo in connection with an agreement for investor relation services (See Note 6). The note carries interest at 8% and is due on January 8, 2015. The note holder has the right to convert the note, until it is no longer outstanding into shares of Common Stock at a price of $.0035. In connection with the issuance of this convertible note payable, the Company encountered a day-one derivative loss of $16,361. At December 31, 2014, this convertible note payable, at fair value, was recorded at $16,303. On January 8, 2015, the conversion for a total of 2,857,143 shares of the companys restricted stock was made in satisfying the note in full with a fair value of $17,728 (See Note 7). · On September 3, 2013, the Company issued a Convertible Debenture in the amount of $100,000 to Coventry Enterprises, LLC (Coventry). The note carries interest at 10% and is due on September 3, 2014, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at a price lesser of $.018, or (ii) fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the twenty trading days preceding the conversion date. On March 11, 2014 and June 12, 2014, Coventry made a conversion of a total of 23,376,623 shares and 6,710,121 shares of the companys restricted stock satisfying $90,000 and $10,000 of the notes in full with a fair value of $187,119 and $65,402, respectively (See note 7). · In connection with the issuances of the Note, the Company also granted five-year warrants to purchase an aggregate of 20,000,000 shares of the Companys common stock at an exercise price of $0.025 per share. The Company classified embedded conversion features in these warrants as a derivative liability. The warrants were valued at their fair value of $87,518 using the Black-Scholes method at December 31, 2014. · On September 12, 2013, the Company issued a Convertible Debenture in the amount of $70,000 to Coventry Enterprises, LLC (Coventry). The note carries interest at 10% and is due on September 12, 2014, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at a price lesser of $.02, or (ii) fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the twenty trading days preceding the conversion date. On March 12, 2014 and June 12, 2014, Coventry made a conversion of a total of 15,584,415 and 5,789,473 shares of the companys restricted stock satisfying $60,000 and $10,000 of the notes with a fair value of $123,641 and $60,296, respectively (See note 7). In connection with the issuances of the Note, the Company also granted five-year warrants to purchase an aggregate of 15,000,000 shares of the Companys common stock at an exercise price of $0.025 per share. The Company classified embedded conversion features in these warrants as a derivative liability. The warrants were valued at their fair value of $65,836 using the Black-Scholes method at December 31, 2014. · On April 9, 2014, the Company issued a Convertible Debenture in the amount of $20,000 to Coventry Enterprises, LLC (Coventry). The note carries interest at 10% and is due on April 9, 2015, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at a price lesser of $.80, or (ii) fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the twenty trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $16,172. At December 31, 2014, the convertible note payable, at fair value, was recorded at $40,627. During June, 2015, the conversion for a total of 250,000 shares of the companys restricted stock was made in satisfying the note in full with a fair value of $44,277 (See Note 7). · During June 2014, $92,310 of Michael McDonalds debt was assigned and sold to Coventry in the form of a Convertible Redeemable Note. The note carries interest at 8% and is due on June 18, 2015, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the fifteen trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $371,772. On June 18, 2014 and July 2, 2014, Coventry made a conversion of 219,535 and 107,337 shares of the companys restricted stock satisfying $18,462 each (total $36,924) of the note with a fair value of $92,816 and $29,909, respectively. At December 31, 2014, the remaining balance of $55,386, at fair value, was recorded at $110,159 (See Note 5(2) and Note 6). On January 26, 2015, Coventry made a conversion of 461,548 shares of the companys restricted stock satisfying the remaining of $55,386 of the note with a fair value of $146,912 (See Note 7).During the year ended December 31, 2015, $84,666 of Michael McDonalds debt was assigned and sold to Coventry in the form of a Convertible Redeemable Note. The note carries interest at 8% and is due in one year from the debt purchase date, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the fifteen trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $83,589. During the year ended December 31, 2015, Coventry made the conversions of a total 1,324,341 shares of the companys restricted stock satisfying the notes in full with a fair value of $201,894. · On October 7, 2013, the Company signed a secured convertible Promissory Note in the amount of $35,000 in favor of Southridge Partners II, LLC. The note was due on demand and carries interest at 10% annum. Southridge Partners II, LLC was entitled to convert the principal into shares of common stock at the lesser of $0.015 or a 50% discount from the lowest closing bid price in the 30 trading days prior to the day that the conversion is requested; and interest accrued was entitled to convert into shares of common stock at $0.001. In the evaluation of these financing arrangements, the Company concluded that these conversion features did not meet the conditions set forth in current accounting standards for equity classification. Since equity classification is not available for the conversion feature, it requires bifurcation and liability classification, at fair value. The Company also concluded that the Default Put required bifurcation because, while puts on debt instruments are generally considered clearly and closely related to the host, the Default Put is indexed to certain events that are not associated with the convertible note payable. Southridge converted the note in full for a total of 13,349,057 shares of the companys restricted stock on April 7, 2014. Pursuant to the reset provision on the note agreement, an additional 2,373,166 shares of common stocks were issued due to stock price depreciation on the clearing date of April 23, 2014. These shares were valued at fair value of $10,679 and recorded as loss on settlement of debt (See note 7). · On March 19, 2014, the Company issued two Convertible Debentures in the amount of up to $500,000 each (total $1,000,000) to two non-related parties. During the year ended December 31, 2015, the Company recorded the first tranche of $15,000 each (total $30,000) of the funds was received during the first quarter of 2014. The notes carry interest at 8% and are due on the date that is two years from the execution and funding of the note. The note holders have the right to convert the notes into shares of Common Stock at a price of $0.20. In connection with the issuance of these convertible notes payable, the Company encountered a day-one derivative loss of $18,104. At December 31, 2015 and 2014, these convertible notes payable, at fair value, was recorded at $8,824 and $36,450. · On February 25, 2015, the Company issued a Convertible Debenture in the amount of $68,250 to LG Capital Funding, LLC (LG). The note carries interest at 9% and is due on February 25, 2016, unless previously converted into shares of restricted common stock. LG has the right to convert the note, until is no longer outstanding into shares of Common Stock at a price of sixty-one percent (61%) of the average of the two lowest closing bid prices of the Companys Common Stock for the twenty trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $49,541. · On August 17, 2015, the principal balance with accrued interest of $70,875 was assigned and sold to Coventry in the form of a Convertible Redeemable Note. At August 17, 2015, the convertible note payable, at fair value, was recorded at $114,759. The Company has recorded loan costs in the amount of $3,250 for the loan origination fees paid at inception date. The total loan cost of $3,250 was fully amortized as of August 17, 2015. The note carries interest at 8% and is due on August 17, 2016, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the fifteen trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $55,279. On August 26, 2015, Coventry made a conversion of 749,625 shares of the companys restricted stock satisfying $50,000 of the note with a fair value of $128,478. On October 23, 2015, Coventry made a conversion of 451,846 shares of the companys restricted stock satisfying the remaining of $20,875 of the note in full with a fair value of $44,363 (See Note 7). · On August 17, 2015, the Company encountered a penalty of $27,300 in connection with prepayment of the LG note. The Company had Coventry make the payment to LG on behalf the Company and issued a Convertible Debentures in the amount of $27,300 to Coventry. The note carries interest at 8% and is due on August 17, 2016, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the fifteen trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $21,293. At December 31, 2015, the convertible notes payable, at fair value, was recorded at $54,452. · On February 24, 2015, the Company issued a Convertible Debentures in the amount of up to $250,000 to a non-related party. During the year ended December 31, 2015, the Company received the fund for first three tranche of a total of $100,000. The note carries one time interest at 12% and is due on the date that is two years from the execution and funding of the note. The note holders have the right to convert the notes into shares of Common Stock at a price of lessor of (a) 0.40 or (b) sixty percent (60%) of the average of the two lowest closing bid prices of the Companys Common Stock for the twenty trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $113,952. During August through December 2015, the Note holder made conversions for a total of 1,456,440 satisfying $60,870 of the note with a fair value of $131,125. At December 31, 2015, the convertible note payable, at fair value, was recorded at $106,947 net of debt discount of $2,917. The Company has recorded loan costs in the amount of $8,000 for the loan origination fees paid at inception date. The total loan cost of $8,000 was amortized over the term of the loan. Amortization for the year ended December 31, 2015 was $5,083. During January and February 2016, Vista made five conversions for a total of 3,550,000 shares of the companys restricted stock satisfying $48,444 of the note (See Note 11). · During April 2015, the Company issued two Convertible Debentures in the amount of $275,000 each (aggregating $550,000) to two non-related parties. The notes carry interest at 8% and are due on the date that is nine months from the execution and funding of the note. If paid fully in cash by the maturity date, the amount of repayment is $137,500 for each Note plus accrued interest of 8%. The notes holders have the right to convert the notes into shares of Common Stock at a fixed price of $0.10. In the event of default, $275,000 each (aggregating $550,000) plus interest may be paid in the form of conversion into common stock at the lower of: (i) the 0.10 or (ii) 0.45 multiplied by the lowest bid price of the Common Stock during the ten consecutive trading day period immediately preceding the trading day that the Company receives a notice of conversion. In connection with the issuance of these convertible notes payable, the Company encountered a day-one derivative loss of $274,958. On December 11, 2015, the principal balance of $137,500 with accrued interest of $7,142 was assigned and sold to Coventry in the form of a Convertible Redeemable Note. The Company encountered a penalty of $28,929 in connection with prepayment of the note. The Company had Coventry make the payment to the note holder on behalf the Company and issued a Convertible Debentures in the amount of $28,929 to Coventry. With these assignments, one of the Notes of $275,000 was paid in full. At December 31, 2015, the remaining balance of convertible notes payable, at fair value, was recorded at $271,805 net of discount of $3,194. During January and March, 2016, the Note holder made a conversion of total of 8,348,252 shares of stocks satisfying $58,753 of notes payable balance (See Note 11). During April 2015, the Company issued a total of 2,000,000 two year warrants to the notes holders to purchase common stock at an exercise price of $0.35 per share The Company classified embedded conversion features in these warrants as a derivative liability. During December 2015, 1,000,000 warrants were exercised via cashless exercise into 400,000 shares with a fair value of $33,440. The warrants were valued at their fair value of $189,959 and $22,264 respectively using the Black-Scholes method at the commitment and re-measurement dates of April 9, 2015 and December 31, 2015, respectively (See Note 7). Also, the Company issued a total of 125,000 shares of common stocks in connection with issuance of these convertible notes payable (See Note 7). The Company has recorded debt discount a total of $232,500 for the warrants issued and origination fees at inception date. The total debt discount was amortized over the term of the loan. Amortization for the debt discount and loan issuance cost for the year ended December 31, 2015 was $229,305. At December 31, 2015, the convertible note payable at fair value was recorded at $271,805, net of debt discount of $3,195. · Following the assignment, the convertible note payable of $144,642, at fair value, was recorded at $368,468 on December 11, 2015. The note carries interest at 8% and is due on December 10, 2016, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the fifteen trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $223,826. On December 15, 2015, Coventry made a conversion of 1,322,751 shares of the companys restricted stock satisfying $50,000 of the note with a fair value of $112,447 (See Note 7). At December 31, 2015, the convertible notes payable, at fair value, was recorded at $190,447. During January through March, 2016, Coventry made conversions of a total of 5,494,451 shares of the companys restricted stock satisfying the note in full (See Note 11). · Following the assignment of prepayment penalty, the convertible note payable of $28,929, at fair value, was recorded at $73,695 on December 11, 2015. The note carries interest at 8% and is due on December 10, 2016, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the fifteen trading days preceding the conversion date. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $44,766. At December 31, 2015, the convertible notes payable, at fair value, was recorded at $58,214. · During December 2015, our President and CEO, Mr. Deitsch, assigned $80,000 of his outstanding loan to a non-related party in the form of a Convertible Redeemable Note. The note carries interest at 4% and is due on December 7, 2016, unless previously converted into shares of restricted common stock. The note holder has the right to convert the note, until is no longer outstanding into shares of Common Stock at eighty-five percent (85%) of the average of the three lowest VWAP prices of the Companys Common Stock for the five trading days preceding the conversion date including the day upon which the notice of conversion is received by the Company. In connection with the issuance of the convertible note payable, the Company encountered a day-one derivative loss of $28,791. At December 31, 2015, the convertible notes payable, at fair value, was recorded at $103,369. · On December 28, 2015, the Company issued a Convertible Debenture in the amount of $65,000 to a non-related party. The note carries interest at 10% and is due on December 23, 2016, unless previously converted into shares of restricted common stock. The note holder has the right to convert the note, until is no longer outstanding into shares of Common Stock at a price of |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | 7. STOCKHOLDERS' DEFICIT Private Placements of Common Stock During September and October, 2015, the Company sold 1,637,334 shares of restricted common stock to investors at a price per share of $0.06 and received proceeds of $98,240. The Company issued 1,637,334 warrants to purchase common stock at an exercise price of $0.20 per share. The warrants expire on September 30, 2016 (See Note 8). During August, 2015, the Company sold 30,000 shares of restricted common stock to an investor at a price per share of $0.10 and received proceeds of $3,000. The Company issued 30,000 warrants to purchase common stock at an exercise price of $0.20 per share. The warrants expire on June 30, 2016 (See Note 8). During May through December, 2015, the Company sold 11,417,666 shares of restricted common stock to investors at a price per share of $0.06 and received proceeds of $685,060. The Company issued 11,417,666 warrants to purchase common stock at an exercise price of $0.20 per share. The warrants expire on June 30, 2016 (See Note 8). In January 2014, the Company sold 300,000 shares of restricted common stock to an investor at a price per share of $0.20 and received proceeds of $60,000. The Company issued 300,000 warrants to purchase common stock at an exercise price of $1.20 per share. The warrants expire on December 31, 2015(See Note 8). Shares Issued to Employees and Directors During July, 2015, the Board of Directors approved a resolution for the issuance of a total of 10,900,000 shares of the Companys restricted common stock to directors and employees of the Company. The issuance was valued at $2,016,500 ($0.185 per share), which was the fair value of the Companys common stock on the date of issuance. During December 2014, the Board of Directors approved a resolution for the issuance of a total of 1,352,300 shares of the Companys restricted common stock to directors and employees of the Company. The issuance was valued at $324,552 ($0.24 per share), which was the fair value of the Companys common stock on the date of issuance. Common Stock Issued for Services During October 2015, the Company signed an agreement with a consultant for consulting services for three months. In connection with the agreement, 110,000 shares of companys restricted common stocks were issued with a fair value of $8,305. The issuance was valued at $0.0755 per share. During October 2015, the Company signed an agreement with a consultant for consulting services for a year. In connection with the agreement, 2,500,000 shares of companys restricted common stocks were granted. 1,000,000 shares of Common Stock of the Company were issued on the date of execution of the agreement. 500,000 shares of Common Stock of the Company are to be issued quarterly, beginning on the first day of the third month following the effective date. Cash payment of $3,000 is expected to be paid on a monthly basis. The 2,500,000 shares granted are valued at the end of each quarter until the consultants complete their performance in October 2016. The 2,500,000 shares granted were valued at $0.055 per share which is the stock price at December 31, 2015. The Company recorded an equity compensation charge of $28,906 during the year ended December 31, 2015. The remaining unrecognized compensation cost of $26,594 is related to non-vested equity-based compensation. During September 2015, the Company signed an agreement with a consultant for investor relation services for three months. In connection with the agreement, 200,000 shares of companys restricted common stocks were issued. The share was valued at $0.10 per share. The Company recorded an equity compensation charge of $19,800 during the year ended December 31, 2015. During September 2015, the Company signed an agreement with a consultant for investor relation services for twelve months. In connection with the agreement, 250,000 shares of companys restricted common stocks were issued. The share was valued at $0.12 per share. The Company recorded an equity compensation charge of $7,705 during the year ended December 31, 2015. The remaining unrecognized compensation cost of $22,295 related to non-vested equity-based compensation to be recognized by the Company over the remaining vesting period. During September 2015, the Company signed an agreement with a consultant for investor relation services for twelve months. In connection with the agreement, 300,000 shares of companys restricted common stocks were issued. The share was valued at $0.12 per share. The Company recorded an equity compensation charge of $9,246 during the year ended December 31, 2015. The remaining unrecognized compensation cost of $26,754 related to non-vested equity-based compensation to be recognized by the Company over the remaining vesting period. During August 2015, the Company signed an agreement with a consultant for investor relation services for six months. In connection with the agreement, 750,000 shares of companys restricted common stocks were issued. The share was valued at $0.15 per share. The Company recorded an equity compensation charge of $92,935 during the year ended December 31, 2015. The remaining unrecognized compensation cost of $19,565 related to non-vested equity-based compensation to be recognized by the Company over the remaining vesting period. During August 2015, the Company signed an agreement with two consultants for investor relation services for six months. In connection with the agreement, 500,000 shares of companys restricted common stocks were issued. The share was valued at $0.15 per share. The Company recorded an equity compensation charge of $61,957 during the year ended December 31, 2015. The remaining unrecognized compensation cost of $13,043 related to non-vested equity-based compensation to be recognized by the Company over the remaining vesting period. During May 2015, the Company signed an agreement with a consultant for investor relation services for one month. In connection with the agreement, 200,000 shares of companys restricted common stocks were issued with a fair value of $26,000. The share was valued at $0.13 per share. During March 2015, the Company issued 1,250,000 shares of the Companys restricted common stock to a consultant for services for a year. The share was valued at $0.104 per share. The Company recorded an equity compensation charge of $101,773 during the year ended December 31, 2015. The remaining unrecognized compensation cost of $28,227 related to non-vested equity-based compensation to be recognized by the Company over the remaining vesting period. During February 2015, the Company signed an agreement with a consultant for investor relation services for one month. In connection with the agreement, 50,000 shares of companys restricted common stocks were issued with a fair value of $14,000. The share was valued at $0.28 per share. During January 2015, the Company signed an agreement with a consultant for investor relation services for one month. In connection with the agreement, 100,000 shares of companys restricted common stocks were issued with a fair value of $24,400. The share was valued at $0.244 per share. During January 2015, the Company issued 250,000 shares of the Companys restricted common stock to a consultant for services for six months. The share was valued at $0.244 per share. The Company recorded an equity compensation charge of $61,000 during the year ended December 31, 2015. During December 2014, the Company issued 94,375 shares of the Companys restricted common stock to sales representatives for services rendered with a fair value of $26,048. The share was valued at $0.276 per share. During December 2014, the Company issued 50,000 shares of the Companys restricted common stock to a consultant for services rendered with a fair value of $12,000. The share was valued at $0.24 per share. During November 2014, the Company issued 50,000 shares of the Companys restricted common stock to a consultant for services for one year. The share was valued at $0.32 per share. The Company recorded an equity compensation charge of $1,929 during the year ended December 31, 2014 and $14,071 for the year ended December 31, 2015. During November 2014, the Company issued 125,000 shares of the Companys restricted common stock to a consultant for services for one year. The share was valued at $0.288 per share. The Company recorded an equity compensation charge of $5,918 during the year ended December 31, 2014 and $30,082 for the year ended December 31, 2015. During July 2014, the Company signed an agreement with a consultant for investor relation services for seven weeks. In connection with the agreement, 125,000 shares of companys restricted common stocks were issued with a fair value of $45,500. A $10,000 convertible note convertible at $0.14 per share was also issued (See Note 6). During May 2014, the Company signed an agreement with a consultant for investor relation services for one month. In connection with the agreement, 125,000 shares of companys restricted common stocks were issued with a fair value of $18,500. A $10,000 convertible note convertible at $0.14 per share was also issued (See Note 6) During June 2014, the Company issued 125,000 shares of the Companys restricted common stock to a consultant for services for one year. The share was valued at $0.34 per share. The Company recorded an equity compensation charge of $22,938 during the year ended December 31, 2014 and $19,561 for the year ended December 31, 2015. During August, 2013, the Company issued a total of 150,000 shares of the Companys restricted common stock to two consultants for investor relation services for six months. The shares were valued at $0.692 per share. The Company recorded an equity compensation charge of $70,902 during the four months ended December 31, 2013, and the remaining compensation cost of $32,899 was recognized by the Company during the year ended December 31, 2014. During August, 2013, the Company issued 50,000 shares of the Companys restricted common stock to a consultant for investor relation services for one year. The shares were valued at $0.48 per share. The Company recorded an equity compensation charge of $8,351 during the four months ended December 31, 2013 and the remaining compensation cost of $15,649 was recognized by the Company during the year ended December 31, 2014. During August, 2013, the Company issued 50,000 shares of the Companys restricted common stock to a consultant for consulting services for six months. The shares were valued at $0.224 per share. The Company recorded an equity compensation charge of $8,446 during the four and one half months ended December 31, 2013, and the remaining compensation cost of $2,754 was recognized by the Company during the year ended December 31, 2014. During February, 2013, the Company issued 200,000 shares of the Companys restricted common stock to a consultant for investor relation services for a year. The shares were valued at $0.32 per share. The Company recorded an equity compensation charge of $61,019 during the year ended December 31, 2013. The remaining compensation cost of $2,981 was recognized by the Company during the year ended December 31, 2014. Common Stock Issued for Debt Modification During February and August, 2015, the Company amended the maturity dates for notes of $100,000 from a non-related party to August 3, 2015 and February 3, 2016, respectively. The Company issued 25,000 restricted shares each (total 50,000 shares) to the note holder per the amendment. The shares were valued at a fair value of $7,000 and $3,750, respectively (See Note 6). During February 2015, the Company issued a total of 25,000 restricted shares to the Michael McDonald Trust due to the default on repayment of the promissory note of $75,000. The shares were valued at a fair value of $6,000 (See Note 6). On August 1, 2014, the Company amended the maturity dates of notes $100,000 from a non-related party to February 3, 2015. The Company issued a total of 25,000 restricted shares to the note holder per the amendment. The shares were valued at a fair value of $9,100 (See note 6). On April 30, 2014, the Company amended the maturity dates of notes $75,000 from a non-related party to November 3, 2014. The Company issued a total of 12,500 restricted shares to the note holder per the amendment. The shares were valued at a fair value of $1,950 (See note 6). On January 17, 2014, the Company issued a total of 25,000 restricted shares to the Michael McDonald Trust due to the default on repayment of the promissory note of $75,000. The shares were valued at a fair value of $9,900(See Note 6). Common Stock Issued with Debts In December 2015, in connection with the issuance of a convertible note to a non-related party in the amount of $65,000 which is due in one year from the funding of the note. The Company also issued a total of 300,000 shares of common stock with a fair value of $15,810 as part of the agreement (See Note 6). During December 2015, 1,000,000 warrants were exercised via cashless exercise into 400,000 shares with a fair value of $33,440 (See Note 6 and 8). In April 2015, in connection with the issuance of two notes to two non-related Parties in the amount of $550,000 which is due in nine months from the funding of the note. The Company also issued a total of 125,000 shares of common stocks as part of the agreement (See Note 6). In August 2014, in connection with the issuance of this promissory note to Michael McDonald Trust in the amount of $75,000 which is due in six months from the funding of the note, the Company issued 50,000 shares of the Company's common stocks. The Company has recorded a debt discount in the amount of $15,665 to reflect the value of the common stocks as a reduction to the carrying amount of the convertible debt and a corresponding increase to common stocks and additional paid-in capital. The total discount of $15,665 was amortized over the term of the debt. Amortization for the year ended December 31, 2014 was $13,054 (See Note 6). Common Stock Held in Escrow On July 27, 2011 the Company issued 5,714,286 shares of free trading common stock in certificate form which is held in escrow as security under an agreement reached with Liquid Packaging Resources, Inc. (LPR) on August 2, 2011(See Note 4 and 6). Common Stock Issued for Settlement of Accounts Payable & Debt Following the assignment of debt of $144,642 on December 15, 2015, Coventry made a conversion of 1,322,751 shares of the companys restricted stock satisfying $50,000 of the note with a fair value of $112,447 (See Note 6). Following the assignment of LGs debt of $70,875 in August 2015, Coventry made a conversion of a total of 749,625 shares of the companys restricted stock satisfying $50,000 of the note with a fair value of $128,478. On October 23, 2015, Coventry made another conversion of 451,846 shares of the companys restricted stock satisfying the remaining of $20,875 of the note in full with a fair value of $44,363 (See Note 6). During October 2015, the Company issued 2,200,000 shares of the companys restricted stock and 2,200,000 warrants (See Note 4) to settle the outstanding commissions payable in aggregate of $77,000 with TCN. The shares were valued at $0.1035 per share and the warrants were valued at $0.0475 per share. The Company recorded a loss of $255,215 as a selling expense during the year ended December 31, 2015. During August through December 2015, one Note holder made conversions for a total of 1,456,440 satisfying $60,870 of the note with a fair value of $131,125(See Note 6). Date Number of shares converted Fair Value of Debt Converted 8/28/2015 300,000 36,000 9/29/2015 300,000 22,037 11/2/2015 300,000 25,239 12/3/2015 275,000 22,645 12/8/2015 281,440 25,203 During July 2015, the Company issued a total of 4,400,000 shares of the companys restricted stock and 4,400,000 warrants (See Note 4) to settle the outstanding commissions payable in aggregate of $59,000 with TCN. The shares were valued at $0.185 per share and the warrants were valued at $0.1009 per share. The Company recorded a loss of $1,198,773 as a selling expense during the year ended December 31, 2015. During June 2015, the Company issued a total of 150,000 shares of the companys restricted stock to settle the outstanding legal fees in aggregate of $15,000 with a vendor. The shares were recorded at a fair value of $28,500 or $0.19 per share. Following the assignment of Michael McDonalds debt of $84,666 in the year ended December 31, 2015, Coventry made the following conversions of a total of 1,324,341 shares of the companys restricted stock satisfying the notes in full with a fair value of $201,894 (See Note 6). Date Number of shares converted Fair Value of Debt Converted 4/20/2015 489,964 $60,034 6/03/2015 453,000 $68,392 6/22/2015 381,377 $73,468 During June 2015, one of the convertible Notes holders made the conversion of 196,850 shares of the companys restricted stock satisfying the notes in the amount of $25,000 with a fair value of $43,716 (See Note 6). During June, 2015, Coventry made the conversion for a total of 250,000 shares of the companys restricted stock in satisfying the note of $20,000 in full with a fair value of $44,277 (See Note 6). During January 2015, Mr. Deitsch accepted a total of 125,000 shares of the Companys restricted common stock as a repayment to discharge $10,000 of his outstanding loan to the Company (See Note 5). The shares were valued at the note payable amount due to the fact that it was a related party transaction. During January 2015, Castaldo converted for a total of 71,429 shares of the companys restricted stock, with a fair value of $17,428 (See Note 6). Following the assignment of Michael McDonalds debt of $92,310 in June 2014, Coventry made the following conversions of a total of 788,419 shares of the companys restricted stock satisfying $92,310 of the note with a fair value of $269,637 (See Note 6). Date Number of shares converted Fair Value of Debt Converted 6/18/2014 219,535 $92,816 7/2/2014 107,337 $29,909 1/25/2015 461,548 $146,912 Following the agreements with Castaldo for $10,000 in June 2014, Castaldo made the conversion for a total of 2,857,143 shares of the companys restricted stock satisfying the notes in full with a fair value of $14,286 during December 2014 (See Note 6). Following the agreements with Castaldo for $30,000 each (total $60,000) in July 2013 and October 2013, Castaldo made the conversion for a total of 12,000,000 shares of the companys restricted stock satisfying the notes in full with a fair value of $79,167 during February and April 2014 (See Note 6). Following the agreement with Southridge Partners II, LLC for $35,000 in October 2013, Southridge converted the note in full for a total of 13,349,057 shares of the Companys restricted stock on April 7, 2014.Pursuant to the reset provision on the note agreement, an additional 2,373,166 shares of common stocks were issued due to stock price depreciation on the clearing date of April 23, 2014. These shares were valued at a fair value of $10,679 and recorded as loss on settlement of debt (See Note 6). During June, August and October 2014, the Company issued a total of 4,500,000 shares of the companys restricted stock to settle the outstanding commissions payable in aggregate of $300,000 with TCN. The shares were valued at a range from $0.224 to $0.396 per share. The Company recorded a loss of $1,164,000 as a selling expense during the year ended December 31, 2014(See Note 4). During May and June, 2014, the two convertible Notes holders made the following conversions of a total of 830,659 shares of the companys restricted stock satisfying the notes in the amount of $92,000 with a fair value of $177,093 on the dates of conversions (See Note 6). Date Number of shares converted Fair Value of Debt Converted 5/30/2014 588,235 $79,632 6/16/2014 113,636 $45,820 6/14/2014 128,788 $51,641 During February and June, 2014, $23,000 and $10,000 of the convertible notes were assigned to third parties with a conversion price at $0.20 and $0.08 per share, respectively. The conversions for a total of 240,000 shares of the companys restricted stock were made as followings in satisfying the notes of $33,000 at the fair value of $65,982 (See Note 6). Date Number of shares converted Fair Value of Debt Converted 2/10/2014 115,000 $30,726 6/14/2014 125,000 $35,256 Following the agreements with Coventry Enterprises, LLC (see Note 6) for $100,000 and $70,000 in September 2013, Coventry made the following conversions for a total of 1,286,516 shares of the companys restricted stock during the year ended December 31, 2014 satisfying the Notes in full (See note 6): Date Number of shares converted Fair Value of Debt Converted 3/11/2014 584,416 $187,119 3/12/2014 389,610 $123,641 6/12/2014 312,490 $103,142 On April 10, 2014, Mr. Deitsch accepted a total of 1,250,000 shares of the Companys restricted common stock as a repayment to discharge $100,000 of his outstanding loan to the Company (See note 5). The shares were valued at the note payable amount due to the fact that it was a related party transaction. Stock Split On April 20, 2015, the Company declared a 1 for 40 reverse common stock split to stockholders. The Stock Split was effectuated on May 18, 2015 based upon filing the appropriate documentation with FINRA. Per share and weighted average amounts have been retroactively restated in the accompanying financial statements and related notes to reflect this stock split. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
STOCK OPTIONS AND WARRANTS | 8. STOCK OPTIONS AND WARRANTS Common Stock Warrants During July 2015, the Company issued a total of 4,400,000 shares of the companys restricted stock and 4,400,000 warrants to settle the outstanding commissions payable in aggregate of $59,000 with TCN. The shares were valued at $0.185 per share and the warrants were valued at $0.1009 per share. The warrants expire on June 30, 2016 (See Note 7). During April 2015, the Company issued a total of 2,000,000 warrants to purchase common stock at an exercise price of $0.35 per share in connection with issuance of two convertible notes payable. The warrants expire on April 14, 2017 (See Note 7). During April, 2014, the Company issued a total of 100,000 warrants to purchase common stock at an exercise price of $1.00 per share in connection with issuance of a convertible note payable to Coventry. The warrants expire on April 9, 2019 (See Note 7). From time to time, we issue warrants to purchase our common stock. These warrants have been issued for cash in conjunction with the private placement of shares of our common stock. During December 2015, 1,000,000 warrants were exercised via cashless exercise into 400,000 shares with a fair value of $33,440 (See Note 7). During September and October, 2015, the Company issued 1,637,334 warrants to purchase common stock at an exercise price of $0.20 per share. The warrants expire on September 30, 2016 (See Note 7). During May through December, 2015, the Company issued 11,447,666 warrants to purchase common stock at an exercise price of $0.20 per share. The warrants expire on June 30, 2016 (See Note 7). During January 2014, the Company issued a total of 300,000 warrants to purchase common stock at an exercise price of $1.20 per share in connection with the private placement offerings. The warrants expired on December 31, 2015. During December 2013, the Company issued a total of 250,000 warrants to purchase common stock at an exercise price of $1.20 per share in connection with the private placement offerings. The warrants expired on December 31, 2015. During October and November 2013, the Company issued a total of 25,000 warrants to purchase common stock at an exercise price of $4.00 per share in connection with the private placement offerings. The warrants expired on December 31, 2014. On September 16, 2013, the Company issued 625,000 warrants to purchase stock at an exercise price of $1.20 in connection with settlement of an outstanding account payable. The warrants expired on December 31, 2014. During June, 2013, 625,000 warrants to purchase stock at an exercise price of $4.00 per share were issued to CEO, Mr. Deitsch in exchange of notes payable. The warrants expired on December 31, 2014 (See Note 5). 250,000 warrants to purchase stock at an exercise price of $4.00 per share were issued to CEO, Mr. Dietsch in December 2012. The warrants expired on December 31, 2014. In the fourth quarter 2012, the Company issued a total of 441,250 warrants to purchase common stock at an exercise price of $4.00 per share in connection with the private placement offerings. The warrants expired on December 31, 2014. In the third quarter 2012, The Company issued a total of 675,000 warrants to purchase common stock at an exercise price of $4.00 per share in connection with a private placement offering. The warrants expired on December 31, 2014. During November 2011, the Company issued a total of 41,667 warrants to purchase common stock at an exercise price of $6 per share in connection with the private placement offerings. The warrants expired on November 8, 2015. During January 2011, the Company issued a total of 25,000 warrants to purchase common stock at an exercise price of $4.00 per share in connection with the private placement offerings. The warrants expired on December 31, 2014. A summary of warrants outstanding in conjunction with private placements of common stock were as follows during the years ended December 31, 2015 and 2014: Number Of shares Weighted average exercise price Balance December 31, 2013 3,872,917 $ 1.94 Exercised - - Issued 400,000 $ 1.2 Forfeited (2,666,250) - Balance December 31, 2014 1,606,667 $ 1.92 Exercised (1,000,000) - Issued 21,685,000 $ 1.11 Forfeited (591,667) - Balance December 31, 2015 21,700,000 $ 0.95 The following table summarizes information about fixed-price warrants outstanding as of December 31, 2015 and 2014 : Exercise Price Weighted Average Number Outstanding Weighted Average Contractual Life Weighted Average Exercise Price 2015 $ 0.20-6.0 21,700,000 0.70 years $ 0.95 2014 $ 0.40-1.20 1,606,667 2.76 years $ 1.92 As of December 31, 2015, the aggregate intrinsic value of all stock options and warrants outstanding and expected to vest was $0. The intrinsic value of each option share is the difference between the fair value of our common stock and the exercise price of such option share to the extent it is in-the-money. Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the year and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation is based on the $0.055, closing stock price of our common stock on December 31, 2015. There were no in-the-money warrants at December 31, 2015. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Operating Leases In February 2013, Nutra Pharma entered into an operating lease for monthly payments of approximately $3,500 for three years and expired in January 2016. In February 2016, Nutra Pharma entered into a new operating lease for monthly payments of approximately $3,200 for three years and expires in February 2019. ReceptoPharm leases a lab and renewed its operating lease agreement for five years in July of 2012. The lease requires monthly payments of approximately $6,400 from August 1, 2012 through August 1, 2017. The lease was renewed in February 2016 for another five years beginning August 1, 2017. Future minimum payments under these lease agreements, including the extension period, are approximately as follows: Years ended December 31, Total 2016 115,688 2017 121,433 2018 126,494 2019 88,513 Thereafter 233,861 $ 685,989 Rent expense in 2015 and 2014 approximated $126,339 and $119,215, respectively. The Company sublets approximately 3779 square feet of its space to Nationwide Laboratory Services, Inc. for one year started from April 2015. The rent for the first three months is $1,500 for the first three months, and then the rent will be increased by $100 per month until the sum of $2,200 per month is attained. During the year ended December 31, 2015, the Company recorded a rental income of $27,564 which included the rent and utilities. Consulting Agreements During July 2015, the Company signed an agreement with a consulting company for consulting services for five years. In connection with the agreement, 500,000 shares of companys restricted common stocks and a one year note of $50,000 with 8% interest were granted. The share was valued at $0.18 per share. The stocks and note payable have not been issued as of December 31, 2015. The Company has accrued the $142, 500 in accrued expense as of December 31, 2015. During July 2015, the Company signed an agreement with a consultant for investor relation services for two months. In connection with the agreement, 400,000 shares of companys restricted common stocks were granted with a fair value of $84,000. The share was valued at $0.21 per share. During August 2015, the Company signed an extension agreement with the consultant for a month. In connection with the agreement, 200,000 shares of companys restricted common stocks were issued with a fair value of $32,000. The share was valued at $0.16 per share. The stocks have not been issued as of December 31, 2015. The Company has accrued the $116,000 in accrued expense and recorded as an equity compensation charge during the year ended December 31, 2015. Litigation f/k/a Receptogen, Inc. On August 18, 2006, ReceptoPharm was named as a defendant in Patricia Meding, et. al. v. ReceptoPharm, Inc. f/k/a Receptogen, Inc., Index No.: 18247/06 (New York Supreme Court, Queens County). The original proceeding claimed that ReceptoPharm owed the Plaintiffs, including Patricia Meding, a former ReceptoPharm officer and shareholder and several corporations that she claims to own, the sum of $118,928.15 plus interest and counsel fees on a series promissory notes that were allegedly executed in 2001 and 2002. On August 23, 2007, the Queens County New York Supreme Court issued a decision denying Plaintiffs motion for summary judgment in lieu of a complaint, concluding that there were issues of fact concerning the enforceability of the promissory notes. On May 23, 2008, the Plaintiffs filed an amended complaint in which they reasserted their original claims and asserted new claims seeking damages of no less than $768,506 on their claims that in or about June 2004 ReceptoPharm breached its fiduciary duty to the Plaintiffs as shareholders of ReceptoPharm by wrongfully canceling certain of their purported ReceptoPharm share certificates. In late 2010, Plaintiffs further amended their complaint alleging that ReceptoPharm violated Plaintiffs contractual and statutory rights by cancelling an additional 30,370 share certificates and failing to permit the Plaintiffs to exercise dissenting shareholder rights with respect to those share certificates. The damages associated with the Plaintiffs' claims could rise as the result of increases in our share price as the Receptopharm shares may be convertible into our common shares. The potential exposure may exceed $10,000,000 if the Plaintiffs are successful with all of their claims. ReceptoPharm believes the suit is without merit and has filed an answer denying the material allegations of the amended complaint and asserted a series of counterclaims against the Plaintiffs alleging claims for declaratory judgment, fraud, breach of fiduciary duty, conversion and unjust enrichment as a result of the promissory notes. Plaintiffs have moved for partial summary judgment on their claims regarding the additional 30,370 shares, but not on their claims regarding the alleged promissory notes or the 43,750 alleged shares. In August of 2011, the Plaintiff's motion was partially granted. In September 2012, ReceptoPharm's attorneys filed a Motion to be removed as counsel. On October 10, 2014 their motion was granted. On June 1, 2015, the parties executed a settlement agreement whereby ReceptoPharm would pay the Plaintiffs a total of $360,000 over 35 months. The first payment of $20,000 was made on July 1, 2015. A second payment of $20,000 was made on August 17, 2015. The settlement requires 32 subsequent monthly $10,000 payments to be made on the 15th of every month. Payments were made in September through December, 2015. In the event of default on any of the payments due under the settlement agreement, the settlement amount would increase by an additional $200,000. As of December 31, 2015, the Company has accrued the legal settlement amount at present value of $243,164 and an additional contingency of $200,000. The settlement agreement is personally guaranteed by Rik Deitsch, our CEO. Liquid Packaging Resources, Inc. v. Nutra Pharma Corp. and Erik Rik Deitsch On April 21, 2011, Nutra Pharma Corp. and its CEO, Erik Deitsch, were named as defendants in Liquid Packaging Resources, Inc. v. Nutra Pharma Corp. and Erik Rik Deitsch Mr. Deitsch and Nutra Pharma Corp. then removed the action to the United States District Court, Northern District of Georgia, Civil Action No. 11-CV-01663-ODE. After removal, LPR amended the Complaint to assert that Nutra Pharma Corp. and Mr. Deitsch were the alter egos of the alleged other companies through whom the subject orders were placed and therefore should be considered one and the same. Mr. Deitsch and Nutra Pharma Corp. moved to dismiss the Complaint on several grounds including statute of frauds, failure to state a claim, and jurisdiction (only for Mr. Deitsch). Mr. Deitsch and Nutra Pharma Corp. believe the suit is without merit. After June 30, 2011, at LPR's request, the parties mediated the dispute before LPR responded to the Motion To Dismiss. At the mediation, the parties worked out an agreement whereby Nutra Pharma Corp. would purchase from LPR the components LPR purchased from third parties at an amount slightly less than the principal amount of the suit and on terms acceptable to us. The agreed price was $350,000 payable over 7 months in equal $50,000 amounts. This agreement was reached by us because it provided tangible value in exchange for the purchase price rather than incurring the expense of litigation, which would likely be substantial and not recouped. While Nutra Pharma Corp. had counterclaims we could assert, we believe this was a practical resolution. The settlement allowed us to take possession of the components prior to full payment and, in exchange, provided security to LPR in the form of our stock valued at $400,000 at the time of issuance. The stock can only be sold in event of a default of the payment schedule. The litigation was dismissed in August of 2011. We made the August, September and November payments (totaling $150,000) in a timely fashion. We were late for the payment due October 15, 2011 and requested an accommodation from LPR, eventually paying an extra $5,000 towards that payment. At December 31, 2011, Nutra Pharma Corp. had made total payments of $205,000 with an additional $150,000 owed. In order to allow us to skip the December payment, LPR agreed to another accommodation whereby we would pay both the December and January payment with an additional $10,000 on or before January 16, 2012. We were unable to make this payment and on January 26, 2012 signed an amended payment schedule adding an additional $15,000 for a total of $175,000 owed. Our CEO, Rik Deitsch, added additional collateral stock in a separate company that he held personally. $25,000 was paid in January, with subsequent payments of $30,000 due monthly on the 15th of March through the 15th of July, 2012. We failed to make the March payment and was subsequently called in default of the Agreement. Under the original agreement, if we are in default of the agreement, LPR has the right to sell shares of our free trading stock held in escrow by their attorney and receive cash settlements for a total amount of $450,000 representing the new total cash amount due to LPR by the Company. On June 11, 2012, LPR sold their debt to Southridge Partners, LLP in an agreement to be paid out over time. In August, 2013, LPR cancelled their agreement with Southridge Partners, LLP. As of December 31, 2015, LPR continues to hold the collateral stock. We are currently negotiating a settlement with LPR. Upon the settlement of the outstanding debt, LPR will return the collateral shares to the Company. Involuntary Petition of Bankruptcy On August 31, 2012, certain former ReceptoPharm employees and a former ReceptoPharm consultant filed a Petition for Involuntary Bankruptcy against us in the United States Bankruptcy Court, Southern District of Florida. The Petitioners originally claimed they were owed $990,927 from Nutra Pharma in the form of accrued wages and promissory notes, but amended their claim to $816,662 in a subsequent filing. In response to the Petition, we filed a motion to dismiss the action which, if successful, would avoid the case being converted into an actual bankruptcy action. On September 30, 2013, the Company entered into a Settlement Agreement with the Petitioners, which is effective upon the court dismissal of the action. In full and final satisfaction of all claims, the Company settled the Agreement with the Petitioners for a total sum of $350,000. $35,000 was made during the year ended December 31, 2013 and a second lump sum payment was due within 8 months from February 12, 2014, the date the court dismissed the action. The Parties executed mutual releases exclusive of releases under the Settlement Agreement. On October 21, 2014 we received a Notice of Default from the Petitioners' counsel. We have responded to the notice and will be seeking remedies to the alleged default. As of December 31, 2015, the Petitioner's claims and accruals for a total of $1,085,468 that have passed the statute of limitation were written off, included in the amount was the accrued salary of $815,747, officers loan and accrued interest for $129,466, salary and payroll tax payable of $140,255. Since the Petitioners can only reinforce the settlement amount due to passing of statute of limitation, the Company has accrued the settlement for $315,000 and recorded the gain on settlement of $770,968 in other income (See Note 4 and 5). |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS Notes payable In January 2016, the Company issued a promissory note to a non-related party in the amount of $100,000 bearing monthly interest at a rate of 2%. The note is due in six months from the execution and funding of the note. In connection with the issuance of this promissory note, the Company issued 68,000 shares of the Company's common stocks. In January 2016, the Company issued a promissory note to a non-related party in the amount of $50,000 bearing monthly interest at a rate of 2%. The note is due in six months from the execution and funding of the note. In connection with the issuance of this promissory note, the Company issued 350,000 shares of the Company's common stocks. In February 2016, the Company issued a promissory note to a non-related party in the amount of $50,000 bearing interest at 10% annually. The note is due in one year from the execution and funding of the note. Convertible Notes Payable On February 10, 2016, the balance of $75,000 of a convertible note payable to a non-related party was assigned and sold in the form of a Convertible Redeemable Note. The note carries interest at 8% and is due on February 10, 2017, unless previously converted into shares of restricted common stock. The convertible notes holder has the right to convert the note, until is no longer outstanding into shares of Common Stock at fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the fifteen trading days preceding the conversion date (See Note 6). During March 2016, the Note holder made a conversion of 6,696,428 shares of the companys restricted stock satisfying the note in full. On February 19, 2016, the Company received the fund of a total of $50,000 pursuant to the agreement signed on February 24, 2015 in which the Company issued a Convertible Debentures in the amount of up to $250,000 to a non-related party. The note carries one time interest at 12% and is due on the date that is two years from the execution and funding of the note. The note holders have the right to convert the notes into shares of Common Stock at a price of lessor of (a) 0.40 or (b) sixty percent (60%) of the average of the two lowest closing bid prices of the Companys Common Stock for the twenty trading days preceding the conversion date. On March 3, 2016, the Company issued a Convertible Debenture in the amount of $100,000 to Coventry Enterprises, LLC (Coventry). The note carries interest at 8% and is due on March 3, 2017, unless previously converted into shares of restricted common stock. Coventry has the right to convert the note, until is no longer outstanding into shares of Common Stock at a price fifty-five percent (55%) of the average of the three lowest VWAP prices of the Companys Common Stock for the twenty trading days preceding the conversion date. In connection with the issuances of the Note, the Company also granted five-year warrants purchasing an aggregate of 2,500,000 shares of the Companys common stock at an exercise price of $0.03 per share. On March 3, 2016, the Company issued an additional Convertible Debenture in the amount of $100,000 to Coventry Enterprises, LLC (Coventry). The note carries interest at 8% and is due on March 3, 2017. The Note was paid for by the issuance of an offsetting $100,000 secured note (Back End Note) issued to the Company by Coventry provided that prior to conversion of the Note, Coventry must have paid off the Note in cash. Coventry promises to pay the Company $100,000 no later than the earlier of (i) September 3, 2016. Or (ii) such time as has a resale registration statement covering the shares issuable upon conversion of the $100,000 back end note dated March 3, 2016 declared effective. The back end note was secured by assets with a fair market value of not less than $100,000. Common Stock Issued for Debt Conversions During January and February 2016, Vista made five conversions for a total of 3,550,000 shares of the companys restricted stock satisfying $48,444 of the note (See Note 6). During January through March, 2016, the Note holder made a conversion of total of 8,348,252 shares of stocks satisfying $58,753 of notes payable of $275,000 originated in April 2015(See Note 6). During January through March, 2016, Coventry made conversions of a total of 5,494,451 shares of the companys restricted stock satisfying the note in full (See Note 6). Settlement of Notes payable During March 2016, the Company issued a total of 1,000,000 shares of the companys restricted stock to settle the outstanding debt of $10,000 with accrued interest of $1,262 with the Note holder. The shares were recorded at a fair value of $12,600 or $0.02 per share (See Note 6). Bridge Financing The Company entered into a loan agreement with Greentree Financial Group, Inc. (Greentree) in connection with a bridge financing transaction, consisting of certain unsecured convertible promissory notes in principal amount up to $250,000, the first tranche of which is in principal amount of $50,000 matures in one year from the funding of the Note. The conversion price is lower of $0.10 per share or 60% of the average of the three lowest lowest volume weighted average prices for the ten consecutive trading days immediately prior to but not including the conversion date. The Company also issued three-year warrants to purchase 2,000,000 shares of the Companys common stock. Consulting agreements During April 2016, the Company signed an agreement with a consulting company for consulting services for six months. In connection with the agreement, 700,000 shares of companys restricted common stocks and a Convertible Promissory Note of $40,000 with annual interest rate of 12% and conversion price of $0.10 per share or 60% of the average of the three lowest volume weighted average prices for the ten consecutive trading days immediately prior to but not including the conversion date, whichever is lower, were issued on the date of execution of the agreement. During April 2016, the Company signed an agreement with a consulting company for consulting services for a fee of $80,000. In connection with the agreement, the Company issued two convertible promissory notes in principal amount of $20,000 and $60,000, respectively, with annual interest rate of 12% and conversion price of $0,10 per share or 60% of the average of the three lowest volume weighted average prices for the ten consecutive trading days immediately prior to but not including the conversion date, whichever is lower. The three-year warrants to purchase 2,000,000 shares of the Companys common stock with an exercise price of $0.05 per share were also issued. Private Placement During March 2016, the Company sold 916,667 shares of restricted common stock to investors at a price per share of $0.06 and received proceeds of $55,000. The Company issued 916,667 warrants to purchase common stock at an exercise price of $0.10 per share. |
BASIS OF PRESENTATION AND SUM19
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Basis Of Presentation And Summary Of Significant Accounting Policies Policies | |
Organization | Organization Nutra Pharma Corp. (Nutra Pharma), is a holding company that owns intellectual property and operates in the biotechnology industry. Nutra Pharma incorporated under the laws of the state of California on February 1, 2000, under the original name of Exotic-Bird.com. Through its wholly-owned subsidiary, ReceptoPharm, Inc. (ReceptoPharm), Nutra Pharma conducts drug discovery research and development activities. In October 2009, Nutra Pharma launched its first consumer product called Cobroxin ® ® ® |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements include the results of Nutra Pharma and its wholly-owned subsidiaries Designer Diagnostics Inc. and ReceptoPharm (collectively the Company, us, we or our). We operate as one reportable segment. All intercompany transactions and balances have been eliminated in consolidation. |
Liquidity and Going Concern | Liquidity and Going Concern Our Consolidated Financial Statements are presented on a going concern basis, which contemplate the realization of assets and satisfaction of liabilities in the normal course of business. We have experienced recurring, significant losses from operations, and have an accumulated deficit of $49,911,786 at December 31, 2015. In addition, we had respective working capital and stockholders deficits at December 31, 2015 of $3,404,497 and $3,574,396, respectively. There is substantial doubt regarding our ability to continue as a going concern which is contingent upon our ability to secure additional financing, increase ownership equity and attain profitable operations. In addition, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered in established markets and the competitive environment in which we operate. As of December 31, 2015, we do not have sufficient cash to sustain our operations for the next year and will require additional financing in order to execute our operating plan and continue as a going concern. Since our sales are not currently adequate to fund our operations, we continue to rely principally on debt and equity funding; however proceeds from such funding have not been sufficient to execute our business plan. Our plan is to attempt to secure adequate funding until sales of our pain products are adequate to fund our operations. We cannot predict whether additional financing will be available, and/or whether any such funding will be in the form of equity, debt, or another form. In the event that these financing sources do not materialize, or if we are unsuccessful in increasing our revenues and profits, we will be unable to implement our current plans for expansion, repay our obligations as they become due and continue as a going concern. The accompanying Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. |
Use of Estimates | Use of Estimates The accompanying Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America which require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense. Significant estimates include our ability to continue as going concern, the recoverability of inventories and long-lived assets, and the valuation of stock-based compensation and certain debt and warrant liabilities. Actual results could differ from those estimates. Changes in facts and circumstances may result in revised estimates, which would be recorded in the period in which they become known. |
Revenue Recognition | Revenue Recognition In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Provision for sales returns is estimated based on our historical return experience. Revenue is presented net of returns and allowances for returns. The Company collects 100% of the cash proceeds from the sale of its product by its distributor, remits a portion of the cash proceeds received back to the distributor and records the sale on a net basis. In the years ended December 31, 2015 and 2014, the Company collected $862,661 and $1,558,124 in gross receipts and recorded $291,302 and $594,505 as net sales. |
Accounting for Shipping and Handling Costs | Accounting for Shipping and Handling Costs The Company records shipping and handling costs incurred in cost of sales. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company grants credit without collateral to its customers based on the Companys evaluation of a particular customers credit worthiness. In addition, allowances for doubtful accounts are maintained for potential credit losses based on the age of the accounts receivable and the results of the Companys periodic credit evaluations of its customers financial condition. Accounts receivable are written off after collection efforts have been deemed to be unsuccessful. Accounts written off as uncollectible are deducted from the allowance for doubtful accounts, while subsequent recoveries are netted against the provision for doubtful accounts expense. The Company generally does not charge interest on accounts receivable. Accounts receivable are stated at estimated net realizable value. Accounts receivable are comprised of balances due from customers net of estimated allowances for uncollectible accounts. |
Inventories | Inventories Inventories, which are stated at the lower of average cost or market, and consist of packaging materials, finished products, and raw venom that is utilized to make the API (active pharmaceutical ingredient). The raw unprocessed venom has an indefinite life for use. The Company regularly reviews inventory quantities on hand. If necessary it records a provision for excess and obsolete inventory based primarily on its estimates of component obsolescence, product demand and production requirements. Write-downs are charged to cost of goods sold. We performed evaluations of our inventory during the years ended December 31, 2015 and 2014 and determined no allowances need to be recorded. |
Financial Instruments and Concentration of Credit Risk | Financial Instruments and Concentration of Credit Risk Our financial instruments include cash, accounts receivable, accounts payable, accrued expenses, loans payable, due to officers and derivative financial instruments. Other than certain warrant and convertible instruments (derivative financial instruments) and liabilities to related parties (for which it was impracticable to estimate fair value due to uncertainty as to when they will be satisfied and a lack of similar type transactions in the marketplace), we believe the carrying values of our financial instruments approximate their fair values because they are short term in nature or payable on demand. Our derivative financial instruments are carried at a measured fair value. Balances in various cash accounts may at times exceed federally insured limits. We have not experienced any losses in such accounts. We do not hold or issue financial instruments for trading purposes. In addition, for the years ended December 31, 2015 and 2014, no customers accounted for more than 10% of the Companys total revenues. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Management evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. For embedded derivatives, the Company uses a Dilution-Adjusted Black-Scholes method to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
Convertible Debt | Convertible Debt The Company bifurcates the embedded derivative element in convertible debt which contain conversion features which are not considered to be conventional convertible debt. The convertible debt is recorded at the bifurcated amount after reducing the proceeds for the liability related to the embedded call provision which is accounted for separately in the accompanying balance sheets. After recording the initial amount of the debt, the discount related to the bifurcated embedded derivative is amortized as additional interest expense over the term of the debt with the resulting debt discount being accreted over the term of the note. |
Property and Equipment and Long-Lived Assets | Property and Equipment and Long-Lived Assets Property and equipment is recorded at cost. Expenditures for major improvements and additions are added to property and equipment, while replacements, maintenance and repairs which do not extend the useful lives are expensed. Depreciation is computed using the straight-line method over the estimated useful lives of the assets of 3 7 years. Property and equipment consists of the following at December 31, 2015 and 2014: 2015 2014 Computer equipment $ 24,208 $ 24,208 Furniture and fixtures 34,757 34,757 Lab equipment 42,129 42,129 Telephone equipment 12,421 12,421 Office equipment other 16,856 16,138 Leasehold improvements 73,168 73,168 Total 203,539 202,821 Less: Accumulated depreciation (184,553) (173,331) Property and equipment, net $ 18,986 $ 29,490 We review our long-lived assets for recoverability if events or changes in circumstances indicate the assets may be impaired. At December 31, 2015, we believe the carrying values of our long-lived assets are recoverable. Depreciation expense for the year ended December 31, 2015 and 2014 was $11,222 and $16,594, respectively. |
Advertising | Advertising All advertising costs are expensed as incurred. Advertising costs were approximately $2,138 and $6,156 for the year ended December 31, 2015 and 2014, respectively. |
Income Taxes | Income Taxes We compute income taxes in accordance with Financial Accounting Standard Board (FASB) Accounting Standard Codification (ASC) Topic 740, Income Taxes On an annual basis, we evaluate tax positions that have been taken or are expected to be taken in our tax returns to determine if they are more than likely to be sustained if the taxing authority examines the respective position. As of December 31, 2015, we do not believe we have a need to record any liabilities for uncertain tax positions or provisions for interest or penalties related to such positions. Since inception, we have been subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire (which may be as much as 20 years while we have unused net operation losses), we are subject to income tax audits in the jurisdictions in which we operate. The Companys 2012 to 2015 tax returns are subject to examination by Internal Revenue Services and State Taxing Agencys. On July 18, 2015, the Company received a notice of penalty charge of $35,296 from IRS for failure to file Forms W-2 for tax period ended at December 31, 2011. During February 2016, the Company signed a payment agreement to pay the penalty. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation in accordance with FASB ASC Topic 718, Stock Compensation |
Net Loss Per Share | Net Loss Per Share Net loss per share is calculated in accordance with ASC Topic 260, Earnings per Share December 31, 2015 December 31, 2014 Options and warrants 21,700,000 1,606,667 Convertible notes payable 15,871,102 1,420,434 Total 37,571,102 3,027,101 |
Reclassifications | Reclassifications Certain amounts in the 2014 Consolidated Financial Statements have been reclassified to conform to the current period presentation. |
Stock Split | Stock Split On April 20, 2015, the Company declared a 1 for 40 reverse common stock split to stockholders. The Stock Split was effectuated on May 18, 2015 based upon filing the appropriate documentation with FINRA. Per share and weighted average amounts have been retroactively restated in the accompanying financial statements and related notes to reflect this stock split (See Note 7). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2015, FASB issued Accounting Standards Update (ASU) No. 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In May 2015, FASB issued Accounting Standards Update (ASU) No. 2015-07, F air Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) In June 2015, Technical Corrections and Improvements covers a wide range of Topics in the Codification. The amendments represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, some of the amendments will make the Codification easier to understand and easier to apply by eliminating inconsistencies, providing needed clarifications, and improving the presentation of guidance in the Codification. In August 2015, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In September 2015, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. |
BASIS OF PRESENTATION AND SUM20
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Property and Equipment and Long-Lived Assets | 2015 2014 Computer equipment $ 24,208 $ 24,208 Furniture and fixtures 34,757 34,757 Lab equipment 42,129 42,129 Telephone equipment 12,421 12,421 Office equipment other 16,856 16,138 Leasehold improvements 73,168 73,168 Total 203,539 202,821 Less: Accumulated depreciation (184,553) (173,331) Property and equipment, net $ 18,986 $ 29,490 |
Net Loss Per Share | December 31, 2015 December 31, 2014 Options and warrants 21,700,000 1,606,667 Convertible notes payable 15,871,102 1,420,434 Total 37,571,102 3,027,101 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | Fair Value Measurements at December 31, 2015 Liabilities: Total Level 1 Level 2 Level 3 Warrant liability $ 142,556 $ - $ - $ 142,556 Convertible notes at fair value $ 1,021,501 $ - $ - $ 1,021,501 Fair Value Measurements at December 31, 2014 Liabilities: Total Level 1 Level 2 Level 3 Warrant liability $ 186,549 $ - $ - $ 186,549 Convertible notes at fair value $ 330,277 $ - $ - $ 330,277 |
Changes in fair value measurements | Description 2015 2014 Beginning balance $ 186,549 $ 323,172 Purchases, issuances, and settlements (782,239) 18,551 Day one loss on value of hybrid instrument - - Total gain included in earnings (1) 738,246 (155,174) Ending balance $ 142,556 $ 186,549 |
Debentures | Conversion Price - Lower of Fixed Price or Percentage of VWAP for Look-back Period Debenture Issuance Year Face Amount Interest Rate Default Interest Rate Anti-Dilution Adjusted Price % Look-back Period 2015 $729,871 4%-20% n/a $0.03-$0.20 50%-85% 10 to 20 Days 2014 215,386 8%-20% n/a $0.0028-$0.0050 50%-85% 10 to 30 Days |
Convertible Notes | Years Ended December 31, 2015 2014 Description Beginning balance $ 330,277 $ 767,057 Purchases, issuances, and settlements 1,012,145 162,311 Day one loss on value of hybrid instrument 779,035 423,340 (Gain) loss from change in fair value (229,316) (78,527) Conversion to common stock (870,640) (943,904) Ending balance $ 1,021,501 $ 330,277 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | December 31, 2015 December 31, 2014 Raw Materials $ 29,216 $ 16,805 Finished Goods 24,818 30,140 Total Inventories $ 54,034 $ 46,945 |
DUE TO OFFICERS (Tables)
DUE TO OFFICERS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Due to officers | December 31, 2015 December 31, 2014 An unsecured demand loan from our President and CEO, Rik Deitsch. The loan bears interest at 4%. The loan balance at December 31, 2015and 2014, respectively, includes accrued interest payable of $279,020 and $369,983. $ 146,770 $ 411,411 A loan from Paul Reid, the former President of ReceptoPharm bearing interest at a rate of 5% per annum, due on demand and secured by certain intellectual property of ReceptoPharm having a zero cost at December 31, 2015and 2014. The accrued interest at December 31, 2015and 2014 was $0 and $49,638, respectively. As of December 31, 2015, the loan and accrued interest were written off due to passing the statute of limitation (See Note 4 and 10) - 129,466 Ending balances $ 146,770 $ 540,877 |
OTHER DEBT (Tables)
OTHER DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Other debt | December 31, 2015 December 31, 2014 Note payable Related Party (1) $ 35,000 $ 120,000 Notes payable Non Related Parties (Net of discount of $24,602 and $2,611, respectively) (2) 518,659 540,644 Convertible notes payable, at fair value (Net of discount of $21,921 and $0, respectively) (3) 999,580 330,277 Ending balances $ 1,553,239 $ 990,921 |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' deficit | Date Number of shares converted Fair Value of Debt Converted 8/28/2015 300,000 36,000 9/29/2015 300,000 22,037 11/2/2015 300,000 25,239 12/3/2015 275,000 22,645 12/8/2015 281,440 25,203 Date Number of shares converted Fair Value of Debt Converted 4/20/2015 489,964 $60,034 6/03/2015 453,000 $68,392 6/22/2015 381,377 $73,468 Date Number of shares converted Fair Value of Debt Converted 6/18/2014 219,535 $92,816 7/2/2014 107,337 $29,909 1/25/2015 461,548 $146,912 Date Number of shares converted Fair Value of Debt Converted 5/30/2014 588,235 $79,632 6/16/2014 113,636 $45,820 6/14/2014 128,788 $51,641 Date Number of shares converted Fair Value of Debt Converted 2/10/2014 115,000 $30,726 6/14/2014 125,000 $35,256 Date Number of shares converted Fair Value of Debt Converted 3/11/2014 584,416 $187,119 3/12/2014 389,610 $123,641 6/12/2014 312,490 $103,142 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Summary of warrants outstanding | Number Of shares Weighted average exercise price Balance December 31, 2013 3,872,917 $ 1.94 Exercised - - Issued 400,000 $ 1.2 Forfeited (2,666,250) - Balance December 31, 2014 1,606,667 $ 1.92 Exercised (1,000,000) - Issued 21,685,000 $ 1.11 Forfeited (591,667) - Balance December 31, 2015 21,700,000 $ 0.95 |
Summary of fixed-price warrants outstanding | Exercise Price Weighted Average Number Outstanding Weighted Average Contractual Life Weighted Average Exercise Price 2015 $ 0.20-6.0 21,700,000 0.70 years $ 0.95 2014 $ 0.40-1.20 1,606,667 2.76 years $ 1.92 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Interest And Other Income | December 31, 2015 2014 Computed expected tax expense (benefit) - Federal $ (1,777,507) $ (813,848) Computed expected tax expense (benefit) - State (304,273) (139,314) Permeate differences 1,874,050 797,895 Change in valuation allowance 207,730 155,267 $ - $ - 2015 2014 Current portion of net deferred income tax assets: Accrued salary $ 207,730 $ 155,267 Valuation allowance (207,730) (155,267) Current net deferred income tax asset $ - $ - Non- current portion of net deferred income tax asset Net operating loss carryforwards $ 12,143,139 $ 11,257,975 Valuation allowance (12,143,139) (11,257,975) Non-current net deferred income tax asset $ - $ - |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Future Minimum Lease Payments | Years ended December 31, Total 2016 115,688 2017 121,433 2018 126,494 2019 88,513 Thereafter 233,861 $ 685,989 |
BASIS OF PRESENTATION AND SUM29
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Total | $ 203,539 | $ 202,821 |
Less: Accumulated depreciation and amortization | (184,553) | (173,331) |
Property and equipment, net | 18,986 | 29,490 |
Computer Equipment [Member] | ||
Total | 24,208 | 24,208 |
Furniture and fixtures [Member] | ||
Total | 34,757 | 34,757 |
Lab equipment [Member] | ||
Total | 42,129 | 42,129 |
Telephone equipment [Member] | ||
Total | 12,421 | 12,421 |
Office equipment other [Member] | ||
Total | 16,856 | 16,138 |
Leasehold improvements [Member] | ||
Total | $ 73,168 | $ 73,168 |
BASIS OF PRESENTATION AND SUM30
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Options and warrants | $ 21,700,000 | $ 1,606,667 |
Convertible notes payable | 15,871,102 | 1,420,434 |
Total | $ 37,571,102 | $ 3,027,101 |
BASIS OF PRESENTATION AND SUM31
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jul. 18, 2015 | Apr. 20, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated deficit | $ 49,911,786 | ||||
Working capital | 4,706,171 | ||||
Stockholders' deficits | (3,574,396) | $ (3,594,761) | $ (4,219,449) | ||
Gross receipts | 862,661 | 1,558,124 | |||
Net sales | 291,302 | 594,505 | |||
Depreciation expense | 11,222 | 16,594 | |||
Advertising costs | $ 2,138 | $ 6,156 | |||
Penalty charge | $ 35,296 | ||||
Stock Split | Company declared a 1 for 40 reverse common stock split | ||||
Maximum [Member] | |||||
Estimated useful lives | 7 years | ||||
Minimum [Member] | |||||
Estimated useful lives | 3 years | ||||
Customer [Member] | |||||
Maximum percenatge of revenue allowed | 10.00% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Warrant liability | $ 142,556 | $ 186,549 |
Convertible notes at fair value | $ 1,021,501 | $ 330,277 |
Fair Value, Inputs, Level 1 [Member] | ||
Warrant liability | ||
Convertible notes at fair value | ||
Fair Value, Inputs, Level 2 [Member] | ||
Warrant liability | ||
Convertible notes at fair value | ||
Fair Value, Inputs, Level 3 [Member] | ||
Warrant liability | $ 142,556 | $ 186,549 |
Convertible notes at fair value | $ 1,021,501 | $ 330,277 |
FAIR VALUE MEASUREMENTS (Deta33
FAIR VALUE MEASUREMENTS (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
Beginning balance | $ 186,549 | $ 323,172 |
Purchases, issuances, and settlements | $ (782,239) | $ 18,551 |
Day one loss on value of hybrid instrument | ||
Total loss included in earnings (1) | $ 738,246 | $ (155,174) |
Ending balance | $ 142,556 | $ 186,549 |
FAIR VALUE MEASUREMENTS (Deta34
FAIR VALUE MEASUREMENTS (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Face Amount | $ 729,871 | $ 215,386 |
Minimum [Member] | ||
Interest Rate | 4.00% | 8.00% |
Default Interest Rate | - | - |
Anti-Dilution Adjusted price | $ 0.03 | $ 0.0028 |
Percentage of hybrid debenture | 50.00% | 50.00% |
Look back period | 10 days | 10 days |
Maximum [Member] | ||
Interest Rate | 20.00% | 20.00% |
Default Interest Rate | - | - |
Anti-Dilution Adjusted price | $ 0.20 | $ 0.0050 |
Percentage of hybrid debenture | 85.00% | 85.00% |
Look back period | 20 years | 30 years |
FAIR VALUE MEASUREMENTS (Deta35
FAIR VALUE MEASUREMENTS (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
Beginning balance | $ 330,277 | $ 767,057 |
Purchases, issuances, and settlements | 1,012,145 | 162,311 |
Day one loss on value of hybrid instrument | 779,035 | 423,340 |
(Gain) loss from change in fair value | (229,316) | (78,527) |
Conversion to common stock | (870,640) | (943,904) |
Ending balance | $ 1,021,501 | $ 330,277 |
FAIR VALUE MEASUREMENTS (Deta36
FAIR VALUE MEASUREMENTS (Details Narrative) | 12 Months Ended |
Dec. 31, 2015 | |
Maximum [Member] | |
Risk-free rate | 1.31% |
Expected volatility | 187.00% |
Minimum [Member] | |
Risk-free rate | 4.90% |
Expected volatility | 157.00% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 29,216 | $ 16,805 |
Finished Goods | 24,818 | 30,140 |
Total Inventories | $ 54,034 | $ 46,945 |
DUE TO OFFICERS (Details)
DUE TO OFFICERS (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Notes to Financial Statements | ||
unsecured demand loan from our President and CEO, Rik Deitsch. The loan bears interest at 4%. The loan balance at September 30, 2015 and December 31, 2014, respectively, includes accrued interest payable of $382,560 and $369,983. | $ 146,770 | $ 411,411 |
loan from Paul Reid, the former President of Recep to Pharm bearing interest at a rate of 5% per annum, due on demand and secured by certain intellectual property of ReceptoPharm having a zero cost at September 30, 2015 and December 31, 2014. The accrued interest at September 30, 2015 and December 31, 2014 was $54,542 and $49,638,respectively | 129,466 | |
Ending balances | $ 146,770 | $ 540,877 |
SETTLEMENT OF ACCOUNTS AND NO39
SETTLEMENT OF ACCOUNTS AND NOTE PAYABLE (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Brokers and Dealers [Abstract] | |
Accruals and notes payable | $ 1,085,468 |
Accrued salary | 815,747 |
Accrued interest | 129,466 |
Payroll tax payable | 140,255 |
Accrued the settlement | 315,000 |
Gain on settlement | $ 770,968 |
DUE TO OFFICERS (Details Narrat
DUE TO OFFICERS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Loan borrowed | $ 70,821 | |
Loan repaid | 351,583 | |
Outstanding Loan | $ 10,000 | |
Restricted common stock | 125,000 | |
Loan 1 [Member] | ||
Loan borrowed | $ 86,464 | |
Loan repaid | 161,969 | |
Accrued interest payable | 369,983 | $ 279,020 |
Outstanding Loan | $ 100,000 | |
Restricted common stock | 1,250,000 | |
Interest rate of Loan | 85.00% | |
Accrued interest | $ 0 | 49,638 |
Loan 2 [Member] | ||
Accrued interest payable | $ 49,638 | |
Interest rate of Loan | 4.00% | 5.00% |
OTHER DEBT (Details)
OTHER DEBT (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Note payable - Related Party (1) | $ 35,000 | $ 120,000 |
Notes payable – Non Related Parties (Net of discount of $24,602 and $2,611, respectively) (2) | 518,659 | 540,644 |
Convertible notes payable, at fair value (Net of discount of $21,921 and $0, respectively) (3) | 999,580 | 330,277 |
Ending balances | $ 1,553,239 | $ 990,921 |
OTHER DEBT (Details Narrative)
OTHER DEBT (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | |
Debt balance | $ 60,000 | ||
Accrued interest | 180,600 | ||
Repaid a total | 30,000 | $ 40,000 | |
Promissory note balance | 401,735 | ||
Amortization | 2,611 | ||
Debt discount | 39,530 | 2,611 | |
Owed approximately | 56,444 | ||
Convertible loans balance | 442,959 | ||
Accrued interest payable | 4,163 | ||
Convertible note payable fair value | 109,524 | $ 87,969 | |
Fair value | 146,912 | ||
Convertible note payable fair value | 103,369 | ||
Convertible note payable fair value | 58,214 | ||
Convertible note payable fair value | 190,447 | ||
Convertible note payable fair value | 97,741 | ||
Amortization for the debt discount | 15,810 | ||
Derivative loss | 28,791 | ||
Michael McDonald | |||
Debt balance | $ 84,666 | ||
Conversions of stock | 1,324,341 | ||
Convertible note payable fair value | $ 201,894 | ||
Convertible note payable fair value | 28,482 | ||
Convertible loans [Member] | |||
Non-related parties | 250,000 | ||
Amortization for the debt discount | 167 | ||
Amortization | 271 | ||
Non-related party [Member] | |||
Debt balance | 97,919 | ||
Accrued interest | 84,666 | ||
Repaid a total | 33,155 | ||
Amortization | 3,472 | ||
Interest expense | $ 7,712 | ||
February 25, 2015 [Member] | Non-related party [Member] | |||
Convertible note payable fair value | 137,751 | ||
Amortization for the debt discount | 3,250 | ||
Derivative loss | 49,541 | ||
November 5, 2014 [Member] | Non-related party [Member] | |||
Interest expense | $ 14,176 | ||
Interest rate | 15.00% | ||
Non-related parties | $ 150,000 | ||
Loan issuance cost | 14,350 | ||
Repayment of loan | 70,664 | ||
Principal balance of the loan net of discount | 60,410 | ||
Amortization | 6,982 | ||
September 2011 [Member] | Non-related party [Member] | |||
Satisfying the notes in the amount | 25,000 | ||
Fair value | 43,716 | ||
April 9, 2015 | Non-related party [Member] | Michael McDonald | |||
Fair value | 44,277 | ||
Convertible Redeemable Note | 92,310 | ||
April 2,015 | |||
Convertible note payable fair value | 466,042 | ||
April 2015 | Non-related party [Member] | |||
Amortization for the debt discount | 83,958 | ||
Derivative loss | 274,958 | ||
March 19, 2014 [Member] | Non-related party [Member] | |||
Convertible note payable fair value | 28,482 | ||
Derivative loss | 18,104 | ||
January 2015 [Member] | Non-related party [Member] | |||
Amortization for the debt discount | 36,485 | ||
Repayment of loan | 86,723 | ||
Principal balance of the loan net of discount | 16,728 | ||
February 24, 2015 [Member] | |||
Convertible note payable fair value | 231,012 | ||
Loan issuance cost | 4,000 | ||
Repayment of loan | 8,000 | ||
Amortization | 3,167 | ||
Derivative loss | 116,935 | ||
University Centre West Ltd [Member] | |||
Owed approximately | $ 55,410 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)shares | |
June, 18 2014 [Member] | |
Number of shares converted | shares | 219,535 |
Fair Value of Debt Converted | $ | $ 92,816 |
January, 25 2015 [Member] | |
Number of shares converted | shares | 461,548 |
Fair Value of Debt Converted | $ | $ 146,912 |
April 20, 2015 | |
Number of shares converted | shares | 489,964 |
Fair Value of Debt Converted | $ | $ 60,034 |
June 3, 2015 | |
Number of shares converted | shares | 453,000 |
Fair Value of Debt Converted | $ | $ 68,392 |
June 22, 2015 | |
Number of shares converted | shares | 381,377 |
Fair Value of Debt Converted | $ | $ 73,468 |
July, 2 2014 [Member] | |
Number of shares converted | shares | 107,337 |
Fair Value of Debt Converted | $ | $ 29,909 |
August 28, 2015 [Member] | |
Number of shares converted | shares | 300,000 |
Fair Value of Debt Converted | $ | $ 36,000 |
September 29, 2015 [Member] | |
Number of shares converted | shares | 300,000 |
Fair Value of Debt Converted | $ | $ 22,037 |
November 2, 2015 [Member] | |
Number of shares converted | shares | 300,000 |
Fair Value of Debt Converted | $ | $ 25,239 |
December 3, 2015 [Member] | |
Number of shares converted | shares | 275,000 |
Fair Value of Debt Converted | $ | $ 22,645 |
December 8, 2015 [Member] | |
Number of shares converted | shares | 281,440 |
Fair Value of Debt Converted | $ | $ 25,203 |
May 30, 2014 [Member] | |
Number of shares converted | shares | 588,235 |
Fair Value of Debt Converted | $ | $ 79,632 |
June 16, 2014 [Member] | |
Number of shares converted | shares | 113,636 |
Fair Value of Debt Converted | $ | $ 45,820 |
June 14, 2014 [Member] | |
Number of shares converted | shares | 128,788 |
Fair Value of Debt Converted | $ | $ 51,641 |
February 10, 2014 [Member] | |
Number of shares converted | shares | 115,000 |
Fair Value of Debt Converted | $ | $ 30,726 |
June 14, 2014 [Member] | |
Number of shares converted | shares | 125,000 |
Fair Value of Debt Converted | $ | $ 35,256 |
March 11, 2014 [Member] | |
Number of shares converted | shares | 584,416 |
Fair Value of Debt Converted | $ | $ 187,119 |
March 12, 2014 [Member] | |
Number of shares converted | shares | 389,610 |
Fair Value of Debt Converted | $ | $ 123,641 |
June 12, 2014 [Member] | |
Number of shares converted | shares | 312,490 |
Fair Value of Debt Converted | $ | $ 103,142 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Aug. 30, 2015 | Aug. 28, 2015 | Jan. 31, 2015 | Jun. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity compensation charge | $ 58,304 | ||||||
Remaining compensation cost | $ 19,561 | ||||||
Warrants expire | 7,180,331 | ||||||
Selling expense | $ 1,198,773 | ||||||
Michael McDonald | |||||||
Debt | $ 84,666 | ||||||
Conversions of stock | 1,324,341 | ||||||
Fair value of restricted stock | $ 201,894 | ||||||
Deitsch [Member] | |||||||
Outstanding loan | $ 10,000 | ||||||
Convertible Debt [Member] | |||||||
Conversions of stock | 300,000 | ||||||
Fair value of restricted stock | $ 37,794 | ||||||
Restricted stock | $ 23,645 | ||||||
Michael McDonald | |||||||
Debt | $ 92,310 | ||||||
Conversions of stock | 788,419 | ||||||
Fair value of restricted stock | $ 269,637 | ||||||
Restricted stock | $ 92,310 | ||||||
LG [Member] | |||||||
Debt | $ 70,875 | ||||||
Conversions of stock | 749,625 | ||||||
Fair value of restricted stock | $ 128,478 | ||||||
Restricted stock | $ 50,000 | ||||||
Castaldo [Member] | |||||||
Conversions of stock | 71,429 | ||||||
Fair value of restricted stock | $ 17,428 | ||||||
Coventry [Member] | |||||||
Conversions of stock | 250,000 | ||||||
Fair value of restricted stock | $ 44,277 | ||||||
Restricted stock | 20,000 | ||||||
Convertible Debt [Member] | |||||||
Conversions of stock | 196,850 | ||||||
Fair value of restricted stock | $ 25,000 | ||||||
Restricted stock | $ 43,716 | ||||||
November 2014 [Member] | |||||||
Equity compensation charge | 5,918 | 26,926 | |||||
November One 2014 [Member] | |||||||
Equity compensation charge | 1,929 | 11,967 | |||||
June 2014 [Member] | |||||||
Equity compensation charge | 22,938 | $ 19,561 | |||||
SeptemberOne 2015 [Member] | |||||||
Equity compensation charge | 1,758 | ||||||
Remaining compensation cost | 18,242 | ||||||
August 2015 [Member] | |||||||
Equity compensation charge | 24,457 | ||||||
Remaining compensation cost | 50,543 | ||||||
AugustOne 2015 [Member] | |||||||
Equity compensation charge | 36,685 | ||||||
Remaining compensation cost | $ 75,815 | ||||||
January 2015 [Member] | Deitsch [Member] | |||||||
Conversions of stock | 125,000 | ||||||
September 2015 [Member] | |||||||
Equity compensation charge | $ 164 | ||||||
Remaining compensation cost | $ 29,836 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Other Liabilities Disclosure [Abstract] | ||
Beginnings balance, Number of shares | 1,606,667 | 3,872,917 |
Number of shares Exercised | (1,000,000) | |
Number of shares, Issued | 21,685,000 | 400,000 |
Number of shares, Forfeited | (591,667) | (2,666,250) |
Endings balance Number of shares | 21,700,000 | 1,606,667 |
Beginnings balance, Weighted average exercise price | $ 1.92 | $ 1.94 |
Weighted average exercise price, Exercised | ||
Weighted average exercise price, Issued | $ 1.11 | $ 1.2 |
Weighted average exercise price, Forfeited | ||
Ending balance, Weighted average exercise price | $ 0.95 | $ 1.92 |
STOCK OPTIONS AND WARRANTS (D46
STOCK OPTIONS AND WARRANTS (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number Outstanding | 21,700,000 | 1,606,667 |
Weighted Average Contractual Life | 8 months 12 days | 2 years 9 months 4 days |
Weighted Average Exercise Price | $ 0.95 | $ 1.92 |
Minimum [Member] | ||
Exercise Price | 0.20 | 0.40 |
Maximum [Member] | ||
Exercise Price | $ 6 | $ 1.20 |
STOCK OPTIONS AND WARRANTS (D47
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2013 | |
Other Liabilities Disclosure [Abstract] | ||
Aggregate intrinsic value | $ 0 | |
Intrinsic value calculation is based | $ 0.55 | |
Warrants exercise | 1,000,000 | |
Cashless exercise | 400,000 | 250,000 |
Fair value warrants | $ 33,440 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Computed “expected” tax expense (benefit) - Federal | $ (1,777,507) | $ (813,848) |
Computed “expected” tax expense (benefit) - State | (304,273) | (139,314) |
Permeate differences | 1,874,050 | 797,895 |
Change in valuation allowance | $ 207,730 | $ 155,267 |
Total Income Tax Expense Benefit |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | Dec. 31, 2015USD ($) |
Current portion of net deferred income tax assets: | |
Accrued salary | $ 155,267 |
Valuation allowance | $ (155,267) |
Current net deferred income tax asset | |
Net operating loss carryforwards | $ 11,257,975 |
Valuation allowance | $ (11,257,975) |
Non-current net deferred income tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Federal Corporate tax rate | 34.00% | 37.63% |
Loss before taxes | 5.00% | |
Net operating loss carryforwards | $ 32,270,000 | |
Accumulated deficit | 17,782,000 | |
Valuation allowances | $ 207,000 | $ 155,000 |
COMMITMENTS AND CONTINGENCIES51
COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 115,688 |
2,017 | 121,433 |
2,018 | 126,494 |
2,019 | 88,513 |
Thereafter | 233,861 |
Total Operating Leases Future Minimum Payments Receivable | $ 685,989 |
COMMITMENTS AND CONTINGENCIES52
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 12 Months Ended | |
Dec. 31, 2015USD ($)ft² | Dec. 31, 2014USD ($) | |
Incurred rent expense | $ 94,329 | |
Rent expense | 126,339 | $ 119,215 |
Equity compensation | $ 116,000 | |
Area for office sublets | ft² | 3,779 | |
Accrued salary | $ 815,747 | |
Accrued interest | 129,466 | |
Accrued expense | 142,500 | |
Accrued the legal settlement | 243,164 | |
Accruals | 1,085,468 | |
February two thousand ten | ||
Monthly payments operating lease | 9,000 | |
February two thousand thirteen | ||
Incurred rent expense | 3,200 | |
Monthly payments operating lease | 3,500 | |
JulyTwo thousand twelve | ||
Monthly payments operating lease | 5,000 | |
Consulting Agreements [Member] | ||
Incurred rent expense | 3,500 | |
Equity compensation | 90,000 | |
Settlement Agreement [Member] | ||
Settlements benefit obligation | 265,423 | |
Rent expense | 16,719 | |
Additional contingency | $ 200,000 |