Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 29, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | FREEZE TAG, INC. | ||
Entity Central Index Key | 1,485,074 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 167,742 | ||
Entity Common Stock, Shares Outstanding | 783,211,798 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 19,934 | $ 42,052 |
Accounts receivable, net of allowance of $0 and $5,600, respectively | 7,745 | 4,504 |
Prepaid expenses and other current assets | 5,281 | 5,249 |
Total current assets | 32,960 | 51,805 |
Total assets | 32,960 | 51,805 |
Current liabilities: | ||
Accounts payable | 133,083 | 124,163 |
Accrued expenses | 495,473 | 492,012 |
Accrued interest payable - related party | 354,165 | 209,461 |
Accrued interest payable | 361,503 | 154,925 |
Unearned royalties | 127,201 | 195,033 |
Notes payable | 58,096 | |
Convertible notes payable, related party | 1,447,041 | 1,447,041 |
Convertible notes payable, net of discount of $239,402 and $180,208, respectively | 1,952,734 | 1,405,361 |
Derivative liabilities | 1,934,617 | 841,677 |
Total current liabilities | 6,863,913 | 4,869,673 |
Total liabilities | 6,863,913 | 4,869,673 |
Stockholder's deficit: | ||
Preferred stock; $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding | ||
Common stock; $0.00001 par value, 2,000,000,000 shares authorized, 648,436,785 and 280,442,125 shares issued and outstanding, respectively | 6,484 | 2,804 |
Additional paid-in capital | 4,259,692 | 4,147,038 |
Common stock payable | 16,800 | 16,800 |
Accumulated deficit | (11,113,929) | (8,984,510) |
Total stockholder's deficit | (6,830,953) | (4,817,868) |
Total liabilities and stockholders' deficit | $ 32,960 | $ 51,805 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Accounts receivable, net | $ 0 | $ 5,600 |
Current Liabilities | ||
Convertible notes payable, net | $ 239,402 | $ 180,208 |
Stockholder's deficit: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized shares | 10,000,000 | 10,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, authorized shares | 2,000,000,000 | 2,000,000,000 |
Common stock, issued shares | 648,436,785 | 280,442,125 |
Common stock, outstanding shares | 648,436,785 | 280,442,125 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statements Of Operations | ||
Revenues | $ 138,720 | $ 43,968 |
Operating costs and expenses: | ||
Cost of sales | 235,153 | 369,046 |
Selling, general and administrative expenses | 554,773 | 551,209 |
Total operating costs and expenses | 789,926 | 920,255 |
Loss from operations | (651,206) | (876,287) |
Other income (expense): | ||
Interest expense, net | (859,645) | (887,447) |
Loss on change in derivative liabilities | (616,286) | (106,543) |
Total other expense | (1,475,931) | (993,990) |
Loss before income taxes | (2,127,137) | (1,870,277) |
Provision for income taxes | (2,282) | (400) |
Net Loss | $ (2,129,419) | $ (1,870,677) |
Weighted average number of common shares outstanding - basic and diluted | 381,194,007 | 238,762,747 |
Loss per common share - basic and diluted | $ (0.01) | $ (0.01) |
STATEMENTS OF STOCKHOLDERS_ DEF
STATEMENTS OF STOCKHOLDERS’ DEFICIT - USD ($) | Common Stock | Additional Paid-In Capital | Common Stock Payable | Accumulated Deficit | Total |
Beginning balance, Shares at Dec. 31, 2014 | 184,518,250 | ||||
Beginning Balance, Amount at Dec. 31, 2014 | $ 1,845 | $ 3,903,394 | $ 16,800 | $ (7,113,833) | $ (3,191,794) |
Issuance of common stock for conversion of debt, Shares | 70,648,155 | ||||
Issuance of common stock for conversion of debt, Amount | $ 706 | 230,627 | 231,333 | ||
Issuance of common stock for conversion of related party debt, Shares | 25,275,720 | ||||
Issuance of common stock for conversion of related party debt, Amount | $ 253 | 13,017 | 13,270 | ||
Net loss | (1,870,677) | (1,870,677) | |||
Ending Balance, Shares at Dec. 31, 2015 | 280,442,125 | ||||
Ending Balance, Amount at Dec. 31, 2015 | $ 2,804 | 4,147,038 | 16,800 | (8,984,510) | (4,817,868) |
Issuance of common stock for conversion of debt, Shares | 367,994,660 | ||||
Issuance of common stock for conversion of debt, Amount | $ 3,680 | 112,654 | 116,334 | ||
Net loss | (2,129,419) | (2,129,419) | |||
Ending Balance, Shares at Dec. 31, 2016 | 648,436,785 | ||||
Ending Balance, Amount at Dec. 31, 2016 | $ 6,484 | $ 4,259,692 | $ 16,800 | $ (11,113,929) | $ (6,830,953) |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net Loss | $ (2,129,419) | $ (1,870,677) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Amortization of debt discount to interest expense | 461,725 | 618,835 |
Loss on change in derivative liabilities | 616,286 | 106,543 |
Non-cash interest expense | 31,939 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (3,241) | 11,693 |
Prepaid expenses and other current assets | (32) | 2,996 |
Accounts payable | 8,920 | 8,013 |
Accrued expenses | 3,461 | (3,303) |
Accrued interest payable - related party | 144,704 | 145,412 |
Accrued interest payable | 214,275 | 122,318 |
Unearned royalties | (67,832) | (7,466) |
Net cash used by operating activities | (719,214) | (865,636) |
Cash flows from Investing activities: | ||
Net cash provided by investing activities | ||
Cash flows from financing activities: | ||
Proceeds from note payable | 58,096 | |
Proceeds from convertible notes payable | 639,000 | 639,000 |
Net cash provided by financing activities | 697,096 | 893,000 |
Net increase (decrease) in cash | (22,118) | 27,364 |
Cash at the beginning of the year | 42,052 | 14,688 |
Cash at the end of the year | 19,934 | 42,052 |
Non-cash transactions | ||
Conversion of related party debt and accrued interest to common shares | 13,270 | |
Conversion of debt and accrued interest to common shares | 116,334 | 72,952 |
Debt discount due to derivative liabilities | $ 520,919 | $ 455,141 |
THE COMPANY AND NATURE OF BUSIN
THE COMPANY AND NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 1 - THE COMPANY AND NATURE OF BUSINESS | Freeze Tag, Inc. (the "Company") is a leading creator of mobile social games that are fun and engaging for all ages. Based on a free-to-play business model that has propelled games like Candy Crush Saga to worldwide success, the Company employs state-of-the-art data analytics and proprietary technology to dynamically optimize the gaming experience for revenue generation. Players can download and enjoy the Company's games for free, or they can purchase virtual items and additional features within the game to increase the fun factor. Our games encourage players to compete and engage with their friends on major social networks such as Facebook and Twitter. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Revenue Recognition The Companys revenues are derived primarily by licensing software products in the form of online and downloadable games for PC, Mac and smartphone platforms. The Company distributes its products primarily through online games portals and smartphone device manufacturers (distribution partners), which market the games to end-users. The nature of our business is such that we sell games basically through four distribution outlets web portals, brick and mortar retail distributors, mobile distributors and publishers, and our own web portal, www.freezetag.com. Product Sales (web and mobile revenues) The Company recognizes revenue from the sale of our products upon the transfer of title and risk of loss to its customers, and once any performance obligations have been completed. Revenue from product sales is recognized after deducting the estimated allowance for returns and price protection. Licensing Revenues (retail revenues- royalties) Third-party licensees distribute games under license agreements with the Company. We receive royalties from the licensees as a result. We recognize these royalties as revenues upon receipt of the monthly or quarterly (varies per distribution partner) revenue reports provided by the partner. Revenue from licensing/royalties is recognized after deducting the estimated allowance for returns and price protection. Some license agreements require a royalty advance from the licensee/distributor in which case the original advance is recognized as a liability and royalty revenue is deducted from the advance as earned. Other Revenues Other revenues primarily include Ad game revenue and work-for-hire game related revenue. We derive our advertising game revenue from certain of our partners that offer our games free of charge to consumers in exchange for the consumers being exposed to advertising embedded in our games. In this way, we do not receive revenue for the sale of our games, but rather a percentage of the advertising revenue generated by these player views. This method of generating revenue is essentially the same as traditional radio or television advertising where consumers are allowed to enjoy content for free but are forced to watch (or listen) to advertising before, in between and at the end of the programming content. Additionally, we derive some revenue from work-for-hire projects. Some of our partners occasionally ask us to render work-for-hire services for them such as preparing packaging materials. For example, a retail game and DVD publisher hired us to create several designs for printed packages that were used for games published by the publisher but not developed by us. For this work, we charge a one-time, fixed fee for each package design. The Company recognizes this revenue once all performance obligations have been completed. In addition, persuasive evidence of an arrangement must exist and collection of the related receivable must be probable. The Company recognizes revenue in accordance with current accounting standards when an arrangement exists, delivery has occurred, the price is fixed and determinable, and collectability is probable. Cash and Cash Equivalents For purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents. The Company places its cash and cash equivalents with large commercial banks. The Federal Deposit Insurance Corporation (FDIC) insures these balances, up to $250,000. All of the Companys cash balances at December 31, 2016 and December 31, 2015 were insured. At December 31, 2016 and December 31, 2015 there were no cash equivalents. Allowances for Returns, Price Protection, and Doubtful Accounts Because the majority of the Companys business is derived through online portals (such as Big Fish Games) and wireless online app stores (such as Apple), there is no physical product, other than the downloadable bits of our games that is involved in the customer purchase. In the digital environment, the customer cannot return a digital download product. Therefore, there are no returns. The customer can ask for a refund of a digital product, and if there are any, then they are reconciled or netted out by our distribution partners before we receive the corresponding payments and royalty statements. As such, we do not allow for returns, bad debts or price protection of digital download products. However, the Company derives a small portion of our revenues from sales of physical packaged software for personal computers through distribution partners who sell through traditional retail channels. Product revenue is recognized net of allowances for price protection and returns and various customer discounts. Our distribution partners who sell to retailers may allow returns for our packaged personal computer products; these partners may decide to provide price protection or allow returns for personal computer products after they analyze: (1) inventory remaining in the retail channel, (2) the rate of inventory sell-through in the retail channel, and (3) the remaining inventory on hand of our games. To allow for these returns, price protection and various customer discounts, some of our distribution partners who sell to retailers will hold back a percentage of our revenue. These hold-back amounts, typically a percentage of revenue, are then reconciled on a quarterly basis and detailed on the statements we receive from our distribution partners. As of December 31, 2016 and December 31, 2015, the allowance for doubtful accounts was $0 and $5,600, respectively. Concentrations of Credit Risk, Major Customers and Major Vendors The Companys customers are the end-consumers that purchase its games from the websites where the Company has its games listed for sale. Therefore, the Company does not have any individual customers that represent any more than a fraction of its revenue. However, the Company does have primary distribution partners, which are the owners of the websites where it sells its games. Under the Companys distribution agreements it is not obligated to make, distribute or sell any games. However, for any games the Company does make and wishes to distribute it can list them on one or more of these websites under a revenue sharing arrangement where it shares the revenue from any of its games that sell. The sharing arrangement varies greatly depending on the distributor with the Company generally keeping between 35% and 70% of the revenue and the distributor keeping the remainder of the revenue generated by each sale. At times the Company enters into exclusivity options whereby if a distributor wishes to have an exclusive period carrying the Companys games (normally 30-90 days) it will agree to that in exchange for the distributor marketing the game in their newsletter and other marketing programs. Due to the fact the Company has a number of distribution partners and a variety of different websites where it can sell its games, the Company is not substantially dependent on any of its distribution partners or agreements. In addition to the distribution agreements, the Company currently has licensing agreements with Ohio Art Company and CMG Worldwide, which allow it to develop and distribute games around third party intellectual property in exchange for paying royalty payments. The Company is not substantially dependent on either of those licensing agreements. For the year ended December 31, 2016, the Companys primary distributors that represented 10% or more of its revenues were: Apple 28.78%, Square Enix Ltd. 28.25% and G5 Holdings Limited 18.02%. For the year ended December 31, 2015, the Companys primary distributors that represented 10% or more of its revenues were: Big Fish Games 23.67%, Wired Media 22.74%, Apple 18.08% and S.A.D. 13.51%. At December 31, 2016, the Companys primary distributors and partners that represented 10% or more of its accounts receivable were: Exent 52.38% and Apple 13.48%. At December 31, 2015, the Companys primary distributors and partners that represented 10% or more of its accounts receivable were: Apple 16.93%, Big Fish Games 10.00% and Exent 48.81%. Income Taxes We account for income taxes using ASC Topic 740, Income Taxes. Under ASC Topic 740, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASC Topic 740 includes accounting guidance which clarifies the accounting for the uncertainty in recognizing income taxes in an organization by providing detailed guidance for financial statement recognition, measurement and disclosure involving uncertain tax positions. This guidance requires an uncertain tax position to meet a more-likely-than-not recognition threshold at the effective date to be recognized both upon the adoption of the related guidance and in subsequent periods. The Company has no uncertain tax positions at any of the dates presented. Foreign Currency Translation The Company derives a portion of its revenue from foreign countries, which report to the Company in foreign currency, but pay in U.S. Dollars. Because of the fluctuations between the reporting time and the payment period (up to 60 days), it is necessary to make adjustments to the Companys accounting records. These adjustments are recorded under a Foreign Currency Translation expense account, and shown in the Statement of Operations as a General& Administrative expense. Accounting for Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation and ASC Subtopic 505-50, Equity-Based Payments to Non-Employees ("ASC stock-based compensation guidance"). Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company had no stock-based compensation expense recognized in its statements of operations for the years ended December 31, 2016 and 2015. Fair Value of Financial Instruments The Company adopted FASB ASC 820 on October 1, 2008. Under this FASB, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value. The Company has various financial instruments that must be measured under the new fair value standard including cash and debt. The Company currently does not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis. The Companys financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Companys cash is based on quoted prices and therefore classified as Level 1. Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. Cash, accounts receivable, capitalized production costs, prepaid royalties, prepaid expenses, accounts payable, accrued compensation, accrued royalties, accrued interest, accrued expenses, unearned royalties, notes payable related party and technology payables reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature. The following tables provide a summary of the fair values of assets and liabilities measured on a non-recurring basis at December 31, 2016 and 2015: 2016 Total Level 1 Level 2 Level 3 Gains (Losses) Derivative liabilities $ 1,934,617 $ - $ - $ 1,934,617 $ (616,286 ) 2015 Total Level 1 Level 2 Level 3 Losses (Gains) Derivative liabilities $ 841,677 $ - $ - $ 841,677 $ (106,543 ) The Company believes that the market rate of interest as of December 31, 2016 and 2015 was not materially different to the rate of interest at which the convertible notes payable were issued. Accordingly, the Company believes that the fair value of the convertible notes payable approximated their carrying value at December 31, 2016 and 2015. Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires the Companys management to make judgments, assumptions and estimates that affect the amounts reported in its financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and these differences may be material. Research and Development Costs The Company charges costs related to research & development of products to general and administrative expense as incurred. The types of costs included in research and development expenses include research materials, salaries, contractor fees, and support materials. Intellectual Property Licenses (Prepaid Royalties) Intellectual property license costs represent license fees paid to intellectual property rights holders for use of their trademarks or copyrights in the development of the Companys products. Intellectual property license costs represent license fees paid to intellectual property rights holders for use of their trademarks, copyrights, software, technology, music or other intellectual property or proprietary rights in the development of the Companys products. Depending upon the agreement with the rights holder, the Company may obtain the rights to use acquired intellectual property in multiple products over multiple years, or alternatively, for a single product. Minimum guaranteed royalty payments for intellectual property licenses are initially recorded as an asset (prepaid royalties or prepaid licensing fees), and a current liability, (accrued royalties payable) at the contractual amount upon execution of the contract when no significant performance remains with the licensor. Commencing upon the related products release date, intellectual property licenses costs are amortized to Cost of Sales Licensing based upon the percentage of revenue outlined in the contract with each specific licensor. Generally, the Companys intellectual property licensing contracts call for licensors to be paid a percentage of revenue actually received by the Company, with allowances for minimum guarantees. Sometimes, the terms of the specific licensing contracts allow for the Company to re-capture expenses before licensing out royalties are calculated. Capitalized intellectual property costs for those products that are cancelled or abandoned are charged to product development expense in the period of cancellation. As of December 31, 2016 and 2015, prepaid royalties (or prepaid licensing fees) were $4,430 and $4,507, respectively. Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-4, Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting units goodwill with the carrying amount of that goodwill. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value. An entity should apply the amendments in this update on a prospective basis. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition. That disclosure should be provided in the first annual period and in the interim period within the first annual period when the entity initially adopts the amendments in this update. A public business entity that is an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. In January 2017, the FASB issued ASU No. 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments of this ASU are effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this Update are to be applied prospectively on or after the effective date. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 3 - GOING CONCERN | As shown in the accompanying financial statements, the Company incurred net losses of $2,129,419 and $1,870,677 for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016, the Companys accumulated deficit was $11,113,929. During the years ended December 3l, 2016 and 2015, the Company experienced negative cash flows from operations largely due to its continued investment spending for product development of game titles for smartphones and tablets that are expected to benefit future periods. Those facts, along with our lack of access to a significant bank credit facility, create an uncertainty about the Companys ability to continue as a going concern. Accordingly, the Company is currently evaluating its alternatives to secure financing sufficient to support the operating requirements of its current business plan, as well as continuing to execute its business strategy of distributing game titles to digital distribution outlets, including mobile gaming app stores, and opportunities for new devices such as tablet (mobile internet device) applications, mobile gaming platforms and international licensing opportunities. The Companys ability to continue as a going concern is dependent upon its success in securing sufficient financing and in successfully executing its plans to return to positive cash flows during fiscal year 2017. The Companys financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
Note 4 - ACCRUED EXPENSES | Accrued expenses consisted of the following at December 31: 2016 2015 Accrued vacation $ 66,194 $ 64,461 Accrued royalties 410,533 408,134 Technology payable 18,000 18,000 Other 746 1,417 $ 495,473 $ 492,012 Accrued royalties consist of amounts owed to other parties with whom the Company has revenue-sharing agreements or from whom it licenses certain trademarks or copyrights. Unearned royalties consist of royalties received from licensees, which have not yet been earned. Unearned royalties were $127,201 and $195,033 at December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015, the Company had technology payable of $18,000 resulting from a technology transfer agreement with an unrelated party entered into in June 2011, payable in 24 installments of $1,500 without interest. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 5 - DEBT | Notes Payable On February 1, 2016, the Company entered into a Game Marketing Agreement with an investor whereby the investor agreed, at its option, to loan up to $250,000 (the Marketing Fund) to the Company to exclusively fund user acquisition efforts for the game Kitty Pawp (the Game). The investor will receive 50% of Net Receipts (as defined in the agreement) from the Game until the Marketing Fund is fully recouped. Once the Marketing Fund is recouped, the investor will receive 50% of Net Receipts from the Game until the investor receives a 50% return on the Marketing Funds advanced. The Company has recorded Marketing Fund advances as notes payable in the accompanying condensed balance sheets. Upon receiving a Marketing Fund advance, the Company accrues the 50% return as interest expense and includes the obligation in accrued interest payable in the accompanying condensed balance sheets. As of December 31, 2016, total advances recorded as notes payable were $58,096 and accrued interest payable included a total of $22,046 of the 50% guaranteed return, net of repayments. Convertible Notes Payable Related Party Convertible notes payable, related party consisted of the following at December 31: 2016 2015 Convertible note payable to the Holland Family Trust, maturing on December 31, 2017, with interest at 10% $ 222,572 $ 222,572 Convertible note payable to Craig Holland, maturing on December 31, 2017, with interest at 10% 813,602 813,602 Convertible note payable to Craig Holland, maturing on December 31, 2017, with interest at 10% 186,450 186,450 Convertible note payable to Mick Donahoo, maturing on December 31, 2017, with interest at 10% 186,450 186,450 Convertible note payable to Craig Holland, maturing on December 31, 2017, with interest at 10% 6,925 6,925 Convertible note payable to Mick Donahoo, maturing on December 31, 2017, with interest at 10% 31,042 31,042 Total $ 1,447,041 $ 1,447,041 The Holland Family Trust Convertible Note is convertible into Company common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the date of conversion. Fixed Conversion Price shall mean $0.00005. The Company evaluated the Holland Family Trust Convertible Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The note payable is convertible into common stock at the discretion of the Holland Family Trust. Furthermore, at any time, the Company may pay the balance of the unconverted note payable in cash. As of September 30, 2014, $72,107 of accrued interest was added to the note principal and $813,602 of the note was transferred to Craig Holland. A new convertible note for $222,572 was issued to the Holland Family Trust with the same terms as the previous note, with the exception of the maturity date, which was extended to December 31, 2017. As of December 31, 2016 and 2015, accrued interest related to the Holland Family Trust Convertible Note was $50,124 and $27,867, respectively. On September 30, 2014, $813,602 principal balance (including interest) of the Holland Family Trust Convertible Note was transferred to Craig Holland (the Holland Transferred Convertible Note). The Holland Transferred Convertible Note retains the same terms as the original Holland Family Trust Convertible Note with the exception of the maturity date, which was extended to December 31, 2017. As of December 31, 2016 and 2015, accrued interest related to the Holland Transferred Convertible Note was $183,228 and $101,867, respectively. On December 31, 2013, the Company converted $186,450 of accrued salaries due to Craig Holland into a convertible note (the Holland Accrued Salary Note) and converted $186,450 of accrued salaries due to Mick Donahoo into a convertible note (the Donahoo Accrued Salary Note). The Holland Accrued Salary Note and the Donahoo Accrued Salary Note are convertible into Company common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. The maturity date of the note has been extended to December 31, 2017. The Company evaluated the Holland Accrued Salary Note and the Donahoo Accrued Salary Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, the conversion feature does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. As of December 31, 2016 and December 31, 2015, there was accrued interest related to each of these notes of $55,935 and $37,290, respectively. On December 31, 2013, the Company converted a note payable to Mick Donahoo of $55,250 and accrued interest of $15,399 into a new convertible related party note in the amount of $70,649 (the Mick Donahoo Convertible Note). On December 31, 2013, the Company converted a note payable to Craig Holland of $35,100 and accrued interest of $11,432 into a new convertible related party note in the amount of $46,532 (the Craig Holland Convertible Note). The Mick Donahoo Convertible Note and the Craig Holland Convertible Note are convertible into Company common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. The maturity date of the notes have been extended to December 31, 2017. The Company evaluated the Mick Donahoo Convertible Note and the Craig Holland Convertible Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The agreements modified the debt to make it convertible into common stock of the Company. As of December 31, 2016 and December 31, 2015, there was accrued interest payable related to these notes totaling of $8,943 and $5,146, respectively. On October 23, 2014, Craig Holland converted $35,000 principal and $2,836 accrued interest into 39,829,849 shares of the Companys common stock. On October 23, 2014, Mick Donahoo converted $35,000 principal and $2,836 accrued interest into 39,829,849 shares of the Companys common stock. On October 8, 2015, Craig Holland converted $4,607 principal and $2,028 accrued interest into 12,637,860 shares of the Companys common stock. On October 8, 2015, Mick Donahoo converted $4,607 principal and $2,028 accrued interest into 12,637,860 shares of the Companys common stock. Effective October 15, 2015, we entered into an Amendment to Convertible Promissory Note with each of Craig Holland and Mick Donahoo with respect to the Craig Holland Convertible Note and the Mick Donahoo Convertible Note. The parties agreed to modify the terms of the notes such that in the event the lender issues a valid conversion notice and the conversion notice results in a conversion price less than the then-par value of the Companys common stock, the conversion will be effected at par value with additional principal amounts added to the note equal to the value of the common shares that were not able to be issued due to the conversion price being less than the par value of the Companys common stock. As the amendment did not alter the shares received by converting the notes, no additional value was recorded by the Company as a result of these amendments. Total accrued interest payable for the related party convertible notes was $354,165 and $209,461 as of December 31, 2016 and 2015, respectively. Convertible Notes Payable Non-Related Party Convertible notes payable non-related party consisted of the following at December 31: 2016 2015 Convertible note payable to Robert Cowdell, maturing on December 31, 2017, with interest at 10% $ 61,443 $ 61,443 Tranche #2 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 14,966 31,126 Tranche #3 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 50,000 50,000 Tranche #4 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 50,000 50,000 Tranche #5 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 50,000 50,000 Tranche #6 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 50,000 50,000 Tranche #1 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 33,727 50,000 Tranche #2 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #3 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #4 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #5 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #6 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 100,000 100,000 Tranche #7 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #8 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 70,000 70,000 Tranche #9 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 30,000 30,000 Tranche #1 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 30,000 30,000 Tranche #2 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 40,000 40,000 Tranche #3 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 110,000 110,000 Tranche #4 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 88,000 88,000 Tranche #5 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 90,000 90,000 Tranche #6 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 90,000 90,000 Tranche #1 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 65,000 65,000 Tranche #2 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 65,000 65,000 Tranche #3 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 60,000 60,000 Tranche #4 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 50,000 50,000 Tranche #5 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 50,000 50,000 Tranche #6 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 55,000 55,000 Tranche #7 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 25,000 - Tranche #8 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 55,000 - Tranche #9 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 50,000 - Tranche #1 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 60,000 - Tranche #2 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 45,000 - Tranche #3 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 55,000 - Tranche #4 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 27,000 - Tranche #5 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 10,000 - Tranche #6 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 48,000 - Tranche #7 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 24,000 - Tranche #8 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 50,000 - Tranche #9 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 50,000 - Tranche #10 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 50,000 - Tranche #11 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 45,000 - Tranche #12 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 45,000 - Total 2,192,136 1,585,569 Less discount (239,402 ) (180,208 ) Net 1,952,734 1,405,361 Less current portion 1,952,734 718,923 Long-term portion $ - $ 686,438 On December 31, 2013, the Company converted $55,429 of convertible debt and $6,014 in accrued interest due to Robert Cowdell (the Convertible Cowdell Note) into a convertible note. The Convertible Cowdell Note is convertible into Company common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. The maturity date of the note has been extended to December 31, 2017. The Convertible Cowdell Note had accrued interest of $18,433 and $12,289 as of December 31, 2016 and December 31, 2015, respectively. The Company evaluated the Convertible Cowdell Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability as the Company has obtained authorization from a majority of shareholders such that should conversion occur at the Fixed Conversion Price the appropriate number of shares will be available or issuable for settlement to occur. The agreement modified the debt to make it convertible into common stock of the Company. The $500,000 principal amount convertible note dated December 20, 2013 to an accredited investor (Accredited Investor #1) with an outstanding balance of $214,966 at December 31, 2016 was funded in $50,000 tranches in January, February, March, April and May 2014. The note is convertible into Company common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. The note also includes conversion price reset features that are triggered when the Company issues certain new equity instruments; as a result, this feature caused the Company to consider this feature a derivative liability. The maturity date of the note initially was one year from the date of funding, but was subsequently extended and changed to be such that the note amount is payable upon demand (with ten days written notice) by the accredited investor, but in no event later than sixty months from the effective date, which means the current maturity date is December 20, 2018. The $500,000 principal amount convertible note dated June 25, 2014 to an accredited investor (Accredited Investor #2) with an outstanding balance of $483,727 at December 31, 2016 was funded in $50,000 tranches in June, July, August, September, October, and December 2014, and tranches of $100,000 in November 2014, $70,000 in January 2015, and $30,000 in February 2015. The note is convertible into Company common stock at the greater of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. The note also includes conversion price reset features that are triggered when the Company issues certain new equity instruments; as a result, this feature caused the Company to consider this feature a derivative liability. The maturity date of the note initially was one year from the date of funding, with the maturity date subsequently extended to June 25, 2017. The $500,000 principal amount convertible note dated February 11, 2015 to Accredited Investor #2 with an outstanding balance of $448,000 at December 31, 2016 was funded by tranches of $30,000 in February 2015, $40,000 in February 2015, $110,000 in March 2015, $88,000 in April 2015, $90,000 in May and June 2015. The note is convertible into Company common stock at the lesser of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three (3) lowest trade prices on three (3) separate trading days of Common Stock recorded after the original Effective Date of the note. Fixed Conversion Price shall mean $0.003. The note also includes conversion price reset features that are triggered when the Company issues certain new equity instruments; as a result, this feature caused the Company to consider this feature a derivative liability. The maturity date of the note initially was nine months from the date of funding, but was subsequently extended and changed to be such that the note amount is payable upon demand (with ten days written notice) by the accredited investor, but in no event later than sixty months from the effective date, which means the current maturity date is February 11, 2020. The $500,000 principal amount convertible note dated July 28, 2015 to Accredited Investor #2 with an outstanding balance of $475,000 at December 31, 2016 was funded by tranches of $65,000 in July and August 2015, $60,000 in September 2015, $50,000 in October and November 2015, $55,000 in December 2015, $25,000 in January 2016, $55,000 in February 2016, and $50,000 in March 2016. The note is convertible into Company common stock at the lesser of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three (3) lowest trade prices on three (3) separate trading days of Common Stock recorded after the original Effective Date of the note. Fixed Conversion Price shall mean $0.003. The note also includes conversion price reset features that are triggered when the Company issues certain new equity instruments; as a result, this feature caused the Company to consider this feature a derivative liability. The maturity date of the note initially was nine months from the date of funding, but was subsequently extended and changed to be such that the note amount is payable upon demand (with ten days written notice) by the accredited investor, but in no event later than sixty months from the effective date, which means the current maturity date is July 28, 2020. The $600,000 principal amount convertible note, dated April 7, 2016 and amended on January 18, 2017, to Accredited Investor #2 with an outstanding balance of $509 at December 31, 2016 was funded by tranches of $60,000 in April 2016, $45,000 in May 2016, $55,000, $27,000 and $10,000 in June 2016, $48,000 and $24,000 in July 2016, $50,000 in August 2016, $50,000 in September 2016, $50,000 in October 2016 and $45,000 in November and December 2016. The note is convertible into Company common stock at the lesser of (i) the Variable Conversion Price and (ii) the Fixed Conversion Price. The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three (3) lowest trade prices on three (3) separate trading days of Common Stock recorded after the original Effective Date of the note. Fixed Conversion Price shall mean $0.003. The note also includes conversion price reset features that are triggered when the Company issues certain new equity instruments; as a result, this feature caused the Company to consider this feature a derivative liability. The maturity date of the note was extended and changed to be such that the note amount is payable upon demand (with ten days written notice) by the accredited investor, but in no event later than sixty months from the effective date, which means the current maturity date is April 7, 2021. The January 2014 derivative was valued as of January 6, 2014 at $44,493, of which all was recorded as a debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The January 2014 note had accrued interest of $4,025 and $5,814 as of December 31, 2016 and 2015, respectively. The February 2014 derivative was valued as of February 18, 2014 at $44,556, which was recorded as a debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The February 2014 note had accrued interest of $14,329 and $9,329 as of December 31, 2016 and 2015, respectively. The March 2014 derivative was valued as of March 26, 2014 at $77,884, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The March 2014 note had accrued interest of $13,836 and $8,836 as of December 31, 2016 and 2015, respectively. The April 2014 derivative was valued as of April 25, 2014 at $90,605, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The April 2014 note had accrued interest of $13,425 and $8,425 as of December 31, 2016 and 2015, respectively. The May 2014 derivative was valued as of May 21, 2014 at $95,029, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The May 2014 note had accrued interest of $13,068 and $8,068 as of December 31, 2016 and 2015, respectively. The June 2014 derivative was valued as of June 25, 2014 at $83,184, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The June 2014 note had accrued interest of $8,470 and $7,575 as of December 31, 2016 and 2015, respectively. The July 2014 derivative was valued as of July 15, 2014 at $73,999, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The July 2014 note had accrued interest of $12,301 and $7,301 as of December 31, 2016 and 2015, respectively. The August 2014 derivative was valued as of August 19, 2014 at $64,104, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The August 2014 note had accrued interest of $11,836 and $6,836 as of December 31, 2016 and 2015, respectively. The September 2014 derivative was valued as of September 17, 2014 at $62,915, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The September 2014 note had accrued interest of $11,438 and $6,438 as of December 31, 2016 and 2015, respectively. The October 2014 derivative was valued as of October 13, 2014 at $63,347, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The October 2014 note had accrued interest of $11,068 and $6,069 as of December 31, 2016 and 2015, respectively. The November 2014 derivative was valued as of November 7, 2014 at $99,757, which was recorded as a debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The November 2014 note had accrued interest of $21,644 and $11,644 as of December 31, 2016 and 2015, respectively. The December 2014 derivative was valued as of December 17, 2014 at $58,456, of which $50,000 was recorded as a debt discount with the remaining amount that exceeded the face value of the note expensed. The debt discount was fully amortized to interest expense at December 31, 2016. The December 2014 note had accrued interest of $10,178 and $5,178 as of December 31, 2016 and 2015, respectively. The January 2015 derivative was valued as of January 14, 2015 at $29,360, which was recorded as a debt discount. During the year ended December 31, 2016, $1,126 was amortized from the debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The January 2015 note had accrued interest of $13,751 and $6,751 as of December 31, 2016 and 2015, respectively. The first February 2015 derivative was valued as of February 10, 2015 at $23,984, which was recorded as a debt discount. During the year ended December 31, 2016, $2,694 was amortized from the debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The first February 2015 note had accrued interest of $5,671 and $2,671 as of December 31, 2016 and 2015, respectively. The second February 2015 derivative was valued as of February 11, 2015 at $18,003, which was recorded as a debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The second February 2015 note had accrued interest of $5,669 and $2,663 as of December 31, 2016 and 2015, respectively. The third February 2015 derivative was valued as of February 25, 2015 at $19,494, which was recorded as a debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The third February 2015 note had accrued interest of $11,096 and $5,096 as of December 31, 2016 and 2015, respectively. The March 2015 derivative was valued as of March 10, 2015 at $31,885, which was recorded as a debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The March 2015 note had accrued interest of $19,951 and $8,951 as of December 31, 2016 and 2015, respectively. The April 2015 derivative was valued as of April 17, 2015 at $31,397, which was recorded as a debt discount. During the year ended December 31, 2016, $1,941 was amortized from the debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The April 2015 note had accrued interest of $15,044 and $6,244 as of December 31, 2016 and 2015, respectively. The May 2015 derivative was valued as of May 22, 2015 at $36,550, which was recorded as a debt discount. During the year ended December 31, 2016, $7,019 was amortized from the debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The May 2015 note had accrued interest of $14,523 and $5,523 as of December 31, 2016 and 2015, respectively. The June 2015 derivative was valued as of June 23, 2015 at $41,878, which was recorded as a debt discount. During the year ended December 31, 2016, $12,686 was amortized from the debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The June 2015 note had accrued interest of $13,734 and $4,734 as of December 31, 2016 and 2015, respectively. The July 2015 derivative was valued as of July 28, 2015 at $38,600, which was recorded as a debt discount. During the year ended December 31, 2016, $16,703 was amortized from the debt discount. The debt discount was fully amortized to interest expense at December 31, 2016. The July 2015 note had accrued interest of $9,296 and $2,796 as of December 31, 2016 and 2015, respectively. The August 2015 derivative was valued as of August 21, 2015 at $37,269, which was recorded as a debt discount. During the year ended Decembe |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS | As discussed in Note 5, the Company issued convertible notes payable to non-related parties that contain anti-dilutive, or down round, price protection. Pursuant to ASC 815-15 Embedded Derivatives and ASC 815-40 Contracts in Entitys Own Equity, the Company recorded a derivative liability for the price protection provisions issued within the convertible debt transactions. The fair values of the Companys derivative liabilities are estimated at the issuance date and are revalued at each subsequent reporting date using a multinomial lattice model simulation discussed below. At December 31, 2016 and 2015, the Company recorded current derivative liabilities of $1,934,617 and $841,677, respectively. The net change in fair value of the derivative liabilities resulted in losses of $616,286 and $106,543 for the years ended December 31, 2016 and 2015, respectively, which are reported as other expense in the statements of operations. The following table presents details of the Companys derivative liabilities for the years ended December 31, 2016 and 2015: Balance, December 31, 2014 $ 438,374 Increases in derivative value due to new issuances of notes 455,141 Derivative adjustment due to debt conversion (158,381 ) Change in fair value of derivative liabilities 106,543 Balance, December 31, 2015 841,677 Increases in derivative value due to new issuances of notes 552,858 Derivative adjustment due to debt conversion (76,204 ) Change in fair value of derivative liabilities 616,286 Balance, December 31, 2016 $ 1,934,617 The Company calculated the fair value of the compound embedded derivatives using a multinomial lattice model simulation. The model is based on a probability weighted discounted cash flow model using projections of the various potential outcomes. Key inputs and assumptions used in valuing the Companys derivative liabilities are as follows for issuances of notes: · Stock prices on all measurement dates were based on the fair market value · Down round protection is based on the subsequent issuance of common stock at prices · The probability of future financing was estimated at 100% · Computed volatility ranging from 271% to 336% |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 7 - STOCKHOLDERS' DEFICIT | The Company is authorized to issue up to 2,000,000,000 shares of its $0.00001 par value common stock, and up to 10,000,000 shares of its $.001 par value preferred stock. As of December 31, 2016 and 2015, the Company had common stock payable of $16,800 resulting from a technology transfer agreement with an unrelated party that obligated the Company to issue a total of 96,000 shares of its common stock, payable in 8 quarterly installments of 12,000 shares. During the year ended December 31, 2016, the Company issued a total of 367,994,660 shares of its common stock to accredited investors in conversion of $32,433 principal and $7,697 accrued interest payable at conversion prices ranging from $0.00005 to $0.00045 per share and settled $76,204 of derivative liabilities. As a result of the debt conversions and derivative settlement, common stock was increased by $3,680 and additional paid-in capital was increased by $112,654. During the year ended December 31, 2015, the Company issued a total of 70,648,155 shares of its common stock to an accredited investor in conversion of $64,174 principal and $8,778 accrued interest payable at conversion prices ranging from $0.00088 to $0.00135 per share, and settled $158,381 of derivative liabilities. As a result of the debt conversions and derivative settlement, common stock was increased by $706 and additional paid-in capital was increased by $230,627. On October 8, 2015, Craig Holland converted $4,607 principal and $2,028 accrued interest into 12,637,860 shares of the Companys common stock. On October 8, 2015, Mick Donahoo converted $4,607 principal and $2,028 accrued interest into 12,637,860 shares of the Companys common stock. As a result of the related party debt conversions, common stock was increased by $253 and additional paid-in capital was increased by $13,017. 2006 Stock Option Plan The Companys 2006 Stock Option Plan adopted by our Board of Directors in March of 2006 terminated in the year ended December 31, 2016. As of December 31, 2016, there were 560,000 stock options outstanding under the 2006 Stock Option Plan. The Company did not grant any stock options or warrants during the years ended December 31, 2016 and 2015. The Company did not record any stock-based compensation expense during the years ended December 31, 2016 and 2015. A summary of the status of the options and warrants issued by the Company as of December 31, 2016, and changes during the years ended December 31, 2016 and 2015 is presented below: Weighted Average Shares Exercise Price Outstanding, December 31, 2014 560,000 $ 0.10 Granted - - Canceled / Expired - - Exercised - - Outstanding, December 31, 2015 560,000 $ 0.10 Granted - - Canceled / Expired - - Exercised - - Outstanding, December 31, 2016 560,000 $ 0.10 The outstanding options expire on various dates beginning May 2020 through August 2020. |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 8 - LOSS PER COMMON SHARE | The computation of basic earnings per common share is based on the weighted average number of shares outstanding during the period. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the weighted average common stock equivalents which would arise from the exercise of stock options, warrants and rights outstanding using the treasury stock method and the average market price per share during the period. For the years ended December 31, 2016 and 2015, the diluted weighted average number of shares is the same as the basic weighted average number of shares as the conversion of debt, options and warrants would be anti-dilutive. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 9 - RELATED PARTY TRANSACTIONS | The Company had convertible notes payable to related parties totaling $1,447,041 as of December 31, 2016 and 2015. See Note 5 for detailed disclosure of this related party debt, including interest rates, terms of conversion and other repayment terms. Accrued interest payable to related parties was $354,165 and $209,461 as of December 31, 2016 and 2015, respectively. On October 8, 2015, Craig Holland converted $4,607 principal and $2,028 accrued interest into 12,637,860 shares of the Companys common stock at a conversion price of $0.000525 per share. On October 8, 2015, Mick Donahoo converted $4,607 principal and $2,028 accrued interest into 12,637,860 shares of the Companys common stock at a conversion price of $0.000525 per share. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 10 - COMMITMENTS AND CONTINGENCIES | Leases We the lease our office facilities on a month-to-month lease with either party having the option to terminate with 30 days notice. The Company or Company employees or contractors own all of the computer and office equipment that is used in the course of business. We do not have any lease agreements for any office equipment. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 11 - INCOME TAXES | The Company accounts for income taxes in accordance with standards of disclosure propounded by the FASB, and any related interpretations of those standards sanctioned by the FASB. Accordingly, deferred tax assets and liabilities are determined based on differences between the financial statement and tax bases of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Due to the uncertainty as to the utilization of net operating loss carry forwards, a valuation allowance has been made to the extent of any tax benefit that net operating losses may generate. The provision for income taxes consists primarily of state minimum franchise taxes and totaled $2,282 and $400 for the years ended December 31, 2016 and 2015, respectively. For Federal and California income tax purposes, the Company has net operating loss carry forwards that expire through 2030. The net operating loss as of December 31, 2016 was $3,895,338 and $2,845,460, respectively. No tax benefit has been reported in the financial statements because after evaluating our own potential tax uncertainties, the Company has determined that there are no material uncertain tax positions that have a greater than 50% likelihood of reversal if the Company were to be audited. The deferred tax asset and the valuation allowance consist of the following at December 31: 2016 2015 Deferred tax asset $ 1,324,918 $ 967,456 Valuation allowance (1,324,918 ) (967,456 ) Net $ - $ - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
NOTE 12 - SUBSEQUENT EVENTS | On January 11, 2017, we received additional proceeds of $45,000 from the April 7, 2016 convertible promissory note. On January 18, 2017, we entered into Amendment #1 to the April 7, 2016 convertible promissory note, increasing the total principal amount to $600,000. On February 8, 2017, we entered into a convertible promissory note (the "Note") with an accredited investor (the "Accredited Investor") under which the Accredited Investor agreed to loan us up to $500,000. The Note bears interest at 10% per annum and matures on February 8, 2018. Under the terms of the Note, the Accredited Investor agreed to loan us $55,000 upon execution of the Note and can loan us the additional amounts up to $500,000 at any time in their sole discretion. The Accredited Investor has the right, at any time after February 8, 2017, at its election, to convert all or part of the amounts due to it under the Note into shares of our common stock. The conversion price shall be the lesser of (a) $0.0003 per share of our common stock or (b) Fifty Percent (50%) of the average of the three (3) lowest trade prices on three (3) separate trading days of our common stock recorded after February 8, 2017, or (c) the lowest effective price per share granted to any person or entity after February 8, 2017 to acquire our common stock or adjust, whether by operation of purchase price adjustment, settlement agreements, exchange agreements, reset provision, floating conversion or otherwise, any outstanding warrant, option or other right to acquire our common stock or outstanding our common stock equivalents, excluding any lower price per share offered to any of our officers and directors. However, the Accredited Investor may not convert the amounts due under the Note into shares of our common stock if such conversion would cause it to own more than 4.99% of our then-outstanding common stock. The Note also contains piggyback registration rights. In the event we default under the terms of the Note, we immediately owe 150% of the principal amount then due under the Note. On March 9, 2017, we received additional proceeds of $60,000 from the February 8, 2017 convertible promissory note. Subsequent to December 31, 2016, we issued a total of 134,775,113 shares of our common stock in the conversion of convertible notes payable principal totaling $5,320 and accrued interest payable totaling $1,419. |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Policies | |
Revenue Recognition | The Companys revenues are derived primarily by licensing software products in the form of online and downloadable games for PC, Mac and smartphone platforms. The Company distributes its products primarily through online games portals and smartphone device manufacturers (distribution partners), which market the games to end-users. The nature of our business is such that we sell games basically through four distribution outlets web portals, brick and mortar retail distributors, mobile distributors and publishers, and our own web portal, www.freezetag.com. |
Product Sales (web and mobile revenues) | The Company recognizes revenue from the sale of our products upon the transfer of title and risk of loss to its customers, and once any performance obligations have been completed. Revenue from product sales is recognized after deducting the estimated allowance for returns and price protection. |
Licensing Revenues (retail revenues- royalties) | Third-party licensees distribute games under license agreements with the Company. We receive royalties from the licensees as a result. We recognize these royalties as revenues upon receipt of the monthly or quarterly (varies per distribution partner) revenue reports provided by the partner. Revenue from licensing/royalties is recognized after deducting the estimated allowance for returns and price protection. Some license agreements require a royalty advance from the licensee/distributor in which case the original advance is recognized as a liability and royalty revenue is deducted from the advance as earned. |
Other Revenues | Other revenues primarily include Ad game revenue and work-for-hire game related revenue. We derive our advertising game revenue from certain of our partners that offer our games free of charge to consumers in exchange for the consumers being exposed to advertising embedded in our games. In this way, we do not receive revenue for the sale of our games, but rather a percentage of the advertising revenue generated by these player views. This method of generating revenue is essentially the same as traditional radio or television advertising where consumers are allowed to enjoy content for free but are forced to watch (or listen) to advertising before, in between and at the end of the programming content. Additionally, we derive some revenue from work-for-hire projects. Some of our partners occasionally ask us to render work-for-hire services for them such as preparing packaging materials. For example, a retail game and DVD publisher hired us to create several designs for printed packages that were used for games published by the publisher but not developed by us. For this work, we charge a one-time, fixed fee for each package design. The Company recognizes this revenue once all performance obligations have been completed. In addition, persuasive evidence of an arrangement must exist and collection of the related receivable must be probable. The Company recognizes revenue in accordance with current accounting standards when an arrangement exists, delivery has occurred, the price is fixed and determinable, and collectability is probable. |
Cash and Cash Equivalents | For purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents. The Company places its cash and cash equivalents with large commercial banks. The Federal Deposit Insurance Corporation (FDIC) insures these balances, up to $250,000. All of the Companys cash balances at December 31, 2016 and December 31, 2015 were insured. At December 31, 2016 and December 31, 2015 there were no cash equivalents. |
Allowances for Returns, Price Protection, and Doubtful Accounts | Because the majority of the Companys business is derived through online portals (such as Big Fish Games) and wireless online app stores (such as Apple), there is no physical product, other than the downloadable bits of our games that is involved in the customer purchase. In the digital environment, the customer cannot return a digital download product. Therefore, there are no returns. The customer can ask for a refund of a digital product, and if there are any, then they are reconciled or netted out by our distribution partners before we receive the corresponding payments and royalty statements. As such, we do not allow for returns, bad debts or price protection of digital download products. However, the Company derives a small portion of our revenues from sales of physical packaged software for personal computers through distribution partners who sell through traditional retail channels. Product revenue is recognized net of allowances for price protection and returns and various customer discounts. Our distribution partners who sell to retailers may allow returns for our packaged personal computer products; these partners may decide to provide price protection or allow returns for personal computer products after they analyze: (1) inventory remaining in the retail channel, (2) the rate of inventory sell-through in the retail channel, and (3) the remaining inventory on hand of our games. To allow for these returns, price protection and various customer discounts, some of our distribution partners who sell to retailers will hold back a percentage of our revenue. These hold-back amounts, typically a percentage of revenue, are then reconciled on a quarterly basis and detailed on the statements we receive from our distribution partners. As of December 31, 2016 and December 31, 2015, the allowance for doubtful accounts was $0 and $5,600, respectively. |
Concentrations of Credit Risk, Major Customers and Major Vendors | The Companys customers are the end-consumers that purchase its games from the websites where the Company has its games listed for sale. Therefore, the Company does not have any individual customers that represent any more than a fraction of its revenue. However, the Company does have primary distribution partners, which are the owners of the websites where it sells its games. Under the Companys distribution agreements it is not obligated to make, distribute or sell any games. However, for any games the Company does make and wishes to distribute it can list them on one or more of these websites under a revenue sharing arrangement where it shares the revenue from any of its games that sell. The sharing arrangement varies greatly depending on the distributor with the Company generally keeping between 35% and 70% of the revenue and the distributor keeping the remainder of the revenue generated by each sale. At times the Company enters into exclusivity options whereby if a distributor wishes to have an exclusive period carrying the Companys games (normally 30-90 days) it will agree to that in exchange for the distributor marketing the game in their newsletter and other marketing programs. Due to the fact the Company has a number of distribution partners and a variety of different websites where it can sell its games, the Company is not substantially dependent on any of its distribution partners or agreements. In addition to the distribution agreements, the Company currently has licensing agreements with Ohio Art Company and CMG Worldwide, which allow it to develop and distribute games around third party intellectual property in exchange for paying royalty payments. The Company is not substantially dependent on either of those licensing agreements. For the year ended December 31, 2016, the Companys primary distributors that represented 10% or more of its revenues were: Apple 28.78%, Square Enix Ltd. 28.25% and G5 Holdings Limited 18.02%. For the year ended December 31, 2015, the Companys primary distributors that represented 10% or more of its revenues were: Big Fish Games 23.67%, Wired Media 22.74%, Apple 18.08% and S.A.D. 13.51%. At December 31, 2016, the Companys primary distributors and partners that represented 10% or more of its accounts receivable were: Exent 52.38% and Apple 13.48%. At December 31, 2015, the Companys primary distributors and partners that represented 10% or more of its accounts receivable were: Apple 16.93%, Big Fish Games 10.00% and Exent 48.81%. |
Income Taxes | We account for income taxes using ASC Topic 740, Income Taxes. Under ASC Topic 740, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASC Topic 740 includes accounting guidance which clarifies the accounting for the uncertainty in recognizing income taxes in an organization by providing detailed guidance for financial statement recognition, measurement and disclosure involving uncertain tax positions. This guidance requires an uncertain tax position to meet a more-likely-than-not recognition threshold at the effective date to be recognized both upon the adoption of the related guidance and in subsequent periods. The Company has no uncertain tax positions at any of the dates presented. |
Foreign Currency Translation | The Company derives a portion of its revenue from foreign countries, which report to the Company in foreign currency, but pay in U.S. Dollars. Because of the fluctuations between the reporting time and the payment period (up to 60 days), it is necessary to make adjustments to the Companys accounting records. These adjustments are recorded under a Foreign Currency Translation expense account, and shown in the Statement of Operations as a General& Administrative expense. |
Accounting for Stock-Based Compensation | The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation and ASC Subtopic 505-50, Equity-Based Payments to Non-Employees ("ASC stock-based compensation guidance"). Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company had no stock-based compensation expense recognized in its statements of operations for the years ended December 31, 2016 and 2015. |
Fair Value of Financial Instruments | The Company adopted FASB ASC 820 on October 1, 2008. Under this FASB, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value. The Company has various financial instruments that must be measured under the new fair value standard including cash and debt. The Company currently does not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis. The Companys financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Companys cash is based on quoted prices and therefore classified as Level 1. Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. Cash, accounts receivable, capitalized production costs, prepaid royalties, prepaid expenses, accounts payable, accrued compensation, accrued royalties, accrued interest, accrued expenses, unearned royalties, notes payable related party and technology payables reported on the balance sheet are estimated by management to approximate fair market value due to their short term nature. The following tables provide a summary of the fair values of assets and liabilities measured on a non-recurring basis at December 31, 2016 and 2015: 2016 Total Level 1 Level 2 Level 3 Gains (Losses) Derivative liabilities $ 1,934,617 $ - $ - $ 1,934,617 $ (616,286 ) 2015 Total Level 1 Level 2 Level 3 Losses (Gains) Derivative liabilities $ 841,677 $ - $ - $ 841,677 $ (106,543 ) The Company believes that the market rate of interest as of December 31, 2016 and 2015 was not materially different to the rate of interest at which the convertible notes payable were issued. Accordingly, the Company believes that the fair value of the convertible notes payable approximated their carrying value at December 31, 2016 and 2015. |
Use of Estimates | The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires the Companys management to make judgments, assumptions and estimates that affect the amounts reported in its financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and these differences may be material. |
Research and Development Costs | The Company charges costs related to research & development of products to general and administrative expense as incurred. The types of costs included in research and development expenses include research materials, salaries, contractor fees, and support materials. |
Intellectual Property Licenses (Prepaid Royalties) | Intellectual property license costs represent license fees paid to intellectual property rights holders for use of their trademarks or copyrights in the development of the Companys products. Intellectual property license costs represent license fees paid to intellectual property rights holders for use of their trademarks, copyrights, software, technology, music or other intellectual property or proprietary rights in the development of the Companys products. Depending upon the agreement with the rights holder, the Company may obtain the rights to use acquired intellectual property in multiple products over multiple years, or alternatively, for a single product. Minimum guaranteed royalty payments for intellectual property licenses are initially recorded as an asset (prepaid royalties or prepaid licensing fees), and a current liability, (accrued royalties payable) at the contractual amount upon execution of the contract when no significant performance remains with the licensor. Commencing upon the related products release date, intellectual property licenses costs are amortized to Cost of Sales Licensing based upon the percentage of revenue outlined in the contract with each specific licensor. Generally, the Companys intellectual property licensing contracts call for licensors to be paid a percentage of revenue actually received by the Company, with allowances for minimum guarantees. Sometimes, the terms of the specific licensing contracts allow for the Company to re-capture expenses before licensing out royalties are calculated. Capitalized intellectual property costs for those products that are cancelled or abandoned are charged to product development expense in the period of cancellation. As of December 31, 2016 and 2015, prepaid royalties (or prepaid licensing fees) were $4,430 and $4,507, respectively. |
Recent Accounting Pronouncements | In January 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-4, Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting units goodwill with the carrying amount of that goodwill. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value. An entity should apply the amendments in this update on a prospective basis. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition. That disclosure should be provided in the first annual period and in the interim period within the first annual period when the entity initially adopts the amendments in this update. A public business entity that is an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. In January 2017, the FASB issued ASU No. 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments of this ASU are effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this Update are to be applied prospectively on or after the effective date. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Fair Value of Financial Instruments | 2016 Total Level 1 Level 2 Level 3 Gains (Losses) Derivative liabilities $ 1,934,617 $ - $ - $ 1,934,617 $ (616,286 ) 2015 Total Level 1 Level 2 Level 3 Losses (Gains) Derivative liabilities $ 841,677 $ - $ - $ 841,677 $ (106,543 ) |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses Tables | |
Accrued Expenses | 2016 2015 Accrued vacation $ 66,194 $ 64,461 Accrued royalties 410,533 408,134 Technology payable 18,000 18,000 Other 746 1,417 $ 495,473 $ 492,012 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Tables | |
Convertible notes payable related party | Convertible notes payable, related party consisted of the following at December 31: 2016 2015 Convertible note payable to the Holland Family Trust, maturing on December 31, 2017, with interest at 10% $ 222,572 $ 222,572 Convertible note payable to Craig Holland, maturing on December 31, 2017, with interest at 10% 813,602 813,602 Convertible note payable to Craig Holland, maturing on December 31, 2017, with interest at 10% 186,450 186,450 Convertible note payable to Mick Donahoo, maturing on December 31, 2017, with interest at 10% 186,450 186,450 Convertible note payable to Craig Holland, maturing on December 31, 2017, with interest at 10% 6,925 6,925 Convertible note payable to Mick Donahoo, maturing on December 31, 2017, with interest at 10% 31,042 31,042 Total $ 1,447,041 $ 1,447,041 |
Convertible notes payable non - related party | Convertible notes payable non-related party consisted of the following at December 31: 2016 2015 Convertible note payable to Robert Cowdell, maturing on December 31, 2017, with interest at 10% $ 61,443 $ 61,443 Tranche #2 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 14,966 31,126 Tranche #3 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 50,000 50,000 Tranche #4 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 50,000 50,000 Tranche #5 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 50,000 50,000 Tranche #6 from 12/20/2013 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than December 20, 2018, with interest at 10% 50,000 50,000 Tranche #1 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 33,727 50,000 Tranche #2 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #3 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #4 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #5 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #6 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 100,000 100,000 Tranche #7 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 50,000 50,000 Tranche #8 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 70,000 70,000 Tranche #9 from 6/25/14 $500,000 convertible note payable to an accredited investor, maturing on June 25, 2017, with interest at 10% 30,000 30,000 Tranche #1 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 30,000 30,000 Tranche #2 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 40,000 40,000 Tranche #3 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 110,000 110,000 Tranche #4 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 88,000 88,000 Tranche #5 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 90,000 90,000 Tranche #6 from 2/11/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than February 11, 2020, with interest at 10% 90,000 90,000 Tranche #1 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 65,000 65,000 Tranche #2 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 65,000 65,000 Tranche #3 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 60,000 60,000 Tranche #4 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 50,000 50,000 Tranche #5 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 50,000 50,000 Tranche #6 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 55,000 55,000 Tranche #7 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 25,000 - Tranche #8 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 55,000 - Tranche #9 from 7/28/15 $500,000 convertible note payable to an accredited investor, payable on demand, but due no later than July 28, 2020, with interest at 10% 50,000 - Tranche #1 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 60,000 - Tranche #2 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 45,000 - Tranche #3 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 55,000 - Tranche #4 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 27,000 - Tranche #5 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 10,000 - Tranche #6 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 48,000 - Tranche #7 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 24,000 - Tranche #8 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 50,000 - Tranche #9 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 50,000 - Tranche #10 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 50,000 - Tranche #11 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 45,000 - Tranche #12 from 4/7/16 $600,000 convertible note payable to an accredited investor, payable on demand, but due no later than April 7, 2021, with interest at 10% 45,000 - Total 2,192,136 1,585,569 Less discount (239,402 ) (180,208 ) Net 1,952,734 1,405,361 Less current portion 1,952,734 718,923 Long-term portion $ - $ 686,438 |
DERIVATIVE FINANCIAL INSTRUME23
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Financial Instruments Tables | |
The fair values of derivative liabilities | Balance, December 31, 2014 $ 438,374 Increases in derivative value due to new issuances of notes 455,141 Derivative adjustment due to debt conversion (158,381 ) Change in fair value of derivative liabilities 106,543 Balance, December 31, 2015 841,677 Increases in derivative value due to new issuances of notes 552,858 Derivative adjustment due to debt conversion (76,204 ) Change in fair value of derivative liabilities 616,286 Balance, December 31, 2016 $ 1,934,617 |
STOCKHOLDERS DEFICIT (Tables)
STOCKHOLDERS DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders Deficit Tables | |
Schedule of status of warrants and options issued | Weighted Average Shares Exercise Price Outstanding, December 31, 2014 560,000 $ 0.10 Granted - - Canceled / Expired - - Exercised - - Outstanding, December 31, 2015 560,000 $ 0.10 Granted - - Canceled / Expired - - Exercised - - Outstanding, December 31, 2016 560,000 $ 0.10 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes Tables | |
Deferred tax asset | 2016 2015 Deferred tax asset $ 1,324,918 $ 967,456 Valuation allowance (1,324,918 ) (967,456 ) Net $ - $ - |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative liabilities | $ 1,934,617 | $ 841,677 |
Losses (Gains) | (616,286) | (106,543) |
Level 1 [Member] | ||
Derivative liabilities | ||
Level 2 [Member] | ||
Derivative liabilities | ||
Level 3 [Member] | ||
Derivative liabilities | $ 1,934,617 | $ 841,677 |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal deposit insurance corporation insured amount | $ 250,000 | |
Allowance for doubtful accounts | 0 | $ 5,600 |
Cash equivalents | ||
Prepaid royalties | $ 4,430 | $ 4,507 |
Minimum [Member] | ||
Revenue percentage limit | 35.00% | |
Maximum [Member] | ||
Revenue percentage limit | 70.00% | |
Exent [Member] | ||
Account receivable from major primary distributors and partners, percentage | 52.38% | 48.81% |
Apple [Member] | ||
Revenue from major primary distributors, percentage | 28.78% | 18.08% |
Account receivable from major primary distributors and partners, percentage | 13.48% | 16.93% |
Square Enix Ltd [Member] | ||
Revenue from major primary distributors, percentage | 28.25% | |
G5 Holdings Limited [Member] | ||
Revenue from major primary distributors, percentage | 18.02% | |
Big Fish Games [Member] | ||
Revenue from major primary distributors, percentage | 23.67% | |
Account receivable from major primary distributors and partners, percentage | 10.00% | |
Wired Media [Member] | ||
Revenue from major primary distributors, percentage | 22.74% | |
S.A.D. [Member] | ||
Revenue from major primary distributors, percentage | 13.51% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Going Concern Details Narrative | ||
Incurred net losses | $ (2,129,419) | $ (1,870,677) |
Accumulated deficit | $ (11,113,929) | $ (8,984,510) |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Expenses Details | ||
Accrued vacation | $ 66,194 | $ 64,461 |
Accrued royalties | 410,533 | 408,134 |
Technology payable | 18,000 | 18,000 |
Other | 746 | 1,417 |
Total Accrued Expenses | $ 495,473 | $ 492,012 |
ACCRUED EXPENSES (Details Narra
ACCRUED EXPENSES (Details Narrative) | Dec. 31, 2016USD ($)Installments | Dec. 31, 2015USD ($) |
Accrued Expenses Details Narrative | ||
Unearned royalties | $ 127,201 | $ 195,033 |
Technology payable | $ 18,000 | $ 18,000 |
Number of installments | Installments | 24 | |
Installment amount | $ 1,500 |
DEBT (Details)
DEBT (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Convertible Notes Payable, related party | $ 1,447,041 | $ 1,447,041 |
Holland Family Trust, maturing on December 31, 2017 | ||
Convertible Notes Payable, related party | $ 222,572 | $ 222,572 |
Interest rate | 10.00% | 10.00% |
Craig Holland, maturing on December 31, 2017 | ||
Convertible Notes Payable, related party | $ 813,602 | $ 813,602 |
Interest rate | 10.00% | 10.00% |
Craig Holland, maturing on December 31, 2017 one | ||
Convertible Notes Payable, related party | $ 186,450 | $ 186,450 |
Interest rate | 10.00% | 10.00% |
Mick Donahoo, maturing on December 31, 2017 | ||
Convertible Notes Payable, related party | $ 186,450 | $ 186,450 |
Interest rate | 10.00% | 10.00% |
Craig Holland, maturing on December 31, 2017, Two | ||
Convertible Notes Payable, related party | $ 6,925 | $ 6,925 |
Interest rate | 10.00% | 10.00% |
Mick Donahoo, maturing on December 31, 2017, One | ||
Convertible Notes Payable, related party | $ 31,042 | $ 31,042 |
Interest rate | 10.00% | 10.00% |
DEBT (Details 1)
DEBT (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Convertible Notes Payable non related party, gross | $ 2,192,136 | $ 1,585,569 |
Less Discounts | (239,402) | (180,208) |
Convertible Notes Payable non related party, net | 1,952,734 | 1,405,361 |
Less current portion | 1,952,734 | 718,923 |
Long-term portion | 686,438 | |
Robert Cowdell, maturing on December 31, 2017 | ||
Convertible Notes Payable non related party, gross | $ 61,443 | $ 61,443 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on December 20, 2018 | ||
Convertible Notes Payable non related party, gross | $ 14,966 | $ 31,126 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on December 20, 2018 One | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on December 20, 2018 Two | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on December 20, 2018 Three | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on December 20, 2018 Four | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 | ||
Convertible Notes Payable non related party, gross | $ 33,727 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 One | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 Two | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 Three | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 Four | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 Five | ||
Convertible Notes Payable non related party, gross | $ 100,000 | $ 100,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 Six | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 Seven | ||
Convertible Notes Payable non related party, gross | $ 70,000 | $ 70,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on June 25, 2017 Eight | ||
Convertible Notes Payable non related party, gross | $ 30,000 | $ 30,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on February 11, 2020 | ||
Convertible Notes Payable non related party, gross | $ 30,000 | $ 30,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on February 11, 2020 One | ||
Convertible Notes Payable non related party, gross | $ 40,000 | $ 40,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on February 11, 2020 Two | ||
Convertible Notes Payable non related party, gross | $ 110,000 | $ 110,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on February 11, 2020 Three | ||
Convertible Notes Payable non related party, gross | $ 88,000 | $ 88,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on February 11, 2020 Four | ||
Convertible Notes Payable non related party, gross | $ 90,000 | $ 90,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on February 11, 2020 Five | ||
Convertible Notes Payable non related party, gross | $ 90,000 | $ 90,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 | ||
Convertible Notes Payable non related party, gross | $ 65,000 | $ 65,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 One | ||
Convertible Notes Payable non related party, gross | $ 65,000 | $ 65,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 Two | ||
Convertible Notes Payable non related party, gross | $ 60,000 | $ 60,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 Three | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 Four | ||
Convertible Notes Payable non related party, gross | $ 50,000 | $ 50,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 Five | ||
Convertible Notes Payable non related party, gross | $ 55,000 | $ 55,000 |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 Six | ||
Convertible Notes Payable non related party, gross | $ 25,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 Seven | ||
Convertible Notes Payable non related party, gross | $ 55,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on July 28, 2020 Eight | ||
Convertible Notes Payable non related party, gross | $ 50,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 | ||
Convertible Notes Payable non related party, gross | $ 60,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 One | ||
Convertible Notes Payable non related party, gross | $ 45,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Two | ||
Convertible Notes Payable non related party, gross | $ 55,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Three | ||
Convertible Notes Payable non related party, gross | $ 27,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Four | ||
Convertible Notes Payable non related party, gross | $ 10,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Five | ||
Convertible Notes Payable non related party, gross | $ 48,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Six | ||
Convertible Notes Payable non related party, gross | $ 24,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Seven | ||
Convertible Notes Payable non related party, gross | $ 50,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Eight | ||
Convertible Notes Payable non related party, gross | $ 50,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Nine | ||
Convertible Notes Payable non related party, gross | $ 50,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Ten | ||
Convertible Notes Payable non related party, gross | $ 45,000 | |
Interest rate | 10.00% | 10.00% |
An accredited investor, maturing on April 7, 2021 Eleven | ||
Convertible Notes Payable non related party, gross | $ 45,000 | |
Interest rate | 10.00% | 10.00% |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | Feb. 01, 2016 | Oct. 08, 2015 | Oct. 23, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2013 | Nov. 30, 2016 | Oct. 31, 2016 | Sep. 30, 2016 | Aug. 31, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | May 31, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Feb. 29, 2016 | Jan. 31, 2016 | Nov. 30, 2015 | Oct. 31, 2015 | Sep. 30, 2015 | Aug. 31, 2015 | Jul. 31, 2015 | Jun. 30, 2015 | May 31, 2015 | Apr. 30, 2015 | Mar. 31, 2015 | Feb. 28, 2015 | Jan. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2014 | Oct. 31, 2014 | Sep. 30, 2014 | Aug. 31, 2014 | Jul. 31, 2014 | Jun. 30, 2014 | May 31, 2014 | Apr. 30, 2014 | Mar. 31, 2014 | Feb. 28, 2014 | Jan. 31, 2014 |
Notes payable | $ 58,096 | |||||||||||||||||||||||||||||||||||||||
Accrued interest payable with 50% guaranteed return | 22,046 | |||||||||||||||||||||||||||||||||||||||
Accrued interest | 354,165 | 209,461 | ||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | 1,447,041 | 1,447,041 | ||||||||||||||||||||||||||||||||||||||
Convertible debt | 1,952,734 | 1,405,361 | ||||||||||||||||||||||||||||||||||||||
Accrued interest payable for non-related party convertible notes | 361,503 | 154,925 | ||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 461,725 | 618,835 | ||||||||||||||||||||||||||||||||||||||
Interest expense, net | 859,645 | 887,447 | ||||||||||||||||||||||||||||||||||||||
Convertible Cowdell Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 18,433 | 12,289 | $ 6,014 | |||||||||||||||||||||||||||||||||||||
Term of conversion feature | Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. | |||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||
Convertible debt | $ 55,429 | |||||||||||||||||||||||||||||||||||||||
Mick Donahoo [Member] | ||||||||||||||||||||||||||||||||||||||||
Notes payable | 55,250 | |||||||||||||||||||||||||||||||||||||||
Accrued interest | 15,399 | |||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | 70,649 | |||||||||||||||||||||||||||||||||||||||
Accrued salaries | 186,450 | |||||||||||||||||||||||||||||||||||||||
Debt conversion orignal amount | $ 4,607 | $ 35,000 | ||||||||||||||||||||||||||||||||||||||
Debt conversion accrued interest | $ 2,028 | $ 2,836 | ||||||||||||||||||||||||||||||||||||||
Debt conversion common stock shares | 12,637,860 | 39,829,849 | ||||||||||||||||||||||||||||||||||||||
Craig Holland [Member] | ||||||||||||||||||||||||||||||||||||||||
Notes payable | 35,100 | $ 813,602 | ||||||||||||||||||||||||||||||||||||||
Accrued interest | 11,432 | 72,107 | ||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | 46,532 | |||||||||||||||||||||||||||||||||||||||
Accrued salaries | $ 186,450 | |||||||||||||||||||||||||||||||||||||||
Debt conversion orignal amount | $ 4,607 | $ 35,000 | ||||||||||||||||||||||||||||||||||||||
Debt conversion accrued interest | $ 2,028 | $ 2,836 | ||||||||||||||||||||||||||||||||||||||
Debt conversion common stock shares | 12,637,860 | 39,829,849 | ||||||||||||||||||||||||||||||||||||||
Mick Donahoo Convertible Note and the Craig Holland Convertible Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | $ 8,943 | 5,146 | ||||||||||||||||||||||||||||||||||||||
Term of conversion feature | Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. | |||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||
Holland and Donahoo Accrued Salary Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | $ 55,935 | 37,290 | ||||||||||||||||||||||||||||||||||||||
Term of conversion feature | Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. | |||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||
Holland Transferred [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | $ 183,228 | 101,867 | ||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||
Holland Family Trust [Member] | ||||||||||||||||||||||||||||||||||||||||
Notes payable | 813,602 | |||||||||||||||||||||||||||||||||||||||
Term of conversion feature | Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. | |||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | $ 50,124 | 27,867 | ||||||||||||||||||||||||||||||||||||||
Game Marketing Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility Maximum | $ 250,000 | |||||||||||||||||||||||||||||||||||||||
Terms of agreement, Description | The investor will receive 50% of Net Receipts (as defined in the agreement) from the Game until the Marketing Fund is fully recouped. Once the Marketing Fund is recouped, the investor will receive 50% of Net Receipts from the Game until the investor receives a 50% return on the Marketing Funds advanced | |||||||||||||||||||||||||||||||||||||||
Tranches Eleven [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 45,000 | |||||||||||||||||||||||||||||||||||||||
Tranches Ten [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 45,000 | |||||||||||||||||||||||||||||||||||||||
Tranches Nine [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 50,000 | |||||||||||||||||||||||||||||||||||||||
Tranches Eight [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 50,000 | $ 50,000 | $ 30,000 | |||||||||||||||||||||||||||||||||||||
Tranches Seven [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 50,000 | $ 55,000 | $ 70,000 | |||||||||||||||||||||||||||||||||||||
Tranches Six [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 24,000 | $ 25,000 | $ 50,000 | |||||||||||||||||||||||||||||||||||||
Tranches Five [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 55,000 | $ 48,000 | $ 90,000 | $ 100,000 | ||||||||||||||||||||||||||||||||||||
Tranches Four [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 10,000 | $ 50,000 | $ 90,000 | $ 50,000 | $ 50,000 | |||||||||||||||||||||||||||||||||||
Tranches Three [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 27,000 | $ 50,000 | $ 88,000 | $ 50,000 | $ 50,000 | |||||||||||||||||||||||||||||||||||
Tranches Two [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 55,000 | $ 60,000 | $ 110,000 | $ 50,000 | $ 50,000 | |||||||||||||||||||||||||||||||||||
Tranches One [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 45,000 | $ 65,000 | 40,000 | $ 50,000 | $ 50,000 | |||||||||||||||||||||||||||||||||||
Tranches [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 60,000 | $ 65,000 | $ 30,000 | $ 50,000 | $ 50,000 | |||||||||||||||||||||||||||||||||||
Holland Family Trust, maturing on December 31, 2017 | ||||||||||||||||||||||||||||||||||||||||
Maturity date | Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | $ 222,572 | |||||||||||||||||||||||||||||||||||||||
April 2016 [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 509 | |||||||||||||||||||||||||||||||||||||||
Term of conversion feature | Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three (3) lowest trade prices on three (3) separate trading days of Common Stock recorded after the original Effective Date of the note. Fixed Conversion Price shall mean $0.003. | |||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | $ 600,000 | |||||||||||||||||||||||||||||||||||||||
July 2015 [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 475,000 | |||||||||||||||||||||||||||||||||||||||
Term of conversion feature | The Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three (3) lowest trade prices on three (3) separate trading days of Common Stock recorded after the original Effective Date of the note. Fixed Conversion Price shall mean $0.003. | |||||||||||||||||||||||||||||||||||||||
Maturity date | Jul. 28, 2020 | |||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | $ 500,000 | |||||||||||||||||||||||||||||||||||||||
February 2015 [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 448,000 | |||||||||||||||||||||||||||||||||||||||
Term of conversion feature | Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three (3) lowest trade prices on three (3) separate trading days of Common Stock recorded after the original Effective Date of the note. Fixed Conversion Price shall mean $0.003. | |||||||||||||||||||||||||||||||||||||||
Maturity date | Feb. 11, 2020 | |||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | $ 500,000 | |||||||||||||||||||||||||||||||||||||||
June 2014 [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 483,727 | |||||||||||||||||||||||||||||||||||||||
Term of conversion feature | Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005 | |||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | $ 500,000 | |||||||||||||||||||||||||||||||||||||||
December 2013 [Member] | ||||||||||||||||||||||||||||||||||||||||
Total outstanding balances | $ 214,966 | |||||||||||||||||||||||||||||||||||||||
Term of conversion feature | Variable Conversion Price shall mean 50% multiplied by the Market Price (representing a discount rate of 50%). Market Price means the average of the three lowest trading prices for the Companys common stock during the twenty-five (25) trading-day period ending on the latest complete trading day prior to the Conversion Date. Fixed Conversion Price shall mean $0.00005. | |||||||||||||||||||||||||||||||||||||||
Convertible Notes Payable, related party | $ 500,000 | |||||||||||||||||||||||||||||||||||||||
January 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 4,025 | 5,814 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 44,493 | |||||||||||||||||||||||||||||||||||||||
February 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 14,329 | 9,329 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 44,556 | |||||||||||||||||||||||||||||||||||||||
March 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 13,836 | 8,836 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 77,884 | |||||||||||||||||||||||||||||||||||||||
April 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 13,425 | 8,425 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 90,605 | |||||||||||||||||||||||||||||||||||||||
May 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 13,068 | 8,068 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 95,029 | |||||||||||||||||||||||||||||||||||||||
June 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 8,470 | 7,575 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 83,184 | |||||||||||||||||||||||||||||||||||||||
July 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 12,301 | 7,301 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 73,999 | |||||||||||||||||||||||||||||||||||||||
August 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 11,836 | 6,836 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 64,104 | |||||||||||||||||||||||||||||||||||||||
September 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 11,438 | 6,438 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 62,915 | |||||||||||||||||||||||||||||||||||||||
October 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 11,068 | 6,069 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 63,347 | |||||||||||||||||||||||||||||||||||||||
November 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 21,644 | 11,644 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 99,757 | |||||||||||||||||||||||||||||||||||||||
December 2014 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 10,178 | 5,178 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 58,456 | |||||||||||||||||||||||||||||||||||||||
January 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 13,751 | 6,751 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 29,360 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 1,126 | |||||||||||||||||||||||||||||||||||||||
February 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 5,671 | 2,671 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 23,984 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 2,694 | |||||||||||||||||||||||||||||||||||||||
April 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 15,044 | 6,244 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 31,397 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 1,941 | |||||||||||||||||||||||||||||||||||||||
May 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 14,523 | 5,523 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 36,550 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 7,019 | |||||||||||||||||||||||||||||||||||||||
June 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 13,734 | 4,734 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 41,878 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 12,686 | |||||||||||||||||||||||||||||||||||||||
July 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 9,296 | 2,796 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 38,600 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 16,703 | |||||||||||||||||||||||||||||||||||||||
August 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 8,869 | 2,369 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 37,269 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 19,315 | |||||||||||||||||||||||||||||||||||||||
September 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 8,263 | 1,763 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 37,820 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 24,293 | |||||||||||||||||||||||||||||||||||||||
October 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 5,959 | 959 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 35,290 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 26,403 | |||||||||||||||||||||||||||||||||||||||
November 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 5,438 | 438 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 36,448 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 32,216 | |||||||||||||||||||||||||||||||||||||||
December 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 5,666 | 166 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 37,163 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 35,812 | |||||||||||||||||||||||||||||||||||||||
February 2015 One derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 5,669 | 2,663 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 18,003 | |||||||||||||||||||||||||||||||||||||||
February 2015 Two derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 11,096 | 5,096 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 19,494 | |||||||||||||||||||||||||||||||||||||||
March 2015 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 19,951 | $ 8,951 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 31,885 | |||||||||||||||||||||||||||||||||||||||
January 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 2,357 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 25,000 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 25,000 | |||||||||||||||||||||||||||||||||||||||
Derivative | 30,855 | |||||||||||||||||||||||||||||||||||||||
February 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 4,914 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 37,835 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 37,835 | |||||||||||||||||||||||||||||||||||||||
March 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 4,085 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 37,402 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 37,402 | |||||||||||||||||||||||||||||||||||||||
April 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 4,393 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 14,345 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 53,978 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 39,633 | |||||||||||||||||||||||||||||||||||||||
May 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 2,902 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 16,027 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 45,000 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 28,973 | |||||||||||||||||||||||||||||||||||||||
Derivative | 47,249 | |||||||||||||||||||||||||||||||||||||||
June 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 3,142 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 20,938 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 48,678 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 27,740 | |||||||||||||||||||||||||||||||||||||||
June 2016 derivative One [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 1,512 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 11,836 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 27,000 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 15,164 | |||||||||||||||||||||||||||||||||||||||
Derivative | 35,935 | |||||||||||||||||||||||||||||||||||||||
June 2016 derivative Two [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 506 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 4,959 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 10,000 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 5,041 | |||||||||||||||||||||||||||||||||||||||
Derivative | 14,630 | |||||||||||||||||||||||||||||||||||||||
July 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 2,256 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 24,587 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 46,259 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 21,672 | |||||||||||||||||||||||||||||||||||||||
July 2016 One derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 1,075 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 13,282 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 24,000 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 10,718 | |||||||||||||||||||||||||||||||||||||||
Derivative | 32,140 | |||||||||||||||||||||||||||||||||||||||
August 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 1,899 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 12,888 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 20,723 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 7,835 | |||||||||||||||||||||||||||||||||||||||
September 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 1,503 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 15,158 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 21,612 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 6,454 | |||||||||||||||||||||||||||||||||||||||
October 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 1,120 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 38,907 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 50,000 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 11,096 | |||||||||||||||||||||||||||||||||||||||
Derivative | 52,130 | |||||||||||||||||||||||||||||||||||||||
November 2016 derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 578 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 37,969 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 43,444 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | 5,475 | |||||||||||||||||||||||||||||||||||||||
December 2016 Derivative [Member] | ||||||||||||||||||||||||||||||||||||||||
Accrued interest | 234 | |||||||||||||||||||||||||||||||||||||||
Total outstanding balances | 28,509 | |||||||||||||||||||||||||||||||||||||||
Debt discount | 29,988 | |||||||||||||||||||||||||||||||||||||||
Amortized Debt discount | $ 1,479 |
DERIVATIVE FINANCIAL INSTRUME34
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Financial Instruments Details | ||
Beginning Balance | $ 841,677 | $ 438,374 |
Increases in derivative value due to new issuances of notes | 552,858 | 455,141 |
Derivative adjustment due to debt conversion | (76,204) | (158,381) |
Change in fair value of derivative liabilities | 616,286 | 106,543 |
Ending Balance | $ 1,934,617 | $ 841,677 |
DERIVATIVE FINANCIAL INSTRUME35
DERIVATIVE FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current derivative liabilities | $ 1,934,617 | $ 841,677 | |
Gain (loss) on change in derivative liabilities | $ (616,286) | $ (106,543) | $ (106,543) |
Computed volatility | 100.00% | ||
Minimum [Member] | |||
Estimated probability of future financing | 271.00% | ||
Maximum [Member] | |||
Estimated probability of future financing | 336.00% |
STOCKHOLDERS_ DEFICIT (Details)
STOCKHOLDERS’ DEFICIT (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | ||
Beginning Balance | 560,000 | 560,000 |
Grant | ||
Canceled / Expired | ||
Exercised | ||
Ending Balance | 560,000 | |
Weighted Average Exercise Price | ||
Beginning Balance | $ 0.10 | $ 0.10 |
Grant | ||
Canceled / Expired | ||
Exercised | ||
Ending Balance | $ 0.10 | $ 0.10 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) | Oct. 08, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock, par value | $ 0.00001 | $ 0.00001 | |
Common stock, authorized shares | 2,000,000,000 | 2,000,000,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, authorized shares | 10,000,000 | 10,000,000 | |
Stock payables | $ 16,800 | $ 16,800 | |
Share issued | 96,000 | ||
Shares per instalments | 12,000 | ||
Principal conversion | $ 32,433 | 64,174 | |
Conversion of accrued interest payable | 7,697 | 8,778 | |
Derivative adjustment due to debt conversion | (76,204) | (158,381) | |
Increase in common stock value | 3,680 | 706 | |
Increased in additional paid in capital | $ 112,654 | $ 230,627 | |
2006 Stock Option Plan [Member] | |||
Stock options outstanding | 560,000 | ||
Common Stock | |||
Issuance of common stock for conversion of debt, Shares | 367,994,660 | 70,648,155 | |
Increase in common stock value | $ 253 | ||
Increased in additional paid in capital | $ 13,017 | ||
Mick Donahoo [Member] | |||
Principal conversion | $ 4,607 | ||
Issuance of common stock for conversion of debt, Shares | 12,637,860 | ||
Conversion of accrued interest payable | $ 2,028 | ||
Craig Holland [Member] | |||
Principal conversion | $ 4,607 | ||
Issuance of common stock for conversion of debt, Shares | 12,637,860 | ||
Conversion of accrued interest payable | $ 2,028 | ||
Minimum [Member] | |||
Conversion prices | $ 0.00005 | $ 0.00088 | |
Maximum [Member] | |||
Conversion prices | $ 0.00045 | $ 0.00135 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Oct. 08, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Convertible Note Payable - Related Party | $ 1,447,041 | $ 1,447,041 | |
Accrued interest payable - related party | 354,165 | 209,461 | |
Principal conversion | 32,433 | 64,174 | |
Conversion of accrued interest payable | $ 7,697 | $ 8,778 | |
Craig Holland [Member] | |||
Principal conversion | $ 4,607 | ||
Conversion of accrued interest payable | $ 2,028 | ||
Issuance of common stock for conversion of debt, Shares | 12,637,860 | ||
Conversion price | $ 0.000525 | ||
Mick Donahoo [Member] | |||
Principal conversion | $ 4,607 | ||
Conversion of accrued interest payable | $ 2,028 | ||
Issuance of common stock for conversion of debt, Shares | 12,637,860 | ||
Conversion price | $ 0.000525 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Taxes Details | ||
Deferred Tax Asset | $ 1,324,918 | $ 967,456 |
Valuation Allowances | (1,324,918) | (967,456) |
Net |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes Details Narrative | ||
Provision for income taxes | $ 2,282 | $ 400 |
Net Operating Loss | $ 3,895,338 | $ 2,845,460 |
Net operating loss carry forwards expire period | 2,030 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Mar. 09, 2017 | Feb. 08, 2017 | Jan. 11, 2017 | Dec. 31, 2016 | Jan. 18, 2017 |
Shares issued upon conversion of debt | 134,775,113 | ||||
Debt conversion, Principal amount | $ 5,320 | ||||
Debt conversion, Accrued interest | $ 1,419 | ||||
February 8, 2017 convertible promissory note [Member] | |||||
Additional proceeds from convertible debt | $ 60,000 | ||||
Convertible promissory note [Member] | Accredited investor [Member] | |||||
Maximum borrowing capacity | $ 500,000 | ||||
Interest rate | 10.00% | ||||
Maturity date | Feb. 8, 2017 | ||||
Convertible note outstanding amount | $ 55,000 | ||||
Terms of conversion feature | The conversion price shall be the lesser of (a) $0.0003 per share of our common stock or (b) Fifty Percent (50%) of the average of the three (3) lowest trade prices on three (3) separate trading days of our common stock recorded after February 8, 2017, or (c) the lowest effective price per share granted to any person or entity after February 8, 2017 | ||||
Debt default description | we immediately owe 150% of the principal amount then due under the Note | ||||
Convertible promissory note [Member] | Accredited investor [Member] | Maximum [Member] | |||||
Equity percentage issuable upon conversion of debt | 4.99% | ||||
April 7, 2016 convertible promissory note [Member] | |||||
Additional proceeds from convertible debt | $ 45,000 | ||||
Convertible debt | $ 600,000 |