Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2015USD ($)shares | |
Document And Entity Information | |
Entity Registrant Name | CMG Holdings Group, Inc. |
Entity Central Index Key | 1,346,655 |
Document Type | 10-K |
Document Period End Date | Dec. 31, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Smaller Reporting Company |
Entity Public Float | $ | $ 2,895,000 |
Entity Common Stock, Shares Outstanding | shares | 289,500,000 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash | $ 230,138 | $ 27,886 |
Prepaid expenses and other current assets | 8,400 | 8,400 |
Total Current Assets | 238,538 | 36,286 |
Property and equipment, net | 28,478 | 32,192 |
Goodwill | 54,500 | 54,500 |
Other noncurrent assets | ||
TOTAL ASSETS | 321,516 | 122,978 |
CURRENT LIABILITIES: | ||
Accounts payable | 676,671 | 676,671 |
Deferred compensation | 220,000 | 40,000 |
Accrued liabilities | 145,408 | 129,422 |
Loan from shareholders | 96,100 | |
Loan outside party | 125,000 | |
Note payable | 150,000 | |
Convertible notes - carrying value | 74,679 | |
Derivative liabilities | 400,892 | |
Total Current Liabilities | 1,413,179 | 1,321,664 |
TOTAL LIABILITIES | 1,413,179 | 1,321,664 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIT | ||
Common Stock: 450,000,000 shares authorized, par value $.001 per share; 449,329,190 and 289,329,190 shares issued and outstanding as of December 31, 2015 and December 31, 2014 | 449,329 | 289,329 |
Additional paid in capital | 14,688,042 | 14,740,042 |
Treasury Stock, 37,174 and 37,174 shares held, respectively, at cost of -0-, as of December 31, 2015 and December 31, 2014. | ||
Accumulated deficit | (16,229,034) | (16,228,057) |
TOTAL STOCKHOLDERS' DEFICIT | (1,091,663) | (1,198,686) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 321,516 | 122,978 |
Series A Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock: | ||
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock: |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Common Stock, shares authorized | 450,000,000 | 450,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares issued | 449,329,190 | 289,329,190 |
Common Stock, shares outstanding | 449,329,190 | 289,329,190 |
Treasury Stock, number of shares held | 37,174 | 37,174 |
Treasury Stock, cost | $ 0 | $ 0 |
Series A Convertible Preferred Stock [Member] | ||
Preferred Stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares issued | ||
Preferred Stock, shares outstanding | ||
Series B Convertible Preferred Stock [Member] | ||
Preferred Stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares issued | 0 | |
Preferred Stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Revenues | $ 1,073,577 | $ 7,811,423 |
Operating Expenses: | ||
Cost of revenues | 352,531 | 6,493,002 |
General and administrative expenses | 752,139 | 2,908,815 |
Total Operating Expenses | 1,104,670 | 9,401,817 |
Operating Loss | (31,093) | (1,590,394) |
Other Income (Expense): | ||
Gain (loss) on derivative liability | (41,884) | |
Amortization of debt discount | 61,250 | |
Change in derivative liability | (15,607) | |
Realized gain on marketable securities | 496,902 | |
Other income | 8,513 | |
Derivative interest | (15,527) | (103,566) |
Interest expense | (26,727) | |
Other expense | (11,027) | |
Total Other Income (Expense) | 30,116 | 322,211 |
Income (loss) from continuing operations | (977) | (1,268,183) |
Net Income | $ (977) | $ (1,268,183) |
Basic income (loss) per common share for continuing operations | ||
Basic income per common share for discontinued operations | ||
Total basic income per common share | ||
Diluted loss per share for continued operations | ||
Diluted income (loss) per common share for discontinued operations | ||
Total diluted income per common share | ||
Basic weighted average common shares outstanding | 449,329,190 | 289,674,514 |
Diluted weighted average common shares outstanding | 449,329,190 | 290,668,814 |
Consolidated Statement of Chang
Consolidated Statement of Change in Stockholders Deficit - USD ($) | Treasury Stock | Common Stock [Member] | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2013 | 37,174 | 283,657,190 | |||
Beginning Balance, Amount at Dec. 31, 2013 | $ 283,657 | $ 14,529,751 | $ (14,959,874) | $ (146,466) | |
Shares issued for cash, shares | 1,500,000 | ||||
Shares issued for cash, amount | $ 1,500 | 13,500 | 15,000 | ||
Shares issued for acquisition of subsidiary, shares | 5,000,000 | ||||
Shares issued for acquisition of subsidiary, amount | $ 5,000 | 82,500 | 87,500 | ||
Shares issued pursuant to a consulting agreement, shares | 522,000 | ||||
Shares issued pursuant to a consulting agreement, amount | $ 522 | 8,091 | 8,613 | ||
Shares issued to former directors, shares | 6,000,000 | ||||
Shares issued to former directors, amount | $ 6,000 | 106,200 | 112,200 | ||
Shares canceled pursant to settlement agreement, shares | (7,350,000) | ||||
Shares canceled pursant to settlement agreement, amount | $ (7,350) | (7,350) | |||
Net loss | (1,268,183) | (1,268,183) | |||
Ending Balance, Shares at Dec. 31, 2014 | 37,174 | 289,329,190 | |||
Ending Balance, Amount at Dec. 31, 2014 | $ 289,329 | 14,740,042 | (16,228,057) | $ (1,198,686) | |
Shares issued for acquisition of subsidiary, shares | 5,000,000 | ||||
Shares issued for acquisition of subsidiary, amount | $ 87,500 | ||||
Shares issued on conversion of debt, shares | 160,000,000 | 160,000,000 | |||
Shares issued on conversion of debt, amount | $ 160,000 | (52,000) | $ 108,000 | ||
Net loss | (977) | (977) | |||
Ending Balance, Shares at Dec. 31, 2015 | 449,329,190 | ||||
Ending Balance, Amount at Dec. 31, 2015 | $ 449,329 | $ 14,688,042 | $ (16,229,034) | $ (1,091,663) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income from continuing operations | $ (977) | $ (1,268,183) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Amortization of debt discount | (61,250) | 74,679 |
Depreciation | 0 | 4,950 |
Shares issued for services | 8,613 | |
Shares for previous directors | $ 112,500 | |
Shares cancelled | 7,152 | |
(Gain) loss on derivatives | $ 15,607 | $ 41,884 |
Realized gain on trading securities | (496,902) | |
Changes in: | ||
Accounts receivable | 287,094 | |
Prepaid expense and other current assets | ||
Deferred income | (13,370) | |
Accrued liabilities | 4,106 | (464,288) |
Accounts payable | 48,976 | |
Deferred compenastion | 180,000 | (446,875) |
Accounts payable, related party | ||
Other noncurrent assets | 60,078 | |
Net cash provided by (used in) operating activities | 137,486 | (2,043,692) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sale of trading securities | 1,260,990 | |
Proceeds from notes payable | 150,000 | |
Payments of convertible notes | (306,334) | |
Proceeds from shareholder loans | 96,100 | |
Proceeds from loan from third party | 125,000 | |
Net cash provided by (used in) investing activities | 64,766 | 1,260,990 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of debt | 319,000 | |
Proceeds from sales of common stock | 15,000 | |
Net cash (used in) provided by financing activities | 334,000 | |
Net increase in cash | 202,252 | (448,702) |
Cash, beginning of period | 27,886 | 476,588 |
Cash, end of period | 230,138 | 27,886 |
Supplemental cash flow information: | ||
Interest paid | 87,273 | |
Non-cash investing and financing activity: | ||
Discount on shares issued with notes payable | $ 98,097 |
NOTE 1_ DESCRIPTION OF BUSINESS
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Activity Creative Management Group, Inc. was formed in Delaware on August 13, 2002 as a limited liability company named Creative Management Group, LLC. On August 7, 2007, this entity converted to a corporation and changed its legal name to Creative Management Group Inc. The Company is a sports, entertainment, marketing and management company providing event management implementation, sponsorships, licensing and broadcast, production and syndication. On February 20, 2008, Creative Management Group, Inc. formed CMG Acquisitions, Inc., a Delaware company, for the purpose of acquiring companies and expansion strategies. On February 20, 2008, Creative Management Group, Inc. acquired 92.6% of Pebble Beach Enterprises, Inc. (a publicly traded company) and changed the name to CMG Holdings Group, Inc. (“the Company”). The purpose of the acquisition was to effect a reverse merger with Pebble Beach Enterprises, Inc. at a later date. On May 27, 2008, Pebble Beach entered into an Agreement and Plan of Reorganization with its controlling shareholder, Creative Management Group, Inc., a privately held Delaware corporation. Upon closing the eighty shareholders of Creative Management Group delivered all of their equity interests in Creative Management Group to Pebble Beach in exchange for shares of common stock in Pebble Beach owned by Creative Management Group, as a result of which Creative Management Group became a wholly-owned subsidiary of Pebble Beach. The shareholders of Creative Management Group received one share of Pebble Beach’s common stock previously owned by Creative Management Group for each issued and outstanding common share owned of Creative Management Group. As a result, the 22,135,148 shares of Pebble Beach that were issued and previously owned by Creative Management Group, are now owned directly by its shareholders. The 22,135,148 shares of Creative Management Group previously owned by its shareholders are now owned by Pebble Beach, thereby making Creative Management Group a wholly-owned subsidiary of Pebble Beach. Pebble Beach did not issue any new shares as part of the Reorganization. The transaction was accounted for as a reverse merger and recapitalization whereby Creative Management Group is the accounting acquirer. Pebble Beach was renamed CMG Holdings Group, Inc. On April 1, 2009, the Company, through a newly formed wholly owned subsidiary CMGO Capital, Inc., a Nevada corporation, completed the acquisition of XA, The Experiential Agency, Inc. On March 31, 2010, the Company and AudioEye, Inc. (“AudioEye”) completed the final Stock Purchase Agreement under which the Company acquired all of the outstanding capital stock of AudioEye. On June 22, 2011 the Company entered into a Master Agreement subject to shareholder approval as may be required under applicable law and subject to closing conditions with AudioEye Acquisition Corp., a Nevada corporation where the shareholders of AudioEye Acquisition Corp. exchanged 100% of the stock in AudioEye Acquisition Corp for 80% of the capital stock of AudioEye. The Company retained 15% of AudioEye subject to transfer restrictions in accordance with the Master Agreement; on October 2012, the Company distributed to its shareholders, in the form of a dividend, 5% of the capital stock of AudioEye in accordance with provisions of the Master Agreement. On March 28, 2014, CMG Holdings Group, Inc. (the “Company” or “CMG”), completed its acquisition of 100% of the shares of Good Gaming, Inc. (“GGI”) by entering into a Share Exchange Agreement (the “SEA”) with BMB Financial, Inc. and Jackie Beckford, the then shareholders of GGI. The sole owner of BMB Financial, Inc. is also the sole owner of Infinite Alpha, Inc. which provides consulting services to CMG. Pursuant to the SEA, the Company received 100% of the shares of GGI in exchange for 5,000,000 shares of the Company’s common stock, $33,000 in equipment and consultant compensation and a commitment to pay $200,000 in development costs. As of September 30, 2014, the Company has paid $58,600 of equipment and consultant compensation and $190,550 in development costs, of which $50,000 of the development costs had been advanced by the Company, prior to entering the agreement. In addition, pursuant to the SEA, CMG shall adopt an incentive plan for GGI which shall entitle the GGI officers, directors and employees to receive up to 30% of the net profits of GGI and up to 30% of the proceeds, in the event of a sale of GGI or its assets. Principles of Consolidation The consolidated financial statements include the accounts of CMG Holdings Group, Inc., XA, The Experiential Agency, Inc. ("XA") and GGI after elimination of all significant inter-company accounts and transactions. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Estimates are used when accounting for allowance for doubtful accounts, depreciation, and contingencies. Actual results could differ from those estimates. Concentrations of Risk Financial Institutions Sales and Accounts Receivable - Revenue and Cost Recognition The Company earns revenues by providing event management services under individually negotiated contracts with varying terms, recognizing revenue in accordance with ASC 605, Revenue Recognition Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are amounts due from event management services, are unsecured and are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis and do not bear interest, although a finance charge may be applied to amounts outstanding more than thirty days. Accounts receivable are periodically evaluated for collectability based on past credit history with clients. Provisions for losses on accounts receivable are determined on the basis of loss experience, known and inherent risk in the account balance and current economic conditions. There were no allowances for doubtful accounts as of December 31, 2015 and 2014. Share-Based Compensation The Company accounts for share-based compensation to employees in accordance with Accounting Standards Codification subtopic 718-10, Stock Compensation Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services Derivative Instruments We generally do not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks. However, certain financial instruments, such as warrants and the embedded conversion features of our convertible promissory notes and debentures, which are indexed to our common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within our control. In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even when the terms of the underlying contracts do not provide for net-cash settlement. Derivative financial instruments are initially recorded, and continuously carried, at fair value. Determining the fair value of these complex derivative financial instruments involves judgment and the use of certain relevant assumptions including, but not limited to, interest rates, volatility and conversion and redemption privileges. The use of different assumptions could have a material effect on the estimated fair value amounts. The Company accounts for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging The Company uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for the Company’s liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc., depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, The Company seeks to validate the model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC 820, Fair Value Measurements Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets, which is generally between three and five years. Depreciation expense was $0 and $0 for the years ended December 31, 2015 and 2014, respectively. Intangible Assets Intangible assets are stated at cost, net of accumulated amortization. Amortization is computed using the straight-line method over the estimated useful life of the respective asset, which is three years. Amortization expense was $0 and $0 for the years ended December 31, 2015 and 2014, respectively. Income Taxes The Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Basic and Diluted Net Loss per Share The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, Recently Issued Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. Fair Value Measurements ASC 820 and ASC 825, Financial Instruments , Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on December 31, 2015 and 2014: December 31, 2015 Level 1 Level 2 Level 3 Total Marketable trading securities $ - $ - $ - $ - Derivative Liabilities $ - $ - $ - $ - December 31, 2014 Level 1 Level 2 Level 3 Total Marketable trading securities $ - $ - $ - $ - Derivative Liabilities $ - $ - $ 400,892 $ 400,892 Investments in Debt and Equity Securities The Company applies the provisions of Accounting Standards Codification 320, Investments – Debt and Equity Securities Details of the Company's marketable trading securities as of December 31, 2015 and 2014 are as follows: December 31, 2015 December 31, 2014 Aggregate fair value $ - $ - Gross unrealized holding gains (losses) - - Proceeds from sales ($1,423,491 stocks plus $85,000 options) $ - $ - Gross realized gains (stocks and options) - - Gross realized losses - - Other than temporary impairment - - |
NOTE 2_ EQUITY
NOTE 2: EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
NOTE 2: EQUITY | NOTE 2 - EQUITY Common Stock On January 29, 2014, the Company sold 1,500,000 shares of its common stock for $0.01 per share and net proceeds of $15,000. On March 28, 2014, the Company issued 5,000,000 shares of its common stock pursuant to the acquisition of its subsidiary. The shares were valued at a total of $87,500 or $0.0175 per share, the closing price of the company’s common stock on the OTCQB. On April 7, 2014, the Company issued 522,000 shares of its common stock pursuant to a consulting agreement. The shares were valued at a total of $8,613 or $0.0165 per share, the closing price of the company’s common stock on the OTCQB. On May 9, 2014, the Company issued to a total of 6,000,000 shares of Common Stock to its three former directors of the Company, with each former director receiving 2,000,000 shares, pursuant to the agreements between the Company and each of the former directors dated February 5, 2014. On June 30, 2014, the Company canceled 7,350,000 shares of common stock pursuant to a settlement agreement with CMGO Investors LLC and Craig Boden. In the quarter ended June 30, 2015, the Company issued 160,000,000 shares of common stock for the conversion of debt. Common Stock Warrants On April 7, 2014, we issued to our newly appointed CEO and Chairman of the Board of Directors, as compensation, a warrant to purchase a total of 40,000,000 shares of Common Stock at the exercise price of $0.0155 with a term of 5 years. A summary of warrant activity for the years ended December 31, 2015 and 2014 is as follows: Outstanding and Exercisable Weighted average Exercise Price December 31, 2012 1,798,000 $ 0.28 Granted 40,000,000 0.016 Exercised Expired (1,148,000 ) — December 31, 2013 40,650,000 $ 0.02 Granted $ Exercised Expired December 31, 2014 40,650,000 $ 0.02 As of December 31, 2015, the warrants have a weighted average remaining life of 4.43 years with $0 aggregate intrinsic value. |
NOTE 3_ NOTES PAYABLE
NOTE 3: NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
NOTE 5: NOTES PAYABLE | NOTE 3 - NOTES PAYABLE Convertible Promissory Note On September 30, 2014, the Company sold a convertible promissory Note (the “Note”) in private placements to Iconic Holdings LLC. The principal amount of the Note is $55,000. The Note is convertible, at the holder's option, into shares of our common stock, generally at 70% of the lowest trading price of our common stock, for the prior 20 trading days. The Note bears interest at 10% annum, can be repaid at any time prior to maturity with a prepayment penalty of 10% of the principal amount paid, is due on September 30, 2015 and contains customary events of default and provide for increased interest rates in the event of default. We did not pay a placement agent or other fees and the Note was issued with an original issue discount of $5,000. Net proceeds to the Company was $50,000. The Note does not require us to register the shares of our common stock underlying their conversion. The terms of the embedded conversion options in the Note does not meet all of the established criteria for equity classification in FASB ASC 815-40, Derivatives and Hedging - Contracts in Entity's Own Equity. Accordingly, the embedded derivative instrument in the Note (the conversion option), is accounted for separately from the host contract, and is recorded at fair value of $81,627. The Company recorded a derivative expense of $31,627 on the date of the Note. Accordingly, the initial carrying amount of the Note on the date of the Note was $0. The embedded derivative instrument that has been separated from the Note, shall be re-valued each reporting period, with any changes in their fair values recognized as a gain or loss in our income statement. In the quarter ended June 30, 2015 the note was converted to 160,000,000 shares of common stock. |
NOTE 4_ DERIVATIVE LIABILITIES
NOTE 4: DERIVATIVE LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
NOTE 4: DERIVATIVE LIABILITIES | NOTE 4 - DERIVATIVE LIABILITIES The Company has a convertible instrument outstanding more fully described in Note 3. In accordance with ASC 815-15 “Derivatives and Hedging”, the convertible share-settleable instruments are classified as liabilities. Embedded Derivative Liabilities in Convertible Notes During the years ended December 31, 2015 and 2014, the Company recognized new derivative liabilities of $0 and $81,627, respectively, as a result of new convertible debt issuances. The fair value of these derivative liabilities exceeded the principal balance of the related notes payable by $0 and $31,627 for the years ended December 31, 2015 and 2014, respectively. As a result of conversions of notes payable, the Company reclassified $108,000 and $0 from equity and $0 and $0 of derivative liabilities to equity during the years ended December 31, 2015 and 2014, respectively. The Company recognized a gain of $0 and a gain of $0 on derivatives due to change in fair value of the liability during the years ended December 31, 2015 and 2014, respectively. The fair value of the Company’s embedded derivative liabilities was $0 and $81,627 at December 31, 2015 and 2014, respectively. Warrants During 2011, 774,000 A Warrants and 774,000 B warrants were issued to individuals. The Company determined that the instruments embedded in the warrants should be classified as liabilities. During March 31, 2010, 250,000 shares of warrants issued to AudioEye at an exercise price of $0.07 per share and a term of 5 years. Under ASC 815-15, the liabilities were subsequently measured at fair value at the end of each reporting period with the change in fair value recorded to earnings. The fair value of all outstanding warrants as of December 31, 2014 and December 31, 2013 was $11,121 and $84,822, respectively. The Company recognized an expense of $381 and a gain $10,196 related to the warrants for the year ended December 31, 2014 and 2013, respectively. The following table summarizes the derivative liabilities included in the consolidated balance sheet: Derivative Liabilities Balance at December 31, 2012 $ 145,970 ASC 815-15 additions 98.097 Change in fair value (210,180) ASC 815-15 deletions (22,270 ) Balance at December 31, 2013 11,121 ASC 815-15 additions 86,640 Change in fair value (1,818 ) ASC 815-15 deletions (11,121 ) Balance at December 31, 2014 84,822 ASC 815-15 additions - Change in fair value (15,607 ) ASC 815-15 deletions (69,215 ) Balance at December 31, 2015 $ - The embedded conversion options in the Notes, which is accounted for separately as a derivative instrument is valued using a binomial lattice model because that model embodies all of the significant relevant assumptions that address the features underlying these instruments. Significant assumptions used in the model as of the date the Note was issued and as of September 30, 2014 included an expected life equal to the remaining term of the Note, an expected dividend yield of zero, estimated volatility ranging of 116%, and a risk-free rate of return of 0.13%. For the risk-free rates of return, we use the published yields on zero-coupon Treasury Securities with maturities consistent with the remaining term of the Note. Volatility is based upon our expected common stock price volatility over the remaining term of the Note. The volatility used for the Note is based on the Company’s 100-day volatility, which is considered a reasonable surrogate for the volatility to be expected over the life of the Note. That volatility has generally ranged from 116% to 146%. |
NOTE 5_ LEGAL PROCEEDINGS
NOTE 5: LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 5: LEGAL PROCEEDINGS | NOTE 5 - LEGAL PROCEEDINGS We are subject to certain claims and litigation in the ordinary course of business. It is the opinion of management that the outcome of such matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. On September 23, 2014, XA filed a lawsuit in the Supreme Court of the State of New York, County of New York against HG and its principals alleging wrongdoing by the defendants in connection with soliciting XA’s clients and seeking against further contact with XA clients. The Company conducted an internal investigation of actions taken by XA’s former employees during the quarter ended September 30, 2014. While the investigation is not complete, we have discovered that there are numerous instances of conversion of XA assets and funds, such as personal charges on company credit cards, payments for cell phones for family members, reimbursement for personal travel and other expenses which did not relate to XA in any way, and transactions between XA and parties owned by these former employees who did not disclose their interests in them. The Company and XA plan to complete the investigation, including recovering e-mails deleted by the former employees, and to vigorously pursue any and all amounts wrongfully taken from XA. In October, 2014, Ronald Burkhardt, XA,s former Executive Chairman and a current member of the Company’s Board of Directors filed a lawsuit in the Supreme Court of the State of New York, County of New York, alleging breach of his employment contract and seeking approximately $695,000 in damages. The Company believes that Mr. Burkhardt’s claim is without merit and plans to vigorously defend the lawsuit. |
NOTE 6_ ACQUISITION OF GOOD GAM
NOTE 6: ACQUISITION OF GOOD GAMING, INC. | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
NOTE 6: ACQUISITION OF GOOD GAMING, INC. | NOTE 6 - ACQUISITION OF GOOD GAMING, INC. On March 28, 2014, CMG Holdings, Inc. (the “Company” or “CMG”), completed its acquisition of 100% of the shares of Good Gaming, Inc. (“GGI”) by entering into a Share Exchange Agreement (the “SEA”) with BMB Financial, Inc. and Jackie Beckford, the then shareholders of GGI. The sole owner of BMB Financial, Inc. is also the sole owner of Infinite Alpha, Inc. which provides consulting services to CMG. The transaction was completed under the purchase method of accounting. Pursuant to the SEA, the Company received 100% of the shares of GGI in exchange for 5,000,000 shares of the Company’s common stock, $33,000 in equipment and consultant compensation and a commitment to pay $200,000 in development costs, of which $50,000 of the development costs had been advanced by the Company. In addition, pursuant to the SEA, CMG shall adopt an incentive plan for GGI which shall entitle the GGI officers, directors and employees to receive up to 30% of the net profits of GGI and up to 30% of the proceeds, in the event of a sale of GGI or its assets. In accordance with the purchase method of accounting, the Company recorded a charge of $87,500. |
NOTE 7_ SEGMENTS
NOTE 7: SEGMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
NOTE 7: SEGMENTS | NOTE 7 - SEGMENTS The Company splits its business activities during the year ended December 31, 2015 into three reportable segments. Each segment represents an entity of which are included in the consolidation. The table below represents the operations results for each segment or entity, for the nine months ended September 30, 2014. XA Good Gaming CMG Holdings Group Totals Revenue $ 1,073,577 $ — $ — $ 1,073,577 Operating expenses 894,670 30,000 180,000 1,104,670 Operating Income (Loss) 178,907 (30,000 ) (180,000 ) (31,093 ) Other Income (Expense) 30,116 30,116 Net Income (Loss) $ 178,907 $ (30,000 ) $ (149,884 ) $ (977 ) |
NOTE 8_ RESIGNATION OF OFFICERS
NOTE 8: RESIGNATION OF OFFICERS AND MEMBERS OF THE BOARD. | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 8: RESIGNATION OF OFFICERS AND MEMBERS OF THE BOARD. | NOTE 8 – RESIGNATION OF OFFICERS AND MEMBERS OF THE BOARD. On May 9, 2014, the Company issued to a total of 6,000,000 shares of Common Stock to its three former directors of the Company, with each former director receiving 2,000,000 shares, pursuant to the agreements between the Company and each of the former directors dated February 5, 2014. On September 17, 2014, Jeffrey Devlin resigned as Chief Financial Officer and Director of the Company. |
NOTE 9 - RELATED PARTY TRANSACT
NOTE 9 - RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
NOTE 9 - RELATED PARTY TRANSACTIONS | NOTE 10 - RELATED PARTY TRANSACTIONS The Company issued to three former directors 2,000,000 shares of the Company’s common stock. The Company issued the Company CEO a warrant to purchase 40,000,000 shares of the Company’s common stock at $0.0155. The warrant has a term of 5 years. The board of directors approved a monthly salary for the Company CEO of $15,000 per month. Due to negative economic factors the company has not made all of these payments and has recorded “Accrued Compensation” of $220,000 at December 31, 2015. Due to these same economic effects the Company is currently using office space provided by the Company CEO’s daughter on a rent free basis and she is also employed as an outside consultant on a part time basis. During the year ended December 31, 2015 the Company borrowed $96,100 from a Company shareholder. This amount is due on demand and has an interest rate of 5%. The Company also borrowed $125,000 from a relative of the Company CEO. This amount is due on demand and has an interest rate of 5%. |
NOTE 10_ SUBSEQUENT EVENTS
NOTE 10: SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
NOTE 10: SUBSEQUENT EVENTS | NOTE 11 - SUBSEQUENT EVENTS In November 2015 the Company entered into an agreement to sell Good Gaming. The sale closed in February of 2016. |
NOTE 11_ GOING CONCERN
NOTE 11: GOING CONCERN | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 11: GOING CONCERN | NOTE 12 GOING CONCERN These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has a working capital deficit and has generated recurring net losses. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and the ability of the Company to obtain necessary equity or debt financing to continue and expand operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the ability of the Company to continue as a going concern. Besides ongoing revenues from continuing operations, the Company may need to raise additional funds to expand operations to the point at which the Company can achieve profitability. |
NOTE 1_ DESCRIPTION OF BUSINE18
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Business Activity | Business Activity Creative Management Group, Inc. was formed in Delaware on August 13, 2002 as a limited liability company named Creative Management Group, LLC. On August 7, 2007, this entity converted to a corporation and changed its legal name to Creative Management Group Inc. The Company is a sports, entertainment, marketing and management company providing event management implementation, sponsorships, licensing and broadcast, production and syndication. On February 20, 2008, Creative Management Group, Inc. formed CMG Acquisitions, Inc., a Delaware company, for the purpose of acquiring companies and expansion strategies. On February 20, 2008, Creative Management Group, Inc. acquired 92.6% of Pebble Beach Enterprises, Inc. (a publicly traded company) and changed the name to CMG Holdings Group, Inc. (“the Company”). The purpose of the acquisition was to effect a reverse merger with Pebble Beach Enterprises, Inc. at a later date. On May 27, 2008, Pebble Beach entered into an Agreement and Plan of Reorganization with its controlling shareholder, Creative Management Group, Inc., a privately held Delaware corporation. Upon closing the eighty shareholders of Creative Management Group delivered all of their equity interests in Creative Management Group to Pebble Beach in exchange for shares of common stock in Pebble Beach owned by Creative Management Group, as a result of which Creative Management Group became a wholly-owned subsidiary of Pebble Beach. The shareholders of Creative Management Group received one share of Pebble Beach’s common stock previously owned by Creative Management Group for each issued and outstanding common share owned of Creative Management Group. As a result, the 22,135,148 shares of Pebble Beach that were issued and previously owned by Creative Management Group, are now owned directly by its shareholders. The 22,135,148 shares of Creative Management Group previously owned by its shareholders are now owned by Pebble Beach, thereby making Creative Management Group a wholly-owned subsidiary of Pebble Beach. Pebble Beach did not issue any new shares as part of the Reorganization. The transaction was accounted for as a reverse merger and recapitalization whereby Creative Management Group is the accounting acquirer. Pebble Beach was renamed CMG Holdings Group, Inc. On April 1, 2009, the Company, through a newly formed wholly owned subsidiary CMGO Capital, Inc., a Nevada corporation, completed the acquisition of XA, The Experiential Agency, Inc. On March 31, 2010, the Company and AudioEye, Inc. (“AudioEye”) completed the final Stock Purchase Agreement under which the Company acquired all of the outstanding capital stock of AudioEye. On June 22, 2011 the Company entered into a Master Agreement subject to shareholder approval as may be required under applicable law and subject to closing conditions with AudioEye Acquisition Corp., a Nevada corporation where the shareholders of AudioEye Acquisition Corp. exchanged 100% of the stock in AudioEye Acquisition Corp for 80% of the capital stock of AudioEye. The Company retained 15% of AudioEye subject to transfer restrictions in accordance with the Master Agreement; on October 2012, the Company distributed to its shareholders, in the form of a dividend, 5% of the capital stock of AudioEye in accordance with provisions of the Master Agreement. On March 28, 2014, CMG Holdings Group, Inc. (the “Company” or “CMG”), completed its acquisition of 100% of the shares of Good Gaming, Inc. (“GGI”) by entering into a Share Exchange Agreement (the “SEA”) with BMB Financial, Inc. and Jackie Beckford, the then shareholders of GGI. The sole owner of BMB Financial, Inc. is also the sole owner of Infinite Alpha, Inc. which provides consulting services to CMG. Pursuant to the SEA, the Company received 100% of the shares of GGI in exchange for 5,000,000 shares of the Company’s common stock, $33,000 in equipment and consultant compensation and a commitment to pay $200,000 in development costs. As of September 30, 2014, the Company has paid $58,600 of equipment and consultant compensation and $190,550 in development costs, of which $50,000 of the development costs had been advanced by the Company, prior to entering the agreement. In addition, pursuant to the SEA, CMG shall adopt an incentive plan for GGI which shall entitle the GGI officers, directors and employees to receive up to 30% of the net profits of GGI and up to 30% of the proceeds, in the event of a sale of GGI or its assets. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of CMG Holdings Group, Inc., XA, The Experiential Agency, Inc. ("XA") and GGI after elimination of all significant inter-company accounts and transactions. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Estimates are used when accounting for allowance for doubtful accounts, depreciation, and contingencies. Actual results could differ from those estimates. |
Concentrations of Risk | Concentrations of Risk Financial Institutions Sales and Accounts Receivable - |
Revenue and Cost Recognition | Revenue and Cost Recognition The Company earns revenues by providing event management services under individually negotiated contracts with varying terms, recognizing revenue in accordance with ASC 605, Revenue Recognition |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are amounts due from event management services, are unsecured and are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis and do not bear interest, although a finance charge may be applied to amounts outstanding more than thirty days. Accounts receivable are periodically evaluated for collectability based on past credit history with clients. Provisions for losses on accounts receivable are determined on the basis of loss experience, known and inherent risk in the account balance and current economic conditions. There were no allowances for doubtful accounts as of December 31, 2015 and December 31, 2014. |
Derivative Instruments | Derivative Instruments We generally do not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks. However, certain financial instruments, such as warrants and the embedded conversion features of our convertible promissory notes and debentures, which are indexed to our common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within our control. In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even when the terms of the underlying contracts do not provide for net-cash settlement. Derivative financial instruments are initially recorded, and continuously carried, at fair value. Determining the fair value of these complex derivative financial instruments involves judgment and the use of certain relevant assumptions including, but not limited to, interest rates, volatility and conversion and redemption privileges. The use of different assumptions could have a material effect on the estimated fair value amounts. The Company accounts for derivative instruments in accordance with ASC Topic 815, Derivatives and Hedging The Company uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for the Company’s liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc., depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, The Company seeks to validate the model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC 820, Fair Value Measurements |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets, which is generally between three and five years. Depreciation expense was $0 and $0 for the years ended December 31, 2015 and 2014, respectively. |
Intangible Assets | Intangible Assets Intangible assets are stated at cost, net of accumulated amortization. Amortization is computed using the straight-line method over the estimated useful life of the respective asset, which is three years. Amortization expense was $0 and $0 for the years ended December 31, 2015 and 2014, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Fair Value Measurements | Fair Value Measurements ASC 820 and ASC 825, Financial Instruments , Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on December 31, 2015 and 2014: December 31, 2015 Level 1 Level 2 Level 3 Total Marketable trading securities $ - $ - $ - $ - Derivative Liabilities $ - $ - $ - $ - December 31, 2014 Level 1 Level 2 Level 3 Total Marketable trading securities $ - $ - $ - $ - Derivative Liabilities $ - $ - $ 400,892 $ 400,892 |
Investments in Debt and Equity Securities | nvestments in Debt and Equity Securities The Company applies the provisions of Accounting Standards Codification 320, Investments – Debt and Equity Securities Details of the Company's marketable trading securities as of December 31, 2015 and 2014 are as follows: December 31, 2015 December 31, 2014 Aggregate fair value $ - $ - Gross unrealized holding gains (losses) - - Proceeds from sales ($1,423,491 stocks plus $85,000 options) $ - $ - Gross realized gains (stocks and options) - - Gross realized losses - - Other than temporary impairment - - |
NOTE 1_ DESCRIPTION OF BUSINE19
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of fair value hierarchy of financial assets and liabilities | December 31, 2015 Level 1 Level 2 Level 3 Total Derivative Liabilities $ - $ - $ 0 $ 0 December 31, 2014 Level 1 Level 2 Level 3 Total Derivative Liabilities $ - $ - $ 400,892 $ 400,892 |
Schedule of marketable trading securities | December 31, 2015 December 31, 2014 Aggregate fair value $ - $ - Gross unrealized holding gains (losses) - - Proceeds from sales ($1,423,491 stocks plus $85,000 options) $ - $ - Gross realized gains (stocks and options) - - Gross realized losses - - Other than temporary impairment - - |
NOTE 2_ EQUITY (Tables)
NOTE 2: EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary of warrant activity | Outstanding and Exercisable Weighted average Exercise Price December 31, 2012 1,798,000 $ 0.28 Granted 40,000,000 0.016 Exercised Expired (1,148,000 ) — December 31, 2013 40,650,000 $ 0.02 Granted $ Exercised Expired December 31, 2014 40,650,000 $ 0.02 |
NOTE 4_ DERIVATIVE LIABILITIES
NOTE 4: DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of derivative liabilities included in consolidated balance sheets | Derivative Liabilities Balance at December 31, 2012 $ 145,970 ASC 815-15 additions 98.097 Change in fair value (210,180) ASC 815-15 deletions (22,270 ) Balance at December 31, 2013 11,121 ASC 815-15 additions 86,640 Change in fair value (1,818 ) ASC 815-15 deletions (11,121 ) Balance at December 31, 2014 84,822 ASC 815-15 additions - Change in fair value (15,607 ) ASC 815-15 deletions (69,215 ) Balance at December 31, 2015 $ - |
NOTE 7_ SEGMENTS (Tables)
NOTE 7: SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | XA Good Gaming CMG Holdings Group Totals Revenue $ 1,073,577 $ — $ — $ 1,073,577 Operating expenses 894,670 30,000 180,000 1,104,670 Operating Income (Loss) 178,907 (30,000 ) (180,000 ) (31,093 ) Other Income (Expense) 30,116 30,116 Net Income (Loss) $ 178,907 $ (30,000 ) $ (149,884 ) $ (977 ) |
NOTE 1_ DESCRIPTION OF BUSINE23
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (Details Textual) - USD ($) | Jun. 22, 2011 | May 27, 2008 | Sep. 30, 2014 | Mar. 28, 2014 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 20, 2008 |
Description of Business and Summary of Significant Accounting Policies (Textual) | |||||||||
Common Stock, shares issued | 449,329,190 | 449,329,190 | 289,329,190 | ||||||
Development costs | $ 19,055 | ||||||||
Allowance for doubtful accounts receivable | $ 0 | $ 0 | $ 0 | ||||||
Depreciation expense | 0 | 4,950 | |||||||
Insured amount in each financial institution, Federal Deposit Insurance Corporation | $ 250,000 | ||||||||
Retained percentage of transfer restrictions | 15.00% | ||||||||
Property, plant and equipment, estimated useful lives | Three and five years | ||||||||
Percentage of dividends distributed | 5.00% | ||||||||
Insured amount, Securities Investor Protection Corporation | $ 500,000 | ||||||||
Subsidiaries [Member] | |||||||||
Description of Business and Summary of Significant Accounting Policies (Textual) | |||||||||
Percentage of equity interest acquired | 92.60% | ||||||||
Number of shares issued to acquire | 22,135,148 | ||||||||
Audio Eye Acquisition Corp [Member] | |||||||||
Description of Business and Summary of Significant Accounting Policies (Textual) | |||||||||
Percentage of stock issued for exchange of stock | 100.00% | ||||||||
Audio Eye Inc [Member] | |||||||||
Description of Business and Summary of Significant Accounting Policies (Textual) | |||||||||
Percentage of stock issued for exchange of stock | 80.00% | ||||||||
Good Gaming Inc [Member] | |||||||||
Description of Business and Summary of Significant Accounting Policies (Textual) | |||||||||
Common Stock, shares issued | 5,000,000 | ||||||||
Development costs | 50,000 | $ 200,000 | |||||||
Percentage of stock issued for exchange of stock | 100.00% | ||||||||
Share exchange agreement description | CMG shall adopt an incentive plan for GGI which shall entitle the GGI officers, directors and employees to receive up to 30% of the net profits of GGI and up to 30% of the proceeds, in the event of a sale of GGI or its assets. | ||||||||
Equipment and consultant compensation cost | $ 58,600 | $ 33,000 | |||||||
Sales Revenue, Net [Member] | |||||||||
Description of Business and Summary of Significant Accounting Policies (Textual) | |||||||||
Concentration risk, percentage | 0.00% | 93.00% | 72.00% | ||||||
Number of customer | 1 | 1 | 1 |
NOTE 1_ DESCRIPTION OF BUSINE24
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Marketable trading securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
Aggregate fair value | ||
Gross unrealized holding gains (losses) | ||
Gross realized losses | ||
Other than temporary impairment |
NOTE 1_ DESCRIPTION OF BUSINE25
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative liabilities | $ 400,892 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative liabilities | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative liabilities | $ 400,892 |
NOTE 2_ EQUITY (Details)
NOTE 2: EQUITY (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding and Exercisable, Beginning balance | 40,650,000 | 1,798,000 |
Outstanding and Exercisable, Granted | 40,000,000 | |
Outstanding and Exercisable, Exercised | ||
Outstanding and Exercisable, Expired | (1,148,000) | |
Outstanding and Exercisable, Ending balance | 40,650,000 | 40,650,000 |
Weighted average Exercise Price, Beginning balance | $ 0.02 | $ 0.28 |
Weighted average Exercise Price, Granted | 0.016 | |
Weighted average Exercise Price, Exercised | ||
Weighted average Exercise Price, Expired | ||
Weighted average Exercise Price, Ending balance | $ 0.02 | $ 0.02 |
NOTE 2_ EQUITY (Details Textual
NOTE 2: EQUITY (Details Textual) - USD ($) | May 09, 2014 | Apr. 07, 2014 | Jan. 29, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 28, 2014 | Dec. 31, 2015 | Dec. 31, 2014 |
Equity (Textual) | ||||||||
Shares issued pursuant to acquisition of subsidiary, shares | 5,000,000 | |||||||
Stock issued during period of acquisition | $ 87,500 | $ 87,500 | ||||||
New stock issued during the period,Value | $ 15,000 | |||||||
Weighted average remaining contractual term | 4 years 4 months 3 days | |||||||
Warrants aggregate intrinsic value | $ 0 | |||||||
Share price | $ 0.0165 | |||||||
Remaining contractual term of warrants | 5 years | |||||||
Warrant to purchase of common stock | 40,000,000 | |||||||
Common stock exercise price | $ 0.0155 | |||||||
Common Stock [Member] | ||||||||
Equity (Textual) | ||||||||
Shares issued pursuant to acquisition of subsidiary, shares | 5,000,000 | 5,000,000 | ||||||
Stock issued during period of acquisition | $ 87,500 | $ 5,000 | ||||||
Shares issued for services, shares | 6,000,000 | 522,000 | ||||||
New stock issued during the period, Shares | 522,000 | 1,500,000 | 1,500,000 | |||||
New stock issued during the period,Value | $ 8,613 | $ 1,500 | ||||||
Proceeds from sale of shares | $ 15,000 | |||||||
Sale of Stock, price per share | $ 0.01 | |||||||
Share price | $ 0.0165 | $ 0.0175 | ||||||
Cancellation of common stock | 7,350,000 | |||||||
Common Stock [Member] | KBM Worldwide And KBM Investments.Inc. [Member] | ||||||||
Equity (Textual) | ||||||||
Shares issued for conversion of convertible notes | 160,000,000 | |||||||
Officer [Member] | Common Stock [Member] | ||||||||
Equity (Textual) | ||||||||
Shares issued for services, shares | 2,000,000 |
NOTE 3_ NOTES PAYABLE (Details)
NOTE 3: NOTES PAYABLE (Details) - USD ($) | 8 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Notes Payable (Textual) | |||
Shares issued on conversion of debt, shares | 160,000,000 | ||
Proceeds from notes payable | $ 150,000 | ||
Fair value of embedded derivative liabilities | $ 0 | $ 81,627 | |
Derivative expense | $ 31,627 | ||
Iconic.Holdings. LLC [Member] | |||
Notes Payable (Textual) | |||
Convertible promissory note | $ 55,000 | ||
Convertible debt, Interest rate | 10.00% | ||
Debt instrument, Maturity date | Sep. 30, 2015 | ||
Debt conversion, Description | 70% of the lowest trading price of our common stock, for the prior 20 trading days | ||
Outstanding balance | $ 0 | ||
Original issue discount | 5,000 | ||
Proceeds from notes payable | 50,000 | ||
Derivative expense | $ 31,627 |
NOTE 4_ DERIVATIVE LIABILITIE29
NOTE 4: DERIVATIVE LIABILITIES - Summary of derivative liabilities included in consolidated balance sheets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative Liabilities, Beginning balance | $ 84,822 | $ 11,121 | $ 145,970 |
ASC 815-15 additions | 86,640 | 98,097 | |
Change in fair value | (15,607) | (1,818) | (210,180) |
ASC 815-15 deletions | (69,215) | (11,121) | (22,270) |
Derivative Liabilities, Ending balance | $ 84,822 | $ 11,121 |
NOTE 4_ DERIVATIVE LIABILITIE30
NOTE 4: DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | |
Derivative Liabilities (Textual) | |||||
Derivative Liabilities | $ 0 | $ 81,627 | |||
Notes payable convertible reclassified from equity | 108,000 | 0 | |||
Reclassified derivative liabilities to equity | 0 | 0 | |||
Gain (loss) on derivatives | 0 | 0 | |||
Fair value of embedded derivative liabilities | $ 0 | 81,627 | |||
Derivative expense | 31,627 | ||||
Gain (loss) related to warrant | $ 381 | $ 10,196 | |||
Expected dividend | 0.00% | ||||
Expected volatility rate | 116.00% | ||||
Risk free interest rate | 0.13% | ||||
Expected term | 100 days | ||||
A Warrants [Member] | |||||
Derivative Liabilities (Textual) | |||||
Fair value all warrants outstanding | $ 774,000 | ||||
B Warrants [Member] | |||||
Derivative Liabilities (Textual) | |||||
Fair value all warrants outstanding | $ 774,000 | ||||
AudioEye [Member] | |||||
Derivative Liabilities (Textual) | |||||
Fair value all warrants outstanding | $ 250,000 | ||||
Expected term | 5 years | ||||
Execise price | $ 0.07 | ||||
Minimum [Member] | |||||
Derivative Liabilities (Textual) | |||||
Expected volatility rate | 116.00% | ||||
Maximum [Member] | |||||
Derivative Liabilities (Textual) | |||||
Expected volatility rate | 146.00% |
NOTE 5_ LEGAL PROCEEDINGS (Deta
NOTE 5: LEGAL PROCEEDINGS (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Legal Proceedings (Textual) | |
Damages | $ 695,000 |
NOTE 6_ ACQUISITION OF GOOD G32
NOTE 6: ACQUISITION OF GOOD GAMING, INC. (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Mar. 28, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Acquisition of Good Gaming, Inc (Textual) | ||||
Common stock, shares, issued | 449,329,190 | 289,329,190 | ||
Development costs | $ 19,055 | |||
Shares issued for acquisition of subsidiary, amount | $ 87,500 | $ 87,500 | ||
Good Gaming Inc [Member] | ||||
Acquisition of Good Gaming, Inc (Textual) | ||||
Percentage of equity interest acquired | 100.00% | |||
Business acquisition liability to pay | $ 200,000 | |||
Business acquisition, description of GGI | The Company received 100% of the shares of GGI in exchange for 5,000,000 shares of the Company's common stock, $33,000 in equipment and consultant compensation and a commitment to pay $200,000 in development costs, of which $50,000 of the development costs had been advanced by the Company. | |||
Common stock, shares, issued | 5,000,000 | |||
Development costs | $ 50,000 | |||
Business acquisition purchase method description | In addition, pursuant to the SEA, CMG shall adopt an incentive plan for GGI which shall entitle the GGI officers, directors and employees to receive up to 30% of the net profits of GGI and up to 30% of the proceeds, in the event of a sale of GGI or its assets. | |||
Equipment and consultant compensation cost | $ 33,000 | |||
Period of goodwill impairment | 12 months |
NOTE 7_ SEGMENTS - Schedule of
NOTE 7: SEGMENTS - Schedule of segment reporting information, by segment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue | $ 1,073,577 | $ 7,811,423 |
Operating expenses | 1,104,670 | 9,401,817 |
Operating Income (Loss) | (31,093) | (1,590,394) |
Other Income (Expense) | 30,116 | 322,211 |
Net Income (Loss) | (977) | $ (1,268,183) |
Xa [Member] | ||
Revenue | 1,073,577 | |
Operating expenses | 894,670 | |
Operating Income (Loss) | 178,907 | |
Net Income (Loss) | 178,907 | |
Good Gaming [Member] | ||
Revenue | ||
Operating expenses | 30,000 | |
Operating Income (Loss) | (30,000) | |
Net Income (Loss) | (30,000) | |
CMG Holdings Group [Member] | ||
Revenue | ||
Operating expenses | 180,000 | |
Operating Income (Loss) | (180,000) | |
Other Income (Expense) | 30,116 | |
Net Income (Loss) | $ (149,884) |
NOTE 8_ RESIGNATION OF OFFICE34
NOTE 8: RESIGNATION OF OFFICERS AND MEMBERS OF THE BOARD. (Details) | May 09, 2014shares | Dec. 31, 2014shares |
Officer [Member] | ||
Resignation of Officers and Members of the Board (Textual) | ||
Shares issued for services, shares | 2,000,000 | |
Common Stock [Member] | ||
Resignation of Officers and Members of the Board (Textual) | ||
Number of former directors | 3 | |
Shares issued for services, shares | 6,000,000 | 522,000 |
NOTE 9_ RELATED PARTY (Details
NOTE 9: RELATED PARTY (Details Narrative) | 12 Months Ended | |
Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | |
Related Party (Textual) | ||
Loan from shareholders | $ 96,100 | |
Interest rate | 5.00% | |
Loan outside party | $ 125,000 | |
Director [Member] | ||
Related Party (Textual) | ||
Number of former directors | 3 | |
Common stock issued to directors | shares | 2,000,000 | |
Chief Executive Officer [Member] | ||
Related Party (Textual) | ||
Warrant to purchase common stock | shares | 40,000,000 | |
Exercise price of warrants | $ / shares | $ 0.0155 | |
Term of warrant | 5 years | |
Monthly salary to CEO | $ 15,000 | |
Accrued compensation | $ 220,000 |