Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 13, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | OncBioMune Pharmaceuticals, Inc | ||
Entity Central Index Key | 1,362,703 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 5,147,221 | ||
Entity Common Stock, Shares Outstanding | 131,668,995 | ||
Trading Symbol | OBMP | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 672,769 | |
Due from related parties | 17,800 | |
Subscription receivable | 11,190 | |
Prepaid expenses and other current assets | 30,119 | 18,968 |
Total Current Assets | 41,309 | 709,537 |
OTHER ASSETS: | ||
Property and equipment, net | 9,604 | 10,702 |
Security deposit | 6,400 | 6,400 |
Total Assets | 57,313 | 726,639 |
CURRENT LIABILITIES: | ||
Convertible debt, net | 54,688 | |
Line of credit | 99,741 | 49,708 |
Bank overdraft | 812 | |
Accounts payable | 213,616 | 102,273 |
Accrued liabilities | 108,034 | 19,277 |
Derivative liabilities | 402,055 | |
Due to related party | 5,000 | |
Total Current Liabilities | 883,946 | 171,258 |
Commitments and contingencies (Note 9) | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.0001 par value; 20,000,000 authorized; Series A Preferred stock ($0.0001 par value; 1,000,000 shares authorized; 1,000,000 and 1,000,000 issued and outstanding at December 31, 2016 and 2015, respectively) | 100 | 100 |
Common stock: $.0001 par value, 500,000,000 shares authorized; 60,807,846 and 57,107,809 issued and outstanding at December 31, 2016 and 2015, respectively | 6,081 | 5,711 |
Additional paid-in capital | 2,310,037 | 1,678,789 |
Accumulated deficit | (3,142,851) | (1,129,219) |
Total Stockholders' Equity (Deficit) | (826,633) | 555,381 |
Total Liabilities and Stockholders' Equity (Deficit) | $ 57,313 | $ 726,639 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 60,807,846 | 57,107,809 |
Common stock, shares outstanding | 60,807,846 | 57,107,809 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
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 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
REVENUES | ||
OPERATING EXPENSES: | ||
Professional fees | 817,014 | 213,838 |
Compensation expense | 678,436 | 326,274 |
Research and development expense | 94,383 | 85,323 |
General and administrative expenses | 214,212 | 182,210 |
Total Operating Expenses | 1,804,045 | 807,645 |
LOSS FROM OPERATIONS | (1,804,045) | (807,645) |
OTHER INCOME (EXPENSE): | ||
Interest expense | (108,071) | (2,479) |
Debt issuance costs | (205,000) | |
Derivative expense | (146,141) | |
Gain on extinguishment of debt | 44,625 | |
Other | 24,728 | |
Total Other Income (Expense) | (209,587) | (182,751) |
NET LOSS | $ (2,013,632) | $ (990,396) |
NET LOSS PER COMMON SHARE - Basic and Diluted: | $ (0.03) | $ (0.02) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic and diluted | 58,305,875 | 49,273,491 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2014 | $ 4,700 | $ (4,700) | $ (138,823) | $ (138,823) | |
Balance, shares at Dec. 31, 2014 | 47,000,000 | ||||
Recapitalization of Company | $ 100 | $ 450 | 99,527 | 100,077 | |
Recapitalization of Company, shares | 1,000,000 | 4,493,390 | |||
Common shares issued for offering costs | $ 100 | 204,900 | 205,000 | ||
Common shares issued for offering costs, shares | 1,000,000 | ||||
Common stock issued for services | $ 6 | 17,994 | |||
Common stock issued for services, shares | 60,000 | 60,000 | |||
Shares issued for cash | $ 455 | 1,361,068 | $ 1,361,523 | ||
Shares issued for cash, shares | 4,554,419 | 4,493,390 | |||
Net loss | (990,396) | $ (990,396) | |||
Balance at Dec. 31, 2015 | $ 100 | $ 5,711 | 1,678,789 | (1,129,219) | 555,381 |
Balance, shares at Dec. 31, 2015 | 1,000,000 | 57,107,809 | |||
Common stock issued for services | $ 26 | 85,974 | 11,190 | ||
Common stock issued for services, shares | 260,000 | ||||
Shares issued for cash pursuant to stock purchase agreement | $ 140 | 202,900 | 203,040 | ||
Shares issued for cash pursuant to stock purchase agreement, shares | 1,400,000 | ||||
Shares issued for cash and subscription receivable pursuant to subscription agreements | $ 204 | 342,374 | 342,578 | ||
Shares issued for cash and subscription receivable pursuant to subscription agreements, shares | 2,040,037 | ||||
Net loss | (2,013,632) | (2,013,632) | |||
Balance at Dec. 31, 2016 | $ 100 | $ 6,081 | $ 2,310,037 | $ (3,142,851) | $ (826,633) |
Balance, shares at Dec. 31, 2016 | 1,000,000 | 60,807,846 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (2,013,632) | $ (990,396) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,098 | 274 |
Stock-based debt issuance costs | 205,000 | |
Stock-based compensation | 89,825 | 18,000 |
Amortization of debt discount | 94,688 | |
Derivative expense | 146,141 | |
Gain of extinguishment of debt | 44,625 | |
Bad debt - related party | 2,244 | |
Change in operating assets and liabilities: | ||
Due from related parties | 15,556 | (36,274) |
Prepaid expenses and other current assets | 324 | (18,968) |
Security Deposit | (6,400) | |
Accounts payable | 111,343 | |
Accrued liabilities | 73,457 | (23,077) |
NET CASH USED IN OPERATING ACTIVITIES | (1,544,003) | (851,841) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of property and equipment | (10,976) | |
Cash received in recapitalization | 4,676 | |
NET CASH PROVIDED BY INVESTING ACTIVITIES | (6,300) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from related party advances | 56,000 | 51,550 |
Payments of related party advances | (51,000) | (97,650) |
Increase in bank overdraft | 812 | |
Proceeds from line of credit | 56,165 | 68,355 |
Payments to line of credit | (6,132) | (53,628) |
Proceeds from convertible debt | 390,000 | 100,000 |
Repayment of convertible debt | (40,000) | |
Debt issue costs paid | (69,039) | |
Proceeds from sale of common stock, net of subscription receivable | 534,428 | 1,361,523 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 871,234 | 1,430,150 |
NET INCREASE (DECREASE) IN CASH | (672,769) | 572,009 |
CASH, beginning of period | 672,769 | 100,760 |
CASH, end of period | 672,769 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest | 9,243 | 2,479 |
Income taxes | ||
Non-cash financing activities: | ||
Increase in debt discount and derivative liability | 320,961 | |
Issuance of common stock recorded as prepaid expenses | 68,000 | |
Increase in prepaid expenses and accrued liabilities | 15,300 | |
Sale of common stock for subscription receivable | 11,190 | |
Conversion of debt as part of recapitalization | $ 100,000 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Organization OncBioMune Pharmaceuticals, Inc. (the “Company,” “we,” “us” or “our”) is a biotechnology company specializing in innovative cancer treatment therapies. The Company has proprietary rights to a breast and prostate patent vaccine, as well as a process for the growth of cancer tumors. The Company’s mission is to improve the overall patient condition through innovative bio immunotherapy with proven treatment protocols, to lower deaths associated with cancer and reduce the cost of cancer treatment. The Company’s technology is safe, and utilizes clinically research proven methods of treatment to provide optimal success of patient recovery. On June 22, 2015 and amended and effective on September 2, 2015, the Company entered into a share exchange agreement (the “Exchange Agreement”) with OncBioMune, Inc. (“ONC”) and the shareholders of ONC. ONC was formed under the laws of the State of Louisiana in March 2005 as a limited liability company. On June 3, 2015 ONC converted from a Louisiana limited liability company to a Louisiana corporation. Pursuant to the Exchange Agreement, the Company acquired 100% of ONC’s issued and outstanding common stock from the ONC shareholders in exchange for the issuance of 47,000,000 shares of the Company’s common stock, representing 91.3% of the outstanding common stock, and 1,000,000 shares of the Company’s Series A Preferred Stock, representing 100% of the outstanding series A Preferred Stock, (the “Exchange”), after giving effect to a 1-for-139.2328 reverse stock split (the “Reverse Stock Split”) which resulted in 4,493,390 common shares outstanding prior to the Exchange. Accordingly, the ONC shareholders became shareholders of the Company and ONC became a subsidiary of the Company. The Exchange has been accounted for as a reverse-merger and recapitalization since the stockholders of ONC obtained voting and management control of the Company. ONC is the acquirer for financial reporting purposes and the Company is acquired company. Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the Exchange are those of ONC and was recorded at the historical cost basis of ONC, and the consolidated financial statements after completion of the Share Exchange included the assets and liabilities of both the Company and ONC and the Company’s consolidated operations from the closing date of the Share Exchange. All share and per share data in the accompanying consolidated financial statements have been retroactively restated to reflect the effect of the Reverse Stock Split and recapitalization. On August 12, 2015, the Company filed amended and restated Articles of Incorporation with the Nevada Secretary of State which: a. changed the Company’s name to OncBioMune Pharmaceuticals, Inc., b. amended the authorized shares of the Company to 520,000,000, of which 500,000,000 shares are common stock, with a par value of $0.0001 per share (“Common Stock”), and 20,000,000 shares are preferred stock, with a par value of $0.0001 per share (“Preferred Stock”), and c. effected the Reverse Stock Split, which became effective on August 27, 2015. On August 20, 2015, the Company filed the Certificate of Designation with the Nevada Secretary of State, designating 1,000,000 shares of the authorized 20,000,000 Preferred Stock as Series A Preferred Stock (“Series A Preferred Stock”). Each holder of Series A Preferred Stock shall be entitled to 500 votes for each share of Series A Preferred Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Company. The holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth in the Certificate of Designation) for taking any corporate action. On August 27, 2015, the Financial Industry Regulatory Authority approved the Reverse Stock Split and our corporate name change. Oncbiomune México, S.A. De C.V. On August 19, 2016, the Company and Vitel Laboratorios S.A. de C.V. (“Vitel”), a Mexico-based pharmaceutical company that develops and commercializes high specialty drugs in Mexico and other Latin American countries, entered into a Shareholders’ Agreement related to the launch of Oncbiomune México, S.A. De C.V. (“oOncbiomune Mexic”) for the purposes of developing and commercializing the Company’s PROSCAVAX vaccine technology and cancer technologies in México, Central and Latin America (“MALA”). The Company and Vitel each own 50% of Oncbiomune Mexico. Under the terms of the Shareholders Agreement, the Company has agreed to assign to Oncbiomune Mexico limited patent and intellectual property rights and trademarks related to its OVCAVAX, PROSCAVAX vaccine technology and cancer technologies and future developments related to these technologies. These rights will permit Oncbiomune Mexico to use and develop these technologies in MALA. Oncbiomune Mexico is treated as an equity-method investee for accounting purpuses, however there was no activity in 2016. Acquisition of Vitel On November 2, 2016, the Company signed a non-binding term sheet to acquire Vitel as contemplated when the Company entered into the Shareholders’ Agreement. Pursuant to the term sheet, the Company’s planned acquisition of Vitel will be structured as an all-stock transaction with both OncBioMune and Vitel contributing equity interests into a newly created trust, resulting in Vitel operating as a wholly owned subsidiary of OncBioMune. In furtherance of the term sheet, the Company completed the acquisition of 100% of the issued and outstanding capital stock of Vitel from its two shareholders (collectively, the “Vitel Stockholders”) on March 10, 2017 (the “Closing Date”) pursuant to the terms and conditions of a Contribution Agreement to the Property of Trust F/2868 entered into among the Company and the Vitel Stockholders on the Closing Date (the “Contribution Agreement”). Vitel is a revenue-stage Mexico-based pharmaceutical company that develops and commercializes specialty drugs in Mexico and other Latin American countries (See Note 10) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principals of consolidation The Company’s consolidated financial statements include the financial statements of its wholly-owned subsidiary, ONC and Oncbiomune Mexico. All significant intercompany accounts and transactions have been eliminated in consolidation Going concern These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in our accompanying consolidated financial statements, the Company had a net loss of $2,013,632 and $990,396 for the years ended December 31, 2016 and 2015, respectively. The net cash used in operations were $1,544,003 and $851,841 for the years ended December 31, 2016 and 2015, respectively. Additionally, the Company had an accumulated deficit of $3,142,851 and $1,129,219, at December 31, 2016 and 2015, respectively, had a stockholders’ deficit of $826,633 at December 31, 2016, had a working capital deficit of $842,637 at December 31, 2016, and had no revenues for the years ended December 31, 2016 and 2015. Management believes that these matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance date of this report. On March 10, 2017, the Company completed the acquisition of 100% of the issued and outstanding capital stock of Vitel. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that our capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending December 31, 2017. The Company will seek to raise capital through additional debt and/or equity financings to fund our operations in the future. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These consolidated financial statements do not include any adjustments related 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. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the years ended December 31, 2016 and 2015 include the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, the valuation of derivative liabilities, and the fair value of assets acquired and liabilities assumed in the subsequent event business acquisition. Concentrations Generally, the Company relies on one vendor as a single source of raw materials to produce certain components of its cancer treatment products. The Company believe that other vendors are available to supply these materials if the Company cannot obtain these materials from its single source vendor. Fair value of financial instruments and fair value measurements FASB ASC 820 — Fair Value Measurements and Disclosures, The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the consolidated balance sheets for cash, due from and to related parties, prepaid expenses, line of credit payable, accounts payable and accrued liabilities, approximate their fair market value based on the short-term maturity of these instruments. The Company accounts for certain instruments at fair value using level 3 valuation. At December 31, 2016 At December 31, 2015 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 402,055 — — — A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liabilities Balance at December 31, 2015 $ - Initial measurement of derivative liabilities reflected as debt discount 320,961 Initial measurement of derivative liabilities reflected in derivative expense 260,479 Reclassification of derivative liability to gain on extinguishment of debt (65,047 ) Change in fair value included in derivative expense (114,338 ) Balance at December 31, 2016 $ 402,055 ASC 825-10 “ Financial Instruments , Cash and cash equivalent For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At December 31, 2016 and 2015, the Company did not have any cash equivalents. The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. At December 31, 2015, cash in bank exceeded federally insured limits. There were no balances in excess of FDIC insured levels as of December 31, 2016. The Company has not experienced any losses in such accounts through December 31, 2016 and 2015. Property and equipment Property are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from three to five years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Derivative liabilities The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to income or expense as part of gain or loss on extinguishment. Revenue recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. Income taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. Prior to the June 3, 2015, the Company operated ONC as a limited liability company and passed all income and loss to each member based on their proportionate interest in ONC. In accordance with the generally accepted method of presenting limited liability company financial statements, the consolidated financial statements do not include the personal assets and liabilities of the members, including their obligation for income taxes on their distributive shares of net income of the LLCs, or any provision for federal income taxes prior to June 3, 2015. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes Research and development Research and development costs incurred in the development of the Company’s products are expensed as incurred. For the years ended December 31, 2016 and 2015, research and development costs were $94,383 and $85,323, respectively, and are included in operating expenses on the accompanying consolidated statements of operations. Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50 – “Equity-Based Payments to Non-Employees” Basic and diluted loss per share Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock warrants (using the treasury stock method). These common stock equivalents may be dilutive in the future. All potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: December 31, 2016 December 31, 2015 Total stock warrants 3,304,872 2,694 Convertible debt 2,333,333 - Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Recent accounting pronouncements In June 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-12, “ Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes Income Taxes On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) to amend the accounting guidance for leases. The accounting applied by a lessor is largely unchanged under ASU 2016-02. However, the standard requires lessees to recognize lease assets and lease liabilities for leases classified as operating leases on the balance sheet. Lessees will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it will recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial statements and notes to its consolidated financial statements. On March 30, 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”) to amend the accounting guidance for share-based payment accounting. The areas for simplification in ASU 2016-09 involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and early adoption is permitted. The adoption of ASU 2016-09 did not have any effect of the Company’s consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 3 - PROPERTY AND EQUIPMENT At December 31, 2016 and 2015, property and equipment consisted of the following: Useful Life 2016 2015 Leasehold improvements 5 Years $ 23,976 $ 23,976 Less: accumulated depreciation (14,372 ) (13,274 ) Property and equipment, net $ 9,604 $ 10,702 For the years ended December 31, 2016 and 2015, depreciation and amortization expense amounted to $1,098 and $274, respectively. |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2016 | |
Line of Credit Facility [Abstract] | |
Line of Credit | NOTE 4 – LINE OF CREDIT In October 2014, ONC entered into a $100,000 revolving promissory note (the “Revolving Note”) with Regions Bank (the “Lender”). The unpaid principal balance of the Revolving Note is payable on demand and any unpaid principal and interest is payable due not later than October 27, 2017, is secured by deposits located at the Lender, and bears interest computed at a variable rate of interest which is equal to the Lender’s prime rate plus 1.7% (5.45% and 5.20% at December 31, 2016 and 2015, respectively). ONC will pay to Lender a late charge of 5.0% of any monthly payment not received by Lender within 10 calendar days after its due date. The Company may, at any time or from time to time, prepay the Revolving Note in whole or in part without penalty. At December 31, 2016 and 2015, the Company had $99,741 and $49,708, respectively, in borrowings outstanding under the Revolving Note with $259 and $50,292, respectively, available for borrowing under such note. The weighted average interest rate during the years ended December 31, 2016 and 2015 was approximately 5.20% and 5.20%, respectively. |
Convertible Debt
Convertible Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Debt | NOTE 5 – CONVERTIBLE DEBT On May 23, 2016, the Company entered into a $40,000 convertible promissory note (the “Convertible Note”) with Crown Bridge Partners, LLC (“Crown”). The unpaid principal and interest was payable no later than May 22, 2017 and bears interest computed at a rate of interest which is equal to 8.0% per annum. The Company may prepay any amount outstanding under the Convertible Note by making a payment to Crown of an amount in cash equal to the principal amount multiplied by a prepayment penalty percentage. Crown was entitled, at their option, at any time after the issuance of the Convertible Note, to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into the Company’s common stock. The Conversion Price was the Variable Conversion Price (“VCP”) as defined in the Convertible Note and subject, in each case, to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events. VCP means 58% multiplied by the “Market Price”, which is calculated as the lowest trading price, as defined, for the Company’s common stock during the twenty trading day period ending on the last complete trading day prior to the conversion date. On November 23, 2016, the Company repaid this Convertible Note by paying the principal amount outstanding of $40,000, all accrued interest due, and a prepayment penalty aggregating $62,000. In connection with the repayment of this Convertible Note, the Company recorded a gain from extinguishment of debt of $44,625. On November 23, 2016 (the “Original Issue Date”), the Company entered into and closed on the transaction set forth in an Amended and Restated Securities Purchase Agreement (the “Securities Purchase Agreement”) it entered into with three institutional investors (the “Purchasers”) for the sale of the Company’s convertible notes and warrants. Pursuant to the terms provided for in the Securities Purchase Agreement, the Company issued upon closing to the Purchasers for an aggregate subscription amount of $350,000: (i) 14.29% Original Issue Discount 10% Senior Secured Convertible Notes (the “Notes”); and (ii) warrants (the “Warrants”) to purchase 2,333,334 shares of the Company’s common stock at an exercise price of $0.175 (subject to adjustments under certain conditions as defined in the Warrants) which are exercisable for a period of five years from the Original Issue Date. The aggregate principal amount of the Notes is $350,000 and the Company received $300,000 after giving effect to the original issue discount of $50,000. The Notes bear interest at a rate equal to 10% per annum (which interest rate is increased to 24% per annum upon the occurrence of an Event of Default (as defined in the Notes)), have a maturity date of July 23, 2017 and are convertible (principal, and interest) at any time after the issuance date of the Notes into shares of the Company’s Common Stock at a conversion price equal to $0.15 per share (subject to adjustment as provided in the Note), provided, however, that if an event of default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the Note shall be convertible at 60% of the lowest closing price during the prior twenty trading days of the Common Stock as reported on the OTCQB or other principal trading market (the “Default Conversion Price”). The Notes provide for two amortization payments on the six-month, seven-month and eight-month anniversary of the issue date with each amortization payment being one third of the total outstanding principal and interest. If the six-month amortization payment is made in cash then the payment is an amount equal to 120% of the applicable amortization payment and if the seven-month or the eight-month amortization payments are made in cash then the payment is an amount equal to 125% of the applicable amortization payment. The Notes may be prepaid at any time until the 180th day following the Original Issue Date at an amount equal to (i) 115% of outstanding principal balance of the Note and accrued and unpaid interest during the period from the Original Issue Date through the three months following the Original Issue Date, and (ii) 120% of outstanding principal balance of the Notes and accrued and unpaid interest during months four through six following the Original Issue Date. In order to prepay the Notes, the Company shall provide 20 Trading Days prior written notice to the Holder, during which time the Holder may convert the Notes in whole or in part at the Conversion Price. The Convertible Note and Notes contain certain covenants, such as restrictions on the incurrence of indebtedness, creation of liens, payment of restricted payments, redemptions, payment of cash dividends and the transfer of assets. The Convertible Note and Notes also contains certain adjustment provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions. The conversion price is also subject to adjustment if the Company issues or sells shares of its common stock for a consideration per share less than the conversion price then in effect, or issue options, warrants or other securities convertible or exchange for shares of its common stock at a conversion or exercise price less than the conversion price of the Notes then in effect. If either of these events should occur, the conversion price is reduced to the lowest price at which these securities were issued or are exercisable. The Company granted the Purchasers certain rights of first refusal on future offerings by the Company for as long as the Purchasers hold the Notes. In addition, subject to limited exceptions, the Purchasers will not have the right to convert any portion of the Note if the Purchaser, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s Common Stock outstanding immediately after giving effect to its conversion. The Purchaser may increase or decrease this ownership limitation to any percentage not exceeding 9.99% upon 61 days prior written notice to the Company. The Warrants are exercisable for shares of the Company’s common stock upon the payment in cash of the exercise price and they are also exercisable on a cashless basis at any time there is no effective registration statement registering the shares of common stock underlying the Warrants. The exercise price of the Warrants is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock and also upon any distributions of assets, including cash, stock or other property to the Company’s stockholders. The exercise price of the Warrants is also subject to full ratchet price adjustment if the Company sells or grants any option to purchase, sell or re-price any common stock or common stock equivalents, as defined, at an exercise price lower than the then-current exercise price of the Warrant with the exception for certain exempted issuances and subject to certain limitations on the reduction of the exercise price as provided in the Warrants. In the event of a fundamental transaction, as described in the Warrants and generally including any reorganization, recapitalization or reclassification of the Common Stock, the sale, transfer or other disposition of all or substantially all of the Company’s properties or assets, the Company’s consolidation or merger with or into another person, the acquisition of more than 50% of the outstanding Common Stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by the outstanding Common Stock, the holders of the Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants immediately prior to such fundamental transaction; provided that upon the occurrence of certain fundamental transactions, the holder can require the Company to purchase the Warrant for cash at a price equal to the higher of the Black Scholes Value of the unexercised portion of the Warrant or difference between the cash per share paid in the fundamental transaction and the exercise price per share. The holder of Warrants will not have the right to exercise any portion of the Warrant if the holder (together with its affiliates) would beneficially own in excess of 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. In connection with the Company’s obligations under the Notes, the Company entered into a Security Agreement, Pledge Agreement and Subsidiary Guaranty with Calvary Fund I LP, as agent, pursuant to which the Company granted a lien on all assets of the Company (the “Collateral”) excluding permitted indebtedness which includes a first lien held by Regions Bank in connection with the $100,000 revolving promissory note entered into with Regions Bank in October 2014, for the benefit of the Purchasers, to secure the Company’s obligations under the Notes. Upon an Event of Default (as defined in the Notes), the Purchasers may, among other things, collect or take possession of the Collateral, proceed with the foreclosure of the security interest in the Collateral or sell, lease or dispose of the Collateral. In connection with the issuance of the Convertible Note and Notes above, the Company determined that the terms of the Convertible Note and Notes included a down-round provision under which the conversion price and exercise price could be affected by future equity offerings undertaken by the Company or contain terms that are not fixed monetary amounts at inception. Accordingly, under the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Stock”, the embedded conversion option contained in the convertible instruments and the Warrants were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date. The fair value of the embedded conversion option derivatives and Warrants were determined using the Binomial valuation model. On the initial measurement date, the fair values of the embedded conversion option derivative and warrant derivative of $581,440 was recorded as derivative liabilities and was allocated as a debt discount up to the net proceeds of the Convertible Note of $36,000 and the Notes of $284,961 with the remainder of $260,479 charged to current period operations as initial derivative expense. At the end of each period, the Company revalued the embedded conversion option and warrants derivative liabilities. For the year ended December 31, 2016, aggregate derivative expense from changes in fair value of derivative liabilities and the initial derivative expense amounted to $146,141, which is recorded as a component of other income/(expense) on the accompanying consolidated statements of operations. During the year ended December 31, 2016, the fair value of the derivative liabilities was estimated using the Binomial valuation model with the following assumptions: Dividend rate 0 Term (in years) 0.58 to 5.0 years Volatility 190.73% to 210.78 % Risk-free interest rate 0.63% to 1.83 % For the year ended December 31, 2016 and 2016, amortization of debt discounts related to this Convertible Note and the Notes amounted to $94,688 and $0, respectively, which has been included in interest expense on the accompanying consolidated statements of operations. At December 31, 2016 and 2015, the convertible debt consisted of the following: December 31, 2016 December 31, 2015 Principal amount $ 350,000 $ - Less: unamortized debt discount (295,312 ) - Convertible note payable, net $ 54,688 $ - At December 31, 2016, and 2015, the Company had $350,000 and $0, respectively, in borrowings outstanding under the Notes. The weighted average interest rate during the year ended December 31, 2016 was approximately 9.0%. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | NOTE 6 – RELATED PARTY TRANSACTIONS Due from/(to) related parties From time to time, the Company receives working capital advances from and makes working capital advances to The Sallie Astor Burdine Breast Foundation (the “Foundation”), a not-for-profit foundation where the Company’s chief executive officer was a Board member until March 17, 2017. The advances are non-interest bearing and are payable on demand. A final balance due to the Company of $2,244 was written off at December 31, 2016. From time to time, the Company receives advances from and repays such advances to the Company’s chief executive officer and chief financial officer for working capital purposes. The advances are non-interest bearing and are payable on demand. For the year ended December 31, 2016 and 2015, due from/(to) related parties activity consisted of the following: Foundation CEO CFO Total Balance due from (to) related parties at December 31, 2014 $ (46,100 ) $ - $ - $ (46,100 ) Working capital advances received (48,350 ) (7,500 ) (4,600 ) (60,450 ) Repayments made 97,650 13,400 13,300 124,350 Balance due from (to) related parties at December 31, 2015 3,200 5,900 8,700 17,800 Working capital advances made 5,094 - 3,795 8,889 Working capital advances received - (55,500 ) - (55,500 ) Repayments made - 50,500 - 50,500 Amounts deemed uncollectible and expensed (2,244 ) - - (2,244 ) Repayments received (6,050) (5,900 ) (12,495 ) (24,445 ) Balance due from (to) related parties at December 31, 2016 $ - $ (5,000 ) $ - $ (5,000 ) |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT) Series A Preferred Stock On August 20, 2015, the Company filed the Certificate of Designation with the Nevada Secretary of State, designating 1,000,000 shares of the authorized 20,000,000 Preferred Stock as Series A Preferred Stock. Each holder of Series A Preferred Stock shall be entitled to 500 votes for each share of Series A Preferred Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Company. The holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. On September 2, 2015, in connection with the Exchange, the Company issued 1,000,000 shares of the Company’s Series A Preferred Stock, representing 100% of the outstanding series A Preferred. Of these shares, 500,000 were issued to our Chief Executive Officer and 500,000 shares were issued to one of the members of the Company’s Board of Directors. Common stock issued in share exchange On June 22, 2015 and amended and effective on September 2, 2015, the Company entered into the “Exchange Agreement” with OncBioMune, Inc. (“ONC”) and the shareholders of ONC. Pursuant to the Exchange Agreement, the Company acquired 100% of ONC’s issued and outstanding common stock from the ONC shareholders in exchange for the issuance of 47,000,000 shares of the Company’s common stock, representing 91.3% of the outstanding common stock. Included in the 47,000,000 common shares the Company issued in the Exchange was 200,000 shares of its common stock issued in full satisfaction of convertible debt of $100,000 which has been reflected as part of the recapitalization of the Company. Immediately prior to the Exchange there were 4,493,390 common shares outstanding. Common stock issued for services On November 18, 2015, the Company issued 60,000 vested shares of common stock valued at $.30 per common share or $18,000 to a director for services to be rendered on the Company’s board of directors. The shares were valued at the most recent cash price paid of $.30 per share. In connection with these shares, the Company recorded stock-based compensation of $18,000. On January 1, 2016, the Company issued 60,000 vested shares of common stock valued at $.30 per common share or $18,000 to a director for services to be rendered on the Company’s board of directors. The shares were valued at the most recent cash price paid of $.30 per share. In connection with these shares, the Company recorded stock-based compensation of $18,000. On May 13, 2016, the Company entered into a six-month consulting agreement for business development services, Pursuant to the agreement, the Company shall pay the consultant a monthly fee of $4,000 beginning on May 15, 2016 and, thereafter, on the fifteenth day of each month. In addition, the Company issued the consultant and/or its affiliates 200,000 shares of the Company’s common stock. The common shares were valued at the most recent quoted trading price of $0.34 per share or $68,000. In connection with these shares, the Company recorded stock-based consulting expense of $68,000 which was amortized over the service period. If the Company chooses to extend the agreement, the Company shall pay the consultant a monthly fee of $7,500 beginning on November 15, 2016 and, thereafter, on the first of each month and the Company shall issue to the consultant 100,000 Shares of the Company’s common stock. Beginning November 2016, the Company negotiated the monthly cash fee to $5,000 per month and is currently negotiating the number shares issuable. As of December 31, 2016, the shares have not been issued and the Company value such shares issuable on the grant date of November 15, 2016 based on the quoted fair market value of shares issuable of $0.153 per common share and recorded consulting fees and accrued liabilities of $15,300. Common stock purchase agreement On October 20, 2015, the Company entered into a common stock purchase agreement (the “Purchase Agreement”), together with a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Under the terms and subject to the conditions of the Purchase Agreement, the Company has the right to sell to, and Lincoln Park is obligated to purchase, up to $10.1 million in amounts of shares, as described below, of the Company’s common stock, subject to certain limitations, from time to time, over the 36-month period commencing on the date that a registration statement, which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC and a final prospectus in connection therewith is filed which occurred on December 15, 2015. The Company may direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 100,000 shares of Common Stock on any business day (such purchases, “Regular Purchases”), provided that at least one business day has passed since the most recent purchase, and provided, however that Lincoln Park’s committed obligation under any single Regular Purchase shall not exceed $50,000, provided that the amount the Company may sell to Lincoln Park under a single Regular Purchase may increase under certain circumstances as described in the Purchase Agreement but in no event will the amount of a single Regular Purchase exceed $500,000. The purchase price of shares of Common Stock related to the future funding will be based on a formula tied to the prevailing market prices of such shares at the time of sales. In addition, the Company may direct Lincoln Park to purchase additional amounts as accelerated purchases if on the date of a Regular Purchase the closing sale price of the Common Stock is not below the threshold price as set forth in the Purchase Agreement. The Company’s sales of shares of Common Stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 4.99% of the then outstanding shares of the Common Stock. In connection with the Purchase Agreement, the Company issued as a commitment fee to Lincoln Park 1,000,000 shares of Common Stock. Lincoln Park represented to the Company, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)), and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) under the Securities Act. The securities sold may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. Actual sales of shares of Common Stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. Lincoln Park has no right to require any sales by the Company, but is obligated to make purchases from the Company as it directs in accordance with the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our shares. The net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its stock to Lincoln Park. The Company expects that any proceeds received by the Company from such sales to Lincoln Park under the Purchase Agreement will be used for general corporate purposes and working capital requirements. In November 2015, pursuant to the Purchase Agreement, the Company issued 333,334 shares for $100,000 with net proceeds of $95,000 after $5,000 in offering costs and issued 1,000,000 shares of common stock to Lincoln Park as a commitment fee. The 1,000,000 shares were value at $300,000 or $0.30 per common share based on the sale price per share under the Purchase Agreement. In connection with the issuance of the commitment shares, the Company recorded offering costs of $300,000 by reducing net proceeds received under the Purchase Agreement by $95,000 and for the year ended December 31, 2015, the Company recorded offering cost expense of $205,000 which is reflected on the accompanying consolidated statement of operations. From July 2016 to December 31, 2016, pursuant to the Purchase Agreement with Lincoln Park dated October 20, 2015, the Company issued an aggregate of 1,400,000 shares of its common stock to Lincoln Park for net proceeds of $191,850 and a subscription receivable of $11,190 which was collected in January 2016. Common stock issued for cash In December 2015, pursuant to stock subscription agreements, the Company issued 4,221,085 shares of its common stock to investors for cash proceeds of $1,266,523. During the year ended December 31, 2016, pursuant to stock subscription agreements, the Company issued 102,341 shares of its common stock to investors for cash proceeds of $51,926. During the year ended December 31, 2016, pursuant to unit subscription agreements, the Company issued 1,937,696 shares of its common stock and 968,844 five-year warrants to purchase common shares for $0.30 per common share to investors for cash proceeds of $279,462 and a subscription receivable of $11,190 which was collected prior to issuance of this report. Warrants Warrant activities for the year ended December 31, 2016 and 2015 are summarized as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance Outstanding December 31, 2014 2,694 $ 69.60 Granted - - Balance Outstanding December 31, 2015 2,694 69.60 Granted 3,302,178 0.21 Balance Outstanding December 31, 2016 3,304,872 $ 0.27 4.82 $ - Exercisable, December 31, 2016 3,304,872 $ 0.27 4.87 $ - |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 – INCOME TAXES The Company maintains deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred tax assets at December 31, 2016 and 2015 consist of net operating loss carryforwards. The net deferred tax asset has been fully offset by a valuation allowance because of the uncertainty of the attainment of future taxable income. Prior to the June 3, 2015, the Company operated ONC as a limited liability company and passed all income and loss to each member based on their proportionate interest in ONC. In accordance with the generally accepted method of presenting limited liability company financial statements, the consolidated financial statements do not include the personal assets and liabilities of the members, including their obligation for income taxes on their distributive shares of net income of the LLCs, or any provision for federal income taxes prior to June 3, 2015. Accordingly, no provision for federal and state income taxes has been made in these consolidated financial statements for these periods. Had the Company been subject to income taxes during the period from January 2014 to June 3, 2015, the pro forma effect of income taxes on the Company’s net income (loss) based of the Company’s statutory income tax rate of 34% was not material. The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the years ended December 31, 2016 and 2015 were as follows: Years Ended December 31, 2016 2015 Income tax benefit at U.S. statutory rate of 34% $ (685,000 ) $ (337,000 ) State income tax benefit (161,000 ) (79,000 ) Non-deductible expenses 112,000 7,000 Income tax effect during LLC period - 36,000 Change in valuation allowance 734,000 373,000 Total provision for income tax $ - $ - The Company’s approximate net deferred tax assets as of December 31, 2016 and 2015 were as follows: December 31, 2016 December 31, 2015 Deferred Tax Assets: Net operating loss carryforward $ 1,107,000 $ 373,000 Total deferred tax assets 1,107,000 373,000 Valuation allowance (1,107,000 ) (373,000 ) Net deferred tax assets $ - $ - The estimated net operating loss carryforward was approximately $2,636,000 at December 31, 2016. The Company’s net operating loss carryforward acquired in the Combination were limited on the usage of such net operating loss carryforwards due to a change in ownership in accordance with Section 382 of the Internal Revenue Code. The Company provided a valuation allowance equal to the net deferred income tax asset for the year ended December 31, 2016 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward. The increase in the valuation allowance was $734,000 from the year ended December 31, 2016. The potential tax benefit arising from tax loss carryforwards will expire in 2036. The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. The Company’s 2014, 2015 and 2016 Corporate Income Tax Returns are subject to Internal Revenue Service examination. |
Commitments and Contincengies
Commitments and Contincengies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contincengies | NOTE 9 – COMMITMENTS AND CONTINCENGIES Lease Effective September 1, 2015, the Company leases its facilities under non-cancelable operating leases. The Company has the right to renew certain facility leases for an additional five years. Rent expense was $44,857 and $14,734 for the years ended December 31, 2016 and 2015, respectively. Future minimum lease payments under non-cancelable operating leases at December 31, 2016 are as follows: Years ending December 31, Amount 2017 36,800 2018 37,333 2019 38,400 2020 25,600 Total minimum non-cancelable operating lease payments $ 138,133 Employment agreements On February 2, 2016, the Company entered into an employment agreement with Jonathan F. Head, Ph.D. (“Dr. Head”) to serve as the Company’s Chief Executive Officer, the term of which runs for three years (from February 2, 2016 through February 1, 2019) and renews automatically for one year periods unless a written notice of termination is provided not less than 120 days prior to the automatic renewal date. The employment agreement with Dr. Head provides that Dr. Head’s salary for calendar year 2016 shall be $275,000 and for calendar year 2017 and for each calendar year thereafter during the term of the employment agreement with Dr. Head shall be an amount determined by the Board of Directors, which in no event shall be less than the annual salary that was payable by the Company to Dr. Head for the immediately preceding calendar year. On February 2, 2016, the Company entered into an employment agreement with Andrew Kucharchuk (“Mr. Kucharchuk) to serve as the Company’s President and Chief Financial Officer, the term of which runs for three years (from February 2, 2016 through February 1, 2019) and renews automatically for one year periods unless a written notice of termination is provided not less than 120 days prior to the automatic renewal date. The employment agreement with Mr. Kucharchuk provides that Mr. Kucharchuk’s salary for calendar year 2016 shall be $200,000 and for calendar year 2017 and for each calendar year thereafter during the term of the employment agreement with Mr. Kucharchuk shall be an amount determined by the Board of Directors, which in no event shall be less than the annual salary that was payable by the Company to Mr. Kucharchuk for the immediately preceding calendar year. The above executives shall be eligible for an annual target bonus payment in an amount equal to ten percent of his base salary (“Bonus”). The Bonus is determined based on the achievement of certain performance objectives of the Company as established by the Board of Directors. The Bonus may be greater or less than the target Bonus, based on the level of achievement of the applicable performance objectives. Future minimum commitment payments under employment agreements at December 31, 2016 are as follows: Years ending December 31, Amount 2017 475,000 2018 475,000 2019 39,600 Total minimum commitment employment agreement lease payments $ 989,600 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 - SUBSEQUENT EVENTS Common stock issued On February 27, 2017, the Company issued 150,000 shares of common stock to an employee as a bonus for services to the Company. The shares were valued at the most recent cash price paid of $0.075 per share. In connection with these shares, the Company recorded stock-based compensation of $11,250. From January 1, 2017 to March 31, 2017, pursuant to a stock purchase agreement with Lincoln Park dated October 20, 2015, whereby we have the right to sell to, and Lincoln Park is obligated to purchase, up to $10.1 million in amounts of shares of the Company’s common stock, subject to certain limitations, from time to time, over the 36-month period, the Company issued 900,000 shares of its common stock to Lincoln Park for net proceeds of $176,617. From April 1, 2017 to April 12, 2017, pursuant to a stock purchase agreement with Lincoln Park dated October 20, 2015, whereby we have the right to sell to, and Lincoln Park is obligated to purchase, up to $10.1 million in amounts of shares of the Company’s common stock, subject to certain limitations, from time to time, over the 36-month period, the Company issued 400,000 shares of its common stock to Lincoln Park for net proceeds of $99,667. From January 2017 to April 5, 2017, pursuant to unit subscription agreements, the Company issued 8,253,136 shares of its common stock and 4,126,568 five-year warrants to purchase common shares for an exercise price of $0.30 per common share to investors for cash proceeds of $618,983 or $0.075 per share. Series B preferred stock On March 7, 2017, the Company filed a certificate of designation, preferences and rights of Series B preferred stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to designate 7,892,000 shares of its previously authorized preferred stock as Series B preferred stock, par value $0.0001 per share and a stated value of $0.0001 per share. The Certificate of Designation and its filing was approved by the Company’s board of directors without shareholder approval as provided for in the Company’s articles of incorporation and under Nevada law. The holders of shares of Series B preferred stock are entitled to dividends or distributions share for share with the holders of the Common Stock, if, as and when declared from time to time by the Board of Directors. The holders of shares of Series B preferred stock have the following voting rights: ● Each share of Series B preferred stock entitles the holder to 100 votes on all matters submitted to a vote of the Company’s stockholders. ● Except as otherwise provided in the Certificate of Designation, the holders of Series B preferred stock, the holders of Company common stock and the holders of shares of any other Company capital stock having general voting rights and shall vote together as one class on all matters submitted to a vote of the Company’s stockholders; and ● Commencing at any time after the date of issuance of any shares of the Series B Preferred Stock (the “Issuance Date”) and upon the earliest of the occurrence of (i) a holder of the Series B Preferred Stock owning, directly or indirectly as a beneficiary or otherwise, shares of Common Stock which are less than 5.0% of the total outstanding shares of Common Stock, (ii) the date a holder of the Series B Preferred Stock is no longer an employee of the Company or any of its subsidiaries or (iii) five years after the Issuance Date, the Company shall have the right to redeem all of the then outstanding Series B Preferred Stock held by such holder at a price equal to the Stated Value (the “Redemption Price”). The Series B Preferred Stock which is redeemed as provided for in the Certificate of Designations shall be returned to the Company (and, if not so returned, shall automatically be deemed canceled). The Redemption Price shall be mailed to such holder at the holder’s address of record, and the Series B Preferred Stock owned by such holder shall be canceled. In the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up of the Corporation, the holders of the Series B Preferred Stock shall be entitled to receive, share for share with the holders of shares of Common Stock and Series A Preferred Stock, all the assets of the Corporation of whatever kind available for distribution to stockholders, after the rights of the holders of the Series A Preferred Stock have been satisfied. Acquisition of Vitel Om March 10, 2017 (the “Closing Date”), the Company completed the acquisition of 100% of the issued and outstanding capital stock of Vitel Laboratorios, S.A. de C.V., a Mexican variable stock corporation (“Vitel”) from its shareholders Manuel Cosme Odabachian and Carlos Fernando Alaman Volnie (collectively, the “Vitel Stockholders”) pursuant to the terms and conditions of a Contribution Agreement to the Property of Trust F/2868 entered into among the Company and the Vitel Stockholders on the Closing Date (the “Contribution Agreement”). Vitel is a revenue-stage Mexico-based pharmaceutical company that develops and commercializes specialty drugs in MALA. The Company acquired Vitel for the purpose of commercializing the Company’s PROSCAVAX vaccine technology and cancer technologies in MALA and to utilize Vitel’s distribution network and customer and industry relationships. Pursuant to the terms of the Contribution Agreement, the Company issued 61,158,013 shares of its common stock and 5,000,000 shares of Series B preferred stock to Banco Actinver, S.A., in its capacity as Trustee (the “Trustee”) of the Irrevocable Management Trust Agreement Trust No. 2868 (the “Trust Agreement”) for the benefit of the Vitel Stockholders in exchange for 100% of the issued and outstanding capital stock of Vitel (the “Vitel Shares”). The Common Stock and Series B Preferred will be held by Trustee for the benefit of the Vitel Stockholders as provided for in the Trust Agreement and 98% of the Vitel Shares are held by the Trustee for the benefit of the Company as provided for in the Trust Agreement and 2% of the Vitel Shares were transferred to the Company. Vitel became a wholly owned subsidiary of the Company as of the Closing Date as the Company has full control of the Vitel Shares through the Trust. In addition, the Company issued 2,892,000 shares of Series B Preferred to Jonathan F. Head, Ph. D, the Company’s Chief Executive Officer and a member of the Board of Directors of the Company (the “Board of Directors”) as provided for in the Contribution Agreement. The Series B preferred stock issued to Dr. Head and were determined to have nominal value of $289 or $.0001 per shares and was recorded as compensation expense. To induce the Vitel Stockholders to enter into the Contribution Agreement and as a condition to close the transactions set forth in that agreement, the Company, the Vitel Stockholders, Dr. Head and Andrew A. Kucharchuk, the Company’s President, Chief Financial Officer and a Director also entered into the following agreements as of the Closing Date or perform the following actions (i) a Stockholder’s Agreement among the Company, Dr. Head, Mr. Kucharchuk, Mr. Cosme and Mr. Alaman dated as of the Closing Date (the “Stockholders’ Agreement”); (ii) the Trust Agreement; (iii) the Company, Vitel and the Vitel Stockholders entered into employment agreements with Messrs. Cosme and Alaman; (iv) the Company and Dr. Head and Mr. Kucharchuk entered into amendments to the employment agreements with, and stock option awards to, Dr. Head and Mr. Kucharchuk; (v) the Company, Dr. Head, Mr. Kucharchuk and the Vitel Stockholders agreed to consent to an amendment to the Company’s Articles of Incorporation and bylaws; (vi) and to elect Mr. Cosme, Mr. Alaman, Dr. Head and Mr. Kucharchuk as directors of Vitel and such directors to elect Mr. Cosme, Mr. Alaman, Dr. Head and Mr. Kucharchuk as officers of Vitel. The Stockholders Agreement The following is a summary of Stockholders Agreement. The Vitel Stockholders and the Company established a trust pursuant to the Trust Agreement described below. Mr. Cosme and Mr. Alaman each contributed, assigned and transferred to the Company ownership of, and title over, one share of the capital stock of Vitel (the “Vitel Shares”) and Mr. Cosme and Mr. Alaman contributed, assigned and transferred to the Trustee (as defined in the Trust Agreement”) ownership of, and title over, the remaining 98 Vitel Shares for the benefit of the Company pursuant to the terms and conditions of the Trust Agreement. The Company contributed, assigned and transferred to the Trustee ownership of, and title over, 61,158,013 newly-issued shares of Common Stock and 5,000,000 newly-issued shares of Series B Preferred Stock with 100 votes per share (collectively, the “OBM Shares”), for the benefit of Mr. Cosme and Mr. Alaman pursuant to the terms and conditions of the Trust Agreement. The OBM Shares held by the Trust have not been and will not be registered under the Securities Act of 1933, as amended, (“Securities Act”) and are restricted securities under the Securities Act and the rules and regulations promulgated thereunder and are subject to the restrictions on transfer contained in Article 4 of the Shareholders’ Agreement. Corporate Rights. The corporate rights resulting from the Vitel Shares contributed to the Trust will be exercised by the Trustee pursuant to the written instructions it receives from the Company. For such purposes, and pursuant to the bylaws of Vitel, the Company shall have the authority to instruct the Trustee regarding exercising any corporate rights it may be entitled to in its capacity as the majority Vitel shareholder Composition of the Board of Directors. Board of Directors Resolutions. Restrictions on Transfer. Permitted Transferees Permitted Transfer Right of First Refusal Right of Co-Sale (Tag Along) Drag Along Termination Effective as of March 10, 2017, Mr. Cosme, Mr. Alaman and the Company entered into the Irrevocable Management Trust Agreement Number F/2868 between Mr. Cosme, Mr. Alaman, the Company and the Trustee (the “Trust Agreement”) for the purpose of establishing a trust to hold the OBM Shares and 98 shares of Vitel’s capital stock which were transferred to Trustee pursuant to the Trust Agreement, in addition to other property the beneficiaries may elect to contribute to the trust. The trust structure of this acquisition transaction was established in order to provide certain income tax benefits to the seller pursuant to Mexican tax law. In connection with the acquisition, the Company issued 61,158,013 restricted shares of its common stock valued at $4,586,851, based on the acquisition-date fair value of our common stock of $.075 per share based on recent sales of the Company’s common stock pursuant to unit subscription agreements and 5,000,000 shares of Series B preferred stock which primarily gives the holder voting rights and were determined to have nominal value of $500. The fair value of the assets acquired and liabilities assumed were based on management estimates of the fair values on March 10, 2017. Based upon the purchase price allocation, the following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition: Cash $ 39,144 Accounts receivable 187,502 Recoverable taxes 50,263 Other current assets 2,675 Property and equipment 493 Goodwill and other intangible assets 4,737,389 Total assets acquired at fair value 5,017,466 Accounts payable and accrued expenses 423,891 Payroll taxes 6,224 Total liabilities assumed 430,115 Total purchase consideration $ 4,587,351 The assets acquired and liabilities assumed are recorded at their estimated fair value on the acquisition date with subsequent changes recognized in earnings or loss. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the business combination date. As a result, during the purchase price measurement period, which may be up to one year from the business acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. After the purchase price measurement period, the Company will record adjustments to assets acquired or liabilities assumed in operating expenses in the period in which the adjustments were determined. The purchase price exceeded the fair value of the net assets acquired by approximately $4,737,389, which shall be recorded as goodwill or other intangible assets pending the Company analysis of the fair values. The fair value of intangible assets may be based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Any goodwill recorded is not expected to be deductible for U.S. income tax purposes. The Company shall record acquisition and transaction related expenses in the period in which they are incurred. Acquisition and transaction related expenses primarily consist of legal, accounting and other fees of third parties related to the acquisition. Employment agreements On March 10, 2017, Vitel entered into employment agreements with each of Messrs. Cosme and Alaman who were the sellers of Vitel. Mr. Cosme was appointed as Vitel’s General Manager of Global Operations and Mr. Alaman was appointed as its Chief Operations Officer. Both of Messrs. Cosme and Alaman will be responsible for, supervising, managing, planning, directing and organizing the activities of the Vitel and will be its two most senior executive officers reporting to Vitel’s Board of Directors with all other employees of Vitel reporting directly or indirectly to them. Each of the agreements provides for a base salary of $187,500, annual bonuses and other compensation as required under Mexican Federal Labor Law and an annual bonus target of 50% of salary based on performance objectives to be established by the Company’s Board of Directors annually. In addition, Messrs. Cosme and Alaman are entitled to a $500 monthly car allowance, health insurance reimbursement of up to $5,000 per year and other benefits required under Mexican law. The employment agreement also contains a non-compete provision prohibiting them from engaging in business activities that compete with Vitel’s current business and allows them to continue to operate their ongoing pharmaceuticals business so long as such business does not interfere with their duties to Vitel under their respective employment agreements. In addition, if Messrs. Cosme and Alaman seek to pursue any future business opportunities that do not interfere with their obligations to Vitel, they are required to notify the Company and provide it with a notice and an opportunity to participate in such opportunity. The employment agreements may be terminated upon the employee’s death or disability, and with or without cause. In the event Vitel terminates either of Messrs. Cosme and Alaman’s employment upon their death or disability, for cause (as defined in the employment agreement) or if either of them should resign without cause, the person resigning is entitled to payment of their base salary through the date of termination and certain severance payments they are legally entitled to receive under Mexican Federal Labor Law. At Vitel’s option, it may terminate their employment without cause or the employee may terminate the agreement for good cause (as defined in the agreement) in which event the person terminated is entitled to (i) the equivalent amount of the corresponding severance payment set forth in the Mexican Federal Labor Law for an unjustified dismissal, or if greater (ii) the equivalent amount of up to three years’ gross salary and certain amounts mandated under Mexican labor laws, depending on the date of termination less the number of months elapsed after March 10, 2017. The severance payment shall be paid in equal monthly installments over the remaining term so long as the employee is in compliance with the non-compete provisions provided for in the employment agreement. The Company is a guarantor of Vitel’s obligations under the employment agreements. The employment agreements do not represent additional purchase consideration. Amendment to employment agreements and stock options On March 10, 2017, the non-management members of the Board of Directors determined that it was in the best interests of the Company to reward the Company’s chief executive officer and chief financial officer of the Company by amending their employment agreements and awarding them stock options in order to provide incentives to retain and motivate them in their roles with the Company. The Company amended each of the February 2, 2016 employment agreements of the Company’s chief executive officer and chief financial officer to extend the term to March 9, 2020 and to provide for 100% vesting of any unvested portion of any outstanding equity, or equity-based award granted to them by the Company upon termination of their respective employment agreements without cause, as a result of a breach of the agreement by the Company or upon their respective death or disability. The stock option award included options for each of them to purchase 2,000,000 shares (the “Stock Options”) of Common Stock at an exercise price of $0.25 per share. One-third of the Stock Options vest on March 10, 2017, March 10, 2018, and March 10, 2019, respectively, and are exercisable at any time after vesting until 10 years after the grant date. The Stock Options vest so long as the optionee remains an employee of the Company or a subsidiary of the Company on the vesting dates (except as otherwise provided for in the employment agreement between the Company and the optionee). The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 203.4%; risk-free interest rate of 2.58%; and, an estimated holding period of 10 years. In connection with these options, the Company valued these options at a fair value of $299,381 and will record stock-based compensation expense over the vesting period. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principals of Consolidation | Basis of presentation and principals of consolidation The Company’s consolidated financial statements include the financial statements of its wholly-owned subsidiary, ONC and Oncbiomune Mexico. All significant intercompany accounts and transactions have been eliminated in consolidation |
Going concern | Going concern These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in our accompanying consolidated financial statements, the Company had a net loss of $2,013,632 and $990,396 for the years ended December 31, 2016 and 2015, respectively. The net cash used in operations were $1,544,003 and $851,841 for the years ended December 31, 2016 and 2015, respectively. Additionally, the Company had an accumulated deficit of $3,142,851 and $1,129,219, at December 31, 2016 and 2015, respectively, had a stockholders’ deficit of $826,633 at December 31, 2016, had a working capital deficit of $842,637 at December 31, 2016, and had no revenues for the years ended December 31, 2016 and 2015. Management believes that these matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance date of this report. On March 10, 2017, the Company completed the acquisition of 100% of the issued and outstanding capital stock of Vitel. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that our capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending December 31, 2017. The Company will seek to raise capital through additional debt and/or equity financings to fund our operations in the future. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These consolidated financial statements do not include any adjustments related 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. |
Use of Estimates | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the years ended December 31, 2016 and 2015 include the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, the valuation of derivative liabilities, and the fair value of assets acquired and liabilities assumed in the subsequent event business acquisition. |
Concentrations | Concentrations Generally, the Company relies on one vendor as a single source of raw materials to produce certain components of its cancer treatment products. The Company believe that other vendors are available to supply these materials if the Company cannot obtain these materials from its single source vendor. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair value of financial instruments and fair value measurements FASB ASC 820 — Fair Value Measurements and Disclosures, The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the consolidated balance sheets for cash, due from and to related parties, prepaid expenses, line of credit payable, accounts payable and accrued liabilities, approximate their fair market value based on the short-term maturity of these instruments. The Company accounts for certain instruments at fair value using level 3 valuation. At December 31, 2016 At December 31, 2015 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 402,055 — — — A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liabilities Balance at December 31, 2015 $ - Initial measurement of derivative liabilities reflected as debt discount 320,961 Initial measurement of derivative liabilities reflected in derivative expense 260,479 Reclassification of derivative liability to gain on extinguishment of debt (65,047 ) Change in fair value included in derivative expense (114,338 ) Balance at December 31, 2016 $ 402,055 ASC 825-10 “ Financial Instruments , |
Cash and Cash Equivalent | Cash and cash equivalent For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At December 31, 2016 and 2015, the Company did not have any cash equivalents. The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. At December 31, 2015, cash in bank exceeded federally insured limits. There were no balances in excess of FDIC insured levels as of December 31, 2016. The Company has not experienced any losses in such accounts through December 31, 2016 and 2015. |
Property and Equipment | Property and equipment Property are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from three to five years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. |
Impairment of Long-lived Assets | Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. |
Derivative liabilities | Derivative liabilities The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to income or expense as part of gain or loss on extinguishment. |
Revenue Recognition | Revenue recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. |
Income Taxes | Income taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. Prior to the June 3, 2015, the Company operated ONC as a limited liability company and passed all income and loss to each member based on their proportionate interest in ONC. In accordance with the generally accepted method of presenting limited liability company financial statements, the consolidated financial statements do not include the personal assets and liabilities of the members, including their obligation for income taxes on their distributive shares of net income of the LLCs, or any provision for federal income taxes prior to June 3, 2015. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes |
Research and Development | Research and development Research and development costs incurred in the development of the Company’s products are expensed as incurred. For the years ended December 31, 2016 and 2015, research and development costs were $94,383 and $85,323, respectively, and are included in operating expenses on the accompanying consolidated statements of operations. |
Stock-Based Compensation | Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50 – “Equity-Based Payments to Non-Employees” |
Basic and Diluted Loss Per Share | Basic and diluted loss per share Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock warrants (using the treasury stock method). These common stock equivalents may be dilutive in the future. All potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: December 31, 2016 December 31, 2015 Total stock warrants 3,304,872 2,694 Convertible debt 2,333,333 - |
Related parties | Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. |
Recent Accounting Pronouncements | Recent accounting pronouncements In June 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-12, “ Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes Income Taxes On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) to amend the accounting guidance for leases. The accounting applied by a lessor is largely unchanged under ASU 2016-02. However, the standard requires lessees to recognize lease assets and lease liabilities for leases classified as operating leases on the balance sheet. Lessees will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it will recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial statements and notes to its consolidated financial statements. On March 30, 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”) to amend the accounting guidance for share-based payment accounting. The areas for simplification in ASU 2016-09 involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and early adoption is permitted. The adoption of ASU 2016-09 did not have any effect of the Company’s consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Using Level 3 Valuation Derivative Liability | The Company accounts for certain instruments at fair value using level 3 valuation. At December 31, 2016 At December 31, 2015 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 402,055 — — — |
Schedule of Roll Forward of Level 3 Valuation Financial Instrument | A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liabilities Balance at December 31, 2015 $ - Initial measurement of derivative liabilities reflected as debt discount 320,961 Initial measurement of derivative liabilities reflected in derivative expense 260,479 Reclassification of derivative liability to gain on extinguishment of debt (65,047 ) Change in fair value included in derivative expense (114,338 ) Balance at December 31, 2016 $ 402,055 |
Schedule of Anti-Dilutive Shares Outstanding | All potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: December 31, 2016 December 31, 2015 Total stock warrants 3,304,872 2,694 Convertible debt 2,333,333 - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | At December 31, 2016 and 2015, property and equipment consisted of the following: Useful Life 2016 2015 Leasehold improvements 5 Years $ 23,976 $ 23,976 Less: accumulated depreciation (14,372 ) (13,274 ) Property and equipment, net $ 9,604 $ 10,702 |
Convertible Debt (Tables)
Convertible Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | During the year ended December 31, 2016, the fair value of the derivative liabilities was estimated using the Binomial valuation model with the following assumptions: Dividend rate 0 Term (in years) 0.58 to 5.0 years Volatility 190.73% to 210.78 % Risk-free interest rate 0.63% to 1.83 % |
Schedule of Convertible Note | At December 31, 2016 and 2015, the convertible debt consisted of the following: December 31, 2016 December 31, 2015 Principal amount $ 350,000 $ - Less: unamortized debt discount (295,312 ) - Convertible note payable, net $ 54,688 $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Parties Activity | For the year ended December 31, 2016 and 2015, due from/(to) related parties activity consisted of the following: Foundation CEO CFO Total Balance due from (to) related parties at December 31, 2014 $ (46,100 ) $ - $ - $ (46,100 ) Working capital advances received (48,350 ) (7,500 ) (4,600 ) (60,450 ) Repayments made 97,650 13,400 13,300 124,350 Balance due from (to) related parties at December 31, 2015 3,200 5,900 8,700 17,800 Working capital advances made 5,094 - 3,795 8,889 Working capital advances received - (55,500 ) - (55,500 ) Repayments made - 50,500 - 50,500 Amounts deemed uncollectible and expensed (2,244 ) - - (2,244 ) Repayments received (6,050) (5,900 ) (12,495 ) (24,445 ) Balance due from (to) related parties at December 31, 2016 $ - $ (5,000 ) $ - $ (5,000 ) |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Schedule of Warrant Activities | Warrant activities for the year ended December 31, 2016 and 2015 are summarized as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance Outstanding December 31, 2014 2,694 $ 69.60 Granted - - Balance Outstanding December 31, 2015 2,694 69.60 Granted 3,302,178 0.21 Balance Outstanding December 31, 2016 3,304,872 $ 0.27 4.82 $ - Exercisable, December 31, 2016 3,304,872 $ 0.27 4.87 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Taxes and Reconciliation | The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the years ended December 31, 2016 and 2015 were as follows: Years Ended December 31, 2016 2015 Income tax benefit at U.S. statutory rate of 34% $ (685,000 ) $ (337,000 ) State income tax benefit (161,000 ) (79,000 ) Non-deductible expenses 112,000 7,000 Income tax effect during LLC period - 36,000 Change in valuation allowance 734,000 373,000 Total provision for income tax $ - $ - |
Schedule of Deferred Tax Assets | The Company’s approximate net deferred tax assets as of December 31, 2016 and 2015 were as follows: December 31, 2016 December 31, 2015 Deferred Tax Assets: Net operating loss carryforward $ 1,107,000 $ 373,000 Total deferred tax assets 1,107,000 373,000 Valuation allowance (1,107,000 ) (373,000 ) Net deferred tax assets $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Future Minimum Lease Payments | Future minimum lease payments under non-cancelable operating leases at December 31, 2016 are as follows: Years ending December 31, Amount 2017 36,800 2018 37,333 2019 38,400 2020 25,600 Total minimum non-cancelable operating lease payments $ 138,133 |
Employment Agreement [Member] | |
Summary of Future Minimum Commitment Payment | Future minimum commitment payments under employment agreements at December 31, 2016 are as follows: Years ending December 31, Amount 2017 475,000 2018 475,000 2019 39,600 Total minimum commitment employment agreement lease payments $ 989,600 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Summary of Estimated Fair Value of Assets Acquired And Liabilities Assumed | Based upon the purchase price allocation, the following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition: Cash $ 39,144 Accounts receivable 187,502 Recoverable taxes 50,263 Other current assets 2,675 Property and equipment 493 Goodwill and other intangible assets 4,737,389 Total assets acquired at fair value 5,017,466 Accounts payable and accrued expenses 423,891 Payroll taxes 6,224 Total liabilities assumed 430,115 Total purchase consideration $ 4,587,351 |
Organization and Nature of Op26
Organization and Nature of Operations (Details Narrative) - USD ($) | Aug. 20, 2015 | Jun. 22, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 02, 2016 | Aug. 19, 2016 | Aug. 12, 2015 |
Capital stock, shares authorized | 520,000,000 | ||||||
Common stock, shares authorized | 500,000,000 | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||
Ownership interest | 50.00% | 50.00% | |||||
Acquisition percentage of issued and outstanding | 50.00% | ||||||
Net loss | $ 2,013,632 | $ 990,396 | |||||
Net cash used in operating activities | 1,544,003 | 851,841 | |||||
Accumulated deficit | 3,142,851 | 1,129,219 | |||||
Revenues | |||||||
Vitel Stockholders [Member] | |||||||
Acquisition percentage of issued and outstanding | 100.00% | ||||||
Series A Preferred Stock [Member] | |||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares authorized | 20,000,000 | 1,000,000 | 1,000,000 | ||||
Preferred stock shares designating | 1,000,000 | ||||||
Stock holder voting rights | Each holder of Series A Preferred Stock shall be entitled to 500 votes for each share of Series A Preferred Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Company. The holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth in the Certificate of Designation) for taking any corporate action. | ||||||
ONC Shareholders [Member] | Series A Preferred Stock [Member] | |||||||
Number of stock exchange for shares | 1,000,000 | ||||||
Percentage of outstanding preferred stock | 100.00% | ||||||
Share Exchange Agreement [Member] | ONC Shareholders [Member] | |||||||
Percentage of acquired of common stock shares issued and outstanding | 100.00% | ||||||
Number of stock exchange for shares | 47,000,000 | ||||||
Percentage of outstanding common stock | 91.30% | ||||||
Reverse stock split | 1-for-139.2328 reverse stock split | ||||||
Number of share reduction of issued and outstanding share of prior to exchange shares | 4,493,390 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Loss | $ 2,013,632 | $ 990,396 | |
Net cash used in operations | 1,544,003 | 851,841 | |
Accumulated deficit | 3,142,851 | 1,129,219 | |
Stockholders deficit | 826,633 | (555,381) | $ 138,823 |
Working capital deficit | $ 842,637 | ||
Acquisition percentage of issued and outstanding | 50.00% | ||
Cash and cash equivalents | |||
Property, plant and equipment, useful life | 5 years | ||
Research and development costs | $ 94,383 | $ 85,323 | |
Minimum [Member] | |||
Property, plant and equipment, useful life | 3 years | ||
Maximum [Member] | |||
Property, plant and equipment, useful life | 5 years | ||
Vitel [Member] | |||
Acquisition percentage of issued and outstanding | 100.00% |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Schedule of Fair Value Using Level 3 Valuation Derivative Liability (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Derivative liability | $ 402,055 | |
Level 1 [Member] | ||
Derivative liability | ||
Level 2 [Member] | ||
Derivative liability | ||
Level 3 [Member] | ||
Derivative liability | $ 402,055 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Schedule of Roll Forward of Level 3 Valuation Financial Instrument (Details) - USD ($) | Nov. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | |||
Balance at the Beginning | |||
Initial measurement of derivative liability reflected as debt discount | 320,961 | ||
Initial measurement of derivative liability reflected in derivative expense | 260,479 | ||
Reclassification of derivative liability to gain on extinguishment of debt | $ 44,625 | 44,625 | |
Change in fair value included in derivative expense | (114,338) | ||
Balance at the End | $ 402,055 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Schedule of Anti-Dilutive Shares Outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Warrants [Member] | ||
Total antidilutive securities excluded from computation of earnings per share | 3,304,872 | 2,694 |
Convertible Debt [Member] | ||
Total antidilutive securities excluded from computation of earnings per share | 2,333,333 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 1,098 | $ 274 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements, Useful Life | 5 years | |
Leasehold improvements | $ 23,976 | $ 23,976 |
Less: accumulated depreciation | (14,372) | (13,274) |
Property and equipment, net | $ 9,604 | $ 10,702 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | Oct. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Line of credit | $ 99,741 | $ 49,708 | |
Line of credit interest rate | 5.45% | 5.20% | |
Available to borrow under the line of credit | $ 259 | $ 50,292 | |
Weighted average interest rate | 5.20% | 5.20% | |
Prime Rate [Member] | |||
Line of credit interest rate | 1.70% | ||
Revolving Credit Facility [Member] | Regions Bank [Member] | |||
Line of credit | $ 100,000 | ||
Line of credit expiration date | Oct. 27, 2017 |
Convertible Debt (Details Narra
Convertible Debt (Details Narrative) - USD ($) | Nov. 30, 2016 | Nov. 23, 2016 | May 23, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 19, 2016 |
Convertible promissory note | $ 350,000 | |||||
Debt maturity date | Jul. 23, 2017 | |||||
Repayment of convertible debt | $ 40,000 | 40,000 | ||||
Prepayment penalty | 62,000 | |||||
Gain on extinguishment of debt | $ 44,625 | $ 44,625 | ||||
Debt face amount | $ 350,000 | |||||
Proceeds from issuance of debt | 300,000 | |||||
Debt original issue discount | $ 50,000 | |||||
Debt bear interest | 10.00% | |||||
Debt conversion price | $ 0.15 | |||||
Conversion price, percentage | 60.00% | |||||
Convertible debt conversion description | (i) 115% of outstanding principal balance of the Note and accrued and unpaid interest during the period from the Original Issue Date through the three months following the Original Issue Date, and (ii) 120% of outstanding principal balance of the Notes and accrued and unpaid interest during months four through six following the Original Issue Date. In order to prepay the Notes, the Company shall provide 20 Trading Days prior written notice to the Holder, during which time the Holder may convert the Notes in whole or in part at the Conversion Price. | In addition, subject to limited exceptions, the Purchasers will not have the right to convert any portion of the Note if the Purchaser, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Companys Common Stock outstanding immediately after giving effect to its conversion. The Purchaser may increase or decrease this ownership limitation to any percentage not exceeding 9.99% upon 61 days prior written notice to the Company. | ||||
Acquisition percentage of common stock | 50.00% | |||||
Ownership interest | 50.00% | 50.00% | ||||
Revolving line of credit | $ 99,741 | 49,708 | ||||
Embedded derivative liability | 581,440 | |||||
Proceeds from convertible note | 390,000 | 100,000 | ||||
Procceds from notes payable | 284,961 | |||||
Initial derivative expense | 260,479 | |||||
Derivative income (expense) | 146,141 | |||||
Amortization of debt discounts | 94,688 | |||||
Debt outstanding | $ 350,000 | $ 0 | ||||
Warrant [Member] | ||||||
Ownership interest | 9.99% | |||||
Revolving line of credit | $ 100,000 | |||||
Convertible Note [Member] | ||||||
Weighted average interest rate | 9.00% | |||||
Six Month Amortization [Member] | ||||||
Amortization debt percentage | 120.00% | |||||
Seven Or Eight Month Amortization [Member] | ||||||
Amortization debt percentage | 125.00% | |||||
Maximum [Member] | ||||||
Debt bear interest | 24.00% | |||||
Securities Purchase Agreement [Member] | ||||||
Debt face amount | $ 350,000 | |||||
Debt instrument description | (i) 14.29% Original Issue Discount 10% Senior Secured Convertible Notes (the Notes); and (ii) warrants (the Warrants) to purchase 2,333,334 shares of the Companys common stock at an exercise price of $0.175 (subject to adjustments under certain conditions as defined in the Warrants) which are exercisable for a period of five years from the Original Issue Date. | |||||
Crown Bridge Partners, LLC [Member] | ||||||
Convertible promissory note | $ 40,000 | |||||
Debt maturity date | May 22, 2017 | |||||
Debt interest rate | 8.00% |
Convertible Promissory Note - S
Convertible Promissory Note - Schedule of Derivative Liabilities at Fair Value (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Dividend rate | 0.00% |
Minimum [Member] | |
Term (in years) | 6 months 29 days |
Volatility | 190.73% |
Risk-free interest rate | 0.63% |
Maximum [Member] | |
Term (in years) | 5 years |
Volatility | 210.78% |
Risk-free interest rate | 1.83% |
Convertible Promissory Note -36
Convertible Promissory Note - Schedule of Convertible Note (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Principal amount | $ 350,000 | |
Less: unamortized debt discount | (265,312) | |
Convertible note payable, net | $ 54,688 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Related Party Transactions [Abstract] | |
Due from related parties write off | $ 2,244 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Parties Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Balance due from (to) related parties | $ 17,800 | $ (46,100) |
Working capital advances received | (55,500) | (60,450) |
Repayments made | 51,000 | 97,650 |
Working capital advances made | 8,889 | |
Amounts deemed uncollectible and expensed | (2,244) | |
Repayments received | (24,445) | |
Balance due from (to) related parties | (5,000) | 17,800 |
Foundation [Member] | ||
Balance due from (to) related parties | 3,200 | (46,100) |
Working capital advances received | (48,350) | |
Repayments made | 97,650 | |
Working capital advances made | 5,094 | |
Amounts deemed uncollectible and expensed | (2,244) | |
Balance due from (to) related parties | 3,200 | |
Chief Executive Officer [Member] | ||
Balance due from (to) related parties | 5,900 | |
Working capital advances received | (55,500) | (7,500) |
Repayments made | 50,500 | 13,400 |
Working capital advances made | ||
Amounts deemed uncollectible and expensed | ||
Balance due from (to) related parties | (5,000) | 5,900 |
CFO [Member] | ||
Balance due from (to) related parties | 8,700 | |
Working capital advances received | (4,600) | |
Repayments made | 13,300 | |
Working capital advances made | 3,795 | |
Amounts deemed uncollectible and expensed | ||
Repayments received | (12,495) | |
Balance due from (to) related parties | $ 8,700 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Oct. 20, 2016 | May 13, 2016 | Jan. 02, 2016 | Nov. 30, 2015 | Nov. 18, 2015 | Sep. 02, 2015 | Aug. 20, 2015 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 19, 2016 | Jan. 31, 2016 | Oct. 20, 2015 | Aug. 12, 2015 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||
Preferred stock, shares issued | ||||||||||||||
Acquisition percentage of issued and outstanding | 50.00% | 50.00% | ||||||||||||
Common stock shares outstanding | 60,807,846 | 60,807,846 | 57,107,809 | |||||||||||
Common stock issued for services, shares | 60,000 | |||||||||||||
Common stock issued for services | $ 68,000 | $ 11,190 | ||||||||||||
Common stock value per share | $ 0.34 | $ 0.153 | $ 0.153 | |||||||||||
Stock-based compensation | $ 51,000 | $ 89,825 | 18,000 | |||||||||||
Pay consultant a monthly fee | 4,000 | 817,014 | 213,838 | |||||||||||
Amortized consulting expenses | 68,000 | |||||||||||||
Accrued liabilities | $ 15,300 | $ 15,300 | ||||||||||||
Number of common stock issued value | 100,077 | |||||||||||||
Beneficial ownership percentage | 50.00% | 50.00% | 50.00% | |||||||||||
Number of shares purchased under the agreement | 333,334 | |||||||||||||
Value of shares purchased under agreement | $ 100,000 | |||||||||||||
Proceeds from issuance of common stock | 95,000 | $ 534,428 | $ 1,361,523 | |||||||||||
Stock offering cost | $ 5,000 | |||||||||||||
Common stock issued for cash, shares | 4,493,390 | |||||||||||||
Common stock issued for cash | $ 1,361,523 | |||||||||||||
November 15, 2016 [Member] | ||||||||||||||
Common stock issued for services | 100,000 | |||||||||||||
Pay consultant a monthly fee | 7,500 | |||||||||||||
November 2016 [Member] | ||||||||||||||
Negotiated cash fee | 5,000 | |||||||||||||
Consultant [Member] | ||||||||||||||
Common stock issued for services | $ 200,000 | |||||||||||||
ExchangeAgreement [Member] | ||||||||||||||
Number of share exchange during period | 47,000,000 | |||||||||||||
Percentage of outstanding shares | 91.30% | |||||||||||||
Acquisition percentage of issued and outstanding | 100.00% | 100.00% | ||||||||||||
Stock issued for convertible debt | 200,000 | |||||||||||||
Stock issued for convertible debt, values | $ 100,000 | |||||||||||||
Common stock shares outstanding | 4,493,390 | 4,493,390 | ||||||||||||
Purchase Agreement [Member] | ||||||||||||||
Proceeds from issuance of common stock | 95,000 | |||||||||||||
Stock offering cost | $ 300,000 | |||||||||||||
Offering cost expense | $ 205,000 | |||||||||||||
Purchase Agreement [Member] | Lincoln Park Capital Fund, LLC [Member] | ||||||||||||||
Number of common stock issued value | $ 10,100,000 | $ 76,510 | ||||||||||||
Maximum purchase of shares of common stock on business day | 100,000 | |||||||||||||
Minimum obligation commitment amount | $ 50,000 | |||||||||||||
Minimum purchase obligation amount | $ 500,000 | |||||||||||||
Number of shares issued as commitment fee | 1,000,000 | |||||||||||||
Proceeds from issuance of common stock | $ 191,850 | |||||||||||||
Common stock subscription | $ 11,190 | |||||||||||||
Purchase Agreement [Member] | Lincoln Park Capital Fund, LLC [Member] | Maximum [Member] | ||||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | ||||||||||||
Unit Subscription Agreements [Member] | ||||||||||||||
Common stock issued for cash, shares | 1,937,696 | |||||||||||||
Director [Member] | ||||||||||||||
Common stock issued for services, shares | 60,000 | 60,000 | ||||||||||||
Common stock issued for services | $ 18,000 | $ 18,000 | ||||||||||||
Common stock value per share | $ 0.30 | $ 0.30 | ||||||||||||
Stock-based compensation | $ 18,000 | $ 18,000 | ||||||||||||
Lincoln Park [Member] | ||||||||||||||
Number of shares purchased under the agreement | 1,000,000 | |||||||||||||
Value of shares purchased under agreement | $ 300,000 | |||||||||||||
Investor [Member] | Subscription Agreements [Member] | ||||||||||||||
Common stock issued for cash, shares | 102,341 | 4,221,085 | ||||||||||||
Common stock issued for cash | $ 51,926 | $ 1,266,523 | ||||||||||||
Investor [Member] | Unit Subscription Agreements [Member] | ||||||||||||||
Warrant term | 5 years | |||||||||||||
Warrants exercise price per share | $ 0.30 | $ 0.30 | ||||||||||||
Proceeds from warrants cash | $ 279,462 | |||||||||||||
Warrant subscriptions | $ 11,190 | $ 11,190 | ||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Preferred stock shares designating | 1,000,000 | |||||||||||||
Preferred stock, shares authorized | 20,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
Stock holder voting rights | Each holder of Series A Preferred Stock shall be entitled to 500 votes for each share of Series A Preferred Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Company. The holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth in the Certificate of Designation) for taking any corporate action. | |||||||||||||
Number of share exchange during period | 1,000,000 | |||||||||||||
Percentage of outstanding shares | 100.00% | |||||||||||||
Preferred stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||
Common stock issued for services, shares | ||||||||||||||
Common stock issued for services | ||||||||||||||
Number of common stock issued value | $ 100 | |||||||||||||
Number of issue shares during period | 1,000,000 | |||||||||||||
Common stock issued for cash, shares | ||||||||||||||
Common stock issued for cash | ||||||||||||||
Series A Preferred Stock [Member] | Chief Executive Officer [Member] | ||||||||||||||
Preferred stock, shares issued | 500,000 | |||||||||||||
Series A Preferred Stock [Member] | Board of Directors [Member] | ||||||||||||||
Preferred stock, shares issued | 500,000 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Warrant Activities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | ||
Number of Warrants, Beginning balance | 2,694 | 2,694 |
Number of Warrants, Granted | 3,302,178 | |
Number of Warrants, Ending balance | 3,304,872 | 2,694 |
Number of Warrants, Exercisable | 3,304,872 | |
Weighted Average Exercise Price, Beginning balance | $ 69.60 | $ 69.60 |
Weighted Average Exercise Price, Granted | 0.21 | |
Weighted Average Exercise Price, Ending balance | 0.27 | $ 69.60 |
Weighted Average Exercise Price, Exercisable | $ 0.27 | |
Weighted Average Remaining Contractual Term (Years), Ending balance | 4 years 9 months 26 days | |
Weighted Average Remaining Contractual Term (Years), Ending Exercisable | 4 years 10 months 13 days | |
Aggregate Intrinsic Value, Beginning balance | ||
Aggregate Intrinsic Value, Ending balance |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Income Tax Disclosure [Abstract] | |
Income tax percentage | 34.00% |
Net operating loss carryforward | $ 2,636,000 |
Change in valuation allowance | $ 734,000 |
Loss carryforward expiration year | 2,036 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Taxes and Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at U.S. statutory rate of 34% | $ (685,000) | $ (337,000) |
State income taxes benefit | (161,000) | (79,000) |
Non-deductible expenses | 112,000 | 7,000 |
Income tax effect during LLC period | 36,000 | |
Change in valuation allowance | 734,000 | 373,000 |
Total provision for income tax | ||
Percentage of statutory rate | 34.00% |
Income Taxes - Schedule of Def
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 1,107,000 | $ 373,000 |
Total deferred tax assets | 1,107,000 | 373,000 |
Valuation allowance | (1,107,000) | (373,000) |
Net deferred tax asset |
Commitments and Contincengies (
Commitments and Contincengies (Details Narrative) - USD ($) | Feb. 02, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Rent expense | $ 44,857 | $ 14,734 | |
Jonathan F. Head, Ph.D [Member] | |||
Salary payable | $ 275,000 | ||
Andrew Kucharchuk Chief Financial Officer [Member] | |||
Salary payable | $ 200,000 |
Commitments and Contincengies -
Commitments and Contincengies - Summary of Future Minimum Lease Payments (Details) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 36,800 |
2,018 | 37,333 |
2,019 | 38,400 |
2,020 | 25,600 |
Total minimum lease payments | $ 138,133 |
Commitments and Contincengies46
Commitments and Contincengies - Summary of Future Minimum Commitment Payment (Details) | Dec. 31, 2016USD ($) |
2,017 | $ 36,800 |
2,018 | 37,333 |
2,019 | 38,400 |
2,020 | 25,600 |
Total minimum commitment lease payment | 138,133 |
Employment Agreement [Member] | |
2,017 | 475,000 |
2,018 | 475,000 |
2,019 | 39,600 |
Total minimum commitment lease payment | $ 989,600 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 12, 2017 | Mar. 10, 2017 | Mar. 07, 2017 | Feb. 27, 2017 | May 13, 2016 | Nov. 30, 2015 | Apr. 05, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 02, 2016 | Aug. 12, 2015 |
Common stock issued for services, shares | 60,000 | |||||||||||
Stock-based compensation | $ 51,000 | $ 89,825 | $ 18,000 | |||||||||
Number of common stock shares issued, value | 100,077 | |||||||||||
Proceeds from issuance of common stock | $ 95,000 | $ 534,428 | 1,361,523 | |||||||||
Common stock issued for cash | $ 1,361,523 | |||||||||||
Common stock value per share | $ 0.34 | $ 0.153 | ||||||||||
Preferred stock par and stated value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Acquisition percentage of issued and outstanding | 50.00% | |||||||||||
Stock-based compensation expense | $ 678,436 | $ 326,274 | ||||||||||
Vitel [Member] | ||||||||||||
Acquisition percentage of issued and outstanding | 100.00% | |||||||||||
Vitel Stockholders [Member] | ||||||||||||
Acquisition percentage of issued and outstanding | 100.00% | |||||||||||
Subsequent Event [Member] | ||||||||||||
Share price | $ .075 | |||||||||||
Business acquistion description | The Common Stock and Series B Preferred will be held by Trustee for the benefit of the Vitel Stockholders as provided for in the Trust Agreement and 98% of the Vitel Shares are held by the Trustee for the benefit of the Company as provided for in the Trust Agreement and 2% of the Vitel Shares were transferred to the Company. Vitel became a wholly owned subsidiary of the Company as of the Closing Date as the Company has full control of the Vitel Shares through the Trust. | |||||||||||
Stock issued during period, restricted shares | 61,158,013 | |||||||||||
Stock issued during period, restricted shares, value | $ 4,586,851 | |||||||||||
Assets acquired for goodwill and other intangible assets | $ 4,737,389 | |||||||||||
Base salary | $ 187,500 | |||||||||||
Annual bonus percentage | 50.00% | |||||||||||
Allowance for car | $ 500 | |||||||||||
Health insurance reimbursement | $ 5,000 | |||||||||||
Stock option vesting percentage | 100.00% | |||||||||||
Subsequent Event [Member] | Stock Option [Member] | ||||||||||||
Purchase of common stock | 2,000,000 | |||||||||||
Stock option description | The stock option award included options for each of them to purchase 2,000,000 shares (the Stock Options) of Common Stock at an exercise price of $0.25 per share. One-third of the Stock Options vest on March 10, 2017, March 10, 2018, and March 10, 2019, respectively, and are exercisable at any time after vesting until 10 years after the grant date. | |||||||||||
Dividend yield | 0.00% | |||||||||||
Expected volatility | 203.40% | |||||||||||
Risk free interest | 2.58% | |||||||||||
Estimated holding period | 10 years | |||||||||||
Stock-based compensation expense | $ 299,381 | |||||||||||
Subsequent Event [Member] | Vitel [Member] | ||||||||||||
Acquisition percentage of issued and outstanding | 100.00% | |||||||||||
Subsequent Event [Member] | Series B Preferred Stock [Member] | ||||||||||||
Number of common stock shares issued | 5,000,000 | |||||||||||
Preferred stock designated shares | 7,892,000 | |||||||||||
Preferred stock par and stated value | $ 0.0001 | |||||||||||
Stockholder voting rights | Each share of Series B preferred stock entitles the holder to 100 votes on all matters submitted to a vote of the Companys stockholders. | |||||||||||
Subsequent Event [Member] | Series B Preferred Stock [Member] | Maximum [Member] | ||||||||||||
Common stock outstanding, percentage | 5.00% | |||||||||||
Subsequent Event [Member] | Unit Subscription Agreements [Member] | ||||||||||||
Common stock issued for cash | $ 8,253,136 | |||||||||||
Warrant to purchase common shares | 4,126,568 | |||||||||||
Warrant term | 5 years | |||||||||||
Warrants exercise price per share | $ 0.30 | |||||||||||
Proceeds from warrants cash | $ 618,983 | |||||||||||
Common stock value per share | $ 0.075 | |||||||||||
Subsequent Event [Member] | Unit Subscription Agreements [Member] | Series B Preferred Stock [Member] | ||||||||||||
Number of common stock shares issued | 5,000,000 | |||||||||||
Number of common stock shares issued, value | $ 500 | |||||||||||
Subsequent Event [Member] | Subscription Agreement [Member] | ||||||||||||
Number of common stock shares issued | 61,158,013 | |||||||||||
Subsequent Event [Member] | Stockholders Agreement [Member] | ||||||||||||
Number of common stock shares issued | 61,158,013 | |||||||||||
Debt interest rate | Right of Co-Sale (Tag Along). In the event that any stockholder who is a party to the Stockholders Agreement or group of such stockholders intends to accept an offer (either solicited or unsolicited) from any third party to acquire or otherwise transfer Company Securities (as defined in the Stockholders Agreement), representing at least 20% of the outstanding Company Securities, on a fully diluted basis, the selling stockholder shall give an offer notice in writing to the other stockholders of the Company who are a party to the Stockholders Agreement, with a copy to the Company, containing the terms and conditions of such offer received from the interested third party. Each such stockholder shall have the right to participate in such offer by selling the pro rata proportion of its Company Securities pursuant to such offer to acquire or otherwise Transfer Company Securities (as defined in the Stockholders Agreement). | |||||||||||
Subsequent Event [Member] | Stockholders Agreement [Member] | Maximum [Member] | ||||||||||||
Diluted shares percentage | 5.00% | |||||||||||
Subsequent Event [Member] | Stockholders Agreement [Member] | Series B Preferred Stock [Member] | ||||||||||||
Number of common stock shares issued | 5,000,000 | |||||||||||
Business acquistion description | Series B Preferred Stock with 100 votes per share | |||||||||||
Subsequent Event [Member] | Employee [Member] | ||||||||||||
Common stock issued for services, shares | 150,000 | |||||||||||
Share price | $ 0.075 | |||||||||||
Stock-based compensation | $ 11,250 | |||||||||||
Subsequent Event [Member] | Lincoln Park [Member] | ||||||||||||
Number of shares purchased, value | 10,100,000 | 10,100,000 | ||||||||||
Number of common stock shares issued | 400,000 | 900,000 | ||||||||||
Proceeds from issuance of common stock | $ 99,667 | $ 176,617 | ||||||||||
Subsequent Event [Member] | Vitel Stockholders [Member] | ||||||||||||
Acquisition percentage of issued and outstanding | 100.00% | |||||||||||
Subsequent Event [Member] | Jonathan [[Member] | ||||||||||||
Number of common stock shares issued | 2,892,000 | |||||||||||
Number of common stock shares issued, value | $ 289 |
Subsequent Events - Summary of
Subsequent Events - Summary of Estimated Fair Value of Assets Acquired And Liabilities Assumed (Details) - Subsequent Event [Member] | Dec. 31, 2016USD ($) |
Cash | $ 39,144 |
Accounts receivable | 187,502 |
Recoverable taxes | 50,263 |
Other current assets | 2,675 |
Property and equipment | 493 |
Goodwill and other intangible assets | 4,737,389 |
Total assets acquired at fair value | 5,017,466 |
Accounts payable and accrued expenses | 423,891 |
Payroll taxes | 6,224 |
Total liabilities assumed | 430,115 |
Total purchase consideration | $ 4,587,351 |