Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Apr. 27, 2017 | May 31, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | AVALANCHE INTERNATIONAL, CORP. | ||
Entity Central Index Key | 1,537,169 | ||
Document Type | 10-K | ||
Trading Symbol | AVLP | ||
Document Period End Date | Nov. 30, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --11-30 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 3,069,889 | ||
Entity Common Stock, Shares Outstanding | 5,092,254 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Nov. 30, 2015 | Nov. 30, 2014 | [1] |
CURRENT ASSETS | |||
Cash | $ 405 | $ 2,247 | |
Accounts receivable, related party | 17,222 | ||
Other receivable | 705 | ||
Inventory | 25,900 | ||
TOTAL CURRENT ASSETS | 18,332 | 28,147 | |
Other assets | 526 | ||
TOTAL ASSETS | 18,332 | 28,673 | |
CURRENT LIABILITIES | |||
Accounts payable and accrued expenses | 177,004 | 87,217 | |
Accounts payable, related party | 63,699 | 88,572 | |
Due to related parties | 6,927 | ||
Derivative liability | 1,313,012 | ||
Convertible notes payable, net of discount of $202,325 and 9,040, respectively | 416,975 | 54,210 | |
Notes payable | 135,031 | 18,300 | |
TOTAL CURRENT LIABILITIES | 2,105,721 | 255,226 | |
TOTAL LIABILITIES | 2,105,721 | 255,226 | |
COMMITMENTS AND CONTINGENCIES | |||
STOCKHOLDERS' DEFICIT | |||
Common stock, $0.001 par value: 75,000,000 shares authorized; 6,309,635 and 5,144,400 shares issued and outstanding, respectively | 6,310 | 5,144 | |
Additional paid-in capital | 1,119,118 | 203,445 | |
Accumulated deficit | (3,212,817) | (435,156) | |
TOTAL STOCKHOLDERS' DEFICIT | (2,087,389) | (226,553) | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 18,332 | 28,673 | |
Class A Preferred Stock [Member] | |||
STOCKHOLDERS' DEFICIT | |||
Preferred stock, $0.001 par value: 10,000,000 shares authorized; Class A Preferred Stock, $0.001 par value; 50,000 shares designated, nil and 14,000 shares issued and outstanding, respectively, stated value $5 per share | $ 14 | ||
[1] | As Restated |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Nov. 30, 2015 | Nov. 30, 2014 |
Convertible notes payable, discount | $ 202,325 | $ 9,040 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 6,309,635 | 5,144,400 |
Common stock, outstanding | 6,309,635 | 5,144,400 |
Class A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, stated par value (in dollars per share) | $ 5 | $ 5 |
Preferred stock, authorized | 50,000 | 50,000 |
Preferred stock, issued | 0 | 14,000 |
Preferred stock, outstanding | 0 | 14,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | [1] | |
Income Statement [Abstract] | |||
Revenue - related party | $ 34,086 | $ 27,000 | |
Revenue | 4,814 | 19,131 | |
Total Revenue | 38,900 | 46,131 | |
Cost of revenue | 32,231 | 45,146 | |
Gross profit | 6,669 | 985 | |
Operating expenses | |||
General and administrative | 1,400,956 | 394,129 | |
Total operating expense | 1,400,956 | 394,129 | |
Loss from operations | (1,394,287) | (393,144) | |
Other expenses | |||
Interest expense, including penalties | (76,029) | (985) | |
Interest expense - debt discount | (357,450) | ||
Loss on issuance of convertible debt | (472,033) | ||
Change in fair value of derivative liability | (360,666) | ||
Total other expenses | (1,266,178) | (985) | |
Loss before income taxes | (2,660,465) | (394,129) | |
Income tax expense | |||
Net loss | $ (2,660,465) | $ (394,129) | |
Preferred dividends | (117,196) | ||
Loss available to common shareholders | $ (2,777,661) | $ (394,129) | |
Basic and diluted net loss per common share (in dollars per share) | $ (0.49) | $ (0.08) | |
Basic and diluted weighted average common shares outstanding (in shares) | 5,622,731 | 5,076,965 | |
[1] | As Restated |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Series A Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit | Total | ||
Balance at Begenning at Nov. 30, 2013 | $ 5,070 | $ 18,330 | $ (41,027) | $ (17,627) | |||
Balance at Begenning (in shares) at Nov. 30, 2013 | 5,070,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for cash | $ 74 | 92,926 | 93,000 | ||||
Issuance of common stock for cash (in shares) | 74,400 | ||||||
Issuance of preferred stock for cash | $ 14 | 69,986 | 70,000 | ||||
Issuance of preferred stock for cash (in shares) | 14,000 | ||||||
Assumption of liabilities | 22,203 | $ 22,203 | |||||
Issuance of common stock with convertible notes payable and notes payable (in shares) | 14,000 | ||||||
Preferred dividends | [1] | ||||||
Net loss | (394,129) | $ (394,129) | [1] | ||||
Balance at ending at Nov. 30, 2014 | $ 14 | $ 5,144 | 203,445 | (435,156) | (226,553) | [1] | |
Balance at ending (in shares) at Nov. 30, 2014 | 14,000 | 5,144,400 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for cash | $ 2 | 1,998 | $ 2,000 | ||||
Issuance of common stock for cash (in shares) | 1,600 | (13,250) | |||||
Issuance of preferred stock to shareholder for payment of accrued expenses, related party | $ 15 | 76,885 | $ 76,900 | ||||
Issuance of preferred stock to shareholder for payment of accrued expenses, related party (in shares) | 15,380 | ||||||
Issuance of common stock for services | $ 440 | 582,685 | $ 583,125 | ||||
Issuance of common stock for services (in shares) | 440,000 | 440,000 | |||||
Issuance of common stock with convertible notes payable and notes payable | $ 134 | 111,194 | $ 111,328 | ||||
Issuance of common stock with convertible notes payable and notes payable (in shares) | 133,990 | 3,890,876 | |||||
Issuance of common stock for conversion of debt | $ 62 | 26,214 | $ 26,276 | ||||
Issuance of common stock for conversion of debt (in shares) | 61,452 | ||||||
Issuance of common stock for conversion of preferred stock | $ (29) | $ 528 | $ 116,697 | $ 117,196 | |||
Issuance of common stock for conversion of preferred stock (in shares) | (29,380) | 528,193 | |||||
Preferred dividends | (117,196) | (117,196) | |||||
Net loss | $ (2,660,465) | $ (2,777,661) | |||||
Balance at ending at Nov. 30, 2015 | $ 6,310 | $ 1,119,118 | $ (3,212,817) | $ (2,087,389) | |||
Balance at ending (in shares) at Nov. 30, 2015 | 6,309,635 | ||||||
[1] | As Restated |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |||
Nov. 30, 2015 | Nov. 30, 2014 | |||
Cash flows from operating activities: | ||||
Net loss | $ (2,660,465) | $ (394,129) | [1] | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Amortization expense - loan fees | 53,791 | |||
Interest expense - debt discount | 357,450 | [1] | ||
Loss on issuance of convertible debt | 472,033 | [1] | ||
Change in fair value on derivative liability | 360,666 | |||
Stock-based compensation | 583,125 | |||
Stock issued for loan fees | 68,011 | |||
Bad debt expense | 173,688 | |||
Changes in operating assets and liabilities: | ||||
Accounts receivable, related party | (17,222) | |||
Other receivables | (705) | (9,566) | ||
Inventories | 25,900 | (25,900) | ||
Other assets | 526 | |||
Accounts payable and accrued expenses | 256,726 | 180,365 | ||
Accounts payable, related parties | (24,873) | |||
Net cash used in operating activities | (351,349) | (249,230) | ||
Cash flows from investing activities: | ||||
Loan issuance | (12,500) | |||
Loan issuance, related party | (12,500) | |||
Advance to related party | (202,766) | |||
Net cash used in investing activities | (227,766) | |||
Cash flows from financing activities: | ||||
Proceeds from issuance of common stock | 2,000 | 93,000 | ||
Proceeds from issuance of preferred stock | 70,000 | |||
Payments to related parties | (6,927) | 6,927 | ||
Proceeds from convertible notes payable | 508,000 | 63,250 | ||
Proceeds from notes payable | 105,000 | 28,300 | ||
Payments on notes payable | (25,500) | |||
Payments on notes payable, related parties | (5,300) | (10,000) | ||
Net cash provided by financing activities | 577,273 | 251,477 | ||
Net increase (decrease) in cash | (1,842) | 2,247 | ||
Cash at beginning of period | 2,247 | [1] | ||
Cash at end of period | 405 | 2,247 | [1] | |
Supplemental disclosures of cash flow information: | ||||
Cash paid during the period for interest | 45 | 65 | ||
Non-cash financing activities: | ||||
Issuance of common stock in payment of preferred dividends | 117,196 | |||
Issuance of notes payable in payment of accrued expenses | 35,074 | |||
Derivative liability recorded in connection with convertible debt | 952,346 | |||
Common stock issued for conversion of debt | $ 26,276 | |||
Issuance of preferred stock to shareholder for payment of accrued expenses | 76,900 | |||
Reduction in related party accounts payable by offset of advances | $ 54,078 | |||
[1] | As Restated |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Nov. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Avalanche International, Corp. (the “Company” “Avalanche” “Agreement” a holding company with operations at the subsidiary levels only “SRB” “RCG” SRB was originally formed as a manufacturer and distributor of flavored liquids for electronic vaporizers and eCigarettes and accessories; this business was discontinued in June 2015. RCG was formed to hold the Company’s investments in the restaurant industry. |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 12 Months Ended |
Nov. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND GOING CONCERN | 2. LIQUIDITY AND GOING CONCERN The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern. The Company has incurred recurring losses and reported loss available to common shareholders for the years ended November 30, 2015 and 2014, totaling $2,777,661 and $394,219, respectively, as well as an accumulated deficit as of November 30, 2015 and 2014, amounting to $3,212,817 and $435,156, respectively. As a result of the Company’s continued losses, at November 30, 2015, the Company’s current liabilities significantly exceed current assets, resulting in negative working capital of $2,087,389. Further, the Company does not have adequate cash to cover projected operating costs for the next 12 months. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In order to ensure the continued viability of the Company, either future equity or debt financings must be obtained or profitable operations must be achieved in order to repay the existing short-term debt and to provide a sufficient source of operating capital. To address its liquidity issues, the Company continues to explore opportunities for additional financing and/or restructuring of its existing debt. No assurances can be made that the Company will be successful obtaining additional equity or debt financing and/or in restructuring existing debt, or that the Company will achieve profitable operations and positive cash flow. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include accounts of Avalanche and its wholly-owned subsidiaries, SRB and RCG, (collectively referred to as the “Company" Accounting Estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s critical accounting policies that involve significant judgment and estimates include share based compensation, valuation of derivative liabilities and valuation of deferred income taxes. Actual results could differ from those estimates. Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The recorded carrying amounts of the Company’s cash and cash equivalents approximate their fair value. As of November 30, 2015 and 2014, the Company had no cash equivalents. Inventory Valuation Inventory is valued at the lower of cost or market. Cost is determined using the first-in, first-out method; market value is based upon estimated replacement costs. Fair Value of Financial Instruments The Company’s financial instruments are accounts receivable, inventory, , inventory, and The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 assumptions: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including liabilities resulting from imbedded derivatives associated with certain warrants to purchase common stock. Derivative Financial Instruments Derivative liabilities are recognized in the consolidated balance sheets at fair value based on the criteria specified in Financial Accounting Standards Board ( “FASB” “ASC” – Derivatives and Hedging – Embedded Derivatives “ASC 815-15” Pursuant to required to be classified as a derivative liability. The fair value of are adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Debt Discounts The Company accounts for debt discount according to ASC 470-20, Debt with Conversion and Other Options Revenue Recognition The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. During the years ended November 30, 2015 and 2014, the Company’s revenues consisted solely of sales of flavored liquids for electronic vaporizers and eCigarettes and accessories from SRB. Income Taxes The Company determines its income taxes under the asset and liability method in accordance with FASB ASC 740, Income Taxes “ASC 740” , which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the Statements of Income and Comprehensive Income in the period that includes the enactment date. ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. To the extent that the final tax outcome of these matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. ASC 740 also requires management to evaluate tax positions taken by the Company and recognize a liability if the Company has taken uncertain tax positions that more likely than not would not be sustained upon examination by applicable taxing authorities. Management of the Company has evaluated tax positions taken by the Company and has concluded that as of November 30, 2015, there are no uncertain tax positions taken, or expected to be taken, that would require recognition of a liability that would require disclosure in the financial statements. Stock-Based Compensation The Company accounts for stock option awards in accordance with FASB ASC Topic No. 718, Compensation-Stock Compensation The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of FASB ASC Topic No. 505-50, Equity Based Payments to Non-Employees Loss per Common Share The Company utilizes FASB ASC Topic No. 260, Earnings per Share Since the effects of outstanding Class A convertible preferred stock and the conversion of convertible debt are anti-dilutive in all periods presented, shares of common stock underlying these instruments have been excluded from the computation of loss per common share. The following sets forth the number of shares of common stock underlying outstanding Class A convertible preferred stock and convertible debt as of November 30, 2015 and 2014: November 30, 2015 2014 Convertible notes payable 3,890,876 — Class A convertible preferred stock — 14,000 3,890,876 14,000 Reclassifications Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results of operations. In addition, certain prior year amounts from the restated amounts have been reclassified for consistency with the current period presentation. Recent Accounting Standards In May 2014, the FASB issued Accounting Standards Update ( “ASU” "Revenue from Contracts with Customers (Topic 606)" ( “ASU 2014-09” “Revenue Recognition” “Revenue Recognition – Construction - Type and Production - Type Contracts.” as a result of ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” There have been four new ASUs issued amending certain aspects of ASU 2014-09, ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross Versus Net),” “Identifying Performance Obligations and Licensing,” “Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients” Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” In August 2014, the FASB issued ASU No. 2014-15 “ Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU No. 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016 In July 2015, the FASB issued ASU No. 2015-11, “ Simplifying the Measurement of Inventory In August 2015, the FASB issued ASU No. 2015-15, “ Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Simplifying the Presentation of Debt Issuance Costs In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share Based Payment Accounting In February 2016, the FASB issued ASU No. 2016-02, Leases In December 2016, the FASB issued ASU 2016-19, Technical Corrections and Improvements In August 2016, the FASB issued ASU No. 2016-15, which revises the guidance in ASC 230, Statement of Cash Flows In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) |
LOAN RECEIVABLE
LOAN RECEIVABLE | 12 Months Ended |
Nov. 30, 2015 | |
Receivables [Abstract] | |
LOAN RECEIVABLE | 4. LOAN RECEIVABLE On June 5, 2015, the Company executed a Promissory Note with Aja Cannafacturing, Inc. for $12,500. The note was unsecured, accrued interest at 10% and was due December 31, 2015. As of November 30, 2015, this note was deemed to be uncollectable and was written off to bad debt expense. |
CONVERTIBLE NOTE PAYABLE
CONVERTIBLE NOTE PAYABLE | 12 Months Ended |
Nov. 30, 2015 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTE PAYABLE | 5. CONVERTIBLE NOTES PAYABLE Convertible notes payable at November 30, 2015, and November 30, 2014, are comprised of the following: November 30, 2015 2014 Notes payable to Adar Bays, LLC $ 115,000 $ — Notes payable to Union Capital, LLC 115,000 — Notes payable to Typenex Co-Investment, LLC 87,500 — Note payable to Gary Gelbfish 100,000 — Notes payable to JMJ Financial 60,500 — Notes payable to Black Mountain Equities, Inc. 55,000 — Notes payable to LG Capital Funding, LLC 50,000 63,250 Note payable to GCEF Opportunity Fund, LLC 27,500 — Note payable to Lord Abstract, LLC 8,800 — Total notes payable 619,300 63,250 Less: debt discount (202,325 ) (9,040 ) Total convertible notes payable, net of discount $ 416,975 $ 54,210 During the years ended November 30, 2015 and 2014 , the Company entered into convertible promissory notes with various entities in which it received aggregate proceeds of $508,000 and $47,500, respectively. As consideration for these loans, the Company issued promissory notes in the aggregate principal amount of $632,550, which included loan fees of $47,500 and original issue discounts of $29,550. The convertible promissory notes accrue interest at rates ranging between 8% and 12% per annum. At November 30, 2015, the Company was in default on the LG Capital Funding, LLC, Gary Gelbfish and Typenex Co-Investment, LLC convertible promissory notes and subject to default interest rates of 24%, 10% and 22%, respectively, on these convertible promissory notes. Further, the Company recorded a default penalty of $18,902 on the Typenex Co-Investments, LLC convertible promissory note. On April 4, 2017, the Company and Typenex agreed to a settlement, see Note 12. As of the date of this report, the Company was in default on all of the convertible notes payable. The table below summarizes the Company’s convertible promissory notes as of November 30, 2014. Inception Original Stock Principal Inception Due Interest Loan Issue Issued in Amount of Date Date Rate Cash Fees Discount Lieu of Cash Note LG Capital Funding, LLC 11/3/2014 11/3/2015 8 % $ 47,500 $ 7,500 $ 8,250 $ - $ 63,250 The table below summarizes the Company’s convertible promissory notes as of November 30, 2015. Inception Original Stock Principal Inception Due Interest Loan Issue Issued in Amount of Date Date Rate Cash Fees Discount Lieu of Cash Note Adar Bays, LLC 5/12/2015 5/12/2016 8 % $ 100,000 $ 15,000 $ - $ - $ 115,000 Union Capital, LLC 5/11/2015 5/11/2016 8 % 100,000 15,000 - - 115,000 Typenex Co-Investment, LLC 6/2/2015 7/2/2016 10 % 70,000 10,000 7,500 - 87,500 Gary Gelbfish 4/1/2015 9/23/2015 10 % 100,000 - - - 100,000 JMJ Financial 4/29/2015 4/29/2017 12 % 55,000 - 5,500 - 60,500 Black Mountain Equities, Inc. 6/4/2015 6/4/2016 10 % 50,000 - 5,000 - 55,000 LG Capital Funding, LLC 11/3/2014 11/3/2015 8 % 47,500 7,500 8,250 (13,250 ) 50,000 GCEF Opportunity Fund, LLC 6/30/2015 6/30/2016 10 % 25,000 - 2,500 - 27,500 Lord Abstract, LLC 6/30/2015 6/30/2016 10 % 8,000 - 800 - 8,800 Total $ 555,500 $ 47,500 $ 29,550 $ (13,250 ) $ 619,300 As reflected below, at November 30, 2015, the Company’s convertible notes payable were convertible into 3,890,876 shares of the Company’s common stock at the conversion terms below. Shares Issuable Upon Conversion Conversion terms at November 30, 2015 Adar Bays, LLC 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion 638,889 Union Capital, LLC 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion 638,889 Typenex Co-Investment, LLC 35% of lowest closing bid price of the Company's common stock for the 20 days preceding conversion 1,013,352 Gary Gelbfish 50% of the average of the closing price of the Company's common stock for the twenty days preceding conversion 455,063 JMJ Financial 60% of the lowest trading price of the Company's common stock in the 25 days prior to conversion 403,333 Black Mountain Equities, Inc. 70% of the average of the three lowest closing prices of the Company's common stock during the twenty days preceding conversion 261,905 LG Capital Funding, LLC 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion 277,778 GCEF Opportunity Fund, LLC 60% of the lowest closing price of the Company's common stock for the 20 days preceding conversion 152,778 Lord Abstract, LLC 60% of the lowest closing price of the Company's common stock for the 20 days preceding conversion 48,889 Number of shares of common stock underlying 3,890,876 The debt conversion features embedded in the Company’s convertible promissory notes are accounted for under ASC Topic 815 – Derivatives and Hedging The tables below summarize the Company’s derivative liabilities and the related non-cash charges at November 30, 2015. Estimated FV of Debt Conversion Debt Feature at Loss on Debt Amortization Discount at Inception Other Fees Issuance Discount Expense November 30, 2015 Adar Bays, LLC $ 203,234 $ - $ (103,234 ) $ 100,000 $ (59,589 ) $ 40,411 Union Capital, LLC 193,664 - (93,664 ) 100,000 (59,904 ) 40,096 Typenex Co-Investment, LLC 48,301 7,500 - 55,801 (27,671 ) 28,130 Gary Gelbfish 116,224 41,349 (57,573 ) 100,000 (100,000 ) - JMJ Financial 173,334 2,500 (118,334 ) 57,500 (12,924 ) 44,576 Black Mountain Equities, Inc. 68,362 5,000 (18,362 ) 55,000 (26,972 ) 28,028 LG Capital Funding, LLC 109,773 - (62,273 ) 47,500 (47,500 ) - GCEF Opportunity Fund, LLC 29,889 2,500 (4,889 ) 27,500 (11,527 ) 15,973 Lord Abstract, LLC 9,565 800 (1,565 ) 8,800 (3,689 ) 5,111 952,346 59,649 (459,894 ) 552,101 (349,776 ) 202,325 Notes payable: Studio Capital, LLC - - - 26,968 (7,674 ) 19,294 Loss on payment - - (12,139 ) - - - Total $ 952,346 $ 59,649 $ (472,033 ) $ 579,069 $ (357,450 ) $ 221,619 Estimated FV of Debt Conversion Feature at Change in FV of Inception November 30, 2015 Debt Conversion Feature Adar Bays, LLC $ 203,234 $ 207,659 $ 4,425 Union Capital, LLC 193,664 207,536 13,872 Typenex Co-Investment, LLC 48,301 380,858 332,557 Gary Gelbfish 116,224 118,391 2,167 JMJ Financial 173,334 155,017 (18,317 ) Black Mountain Equities, Inc. 68,362 81,951 13,589 LG Capital Funding, LLC 109,773 94,905 (14,868 ) GCEF Opportunity Fund, LLC 29,889 50,532 20,643 Lord Abstract, LLC 9,565 16,163 6,598 $ 952,346 $ 1,313,012 $ 360,666 As reflected in the table below, during the years ended November 30, 2015 and 2014, the Company incurred interest expense, excluding amortization of debt discount, of $43,313 and $374, respectively, on the convertible promissory notes. At November 30, 2015 and 2014, accrued interest on the convertible promissory notes totaled $42,426 and $374, respectively, and is recorded in accounts payable and accrued expenses on the consolidated balance sheets. Interest Expense for the Year ended Accrued Interest at November 30, November 30, 2015 November 30, 2014 2015 2014 Adar Bays, LLC $ 5,091 $ - $ 5,091 $ - Union Capital, LLC 5,117 - 5,117 - Typenex Co-Investment, LLC 6,225 - 6,225 - Gary Gelbfish 6,795 - 6,795 - JMJ Financial 7,260 - 7,260 - Black Mountain Equities, Inc. 5,500 - 5,500 - LG Capital Funding, LLC 5,778 374 4,891 374 GCEF Opportunity Fund, LLC 1,172 - 1,172 - Lord Abstract, LLC 375 - 375 - Total $ 43,313 $ 374 $ 42,426 $ 374 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Nov. 30, 2015 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | 6. NOTES PAYABLE Notes payable at November 30, 2015, and November 30, 2014, are comprised of the following: November 30, 2015 2014 Notes payable to Studio Capital, LLC (a) $ 125,000 $ — Notes payable to Argent Offset, LLC (b) 16,825 13,000 Notes payable to Strategic IR, Inc. (c) 12,500 — Notes payable to Cross Click Media, Inc. (d) — 4,200 Notes payable to MCKEA Holdings, LLC (d) — 1,100 Total notes payable 154,325 18,300 Less: debt discount (19,294 ) — Notes payable 135,031 18,300 (a) On October 8, 2015, Studio Capital, LLC, ( “Studio Capital” “Studio Capital Note” (b) On November 26, 2014, the Company issued Argent Offset, LLC ( “Argent” “Argent Note” (c) On March 17, 2015, the Company issued Strategic, IR, Inc. ( “Strategic” “Strategic Note” (d) As of November 30, 2014, the Company owed $4,200 to Cross Click and $1,100 to MCKEA for short-term advances to the Company. During 2015, these advances were repaid. All advances were non-interest bearing, due upon demand and unsecured. (e) During 2015, the Company entered into two short-terms loans, in the aggregate amount of $9,500. The Company received $5,000 in cash and expenses of $4,500 were paid on the Company’s behalf. These short-term loans accrued interest at 10% and These loans were repaid during 2015. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Nov. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of November 30 Fair value measured at November 30, 2015 Fair value at Quoted prices in Significant other Significant Derivative liabilities $ 1,313,012 $ - $ - $ 1,313,012 There were no transfers between Level 1, 2 or 3 during the year ended November 30 The following table presents changes in Level 3 liabilities measured at fair value for the year ended November 30 December 1, 2014 Derivative Change in estimated November 30, 2015 Derivative liabilities $ - $ 952,346 $ 360,666 $ 1,313,012 The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management. A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liabilities that are categorized within Level 3 of the fair value hierarchy for the year ended November 30 Date of valuation November 30, 2015 Inception of loan Stock price $ 0.45 $ 0.55 – 1.41 Conversion price $ 0.10 – 0.22 $ 0.24 – 1.20 Volatility 161% – 239% 103% – 151% Risk free interest rate .11% – .86% .08% – .74% Years to maturity .45 – 1.74 .43 – 2.00 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Nov. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 8. RELATED PARTY TRANSACTIONS During the years ended November 30, 2015 and 2014, the Company sold $34,086 and $27,000, respectively, in products to Vape Nation. These sales represented 87.6% and 69.4%, respectively, of total revenue. Vape Nation, is 50% owned by MCKEA Holdings, LLC (“MCKEA” , the wife of Milton C. Ault III, , is the manager and owner of MCKEA. During the years ended November 31, 2015 and 2014, Cross Click Media, Inc. ( “Cross Click” On June 5, 2015, the Company entered into a promissory note with Cross Click for $12,500. The note is unsecured, accrues interest at 10% per annum and is due on December 31, 2015. As of November 30, 2015, this note was deemed to be uncollectable and was written off to bad debt expense. During 2015, the Company repaid $4,200 to Cross Click and $1,100 to MCKEA for short-term advances that the Company received during 2014. In addition, during the year ended November 30, 2015, the Company advanced Cross Click $202,766. The Company offset the advances by $54,078 in accounts payable due to Cross Click for sales, marketing, and investor relation services it had performed. The advances were due in one year and accrue interest at 12%. As of November 30, 2015, the advances were deemed to be uncollectable and the remaining balance due from Cross Click of $148,688 was written off to bad debt expense. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 12 Months Ended |
Nov. 30, 2015 | |
Equity [Abstract] | |
EQUITY TRANSACTIONS | 9 EQUITY TRANSACTIONS Preferred Stock The Company is authorized to issue 10,000,000 shares of Preferred Stock with a par value of $0.001 per share. On July 31, 2014, the Board of Directors designated 50,000 shares of its Preferred Stock as “Class A Convertible Preferred Stock” (the “Class A Preferred Shares” Each share of Class A Preferred Stock has a stated value of $5.00 per share. The holders of Class A Preferred Stock have no voting rights. The holders are entitled to receive cumulative dividends at a rate of 10% of the stated value per annum, payable twice a year, subject to the availability of funds and approval by the Board of Directors. In the discretion of the Board of Directors, dividends may be paid with common stock. In the event of a liquidation or dissolution of the Company each holder of Class A Preferred Stock shall be entitled to be paid in cash $5 per share. At any time after August 31, 2015, a holder of Class A Preferred Stock may, at their option, convert all or a portion of their outstanding shares into common stock. On February 1, 2016, all issued and outstanding preferred stock were to be automatically converted into shares of common stock. During the year ended November 30, 2014, the Company issued 14,000 shares of Class A Preferred Stock at a price of $5.00 per share for total cash proceeds of $70,000. On January 30, 2015, the Company issued 15,380 shares of Class A Preferred Stock to Finiks Capital, LLC at a price of $5.00 per share for total proceeds of $76,900. On September 21, 2015, pursuant to individual Notices of Conversion executed by each of the holders of its Class A Preferred Stock, the Company exchanged all 29,380 shares of its outstanding Class A Preferred Stock, as well as accrued dividends thereon in the amount of $11,558, at a $0.30 conversion ratio per share for a total of 528,193 shares of common stock. The conversion of the Class A Preferred Shares resulted in an additional return to the preferred stockholders of $105,638 based on the difference of the carrying amount of the preferred stock and the fair value of the consideration transferred which is based on the closing price of the Company’s common stock on the date of conversion. Common Stock On December 15, 2014, the Company issued 1,600 shares of common stock at a price of $1.25 per share for tota Stock based compensation During the year ended November 30, 2015, the Company issued 440,000 shares of common stock to service providers for total stock based compensation of $583,125. All of the shares of common stock were valued based on the closing price of the Company’s common stock on the date of grant. Stock issued for convertible notes payable and notes payable On March 27, 2015, the Company issued 50,000 shares of common stock to Dr. Gary Gelbfish in connection with the issuance of a convertible promissory note. As a result of this issuance, the Company recognized debt discount of $41,349 based on the fair value of the common stock issued to Dr. Gelbfish relative to the fair value of the convertible promissory note. On October 8, 2015, the Company entered into a promissory note with Studio Capital. As additional consideration, the Company issued Studio Capital 5,000 shares of its common stock. As a result of the issuance of 5,000 shares of common stock, the Company recognized debt discount of $1,968 based on the fair value of the common stock issued to Studio Capital relative to the fair value of the promissory note. The fair value of the common stock issued was determined to be $11,997 based on the closing price of the Company’s common stock on the date of grant. During the year ended November 30, 2015, in connection with the issuance of certain convertible promissory notes, the Company issued 48,990 shares of its common stock, for total non-cash consideration of $56,013. All of the shares of common stock were valued based on the closing price of the Company’s common stock on the date of grant. Conversion of debt Between August 19, 2015 and September 21, 2015, the Company issued 61,452 shares of common stock to LG Capital Funding, LLC in conversion of $13,250 of principal and $887 of accrued interest on its convertible promissory note. The shares of common stock were valued $26,276 resulting in a loss on conversion of $12,139. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Nov. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | 10. INCOME TAXES The Company has fully reserved the net deferred income tax assets by taking a full valuation allowance against these assets. During the years ended November 30, 2015 and 2014, the Company did not recognize any income tax benefit as a result of its net loss. The table below shows the balances for the deferred income tax assets and liabilities as of the date indicated. November 30, 2015 2014 Deferred income tax asset: Net operating loss $ 623,354 $ 138,008 Other accrued liabilities 21,961 — Total deferred tax asset 645,315 138,008 Valuation allowance (645,315 ) (138,008 ) Deferred income tax asset, net of allowance $ — $ — The income tax provision (benefit) consists of the following: November 30, 2015 2014 Federal and State Current $ — $ — Deferred (645,315 ) (138,008 ) Valuation allowance 645,315 138,008 Income tax provision (benefit) $ — $ — During the years ended November 30, 2015 and 2014, the Company did not recognize income tax expense. The Company’s effective tax rate was 0% in both years. The effective tax rate differed primarily due to the change in the valuation allowance. The reconciliation of income tax attributable to operations computed at the U.S. Federal statutory income tax rate of 34% to income tax expense is as follows: Year Ended November 30, 2015 2014 Tax benefit at U.S. Federal statutory tax rate (34.0 %) (34.0 %) Increase (decrease) in tax rate resulting from: Change to valuation allowance 18.3 % 34.0 % Derivative revaluation expense 14.6 % — Nondeductible meals & entertainment expense and other 1.1 % — Effective tax rate 0.0 % 0.0 % At November 30, 2015, the Company had total domestic Federal net operating loss carryovers of approximately $1,833,000 available to offset future taxable income. Federal net operating loss carryovers ( “NOLs” In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available and due to the substantial doubt related to the Company’s ability to continue as a going concern and utilize its deferred tax assets, the Company recorded a full valuation allowance of the deferred tax asset. For the year ended November 30, 2015, the valuation allowance has increased by $507,306. The 2012 through 2015 tax years remain open to examination by the Internal Revenue Service. The IRS has the authority to examine such tax year until the applicable statute of limitations expire. |
RESTATEMENT
RESTATEMENT | 12 Months Ended |
Nov. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
RESTATEMENT | 11. RESTATEMENT The consolidated financial statements for the year ended November 30, 2014 have been restated to expense the previously capitalized licensing fee and to reclassify original issue discount that was initially recorded as a prepaid asset to debt discount. An analysis of those restated numbers is reflected below. Consolidated Balance Sheet November 30, 2014 As Reported Adjustment (As Restated) ASSETS CURRENT ASSETS Cash $ 2,247 $ — $ 2,247 Inventory 25,900 — 25,900 TOTAL CURRENT ASSETS 28,147 — 28,147 Other assets 526 — 526 Product license 29,250 (29,250 ) — TOTAL ASSETS $ 57,923 $ (29,250 ) $ 28,673 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 87,217 $ — $ 87,217 Accounts payable, related party 88,572 — 88,572 Due to related parties 6,927 — 6,927 Convertible notes payable, net of discount of 9,040 54,210 — 54,210 Notes payable 18,300 — 18,300 TOTAL CURRENT LIABILITIES 255,226 — 255,226 TOTAL LIABILITIES 255,226 — 255,226 COMMITMENTS AND CONTINGENCIES — — — STOCKHOLDERS' DEFICIT Preferred stock, $0.001 par value: 10,000,000 shares authorized; Class A Preferred Stock, $0.001 par value; 50,000 shares designated, 14,000 shares issued and outstanding 14 — 14 Common stock, $0.001 par value: 75,000,000 shares authorized; 5,144,400 shares issued and outstanding 5,144 — 5,144 Additional paid-in capital 203,445 — 203,445 Accumulated deficit (405,906 ) (29,250 ) (435,156 ) TOTAL STOCKHOLDERS' DEFICIT (197,303 ) (29,250 ) (226,553 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 57,923 $ (29,250 ) $ 28,673 Consolidated Statements of Operations For the Year Ended November 30, 2014 As Reported Adjustment (As Restated) Revenue $ 46,131 $ — $ 46,131 Cost of revenue 45,146 — 45,146 Gross profit 985 — 985 Operating expenses Advertising and marketing 137,473 — 137,473 Salary expense 50,200 — 50,200 Professional fees 42,954 — 42,954 General and administrative 134,252 29,250 163,502 Total operating expenses 364,879 29,250 394,129 Loss from operations (363,894 ) (29,250 ) (393,144 ) Other expenses Interest expense (985 ) — (985 ) Total other expenses (985 ) — (985 ) Loss before income taxes (364,879 ) (29,250 ) (394,129 ) Income tax expense — — — Net loss $ (364,879 ) $ (29,250 ) $ (394,129 ) Basic and diluted net loss per common share $ (0.07 ) $ (0.01 ) $ (0.08 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Nov. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS In accordance with FASB ASC 855-10, the Company has analyzed its operations subsequent to November 30, 2015 through April 28, 2017 and has determined that it does not have any material subsequent events to disclose in these financial statements except for the following. Notes Payable On December 2, 2015, the Company entered into a Promissory Note (the “Note” ) with a third party. Under the Note, the Company borrowed the sum of $125,000. The Note featured an original issue discount of $25,000, resulting in net funding to the Company of $100,000. The Note is due in sixty (60) days and does not bear interest. As additional consideration to the investor, the Company agreed to issue . Convertible Notes Payable On December 7, 2015, Amendments In January 2016, the Company entered into Amendments to its promissory notes with Adar Bays, Union Capital, LG Capital, and Typenex (the “Amendments”). In general, each of the Amendments stipulates that the lender will, for a period of ninety (90) days, convert no more than ten percent (10%) of the principal amount due under their notes in any thirty (30) day period. In addition, the specific Amendments also provide as follows: · The Adar Bays and Union Capital Amendments each provide that the conversion discount shall be increased by 5%, such that these notes are convertible at 55%, rather than 60%, of market price as defined in the notes. Further, the pricing period, or “look-back” for determining the conversion price has been extended from 20 days to 25 days, and the pre-payment penalty has been increased to 150%. · The LG Capital Amendment also calls for additional consideration to LG Capital in the form of warrants to purchase 75,000 shares of our common stock at a price of $0.30 per share, exercisable for 3 years. Also, we will be permitted to re-pay the LG Capital note with the applicable penalty set forth in the note for a pre-payment made between 91 and 180 days after issue. · The Typenex Amendment also allows pre-payment in accord with the terms for such pre-payment as set forth in the note, and contains certain affirmations and representations and warranties regarding our liability under the Typenex note and other matters. The Typenex Amendment was also conditional upon our filing our quarterly report for the period ended August 31, 2015 by January 27, 2016. On or around April 19, 2016, the Company received from counsel for Typenex, a written demand to accelerate and demand payment of the entire outstanding balance of the Convertible Note entered into between the Company and Typenex on May 29, 2015 (the “Typenex Note” Between April 2016 and August 2016, the Company entered into a convertible promissory note with JLA Realty (the “JLA Note” ). Under the terms of the JLA Note, the Company borrowed the sum of $325,600. The Note featured an original issue discount of $29,600, resulting in net funding to the Company of $296,000. The JLA Note is due in three years and accrues interest at 12% per annum. Between October 2016 and February 2017, the Company entered into three convertible promissory notes with Digital Power Corporation (NYSE: DPW) (the “DPW Notes” ). Under the terms of the DPW Notes, the Company borrowed the sum of $1,500,000. The DPW Notes featured an original issue discount of $75,000, resulting in net funding to the Company of $1,500,000. The DPW Notes are due in two years and accrue interest at 12% per annum. Subject to adjustment as provided for by the DPW Notes, DPW . Between March 2017 and April 2017, the Company received $400,871 in loans from DPW in excess of the three convertible promissory notes. Common Stock On December 10, 2015, the Company entered into a Subscription Agreement with a third party, whereby it sold 25,000 shares of its common stock at a price of $0.20 per share for total cash proceeds of $5,000 . On January 26, 2016, the Company granted 50,000 shares of common stock to a third party for consulting services. The shares were valued at $20,000, the fair value of the shares was determined based on the closing price of the Company’s common stock On January 26, 2016, the Company issued 297,619 shares of common stock to Typenex Co-Investment, LLC in conversion of $12,500 of accrued interest. On January 28, 2016, the Company issued 100,000 shares of common stock to Black Mountain Equities, Inc. in conversion of $12,830 of principal and accrued interest. On January 29, 2016, the Company issued 60,000 shares of common stock to JMJ Investments, Inc in conversion of $3,024 of accrued interest. On October 27, 2016, the Company authorized the issuance of 250,000 shares of common stock as payment for services to an officer. The company issued the shares on February 28, 2017. The shares were valued at $40,000, $0.16 per share, based on the closing price of the Company’s common stock on the date of grant. Preferred Stock On March 6, 2017, the Company withdrew its former Class A Convertible Preferred Stock (the “ Previous Class On March 7, 2017, the Company filed a new Certificate of Designations, Preferences, Rights and Limitations of Class A Convertible Preferred Stock (the “ Class A Certificate of Designations The Class A Shares each carry a stated value of $20.00. The Class A Shares shall vote together with the shares of Common Stock as a single class and, regardless of the number of Class A Shares outstanding, provided that at least 25,000 of such Class A Shares are outstanding, shall represent eighty percent (80%) of all votes entitled to be voted at any annual or special meeting of shareholders of the Company or action by written consent of shareholders, including any shares of preferred stock other than the Class A Shares that are voted with the Common Stock. Each outstanding Class A Share shall represent its proportionate share of the 80% which is allocated to the outstanding Class A Shares. The Class A Shares are convertible at the Holder’s option into shares of Common Stock of the Company at a conversion price derived by dividing the stated value of each Class A Share by $0.50 per share, subject to customary adjustment, which conversion may occur at any time at the option of the Holder. On March 7, 2017, the Company entered into an agreement (the “ Exchange Agreement Class A Shares On March 7, 2017, the Company filed the Certificate of Designations, Preferences, Rights and Limitations of Class B Convertible Preferred Stock (the “ Class B Certificate of Designations The Company designated 100,000 shares of its preferred stock, par value $0.001 per share, as Class B Shares. The Class B Shares will have a priority over all of the shares of Common Stock on liquidation or sale of the Company, at the rate of $50.00 per Class B Share, or a liquidation preference of $5,000,000 (the “ Class B Stated Value Management Services Agreement On May, 1, 2016, the Company entered into “MSA” “Alzamend” MTIX, Ltd. On October 26, 2016, the Company made an initial payment of $50,000 towards the purchase of MTIX Ltd., an advanced materials and processing technology company located in Huddersfield, West Yorkshire, UK ( “MTIX” On March 3, 2017, the Company entered into a Share Exchange Agreement (the “Exchange Agreement “Seller” “Sellers” “MTIX Shares” “Exchange” “Note” “Notes” “Class B Shares” “Majority Shareholder” Consummation of the Exchange (the “Closing” At the Closing the Company shall deliver to the Majority Shareholder and the two Sellers other than Majority Shareholder (the “Minority Shareholders” The Notes The Notes bear interest at 7% per annum with interest payable (i) in cash upon maturity or in connection with any voluntary or mandatory conversion or, (ii) at the option of the Seller, in arrears “Closing Date” Commencing two (2) years from the Closing Date, the Company may prepay any portion of the principal amount of the Notes without the prior written consent of the holders, provided, however, that the Company shall provide the Sellers with 90 days’ notice of such prepayment, and any prepayment must be undertaken on a pro rata basis for all Notes then outstanding. The holders of Notes shall have the right to convert any or all of the amount to be redeemed into common stock prior to prepayment. Each Note ranks pari passu in right of payment with all other Notes now or hereafter issued in accordance with the Exchange Agreement and matures on the five-year anniversary of the issuance date thereof. Subject to certain limitations, the Notes are convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion price equal to either (i) if the aggregate market capital of the Company on the date of conversion (the “Market Cap” “Conversion Price” Certificate of Designations of Class B Convertible Preferred Stock Upon Closing, the Company will issue the 100,000 Class B Shares to the Majority Shareholder. The Class B Shares will have a priority over all of the shares of Common Stock on liquidation or sale of the Company, at the rate of $50.00 per Class B Share, or a liquidation preference of $5,000,000 (the “ Class B Stated Value Security Agreement The Notes will be secured, pursuant to a Security Agreement, by a lien on certain of the Company’s assets, including but not limited to the intellectual property of MTIX. Upon the occurrence of an event of default under the Notes, a majority in interest of the Notes may require the Company to repay all of its Notes in cash, at a price equal to 100% of the principal, accrued and unpaid interest and any amounts, costs and liquidated damages, as applicable. Registration Rights Agreement In connection with the Exchange, the Company and the Sellers will enter into a Registration Rights Agreement under which the Company shall be required to file a registration statement with the Commission covering the resale of the shares of the Common Stock issuable pursuant to conversion of: (i) the Notes Stock Incentive Plan On October 27, 2016, subject to stockholder approval, the Company’s Board of Directors approved the Company’s 2016 Stock Incentive Plan (the “Plan” Restaurant Capital Group On April 13, 2016, through our wholly-owned subsidiary, Restaurant Capital Group, LLC (“ RCG Philo Between April 2016 and April 2017, the Company provided $931,000 in financing to Philo under the terms of a Senior Secured Property Note dated April 4, 2016, as amended (the “Philo Note” We partially funded the Philo Note from our loans dated April 13, 2016 and September 15, 2016, with JLA Realty Associates, LLC and its principals ( “JLA” “JLA Notes” In addition to the financing from JLA discussed above, RCG has received financing from MCKEA Holdings, LLC under a Promissory Note dated March 4, 2016 (the “MCKEA Note” |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of Consolidation The consolidated financial statements include accounts of Avalanche and its wholly-owned subsidiaries, SRB and RCG, (collectively referred to as the “Company" |
Accounting estimates | Accounting Estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s critical accounting policies that involve significant judgment and estimates include share based compensation, valuation of derivative liabilities and valuation of deferred income taxes. Actual results could differ from those estimates. |
Cash equivalents | Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The recorded carrying amounts of the Company’s cash and cash equivalents approximate their fair value. As of November 30, 2015 and 2014, the Company had no cash equivalents. |
Inventory valuation | Inventory Valuation Inventory is valued at the lower of cost or market. Cost is determined using the first-in, first-out method; market value is based upon estimated replacement costs. |
Fair value of financial instruments | Fair Value of Financial Instruments The Company’s financial instruments are accounts receivable, inventory, , inventory, and The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 assumptions: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including liabilities resulting from imbedded derivatives associated with certain warrants to purchase common stock. |
Derivative financial instruments | Derivative Financial Instruments Derivative liabilities are recognized in the consolidated balance sheets at fair value based on the criteria specified in Financial Accounting Standards Board ( “FASB” “ASC” – Derivatives and Hedging – Embedded Derivatives “ASC 815-15” Pursuant to required to be classified as a derivative liability. The fair value of are adjusted for changes in fair value at each reporting period, and the corresponding non-cash gain or loss is recorded When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. |
Debt discounts | Debt Discounts The Company accounts for debt discount according to ASC 470-20, Debt with Conversion and Other Options |
Revenue recognition | Revenue Recognition The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. During the years ended November 30, 2015 and 2014, the Company’s revenues consisted solely of sales of flavored liquids for electronic vaporizers and eCigarettes and accessories from SRB. |
Income taxes | Income Taxes The Company determines its income taxes under the asset and liability method in accordance with FASB ASC 740, Income Taxes “ASC 740” , which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the Statements of Income and Comprehensive Income in the period that includes the enactment date. ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. To the extent that the final tax outcome of these matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. ASC 740 |
Stock-based compensation | Stock-Based Compensation The Company accounts for stock option awards in accordance with FASB ASC Topic No. 718, Compensation-Stock Compensation The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of FASB ASC Topic No. 505-50, Equity Based Payments to Non-Employees |
Loss per common share | Loss per Common Share The Company utilizes FASB ASC Topic No. 260, Earnings per Share Since the effects of outstanding Class A convertible preferred stock and the conversion of convertible debt are anti-dilutive in all periods presented, shares of common stock underlying these instruments have been excluded from the computation of loss per common share. The following sets forth the number of shares of common stock underlying outstanding Class A convertible preferred stock and convertible debt as of November 30, 2015 and 2014: November 30, 2015 2014 Convertible notes payable 3,890,876 — Class A convertible preferred stock — 14,000 3,890,876 14,000 |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results of operations. In addition, certain prior year amounts from the restated amounts have been reclassified for consistency with the current period presentation. |
Recent accounting pronouncements | Recent Accounting Standards In May 2014, the FASB issued Accounting Standards Update ( “ASU” "Revenue from Contracts with Customers (Topic 606)" ( “ASU 2014-09” “Revenue Recognition” “Revenue Recognition – Construction - Type and Production - Type Contracts.” as a result of ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” There have been four new ASUs issued amending certain aspects of ASU 2014-09, ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross Versus Net),” “Identifying Performance Obligations and Licensing,” “Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients” Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” In August 2014, the FASB issued ASU No. 2014-15 “ Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU No. 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016 In July 2015, the FASB issued ASU No. 2015-11, “ Simplifying the Measurement of Inventory In August 2015, the FASB issued ASU No. 2015-15, “ Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Simplifying the Presentation of Debt Issuance Costs In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share Based Payment Accounting In February 2016, the FASB issued ASU No. 2016-02, Leases In December 2016, the FASB issued ASU 2016-19, Technical Corrections and Improvements In August 2016, the FASB issued ASU No. 2016-15, which revises the guidance in ASC 230, Statement of Cash Flows In January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of convertible preferred stock | The following sets forth the number of shares of common stock underlying outstanding Class A convertible preferred stock and convertible debt as of November 30, 2015 and 2014: November 30, 2015 2014 Convertible notes payable 3,890,876 — Class A convertible preferred stock — 14,000 3,890,876 14,000 |
CONVERTIBLE NOTES PAYBLE (Table
CONVERTIBLE NOTES PAYBLE (Tables) | 12 Months Ended |
Nov. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | Convertible notes payable at November 30, 2015, and November 30, 2014, are comprised of the following: November 30, 2015 2014 Notes payable to Adar Bays, LLC $ 115,000 $ — Notes payable to Union Capital, LLC 115,000 — Notes payable to Typenex Co-Investment, LLC 87,500 — Note payable to Gary Gelbfish 100,000 — Notes payable to JMJ Financial 60,500 — Notes payable to Black Mountain Equities, Inc. 55,000 — Notes payable to LG Capital Funding, LLC 50,000 63,250 Note payable to GCEF Opportunity Fund, LLC 27,500 — Note payable to Lord Abstract, LLC 8,800 — Total notes payable 619,300 63,250 Less: debt discount (202,325 ) (9,040 ) Total convertible notes payable, net of discount $ 416,975 $ 54,210 |
Schedule of convertible promissory notes | The table below summarizes the Company’s convertible promissory notes as of November 30, 2014. Inception Original Stock Principal Inception Due Interest Loan Issue Issued in Amount of Date Date Rate Cash Fees Discount Lieu of Cash Note LG Capital Funding, LLC 11/3/2014 11/3/2015 8 % $ 47,500 $ 7,500 $ 8,250 $ - $ 63,250 The table below summarizes the Company’s convertible promissory notes as of November 30, 2015. Inception Original Stock Principal Inception Due Interest Loan Issue Issued in Amount of Date Date Rate Cash Fees Discount Lieu of Cash Note Adar Bays, LLC 5/12/2015 5/12/2016 8 % $ 100,000 $ 15,000 $ - $ - $ 115,000 Union Capital, LLC 5/11/2015 5/11/2016 8 % 100,000 15,000 - - 115,000 Typenex Co-Investment, LLC 6/2/2015 7/2/2016 10 % 70,000 10,000 7,500 - 87,500 Gary Gelbfish 4/1/2015 9/23/2015 10 % 100,000 - - - 100,000 JMJ Financial 4/29/2015 4/29/2017 12 % 55,000 - 5,500 - 60,500 Black Mountain Equities, Inc. 6/4/2015 6/4/2016 10 % 50,000 - 5,000 - 55,000 LG Capital Funding, LLC 11/3/2014 11/3/2015 8 % 47,500 7,500 8,250 (13,250 ) 50,000 GCEF Opportunity Fund, LLC 6/30/2015 6/30/2016 10 % 25,000 - 2,500 - 27,500 Lord Abstract, LLC 6/30/2015 6/30/2016 10 % 8,000 - 800 - 8,800 Total $ 555,500 $ 47,500 $ 29,550 $ (13,250 ) $ 619,300 |
Schedule of maturities of convertible notes payable | As reflected below, at November 30, 2015, the Company’s convertible notes payable were convertible into 3,890,876 shares of the Company’s common stock at the conversion terms below. Shares Issuable Upon Conversion Conversion terms at November 30, 2015 Adar Bays, LLC 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion 638,889 Union Capital, LLC 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion 638,889 Typenex Co-Investment, LLC 35% of lowest closing bid price of the Company's common stock for the 20 days preceding conversion 1,013,352 Gary Gelbfish 50% of the average of the closing price of the Company's common stock for the twenty days preceding conversion 455,063 JMJ Financial 60% of the lowest trading price of the Company's common stock in the 25 days prior to conversion 403,333 Black Mountain Equities, Inc. 70% of the average of the three lowest closing prices of the Company's common stock during the twenty days preceding conversion 261,905 LG Capital Funding, LLC 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion 277,778 GCEF Opportunity Fund, LLC 60% of the lowest closing price of the Company's common stock for the 20 days preceding conversion 152,778 Lord Abstract, LLC 60% of the lowest closing price of the Company's common stock for the 20 days preceding conversion 48,889 Number of shares of common stock underlying 3,890,876 |
Schedule of company derivative liabilities | The tables below summarize the Company’s derivative liabilities and the related non-cash charges at November 30, 2015. Estimated FV of Debt Conversion Debt Feature at Loss on Debt Amortization Discount at Inception Other Fees Issuance Discount Expense November 30, 2015 Adar Bays, LLC $ 203,234 $ - $ (103,234 ) $ 100,000 $ (59,589 ) $ 40,411 Union Capital, LLC 193,664 - (93,664 ) 100,000 (59,904 ) 40,096 Typenex Co-Investment, LLC 48,301 7,500 - 55,801 (27,671 ) 28,130 Gary Gelbfish 116,224 41,349 (57,573 ) 100,000 (100,000 ) - JMJ Financial 173,334 2,500 (118,334 ) 57,500 (12,924 ) 44,576 Black Mountain Equities, Inc. 68,362 5,000 (18,362 ) 55,000 (26,972 ) 28,028 LG Capital Funding, LLC 109,773 - (62,273 ) 47,500 (47,500 ) - GCEF Opportunity Fund, LLC 29,889 2,500 (4,889 ) 27,500 (11,527 ) 15,973 Lord Abstract, LLC 9,565 800 (1,565 ) 8,800 (3,689 ) 5,111 952,346 59,649 (459,894 ) 552,101 (349,776 ) 202,325 Notes payable: Studio Capital, LLC - - - 26,968 (7,674 ) 19,294 Loss on payment - - (12,139 ) - - - Total $ 952,346 $ 59,649 $ (472,033 ) $ 579,069 $ (357,450 ) $ 221,619 Estimated FV of Debt Conversion Feature at Change in FV of Inception November 30, 2015 Debt Conversion Feature Adar Bays, LLC $ 203,234 $ 207,659 $ 4,425 Union Capital, LLC 193,664 207,536 13,872 Typenex Co-Investment, LLC 48,301 380,858 332,557 Gary Gelbfish 116,224 118,391 2,167 JMJ Financial 173,334 155,017 (18,317 ) Black Mountain Equities, Inc. 68,362 81,951 13,589 LG Capital Funding, LLC 109,773 94,905 (14,868 ) GCEF Opportunity Fund, LLC 29,889 50,532 20,643 Lord Abstract, LLC 9,565 16,163 6,598 $ 952,346 $ 1,313,012 $ 360,666 |
Schedule of accounts payable and accrued expenses | At November 30, 2015 and 2014, accrued interest on the convertible promissory notes totaled $42,426 and $374, respectively, and is recorded in accounts payable and accrued expenses on the consolidated balance sheets. Interest Expense for the Year ended Accrued Interest at November 30, November 30, 2015 November 30, 2014 2015 2014 Adar Bays, LLC $ 5,091 $ - $ 5,091 $ - Union Capital, LLC 5,117 - 5,117 - Typenex Co-Investment, LLC 6,225 - 6,225 - Gary Gelbfish 6,795 - 6,795 - JMJ Financial 7,260 - 7,260 - Black Mountain Equities, Inc. 5,500 - 5,500 - LG Capital Funding, LLC 5,778 374 4,891 374 GCEF Opportunity Fund, LLC 1,172 - 1,172 - Lord Abstract, LLC 375 - 375 - Total $ 43,313 $ 374 $ 42,426 $ 374 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Nov. 30, 2015 | |
Notes Payable [Abstract] | |
Schedule of short term notes payable | Notes payable at November 30, 2015, and November 30, 2014, are comprised of the following: November 30, 2015 2014 Notes payable to Studio Capital, LLC (a) $ 125,000 $ — Notes payable to Argent Offset, LLC (b) 16,825 13,000 Notes payable to Strategic IR, Inc. (c) 12,500 — Notes payable to Cross Click Media, Inc. (d) — 4,200 Notes payable to MCKEA Holdings, LLC (d) — 1,100 Total notes payable 154,325 18,300 Less: debt discount (19,294 ) — Notes payable 135,031 18,300 (a) On October 8, 2015, Studio Capital, LLC, ( “Studio Capital” “Studio Capital Note” (b) On November 26, 2014, the Company issued Argent Offset, LLC ( “Argent” “Argent Note” (c) On March 17, 2015, the Company issued Strategic, IR, Inc. ( “Strategic” “Strategic Note” (d) As of November 30, 2014, the Company owed $4,200 to Cross Click and $1,100 to MCKEA for short-term advances to the Company. During 2015, these advances were repaid. All advances were non-interest bearing, due upon demand and unsecured. (e) During 2015, the Company entered into two short-terms loans, in the aggregate amount of $9,500. The Company received $5,000 in cash and expenses of $4,500 were paid on the Company’s behalf. These short-term loans accrued interest at 10% and These loans were repaid during 2015. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Nov. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of liabilities | The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of November 30 Fair value measured at November 30, 2015 Fair value at Quoted prices in Significant other Significant Derivative liabilities $ 1,313,012 $ - $ - $ 1,313,012 |
Schedule of fair value liabilities gains & losses | Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. December 1, 2014 Derivative Change in estimated November 30, 2015 Derivative liabilities $ - $ 952,346 $ 360,666 $ 1,313,012 |
Schedule of fair value inputs | A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liabilities that are categorized within Level 3 of the fair value hierarchy for the year ended November 30 Date of valuation November 30, 2015 Inception of loan Stock price $ 0.45 $ 0.55 – 1.41 Conversion price $ 0.10 – 0.22 $ 0.24 – 1.20 Volatility 161% – 239% 103% – 151% Risk free interest rate .11% – .86% .08% – .74% Years to maturity .45 – 1.74 .43 – 2.00 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Nov. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax asset | The table below shows the balances for the deferred income tax assets and liabilities as of the date indicated. November 30, 2015 2014 Deferred income tax asset: Net operating loss $ 623,354 $ 138,008 Other accrued liabilities 21,961 — Total deferred tax asset 645,315 138,008 Valuation allowance (645,315 ) (138,008 ) Deferred income tax asset, net of allowance $ — $ — |
Schedule of income tax provision | The income tax provision (benefit) consists of the following: November 30, 2015 2014 Federal and State Current $ — $ — Deferred (645,315 ) (138,008 ) Valuation allowance 645,315 138,008 Income tax provision (benefit) $ — $ — |
Schedule of federal income tax | During the years ended November 30, 2015 and 2014, the Company did not recognize income tax expense. The Company’s effective tax rate was 0% in both years. The effective tax rate differed primarily due to the change in the valuation allowance. The reconciliation of income tax attributable to operations computed at the U.S. Federal statutory income tax rate of 34% to income tax expense is as follows: Year Ended November 30, 2015 2014 Tax benefit at U.S. Federal statutory tax rate (34.0 %) (34.0 %) Increase (decrease) in tax rate resulting from: Change to valuation allowance 18.3 % 34.0 % Derivative revaluation expense 14.6 % — Nondeductible meals & entertainment expense and other 1.1 % — Effective tax rate 0.0 % 0.0 % |
RESTATEMENT (Tables)
RESTATEMENT (Tables) | 12 Months Ended |
Nov. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of condensed balance sheet | Consolidated Balance Sheet November 30, 2014 As Reported Adjustment (As Restated) ASSETS CURRENT ASSETS Cash $ 2,247 $ — $ 2,247 Inventory 25,900 — 25,900 TOTAL CURRENT ASSETS 28,147 — 28,147 Other assets 526 — 526 Product license 29,250 (29,250 ) — TOTAL ASSETS $ 57,923 $ (29,250 ) $ 28,673 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 87,217 $ — $ 87,217 Accounts payable, related party 88,572 — 88,572 Due to related parties 6,927 — 6,927 Convertible notes payable, net of discount of 9,040 54,210 — 54,210 Notes payable 18,300 — 18,300 TOTAL CURRENT LIABILITIES 255,226 — 255,226 TOTAL LIABILITIES 255,226 — 255,226 COMMITMENTS AND CONTINGENCIES — — — STOCKHOLDERS' DEFICIT Preferred stock, $0.001 par value: 10,000,000 shares authorized; Class A Preferred Stock, $0.001 par value; 50,000 shares designated, 14,000 shares issued and outstanding 14 — 14 Common stock, $0.001 par value: 75,000,000 shares authorized; 5,144,400 shares issued and outstanding 5,144 — 5,144 Additional paid-in capital 203,445 — 203,445 Accumulated deficit (405,906 ) (29,250 ) (435,156 ) TOTAL STOCKHOLDERS' DEFICIT (197,303 ) (29,250 ) (226,553 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 57,923 $ (29,250 ) $ 28,673 |
Schedule of condensed statement of operations | Consolidated Statements of Operations For the Year Ended November 30, 2014 As Reported Adjustment (As Restated) Revenue $ 46,131 $ — $ 46,131 Cost of revenue 45,146 — 45,146 Gross profit 985 — 985 Operating expenses Advertising and marketing 137,473 — 137,473 Salary expense 50,200 — 50,200 Professional fees 42,954 — 42,954 General and administrative 134,252 29,250 163,502 Total operating expenses 364,879 29,250 394,129 Loss from operations (363,894 ) (29,250 ) (393,144 ) Other expenses Interest expense (985 ) — (985 ) Total other expenses (985 ) — (985 ) Loss before income taxes (364,879 ) (29,250 ) (394,129 ) Income tax expense — — — Net loss $ (364,879 ) $ (29,250 ) $ (394,129 ) Basic and diluted net loss per common share $ (0.07 ) $ (0.01 ) $ (0.08 ) |
ORGANIZATION AND DESCRIPTION 26
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) | 12 Months Ended |
Nov. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Date of Incorporation | Apr. 14, 2011 |
Date of Subsidiary Incorporation | May 19, 2014 |
Current Fiscal Year End | --11-30 |
LIQUIDITY AND GOING CONCERN (De
LIQUIDITY AND GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Loss available to common shareholders | $ (2,777,661) | $ (394,129) | |
Accumulated deficit | (3,212,817) | $ (435,156) | [1] |
Working capital | $ (2,087,389) | ||
[1] | As Restated |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 12 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Number of shares of common stock underlying the convertible promissory notes | 3,890,876 | 14,000 |
Class A Convertible Preferred Stock [Member] | ||
Number of shares of common stock underlying the convertible promissory notes | 14,000 | |
Convertible Notes Payable [Member] | ||
Number of shares of common stock underlying the convertible promissory notes | 3,890,876 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | [1] | |
Accounting Policies [Abstract] | |||
Derivative liability | $ 1,313,012 | ||
Interest expense - debt discount | $ 357,450 | ||
[1] | As Restated |
LOAN RECEIVABLE (Details Narrat
LOAN RECEIVABLE (Details Narrative) - Aja Cannafacturing, Inc. [Member] - 10 % Promissory Note [Member] | Jun. 05, 2015USD ($) |
Loan issuance | $ 12,500 |
Maturity date | Dec. 31, 2015 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Nov. 30, 2015 | Nov. 30, 2014 | |
Total notes payable | $ 619,300 | $ 63,250 | |
Less: debt discount | 202,325 | 9,040 | |
Total convertible notes payable, net of discount | 416,975 | 54,210 | [1] |
Convertible Notes Payable [Member] | |||
Less: debt discount | (202,325) | ||
Convertible Notes Payable [Member] | Black Mountain Equities, Inc. [Member] | |||
Total notes payable | 55,000 | ||
Less: debt discount | 28,028 | ||
Convertible Notes Payable [Member] | Adar Bays, LLC [Member] | |||
Total notes payable | 115,000 | ||
Less: debt discount | 40,411 | ||
Convertible Notes Payable [Member] | Union Capital, LLC [Member] | |||
Total notes payable | 115,000 | ||
Less: debt discount | 40,096 | ||
Convertible Notes Payable [Member] | Typenex Co-Investment, LLC [Member] | |||
Total notes payable | 87,500 | ||
Less: debt discount | 28,130 | ||
Convertible Notes Payable [Member] | Dr.Gary Gelbfish [Member] | |||
Total notes payable | 100,000 | ||
Less: debt discount | |||
Convertible Notes Payable [Member] | JMJ Financial [Member] | |||
Total notes payable | 60,500 | ||
Less: debt discount | 44,576 | ||
Convertible Notes Payable [Member] | LG Capital Funding, LLC [Member] | |||
Total notes payable | 50,000 | 63,250 | |
Less: debt discount | |||
Convertible Notes Payable [Member] | GCEF Opportunity Fund, LLC [Member] | |||
Total notes payable | 27,500 | ||
Less: debt discount | 15,973 | ||
Convertible Notes Payable [Member] | Lord Abstract, LLC [Member] | |||
Total notes payable | 8,800 | ||
Less: debt discount | $ 5,111 | ||
[1] | As Restated |
CONVERTIBLE NOTES PAYABLE (De32
CONVERTIBLE NOTES PAYABLE (Details 1) - USD ($) | 12 Months Ended | |||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | ||
Cash | $ 405 | $ 2,247 | [1] | |
Loan Fees | $ 47,500 | |||
Original Issue Discount | 2955000.00% | |||
Stock Issued in Lieu of Cash | (13,250) | |||
Principal Amount of Note | $ 619,300 | 63,250 | ||
Convertible Notes Payable [Member] | ||||
Cash | 555,500 | |||
Loan Fees | $ 47,500 | |||
Convertible Notes Payable [Member] | Black Mountain Equities, Inc. [Member] | ||||
Inception date | Jun. 4, 2015 | |||
Due Date | Jun. 4, 2016 | |||
Inception Interest Rate | 10.00% | |||
Cash | $ 50,000 | |||
Loan Fees | ||||
Original Issue Discount | 500000.00% | |||
Stock Issued in Lieu of Cash | ||||
Principal Amount of Note | $ 55,000 | |||
Convertible Notes Payable [Member] | LG Capital Funding, LLC [Member] | ||||
Inception date | Nov. 3, 2014 | Nov. 3, 2014 | ||
Due Date | Nov. 3, 2015 | Nov. 3, 2015 | ||
Inception Interest Rate | 8.00% | 8.00% | ||
Cash | $ 47,500 | $ 47,500 | ||
Loan Fees | $ 7,500 | $ 7,500 | ||
Original Issue Discount | 825000.00% | 825000.00% | ||
Stock Issued in Lieu of Cash | (13,250) | |||
Principal Amount of Note | $ 50,000 | $ 63,250 | ||
Convertible Notes Payable [Member] | Adar Bays, LLC [Member] | ||||
Inception date | May 12, 2015 | |||
Due Date | May 12, 2016 | |||
Inception Interest Rate | 8.00% | |||
Cash | $ 100,000 | |||
Loan Fees | $ 15,000 | |||
Original Issue Discount | ||||
Stock Issued in Lieu of Cash | ||||
Principal Amount of Note | $ 115,000 | |||
Convertible Notes Payable [Member] | Union Capital, LLC [Member] | ||||
Inception date | May 11, 2015 | |||
Due Date | May 11, 2016 | |||
Inception Interest Rate | 8.00% | |||
Cash | $ 100,000 | |||
Loan Fees | $ 15,000 | |||
Original Issue Discount | ||||
Stock Issued in Lieu of Cash | ||||
Principal Amount of Note | $ 115,000 | |||
Convertible Notes Payable [Member] | Typenex Co-Investment, LLC [Member] | ||||
Inception date | Jun. 2, 2015 | |||
Due Date | Jul. 2, 2016 | |||
Inception Interest Rate | 10.00% | |||
Cash | $ 70,000 | |||
Loan Fees | $ 10,000 | |||
Original Issue Discount | 750000.00% | |||
Stock Issued in Lieu of Cash | ||||
Principal Amount of Note | $ 87,500 | |||
Convertible Notes Payable [Member] | Dr.Gary Gelbfish [Member] | ||||
Inception date | Apr. 1, 2015 | |||
Due Date | Sep. 23, 2015 | |||
Inception Interest Rate | 10.00% | |||
Cash | $ 100,000 | |||
Loan Fees | ||||
Original Issue Discount | ||||
Stock Issued in Lieu of Cash | ||||
Principal Amount of Note | $ 100,000 | |||
Convertible Notes Payable [Member] | JMJ Financial [Member] | ||||
Inception date | Apr. 29, 2015 | |||
Due Date | Apr. 29, 2017 | |||
Inception Interest Rate | 12.00% | |||
Cash | $ 55,000 | |||
Loan Fees | ||||
Original Issue Discount | 550000.00% | |||
Stock Issued in Lieu of Cash | ||||
Principal Amount of Note | $ 60,500 | |||
Convertible Notes Payable [Member] | GCEF Opportunity Fund, LLC [Member] | ||||
Inception date | Jun. 30, 2015 | |||
Due Date | Jun. 30, 2016 | |||
Inception Interest Rate | 10.00% | |||
Cash | $ 25,000 | |||
Loan Fees | ||||
Original Issue Discount | 250000.00% | |||
Stock Issued in Lieu of Cash | ||||
Principal Amount of Note | $ 27,500 | |||
Convertible Notes Payable [Member] | Lord Abstract, LLC [Member] | ||||
Inception date | Jun. 30, 2015 | |||
Due Date | Jun. 30, 2016 | |||
Inception Interest Rate | 10.00% | |||
Cash | $ 8,000 | |||
Loan Fees | ||||
Original Issue Discount | 80000.00% | |||
Stock Issued in Lieu of Cash | ||||
Principal Amount of Note | $ 8,800 | |||
[1] | As Restated |
CONVERTIBLE NOTES PAYABLE (De33
CONVERTIBLE NOTES PAYABLE (Details 2) - shares | 12 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Shares Issuable Upon Conversion | 3,890,876 | 14,000 |
Convertible Notes Payable [Member] | ||
Shares Issuable Upon Conversion | 3,890,876 | |
Convertible Notes Payable [Member] | Black Mountain Equities, Inc. [Member] | ||
Conversion terms | 70% of the average of the three lowest closing prices of the Company's common stock during the twenty days preceding conversion | |
Shares Issuable Upon Conversion | 261,905 | |
Convertible Notes Payable [Member] | Adar Bays, LLC [Member] | ||
Conversion terms | 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion | |
Shares Issuable Upon Conversion | 638,889 | |
Convertible Notes Payable [Member] | Union Capital, LLC [Member] | ||
Conversion terms | 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion | |
Shares Issuable Upon Conversion | 638,889 | |
Convertible Notes Payable [Member] | Typenex Co-Investment, LLC [Member] | ||
Conversion terms | 35% of lowest closing bid price of the Company's common stock for the 20 days preceding conversion | |
Shares Issuable Upon Conversion | 1,013,352 | |
Convertible Notes Payable [Member] | Dr.Gary Gelbfish [Member] | ||
Conversion terms | 50% of the average of the closing price of the Company's common stock for the twenty days preceding conversion | |
Shares Issuable Upon Conversion | 455,063 | |
Convertible Notes Payable [Member] | JMJ Financial [Member] | ||
Conversion terms | 60% of the lowest trading price of the Company's common stock in the 25 days prior to conversion | |
Shares Issuable Upon Conversion | 403,333 | |
Convertible Notes Payable [Member] | LG Capital Funding, LLC [Member] | ||
Conversion terms | 60% of the lowest trading price of the Company's common stock for the 20 days preceding conversion | |
Shares Issuable Upon Conversion | 277,778 | |
Convertible Notes Payable [Member] | GCEF Opportunity Fund, LLC [Member] | ||
Conversion terms | 60% of the lowest closing price of the Company's common stock for the 20 days preceding conversion | |
Shares Issuable Upon Conversion | 152,778 | |
Convertible Notes Payable [Member] | Lord Abstract, LLC [Member] | ||
Conversion terms | 60% of the lowest closing price of the Company's common stock for the 20 days preceding conversion | |
Shares Issuable Upon Conversion | 48,889 |
CONVERTIBLE NOTES PAYABLE (De34
CONVERTIBLE NOTES PAYABLE (Details 3) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | ||
Loss on Issuance | $ (472,033) | [1] | |
Less: debt discount | 202,325 | $ 9,040 | |
Convertible Notes Payable [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 952,346 | ||
Other Fees | 59,649 | ||
Loss on Issuance | (459,894) | ||
Debt Discount | 552,101 | ||
Amortization Expense | (349,776) | ||
Less: debt discount | (202,325) | ||
Estimated FV of Debt Conversion Feature at Inception After Notes Payable | 952,346 | ||
Other Fees After Notes Payable | 59,649 | ||
Loss on Issuance After Notes Payable | (472,033) | ||
Loss on payment | (12,139) | ||
Debt Discount After Notes Payable | 579,069 | ||
Amortization Expense After Notes Payable | (357,450) | ||
Debt Discount After Notes Payable at 11/30/2015 | 221,619 | ||
Convertible Notes Payable [Member] | Black Mountain Equities, Inc. [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 68,362 | ||
Other Fees | 5,000 | ||
Loss on Issuance | (18,362) | ||
Debt Discount | 55,000 | ||
Amortization Expense | (26,972) | ||
Less: debt discount | 28,028 | ||
Convertible Notes Payable [Member] | Adar Bays, LLC [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 203,234 | ||
Other Fees | |||
Loss on Issuance | (103,234) | ||
Debt Discount | 100,000 | ||
Amortization Expense | (59,589) | ||
Less: debt discount | 40,411 | ||
Convertible Notes Payable [Member] | Union Capital, LLC [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 193,664 | ||
Other Fees | |||
Loss on Issuance | (93,664) | ||
Debt Discount | 100,000 | ||
Amortization Expense | (59,904) | ||
Less: debt discount | 40,096 | ||
Convertible Notes Payable [Member] | Typenex Co-Investment, LLC [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 48,301 | ||
Other Fees | 7,500 | ||
Loss on Issuance | |||
Debt Discount | 55,801 | ||
Amortization Expense | (27,671) | ||
Less: debt discount | 28,130 | ||
Convertible Notes Payable [Member] | Dr.Gary Gelbfish [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 116,224 | ||
Other Fees | 41,349 | ||
Loss on Issuance | (57,573) | ||
Debt Discount | 100,000 | ||
Amortization Expense | (100,000) | ||
Less: debt discount | |||
Convertible Notes Payable [Member] | JMJ Financial [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 173,334 | ||
Other Fees | 2,500 | ||
Loss on Issuance | (118,334) | ||
Debt Discount | 57,500 | ||
Amortization Expense | (12,924) | ||
Less: debt discount | 44,576 | ||
Convertible Notes Payable [Member] | LG Capital Funding, LLC [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 109,773 | ||
Other Fees | |||
Loss on Issuance | (62,273) | ||
Debt Discount | 47,500 | ||
Amortization Expense | (47,500) | ||
Less: debt discount | |||
Convertible Notes Payable [Member] | GCEF Opportunity Fund, LLC [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 29,889 | ||
Other Fees | 2,500 | ||
Loss on Issuance | (4,889) | ||
Debt Discount | 27,500 | ||
Amortization Expense | (11,527) | ||
Less: debt discount | 15,973 | ||
Convertible Notes Payable [Member] | Lord Abstract, LLC [Member] | |||
Estimated FV of Debt Conversion Feature at Inception | 9,565 | ||
Other Fees | 800 | ||
Loss on Issuance | (1,565) | ||
Debt Discount | 8,800 | ||
Amortization Expense | (3,689) | ||
Less: debt discount | $ 5,111 | ||
[1] | As Restated |
CONVERTIBLE NOTES PAYABLE (De35
CONVERTIBLE NOTES PAYABLE (Details 4) - Convertible Notes Payable [Member] | 12 Months Ended |
Nov. 30, 2015USD ($) | |
Estimated FV of Debt Conversion Feature at Inception | $ 952,346 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 1,313,012 |
Change in FV of Debt Conversion Feature | 360,666 |
Black Mountain Equities, Inc. [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 68,362 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 81,951 |
Change in FV of Debt Conversion Feature | 13,589 |
Adar Bays, LLC [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 203,234 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 207,659 |
Change in FV of Debt Conversion Feature | 4,425 |
Union Capital, LLC [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 193,664 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 207,536 |
Change in FV of Debt Conversion Feature | 13,872 |
Typenex Co-Investment, LLC [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 48,301 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 380,858 |
Change in FV of Debt Conversion Feature | 332,557 |
Dr.Gary Gelbfish [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 116,224 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 118,391 |
Change in FV of Debt Conversion Feature | 2,167 |
JMJ Financial [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 173,334 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 155,017 |
Change in FV of Debt Conversion Feature | (18,317) |
LG Capital Funding, LLC [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 109,773 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 94,905 |
Change in FV of Debt Conversion Feature | (14,868) |
GCEF Opportunity Fund, LLC [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 29,889 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 50,532 |
Change in FV of Debt Conversion Feature | 20,643 |
Lord Abstract, LLC [Member] | |
Estimated FV of Debt Conversion Feature at Inception | 9,565 |
Estimated FV of Debt Conversion Feature at November 30, 2015 | 16,163 |
Change in FV of Debt Conversion Feature | $ 6,598 |
CONVERTIBLE NOTES PAYABLE (De36
CONVERTIBLE NOTES PAYABLE (Details 5) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | ||
Interest Expense | $ 76,029 | $ 985 | [1] |
Convertible Notes Payable [Member] | |||
Interest Expense | 43,313 | 985 | |
Accrued Interest | 42,426 | 374 | |
Convertible Notes Payable [Member] | Black Mountain Equities, Inc. [Member] | |||
Interest Expense | 5,500 | ||
Accrued Interest | 5,500 | ||
Convertible Notes Payable [Member] | Adar Bays, LLC [Member] | |||
Interest Expense | 5,091 | ||
Accrued Interest | 5,091 | ||
Convertible Notes Payable [Member] | Union Capital, LLC [Member] | |||
Interest Expense | 5,117 | ||
Accrued Interest | 5,117 | ||
Convertible Notes Payable [Member] | Typenex Co-Investment, LLC [Member] | |||
Interest Expense | 6,225 | ||
Accrued Interest | 6,225 | ||
Convertible Notes Payable [Member] | Dr.Gary Gelbfish [Member] | |||
Interest Expense | 6,795 | ||
Accrued Interest | 6,795 | ||
Convertible Notes Payable [Member] | JMJ Financial [Member] | |||
Interest Expense | 7,260 | ||
Accrued Interest | 7,260 | ||
Convertible Notes Payable [Member] | LG Capital Funding, LLC [Member] | |||
Interest Expense | 5,778 | 374 | |
Accrued Interest | 4,891 | 374 | |
Convertible Notes Payable [Member] | GCEF Opportunity Fund, LLC [Member] | |||
Interest Expense | 1,172 | ||
Accrued Interest | 1,172 | ||
Convertible Notes Payable [Member] | Lord Abstract, LLC [Member] | |||
Interest Expense | 375 | ||
Accrued Interest | $ 375 | ||
[1] | As Restated |
CONVERTIBLE NOTES PAYABLE (De37
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | |||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | ||
Proceeds from convertible notes payable | $ 508,000 | $ 63,250 | ||
Loan Fees | $ 47,500 | |||
Number of shares of common stock underlying the convertible promissory notes | 3,890,876 | 14,000 | ||
Cash | $ 405 | $ 2,247 | [1] | |
Loss on Issuance | (472,033) | [1] | ||
Change in estimated fair value recognized in results of operations | (360,666) | [1] | ||
Interest Expense | 76,029 | 985 | [1] | |
Convertible Notes Payable [Member] | ||||
Proceeds from convertible notes payable | 508,000 | $ 47,500 | ||
Aggregate principal amount | 632,550 | |||
Loan Fees | 47,500 | |||
Original Issue Discount | $ 29,550 | |||
Number of shares of common stock underlying the convertible promissory notes | 3,890,876 | |||
Estimated FV of Debt Conversion Feature at Inception | $ 952,346 | |||
Cash | 555,500 | |||
Debt Discount | 552,101 | |||
Loss on Issuance | (459,894) | |||
Amortization Expense After Notes Payable | (357,450) | |||
Derivative liabilities | 1,313,012 | |||
Change in estimated fair value recognized in results of operations | 360,666 | |||
Interest Expense | 43,313 | $ 985 | ||
Accrued Interest | 42,426 | 374 | ||
Convertible Notes Payable [Member] | LG Capital Funding, LLC [Member] | ||||
Loan Fees | $ 7,500 | 7,500 | ||
Interest rate | 24.00% | |||
Number of shares of common stock underlying the convertible promissory notes | 277,778 | |||
Estimated FV of Debt Conversion Feature at Inception | $ 109,773 | |||
Cash | 47,500 | 47,500 | ||
Debt Discount | 47,500 | |||
Loss on Issuance | (62,273) | |||
Interest Expense | 5,778 | 374 | ||
Accrued Interest | 4,891 | 374 | ||
Convertible Notes Payable [Member] | Dr.Gary Gelbfish [Member] | ||||
Loan Fees | ||||
Interest rate | 10.00% | |||
Number of shares of common stock underlying the convertible promissory notes | 455,063 | |||
Estimated FV of Debt Conversion Feature at Inception | $ 116,224 | |||
Cash | 100,000 | |||
Debt Discount | 100,000 | |||
Loss on Issuance | (57,573) | |||
Interest Expense | 6,795 | |||
Accrued Interest | 6,795 | |||
Convertible Notes Payable [Member] | Typenex Co-Investment, LLC [Member] | ||||
Loan Fees | $ 10,000 | |||
Interest rate | 2200.00% | |||
Default penalty | $ 18,902 | |||
Number of shares of common stock underlying the convertible promissory notes | 1,013,352 | |||
Estimated FV of Debt Conversion Feature at Inception | $ 48,301 | |||
Cash | 70,000 | |||
Debt Discount | 55,801 | |||
Loss on Issuance | ||||
Interest Expense | 6,225 | |||
Accrued Interest | $ 6,225 | |||
Convertible Notes Payable [Member] | Minimum [Member] | ||||
Interest rate | 8.00% | |||
Convertible Notes Payable [Member] | Maximum [Member] | ||||
Interest rate | 12.00% | |||
[1] | As Restated |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Nov. 30, 2015 | Nov. 30, 2014 | ||
Total notes payable | [1] | $ 18,300 | ||
Notes payable | $ 135,031 | 18,300 | [1] | |
Notes payable [Member] | ||||
Total notes payable | 154,325 | 18,300 | ||
Less: debt discount | (19,294) | |||
Notes payable | 135,031 | 18,300 | ||
Notes payable [Member] | Cross Click Media, Inc. [Member] | ||||
Total notes payable | [2] | 4,200 | ||
Notes payable [Member] | MCKEA Holdings, LLC [Member] | ||||
Total notes payable | [2] | 1,100 | ||
Notes payable [Member] | Studio Capital, LLC [Member] | ||||
Total notes payable | [3] | 125,000 | ||
Notes payable [Member] | Argent Offset, LLC [Member] | ||||
Total notes payable | [4] | 16,825 | 13,000 | |
Notes payable [Member] | Strategic IR, Inc. [Member] | ||||
Total notes payable | [5] | $ 12,500 | ||
[1] | As Restated | |||
[2] | As of November 30, 2014, the Company owed $4,200 to Cross Click and $1,100 to MCKEA for short-term advances to the Company. During 2015, these advances were repaid. All advances were non-interest bearing, due upon demand and unsecured. | |||
[3] | On October 8, 2015, Studio Capital, LLC, ("Studio Capital") loaned $100,000 to the Company. As consideration for the loan, the Company issued Studio Capital a promissory note in the aggregate principal amount of $125,000, which included a loan discount of $25,000 (the "Studio Capital Note") with net proceeds of $100,000. The Studio Capital note does not accrue interest; however, the note provides for a loan fee of 5,000 shares of the Company's common stock and has a maturity date of April 8, 2016. The Studio Capital Note was not repaid on the maturity date and, as a result of this default, subsequent to year end, on April 8, 2016, the Company recorded a default penalty of $25,000, 20% of the outstanding balance of the Studio Capital Note. The Company recorded a debt discount in the amount of $26,968 based on the estimated fair value of the 5,000 shares of common stock, derived from the closing market price of the Company's common stock on the date of the loan, and the $25,000 loan discount. The debt discount is being amortized as non-cash interest expense over the term of the debt using the effective interest method. During the year ended November 30, 2015, interest expense of $7,674 was recorded from the debt discount amortization. | |||
[4] | On November 26, 2014, the Company issued Argent Offset, LLC ("Argent") a promissory note in consideration of expenses that it paid on the Company's behalf in the aggregate principal amount of $13,000 (the "Argent Note"). The Argent Note included a $500 loan fee, accrued interest at 10%, compounded monthly, and was due December 5, 2014. A late payment fee of $500 per day was to be incurred from December 6, 2014 through December 7, 2014 and then increases to $1,000 per day. On February 1, 2015, the Company entered into a Temporary Forbearance Agreement with Argent. Under the forbearance agreement, the Company agreed to pay a forbearance fee of $7,000 and to extend the maturity date to August 1, 2015. Argent also advanced the Company an additional $19,825 pursuant to the terms of the Argent Note. As of November 30, 2015, $16,000 has been repaid on the Argent Note. The Argent Note is currently in default. During the years ended November 30, 2015 and 2014, the Company incurred interest expense, excluding loan fees, of $14 and $2,050, respectively, on the Argent Note. At November 30, 2015 and 2014, accrued interest on the Argent Note totaled $2,064 and $14, respectively. | |||
[5] | On March 17, 2015, the Company issued Strategic, IR, Inc. ("Strategic") a promissory note in consideration of expenses that it paid on the Company's behalf in the aggregate principal amount of $12,500 (the "Strategic Note"). The Strategic Note included a $1,750 loan fee, accrued interest at 10% and was due April 16, 2015. The Strategic Note is currently in default and accruing interest at the default rate of 21% per annum. During the year ended November 30, 2015, the Company incurred interest expense, excluding loan fees, of $1,742 on the Strategic Note. At November 30, 2015, accrued interest on the Strategic Note totaled $1,742. |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Oct. 08, 2015 | Mar. 17, 2015 | Nov. 26, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Proceeds from notes payable | $ 105,000 | $ 28,300 | ||||
Debt instrument, carrying amount | 619,300 | $ 63,250 | ||||
Loan fees | $ 47,500 | |||||
Number of shares of common stock underlying the convertible promissory notes | 3,890,876 | 14,000 | ||||
Interest expense | $ 76,029 | $ 985 | [1] | |||
Two Short Terms Notes Payable [Member] | ||||||
Interest rate | 10.00% | |||||
Aggregate principal amount | $ 9,500 | |||||
Debt instrument payment | 4,500 | |||||
Debt amount received in cash | 5,000 | |||||
Interest expense | 45 | |||||
Studio Capital, LLC [Member] | Notes payable [Member] | ||||||
Proceeds from notes payable | $ 100,000 | |||||
Debt issuance date | Oct. 8, 2015 | |||||
Aggregate principal amount | $ 100,000 | |||||
Debt instrument, carrying amount | 125,000 | |||||
Debt unamortized discount | $ 25,000 | |||||
Debt maturity date | Apr. 8, 2016 | |||||
Debt instrument fee | The Studio Capital note does not accrue interest; however, the note provides for a loan fee of 5,000 shares of the Company’s common stock and has a maturity date of April 8, 2016. | |||||
Discription of debt penalty | The Studio Capital Note was not repaid on the maturity date and, as a result of this default, subsequent to year end, on April 8, 2016, the Company recorded a default penalty of $25,000, 20% of the outstanding balance of the Studio Capital Note. | |||||
Amount of penalty on debt issued | $ 25,000 | |||||
Number of shares of common stock underlying the convertible promissory notes | 5,000 | |||||
Value of shares of common stock underlying the convertible promissory notes | $ 26,968 | |||||
Interest expense | $ 7,674 | |||||
Argent Offset, LLC [Member] | Notes payable [Member] | ||||||
Debt issuance date | Nov. 26, 2014 | |||||
Interest rate | 10.00% | |||||
Aggregate principal amount | $ 13,000 | |||||
Debt maturity date | Dec. 5, 2014 | |||||
Debt instrument fee | A late payment fee of $500 per day was to be incurred from December 6, 2014 through December 7, 2014 and then increases to $1,000 per day. | |||||
Discription of debt penalty | On February 1, 2015, the Company entered into a Temporary Forbearance Agreement with Argent. Under the forbearance agreement, the Company agreed to pay a forbearance fee of $7,000 and to extend the maturity date to August 1, 2015. Argent also advanced the Company an additional $19,825 pursuant to the terms of the Argent Note. | |||||
Debt instrument payment | 16,000 | |||||
Loan fees | $ 500 | |||||
Interest expense | 2,050 | 14 | ||||
Accrued interest | 2,064 | 14 | ||||
Strategic IR, Inc. [Member] | Notes payable [Member] | ||||||
Debt issuance date | Mar. 17, 2015 | |||||
Interest rate | 10.00% | |||||
Default accruing interest rate | 21.00% | |||||
Aggregate principal amount | $ 12,500 | |||||
Debt maturity date | Apr. 16, 2015 | |||||
Loan fees | $ 1,750 | |||||
Interest expense | 1,742 | |||||
Accrued interest | $ 1,742 | |||||
Cross Click Media, Inc. [Member] | Notes payable [Member] | ||||||
Aggregate principal amount | 4,200 | |||||
MCKEA Holdings, LLC [Member] | Notes payable [Member] | ||||||
Aggregate principal amount | $ 1,100 | |||||
[1] | As Restated |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring [Member] | Nov. 30, 2015USD ($) |
Quoted Prices In Active Markets (Level 1) [Member] | |
Derivative liabilities | |
Significant Other Observable Inputs (Level 2) [Member] | |
Derivative liabilities | |
Significant Unobservable Inputs (Level 3) [Member] | |
Derivative liabilities | 1,313,012 |
Fair Value Measurement [Member] | |
Derivative liabilities | $ 1,313,012 |
FAIR VALUE MEASUREMENTS (Deta41
FAIR VALUE MEASUREMENTS (Details 1) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | ||
Defined Benefit Plan Disclosure [Line Items] | |||
Change in estimated fair value recognized in results of operations | $ (360,666) | [1] | |
Significant Unobservable Inputs (Level 3) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Balance at beginning | |||
Derivative liabilities from Convertible Notes Payable | 952,346 | ||
Change in estimated fair value recognized in results of operations | 360,666 | ||
Balance at end | $ 1,313,012 | ||
[1] | As Restated |
FAIR VALUE MEASUREMENTS (Deta42
FAIR VALUE MEASUREMENTS (Details 2) - $ / shares | 9 Months Ended | 12 Months Ended | |
Aug. 31, 2015 | Nov. 30, 2015 | Sep. 21, 2015 | |
Conversion price | $ 0.30 | ||
Significant Unobservable Inputs (Level 3) [Member] | |||
Stock price | $ 0.45 | ||
Significant Unobservable Inputs (Level 3) [Member] | Minimum [Member] | |||
Stock price | $ 0.55 | ||
Conversion price | $ 0.24 | $ 0.10 | |
Volatility | 103.00% | 1.61% | |
Risk free interest rate | 0.08% | 0.11% | |
Years to maturity | 5 months 5 days | 5 months 12 days | |
Significant Unobservable Inputs (Level 3) [Member] | Maximum [Member] | |||
Stock price | $ 1.41 | ||
Conversion price | $ 1.20 | $ 0.22 | |
Volatility | 151.00% | 239.00% | |
Risk free interest rate | 0.74% | 0.86% | |
Years to maturity | 2 years | 1 year 8 months 26 days |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jun. 05, 2015 | Nov. 30, 2015 | Nov. 30, 2014 | |
Product sold | $ 34,086 | $ 27,000 | ||
Percentage of total revenue | 87.60% | 69.40% | ||
Services | [1] | $ 137,473 | ||
Reduction in related party accounts payable by offset of advances | $ 54,078 | |||
Bad debts written off | $ 173,688 | |||
Cross Click Media, Inc. [Member] | ||||
Debt instrument, face value | $ 12,500 | |||
Description of collateral | The note is unsecured. | |||
Interest rate | 10.00% | 12.00% | ||
Repayment of short term debt | $ 4,200 | |||
Advances | 202,766 | |||
Reduction in related party accounts payable by offset of advances | 54,078 | |||
Bad debts written off | 148,688 | |||
Cross Click Media, Inc. [Member] | Advertising and Marketing Expense [Member] | ||||
Services | 114,000 | |||
Cross Click Media, Inc. [Member] | General and Administrative Expense [Member] | ||||
Services | 154,000 | |||
MCKEA Holdings, LLC [Member] | ||||
Repayment of short term debt | $ 1,100 | |||
[1] | As Restated |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - USD ($) | Oct. 08, 2015 | Sep. 21, 2015 | Mar. 27, 2015 | Jan. 30, 2015 | Dec. 15, 2014 | Jul. 31, 2014 | Sep. 21, 2015 | Nov. 30, 2015 | Nov. 30, 2014 |
Preferred stock, share authorized | 10,000,000 | 10,000,000 | |||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Number of shares isssued during the period (in shares) | (13,250) | ||||||||
Issuance of shares, value | $ 2,000 | $ 93,000 | |||||||
Issuance of common stock for conversion of preferred stock | $ 11,558 | $ 111,328 | |||||||
Debt conversion rate (in dollars per share) | $ 0.30 | $ 0.30 | |||||||
Shares issued for services | 440,000 | ||||||||
Shares issued for services, value | $ 583,125 | ||||||||
Stock based compensation | 583,125 | ||||||||
Convertible notes payable, discount | $ 202,325 | $ 9,040 | |||||||
Promissory Note [Member] | |||||||||
Number of shares isssued during the period (in shares) | 48,990 | ||||||||
Non-cash consideration | $ 56,013 | ||||||||
Promissory Note [Member] | Individual Counterparty [Member] | |||||||||
Number of shares isssued during the period (in shares) | 30,000 | ||||||||
Issuance of shares, value | $ 11,997 | ||||||||
Common Stock [Member] | |||||||||
Number of shares isssued during the period (in shares) | 1,600 | 1,600 | 74,400 | ||||||
Issuance of shares, value | $ 2,000 | $ 2 | $ 74 | ||||||
Sale of Stock price (in dollars per share) | $ 1.25 | ||||||||
Issuance of common stock for conversion of preferred stock | $ 528,193 | $ 134 | |||||||
Shares issued for services | 440,000 | ||||||||
Shares issued for services, value | $ 440 | ||||||||
Dr. Gary Gelbfish [Member] | Promissory Note [Member] | |||||||||
Number of shares isssued during the period (in shares) | 50,000 | ||||||||
Convertible notes payable, discount | $ 41,349 | ||||||||
Studio Capital, LLC [Member] | Promissory Note [Member] | |||||||||
Number of shares isssued during the period (in shares) | 5,000 | ||||||||
Convertible notes payable, discount | $ 1,968 | ||||||||
Loan discount | 25,000 | ||||||||
Aggregate debt discount | $ 26,968 | ||||||||
LG Capital Funding, LLC [Member] | Promissory Note [Member] | |||||||||
Number of shares isssued during the period (in shares) | 61,452 | ||||||||
Issuance of shares, value | $ 13,250 | ||||||||
Issuance of common stock for conversion of preferred stock | 26,276 | ||||||||
Accrued interest | 887 | 887 | |||||||
Loss on conversion | $ 12,139 | ||||||||
Class A Preferred Stock [Member] | |||||||||
Preferred stock, share authorized | 50,000 | 50,000 | |||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Number of shares isssued during the period (in shares) | 14,000 | ||||||||
Issuance of shares, value | $ 70,000 | ||||||||
Sale of Stock price (in dollars per share) | $ 5 | ||||||||
Issuance of common stock for conversion of preferred stock | $ 29,380 | ||||||||
Class A Preferred Stock [Member] | Finiks Capital, LLC | |||||||||
Number of shares isssued during the period (in shares) | 15,380 | ||||||||
Issuance of shares, value | $ 76,900 | ||||||||
Sale of Stock price (in dollars per share) | $ 5 | ||||||||
Board of Director [Member] | |||||||||
Class A preferred stock, shares authorized | 50,000 | ||||||||
Class A preferred stock, par value | $ 5 | ||||||||
Percentage of class A preferred stock | 10.00% | ||||||||
Amount of dividend paid class A preferred stock | $ 5 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Nov. 30, 2015 | Nov. 30, 2014 |
Deferred income tax asset: | ||
Net operating loss carryforward | $ 623,354 | $ 138,008 |
Other accrued liabilities | 21,961 | |
Total deferred tax asset | 645,315 | 138,008 |
Valuation allowance | (645,315) | (138,008) |
Deferred income tax asset, net of allowance |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | ||
Federal and State | |||
Current | |||
Deferred | (645,315) | (138,008) | |
Valuation allowance | 645,315 | 138,008 | |
Income tax provision (benefit) | [1] | ||
[1] | As Restated |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at U.S. Federal statutory tax rate | (34.00%) | (34.00%) |
Increase (decrease) in tax rate resulting from: | ||
Change to valuation allowance | 18.30% | 34.00% |
Derivative revaluation expense | 14.60% | |
Nondeductible meals & entertainment expense and other | 1.10% | |
Effective tax rate | 0.00% | 0.00% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0.00% | 0.00% |
Federal net operating loss carryovers | $ 1,833,000 | |
Valuation allowance | $ 507,306 |
RESTATEMENT (Details)
RESTATEMENT (Details) - USD ($) | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | ||
CURRENT ASSETS | |||||
Cash | $ 405 | $ 2,247 | [1] | ||
Inventory | 25,900 | [1] | |||
TOTAL CURRENT ASSETS | 18,332 | 28,147 | [1] | ||
Other assets | [1] | 526 | |||
Product license | [1] | ||||
TOTAL ASSETS | 18,332 | 28,673 | [1] | ||
CURRENT LIABILITIES | |||||
Accounts payable and accrued expenses | 177,004 | 87,217 | [1] | ||
Accounts payable, related party | 63,699 | 88,572 | [1] | ||
Due to related parties | 6,927 | [1] | |||
Convertible notes payable, net of discount of 9,040 | 416,975 | 54,210 | [1] | ||
Notes payable | [1] | 18,300 | |||
TOTAL CURRENT LIABILITIES | 2,105,721 | 255,226 | [1] | ||
TOTAL LIABILITIES | 2,105,721 | 255,226 | [1] | ||
COMMITMENTS AND CONTINGENCIES | [1] | ||||
STOCKHOLDERS' DEFICIT | |||||
Common stock, $0.001 par value: 75,000,000 shares authorized; 5,144,400 shares issued and outstanding | 6,310 | 5,144 | [1] | ||
Additional paid-in capital | 1,119,118 | 203,445 | [1] | ||
Accumulated deficit | (3,212,817) | (435,156) | [1] | ||
TOTAL STOCKHOLDERS' DEFICIT | (2,087,389) | (226,553) | [1] | $ (17,627) | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 18,332 | 28,673 | [1] | ||
Class A Preferred Stock [Member] | |||||
STOCKHOLDERS' DEFICIT | |||||
Preferred stock | 14 | [1] | |||
As Reported [Member] | |||||
CURRENT ASSETS | |||||
Cash | 2,247 | ||||
Inventory | 25,900 | ||||
TOTAL CURRENT ASSETS | 28,147 | ||||
Other assets | 526 | ||||
Product license | 29,250 | ||||
TOTAL ASSETS | 57,923 | ||||
CURRENT LIABILITIES | |||||
Accounts payable and accrued expenses | 87,217 | ||||
Accounts payable, related party | 88,572 | ||||
Due to related parties | 6,927 | ||||
Convertible notes payable, net of discount of 9,040 | 54,210 | ||||
Notes payable | 18,300 | ||||
TOTAL CURRENT LIABILITIES | 255,226 | ||||
TOTAL LIABILITIES | 255,226 | ||||
COMMITMENTS AND CONTINGENCIES | |||||
STOCKHOLDERS' DEFICIT | |||||
Common stock, $0.001 par value: 75,000,000 shares authorized; 5,144,400 shares issued and outstanding | 5,144 | ||||
Additional paid-in capital | 203,445 | ||||
Accumulated deficit | (405,906) | ||||
TOTAL STOCKHOLDERS' DEFICIT | (197,303) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 57,923 | ||||
As Reported [Member] | Class A Preferred Stock [Member] | |||||
STOCKHOLDERS' DEFICIT | |||||
Preferred stock | 14 | ||||
Adjustment [Member] | |||||
CURRENT ASSETS | |||||
Cash | |||||
Inventory | |||||
TOTAL CURRENT ASSETS | |||||
Other assets | |||||
Product license | (29,250) | ||||
TOTAL ASSETS | (29,250) | ||||
CURRENT LIABILITIES | |||||
Accounts payable and accrued expenses | |||||
Accounts payable, related party | |||||
Due to related parties | |||||
Convertible notes payable, net of discount of 9,040 | |||||
Notes payable | |||||
TOTAL CURRENT LIABILITIES | |||||
TOTAL LIABILITIES | |||||
COMMITMENTS AND CONTINGENCIES | |||||
STOCKHOLDERS' DEFICIT | |||||
Common stock, $0.001 par value: 75,000,000 shares authorized; 5,144,400 shares issued and outstanding | |||||
Additional paid-in capital | |||||
Accumulated deficit | (29,250) | ||||
TOTAL STOCKHOLDERS' DEFICIT | (29,250) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | (29,250) | ||||
Adjustment [Member] | Class A Preferred Stock [Member] | |||||
STOCKHOLDERS' DEFICIT | |||||
Preferred stock | |||||
[1] | As Restated |
RESTATEMENT (Details 1)
RESTATEMENT (Details 1) - USD ($) | 12 Months Ended | |||
Nov. 30, 2015 | Nov. 30, 2014 | |||
Revenue | $ 38,900 | $ 46,131 | [1] | |
Cost of revenue | 32,231 | 45,146 | [1] | |
Gross profit | 6,669 | 985 | [1] | |
Operating expenses | ||||
Advertising and marketing | [1] | 137,473 | ||
Salary expense | [1] | 50,200 | ||
Professional fees | [1] | 42,954 | ||
General and administrative | 1,400,956 | 394,129 | [1] | |
Total operating expenses | 1,400,956 | 394,129 | [1] | |
Loss from operations | (1,394,287) | (393,144) | [1] | |
Other expenses | ||||
Interest expense | 76,029 | 985 | [1] | |
Total other expenses | [1] | (985) | ||
Loss before income taxes | [1] | (394,129) | ||
Income tax expense | [1] | |||
Net loss | $ (2,660,465) | $ (394,129) | [1] | |
Basic and diluted net loss per common share (in dollars per share) | $ (0.49) | $ (0.08) | [1] | |
As Reported [Member] | ||||
Revenue | $ 46,131 | |||
Cost of revenue | 45,146 | |||
Gross profit | 985 | |||
Operating expenses | ||||
Advertising and marketing | 137,473 | |||
Salary expense | 50,200 | |||
Professional fees | 42,954 | |||
General and administrative | 134,252 | |||
Total operating expenses | 364,879 | |||
Loss from operations | (363,894) | |||
Other expenses | ||||
Interest expense | 985 | |||
Total other expenses | (985) | |||
Loss before income taxes | (364,879) | |||
Income tax expense | ||||
Net loss | $ (364,879) | |||
Basic and diluted net loss per common share (in dollars per share) | $ (0.07) | |||
Adjustment [Member] | ||||
Revenue | ||||
Cost of revenue | ||||
Gross profit | ||||
Operating expenses | ||||
Advertising and marketing | ||||
Salary expense | ||||
Professional fees | ||||
General and administrative | 29,250 | |||
Total operating expenses | 29,250 | |||
Loss from operations | (29,250) | |||
Other expenses | ||||
Interest expense | ||||
Total other expenses | ||||
Loss before income taxes | (29,250) | |||
Income tax expense | ||||
Net loss | $ (29,250) | |||
Basic and diluted net loss per common share (in dollars per share) | $ (0.01) | |||
[1] | As Restated |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Apr. 04, 2017 | Mar. 03, 2017 | Mar. 03, 2017 | Oct. 27, 2016 | Oct. 26, 2016 | Mar. 07, 2016 | Jan. 29, 2016 | Jan. 28, 2016 | Jan. 26, 2016 | Dec. 10, 2015 | Dec. 07, 2015 | Dec. 02, 2015 | Jan. 31, 2016 | Feb. 28, 2017 | Aug. 31, 2016 | Dec. 31, 2016 | Nov. 30, 2015 | Nov. 30, 2014 | Apr. 30, 2017 | Dec. 31, 2017 | Sep. 15, 2016 | Jun. 07, 2016 | Apr. 13, 2016 | Sep. 21, 2015 |
Proceeds from notes payable | $ 105,000 | $ 28,300 | ||||||||||||||||||||||
Debt instrument, carrying amount | $ 619,300 | $ 63,250 | ||||||||||||||||||||||
Debt conversion price per share | $ 0.30 | |||||||||||||||||||||||
Number of shares of common stock underlying the convertible promissory notes | 3,890,876 | 14,000 | ||||||||||||||||||||||
Number of shares isssued during the period (in shares) | (13,250) | |||||||||||||||||||||||
Value of shares isssued during the period (in shares) | $ 2,000 | $ 93,000 | ||||||||||||||||||||||
Number of shares issued for consulting services (in shares) | 440,000 | |||||||||||||||||||||||
Value of shares issued for consulting services | $ 583,125 | |||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||||||||||||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | ||||||||||||||||||||||
Repayments of notes payable | $ 25,500 | |||||||||||||||||||||||
Class A Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Number of shares of common stock underlying the convertible promissory notes | 14,000 | |||||||||||||||||||||||
Notes payable [Member] | MCKEA Holdings, LLC [Member] | ||||||||||||||||||||||||
Aggregate principal amount | $ 1,100 | |||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||
Description of amendments | Amendments stipulates that the lender will, for a period of ninety (90) days, convert no more than ten percent (10%) of the principal amount due under their notes in any thirty (30) day period. | |||||||||||||||||||||||
Description of conversion stock | (i) if the aggregate market capital of the Company on the date of conversion (the “Market Cap” “Conversion Price” | |||||||||||||||||||||||
Subsequent Event [Member] | 2016 Stock Incentive Plan [Member] | ||||||||||||||||||||||||
Number of shares granted | 3,000,000 | |||||||||||||||||||||||
Discription of options expire period | The options expire between 5 and 10 years from the date of grant. | |||||||||||||||||||||||
Subsequent Event [Member] | Class A Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Stock price (in dollars per share) | $ 20 | |||||||||||||||||||||||
Preferred stock voting rights | The Class A Shares shall vote together with the shares of Common Stock as a single class and, regardless of the number of Class A Shares outstanding, provided that at least 25,000 of such Class A Shares are outstanding, shall represent eighty percent (80%) of all votes entitled to be voted at any annual or special meeting of shareholders of the Company or action by written consent of shareholders, including any shares of preferred stock other than the Class A Shares that are voted with the Common Stock. Each outstanding Class A Share shall represent its proportionate share of the 80% which is allocated to the outstanding Class A Shares. The Class A Shares are convertible at the Holder’s option into shares of Common Stock of the Company at a conversion price derived by dividing the stated value of each Class A Share by $0.50 per share, subject to customary adjustment, which conversion may occur at any time at the option of the Holder. | |||||||||||||||||||||||
Preferred stock, outstanding | 25,000 | |||||||||||||||||||||||
Subsequent Event [Member] | Class B Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | |||||||||||||||||||||||
Preferred stock, authorized | 100,000 | |||||||||||||||||||||||
Liquidation preference value | $ 5,000,000 | |||||||||||||||||||||||
Liquidation preference per share | $ 50 | |||||||||||||||||||||||
Subsequent Event [Member] | Subscription Agreement [Member] | ||||||||||||||||||||||||
Number of shares isssued during the period (in shares) | 25,000 | |||||||||||||||||||||||
Stock price (in dollars per share) | $ 0.20 | |||||||||||||||||||||||
Total cash proceeds of common stock | $ 5,000 | |||||||||||||||||||||||
Subsequent Event [Member] | Consulting Agreement [Member] | ||||||||||||||||||||||||
Number of shares issued for consulting services (in shares) | 50,000 | |||||||||||||||||||||||
Value of shares issued for consulting services | $ 20,000 | |||||||||||||||||||||||
Subsequent Event [Member] | Management Services Agreement [Member] | ||||||||||||||||||||||||
Avalanche receives for services | $ 40,000 | |||||||||||||||||||||||
Subsequent Event [Member] | Adar Bays, LLC [Member] | ||||||||||||||||||||||||
Description of amendments | The Adar Bays and Union Capital Amendments each provide that the conversion discount shall be increased by 5%, such that these notes are convertible at 55%, rather than 60%, of market price as defined in the notes. Further, the pricing period, or “look-back” for determining the conversion price has been extended from 20 days to 25 days, and the pre-payment penalty has been increased to 150%. | |||||||||||||||||||||||
Subsequent Event [Member] | Typenex Co-Investment, LLC [Member] | ||||||||||||||||||||||||
Description of amendments | The Typenex Amendment also allows pre-payment in accord with the terms for such pre-payment as set forth in the note, and contains certain affirmations and representations and warranties regarding our liability under the Typenex note and other matters. The Typenex Amendment was also conditional upon our filing our quarterly report for the period ended August 31, 2015 by January 27, 2016. | |||||||||||||||||||||||
Number of shares isssued during the period (in shares) | 297,619 | |||||||||||||||||||||||
Value of shares isssued during the period (in shares) | $ 12,500 | |||||||||||||||||||||||
Ltigation amount due | $ 149,054 | |||||||||||||||||||||||
Amount receiverd for settlement of lawsuit | $ 90,000 | |||||||||||||||||||||||
Subsequent Event [Member] | LG Capital Funding, LLC [Member] | ||||||||||||||||||||||||
Description of amendments | The LG Capital Amendment also calls for additional consideration to LG Capital in the form of warrants to purchase 75,000 shares of our common stock at a price of $0.30 per share, exercisable for 3 years. Also, we will be permitted to re-pay the LG Capital note with the applicable penalty set forth in the note for a pre-payment made between 91 and 180 days after issue. | |||||||||||||||||||||||
Subsequent Event [Member] | JLA Realty Associates, LLC [Member] | JLA Note [Member] | ||||||||||||||||||||||||
Aggregate principal amount | $ 325,600 | |||||||||||||||||||||||
Debt instrument, carrying amount | 296,000 | |||||||||||||||||||||||
Debt unamortized discount | $ 29,600 | |||||||||||||||||||||||
Description of debt maturity | The JLA Note is due in three years and accrues interest at 12% per annum. | |||||||||||||||||||||||
Number of shares of common stock underlying the convertible promissory notes | 2,170,667 | |||||||||||||||||||||||
Interest rate | 12.00% | |||||||||||||||||||||||
Subsequent Event [Member] | Digital Power Corporation [Member] | DPW Notes [Member] | ||||||||||||||||||||||||
Proceeds from notes payable | $ 400,871 | |||||||||||||||||||||||
Aggregate principal amount | 1,500,000 | |||||||||||||||||||||||
Debt instrument, carrying amount | 75,000 | |||||||||||||||||||||||
Debt unamortized discount | $ 1,500,000 | |||||||||||||||||||||||
Description of debt maturity | The DPW Notes are due in two years and accrue interest at 12% per annum. | |||||||||||||||||||||||
Number of shares of common stock underlying the convertible promissory notes | 2,113,086 | |||||||||||||||||||||||
Interest rate | 12.00% | |||||||||||||||||||||||
Subsequent Event [Member] | Black Mountain Equities, Inc. [Member] | ||||||||||||||||||||||||
Number of shares isssued during the period (in shares) | 100,000 | |||||||||||||||||||||||
Value of shares isssued during the period (in shares) | $ 12,830 | |||||||||||||||||||||||
Subsequent Event [Member] | JMJ Financial [Member] | ||||||||||||||||||||||||
Number of shares isssued during the period (in shares) | 60,000 | |||||||||||||||||||||||
Value of shares isssued during the period (in shares) | $ 3,024 | |||||||||||||||||||||||
Subsequent Event [Member] | Philou Ventures, LLC [Member] | Exchange Agreement [Member] | Class A Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Number of shares isssued during the period (in shares) | 50,000 | |||||||||||||||||||||||
Number of surrender common stock | 2,000,000 | |||||||||||||||||||||||
Subsequent Event [Member] | MTIX Ltd [Member] | ||||||||||||||||||||||||
Payment for advanced materials | $ 50,000 | |||||||||||||||||||||||
Value of minority shareholders | $ 1,666,667 | |||||||||||||||||||||||
Value of majority shareholders | 6,166,666 | |||||||||||||||||||||||
Subsequent Event [Member] | MTIX Ltd [Member] | Share Exchange Agreement [Member] | ||||||||||||||||||||||||
Aggregate principal amount | $ 9,500,000 | $ 9,500,000 | ||||||||||||||||||||||
Debt instrument payment terms | (b) (i) $500,000 in cash, $50,000 of which has already been paid, and (ii) 100,000 shares of the Company’s newly designated shares of Class B Convertible Preferred Stock (the “Class B Shares” “Majority Shareholder” | |||||||||||||||||||||||
Interest rate | 7.00% | 7.00% | ||||||||||||||||||||||
Subsequent Event [Member] | Notes payable [Member] | ||||||||||||||||||||||||
Aggregate principal amount | $ 125,000 | |||||||||||||||||||||||
Debt instrument, carrying amount | 100,000 | |||||||||||||||||||||||
Debt unamortized discount | $ 25,000 | |||||||||||||||||||||||
Debt conversion price per share | $ 0.01 | |||||||||||||||||||||||
Description of debt maturity | The Note is due in sixty (60) days and does not bear interest. | |||||||||||||||||||||||
Subsequent Event [Member] | Notes payable [Member] | Warrant [Member] | ||||||||||||||||||||||||
Number of shares of common stock underlying the convertible promissory notes | 100,000 | |||||||||||||||||||||||
Subsequent Event [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||||
Proceeds from notes payable | $ 11,000 | |||||||||||||||||||||||
Aggregate principal amount | $ 11,000 | |||||||||||||||||||||||
Description of debt maturity | The convertible promissory notes accrue interest at 10% per annum and are due in three years. | |||||||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||||||
Subsequent Event [Member] | Senior Secured Property Notes Dated April 4, 2016 [Member] | JLA Realty Associates, LLC [Member] | JLA Note [Member] | ||||||||||||||||||||||||
Aggregate principal amount | $ 150,000 | $ 330,000 | ||||||||||||||||||||||
Description of debt maturity | The JLA Notes feature terms mirroring those of the Philo Note, including 16% annual interest, a due date six months from issue, and required monthly interest payments. | |||||||||||||||||||||||
Interest rate | 16.00% | |||||||||||||||||||||||
Repayments of notes payable | $ 100,000 | |||||||||||||||||||||||
Subsequent Event [Member] | Senior Secured Property Notes Dated April 4, 2016 [Member] | Philou Ventures, LLC [Member] | ||||||||||||||||||||||||
Aggregate principal amount | 931,000 | |||||||||||||||||||||||
Debt unamortized discount | $ 285,000 | |||||||||||||||||||||||
Description of debt maturity | The Philo Note bears interest at a rate of sixteen percent (16%) per year, requires monthly interest payments, and was due within six (6) months from the date of issue. | |||||||||||||||||||||||
Interest rate | 16.00% | |||||||||||||||||||||||
Legal fees | $ 20,000 | |||||||||||||||||||||||
Subsequent Event [Member] | Senior Secured Property Notes Dated April 4, 2016 [Member] | MCKEA Holdings, LLC [Member] | ||||||||||||||||||||||||
Aggregate principal amount | $ 100,000 | |||||||||||||||||||||||
Debt unamortized discount | $ 5,305 | |||||||||||||||||||||||
Interest rate | 15.00% | |||||||||||||||||||||||
Repayments of notes payable | $ 42,125 | |||||||||||||||||||||||
Percentage of original issue discount | 10.00% | |||||||||||||||||||||||
Total cash advance | $ 58,350 | |||||||||||||||||||||||
Subsequent Event [Member] | Officer [Member] | ||||||||||||||||||||||||
Stock price (in dollars per share) | $ 0.16 | |||||||||||||||||||||||
Number of shares issued for consulting services (in shares) | 250,000 | |||||||||||||||||||||||
Value of shares issued for consulting services | $ 40,000 |