Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 27, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | PCT LTD | |
Entity Central Index Key | 0001119897 | |
Document Type | 10-Q/A | |
Document Period End Date | Jun. 30, 2020 | |
Entity Incorporation, State or Country Code | NV | |
Amendment Flag | true | |
Amendment Description | Amendment No. 1 to Form 10-Q/A (this “Form 10-Q/A") amends and restates certain items noted below in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, as originally filed with the Securities and Exchange Commission on August 31, 2020 (the “Original Filing”). This Form 10-Q/A amends the Original Filing to reflect the correction of an error in the previously reported financial statements related to the accounting for the settlement of certain derivative warrants. See Note 13 to the Condensed Consolidated Financial Statements included in Item 1 for additional information and a reconciliation of the previously reported amounts to the restated amounts. For the convenience of the reader, this Form 10-Q/A sets forth the Original Filing, as amended, in its entirety; however, this Form 10-Q/A amends and restates only the following financial statements and disclosures that were impacted from the correction of the error: • Part I, Item 1 - Financial Statements • Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations • Part I, Item 4 - Controls and Procedures Except as described above, no other changes have been made to the Original Filing. This Form 10-Q/A speaks as of the date of the Original Filing and does not reflect events that may have occurred after the date of the Original Filing or modify or update any disclosures that may have been affected by subsequent events. The Company is also filing an amended Annual Report for the fiscal year ended December 31, 2020 and an amended Quarterly Report for each of the quarterly periods ended September 30, 2020 and March 31, 2021 to restate the previously issued annual and interim financial statements due to the accounting error described above. | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-31549 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Interactive Data Current | Yes | |
Is Entity Emerging Growth Company? | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 598,982,574 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 29,260 | $ 67,613 |
Accounts receivable, net | 319,128 | 111,915 |
Prepaid expenses | 51,395 | 43,100 |
Other current assets | 17,110 | 2,110 |
Total current assets | 416,893 | 224,738 |
PROPERTY AND EQUIPMENT | ||
Property and equipment, net | 401,233 | 440,109 |
OTHER ASSETS | ||
Intangible assets, net | 3,552,267 | 3,704,429 |
Deposits | 2,526 | 5,499 |
Total other assets | 3,554,793 | 3,709,928 |
TOTAL ASSETS | 4,372,919 | 4,374,775 |
CURRENT LIABILITIES | ||
Accounts payable | 447,805 | 315,228 |
Accrued expenses - related parties | 98,311 | 84,538 |
Accrued expenses | 912,393 | 890,104 |
Notes payable - related party, net | 826,214 | 826,957 |
Notes payable, net | 408,617 | 468,153 |
Convertible notes payable, net | 980,254 | 1,187,633 |
Derivative liability | 11,393,973 | 10,517,873 |
Total current liabilities | 15,067,567 | 14,290,486 |
TOTAL LIABILITIES | 15,067,567 | 14,290,486 |
MEZZANINE EQUITY | ||
Preferred stock series A, $0.001 par value; 1,000,000 authorized; 500,000 and 500,000 issued and outstanding at June 30, 2020 and December 31, 2019, respectively; Preferred stock series B, $0.001 par value; 1,000,000 authorized; 1,000,000 and 1,000,000 issued and outstanding at June 30, 2020 and December 31, 2019, respectively; Preferred series C stock, $0.001 par value; 5,500,000 authorized; 440,000 and nil issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 702,645 | 218,645 |
STOCKHOLDERS' DEFICIT | ||
Common stock, $0.001 par value; 1,000,000,000 authorized; 584,201,486 and 498,880,300 issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 584,202 | 498,881 |
Additional paid-in capital | 18,056,637 | 15,872,330 |
Accumulated deficit | (30,038,132) | (26,505,567) |
TOTAL STOCKHOLDERS' DEFICIT | (11,397,293) | (10,134,356) |
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT | $ 4,372,919 | $ 4,374,775 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 7,500,000 | 7,500,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 584,201,486 | 498,880,300 |
Common stock, shares outstanding | 584,201,486 | 498,880,300 |
Preferred stock series A | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 500,000 | 500,000 |
Preferred stock, shares outstanding | 500,000 | 500,000 |
Preferred stock series B | ||
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Preferred stock series C | ||
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 5,500,000 | |
Preferred stock, shares issued | 440,000 | |
Preferred stock, shares outstanding | 440,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES | ||||
Product | $ 582,389 | $ 11,745 | $ 745,037 | $ 98,839 |
Licensing | 77,000 | 34,000 | 84,000 | 78,500 |
Equipment leases | 221,783 | 73,117 | 324,317 | 137,480 |
Total Revenues | 881,172 | 118,862 | 1,153,354 | 314,819 |
OPERATING EXPENSES | ||||
General and administrative | 592,042 | 415,339 | 1,140,828 | 1,082,303 |
Research and development | 5,000 | 3,792 | 5,000 | 3,792 |
Costs of product, licensing and equipment leases | 415,855 | 24,077 | 564,705 | 96,731 |
Depreciation and amortization | 81,348 | 84,189 | 164,369 | 169,101 |
Total operating expenses | 1,094,245 | 527,397 | 1,874,902 | 1,351,927 |
Loss from operations | (213,073) | (408,535) | (721,548) | (1,037,108) |
OTHER INCOME (EXPENSE) | ||||
Loss on change in fair value of derivative liability | (6,015,835) | (2,789,342) | (15,310,597) | (2,951,641) |
Gain (loss) on change in fair value of preferred series A stock liability | (3,004) | 72,473 | ||
Gain on sale of intangible assets | 52,498 | 52,498 | ||
Gain (loss) on settlement of debt | 13,707,921 | 13,663,921 | (84,409) | |
Interest expense | (459,930) | (381,764) | (894,341) | (502,283) |
Total other income (expense) | 7,232,156 | (3,121,612) | (2,541,017) | (3,413,362) |
Income (loss) before income taxes | 7,019,083 | (3,530,147) | (3,262,565) | (4,450,470) |
Income taxes | ||||
NET INCOME (LOSS) | 7,019,083 | (3,530,147) | (3,262,565) | (4,450,470) |
Preferred series C stock deemed dividends | (270,000) | |||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS’ | $ 7,019,083 | $ (3,530,147) | $ (3,532,565) | $ (4,450,470) |
Basic net income (loss) per share | $ 0.01 | $ (0.07) | $ (0.01) | $ (0.09) |
Diluted net income (loss) per share | $ 0 | $ (0.07) | $ (0.01) | $ (0.09) |
Basic weighted average shares outstanding | 569,964,666 | 52,755,139 | 557,809,456 | 49,208,103 |
Diluted weighted average shares outstanding | 774,463,424 | 52,755,139 | 557,809,456 | 49,208,103 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 44,559,238 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 44,560 | $ 11,588,030 | $ (9,927,003) | $ 1,705,587 |
Common stock issued for services, shares | 575,000 | |||
Common stock issued for services, amount | $ 575 | 98,352 | 98,927 | |
Common stock issued in settlement of debt, shares | 5,383,810 | |||
Common stock issued in settlement of debt, amount | $ 5,383 | 800,012 | 805,395 | |
Net loss/income | (920,323) | (920,323) | ||
Ending balance, shares at Mar. 31, 2019 | 50,518,048 | |||
Ending balance, amount at Mar. 31, 2019 | $ 50,518 | 12,486,394 | (10,847,326) | 1,689,586 |
Beginning balance, shares at Dec. 31, 2018 | 44,559,238 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 44,560 | 11,588,030 | (9,927,003) | 1,705,587 |
Net loss/income | (4,450,470) | |||
Ending balance, shares at Jun. 30, 2019 | 76,859,961 | |||
Ending balance, amount at Jun. 30, 2019 | $ 76,860 | 12,770,553 | (14,377,473) | (1,530,060) |
Beginning balance, shares at Mar. 31, 2019 | 50,518,048 | |||
Beginning balance, amount at Mar. 31, 2019 | $ 50,518 | 12,486,394 | (10,847,326) | 1,689,586 |
Stock-based compensation | 23,125 | 23,125 | ||
Common stock issued in conversion of convertible notes payable, shares | 26,341,913 | |||
Common stock issued in conversion of convertible notes payable, amount | $ 26,342 | 261,034 | 287,376 | |
Net loss/income | (3,530,147) | (3,530,147) | ||
Ending balance, shares at Jun. 30, 2019 | 76,859,961 | |||
Ending balance, amount at Jun. 30, 2019 | $ 76,860 | 12,770,553 | (14,377,473) | (1,530,060) |
Beginning balance, shares at Dec. 31, 2019 | 498,880,300 | |||
Beginning balance, amount at Dec. 31, 2019 | $ 498,881 | 15,872,330 | (26,505,567) | (10,134,356) |
Common stock issued for services, shares | 15,525,000 | |||
Common stock issued for services, amount | $ 15,525 | 103,538 | 119,063 | |
Common stock issued in settlement of debt, shares | 250,000 | |||
Common stock issued in settlement of debt, amount | $ 250 | 7,975 | 8,225 | |
Common stock issued in conversion of convertible notes payable, shares | 36,050,000 | |||
Common stock issued in conversion of convertible notes payable, amount | $ 36,050 | 360,660 | 396,710 | |
Beneficial conversion feature on preferred series C stock | 270,000 | (270,000) | ||
Net loss/income | (10,281,648) | (10,281,648) | ||
Ending balance, shares at Mar. 31, 2020 | 550,705,300 | |||
Ending balance, amount at Mar. 31, 2020 | $ 550,706 | 16,614,503 | (37,057,215) | (19,892,006) |
Beginning balance, shares at Dec. 31, 2019 | 498,880,300 | |||
Beginning balance, amount at Dec. 31, 2019 | $ 498,881 | 15,872,330 | (26,505,567) | (10,134,356) |
Net loss/income | (3,262,565) | |||
Ending balance, shares at Jun. 30, 2020 | 584,201,486 | |||
Ending balance, amount at Jun. 30, 2020 | $ 584,202 | 18,056,637 | (30,038,132) | (11,397,293) |
Beginning balance, shares at Mar. 31, 2020 | 550,705,300 | |||
Beginning balance, amount at Mar. 31, 2020 | $ 550,706 | 16,614,503 | (37,057,215) | (19,892,006) |
Common stock issued for cash, shares | 4,250,000 | |||
Common stock issued for cash, amount | $ 4,250 | 135,750 | 140,000 | |
Stock-based compensation | 14,182 | 14,182 | ||
Common stock issued in settlement of debt, shares | 15,000,000 | |||
Common stock issued in settlement of debt, amount | $ 15,000 | 826,500 | 841,500 | |
Common stock issued in cashless exercise of warrants, shares | 9,246,186 | |||
Common stock issued in cashless exercise of warrants, amount | $ 9,246 | 420,702 | 429,948 | |
Common stock issued in conversion of preferred series C stock, shares | 5,000,000 | |||
Common stock issued in conversion of preferred series C stock, amount | $ 5,000 | 45,000 | 50,000 | |
Net loss/income | 7,019,083 | 7,019,083 | ||
Ending balance, shares at Jun. 30, 2020 | 584,201,486 | |||
Ending balance, amount at Jun. 30, 2020 | $ 584,202 | $ 18,056,637 | $ (30,038,132) | $ (11,397,293) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (3,262,565) | $ (4,450,470) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 164,369 | 169,101 |
Amortization of debt discount | 280,188 | 300,703 |
Amortization of operating lease right-of-use asset | 23,635 | |
Common stock issued for services | 133,245 | 122,052 |
Loss on change in fair value of derivative liability | 15,310,597 | 2,951,641 |
Gain on change in fair value of preferred series A stock liability | (72,473) | |
(Gain) loss on settlement of debt | (13,663,921) | 84,409 |
Gain on sale of intangible assets | (52,498) | |
Default penalties on convertible notes payable | 13,762 | 87,500 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (207,213) | (81,166) |
Inventory | 26,669 | 644 |
Prepaid expenses | (8,295) | 177,475 |
Other assets | (12,027) | |
Operating lease liability | (21,626) | |
Accounts payable | 132,577 | 59,265 |
Accrued expenses - related party | 13,773 | 8,245 |
Accrued expenses | 620,188 | 215,811 |
Contract liabilities | 24,532 | |
Net cash used in operating activities | (458,653) | (453,220) |
Cash Flows from Investing Activities | ||
Proceeds from sale of intangible assets | 57,500 | |
Purchase of property and equipment | (2,516) | |
Purchase of intangible assets | (5,000) | |
Net cash used in investing activities | 49,984 | |
Cash Flows from Financing Activities | ||
Proceeds from notes payable - related parties | 3,500 | 2,544 |
Proceeds from notes payable | 155,525 | 88,600 |
Proceeds from convertible notes payable | 413,000 | 460,750 |
Proceeds from common stock subscriptions | 140,000 | |
Proceeds from preferred series C stock subscriptions | 270,000 | |
Repayment of notes payable - related parties | (4,286) | (16,044) |
Repayment of notes payable | (245,551) | (9,209) |
Repayment of convertible notes payable | (311,888) | (91,000) |
Net cash provided by financing activities | 420,300 | 435,641 |
Net change in cash | (38,353) | 32,405 |
Cash and cash equivalents at beginning of period | 67,613 | 4,893 |
Cash and cash equivalents at end of period | 29,260 | 37,298 |
Supplemental Cash Flow Information: | ||
Cash paid for interest | 53,645 | 51,639 |
Cash paid for Income taxes | ||
Non-Cash Investing and Financing Activities | ||
Preferred series C stock deemed dividend | 270,000 | |
Original debt discount against notes payable | 23,917 | 10,204 |
Original debt discount against convertible notes payable | 197,888 | 395,125 |
Modification of notes payable | 20,590 | |
Common stock issued in conversion of convertible notes payable | 396,710 | 287,376 |
Common stock issued in cashless exercise of warrants | 429,948 | |
Common stock issued in conversion of preferred series C stock | 50,000 | |
Accounts receivable netted against notes payable | 18,000 | |
Initial operating lease right-of-use asset and liability | 43,330 | |
Preferred series A stock reclassification from liability to mezzanine equity | 60,398 | |
Property plant and equipment transferred to inventory | $ 26,669 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The unaudited interim condensed consolidated financial statements of PCT LTD (the “Company”) have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of our balance sheets, statements of operations, stockholders’ equity (deficit), and cash flows for the periods presented. All such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative of the results to be expected for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2019 audited financial statements as reported in its Form 10-K, filed on August 3, 2020. COVID-19 In December 2019 COVID-19 emerged in Wuhan, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to almost all other countries, including the United States, and infections have been reported globally. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may be issued in the future. The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak. Any resulting financial impact cannot be reasonably estimated at this time but may have a material impact on our business, financial condition and results of operations. The significance of the impact of the COVID-19 outbreak on the Company’s businesses and the duration for which it may have an impact cannot be determined at this time. At a minimum, the COVID-19 pandemic caused the Company to restrict travel of its personnel and to initiate distributor installations of certain of the Company’s equipment, as possible. The Company adapted to the immediate need for its US EPA registered disinfectant at the end of March and beginning of April, 2020, by installing greater storage reserves and by assembling more of it higher-volume equipment to produce the hospital grade disinfectant known as Hydrolyte®. There were hard costs associated with these adaptations to the Little River, SC facility, but the Company continues to benefit from its fluid production capacities over the longer term. As the Federal, state and other restrictions associated with the pandemic have lessened, the Company is able to act more effectively in obtaining new contracts for its healthcare equipment, the Annihilyzer® and other equipment. Nature of Operations PCT LTD (formerly Bingham Canyon Corporation, (the “Company,” “PCT Ltd,” or “Bingham”), a Delaware corporation, was formed on February 27, 1986. The Company changed its domicile to Nevada on August 26, 1998. The Company acquires, develops and provides sustainable, environmentally safe disinfecting, cleaning and tracking technologies. The Company specializes in providing cleaning, sanitizing, and disinfectant fluid solutions and fluid-generating equipment that creates environmentally safe solutions for global sustainability. Paradigm is located in Little River, SC and was formed June 6, 2012 under the name of EUR-ECA, Ltd. On September 11, 2015, its Board of Directors authorized EUR-ECA Ltd to file with the Nevada Secretary of State to change its name to Paradigm Convergence Technologies Corp. Paradigm is a technology licensing company specializing in environmentally safe solutions for global sustainability. The company holds a patent, intellectual property and/or distribution rights to innovative products and technologies. Paradigm provides innovative products and technologies for eliminating biocidal contamination from water supplies, industrial fluids, hard surfaces, food processing equipment, and medical devices. Paradigm’s overall strategy is to market new products and technologies through the use of equipment leasing, joint ventures, licensing, distributor agreements and partnerships. Effective on February 29, 2018, the Company changed its name from Bingham Canyon Corporation to PCT LTD to more accurately identify the Company’s direction and to develop the complimentary relationship and association with its wholly-owned operating company, Paradigm Convergence Technologies Corporation (“Paradigm” or “PCT Corp.”). Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 1 of the Notes to the Consolidated Financial Statements in the Company's most recent Form 10-K. Reclassification Certain balances on the previously issued statements of operations and cash flows have been reclassified to be consistent with the current period presentation. The reclassification had no impact on total financial position, net loss, or stockholders’ equity (deficit). Fair Value Measurements The Company follows ASC 820, “ Fair Value Measurements and Disclosures • Level 1 - Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. • Level 2 - Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of our financial instruments, including, cash and cash equivalents, accounts receivable, inventory, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to the short maturities of these financial instruments. Derivative liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. Our financial assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2020, consisted of the following: Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs (restated) (restated) Description: Derivative liability (1) 11,393,973 — — 11,393,973 Total 11,393,973 — — 11,393,973 Our financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2019, consisted of the following: Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 10,517,873 — — 10,517,873 Total 10,517,873 — — 10,517,873 (1) The Company has estimated the fair value of these liabilities using the Binomial Model. Basic and Diluted Income (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as options, warrants, convertible notes payable, preferred series A stock and preferred series C stock. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result, for the three months ended June 30, 2020, there were outstanding common share equivalents which amounted to 319,106,192 (restated) shares of common stock that were not included in the calculation as their effect is anti-dilutive. For fiscal periods with net losses, these common share equivalents were not included in the computation of diluted loss per share as their effect would have been anti-dilutive. Three months ended June 30, 2020 Three months ended June 30, 2019 Six months Six months Numerator: Net income (loss) 7,019,083 (3,530,147 ) (3,532,565 ) (4,450,470 ) Loss on change in fair value of derivative liability 4,463,852 — — — Gain on settlement of debt (13,794,438 ) — — — Amortization of debt discount 176,381 — — — Interest expense 52,146 — — — Adjusted net income (loss) (2,082,976 ) (3,530,147 ) (3,532,565 ) (4,450,470 ) Denominator: Weighted average shares outstanding used in computing net income (loss) per share Basic 569,964,666 52,755,139 557,809,456 49,208,103 Effect of dilutive warrants 81,681,300 — — — Effect of convertible note weighted shares 122,817,458 — — — Diluted 774,463,424 52,755,139 557,809,456 49,208,103 Net income (loss) per share applicable to common shareholders: Basic 0.01 (0.07 ) (0.01 ) (0.09 ) Diluted (0.00 ) (0.07 ) (0.01 ) (0.09 ) Recent Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update No. 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements relating to fair value measurements as outlined in Topic 820, Fair Value Measurement. ASU 2018-13 is applicable to all entities that are required, under GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments outlined in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures upon issuance of ASU 2018-13. The Company adopted ASU 2018-13 on January 1, 2020 and the adoption of ASU 2018-13 did not have a material effect on the consolidated financial statements. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2. GOING CONCERN The accompanying consolidated condensed financial statements have been prepared assuming that the Company will continue as a going concern. The Company has an accumulated deficit of $30,038,132 (restated) and has negative cash flows from operations. As of June 30, 2020, the Company had a working capital deficit of $14,650,674 (restated). The Company has relied on raising debt and equity capital in order to fund its ongoing day-to-day operations and its corporate overhead. The Company will require additional working capital from either cash flow from operations, from debt or equity financing, or from a combination of these sources. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3. PROPERTY AND EQUIPMENT Property and equipment at June 30, 2020 and December 31, 2019 consisted of the following: June 30, 2020 December 31, 2019 Machinery and leased equipment $ 151,719 $ 151,719 Machinery and equipment not yet in service 294,896 321,565 Office equipment and furniture 20,064 20,064 Website 2,760 2,760 Total property and equipment $ 469,439 $ 496,108 Less: Accumulated Depreciation (68,206 ) (55,999 ) Property and equipment, net 401,233 440,109 Depreciation expense was $12,207 and $12,701 for the six-months ended June 30, 2020 and 2019, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4. INTANGIBLE ASSETS Intangible assets at June 30, 2020 and December 31, 2019 consisted of the following: June 30, 2020 December 31, 2019 Patents $ 4,505,489 $ 4,505,489 Technology rights 200,000 200,000 Intangibles, at cost 4,705,489 4,705,489 Less: Accumulated amortization (1,153,222 ) (1,001,060 ) Net Carrying Amount $ 3,552,267 $ 3,704,429 Amortization expense was $152,162 and $156,400 for the six-months ended June 30, 2020 and 2019, respectively. Estimated Future Amortization Expense: $ For year ending December 31, 2020 - remaining 151,002 For year ending December 31, 2021 302,003 For year ending December 31, 2022 302,003 For year ending December 31, 2023 302,003 For year ending December 31, 2024 302,003 Thereafter 2,193,253 Total 3,552,267 |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 5. Notes Payable The following tables summarize notes payable as of June 30, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at June 30, 2020 Balance at December 31, 2019 Note Payable ** $ 25,000 05/08/2017 06/30/2018 0 % $ 27,500 $ 27,500 Note Payable ** $ 130,000 06/20/2018 01/02/2020 8 % $ 112,500 $ 130,000 Note Payable ** $ 8,700 11/15/2018 06/30/2019 10 % $ 8,700 $ 8,700 Note Payable (e) $ 90,596 09/15/2019 05/28/2020 8 % $ — $ 90,596 Note Payable (k) $ 50,000 10/03/2019 04/03/2020 12 % $ — $ 37,500 Note Payable (e) $ 17,500 11/12/2019 11/12/2020 8 % $ — $ 17,500 Note Payable ** $ 83,400 12/20/2019 06/19/2020 150 % $ 38,491 $ 80,192 Note Payable $ 148,362 12/20/2019 11/27/2020 80 % $ 68,496 $ 145,404 Note Payable (a) $ 25,782 01/08/2020 05/13/2020 313 % $ — $ — Note Payable (b) $ 33,660 02/19/2020 04/30/2020 585 % $ — $ — Note Payable (c)(e) $ 20,000 02/28/2020 05/28/2020 8 % $ — $ — Note Payable (d) $ 100,000 03/31/2020 08/01/2020 30 % $ 50,000 $ — Note Payable (e) $ 118,644 05/05/2020 05/05/2021 8 % $ 118,644 $ — Subtotal $ 424,331 $ 537,392 Debt discount $ (15,714 ) $ (69,239 ) Balance, net $ 408,617 $ 468,153 Less current portion $ (408,617 ) $ (468,153 ) Total long-term $ — $ — ** Currently in default a) On January 8, 2020, the Company sold future receivables with a non-related party for up to $87,540. During the period $25,782 was sold, of which $10,207 was loan fees and original issue discount resulting in cash proceeds to the Company of $15,575. The advance was repaid through $1,450 weekly payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. This note was repaid during the period. b) On February 19, 2020, the Company sold future receivables with a non-related party for $33,660, of which $13,710 was loan fees and original issue discount resulting in cash proceeds to the Company of $19,950. The advance was repaid through $660 daily payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. This note was repaid during the period. c) On February 28, 2020, the Company entered into a promissory note with a non-related party for $20,000. The note is due May 28, 2020, is unsecured and bears an interest rate of 8% per annum. On May 5, 2020, the Company consolidated this note with two others as described in Note 6(e). d) On March 31, 2020, the Company entered into a promissory note with a non-related party for $100,000. The note is due August 1, 2020, is unsecured and bears interest at $2,500 per month, repayable in four monthly payments of $27,500 commencing May 1, 2020. Additionally, the Company issued the lender 250,000 shares of the Company’s common stock with a fair market value of $8,225 as additional consideration for the loan. During the period, the Company repaid $50,000 of the note. e) On May 5, 2020, the Company consolidated three notes with principal amounts of $90,596, $17,500 and $20,000 as well as accrued interest into a new note with a principal amount of $118,644 and a maturity date of May 5, 2021. The note bears interest at 8% per annum and in connection with the consolidation the Company issued the lender 15,000,000 shares of the Company’s common stock with a fair value of $841,500. As the instruments were substantially different, the old notes were considered to be extinguished and the Company recognized a loss on settlement of debt of $826,500. The following table summarizes notes payable, related parties as of June 30, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at June 30, 2020 Balance at December 31, 2019 Note Payable, RP ** $ 30,000 04/10/2018 01/15/2019 3 % $ 30,000 $ 30,000 Note Payable, RP ** $ 380,000 06/20/2018 01/02/2020 8 % $ 380,000 $ 380,000 Note Payable, RP ** $ 350,000 06/20/2018 01/02/2020 5 % $ 322,214 $ 325,000 Note Payable, RP ** $ 17,000 06/20/2018 01/02/2020 5 % $ 17,000 $ 17,000 Note Payable, RP ** $ 50,000 07/27/2018 11/30/2018 8 % $ 50,000 $ 50,000 Note Payable, RP $ 5,000 10/09/2018 Demand 0 % $ 5,000 $ 5,000 Note Payable, RP $ 5,000 10/19/2018 Demand 0 % $ 5,000 $ 5,000 Note Payable, RP ** $ 15,000 08/16/2019 02/16/2020 8 % $ 15,000 $ 15,000 Note Payable, RP (f) $ 1,500 02/11/2020 Demand 0 % $ — $ — Note Payable, RP (g) $ 2,000 02/11/2020 Demand 0 % $ 2,000 $ — Subtotal $ 826,214 $ 827,000 Debt discount $ — $ (43 ) Balance, net $ 826,214 $ 826,957 Less current portion $ (826,214 ) $ (826,957 ) Total long-term $ — $ — ** Currently in default f) On February 11, 2020, the Company entered into a promissory note with the Chairman and CEO of the Company for $1,500. The note is due on demand, is unsecured and bears an interest rate of 0% per annum. The note was repaid during the period. g) On February 11, 2020, the Company entered into a promissory note with the COO and Director of the Company for $2,000. The note is due on demand, is unsecured and bears an interest rate of 0% per annum. The following table summarizes convertible notes payable as of June 30, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at June 30, 2020 Balance at December 31, 2019 Convertible Note Payable (h) * ** $ 50,000 12/06/2018 12/06/2019 12 % $ 5,685 $ 22,777 Convertible Note Payable * ** $ 65,000 12/06/2018 12/06/2019 12 % $ 46 $ 46 Convertible Note Payable (i) * ** $ 100,000 01/18/2019 01/16/2020 24 % $ 105,041 $ 95,492 Convertible Note Payable (r) $ 60,000 01/29/2019 01/22/2020 18 % $ — $ 266,050 Convertible Note Payable * ** $ 50,000 02/01/2019 10/22/2019 24 % $ 154,330 $ 154,330 Convertible Note Payable (o) $ 60,000 02/21/2019 02/14/2022 0 % $ — $ 74,000 Convertible Note Payable (j) * ** $ 55,125 02/21/2019 02/20/2020 24 % $ 46,338 $ 42,125 Convertible Note Payable * ** $ 75,000 03/18/2019 12/13/2019 24 % $ 232,814 $ 232,814 Convertible Note Payable (o) $ 26,000 09/16/2019 09/11/2022 0 % $ — $ 26,000 Convertible Note Payable (k) $ 175,814 09/27/2019 09/25/2020 8 % $ — $ 175,814 Convertible Note Payable $ 53,000 10/08/2019 10/07/2020 12 % $ — $ 53,000 Convertible Note Payable $ 50,000 10/31/2019 10/29/2020 12 % $ — $ 50,000 Convertible Note Payable (l) $ 8,888 02/19/2020 02/18/2021 12 % $ — $ — Convertible Note Payable (m) * ** $ 30,000 03/06/2020 03/05/2021 12 % $ 30,000 $ — Convertible Note Payable (n) $ 45,000 03/09/2020 03/02/2021 12 % $ 45,000 $ — Convertible Note Payable (p) * ** $ 150,000 04/10/2020 04/09/2021 12 % $ 150,000 $ — Convertible Note Payable (q) $ 128,000 04/16/2020 04/09/2021 12 % $ 128,000 $ — Convertible Note Payable (s) $ 83,000 05/12/2020 11/08/2021 12 % $ 83,000 $ — Subtotal $ 980,254 $ 1,192,448 Debt discount $ — $ (4,815 ) Balance, net $ 980,254 $ 1,187,633 Less current portion $ (980,254 ) $ (1,187,633 ) Total long-term $ — $ — * Embedded conversion feature accounted for as a derivative liability at period end h) During the period ended June 30, 2020, $17,092 of principal and $3,507 of interest of the convertible note payable was converted into 36,050,000 shares of the Company’s common stock. i) During the period ended June 30, 2020, the Company was further assessed default penalties and interest on this convertible note as the note reached maturity. Additional default and penalties were assessed in the amount of $118,295 of which $9,549 was recorded as a principal addition and $108,746 was recorded in accrued interest. to the note. j) During the period ended June 30, 2020, the Company was further assessed default penalties and interest on this convertible note as the note reached maturity. Additional default and penalties were assessed in the amount of $4,213 was recorded as a principal addition. k) On February 7, 2020, the Company extinguished both promissory note (totaling $39,000) and convertible note (totaling $181,000), including accrued interest with a non-related party through the issuance of 220,000 shares of preferred series C stock. The Company recorded the difference between the fair value of the preferred series C stock of $264,000 and the debt outstanding of $220,000 as a loss on extinguishment of debt of $44,000. l) On February 19, 2020, the Company received another tranche on a convertible note originally dated December 6, 2018. The new tranche had a principal amount of $8,888, with an original issue discount of $888. The convertible note is due 365 days from issuance, bears interest at 12% per annum and is convertible into common shares of the Company at 65% multiplied by the lowest traded price or lowest closing bid price during the 25 days the Company’s stock is tradable prior to the conversion date. Further, if at any time the stock price is less than $0.30 an additional 20% discount is applied and if at any time the conversion price is less than $0.01 and additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. m) On March 6, 2020, the Company received another tranche on a convertible note originally dated December 6, 2018. The new tranche had a principal amount of $30,000, with an original issue discount of $4,000. The convertible note is due 365 days from issuance, bears interest at 12% per annum and is convertible into common shares of the Company at 65% multiplied by the lowest traded price or lowest closing bid price during the 25 days the Company’s stock is tradable prior to the conversion date. Further, if at any time the stock price is less than $0.30 an additional 20% discount is applied and if at any time the conversion price is less than $0.01 and additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. n) On March 9, 2020, the Company entered into a convertible promissory with a non-related party for $45,000 of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $42,000. The note is due on March 2, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. As the note isn’t convertible until 180 days following issuance, no derivative liability was recognized as of June 30, 2020. o) On April 1, 2020, the Company entered into a settlement agreement to settle convertible notes with principal amounts of convertible notes. The Company agreed to pay $100,000 to settle the principal and accrued interest and penalties relating to the two convertible notes. The Company recorded a gain on settlement of debt of $312,269. As part of the settlement, the Company cancelled 197,190,272 warrants. p) On April 10, 2020, the Company entered into a convertible promissory note with a non-related party for $150,000 of which $18,000 was an original issue discount resulting in cash proceeds to the Company of $132,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. The Note may be converted by the Lender at any time into shares of Company’s common stock at a conversion price equal to 65% of the lowest trading price during the 25-trading day period prior to the conversion date. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, this additional discount was triggered. q) On April 16, 2020, the Company entered into a convertible promissory with a non-related party for $128,000 of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $125,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. As the note isn’t convertible until 180 days following issuance, no derivative liability was recognized as of June 30, 2020. r) On May 11, 2020, the Company entered into a settlement agreement to settle the $60,000 convertible note. The Company agreed to pay $100,000 to settle the principal and accrued interest and penalties relating the convertible note. The Company recorded a gain on settlement of debt of $2,273,770. s) On May 12, 2020, the Company entered into a convertible promissory with a non-related party for $83,000 of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $80,000. The note is due on November 8, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. As the note isn’t convertible until 180 days following issuance, no derivative liability was recognized as of June 30, 2020. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
DERIVATIVE LIABILITIES | NOTE 6. DERIVATIVE LIABILITIES The embedded conversion option of (1) the convertible notes payable described in Note 5; (2) warrants; contain conversion features that qualify for embedded derivative classification. The fair value of the liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments. Upon the issuance of the convertible notes payable described in Note 5, the Company concluded that it only has sufficient shares to satisfy the conversion of some but not all of the outstanding convertible notes, warrants and options. The Company elected to reclassify contracts from equity with the earliest inception date first. As a result, none of the Company’s previously outstanding convertible instruments qualified for derivative reclassification, however, any convertible securities issued after the election, including the warrants described in Note 9, qualified for derivative classification. The Company reassesses the classification of the instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities. June 30, December 31, (restated) Balance at the beginning of period $ 10,517,873 $ 322,976 Original discount limited to proceeds of notes 166,000 540,750 Fair value of derivative liabilities in excess of notes proceeds received 804,403 1,653,887 Settlement of derivative instruments (14,600,497 ) (3,258,054 ) Change in fair value of embedded conversion option 14,506,194 11,258,314 Balance at the end of the period $ 11,393,973 $ 10,517,873 The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option and warrant liabilities as their fair values were determined by using the Binomial Model based on various assumptions. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations: Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At issuance during the period 336-358% 0.25-1.47% 0 % 1.00 At June 30, 2020 236-320% 0.16-0.18% 0 % 0.68-3.70 The Company uses Level 3 inputs for its valuation methodology for the preferred series A stock liability as their fair values were determined by using the Binomial Model based on various assumptions. |
STOCKHOLDERS' DEFICIT AND STOCK
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS | NOTE 7. STOCKHOLDERS’ DEFICIT Preferred Stock On February 7, 2020, the Company extinguished a promissory note and convertible note, including accrued interest through the issuance of 220,000 shares of preferred series C stock. The Company recorded the difference between the fair value of the preferred series C stock of $264,000 and the debt outstanding of $220,000 as a loss on extinguishment of debt of $44,000. During the period ended June 30, 2020, the Company sold 270,000 shares of preferred series C stock for proceeds of $270,000. The preferred series C stock sold during the period contained a beneficial conversion feature as the conversion price was less than the fair value of the common stock which the instrument is convertible at the commitment date. During the six-months ended June 30, 2020, the intrinsic value of the 270,000 shares sold was $270,000. As the preferred series C stock are have no stated maturity date and are convertible at any time, the discount created in the preferred series C stock is fully amortized at issuance as a deemed dividend. On June 24, 2020, 50,000 shares of preferred series C stock was converted into common stock (1 share converts into 100 shares of common stock), resulting in the issuance of 5,000,000 shares of common stock. Common Stock On January 1, 2019, the Company entered into a four-year employment agreement with F. Jody Read in his role as Chief Executive Officer. The employment agreement awards the CEO 1,500,000 restricted shares of the Company’s restricted stock valued at $240,000, which shall vest in the following manner: 375,000 shares on March 1, 2019, 375,000 shares on March 1, 2020, 375,000 shares on March 1, 2021 and the final 375,000 shares on March 1, 2022. On October 4, 2019, F. Jody Read resigned from the position of CEO and moved back into the role of COO. The terms of his employment agreement remained unchanged. As of June 30, 2020, 750,000 shares were issued and the Company had recognized $145,093 of stock-based compensation. During the period ended June 30, 2020, $17,092 of principal and $3,507 of interest of a convertible note payable was converted into 36,050,000 shares of the Company’s common stock as further described in Note 5(h). During the period ended June 30, 2020, the Company issued 9,246,186 shares of common stock upon the cashless exercise of 9,280,742 warrants. On January 1, 2020, the Company issued 15,000,000 fully vested shares of the Company’s common stock to Gary J. Grieco, its President and CEO, pursuant to an employment agreement. The Company recorded the fair value of the common shares of $99,000 as stock-based compensation. On March 20, 2020, the Company issued 150,000 shares of common stock to a consultant. The Company recorded the fair value of the common shares of $5,880 in consulting expense. On March 31, 2020, the Company issued 250,000 shares of common stock pursuant to a loan agreement. The Company recorded the fair value of the common shares of $8,225 in interest expense. On April 27, 2020, the Company issued 1,000,000 shares of common stock to an employee of the Company for cash proceeds of $10,000. On April 27, 2020, the Company issued 2,750,000 shares of common stock for cash proceeds of $110,000. On May 5, 2020, the Company issued 15,000,000 shares of common stock as part of the note extinguishment and consolidation agreement described in Note 5(e). On May 19, 2020, the Company issued 500,000 shares of common stock for cash proceeds of $20,000. On June 24, 2020, 50,000 shares of preferred series C stock was converted into common stock (1 share converts into 100 shares of common stock), resulting in the issuance of 5,000,000 shares of common stock. NOTE 8. STOCK OPTIONS Below is a table summarizing the options issued and outstanding as of June 30, 2020: Number of Weighted average exercise price Balance, December 31, 2019 200,000 2.00 Granted — — Expired — — Settled — — Balance, June 30, 2020 200,000 2.00 As at June 30, 2020, the following share stock options were outstanding: Date Number Number Exercise Weighted Average Remaining Contractual Expiration Proceeds to Company if Issued Outstanding Exercisable Price $ Life (Years) Date Exercised 01/26/2017 200,000 200,000 2.00 1.58 01/26/2022 400,000 200,000 200,000 $ 400,000 The weighted average exercise prices are $2.00 for the options outstanding and exercisable, respectively. The intrinsic value of stock options outstanding at June 30, 2020 was $nil. |
WARRANTS
WARRANTS | 6 Months Ended |
Jun. 30, 2020 | |
Guarantees and Product Warranties [Abstract] | |
WARRANTS | NOTE 9. WARRANTS The Company concluded that it only has sufficient shares to satisfy the conversion of some but not all of the outstanding convertible instruments. The initial fair value of the warrants issued during the period was calculated using the Binomial Model as described in Note 6. The following table summarizes the continuity of share purchase warrants: Number of Weighted average exercise price (restated) Balance, December 31, 2019 413,816,252 0.00053 Adjustment to warrants outstanding 43,154,762 0.00056 Granted — — Cancelled (197,190,272 ) 0.00041 Exercised (9,280,742 ) 0.00035 Balance, June 30, 2020 250,500,000 0.00049 As at June 30, 2020, the following share purchase warrants were outstanding: Date Number Number Exercise Weighted Average Remaining Contractual Expiration Proceeds to Company if Issued Outstanding Exercisable Price $ Life (Years) Date Exercised (restated) (restated) (restated) 11/28/2018 142,857,143 * 142,857,143 * 0.00035 * 1.41 11/28/2021 $ 50,000 12/3/2018 500,000 500,000 0.10 3.43 12/3/2023 50,000 3/13/2019 107,142,857 * 107,142,857 * 0.00035 * 3.70 3/13/2024 37,500 250,500,000 250,500,000 $ 137,500 *The number of warrants outstanding and exercisable is variable based on adjustments to the exercise price of the warrant due to dilutive issuances. The Company cancelled 197,190,272 warrants as part of the settlement of a convertible note as described in Note 5(o). The intrinsic value of warrants outstanding at June 30, 2020 was $8,825,000 (restated). |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10. RELATED PARTY TRANSACTIONS The Company has agreements with related parties for consulting services, accrued rent, accrued interest, notes payable and stock options. See Notes to Financial Statements numbers 5, 7, 8 and 11 for more details. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11. COMMITMENTS AND CONTINGENCIES Consulting Agreements On October 1, 2019, the Company entered into a consulting agreement for investor relations services through March 31, 2020. The agreement called for a cash payment of $25,000 and 12,000,000 restricted shares of common stock to be issued to the consultant. As of December 31, 2019, the Company recorded the fair value of the shares of $61,200 for the consulting expense related to the consulting services provided. The expense was recognized over the service period, ending on March 31, 2020. In addition to contracts for service, the Company also regularly uses the professional services of securities attorneys, a US EPA specialist, professional accountants and other public-company specialists. Employment Agreements – On January 1, 2019, the Company entered into a four-year employment agreement with F. Jody Read in his role as Chief Executive Officer. The terms of the contract call for an annual salary of $90,000 for the first year, effective March 1, 2019 and increasing to $120,000 once the Company’s revenue exceeds monthly expenses, then incrementally over time and with certain operation results, up to $200,000/year. The salary may be paid, at the employee’s discretion, either in cash or in common stock. A $1,000 per month allowance will be granted to the executive for housing near the Company’s South Carolina facility. The employment agreement awards the CEO 1,500,000 restricted shares of the Company’s restricted stock, which shall vest in the following manner: 375,000 shares on March 1, 2019, 375,000 shares on March 1, 2020, 375,000 shares on March 1, 2021 and the final 375,000 shares on March 1, 2022. On August 12, 2019, the Company amended the Employment Contract with F. Jody Read, CEO, whereby 500,000 preferred series B stock were issued to Read. All other terms of the January 1, 2019 employment agreement remain in effect. On October 4, 2019, F. Jody Read resigned from the position of CEO and moved back into the role of COO. On August 12, 2019, the Company entered into a four-year employment agreement with Gary J. Grieco, its President, whereby Mr. Grieco will continue to receive $24,000 per year for services to Company as its President and whereby 500,000 preferred series B stock were issued to Grieco. The employment agreement begins on August 12, 2019, is automatically renewable for two years unless terminated earlier as per the terms of the agreement. Gary Grieco entered the role of CEO of the Company upon F. Jody Read’s resignation on October 4, 2019 and entered into a four-year employment agreement with the Company on January 1, 2020. Pursuant to the agreement Mr. Grieco will receive $48,000 per year commencing April 1, 2020 and receive 15,000,000 shares of the Company’s common stock for services to the Company as its President and CEO. In addition, once monthly revenue exceeds monthly expenses the salary will be increased and Mr. Grieco will be issued an additional 10,000,000 shares of the Company’s common stock. The employment agreement begins on January 1, 2020 and is automatically renewable for two years unless terminated earlier as per the terms of the agreement. Other Obligations and Commitments – On March 20, 2020, the Company entered into a consulting agreement. Pursuant to the agreement the consultant will provide investor relations services for a period of six months. The Company had issued the consultant 150,000 shares of common stock with a fair value of $5,880 for services received. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12. SUBSEQUENT EVENTS On July 6, 2020, the Company entered into a consulting agreement. Pursuant to the agreement the consultant will provide investor relations services for a period of one year in consideration for $3,000 per month and the issuance of 1,000,000 common shares of the Company. On July 7, 2020, the Company entered into a promissory note with a non-related party for $150,000. The note is due October 5, 2020, is unsecured and bears an interest rate of 10% per annum. On July 8, 2020, the Company entered into a consulting agreement. Pursuant to the agreement the consultant will provide operational business development and introductory services for a period of five years in consideration for the issuance of 1,000,000 common shares of the Company and a 5% commission, paid in shares, for any investments brokered. On July 15, 2020, the Company entered into a promissory note with a non-related party for $119,200. The note is repayable in $7,450 weekly payments. On August 11, 2020, 75,000 shares of preferred series C stock was converted into common stock (1 share converts into 100 shares of common stock), resulting in the issuance of 7,500,000 shares of common stock. On August 18, 2020, the Company settled the $100,000 note described in Note 5(i). Pursuant to the settlement agreement, the Company will issue the lender 5,281,088 shares of common stock and pay the lender $140,000 in four monthly installments of $35,000 commencing August 19, 2020 and ending November 19, 2020. On August 21, 2020, the Company sold future receivables with a non-related party for $50,000. The advance is repayable through daily payments of $1,071 totaling $74,950. |
RESTATEMENT
RESTATEMENT | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
RESTATEMENT | NOTE 13. RESTATEMENT As previously disclosed, the Company determined that previously issued warrants to a debt holder should have been accounted for as cancelled along with the settlement of all outstanding debt with such holder in May 2020. In May 2020, the Company entered into a debt settlement agreement with one of its debt holders which settled all debt and warrants held by such holder. However, due to a misunderstanding of the facts and circumstances related to the settlement agreement, the Company did not reflect the warrants as settled at that time. Due to the provisions of the warrants, these were accounted for as derivative liabilities. The Company concluded that the impact of recognizing the cancellation of the warrants was materially different from its previously reported results. As a result, the Company is restating its unaudited condensed consolidated financial statements for the periods impacted. The following financial tables reconcile the previously reported amounts to the restated amounts for each unaudited condensed consolidated financial statement. The table below sets forth changes to the unaudited consolidated balance sheet: June 30, 2020 As Previously Reported Adjustments As Restated ASSETS Total current assets $ 416,893 $ — $ 416,893 Total property and equipment, net 401,233 — 401,233 Total other assets 3,554,793 — 3,554,793 TOTAL ASSETS 4,372,919 — 4,372,919 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable 447,805 — 447,805 Accrued expenses – related parties 98,311 — 98,311 Accrued expenses 912,393 — 912,393 Notes payable – related parties 826,214 — 826,214 Notes payable, net 408,617 — 408,617 Convertible notes payable, net 980,254 — 980,254 Derivative liability 18,419,365 (7,025,392 ) 11,393,973 Total current liabilities 22,092,959 (7,025,392 ) 15,067,567 TOTAL LIABILITIES 22,092,959 (7,025,392 ) 15,067,567 TOTAL MEZZANINE EQUITY 702,645 — 702,645 STOCKHOLDERS’ DEFICIT Common stock 584,202 — 584,202 Additional paid-in capital 18,056,637 — 18,056,637 Accumulated deficit (37,063,524 ) 7,025,392 (30,038,132 ) (18,422,685 ) 7,025,392 (11,397,293 ) TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY $ 4,372,919 $ — $ 4,372,919 The table below sets forth changes to the unaudited condensed consolidated statements of operations for the three months ended June 30, 2020: For the three months ended June 30, 2020 As Previously Reported Adjustments As Restated REVENUES Total revenues $ 881,172 $ — $ 881,172 OPERATING EXPENSES Total operating expenses 1,094,245 — 1,094,245 LOSS FROM OPERATIONS (213,073 ) — (213,073 ) OTHER INCOME (EXPENSE) Loss on change in fair value of derivative liability (1,092,845 ) (4,922,990 ) (6,015,835 ) Gain (loss) on change in fair value of preferred series A stock liability — — — Gain on sale of intangible assets — — — Gain (loss) on settlement of debt 1,759,539 11,948,382 13,707,921 Interest expense (459,930 ) — (459,930 ) Total other income (expense) 206,764 7,025,392 7,232,156 Income (loss) before income taxes (6,309 ) 7,025,392 7,019,083 Income taxes — — — NET INCOME (LOSS) (6,309 ) 7,025,392 7,019,083 Preferred series C stock deemed dividends — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS’ $ (6,309 ) $ 7,025,392 $ 7,019,083 Basic net income (loss) per share $ (0.00 ) $ 0.01 $ 0.01 Diluted net income (loss) per share $ (0.00 ) $ — $ (0.00 ) Basic weighted average shares outstanding 569,964,666 569,964,666 Diluted weighted average shares outstanding 569,964,666 774,463,424 The table below sets forth changes to the unaudited condensed consolidated statements of operations for the six months ended June 30, 2020: For the six months ended June 30, 2020 As Previously Reported Adjustments As Restated REVENUES Total revenues $ 1,153,354 $ — $ 1,153,354 OPERATING EXPENSES Total operating expenses 1,874,902 — 1,874,902 LOSS FROM OPERATIONS (721,548 ) — (721,548 ) OTHER INCOME (EXPENSE) Loss on change in fair value of derivative liability (10,387,607 ) (4,922,990 ) (15,310,597 ) Gain (loss) on change in fair value of preferred series A stock liability — — — Gain on sale of intangible assets — — — Gain (loss) on settlement of debt 1,715,539 11,948,382 13,663,921 Interest expense (894,341 ) — (894,341 ) Total other income (expense) (9,566,409 ) 7,025,392 (2,541,017 ) Income (loss) before income taxes (10,287,957 ) 7,025,392 (3,262,565 ) Income taxes — — — NET INCOME (LOSS) (10,287,957 ) 7,025,392 (3,262,565 ) Preferred series C stock deemed dividends (270,000 ) — (270,000 ) NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS’ $ (10,557,957 ) $ 7,025,392 $ (3,532,565 ) Basic and diluted net income (loss) per share $ (0.02 ) $ 0.01 $ (0.01 ) Basic and diluted weighted average shares outstanding 557,809,456 557,809,456 The table below sets forth changes to the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2020: For the six months ended June 30, 2020 As Previously Reported Adjustments As Restated Cash Flows from Operating Activities Net loss $ (10,287,957 ) $ 7,025,392 $ (3,262,565 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 164,369 — 164,369 Amortization of debt discounts 280,188 — 280,188 Common stock issued for services 133,245 — 133,245 Loss on change in fair value of derivative liability 10,387,607 4,922,990 15,310,597 (Gain) loss on settlement of debt (1,715,539 ) (11,948,382 ) (13,663,921 ) Default penalties on convertible notes payable 13,762 13,762 Change in operating assets and liabilities Accounts receivable (207,213 ) — (207,213 ) Inventory 26,669 — 26,669 Prepaid expenses (8,295 ) — (8,295 ) Other assets (12,027 ) — (12,027 ) Accounts payable 132,577 — 132,577 Accrued expenses – related party 13,773 — 13,773 Accrued expenses 620,188 — 620,188 Net cash used in operating activities (458,653 ) — (458,653 ) Net cash provided by investing activities — — — Net cash provided by financing activities 420,300 — 420,300 Net change in cash (38,353 ) — (38,353 ) Cash and cash equivalents at beginning of period 67,613 — 67,613 Cash and cash equivalents at end of period $ 29,260 $ — $ 29,260 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations and Significant Accounting Policies | Nature of Operations PCT LTD (formerly Bingham Canyon Corporation, (the “Company,” “PCT Ltd,” or “Bingham”), a Delaware corporation, was formed on February 27, 1986. The Company changed its domicile to Nevada on August 26, 1998. The Company acquires, develops and provides sustainable, environmentally safe disinfecting, cleaning and tracking technologies. The Company specializes in providing cleaning, sanitizing, and disinfectant fluid solutions and fluid-generating equipment that creates environmentally safe solutions for global sustainability. Paradigm is located in Little River, SC and was formed June 6, 2012 under the name of EUR-ECA, Ltd. On September 11, 2015, its Board of Directors authorized EUR-ECA Ltd to file with the Nevada Secretary of State to change its name to Paradigm Convergence Technologies Corp. Paradigm is a technology licensing company specializing in environmentally safe solutions for global sustainability. The company holds a patent, intellectual property and/or distribution rights to innovative products and technologies. Paradigm provides innovative products and technologies for eliminating biocidal contamination from water supplies, industrial fluids, hard surfaces, food processing equipment, and medical devices. Paradigm’s overall strategy is to market new products and technologies through the use of equipment leasing, joint ventures, licensing, distributor agreements and partnerships. Effective on February 29, 2018, the Company changed its name from Bingham Canyon Corporation to PCT LTD to more accurately identify the Company’s direction and to develop the complimentary relationship and association with its wholly-owned operating company, Paradigm Convergence Technologies Corporation (“Paradigm” or “PCT Corp.”). Significant Accounting Policies There have been no changes to the significant accounting policies of the Company from the information provided in Note 1 of the Notes to the Consolidated Financial Statements in the Company's most recent Form 10-K. |
Reclassification | Reclassification Certain balances on the previously issued statements of operations and cash flows have been reclassified to be consistent with the current period presentation. The reclassification had no impact on total financial position, net loss, or stockholders’ equity (deficit). |
Fair Value Measurements | Fair Value Measurements The Company follows ASC 820, “ Fair Value Measurements and Disclosures • Level 1 - Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. • Level 2 - Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of our financial instruments, including, cash and cash equivalents, accounts receivable, inventory, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to the short maturities of these financial instruments. Derivative liabilities are determined based on “Level 3” inputs, which are significant and unobservable and have the lowest priority. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. Our financial assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2020, consisted of the following: Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs (restated) (restated) Description: Derivative liability (1) 11,393,973 — — 11,393,973 Total 11,393,973 — — 11,393,973 Our financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2019, consisted of the following: Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 10,517,873 — — 10,517,873 Total 10,517,873 — — 10,517,873 (1) The Company has estimated the fair value of these liabilities using the Binomial Model. |
Basic and Diluted Income (Loss) Per Share | Basic and Diluted Income (Loss) Per Share Basic income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as options, warrants, convertible notes payable, preferred series A stock and preferred series C stock. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result, for the three months ended June 30, 2020, there were outstanding common share equivalents which amounted to 319,106,192 (restated) shares of common stock that were not included in the calculation as their effect is anti-dilutive. For fiscal periods with net losses, these common share equivalents were not included in the computation of diluted loss per share as their effect would have been anti-dilutive. Three months ended June 30, 2020 Three months ended June 30, 2019 Six months Six months Numerator: Net income (loss) 7,019,083 (3,530,147 ) (3,532,565 ) (4,450,470 ) Loss on change in fair value of derivative liability 4,463,852 — — — Gain on settlement of debt (13,794,438 ) — — — Amortization of debt discount 176,381 — — — Interest expense 52,146 — — — Adjusted net income (loss) (2,082,976 ) (3,530,147 ) (3,532,565 ) (4,450,470 ) Denominator: Weighted average shares outstanding used in computing net income (loss) per share Basic 569,964,666 52,755,139 557,809,456 49,208,103 Effect of dilutive warrants 81,681,300 — — — Effect of convertible note weighted shares 122,817,458 — — — Diluted 774,463,424 52,755,139 557,809,456 49,208,103 Net income (loss) per share applicable to common shareholders: Basic 0.01 (0.07 ) (0.01 ) (0.09 ) Diluted (0.00 ) (0.07 ) (0.01 ) (0.09 ) |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update No. 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements relating to fair value measurements as outlined in Topic 820, Fair Value Measurement. ASU 2018-13 is applicable to all entities that are required, under GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments outlined in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures upon issuance of ASU 2018-13. The Company adopted ASU 2018-13 on January 1, 2020 and the adoption of ASU 2018-13 did not have a material effect on the consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Financial assets and liabilities carried at fair value | Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs (restated) (restated) Description: Derivative liability (1) 11,393,973 — — 11,393,973 Total 11,393,973 — — 11,393,973 Total fair value at Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Description: Derivative liability (1) 10,517,873 — — 10,517,873 Total 10,517,873 — — 10,517,873 (1) The Company has estimated the fair value of these liabilities using the Binomial Model. |
Basic and diluted income (loss) per share | Three months ended June 30, 2020 Three months ended June 30, 2019 Six months Six months Numerator: Net income (loss) 7,019,083 (3,530,147 ) (3,532,565 ) (4,450,470 ) Loss on change in fair value of derivative liability 4,463,852 — — — Gain on settlement of debt (13,794,438 ) — — — Amortization of debt discount 176,381 — — — Interest expense 52,146 — — — Adjusted net income (loss) (2,082,976 ) (3,530,147 ) (3,532,565 ) (4,450,470 ) Denominator: Weighted average shares outstanding used in computing net income (loss) per share Basic 569,964,666 52,755,139 557,809,456 49,208,103 Effect of dilutive warrants 81,681,300 — — — Effect of convertible note weighted shares 122,817,458 — — — Diluted 774,463,424 52,755,139 557,809,456 49,208,103 Net income (loss) per share applicable to common shareholders: Basic 0.01 (0.07 ) (0.01 ) (0.09 ) Diluted (0.00 ) (0.07 ) (0.01 ) (0.09 ) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | June 30, 2020 December 31, 2019 Machinery and leased equipment $ 151,719 $ 151,719 Machinery and equipment not yet in service 294,896 321,565 Office equipment and furniture 20,064 20,064 Website 2,760 2,760 Total property and equipment $ 469,439 $ 496,108 Less: Accumulated Depreciation (68,206 ) (55,999 ) Property and equipment, net 401,233 440,109 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of intangible assets | June 30, 2020 December 31, 2019 Patents $ 4,505,489 $ 4,505,489 Technology rights 200,000 200,000 Intangibles, at cost 4,705,489 4,705,489 Less: Accumulated amortization (1,153,222 ) (1,001,060 ) Net Carrying Amount $ 3,552,267 $ 3,704,429 |
Estimated future amortization expense of intangible assets | $ For year ending December 31, 2020 - remaining 151,002 For year ending December 31, 2021 302,003 For year ending December 31, 2022 302,003 For year ending December 31, 2023 302,003 For year ending December 31, 2024 302,003 Thereafter 2,193,253 Total 3,552,267 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes payable | The following tables summarize notes payable as of June 30, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at June 30, 2020 Balance at December 31, 2019 Note Payable ** $ 25,000 05/08/2017 06/30/2018 0 % $ 27,500 $ 27,500 Note Payable ** $ 130,000 06/20/2018 01/02/2020 8 % $ 112,500 $ 130,000 Note Payable ** $ 8,700 11/15/2018 06/30/2019 10 % $ 8,700 $ 8,700 Note Payable (e) $ 90,596 09/15/2019 05/28/2020 8 % $ — $ 90,596 Note Payable (k) $ 50,000 10/03/2019 04/03/2020 12 % $ — $ 37,500 Note Payable (e) $ 17,500 11/12/2019 11/12/2020 8 % $ — $ 17,500 Note Payable ** $ 83,400 12/20/2019 06/19/2020 150 % $ 38,491 $ 80,192 Note Payable $ 148,362 12/20/2019 11/27/2020 80 % $ 68,496 $ 145,404 Note Payable (a) $ 25,782 01/08/2020 05/13/2020 313 % $ — $ — Note Payable (b) $ 33,660 02/19/2020 04/30/2020 585 % $ — $ — Note Payable (c)(e) $ 20,000 02/28/2020 05/28/2020 8 % $ — $ — Note Payable (d) $ 100,000 03/31/2020 08/01/2020 30 % $ 50,000 $ — Note Payable (e) $ 118,644 05/05/2020 05/05/2021 8 % $ 118,644 $ — Subtotal $ 424,331 $ 537,392 Debt discount $ (15,714 ) $ (69,239 ) Balance, net $ 408,617 $ 468,153 Less current portion $ (408,617 ) $ (468,153 ) Total long-term $ — $ — ** Currently in default a) On January 8, 2020, the Company sold future receivables with a non-related party for up to $87,540. During the period $25,782 was sold, of which $10,207 was loan fees and original issue discount resulting in cash proceeds to the Company of $15,575. The advance was repaid through $1,450 weekly payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. This note was repaid during the period. b) On February 19, 2020, the Company sold future receivables with a non-related party for $33,660, of which $13,710 was loan fees and original issue discount resulting in cash proceeds to the Company of $19,950. The advance was repaid through $660 daily payments. In connection with the advance, the Company granted the lender a security interest in all accounts, equipment, intangibles and inventory. This note was repaid during the period. c) On February 28, 2020, the Company entered into a promissory note with a non-related party for $20,000. The note is due May 28, 2020, is unsecured and bears an interest rate of 8% per annum. On May 5, 2020, the Company consolidated this note with two others as described in Note 6(e). d) On March 31, 2020, the Company entered into a promissory note with a non-related party for $100,000. The note is due August 1, 2020, is unsecured and bears interest at $2,500 per month, repayable in four monthly payments of $27,500 commencing May 1, 2020. Additionally, the Company issued the lender 250,000 shares of the Company’s common stock with a fair market value of $8,225 as additional consideration for the loan. During the period, the Company repaid $50,000 of the note. e) On May 5, 2020, the Company consolidated three notes with principal amounts of $90,596, $17,500 and $20,000 as well as accrued interest into a new note with a principal amount of $118,644 and a maturity date of May 5, 2021. The note bears interest at 8% per annum and in connection with the consolidation the Company issued the lender 15,000,000 shares of the Company’s common stock with a fair value of $841,500. As the instruments were substantially different, the old notes were considered to be extinguished and the Company recognized a loss on settlement of debt of $826,500. The following table summarizes notes payable, related parties as of June 30, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at June 30, 2020 Balance at December 31, 2019 Note Payable, RP ** $ 30,000 04/10/2018 01/15/2019 3 % $ 30,000 $ 30,000 Note Payable, RP ** $ 380,000 06/20/2018 01/02/2020 8 % $ 380,000 $ 380,000 Note Payable, RP ** $ 350,000 06/20/2018 01/02/2020 5 % $ 322,214 $ 325,000 Note Payable, RP ** $ 17,000 06/20/2018 01/02/2020 5 % $ 17,000 $ 17,000 Note Payable, RP ** $ 50,000 07/27/2018 11/30/2018 8 % $ 50,000 $ 50,000 Note Payable, RP $ 5,000 10/09/2018 Demand 0 % $ 5,000 $ 5,000 Note Payable, RP $ 5,000 10/19/2018 Demand 0 % $ 5,000 $ 5,000 Note Payable, RP ** $ 15,000 08/16/2019 02/16/2020 8 % $ 15,000 $ 15,000 Note Payable, RP (f) $ 1,500 02/11/2020 Demand 0 % $ — $ — Note Payable, RP (g) $ 2,000 02/11/2020 Demand 0 % $ 2,000 $ — Subtotal $ 826,214 $ 827,000 Debt discount $ — $ (43 ) Balance, net $ 826,214 $ 826,957 Less current portion $ (826,214 ) $ (826,957 ) Total long-term $ — $ — ** Currently in default f) On February 11, 2020, the Company entered into a promissory note with the Chairman and CEO of the Company for $1,500. The note is due on demand, is unsecured and bears an interest rate of 0% per annum. The note was repaid during the period. g) On February 11, 2020, the Company entered into a promissory note with the COO and Director of the Company for $2,000. The note is due on demand, is unsecured and bears an interest rate of 0% per annum. The following table summarizes convertible notes payable as of June 30, 2020 and December 31, 2019: Type Original Amount Origination Date Maturity Date Annual Interest Rate Balance at June 30, 2020 Balance at December 31, 2019 Convertible Note Payable (h) * ** $ 50,000 12/06/2018 12/06/2019 12 % $ 5,685 $ 22,777 Convertible Note Payable * ** $ 65,000 12/06/2018 12/06/2019 12 % $ 46 $ 46 Convertible Note Payable (i) * ** $ 100,000 01/18/2019 01/16/2020 24 % $ 105,041 $ 95,492 Convertible Note Payable (r) $ 60,000 01/29/2019 01/22/2020 18 % $ — $ 266,050 Convertible Note Payable * ** $ 50,000 02/01/2019 10/22/2019 24 % $ 154,330 $ 154,330 Convertible Note Payable (o) $ 60,000 02/21/2019 02/14/2022 0 % $ — $ 74,000 Convertible Note Payable (j) * ** $ 55,125 02/21/2019 02/20/2020 24 % $ 46,338 $ 42,125 Convertible Note Payable * ** $ 75,000 03/18/2019 12/13/2019 24 % $ 232,814 $ 232,814 Convertible Note Payable (o) $ 26,000 09/16/2019 09/11/2022 0 % $ — $ 26,000 Convertible Note Payable (k) $ 175,814 09/27/2019 09/25/2020 8 % $ — $ 175,814 Convertible Note Payable $ 53,000 10/08/2019 10/07/2020 12 % $ — $ 53,000 Convertible Note Payable $ 50,000 10/31/2019 10/29/2020 12 % $ — $ 50,000 Convertible Note Payable (l) $ 8,888 02/19/2020 02/18/2021 12 % $ — $ — Convertible Note Payable (m) * ** $ 30,000 03/06/2020 03/05/2021 12 % $ 30,000 $ — Convertible Note Payable (n) $ 45,000 03/09/2020 03/02/2021 12 % $ 45,000 $ — Convertible Note Payable (p) * ** $ 150,000 04/10/2020 04/09/2021 12 % $ 150,000 $ — Convertible Note Payable (q) $ 128,000 04/16/2020 04/09/2021 12 % $ 128,000 $ — Convertible Note Payable (s) $ 83,000 05/12/2020 11/08/2021 12 % $ 83,000 $ — Subtotal $ 980,254 $ 1,192,448 Debt discount $ — $ (4,815 ) Balance, net $ 980,254 $ 1,187,633 Less current portion $ (980,254 ) $ (1,187,633 ) Total long-term $ — $ — * Embedded conversion feature accounted for as a derivative liability at period end h) During the period ended June 30, 2020, $17,092 of principal and $3,507 of interest of the convertible note payable was converted into 36,050,000 shares of the Company’s common stock. i) During the period ended June 30, 2020, the Company was further assessed default penalties and interest on this convertible note as the note reached maturity. Additional default and penalties were assessed in the amount of $118,295 of which $9,549 was recorded as a principal addition and $108,746 was recorded in accrued interest. to the note. j) During the period ended June 30, 2020, the Company was further assessed default penalties and interest on this convertible note as the note reached maturity. Additional default and penalties were assessed in the amount of $4,213 was recorded as a principal addition. k) On February 7, 2020, the Company extinguished both promissory note (totaling $39,000) and convertible note (totaling $181,000), including accrued interest with a non-related party through the issuance of 220,000 shares of preferred series C stock. The Company recorded the difference between the fair value of the preferred series C stock of $264,000 and the debt outstanding of $220,000 as a loss on extinguishment of debt of $44,000. l) On February 19, 2020, the Company received another tranche on a convertible note originally dated December 6, 2018. The new tranche had a principal amount of $8,888, with an original issue discount of $888. The convertible note is due 365 days from issuance, bears interest at 12% per annum and is convertible into common shares of the Company at 65% multiplied by the lowest traded price or lowest closing bid price during the 25 days the Company’s stock is tradable prior to the conversion date. Further, if at any time the stock price is less than $0.30 an additional 20% discount is applied and if at any time the conversion price is less than $0.01 and additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. m) On March 6, 2020, the Company received another tranche on a convertible note originally dated December 6, 2018. The new tranche had a principal amount of $30,000, with an original issue discount of $4,000. The convertible note is due 365 days from issuance, bears interest at 12% per annum and is convertible into common shares of the Company at 65% multiplied by the lowest traded price or lowest closing bid price during the 25 days the Company’s stock is tradable prior to the conversion date. Further, if at any time the stock price is less than $0.30 an additional 20% discount is applied and if at any time the conversion price is less than $0.01 and additional 10% is applied. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, all these additional discounts were triggered. n) On March 9, 2020, the Company entered into a convertible promissory with a non-related party for $45,000 of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $42,000. The note is due on March 2, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. As the note isn’t convertible until 180 days following issuance, no derivative liability was recognized as of June 30, 2020. o) On April 1, 2020, the Company entered into a settlement agreement to settle convertible notes with principal amounts of convertible notes. The Company agreed to pay $100,000 to settle the principal and accrued interest and penalties relating to the two convertible notes. The Company recorded a gain on settlement of debt of $312,269. p) On April 10, 2020, the Company entered into a convertible promissory note with a non-related party for $150,000 of which $18,000 was an original issue discount resulting in cash proceeds to the Company of $132,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. The Note may be converted by the Lender at any time into shares of Company’s common stock at a conversion price equal to 65% of the lowest trading price during the 25-trading day period prior to the conversion date. Further, an additional 15% is applied if the Company fails to comply with its reporting requirements. During the period, this additional discount was triggered. q) On April 16, 2020, the Company entered into a convertible promissory with a non-related party for $128,000 of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $125,000. The note is due on April 9, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. As the note isn’t convertible until 180 days following issuance, no derivative liability was recognized as of June 30, 2020. r) On May 11, 2020, the Company entered into a settlement agreement to settle the $60,000 convertible note. The Company agreed to pay $100,000 to settle the principal and accrued interest and penalties relating the convertible note. The Company recorded a gain on settlement of debt of $2,273,770. s) On May 12, 2020, the Company entered into a convertible promissory with a non-related party for $83,000 of which $3,000 was an original issue discount resulting in cash proceeds to the Company of $80,000. The note is due on November 8, 2021 and bears interest on the unpaid principal balance at a rate of 12% per annum. Stringent pre-payment terms apply (from 15% to 40%, dependent upon the timeframe of repayment during the note’s term) and any part of the note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid. The Note may be converted by the Lender at any time after 180 days of the date of issuance into shares of Company’s common stock at a conversion price equal to 61% of the lowest trading price during the 15-trading day period prior to the conversion date. As the note isn’t convertible until 180 days following issuance, no derivative liability was recognized as of June 30, 2020. |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Summary of changes in the fair value of the Company's Level 3 financial liabilities | June 30, December 31, (restated) Balance at the beginning of period $ 10,517,873 $ 322,976 Original discount limited to proceeds of notes 166,000 540,750 Fair value of derivative liabilities in excess of notes proceeds received 804,403 1,653,887 Settlement of derivative instruments (14,600,497 ) (3,258,054 ) Change in fair value of embedded conversion option 14,506,194 11,258,314 Balance at the end of the period $ 11,393,973 $ 10,517,873 |
Assumptions used in the calculations for fair value of derivative liabilities | Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At issuance during the period 336-358% 0.25-1.47% 0 % 1.00 At June 30, 2020 236-320% 0.16-0.18% 0 % 0.68-3.70 |
STOCKHOLDERS' DEFICIT AND STO_2
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Summary of options issued and outstanding | Number of Weighted average exercise price Balance, December 31, 2019 200,000 2.00 Granted — — Expired — — Settled — — Balance, June 30, 2020 200,000 2.00 |
Stock options outstanding | Date Number Number Exercise Weighted Average Remaining Contractual Expiration Proceeds to Company if Issued Outstanding Exercisable Price $ Life (Years) Date Exercised 01/26/2017 200,000 200,000 2.00 1.58 01/26/2022 400,000 200,000 200,000 $ 400,000 |
WARRANTS (Tables)
WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Guarantees and Product Warranties [Abstract] | |
Summary of the continuity of share purchase warrants | Number of Weighted average exercise price (restated) Balance, December 31, 2019 413,816,252 0.00053 Adjustment to warrants outstanding 43,154,762 0.00056 Granted — — Cancelled (197,190,272 ) 0.00041 Exercised (9,280,742 ) 0.00035 Balance, June 30, 2020 250,500,000 0.00049 |
Share purchase warrants outstanding | Date Number Number Exercise Weighted Average Remaining Contractual Expiration Proceeds to Company if Issued Outstanding Exercisable Price $ Life (Years) Date Exercised (restated) (restated) (restated) 11/28/2018 142,857,143 * 142,857,143 * 0.00035 * 1.41 11/28/2021 $ 50,000 12/3/2018 500,000 500,000 0.10 3.43 12/3/2023 50,000 3/13/2019 107,142,857 * 107,142,857 * 0.00035 * 3.70 3/13/2024 37,500 250,500,000 250,500,000 $ 137,500 |
RESTATEMENT (Tables)
RESTATEMENT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Changes to the unaudited consolidated balance sheet | June 30, 2020 As Previously Reported Adjustments As Restated ASSETS Total current assets $ 416,893 $ — $ 416,893 Total property and equipment, net 401,233 — 401,233 Total other assets 3,554,793 — 3,554,793 TOTAL ASSETS 4,372,919 — 4,372,919 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable 447,805 — 447,805 Accrued expenses – related parties 98,311 — 98,311 Accrued expenses 912,393 — 912,393 Notes payable – related parties 826,214 — 826,214 Notes payable, net 408,617 — 408,617 Convertible notes payable, net 980,254 — 980,254 Derivative liability 18,419,365 (7,025,392 ) 11,393,973 Total current liabilities 22,092,959 (7,025,392 ) 15,067,567 TOTAL LIABILITIES 22,092,959 (7,025,392 ) 15,067,567 TOTAL MEZZANINE EQUITY 702,645 — 702,645 STOCKHOLDERS’ DEFICIT Common stock 584,202 — 584,202 Additional paid-in capital 18,056,637 — 18,056,637 Accumulated deficit (37,063,524 ) 7,025,392 (30,038,132 ) (18,422,685 ) 7,025,392 (11,397,293 ) TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY $ 4,372,919 $ — $ 4,372,919 |
Changes to the unaudited condensed consolidated statements of operations | For the three months ended June 30, 2020 As Previously Reported Adjustments As Restated REVENUES Total revenues $ 881,172 $ — $ 881,172 OPERATING EXPENSES Total operating expenses 1,094,245 — 1,094,245 LOSS FROM OPERATIONS (213,073 ) — (213,073 ) OTHER INCOME (EXPENSE) Loss on change in fair value of derivative liability (1,092,845 ) (4,922,990 ) (6,015,835 ) Gain (loss) on change in fair value of preferred series A stock liability — — — Gain on sale of intangible assets — — — Gain (loss) on settlement of debt 1,759,539 11,948,382 13,707,921 Interest expense (459,930 ) — (459,930 ) Total other income (expense) 206,764 7,025,392 7,232,156 Income (loss) before income taxes (6,309 ) 7,025,392 7,019,083 Income taxes — — — NET INCOME (LOSS) (6,309 ) 7,025,392 7,019,083 Preferred series C stock deemed dividends — — — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS’ $ (6,309 ) $ 7,025,392 $ 7,019,083 Basic net income (loss) per share $ (0.00 ) $ 0.01 $ 0.01 Diluted net income (loss) per share $ (0.00 ) $ — $ (0.00 ) Basic weighted average shares outstanding 569,964,666 569,964,666 Diluted weighted average shares outstanding 569,964,666 774,463,424 The table below sets forth changes to the unaudited condensed consolidated statements of operations for the six months ended June 30, 2020: For the six months ended June 30, 2020 As Previously Reported Adjustments As Restated REVENUES Total revenues $ 1,153,354 $ — $ 1,153,354 OPERATING EXPENSES Total operating expenses 1,874,902 — 1,874,902 LOSS FROM OPERATIONS (721,548 ) — (721,548 ) OTHER INCOME (EXPENSE) Loss on change in fair value of derivative liability (10,387,607 ) (4,922,990 ) (15,310,597 ) Gain (loss) on change in fair value of preferred series A stock liability — — — Gain on sale of intangible assets — — — Gain (loss) on settlement of debt 1,715,539 11,948,382 13,663,921 Interest expense (894,341 ) — (894,341 ) Total other income (expense) (9,566,409 ) 7,025,392 (2,541,017 ) Income (loss) before income taxes (10,287,957 ) 7,025,392 (3,262,565 ) Income taxes — — — NET INCOME (LOSS) (10,287,957 ) 7,025,392 (3,262,565 ) Preferred series C stock deemed dividends (270,000 ) — (270,000 ) NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS’ $ (10,557,957 ) $ 7,025,392 $ (3,532,565 ) Basic and diluted net income (loss) per share $ (0.02 ) $ 0.01 $ (0.01 ) Basic and diluted weighted average shares outstanding 557,809,456 557,809,456 |
Changes to the unaudited condensed consolidated statements of cash flows | For the six months ended June 30, 2020 As Previously Reported Adjustments As Restated Cash Flows from Operating Activities Net loss $ (10,287,957 ) $ 7,025,392 $ (3,262,565 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 164,369 — 164,369 Amortization of debt discounts 280,188 — 280,188 Common stock issued for services 133,245 — 133,245 Loss on change in fair value of derivative liability 10,387,607 4,922,990 15,310,597 (Gain) loss on settlement of debt (1,715,539 ) (11,948,382 ) (13,663,921 ) Default penalties on convertible notes payable 13,762 13,762 Change in operating assets and liabilities Accounts receivable (207,213 ) — (207,213 ) Inventory 26,669 — 26,669 Prepaid expenses (8,295 ) — (8,295 ) Other assets (12,027 ) — (12,027 ) Accounts payable 132,577 — 132,577 Accrued expenses – related party 13,773 — 13,773 Accrued expenses 620,188 — 620,188 Net cash used in operating activities (458,653 ) — (458,653 ) Net cash provided by investing activities — — — Net cash provided by financing activities 420,300 — 420,300 Net change in cash (38,353 ) — (38,353 ) Cash and cash equivalents at beginning of period 67,613 — 67,613 Cash and cash equivalents at end of period $ 29,260 $ — $ 29,260 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial assets and liabilities carried at fair value (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative liability | $ 11,393,973 | $ 10,517,873 | $ 322,976 |
Total | 11,393,973 | 10,517,873 | |
Quoted prices in active markets (Level 1) | |||
Derivative liability | |||
Total | |||
Significant other observable inputs (Level 2) | |||
Derivative liability | |||
Total | |||
Significant unobservable inputs (Level 3) | |||
Derivative liability | 11,393,973 | 10,517,873 | |
Total | $ 11,393,973 | $ 10,517,873 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basic and diluted income (loss) per share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator | ||||||
Net income (loss) | $ 7,019,083 | $ (10,281,648) | $ (3,530,147) | $ (920,323) | $ (3,262,565) | $ (4,450,470) |
Loss on change in fair value of derivative liability | 4,463,852 | |||||
Gain on settlement of debt | (13,794,438) | |||||
Amortization of debt discount | 176,381 | |||||
Interest expense | 52,146 | |||||
Adjusted net income (loss) | $ (2,082,976) | $ (3,530,147) | $ (3,532,565) | $ (4,450,470) | ||
Denominator: Weighted average shares outstanding used in computing net income (loss) per share | ||||||
Basic | 569,964,666 | 52,755,139 | 557,809,456 | 49,208,103 | ||
Effect of dilutive warrants | 81,681,300 | |||||
Effect of convertible note weighted shares | 122,817,458 | |||||
Diluted | 774,463,424 | 52,755,139 | 557,809,456 | 49,208,103 | ||
Net income (loss) per share applicable to common shareholders: | ||||||
Basic | $ 0.01 | $ (0.07) | $ (0.01) | $ (0.09) | ||
Diluted | $ 0 | $ (0.07) | $ (0.01) | $ (0.09) |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 6 Months Ended |
Jun. 30, 2020shares | |
Accounting Policies [Abstract] | |
Antidilutive securities excluded from calculation of earnings per share | 573,019,281 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Losses incurred since inception | $ (30,038,132) | $ (26,505,567) |
Working capital deficit | $ (14,650,674) |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and equipment (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Machinery and leased equipment | $ 151,719 | $ 151,719 |
Machinery and equipment not yet in services | 294,896 | 321,565 |
Office equipment and furniture | 20,064 | 20,064 |
Website | 2,760 | 2,760 |
Total Property and equipment | 469,439 | 496,108 |
Less: Accumulated depreciation | (68,206) | (55,999) |
Property and equipment, net | $ 401,233 | $ 440,109 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ (12,207) | $ (12,701) |
INTANGIBLE ASSETS - Components
INTANGIBLE ASSETS - Components of intangible assets (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents | $ 4,505,489 | $ 4,505,489 |
Technology rights | 200,000 | 200,000 |
Intangible, at cost | 4,705,489 | 4,705,489 |
Less: Accumulated amortization | (1,153,222) | (1,001,060) |
Net Carrying Amount | $ 3,552,267 | $ 3,704,429 |
INTANGIBLE ASSETS - Estimated f
INTANGIBLE ASSETS - Estimated future amortization expense of intangible assets (Details) | Jun. 30, 2020USD ($) |
Intangible Assets - Estimated Future Amortization Expense Of Intangible Assets | |
For year ending December 31, 2020 - remaining | $ 151,002 |
For year ending December 31, 2021 | 302,003 |
For year ending December 31, 2022 | 302,003 |
For year ending December 31, 2023 | 302,003 |
For year ending December 31, 2024 | 302,003 |
Thereafter | 2,193,046 |
Total | $ 3,552,267 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Intangible Assets | ||
Amortization expense | $ (152,162) | $ (156,400) |
NOTES PAYABLE - Notes payable (
NOTES PAYABLE - Notes payable (Details) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Notes Payable (4) | |
Original amount | $ 25,000 |
Issuance date | May 8, 2017 |
Maturity date | Jun. 30, 2018 |
Interest rate | 0.00% |
Balance, beginning | $ 27,500 |
Balance, ending | 27,500 |
Notes Payable (14) | |
Original amount | $ 130,000 |
Issuance date | Jun. 20, 2018 |
Maturity date | Jan. 2, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 130,000 |
Balance, ending | 112,500 |
Notes Payable (18) | |
Original amount | $ 8,700 |
Issuance date | Nov. 15, 2018 |
Maturity date | Jun. 30, 2019 |
Interest rate | 10.00% |
Balance, beginning | $ 8,700 |
Balance, ending | 8,700 |
Notes Payable (22) | |
Original amount | $ 90,596 |
Issuance date | Sep. 15, 2019 |
Maturity date | May 28, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 90,596 |
Balance, ending | |
Notes Payable (23) | |
Original amount | $ 50,000 |
Issuance date | Oct. 3, 2019 |
Maturity date | Apr. 3, 2020 |
Interest rate | 12.00% |
Balance, beginning | $ 37,500 |
Balance, ending | |
Notes Payable (24) | |
Original amount | $ 17,500 |
Issuance date | Nov. 12, 2019 |
Maturity date | Nov. 12, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 17,500 |
Balance, ending | |
Notes Payable (26) | |
Original amount | $ 83,400 |
Issuance date | Dec. 20, 2019 |
Maturity date | Jun. 19, 2020 |
Interest rate | 150.00% |
Balance, beginning | $ 80,192 |
Balance, ending | 38,491 |
Notes Payable (27) | |
Original amount | $ 148,362 |
Issuance date | Dec. 20, 2019 |
Maturity date | Nov. 27, 2020 |
Interest rate | 80.00% |
Balance, beginning | $ 145,404 |
Balance, ending | 68,496 |
Notes Payable (28) | |
Original amount | $ 25,782 |
Issuance date | Jan. 8, 2020 |
Maturity date | May 13, 2020 |
Interest rate | 313.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (29) | |
Original amount | $ 33,660 |
Issuance date | Feb. 19, 2020 |
Maturity date | Apr. 30, 2020 |
Interest rate | 585.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (30) | |
Original amount | $ 20,000 |
Issuance date | Feb. 28, 2020 |
Maturity date | May 28, 2020 |
Interest rate | 8.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable (31) | |
Original amount | $ 100,000 |
Issuance date | Mar. 31, 2020 |
Maturity date | Aug. 1, 2020 |
Interest rate | 30.00% |
Balance, beginning | |
Balance, ending | 50,000 |
Notes Payable (32) | |
Original amount | $ 118,644 |
Issuance date | May 5, 2020 |
Maturity date | May 5, 2021 |
Interest rate | 8.00% |
Balance, beginning | |
Balance, ending | 118,644 |
Notes Payable, Related Party (12) | |
Original amount | $ 30,000 |
Issuance date | Apr. 10, 2018 |
Maturity date | Jan. 15, 2019 |
Interest rate | 3.00% |
Balance, beginning | $ 30,000 |
Balance, ending | 30,000 |
Notes Payable, Related Party (14) | |
Original amount | $ 380,000 |
Issuance date | Jun. 20, 2018 |
Maturity date | Jan. 2, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 380,000 |
Balance, ending | 380,000 |
Notes Payable, Related Party (15) | |
Original amount | $ 350,000 |
Issuance date | Jun. 20, 2018 |
Maturity date | Jan. 2, 2020 |
Interest rate | 5.00% |
Balance, beginning | $ 325,000 |
Balance, ending | 322,214 |
Notes Payable, Related Party (16) | |
Original amount | $ 17,000 |
Issuance date | Jun. 20, 2018 |
Maturity date | Jan. 2, 2020 |
Interest rate | 5.00% |
Balance, beginning | $ 17,000 |
Balance, ending | 17,000 |
Notes Payable, Related Party (18) | |
Original amount | $ 50,000 |
Issuance date | Jul. 27, 2018 |
Maturity date | Nov. 30, 2018 |
Interest rate | 8.00% |
Balance, beginning | $ 50,000 |
Balance, ending | 50,000 |
Notes Payable, Related Party (19) | |
Original amount | $ 5,000 |
Issuance date | Oct. 9, 2018 |
Interest rate | 0.00% |
Balance, beginning | $ 5,000 |
Balance, ending | 5,000 |
Notes Payable, Related Party (20) | |
Original amount | $ 5,000 |
Issuance date | Oct. 19, 2018 |
Interest rate | 0.00% |
Balance, beginning | $ 5,000 |
Balance, ending | 5,000 |
Notes Payable, Related Party (24) | |
Original amount | $ 15,000 |
Issuance date | Aug. 16, 2019 |
Maturity date | Feb. 16, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 15,000 |
Balance, ending | 15,000 |
Notes Payable, Related Party (25) | |
Original amount | $ 1,500 |
Issuance date | Feb. 11, 2020 |
Interest rate | 0.00% |
Balance, beginning | |
Balance, ending | |
Notes Payable, Related Party (26) | |
Original amount | $ 2,000 |
Issuance date | Feb. 11, 2020 |
Interest rate | 0.00% |
Balance, beginning | |
Balance, ending | 2,000 |
Convertible Note Payable (5) | |
Original amount | $ 50,000 |
Issuance date | Dec. 6, 2018 |
Maturity date | Dec. 6, 2019 |
Interest rate | 12.00% |
Balance, beginning | $ 22,777 |
Balance, ending | 5,685 |
Convertible Note Payable (6) | |
Original amount | $ 65,000 |
Issuance date | Dec. 6, 2018 |
Maturity date | Dec. 6, 2019 |
Interest rate | 12.00% |
Balance, beginning | $ 46 |
Balance, ending | 46 |
Convertible Note Payable (9) | |
Original amount | $ 100,000 |
Issuance date | Jan. 18, 2019 |
Maturity date | Jan. 16, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 95,492 |
Balance, ending | 105,041 |
Convertible Note Payable (10) | |
Original amount | $ 60,000 |
Issuance date | Jan. 29, 2019 |
Maturity date | Jan. 22, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 266,050 |
Balance, ending | |
Convertible Note Payable (11) | |
Original amount | $ 50,000 |
Issuance date | Feb. 1, 2019 |
Maturity date | Oct. 22, 2019 |
Interest rate | 24.00% |
Balance, beginning | $ 154,330 |
Balance, ending | 154,330 |
Convertible Note Payable (12) | |
Original amount | $ 60,000 |
Issuance date | Feb. 21, 2019 |
Maturity date | Feb. 14, 2022 |
Interest rate | 0.00% |
Balance, beginning | $ 74,000 |
Balance, ending | |
Convertible Note Payable (13) | |
Original amount | $ 55,125 |
Issuance date | Feb. 21, 2019 |
Maturity date | Feb. 20, 2020 |
Interest rate | 12.00% |
Balance, beginning | $ 42,125 |
Balance, ending | 46,338 |
Convertible Note Payable (15) | |
Original amount | $ 75,000 |
Issuance date | Mar. 18, 2019 |
Maturity date | Dec. 13, 2019 |
Interest rate | 24.00% |
Balance, beginning | $ 232,814 |
Balance, ending | 232,814 |
Convertible Note Payable (17) | |
Original amount | $ 26,000 |
Issuance date | Sep. 16, 2019 |
Maturity date | Sep. 11, 2022 |
Interest rate | 0.00% |
Balance, beginning | $ 26,000 |
Balance, ending | |
Convertible Note Payable (18) | |
Original amount | $ 175,814 |
Issuance date | Sep. 27, 2019 |
Maturity date | Sep. 25, 2020 |
Interest rate | 8.00% |
Balance, beginning | $ 175,814 |
Balance, ending | |
Convertible Note Payable (19) | |
Original amount | $ 53,000 |
Issuance date | Oct. 8, 2019 |
Maturity date | Oct. 7, 2020 |
Interest rate | 12.00% |
Balance, beginning | $ 53,000 |
Balance, ending | |
Convertible Note Payable (20) | |
Original amount | $ 50,000 |
Issuance date | Oct. 31, 2019 |
Maturity date | Oct. 29, 2020 |
Interest rate | 12.00% |
Balance, beginning | $ 50,000 |
Balance, ending | |
Convertible Note Payable (21) | |
Original amount | $ 8,888 |
Issuance date | Feb. 19, 2020 |
Maturity date | Feb. 18, 2021 |
Interest rate | 5.00% |
Balance, beginning | |
Balance, ending | |
Convertible Note Payable (22) | |
Original amount | $ 30,000 |
Issuance date | Mar. 6, 2020 |
Maturity date | Mar. 5, 2021 |
Interest rate | 5.00% |
Balance, beginning | |
Balance, ending | 30,000 |
Convertible Note Payable (23) | |
Original amount | $ 45,000 |
Issuance date | Mar. 9, 2020 |
Maturity date | Mar. 2, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | 45,000 |
Convertible Note Payable (24) | |
Original amount | $ 150,000 |
Issuance date | Apr. 10, 2020 |
Maturity date | Apr. 9, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | 150,000 |
Convertible Note Payable (25) | |
Original amount | $ 128,000 |
Issuance date | Apr. 16, 2020 |
Maturity date | Apr. 9, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | 128,000 |
Convertible Note Payable (26) | |
Original amount | $ 83,000 |
Issuance date | May 12, 2020 |
Maturity date | Nov. 8, 2021 |
Interest rate | 12.00% |
Balance, beginning | |
Balance, ending | $ 83,000 |
DERIVATIVE LIABILITIES - Summar
DERIVATIVE LIABILITIES - Summary of changes in the fair value of the Company's Level 3 financial liabilities (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Balance at the beginning of period | $ 10,517,873 | $ 322,976 |
Original discount limited to proceeds of notes | 166,000 | 540,750 |
Fair value of derivative liabilities in excess of notes proceeds received | 804,403 | 1,653,887 |
Settlement of derivative instruments | (14,600,497) | (3,258,054) |
Change in fair value of embedded conversion option | 14,506,194 | 11,258,314 |
Balance at the end of the period | $ 11,393,973 | $ 10,517,873 |
DERIVATIVE LIABILITIES - Assump
DERIVATIVE LIABILITIES - Assumptions used in the calculations for fair value of derivative liabilities (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative liabilities - At Issuance | |
Expected price volatility, minimum | 336.00% |
Expected price volatility, maximum | 358.00% |
Expected dividend yield | 0.00% |
Expected option life, maximum | 1 year |
Risk-free interest rate, minimum | 0.25% |
Risk-free interest rate, maximum | 1.47% |
Derivative liabilities | |
Expected price volatility, minimum | 236.00% |
Expected price volatility, maximum | 320.00% |
Expected dividend yield | 0.00% |
Expected option life, minimum | 8 months 5 days |
Expected option life, maximum | 3 years 8 months 12 days |
Risk-free interest rate, minimum | 0.16% |
Risk-free interest rate, maximum | 0.18% |
STOCKHOLDERS' DEFICIT AND STO_3
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS - Summary of options issued and outstanding (Details) | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Stockholders Deficit And Stock Options - Summary Of Options Issued And Outstanding | |
Number of options, beginning balance | shares | 200,000 |
Number of options, granted | shares | |
Number of options, expired | shares | |
Number of options, settled | shares | |
Number of options, ending balance | shares | 200,000 |
Weighted average exercise price, beginning balance | $ / shares | $ 2 |
Weighted average exercise price, granted | $ / shares | |
Weighted average exercise price, expired | $ / shares | |
Weighted average exercise price, settled | $ / shares | |
Weighted average exercise price, ending balance | $ / shares | $ 2 |
STOCKHOLDERS' DEFICIT AND STO_4
STOCKHOLDERS' DEFICIT AND STOCK OPTIONS - Stock options outstanding (Details) - Options issued and outstanding | 6 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Number outstanding | 200,000 |
Number exercisable | 200,000 |
Exercise price | $ / shares | $ 2 |
Weighted average remaining contractual life | 1 year 6 months 29 days |
Expiration date | Jan. 26, 2022 |
Proceeds to Company if exercised | $ | $ 400,000 |
WARRANTS - Summary of the conti
WARRANTS - Summary of the continuity of share purchase warrants (Details) | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Guarantees and Product Warranties [Abstract] | |
Number of warrants, beginning balance | shares | 413,816,252 |
Number of warrants, adjustments to warrants outstanding | shares | 43,154,762 |
Number of warrants, granted | shares | |
Number of warrants, cancelled | shares | (197,190,272) |
Number of warrants, exercised | shares | (9,280,742) |
Number of warrants, ending balance | shares | 250,500,000 |
Weighted average exercise price, beginning balance | $ / shares | $ 0.00053 |
Weighted average exercise price, adjustments to warrants outstanding | $ / shares | 0.00056 |
Weighted average exercise price, granted | $ / shares | |
Weighted average exercise price, cancelled | $ / shares | 0.00041 |
Weighted average exercise price, exercised | $ / shares | 0.00035 |
Weighted average exercise price, ending balance | $ / shares | $ 0.00049 |
WARRANTS - Share purchase warra
WARRANTS - Share purchase warrants outstanding (Details) - Share purchase warrants outstanding - USD ($) | Mar. 14, 2019 | Dec. 04, 2018 | Nov. 29, 2018 | Jun. 30, 2020 |
Number outstanding | 107,142,857 | 500,000 | 142,857,143 | 250,500,000 |
Number exercisable | 107,142,857 | 500,000 | 142,857,143 | 250,500,000 |
Exercise price | $ 0.00035 | $ 0.10 | $ 0.00035 | |
Weighted average remaining contractual life | 3 years 8 months 12 days | 3 years 5 months 5 days | 1 year 4 months 28 days | |
Expiration date | Mar. 13, 2024 | Dec. 3, 2023 | Nov. 28, 2021 | |
Proceeds to Company if exercised | $ 37,500 | $ 50,000 | $ 50,000 | $ 137,500 |
RESTATEMENT - Changes to the un
RESTATEMENT - Changes to the unaudited consolidated balance sheet (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||||||
Total current assets | $ 416,893 | $ 224,738 | ||||
Total property and equipment, net | 401,233 | 440,109 | ||||
Total other assets | 3,554,793 | 3,709,928 | ||||
TOTAL ASSETS | 4,372,919 | 4,374,775 | ||||
CURRENT LIABILITIES | ||||||
Accounts payable | 447,805 | 315,228 | ||||
Accrued expenses – related parties | 98,311 | 84,538 | ||||
Accrued expenses | 912,393 | 890,104 | ||||
Notes payable – related parties | 826,214 | 826,957 | ||||
Notes payable, net | 408,617 | 468,153 | ||||
Convertible notes payable, net | 980,254 | 1,187,633 | ||||
Derivative liability | 11,393,973 | 10,517,873 | $ 322,976 | |||
Total current liabilities | 15,067,567 | 14,290,486 | ||||
TOTAL LIABILITIES | 15,067,567 | 14,290,486 | ||||
TOTAL MEZZANINE EQUITY | 702,645 | 218,645 | ||||
STOCKHOLDERS’ DEFICIT | ||||||
Common stock | 584,202 | 498,881 | ||||
Additional paid-in capital | 18,056,637 | 15,872,330 | ||||
Accumulated deficit | (30,038,132) | (26,505,567) | ||||
TOTAL STOCKHOLDERS' DEFICIT | (11,397,293) | $ (19,892,006) | (10,134,356) | $ (1,530,060) | $ 1,689,586 | $ 1,705,587 |
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS EQUITY | 4,372,919 | $ 4,374,775 | ||||
As Previously Reported | ||||||
ASSETS | ||||||
Total current assets | 416,893 | |||||
Total property and equipment, net | 401,233 | |||||
Total other assets | 3,554,793 | |||||
TOTAL ASSETS | 4,372,919 | |||||
CURRENT LIABILITIES | ||||||
Accounts payable | 447,805 | |||||
Accrued expenses – related parties | 98,311 | |||||
Accrued expenses | 912,393 | |||||
Notes payable – related parties | 826,214 | |||||
Notes payable, net | 408,617 | |||||
Convertible notes payable, net | 980,254 | |||||
Derivative liability | 18,419,365 | |||||
Total current liabilities | 22,092,959 | |||||
TOTAL LIABILITIES | 22,092,959 | |||||
TOTAL MEZZANINE EQUITY | 702,645 | |||||
STOCKHOLDERS’ DEFICIT | ||||||
Common stock | 584,202 | |||||
Additional paid-in capital | 18,056,637 | |||||
Accumulated deficit | (37,063,524) | |||||
TOTAL STOCKHOLDERS' DEFICIT | (18,422,685) | |||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS EQUITY | 4,372,919 | |||||
Adjustments | ||||||
ASSETS | ||||||
Total current assets | ||||||
Total property and equipment, net | ||||||
Total other assets | ||||||
TOTAL ASSETS | ||||||
CURRENT LIABILITIES | ||||||
Accounts payable | ||||||
Accrued expenses – related parties | ||||||
Accrued expenses | ||||||
Notes payable – related parties | ||||||
Notes payable, net | ||||||
Convertible notes payable, net | ||||||
Derivative liability | (7,025,392) | |||||
Total current liabilities | (7,025,392) | |||||
TOTAL LIABILITIES | (7,025,392) | |||||
TOTAL MEZZANINE EQUITY | ||||||
STOCKHOLDERS’ DEFICIT | ||||||
Common stock | ||||||
Additional paid-in capital | ||||||
Accumulated deficit | 7,025,392 | |||||
TOTAL STOCKHOLDERS' DEFICIT | 7,025,392 | |||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS EQUITY |
RESTATEMENT - Changes to the _2
RESTATEMENT - Changes to the unaudited condensed consolidated statements of operations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES | ||||||
Total revenues | $ 881,172 | $ 118,862 | $ 1,153,354 | $ 314,819 | ||
OPERATING EXPENSES | ||||||
Total operating expenses | 1,094,245 | 527,397 | 1,874,902 | 1,351,927 | ||
LOSS FROM OPERATIONS | (213,073) | (408,535) | (721,548) | (1,037,108) | ||
OTHER INCOME (EXPENSE) | ||||||
Loss on change in fair value of derivative liability | (6,015,835) | (2,789,342) | (15,310,597) | (2,951,641) | ||
Gain (loss) on change in fair value of preferred series A stock liability | (3,004) | 72,473 | ||||
Gain on sale of intangible assets | 52,498 | 52,498 | ||||
Gain (loss) on settlement of debt | 13,707,921 | 13,663,921 | (84,409) | |||
Interest expense | (459,930) | (381,764) | (894,341) | (502,283) | ||
Total other income (expense) | 7,232,156 | (3,121,612) | (2,541,017) | (3,413,362) | ||
Income (loss) before income taxes | 7,019,083 | (3,530,147) | (3,262,565) | (4,450,470) | ||
Income taxes | ||||||
Net income (loss) | 7,019,083 | $ (10,281,648) | (3,530,147) | $ (920,323) | (3,262,565) | (4,450,470) |
Preferred series C stock deemed dividends | (270,000) | |||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 7,019,083 | $ (3,530,147) | $ (3,532,565) | $ (4,450,470) | ||
Basic net income (loss) per share | $ 0.01 | $ (0.07) | $ (0.01) | $ (0.09) | ||
Diluted net income (loss) per share | $ 0 | $ (0.07) | $ (0.01) | $ (0.09) | ||
Basic weighted average shares outstanding | 569,964,666 | 52,755,139 | 557,809,456 | 49,208,103 | ||
Diluted weighted average shares outstanding | 774,463,424 | 52,755,139 | 557,809,456 | 49,208,103 | ||
As Previously Reported | ||||||
REVENUES | ||||||
Total revenues | $ 881,172 | $ 1,153,354 | ||||
OPERATING EXPENSES | ||||||
Total operating expenses | 1,094,245 | 1,874,902 | ||||
LOSS FROM OPERATIONS | (213,073) | (721,548) | ||||
OTHER INCOME (EXPENSE) | ||||||
Loss on change in fair value of derivative liability | (1,092,845) | (10,387,607) | ||||
Gain (loss) on change in fair value of preferred series A stock liability | ||||||
Gain on sale of intangible assets | ||||||
Gain (loss) on settlement of debt | 1,759,539 | 1,715,539 | ||||
Interest expense | (459,930) | (894,341) | ||||
Total other income (expense) | 206,764 | (9,566,409) | ||||
Income (loss) before income taxes | (6,309) | (10,287,957) | ||||
Income taxes | ||||||
Net income (loss) | (6,309) | (10,287,957) | ||||
Preferred series C stock deemed dividends | (270,000) | |||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (6,309) | $ (10,557,957) | ||||
Basic net income (loss) per share | $ 0 | $ (0.02) | ||||
Diluted net income (loss) per share | $ 0 | |||||
Basic weighted average shares outstanding | 569,964,666 | 557,809,456 | ||||
Diluted weighted average shares outstanding | 569,964,666 | |||||
Adjustments | ||||||
REVENUES | ||||||
Total revenues | ||||||
OPERATING EXPENSES | ||||||
Total operating expenses | ||||||
LOSS FROM OPERATIONS | ||||||
OTHER INCOME (EXPENSE) | ||||||
Loss on change in fair value of derivative liability | (4,922,990) | (4,922,990) | ||||
Gain (loss) on change in fair value of preferred series A stock liability | ||||||
Gain on sale of intangible assets | ||||||
Gain (loss) on settlement of debt | 11,948,382 | 11,948,382 | ||||
Interest expense | ||||||
Total other income (expense) | 7,025,392 | 7,025,392 | ||||
Income (loss) before income taxes | 7,025,392 | 7,025,392 | ||||
Income taxes | ||||||
Net income (loss) | 7,025,392 | 7,025,392 | ||||
Preferred series C stock deemed dividends | ||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 7,025,392 | $ 7,025,392 | ||||
Basic net income (loss) per share | $ 0.01 | $ 0.01 | ||||
Diluted net income (loss) per share |
RESTATEMENT - Changes to the _3
RESTATEMENT - Changes to the unaudited condensed consolidated statements of cash flows (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows from Operating Activities | ||||||
Net loss | $ 7,019,083 | $ (10,281,648) | $ (3,530,147) | $ (920,323) | $ (3,262,565) | $ (4,450,470) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | 164,369 | 169,101 | ||||
Amortization of debt discounts | 280,188 | 300,703 | ||||
Common stock issued for services | 133,245 | 122,052 | ||||
Loss on change in fair value of derivative liability | 6,015,835 | 2,789,342 | 15,310,597 | 2,951,641 | ||
(Gain) loss on settlement of debt | (13,707,921) | (13,663,921) | 84,409 | |||
Default penalties on convertible notes payable | 13,762 | 87,500 | ||||
Change in operating assets and liabilities | ||||||
Accounts receivable | (207,213) | (81,166) | ||||
Inventory | 26,669 | 644 | ||||
Prepaid expenses | (8,295) | 177,475 | ||||
Other assets | (12,027) | |||||
Accounts payable | 132,577 | 59,265 | ||||
Accrued expenses – related party | 13,773 | 8,245 | ||||
Accrued expenses | 620,188 | 215,811 | ||||
Net cash used in operating activities | (458,653) | (453,220) | ||||
Net cash provided by investing activities | 49,984 | |||||
Net cash provided by financing activities | 420,300 | 435,641 | ||||
Net change in cash | (38,353) | 32,405 | ||||
Cash and cash equivalents at beginning of period | 67,613 | $ 4,893 | 67,613 | 4,893 | ||
Cash and cash equivalents at end of period | 29,260 | $ 37,298 | 29,260 | $ 37,298 | ||
As Previously Reported | ||||||
Cash Flows from Operating Activities | ||||||
Net loss | (6,309) | (10,287,957) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | 164,369 | |||||
Amortization of debt discounts | 280,188 | |||||
Common stock issued for services | 133,245 | |||||
Loss on change in fair value of derivative liability | 1,092,845 | 10,387,607 | ||||
(Gain) loss on settlement of debt | (1,759,539) | (1,715,539) | ||||
Default penalties on convertible notes payable | 13,762 | |||||
Change in operating assets and liabilities | ||||||
Accounts receivable | (207,213) | |||||
Inventory | 26,669 | |||||
Prepaid expenses | (8,295) | |||||
Other assets | (12,027) | |||||
Accounts payable | 132,577 | |||||
Accrued expenses – related party | 13,773 | |||||
Accrued expenses | 620,188 | |||||
Net cash used in operating activities | (458,653) | |||||
Net cash provided by investing activities | ||||||
Net cash provided by financing activities | 420,300 | |||||
Net change in cash | (38,353) | |||||
Cash and cash equivalents at beginning of period | 67,613 | 67,613 | ||||
Cash and cash equivalents at end of period | 29,260 | 29,260 | ||||
Adjustments | ||||||
Cash Flows from Operating Activities | ||||||
Net loss | 7,025,392 | 7,025,392 | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | ||||||
Amortization of debt discounts | ||||||
Common stock issued for services | ||||||
Loss on change in fair value of derivative liability | 4,922,990 | 4,922,990 | ||||
(Gain) loss on settlement of debt | (11,948,382) | (11,948,382) | ||||
Change in operating assets and liabilities | ||||||
Accounts receivable | ||||||
Inventory | ||||||
Prepaid expenses | ||||||
Other assets | ||||||
Accounts payable | ||||||
Accrued expenses – related party | ||||||
Accrued expenses | ||||||
Net cash used in operating activities | ||||||
Net cash provided by investing activities | ||||||
Net cash provided by financing activities | ||||||
Net change in cash | ||||||
Cash and cash equivalents at beginning of period | ||||||
Cash and cash equivalents at end of period |