Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 15, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | LIFEAPPS BRANDS INC. | |
Entity Central Index Key | 1,510,247 | |
Document Type | 10-Q | |
Trading Symbol | LFAP | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 90,704,686 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 25,009 | $ 1,084 |
Accounts receivable | 1,575 | |
Other current assets | 595 | 595 |
Total current assets | 27,179 | 1,679 |
Intangible asset, net of amortization | 150 | |
Total Assets | 27,179 | 1,829 |
Current liabilities: | ||
Accounts payable | 124,882 | 124,620 |
Accrued salaries - officers | 682,154 | 601,154 |
Accrued interest | 946 | |
Notes payable | 19,486 | 20,000 |
Notes payable to related party | 17,585 | 17,585 |
Advances due to related party | 10,445 | 7,675 |
Convertible note payable, net of debt discount | 2,397 | |
Derivative liability | 70,848 | |
Total current liabilities | 928,743 | 771,034 |
Stockholders' Equity (Deficit) | ||
Preferred stock, $.001 par value, 10,000,000 authorized, none issued or outstanding | ||
Common stock, $0.001 par value, 300,000,000 shares authorized, 90,704,686 and 87,404,686 shares issued and outstanding, as of March 31, 2018 and December 31, 2017, respectively | 90,704 | 87,704 |
Additional paid in capital | 2,620,589 | 2,579,489 |
Deferred officer compensation | (342,020) | (391,010) |
Accumulated (deficit) | (3,270,837) | (3,045,388) |
Total stockholders' (deficit) | (901,564) | (769,205) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 27,179 | $ 1,829 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, issued | 90,704,686 | 87,404,686 |
Common stock, outstanding | 90,704,686 | 87,404,686 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenue | $ 1,594 | $ 1,055 |
Cost of revenue | 49 | |
Gross profit | 1,594 | 1,006 |
Operating expenses: | ||
General and administrative | 184,702 | 41,929 |
Depreciation and amortization | 150 | 225 |
Total operating expenses | 184,852 | 42,154 |
Operating loss | (183,258) | (41,148) |
Interest expense | 26,461 | |
Change in derivative liability | 15,730 | |
Net (loss) before income taxes | (225,449) | (41,148) |
Provision for income taxes | ||
Net (loss) | $ (225,449) | $ (41,148) |
Per share information - basic and fully diluted: | ||
Net (loss) per share (in dollars per share) | $ 0 | $ 0 |
Weighted average shares outstanding (in shares) | 90,360,242 | 25,311,186 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net cash used in operations | $ (10,331) | $ (986) |
Cash flow from investing activities: | ||
Net Cash used in investing activities | ||
Cash flow from financing activities: | ||
Proceeds from convertible notes payable | 32,000 | |
Repayment of note payable | (514) | |
Shareholder advances | 2,770 | 715 |
Net cash provided by financing activities | 34,256 | 715 |
Net increase (decrease) in cash | 23,925 | (271) |
Cash at beginning of period | 1,084 | 1,388 |
Cash at end of period | 25,009 | 1,117 |
Non-cash investing and financing activities: | ||
Stock issued for services | 44,100 | |
Officer salary accrual | $ 81,000 | $ 37,500 |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Note 1. Nature of Business Throughout this report, the terms “our,” “we,” “us,” and the “Company” refer to LifeApps Brands Inc., including its subsidiaries. The accompanying unaudited condensed consolidated financial statements of LifeApps Brands Inc. at March 31, 2018 and 2017 have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial statements, instructions to Form 10-Q, and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2017. In management’s opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included. The results of operations for the periods ended March 31, 2018 and 2017 presented are not necessarily indicative of the results to be expected for the full year. The December 31, 2017 balance sheet has been derived from our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2017. Through our wholly owned subsidiary LifeApps, Inc., we are a licensed developer and publisher of apps for the Apple Apps Store for iPhone, iPod touch, iPad and iPad mini. We are also a licensed developer on both Google Play and Amazon Appstore for Android. We have distributed apps on all three platforms. Moving forward we are developing a digital media network specializing in targeting highly sought-after niche demographic audiences. The company will focus on two core businesses, an LGBT Ad Network and an LGBT Digital Network. Through our digital platform we will aggregate content from around the world. We will create original content along with sponsored content in a 24/7 digital network. The LGBT Ad Network will assist brands in global targeting of the LGBT demographic. The Ad Network will provide advertisers and brands with over 300 mainstream digital platforms and a “bullseye” on this loyal, affluent and ever-expanding audience. We will deliver to our audience with a relevant sponsored content marketing message across all spectrums of digitally connected devices. Our unique value proposition to our audience and sponsors is the ability deliver aggregated and original content, with emphasis on interactive content and captive video. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Business Condition (OR Going Concern) The accompanying financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”), which contemplates our continuation as a going concern. We have incurred losses to date of $3,270,837 and have negative working capital. To date we have funded our operations through advances from related parties, issuance of convertible debt, and the sale of our common stock. We intend to raise additional funding through third party equity or debt financing. There is no certainty that funding will be available as needed. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, LifeApps Inc. and Sports One Group Inc. All material inter-company transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. Financial Instruments The estimated fair values for financial instruments were determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with precision. The carrying amounts of accounts payable and accrued liabilities approximated fair value because of the short-term maturities of these instruments. The fair value of notes payable approximated to their carrying value as generally their interest rates reflected our effective annual borrowing rate. Fair Value Measurements: ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange. Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs. Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights. Our financial instruments consist of cash, short-term trade receivables, prepaid expenses, payables, accruals and convertible notes payable. The carrying values of cash and cash equivalents, short-term trade receivables, prepaid expenses, payables, and accruals approximate fair value because of the short-term maturities of these instruments. Intangibles Intangibles, which include websites and databases acquired, internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three to five years. In accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 350 Intangibles – Goodwill and Other Fixed Assets Fixed assets consists of furniture and equipment and are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. The estimated useful lives used for financial statement purposes 3 years. The Company’s fixed assets were fully depreciated and abandoned in prior years. Derivative Financial Instruments: We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. Revenue Recognition ASC Topic 606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: ● identify the contract with a customer; ● identify the performance obligations in the contract; ● determine the transaction price; ● allocate the transaction price to performance obligations in the contract; and ● recognize revenue as the performance obligation is satisfied. Revenue is derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets. Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability is probable. We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue. We also publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales. Cost of Revenue Cost of revenue includes the cost of amounts paid for articles, photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales includes the direct cost of those products sold. Research and development, Website Development Costs, and Software Development Costs All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 350-50, Website Development Cost, and ASC 985-20, Software-Costs of Software to be Sold, Leased or Marketed, were not material to our financial statements for the for the three months ended March 31, 2018 and 2017, respectively. We had no research and development expenses for the three months ended March 31, 2018 and 2017, respectively. Advertising Costs We recognize advertising expense when incurred. We had no advertising expense for the three months ended March 31, 2018 and 2017, respectively. Rent Expense We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases (“ASC 840”). Our lease is short term and will be renewed on a month to month basis. Rent expense was $255 and $2,160 for the three months ended March 31, 2018 and 2017, respectively. Equity-Based Compensation Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation Income Taxes The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the periods ended March 31, 2018 and 2017 we did not have any interest, penalties or any significant unrecognized uncertain tax positions. Earnings per share We calculate earnings per share in accordance with ASC Topic 260 Earnings Per Share Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position. In February 2016, the FASB issued ASU No. 2016-02, Leases The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Consolidated Financial Statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows - Restricted Cash , which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance will be effective for the Company in its first quarter of fiscal 2018. Early adoption is permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The new standard must be adopted retrospectively. The adoption of this standard did not have an effect on the Company’s financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other, which eliminates step two of the quantitative goodwill impairment test. Step two required determination of the implied fair value of a reporting unit, and then a comparison of this implied fair value with the carrying amount of goodwill for the reporting unit, in order to determine any goodwill impairment. Under the new guidance, an entity is only required to complete a one-step quantitative test, by comparing the fair value of a reporting unit with its carrying amount, and any goodwill impairment charge is determined by the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The standard is effective for the Company in the first quarter of 2020, with early adoption permitted as of January 1, 2017, and is to be applied on a prospective basis. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the statement of operations. The new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside the subtotal of loss from operations. ASU 2017-07 also provides that only the service cost component is eligible for capitalization. The standard is effective for the Company in the first quarter of 2018, with adoption to be applied on a retrospective basis. The adoption of this standard did not have an effect on the Company’s financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting , which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of this ASU are effective for the Company in the first quarter of 2018, with early adoption permitted. The adoption of this standard did not have an effect on the Company’s financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities , which modifies the presentation and disclosure of hedging results. Further, it provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for the Company in the first quarter of 2019. In September 2017, the FASB has issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Related Party Transactions - Of
Related Party Transactions - Officer and Shareholder Advances | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions - Officer and Shareholder Advances | Note 3. Related Party Transactions – Officer and Shareholder Advances Parties, which can be a corporation or an individual, are considered to be related if we have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Amounts due related party represents cash advances, salary accruals, notes payable, and amounts paid on our behalf by an officer and shareholders of the Company. These advances are non-interest bearing, short term in nature and due on demand. The balance at March 31, 2018 and December 31, 2017 was $10,445 and $7,675, respectively. Notes payable to related parties at March 31, 2018 and December 31, 2017 totaled $17,585 with a 2% annual interest rate. Currently the company has defaulted on all of their related party loan obligations. Forbearance has been granted by the related parties on all loans. Salary accruals for the three-month periods ended March 31, 2018 and 2017 amounted to $81,000 and $37,500 respectively and net cash advances amounted to $2,770 and $715, respectively for the periods ended March 31, 2018 and 2017. Total unpaid accrued salary was $682,154 and $601,154 as of March 31, 2018 and December 31, 2017, respectively. On December 19, 2017 we entered into an Employment Services Agreements with our Chief Executive Officer and our President and an Executive Management Consulting Agreement with our former Chief Executive Officer. The Agreements have a two-year term and are subject to automatic renewal for successive periods of one year unless either we or the counterparties give the other written notice of intention to not renew at least 30 days prior to the end of the existing term. The Agreement with our current and former Chief Executive Officers provide for base compensation of $150,000 and a base annual salary of $24,000 for our President. The compensation payments are payable in bi-weekly installments. In the event any of the payments are not made within 30 days of the due date, they will accrue interest at the rate of 10% per annum and the officers and consultant will have the right, in their sole discretion, to convert such payments, in whole or in part, into shares of our common stock at 50% of the value weighted average price for our common stock during the 20 trading days immediately preceding the date on which we are provided with a Notice of Conversion. The Agreements require us to approve a 2018 Equity Incentive Plan within 120 days of the effective date of the Agreements from which stock options or other equity incentive securities may be issued to employees and our advisors and consultants. The Agreements contains customary termination provisions including terminations with or without cause, for good reason or voluntarily, non-competition and non-solicitation provisions, and an inventions and patents provision which provides that all the work produced by the counterparties, which is created, designed, conceived or developed by them in the course of their employment under the Agreements belong to us. Effective as of January 1, 2018, the agreements were modified to remove the conversion right provisions. During the period ended March 31, 2018 we recorded interest accruals of $658 related to the contracts. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 4. Note Payable Note payable to an unrelated third party amounted to $19,486 and $20,000 at March 31, 2018 and December 31, 2017, respectively with an interest rate of 2%. The note is past due and is, therefore, in default. |
Convertible Note Payable
Convertible Note Payable | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Convertible Note Payable | Note 5. Convertible Note Payable On March 6, 2018, we executed a Promissory Note (the “2018 Note”) to an unrelated entity and received an aggregate of $32,000. The Note has an initial term of one year and provides for an original issue discount of $3,000, which is being amortized over the initial term. The note carries face interest rates of 12% per annum. The Lender has the right, at any time and/or after 180 days at their election to convert all or part of the outstanding and unpaid principal and accrued interest into shares of our common stock. The conversion price is 58% of a two-day average of the lowest trading price in the 15 range of trading days prior the conversion. The Notes provide for additional penalties if we cannot deliver the underlying common stock on a timely basis. We evaluated the terms of the conversion features of the convertible note in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability. We valued the conversion feature at origination of the Note at $55,118 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 1 year to maturity, risk free interest rate of 3.03% and annualized volatility of 298.79%. $32,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible Note and is being amortized over the initial term of the convertible Note. The balance of $23,118 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination. To determine the fair value of our embedded derivatives, management evaluates assumptions regarding the probability of certain future events. Other factors used to determine fair value include our period end stock price, historical stock volatility, risk free interest rate and derivative term. The fair value recorded for the derivative liability varies from period to period. This variability may result in the actual derivative liability for a period either above or below the estimates recorded on our consolidated financial statements, resulting in significant fluctuations in other income (expense) because of the corresponding non-cash gain or loss recorded. We value the derivative liability and at the end of each accounting period with the difference in value is recognized as gain or loss. At March 31, 2018 we determined the valuation using the Black-Sholes valuation model with the following assumptions: dividend yield of zero, .94 years to maturity, risk free interest rate of 2.85% and annualized volatility of 289.61%. We recognized $15,730 of expense for the change in value of the derivative for the three months ended March 31, 2018. Interest expense for the period includes $23,118 of origination interest, amortization of debt discounts of $2,394 and interest accrual of $288. At March 31, 2018 the balance of the Note is comprised of the following: Face amount of Note $ 35,000 Original issue discount (2,795 ) Debt discount (29,808 ) $ 2,397 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Note 6. Stockholders’ Equity During the period ended March 31, 2018 we issued 3,000,000 shares of common stock in connection with consulting agreements with two unrelated entities. The shares were valued at fair value of $44,100, based on the respective trading prices of our common stock on the dates the agreements were signed. Additionally, we recorded $48,990 of amortization of deferred officer compensation during the period ended March 31, 2018. |
Options
Options | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Options | Note 7. Options In prior periods, our Board of Directors adopted the 2012 Equity Incentive Plan (“2012 Plan”), which was approved by our shareholders. The 2012 Plan provided for the issuance of up to 666,667 shares of our common stock. During October 2015 the Board of Directors amended the plan to increase the number of shares issuable under the LifeApps Digital Media Inc. 2012 Equity Incentive Plan to 20,000,000, on a post-Reverse Stock Split basis. The plan provides for the award of options, stock appreciation rights, performance share awards, and restricted stock and stock units. The plan is administered by the Board of Directors. Pursuant to the 2012 Plan our Board of Directors granted options to purchase 418,333 shares of our common stock in periods prior to December 31, 2015. All of those options have been cancelled or lapsed as of December 31, 2016. On May 24, 2016 our Board of Directors granted four-year options to purchase 15,000,000 shares of our common stock to officers and or directors and a consultant. The options vested quarterly during the initial year following the grant date. The fair value of the options granted, $39,000, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions: Expected life (in years) 4 Volatility 383 % Risk Free interest rate 0.68 % Dividend yield (on common stock) — On December 19, 2017 our Board of Directors granted options to purchase 6,946,688 shares of our common stock to an officer, a consultant and a director. The options were fully vested when issued and are exercisable for a term of five years. The fair value of the options granted, $63,770, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions: Expected life (in years) 5 Volatility 311 % Risk Free interest rate 1.71 % Dividend yield (on common stock) — Stock based compensation expense for options for the periods ended March 31, 2018 and 2017 amounted to $0 and $2,437. The following is a summary of stock options issued to employees and directors: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding January 1, 2018 15,946,688 $ 0.0054 3.4 — Granted — $ — — — Exercised — $ — — — Cancelled — $ — — — Outstanding March 31, 2018 15,946,688 $ 0.0054 3.1 $ — Exercisable March 31, 2018 15,946,688 $ 0.0054 3.1 $ — There will be no additional compensation expense recognized in future periods. The following is a summary of stock options issued to non-employees, excluding Directors:. Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value at date of grant Outstanding January 1, 2018 1,300,000 $ 0.0083 4.4 — Granted — $ — — — Exercised — $ — — — Cancelled — $ — — — Outstanding March 31, 2018 1,300,000 $ 0.0083 4.1 $ — Exercisable March 31, 2018 1,300,000 $ 0.0083 4.1 $ — There will be no additional compensation expense recognized in future periods. |
Outstanding Warrants
Outstanding Warrants | 3 Months Ended |
Mar. 31, 2018 | |
Outstanding Warrants | |
Outstanding Warrants | Note 8. Outstanding Warrants There were no warrants issued during the periods ended March 31, 2018 and 2017. The 400,000 previously outstanding warrants expired on September 20, 2017. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company has completed a review of the accounting for the effects of the Act during the quarter ended December 31, 2017. The Company’s financial statements for the period ended March 31, 2018 reflect certain effects of the Act which includes a reduction in the corporate tax rate from 34% to 21% as well as other changes. Income tax provision (benefit) for the periods ended March 31, 2018 and 2017, is summarized below: 2018 2017 Current: Federal $ — $ — State — — Total current — — Deferred: Federal (21% tax rate in 2018) (28,400 ) (14,000 ) State (7,400 ) (2,300 ) Total deferred (35,800 ) (16,300 ) Valuation allowance 35,800 16,300 Total provision $ — $ — The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences as of March 31, 2018 and 2017 are as follows: 2018 2017 Income tax provision at the federal statutory rate 21.0 % 34.0 % State income taxes, net of federal benefit 5.5 % 5.5 % Increase in valuation allowance (26.5 %) (39.5 %) 0.0 % 0.0 % Components of the net deferred income tax assets at March 31, 2018 and December 31, 2017 were as follows: 2018 2017 Net operating loss carryovers (adjusted for revised tax rate) $ 399,900 $ 364,100 Valuation allowance (399,900 ) (364,100 ) $ — $ — In accordance with ASC 740, at March 31, 2018 and December 31, 2017 we determined that a valuation allowance should be recognized against deferred tax assets because, based on the weight of available evidence, it is more likely than not (i.e., greater than 50% probability) that some portion or all of the deferred tax asset will not be realized in the future. We recognized a reserve of 100% of the amounts of the deferred tax benefit in the amount of $399,900 and $364,100, respectively. As of March 31, 2018, we had cumulative net operating loss carry forwards of $1,874,000 which expire from 2032 through 2038. There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2010 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the consolidated statement of operations. There have been no income tax related interest or penalties assessed or recorded. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10. Subsequent Events Management has evaluated all activity and concluded that no subsequent events have occurred that would require recognition in these financial statements or disclosure in the notes to these financial statements. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Business Condition (OR Going Concern) | Business Condition (OR Going Concern) The accompanying financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”), which contemplates our continuation as a going concern. We have incurred losses to date of $3,270,837 and have negative working capital. To date we have funded our operations through advances from related parties, issuance of convertible debt, and the sale of our common stock. We intend to raise additional funding through third party equity or debt financing. There is no certainty that funding will be available as needed. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, LifeApps Inc. and Sports One Group Inc. All material inter-company transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. |
Financial Instruments | Financial Instruments The estimated fair values for financial instruments were determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with precision. The carrying amounts of accounts payable and accrued liabilities approximated fair value because of the short-term maturities of these instruments. The fair value of notes payable approximated to their carrying value as generally their interest rates reflected our effective annual borrowing rate. |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange. Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs. Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights. Our financial instruments consist of cash, short-term trade receivables, prepaid expenses, payables, accruals and convertible notes payable. The carrying values of cash and cash equivalents, short-term trade receivables, prepaid expenses, payables, and accruals approximate fair value because of the short-term maturities of these instruments. |
Intangibles | Intangibles Intangibles, which include websites and databases acquired, internet domain name costs, and customer lists, are being amortized over the expected useful lives which we estimate to be three to five years. In accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 350 Intangibles – Goodwill and Other |
Fixed Assets | Fixed Assets Fixed assets consists of furniture and equipment and are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. The estimated useful lives used for financial statement purposes 3 years. The Company’s fixed assets were fully depreciated and abandoned in prior years. |
Derivative Financial Instruments: | Derivative Financial Instruments: We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, we used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. |
Revenue Recognition | Revenue Recognition ASC Topic 606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: ● identify the contract with a customer; ● identify the performance obligations in the contract; ● determine the transaction price; ● allocate the transaction price to performance obligations in the contract; and ● recognize revenue as the performance obligation is satisfied. Revenue is derived primarily from the sale of sports and fitness apparel and equipment, and software applications designed for use on mobile devices such as smart phones and tablets. Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability is probable. We sell our software directly via Internet download through third party agents. We recognize revenue when payment is received from the agent. Payment is received net of commission paid to the agent, usually 70% to us and 30% to the agent. We record the net amount received as revenue. We also publish and sell digital magazines through the internet. Magazines can be purchased as individual volumes or as a subscription. To date we have not had any subscription sales. |
Cost of Revenue | Cost of Revenue Cost of revenue includes the cost of amounts paid for articles, photography, editorial and production cost of the magazine and ongoing web hosting costs. Cost of revenue related to product sales includes the direct cost of those products sold. |
Research and development, Website Development Costs, and Software Development Costs | Research and development, Website Development Costs, and Software Development Costs All research and development costs are expensed as incurred. Software development costs eligible for capitalization under ASC 350-50, Website Development Cost, and ASC 985-20, Software-Costs of Software to be Sold, Leased or Marketed, were not material to our financial statements for the for the three months ended March 31, 2018 and 2017, respectively. . We had no research and development expenses for the three months ended March 31, 2018 and 2017, respectively. |
Advertising Costs | Advertising Costs We recognize advertising expense when incurred. We had no advertising expense for the three months ended March 31, 2018 and 2017, respectively. |
Rent Expense | Rent Expense We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases (“ASC 840”). Our lease is short term and will be renewed on a month to month basis. Rent expense was $255 and $2,160 for the three months ended March 31, 2018 and 2017, respectively. |
Equity-Based Compensation | Equity-Based Compensation Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation |
Income Taxes | Income Taxes The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the periods ended March 31, 2018 and 2017 we did not have any interest, penalties or any significant unrecognized uncertain tax positions. |
Earnings per share | Earnings per share We calculate earnings per share in accordance with ASC Topic 260 Earnings Per Share |
Recent Pronouncements | Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position. In February 2016, the FASB issued ASU No. 2016-02, Leases The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Consolidated Financial Statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows - Restricted Cash , which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance will be effective for the Company in its first quarter of fiscal 2018. Early adoption is permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The new standard must be adopted retrospectively. The adoption of this standard did not have an effect on the Company’s financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other, which eliminates step two of the quantitative goodwill impairment test. Step two required determination of the implied fair value of a reporting unit, and then a comparison of this implied fair value with the carrying amount of goodwill for the reporting unit, in order to determine any goodwill impairment. Under the new guidance, an entity is only required to complete a one-step quantitative test, by comparing the fair value of a reporting unit with its carrying amount, and any goodwill impairment charge is determined by the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The standard is effective for the Company in the first quarter of 2020, with early adoption permitted as of January 1, 2017, and is to be applied on a prospective basis. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the statement of operations. The new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside the subtotal of loss from operations. ASU 2017-07 also provides that only the service cost component is eligible for capitalization. The standard is effective for the Company in the first quarter of 2018, with adoption to be applied on a retrospective basis. The adoption of this standard did not have an effect on the Company’s financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting , which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of this ASU are effective for the Company in the first quarter of 2018, with early adoption permitted. The adoption of this standard did not have an effect on the Company’s financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities , which modifies the presentation and disclosure of hedging results. Further, it provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for the Company in the first quarter of 2019. In September 2017, the FASB has issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Summmary of convertible Note Payable | At March 31, 2018 the balance of the Note is comprised of the following: Face amount of Note $ 35,000 Original issue discount (2,795 ) Debt discount (29,808 ) $ 2,397 |
Options (Tables)
Options (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value of the options of grant using the Black-Scholes option pricing model | The fair value of the options granted, $39,000, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions: Expected life (in years) 4 Volatility 383 % Risk Free interest rate 0.68 % Dividend yield (on common stock) — The fair value of the options granted, $63,770, was estimated at the date of grant using the Black-Scholes option pricing model, with the following assumptions: Expected life (in years) 5 Volatility 311 % Risk Free interest rate 1.71 % Dividend yield (on common stock) — |
Schedule of stock option issued employees and directors | The following is a summary of stock options issued to employees and directors: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding January 1, 2018 15,946,688 $ 0.0054 3.4 — Granted — $ — — — Exercised — $ — — — Cancelled — $ — — — Outstanding March 31, 2018 15,946,688 $ 0.0054 3.1 $ — Exercisable March 31, 2018 15,946,688 $ 0.0054 3.1 $ — |
Schedule of stock option issued to non employees | The following is a summary of stock options issued to non-employees, excluding Directors:. Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value at date of grant Outstanding January 1, 2018 1,300,000 $ 0.0083 4.4 — Granted — $ — — — Exercised — $ — — — Cancelled — $ — — — Outstanding March 31, 2018 1,300,000 $ 0.0083 4.1 $ — Exercisable March 31, 2018 1,300,000 $ 0.0083 4.1 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision (benefit) | Income tax provision (benefit) for the periods ended March 31, 2018 and 2017, is summarized below: 2018 2017 Current: Federal $ — $ — State — — Total current — — Deferred: Federal (21% tax rate in 2018) (28,400 ) (14,000 ) State (7,400 ) (2,300 ) Total deferred (35,800 ) (16,300 ) Valuation allowance 35,800 16,300 Total provision $ — $ — |
Schedule of sources and tax effects | The sources and tax effects of the differences as of March 31, 2018 and 2017 are as follows: 2018 2017 Income tax provision at the federal statutory rate 21.0 % 34.0 % State income taxes, net of federal benefit 5.5 % 5.5 % Increase in valuation allowance (26.5 %) (39.5 %) 0.0 % 0.0 % |
Schedule of net deferred income tax assets | Components of the net deferred income tax assets at March 31, 2018 and December 31, 2017 were as follows: 2018 2017 Net operating loss carryovers (adjusted for revised tax rate) $ 399,900 $ 364,100 Valuation allowance (399,900 ) (364,100 ) $ — $ — |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Accumulated (deficit) | $ 3,270,837 | $ 3,045,388 | |
Furniture and equipment estimated useful lives | 3 years | ||
Research and development expenses | $ 0 | $ 0 | |
Advertising expense | 0 | 0 | |
Rent expense | $ 255 | $ 2,160 | |
Minimum [Member] | |||
Intangibles assets estimated useful life | 3 years | ||
Maximum [Member] | |||
Intangibles assets estimated useful life | 5 years |
Related Party Transactions - 21
Related Party Transactions - Officer and Shareholder Advances (Details Narrative) | 1 Months Ended | ||
Dec. 19, 2017USD ($)Number | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Amount due to related party | $ 10,445 | $ 7,675 | |
Notes payable to related parties | 17,585 | 17,585 | |
Accrued salary | 81,000 | 37,500 | |
Net cash advances | 2,770 | 715 | |
Accrued interest | 658 | ||
Unpaid accrued salary | $ 682,154 | $ 601,154 | |
Former Chief Executive Officers [Member] | Employment Services Agreements [Member] | |||
Base compensation | $ 150,000 | ||
Interest rate | 10.00% | ||
Conversion price | 50.00% | ||
Trading days | Number | 20 | ||
President [Member] | Employment Services Agreements [Member] | |||
Base annual salary | $ 24,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Notes payable | $ 19,486 | $ 20,000 |
Interest rate | 2.00% |
Convertible Note Payable (Detai
Convertible Note Payable (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | ||
Face amount of Note | $ 35,000 | |
Original issue discount | (2,795) | |
Debt discount | (29,808) | |
Convertible note payable, net of debt discount | $ 2,397 |
Convertible Note Payable (Det24
Convertible Note Payable (Details Narrative) | Mar. 06, 2018USD ($)Number | Mar. 31, 2018USD ($) | Mar. 31, 2017 | Dec. 31, 2017USD ($) |
Convertible Note Payable | $ 2,397 | |||
Original issue discount | $ (2,795) | |||
Dividend yield | ||||
Maturity Term (in years) | 4 years | 5 years | ||
Risk free interest rate | 0.68% | 1.71% | ||
Annualized volatility | 383.00% | 311.00% | ||
Change in value of derivative | $ 15,730 | |||
Interest on derivative liability | 23,118 | |||
Amortization of debt discounts | 2,394 | |||
Accrued interest | $ 288 | |||
Promissory Note [Member] | ||||
Convertible Note Payable | $ 32,000 | |||
Original issue discount | $ 3,000 | |||
Term | 1 year | |||
Interest rate | 12.00% | |||
Conversion price | 58.00% | |||
Trading days | Number | 15 | |||
Conversion feature of note | $ 55,118 | |||
Valuation method | Black Scholes valuation model | Black Scholes valuation model | ||
Dividend yield | 0.00% | 0.00% | ||
Maturity Term (in years) | 1 year | 11 months 8 days | ||
Risk free interest rate | 3.03% | 2.85% | ||
Annualized volatility | 298.79% | 289.61% | ||
Debt discount | $ 32,000 | |||
Interest on derivative liability | $ 23,118 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($)shares | |
Stockholders' Equity Note [Abstract] | |
Compensation expense | $ 48,990 |
Common stock issued for legal services | shares | 3,000,000 |
Value of stock issued for legal services | $ 44,100 |
Option (Details)
Option (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected life (in years) | 4 years | 5 years |
Volatility | 383.00% | 311.00% |
Risk Free interest rate | 0.68% | 1.71% |
Dividend yield (on common stock) |
Option (Details 1)
Option (Details 1) | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding beginning | shares | 15,946,688 |
Granted | shares | |
Exercised | shares | |
Cancelled | shares | |
Outstanding ending | shares | 15,946,688 |
Exercisable ending | shares | 15,946,688 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding beginning | $ 0.0054 |
Granted | |
Exercised | |
Cancelled | |
Outstanding ending | 0.0054 |
Exercisable ending | $ 0.0054 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term [Roll Forward] | |
Outstanding beginning | 3 years 4 months 24 days |
Outstanding ending | 3 years 1 month 6 days |
Exercisable ending | 3 years 1 month 6 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Aggregate Intrinsic Value At Date Grant [Roll Forward] | |
Outstanding beginning | $ | |
Granted | |
Exercised | $ | |
Cancelled | |
Outstanding ending | $ | |
Exercisable ending | $ | |
Non Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding beginning | shares | 1,300,000 |
Granted | shares | |
Exercised | shares | |
Cancelled | shares | |
Outstanding ending | shares | 1,300,000 |
Exercisable ending | shares | 1,300,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding beginning | $ 0.0083 |
Granted | |
Exercised | |
Cancelled | |
Outstanding ending | 0.0083 |
Exercisable ending | $ 0.0083 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term [Roll Forward] | |
Outstanding beginning | 4 years 4 months 24 days |
Outstanding ending | 4 years 1 month 6 days |
Exercisable ending | 4 years 1 month 6 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Aggregate Intrinsic Value At Date Grant [Roll Forward] | |
Granted | |
Exercised | $ | |
Cancelled | |
Outstanding ending | $ | |
Exercisable ending | $ |
Option (Details Narrative)
Option (Details Narrative) - USD ($) | May 24, 2016 | Dec. 19, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Oct. 31, 2015 |
Stock based compensation expense | $ 0 | $ 2,437 | |||
Employees [Member] | |||||
Stock based compensation expense Compensation expense recognized in future periods | 0 | ||||
Non Employees [Member] | |||||
Stock based compensation expense Compensation expense recognized in future periods | $ 0 | ||||
2012 Equity Incentive Plan [Member] | |||||
Number of options authorized | 666,667 | ||||
Number of options to purchase | 418,333 | ||||
Fair value of options | $ 39,000 | $ 63,770 | |||
2012 Equity Incentive Plan [Member] | Director [Member] | |||||
Number of options to purchase | 15,000,000 | 6,946,688 | |||
Expiration term | 4 years | 5 years | |||
Amended 2012 Equity Incentive Plan [Member] | |||||
Number of options authorized | 20,000,000 |
Outstanding Warrants (Details N
Outstanding Warrants (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Outstanding Warrants | ||
Number of warrants | 0 | 0 |
Number of warrants previously outstanding | 400,000 | |
Warrants expiration date | Sep. 20, 2017 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Current: | ||
Federal | ||
State | ||
Total current | ||
Deferred: | ||
Federal (21% tax rate in 2018) | (28,400) | (14,000) |
State | (7,400) | (2,300) |
Total deferred | (35,800) | (16,300) |
Valuation allowance | 35,800 | 16,300 |
Total provision |
Income Taxes (Details 1)
Income Taxes (Details 1) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision at the federal statutory rate | 21.00% | 34.00% |
State income taxes, net of federal benefit | 5.50% | 5.50% |
Increase in valuation allowance | (26.50%) | (39.50%) |
Effective income tax rate reconciliation | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryovers (adjusted for revised tax rate) | $ 399,900 | $ 364,100 |
Valuation allowance | (399,900) | (364,100) |
Deferred tax assets, net | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Corporate tax rate | 21.00% | ||
Deferred tax benefit | $ 399,900 | $ 364,100 | |
Net operating loss carry forwards | $ 1,874,000 | ||
Minimum [Member] | |||
Operating loss carry forwards expiration period | Dec. 31, 2032 | ||
Maximum [Member] | |||
Operating loss carry forwards expiration period | Dec. 31, 2038 |