• Filing Date: 2018-01-12
  • Form Type: 10-Q
  • Description: Quarterly report
v3.8.0.1
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2017
Jan. 04, 2018
Document And Entity Information    
Entity Registrant Name CODE GREEN APPAREL CORP  
Entity Central Index Key 0001444403  
Document Type 10-Q  
Trading Symbol CGAC  
Document Period End Date Sep. 30, 2017  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
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 Common Stock, Shares Outstanding   1,266,215,455
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2017  
v3.8.0.1
CONDENSED BALANCE SHEETS (Unaudited) - USD ($)
Sep. 30, 2017
Dec. 31, 2016
CURRENT ASSETS    
Cash $ 32 $ 47
Accounts receivable, net   7,834
Inventory   22,831
TOTAL CURRENT ASSETS 32 30,712
Fixed assets, net 10,444 12,962
TOTAL ASSETS 10,476 43,674
CURRENT LIABILITIES    
Accounts payable and accrued expenses 313,465 341,615
Accrued interest 126,904 120,232
Notes payable, current 82,500 82,595
Convertible debt payable, net of discount of $434,670 and $19,811, respectively 503,118 556,388
Derivative liability 1,899,414 1,525,135
TOTAL CURRENT LIABILITIES 2,925,401 2,625,965
Notes payable, net of current portion 200,000 200,000
TOTAL LIABILITIES 3,125,401 2,825,965
STOCKHOLDERS' DEFICIT    
Common stock, par value $0.001 per share, Authorized - 4,990,000,000 shares, Issued and outstanding - 1,042,205,655 and 404,985,101 shares, respectively 1,042,205 404,985
Additional paid-in capital 11,577,661 11,352,697
Accumulated deficit (15,734,857) (14,540,039)
TOTAL STOCKHOLDERS' DEFICIT (3,114,925) (2,782,291)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 10,476 43,674
Series A Preferred Stock [Member]    
STOCKHOLDERS' DEFICIT    
Preferred Stock 1 1
TOTAL STOCKHOLDERS' DEFICIT 1 1
Series B Preferred Stock [Member[    
STOCKHOLDERS' DEFICIT    
Preferred Stock 65 65
TOTAL STOCKHOLDERS' DEFICIT $ 65 $ 65
v3.8.0.1
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Discount on convertible debts payable $ 434,670 $ 19,811
Preferred stock, par value (in dollars per share) $ 0.001  
Preferred stock, shares authorized 10,000,000  
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 4,990,000,000 4,990,000,000
Common stock, shares issued 1,042,205,655 404,985,101
Common stock, shares outstanding 1,042,205,655 404,985,101
Series A Preferred Stock [Member]    
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 1,000 1,000
Preferred stock, shares issued 1,000 1,000
Preferred stock, shares outstanding 1,000 1,000
Series B Preferred Stock [Member[    
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 9,999,000 9,999,000
Preferred stock, shares issued 65,000 65,000
Preferred stock, shares outstanding 65,000 65,000
v3.8.0.1
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Statement [Abstract]        
REVENUE $ 10,785 $ 208,884 $ 44,264 $ 237,262
COST OF GOODS SOLD (4,142) (173,321) (28,770) (197,019)
GROSS LOSS 6,643 35,563 15,494 40,243
OPERATING EXPENSES        
Selling, general and administrative 108,921 148,477 530,573 750,163
TOTAL OPERATING EXPENSES 108,921 148,477 530,573 750,163
LOSS FROM OPERATIONS (102,278) (112,914) (515,079) (709,920)
OTHER INCOME (EXPENSE)        
Gain on conversion of debt 17,799   59,616  
Change in fair value of derivative (105,990) 456,744 806,434 (136,960)
Derivative liability gain (expense) - insufficient shares (260,681) 905,980 300,766  
Interest expense (469,389) (34,607) (1,846,555) (66,526)
TOTAL OTHER INCOME (EXPENSE) (818,261) 1,328,117 (679,739) (203,486)
INCOME (LOSS) BEFORE INCOME TAXES (920,539) 1,215,203 (1,194,818) (913,406)
Income tax expense      
NET INCOME (LOSS) (920,539) 1,215,203 (1,194,818) (913,406)
Discount attributable to beneficial conversion privilege of preferred stock       (250,000)
Income (Loss) applicable to common stock $ (920,539) $ 1,215,203 $ (1,194,818) $ (1,163,406)
NET INCOME (LOSS) PER COMMON SHARE        
Basic net incme (loss) per common share (in dollars per share) $ 0.00 $ 0.00 $ 0.00 $ (0.01)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING        
Basic (in shares) 804,611,295 330,671,531 589,721,295 375,114,245
v3.8.0.1
CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($)
Series A Preferred Stock [Member]
Series B Preferred Stock [Member[
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Total
Balance, beginning at Dec. 31, 2016 $ 1 $ 65 $ 404,985 $ 11,352,697 $ (14,540,039) $ (2,782,291)
Balance, beginning, shares at Dec. 31, 2016 1,000 65,000 404,985,101      
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Issuance of shares for services     $ 42,000 84,000   126,000
Issuance of shares for services, shares 42,000,000      
Issuance of shares for conversion of convertible debt     $ 595,220 140,964   736,184
Issuance of shares for conversion of convertible debt, shares     59,220,554      
Net loss         (1,194,818) (1,194,818)
Balance, ending at Sep. 30, 2017 $ 1 $ 65 $ 1,042,205 $ 11,577,661 $ (15,734,857) $ (3,114,925)
Balance, ending, shares at Sep. 30, 2017 1,000 65,000 1,042,205,655      
v3.8.0.1
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (1,194,818) $ (913,406)
Adjustments to reconcile net loss to net cash used in operating activities:    
Derivative liability - initial valuation 1,384,997  
(Gain) loss on derivative revaluation (806,434) 136,960
Derivative liability gain (expense) - insufficient shares (300,766)  
Gain on conversion of debt (59,616)  
Depreciation 2,518 2,307
Amortization   30,000
Common stock issued for services 126,000 117,000
Amortization of debt discount 59,939 33,371
Amortization of debt discount due to beneficial conversion feature 276,602  
Changes in operating assets and liabilities:    
Accounts receivable 7,834 (128,323)
Inventory 22,831 129,772
Prepaid expenses   33,387
Accounts payable and accrued expenses (28,150) 71,819
Accrued interest 100,412 22,691
NET CASH USED IN OPERATING ACTIVITIES (408,651) (464,422)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of fixed assets   (14,534)
NET CASH USED IN INVESTING ACTIVITIES   (14,534)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from the sale of Series B Preferred Stock   250,000
Proceeds from notes payable 574,750 202,223
Repayments on notes payable (166,114)  
NET CASH PROVIDED BY FINANCING ACTIVITIES 408,636 452,223
NET DECREASE IN CASH (15) (26,733)
CASH AT THE BEGINNING OF THE PERIOD 47 32,205
CASH AT THE END OF THE PERIOD 32 5,472
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION    
Interest paid 19,603 $ 11,114
Taxes paid  
Noncash transactions:    
Issuance of shares upon debt conversion $ 736,184  
v3.8.0.1
ORGANIZATION AND BASIS OF PRESENTATION
9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND BASIS OF PRESENTATION

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION

 

Organization and Nature of Business

 

Code Green Apparel Corp. (the “Company”) was incorporated in Nevada on December 11, 2007. On April 26, 2014, and with the appointment of George Powell as its CEO and Director, the Company changed its business model to offer eco-friendly corporate apparel primarily constructed from recycled textiles.

 

The Company is a publicly held Nevada corporation, whose common stock trades on the OTC Market Group, Inc.’s Pink Sheets under the trading symbol, “CGAC.

 

Basis of Presentation

 

The accompanying unaudited interim condensed financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2016.

 

Going Concern

 

The Company has generated only limited revenues from operations since inception. Since inception, it has incurred significant losses to date, and as of September 30, 2017, has a working capital deficit of approximately $3,000,000, and an accumulated deficit of approximately $15,700,000. The Company’s ability to continue its operations is uncertain and is dependent upon its ability to implement a business plan sufficient to generate a positive cash flow and/or raise capital to fund its operations.

 

These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations in the normal course of business.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and the disclosure of contingent assets and liabilities. These estimates and assumptions are based on the Company’s historical results as well as management’s future expectations. The Company’s actual results could vary materially from management’s estimates and assumptions. Additionally, interim results may not be indicative of the Company’s results for future interim periods, or the Company’s annual results. 

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At September 30, 2017, and December 31, 2016, the Company did not have any cash equivalents.

 

Accounts Receivable

 

Accounts receivable are not collateralized and interest is not accrued on past due accounts. Periodically, management reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts receivable. After management has exhausted all collection efforts, management writes off receivables and the related reserve. Additionally, the Company may identify additional allowance requirements based on indications that a specific customer may be experiencing financial difficulties. Actual bad debt results could differ materially from these estimates.

 

Inventories

 

Inventories are stated at the lower of cost (first-in, first-out) or market. The Company periodically reviews its inventories for indications of slow movement and obsolescence and records an allowance when it is deemed necessary. There was no inventory at September 30, 2017.

 

Revenue Recognition

 

The Company recognizes gross sales when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collection is reasonably assured. It recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”).

 

Stock Based Compensation

 

The Company from time to time issues shares of common stock for services. These issuances have been valued based upon the quoted market price of the shares.

 

Disclosure About Fair Value of Financial Instruments

 

The Company estimates that the fair value of all financial instruments at September 30, 2017 and December 31, 2016, do not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying condensed balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

 

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. 

 

The Company has determined that certain outstanding convertible debt instruments include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible debentures have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period recorded in earnings as “Other income (expense) - gain (loss) on change in derivative liabilities.

  

   Carrying
Value
   Fair Value Measurements 
Using Fair Value Hierarchy
 
       Level 1   Level 2   Level 3 
Derivative liability – December 31, 2016  $1,525,135   $   $   $1,525,135 
Derivative liability – September 30, 2017  $1,899,414   $   $   $1,899,414 
                     
Balance at December 31, 2016                 $1,525,135 
Revaluation of derivative arising from insufficient shares available for issuance                  (300,766)
New embedded derivatives issued with indebtedness                  2,048,072 
Conversion                  (566,593)
Change in derivative liability during the nine months ended September 30, 2017                  (806,434)
Balance September 30, 2017                 $1,899,414 

  

Net Income (Loss) Per Share

 

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Any anti-dilutive effects on net income (loss) per share are excluded. The Company has 16,724,126,399 potentially dilutive securities outstanding as of September 30, 2017.

 

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

 

The Company has adopted the provisions of FASB ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Open tax-years subject to IRS examination include 2013 - 2016. 

 

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this ASU supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU No. 2016-02 on its financial statements.

 

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-08 on its financial statements.

 

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-10 on its financial statements.

 

v3.8.0.1
FIXED ASSETS, NET
9 Months Ended
Sep. 30, 2017
Property, Plant and Equipment [Abstract]  
FIXED ASSETS, NET

NOTE 2 FIXED ASSETS, NET

 

Fixed assets consist of the following equipment:

 

    September 30,
2017
    December 31,
2016
 
             
Computer equipment   $ 16,783     $ 16,783  
      16,783       16,783  
Less accumulated depreciation     (6,339 )     (3,821 )
Total   $ 10,444     $ 12,962  

  

The aggregate depreciation charge to operations was $2,518 and $2,307 for the nine months ended September 30, 2017 and 2016, respectively. The depreciation policies followed by the Company are described in Note 1.

v3.8.0.1
NOTES PAYABLE
9 Months Ended
Sep. 30, 2017
Notes Payable [Abstract]  
NOTES PAYABLE

NOTE 3 NOTES PAYABLE 

 

During June 2016, the Company issued a $200,000 promissory note in connection with the Asset Purchase Agreement, see Note 9. The note carries interest at 10% per annum and is due June 23, 2018. Total outstanding debt was $200,000 at both September 30, 2017 and December 31, 2016. The accrued interest on the note was $25,425 and $10,466 at September 30, 2017 and December 31, 2016, respectively. 

 

During July 2016, the Company issued a promissory note in the amount of $82,500. The note is currently in default. The note contains an original issue discount in the amount of $7,500. The remaining balance due at September 30, 2017 and December 31, 2016 was $82,500 and $82,500, respectively. The accrued interest on the note was $60,899 and $8,945 at September 30, 2017 and December 31, 2016, respectively.

 

During September 2016, the Company issued a promissory note in the amount of $10,000. The note is due in six months. The note contains an original issue discount in the amount of $650. The remaining balance due at September 30, 2017 and December 31, 2016 was $0 and $95, respectively. Interest accrues at 12% and is paid daily. The accrued interest on the note was $0 and $0 at September 30, 2017 and December 31, 2016, respectively. The balance of this note was paid in February 2017. 

 

During January 2017, the Company issued a promissory note in the amount of $20,000. The note was due February 15, 2017. The note requires an interest payment of $5,000 upon repayment. The remaining balance due at September 30, 2017 and December 31, 2016 was $0 and $0, respectively. The accrued interest on the note was $0 and $0 at September 30, 2017 and December 31, 2016, respectively. The balance of this note and accrued interest was paid in April 2017.

v3.8.0.1
CONVERTIBLE NOTES
9 Months Ended
Sep. 30, 2017
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES

NOTE 4 CONVERTIBLE NOTES

 

On May 1, 2014, the Company entered into an agreement with Anubis Capital Partners, a business advisor. The agreement calls for monthly payments of $2,500 in service fees along with the issuance of a $500,000 fully earned convertible debt that accrues interest at 8% per annum. The holder has the option to convert any balance of principal and interest into common stock of the Company. The rate of conversion for the note is calculated as the lowest of the 20 trading closing prices immediately preceding such conversion, discounted by 50%. During December 2015, the Company issued 25,000,000 shares of common stock in payment of $212,500 of principal on this convertible debt. On June 29, 2017, Anubis Capital Partners sold $100,000 of the principal due under this note to an unrelated party. As a result, the Company issued a replacement note with the same terms to the new holder. At September 30, 2017 and December 31, 2016, $20,000 was owed in services fees, accrued interest was $11,337 and $88,795, and the outstanding convertible debt was $187,500 and $287,500, respectively.

 

During the year ended December 31, 2014, the Company issued $173,500 of convertible notes. The convertible notes carry interest at 10% per annum and are due 24 months from the date of issuance, June 2016 through September 2016. The note holders had the option to convert into shares of the Company’s common stock after 180 days at 50% of the market price. During April and May of 2015, the Company issued 14,660,440 shares of common stock upon conversion of $173,500 of principal amount outstanding under these convertible notes. At September 30, 2017 and December 31, 2016, the remaining accrued interest on the convertible notes was $12,027 and $12,027, respectively.

 

During December 2015, the Company issued a one-year convertible note in the amount of $175,000. The convertible note is currently in default, and contains a prepayment penalty of $25,000. The holder has the option to convert any balance of principal into common stock of the Company. The rate of conversion for the note is calculated as the lowest of the 10 trading closing prices immediately preceding such conversion, discounted by 32.5%. During December 2016, the Company issued 12,000,000 shares of common stock upon conversion of $13,770 of principal amount outstanding under this convertible note. During May 2017, the original note holder sold the note to an unrelated party. As a result, the Company issued a replacement note with the same terms to the new holder. During June 2017, the Company issued 70,119,900 shares of common stock upon conversion of $48,436 of principal amount outstanding under this convertible note. During July 2017, the Company issued 35,450,000 shares of common stock upon conversion of $3,403 of principal amount outstanding under this convertible note. During August 2017, the Company issued 76,200,000 shares of common stock upon conversion of $3,658 of principal amount outstanding under this convertible note. During September 2017, the Company issued 133,517,700 shares of common stock upon conversion of $6,409 of principal amount outstanding under this convertible note. The remaining balance due at September 30, 2017 and December 31, 2016 was $100,517 and $161,730, respectively. At September 30, 2017 and December 31, 2016, the remaining accrued interest on the convertible note was $3,532 and $0, respectively.

 

During June 2016, the Company sold a convertible note in the principal amount of $121,325. The convertible note was due in one year and contains an original issue discount in the amount of $15,825. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 50%. During April and June 2017, the Company issued 62,498,139 shares of common stock upon conversion of $63,427 of principal amount outstanding under this convertible note. The remaining balance due at September 30, 2017 and December 31, 2016 was $0 and $73,989, respectively. Interest accrues at 12% per annum and is paid daily. 

 

During September 2016, the Company sold a one-year convertible note in the principal amount of $63,825. The convertible note is currently in default and contains an original issue discount in the amount of $13,825. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 50%. The remaining balance due at September 30, 2017 and December 31, 2016 was $13,030 and $53,481, respectively. Interest accrues at 12% per annum and is paid daily.

 

During April 2017, the Company sold Carebourn a Convertible Promissory Note in the principal amount of $135,575 (the “April 2017 Carebourn Convertible Note”), pursuant to a Securities Purchase Agreement, dated April 17, 2017. The April 2017 Carebourn Convertible Note bears interest at the rate of 12% per annum (22% upon an event of default) and is due and payable on April 17, 2018. The conversion price of the April 2017 Carebourn Convertible Note is the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 50%. The April 2017 Carebourn Convertible Note had an original issue discount of $27,075. In addition, the Company paid $8,500 of Carebourn’s expenses and attorney fees in connection with the sale of the note, which were included in the principal amount of the note. The remaining balance due at September 30, 2017 was $55,117. Interest accrues at 12% per annum and is paid daily.

 

During April 2017, pursuant to a Note Purchase Agreement, the Company sold a 10% Convertible Debenture in the principal amount of $32,500 (which included a $5,000 original issue discount) to Sojourn Investments, LP (“Sojourn” and the “Sojourn Debenture”). The principal amount of the debenture accrues at 10% per annum until paid or converted into common stock (18% upon the occurrence of an event of default). The rate of conversion for the note is calculated as the lowest of the 20 trading closing prices immediately preceding such conversion, discounted by 42%. The Sojourn Debenture has a maturity date of January 12, 2018, provided the debenture can be repaid at any time, provided that if repaid more than 30 days after the issuance date, the Company is required to pay 130% of the principal amount of the debenture, together with accrued interest. The remaining balance due at September 30, 2017 was $32,500. The accrued interest on the note was $1,523 at September 30, 2017.

 

During May 2017, the Company sold a one-year convertible note in the principal amount of $35,000. The convertible note contains an original issue discount in the amount of $3,000. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 35%. The note was repaid in full in June 2017. The remaining balance due at September 30, 2017 was $0. Interest accrues at 12% per annum and is paid daily. The accrued interest on the note was $0 at September 30, 2017.

 

During May 2017, the Company sold a one-year convertible note in the principal amount of $100,000. The convertible note contains an original issue discount in the amount of $9,500. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 45%. The remaining balance due at September 30, 2017 was $100,000. Interest accrues at 10% per annum. The accrued interest on the note was $3,507 at September 30, 2017. 

 

During June 2017, the Company sold a one-year convertible note in the principal amount of $100,000. The convertible note contains an original issue discount in the amount of $11,083. The holder funded an additional $50,000 in August 2017, with an original discount of $4,167. The total purchase price of the note is $150,000 with an original discount of $15,250. The holder has the option to convert any balance of principal into common stock of the Company after 180 days from the date of funding. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 42%. The remaining balance due at September 30, 2017 was $150,000. Interest accrues at 10% per annum. The accrued interest on the note was $2,458 at September 30, 2017.

 

On June 29, 2017, the Company issued a replacement note in the amount of $100,000, related to the Anubis Capital Partners note dated May 1, 2014. The replacement note accrues interest at 8% per annum. The holder has the option to convert any balance of principal and interest into common stock of the Company. The rate of conversion for the note is calculated as the lowest of the 20 trading closing prices immediately preceding such conversion, discounted by 58%. During July 2017, the Company issued 33,781,609 shares of common stock in payment of $5,878 of principal on this convertible debt. During September 2017, the Company issued 86,171,725 shares of common stock in payment of $4,998 of principal on this convertible debt. At September 30, 2017 and December 31, 2016, accrued interest was $1,916 and $0, and the outstanding convertible debt was $89,124 and $0, respectively.

 

On June 29, 2017, the Company sold three one-year convertible notes in the principal amount of $210,000. The convertible notes contain an original issue discount in the amount of $20,000. The funds were received July 3, 2017. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 42%. The remaining balance due at September 30, 2017 was $210,000. Interest accrues at 8% per annum. The accrued interest on the note was $4,281 at September 30, 2017.

 

Derivative Liability

 

On May 1, 2014, the Company secured $500,000 in the form of a convertible promissory note. The note bears interest at the rate of 8% per annum until it matures, or until there is an event of default. The note matured on May 1, 2015. The holder has the option to convert any balance of principal and interest into common stock of the Company. The rate of conversion for the note is calculated as the lowest of the 20 trading closing prices immediately preceding such conversion, discounted by 50%.

 

On December 3, 2015, the Company secured $175,000 in the form of a convertible promissory note. The note does not bear interest until or unless there is an event of default. The note matured on December 3, 2016. The holder has the option to convert any balance of principal into common stock of the Company. The rate of conversion for the note is calculated as the lowest of the 10 trading closing prices immediately preceding such conversion, discounted by 32.5%.

 

On June 15, 2016, the Company secured $121,325 in the form of a convertible promissory note. The note bears interest at 12% per annum. The note matured on June 15, 2017. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 50%.

 

On September 23, 2016, the Company secured $63,825 in the form of a convertible promissory note. The note bears interest at 12% per annum. The note matured on September 23, 2017. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 50%.

 

During April 2017, the Company sold Carebourn a Convertible Promissory Note in the principal amount of $135,575 (the “April 2017 Carebourn Convertible Note”), pursuant to a Securities Purchase Agreement, dated April 17, 2017. The April 2017 Carebourn Convertible Note bears interest at the rate of 12% per annum (22% upon an event of default) and is due and payable on April 17, 2018. The conversion price of the April 2017 Carebourn Convertible Note is the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 50%. The April 2017 Carebourn Convertible Note had an original issue discount of $27,075. In addition, the Company paid $8,500 of Carebourn’s expenses and attorney fees in connection with the sale of the note, which were included in the principal amount of the note. Interest accrues at 12% per annum and is paid daily. 

 

During April 2017, pursuant to a Note Purchase Agreement, the Company sold a 10% Convertible Debenture in the principal amount of $32,500 (which included a $5,000 original issue discount) to Sojourn (the “Sojourn Debenture”). The principal amount of the debenture accrues at 10% per annum until paid or converted into common stock (18% upon the occurrence of an event of default). The rate of conversion for the note is calculated as the lowest of the 20 trading closing prices immediately preceding such conversion, discounted by 42%. The Sojourn Debenture has a maturity date of January 12, 2018, provided the debenture can be repaid at any time, provided that if repaid more than 30 days after the issuance date, the Company is required to pay 130% of the principal amount of the debenture, together with accrued interest.  

 

During May 2017, the Company sold a convertible note in the principal amount of $100,000. The convertible note is due in one year and contains an original issue discount in the amount of $9,500. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 45%. Interest accrues at 10% per annum.

 

During June 2017, the Company sold a convertible note in the principal amount of $100,000. The convertible note is due in one year and contains an original issue discount in the amount of $11,083. The holder funded an additional $50,000 in August with an original discount of $4,167. The total purchase price of the note is $150,000 with an original discount of $15,250. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 42%. Interest accrues at 10% per annum.

 

On June 29, 2017, the Company issued a replacement note in the amount of $100,000, related to the Anubis Capital Partners note dated May 1, 2014. The note accrues interest at 8% per annum. The holder has the option to convert any balance of principal and interest into common stock of the Company. The rate of conversion for the note is calculated as the lowest of the 20 trading closing prices immediately preceding such conversion, discounted by 50%.

 

On June 29, 2017, the Company sold three convertible notes in the principal amount of $210,000. The convertible notes are due in one year and contain an original issue discount in the amount of $20,000. The funds were received July 3, 2017. The holder has the option to convert any balance of principal into common stock of the Company after the initial 180 days. The rate of conversion for this note is calculated as the average of the three lowest closing prices of the Company’s common stock during the 20 trading days immediately preceding such conversion, discounted by 42%. The remaining balance due at September 30, 2017 was $210,000. Interest accrues at 8% per annum.

 

Due to the variable conversion price associated with these convertible promissory notes, the Company has determined that the conversion feature is considered a derivative liability. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. 

 

The initial fair values of the embedded debt derivatives of $500,842, $227,746, $322,660, $108,458, $782,714, $87,897, $67,152, $466,458, $300,415, and $343,436, respectively, were allocated between debt discount and interest expense according to the face value of the debt.  During the nine months ended September 30, 2017 and 2016, $1,384,997 and $431,118, respectively, was charged to current period operations as interest expenses. The fair value of the described embedded derivative was determined using the Black-Scholes Model with the following assumptions:

 

(1) risk free interest rate of 0.10% to 0.45%
(2) dividend yield of 0%;
(3) volatility factor of 248% to 441%;
(4) an expected life of the conversion feature of 365 days; and
(5) estimated fair value of the Company’s common stock of $0.0001 to $0.008 per share.

 

During the nine months ended September 30, 2017, the Company recorded a gain on fair value of derivative of $806,434.

 

The following table represents the Company’s derivative liability activity for the nine months ended September 30, 2017:

 

Balance at December 31, 2016  $1,525,135 
Revaluation due to insufficient shares available for issuance   (300,766)
Valuation upon issuance of debts   2,048,072 
Conversion   (566,593)
Change in derivative liability during the nine months ended September 30, 2017   (806,434)
Balance September 30, 2017  $1,899,414 

 

v3.8.0.1
DERIVATIVE FINANCIAL INSTRUMENTS
9 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 5 DERIVATIVE FINANCIAL INSTRUMENTS

 

The following table presents the components of the Company’s derivative financial instruments associated with convertible promissory notes (See Note 4) which have no observable market data and are derived using the Black-Scholes option pricing model measured at fair value on a recurring basis, using Level 1 and 3 inputs to the fair value hierarchy, at September 30, 2017 and December 31, 2016:

 

   September 30,
2017
   December 31,
2016
 
Embedded conversion features  $1,638,733   $963,688 
Insufficient shares   260,681    561,447 
Derivative liability  $1,899,414   $1,525,135 


These derivative financial instruments arise as a result of applying ASC 815 Derivative and Hedging (“ASC 815”), which requires the Company to make a determination whether an equity-linked financial instrument, or embedded feature, is indexed to the entity’s own stock. This guidance applies to any freestanding financial instrument or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially settled in an entity’s own stock.

 

During the nine months ended September 30, 2017, the Company had outstanding notes with embedded conversion features and the Company did not, at this date, have a sufficient number of authorized and available shares of common stock to settle the outstanding contracts which triggered the requirement to account for these instruments as derivative financial instruments until such time as the Company has sufficient authorized shares.

 

v3.8.0.1
LEASE COMMITMENTS
9 Months Ended
Sep. 30, 2017
Leases [Abstract]  
LEASE COMMITMENTS

NOTE 6 LEASE COMMITMENTS 

 

Laguna Beach Office 

 

The Company is obligated under a commercial real estate lease agreement. The lease is for a term of 60 months which began February 1, 2016 and expires January 31, 2021. The lease calls for current monthly rental payments of $3,438. 

 

Dallas Office 

 

The Company was obligated under a commercial real estate sublease agreement. The sublease was for a term of seven months which began on August 1, 2016 and expired on February 28, 2017. The lease called for current monthly rental payments of $2,200. 

 

Rental expense for the nine months ended September 30, 2017 and 2016 was $28,538 and $35,337, respectively. Future minimum rental payments for the remaining terms are as follows: 

 

Year Ending December 31,     Amount  
2018 – remaining three months     $ 10,314  
2019       41,256  
2020       41,256  
2021       3,438  
Total     $ 96,264  

v3.8.0.1
STOCKHOLDERS' EQUITY
9 Months Ended
Sep. 30, 2017
Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 7 STOCKHOLDERS’ EQUITY 

 

Effective on August 3, 2017, George J. Powell, III, our Chief Executive Officer, Interim Chief Financial Officer, Secretary and Director, and the holder of all 1,000 shares of our outstanding Series A Preferred Stock, which provide the holder thereof the power to vote on all stockholder matters (including, but not limited to at every meeting of the stockholders of the Company and upon any action taken by stockholders of the Company with or without a meeting) equal to fifty-one percent (51%) of the total vote, executed a written consent in lieu of the 2017 annual meeting of stockholders (the “Majority Stockholder Consent”), approving the following matters: 

 

  the appointment of two members to the Company’s Board of Directors (Mr. Powell and Thomas H. Witthuhn);

  

  the adoption of the Code Green Apparel Corp. 2017 Equity Incentive Plan;

  

  The filing of a Certificate of Amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of the Company’s capital stock to five billion (5,000,000,000) shares, consisting of four billion nine hundred ninety million (4,990,000,000) shares of common stock, $0.001 par value per share and ten million (10,000,000) shares of preferred stock, $0.001 par value per share, without affecting or modifying the Company’s previously designated shares of preferred stock in any way (the “Amendment”);

  

  authority for our Board of Directors, without further stockholder approval, to effect a reverse stock split of all of the outstanding common stock of the Company, by the filing of a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada, in a ratio of between one-for-one hundred and one-for-one thousand, with the Company’s Board of Directors having the discretion as to whether or not the reverse split is to be effected, and with the exact exchange ratio of any reverse split to be set at a whole number within the above range as determined by the Board of Directors in its sole discretion, at any time before the earlier of (a) August 3, 2018; and (b) the date of the Company’s 2018 annual meeting of stockholders;

  

  the appointment of Soles, Heyn & Company LLP as the Company’s independent registered public accounting firm;

  

  an advisory vote on the frequency of an advisory vote on executive compensation; and

  

  an advisory vote on executive compensation.

  

In accordance with Rule 14c-2 of the Exchange Act, the corporate actions became effective forty (40) days after the date notice of the internet availability of an Information Statement disclosing the Majority Stockholder Consent was first sent to stockholders, which date was September 25, 2017.

  

On December 21, 2017, the Amendment was filed with, and became effective with the Secretary of State of Nevada. The increase in authorized shares is reflected in the balance sheets.

  

On April 12, 2017, our Board of Directors and majority shareholder (i.e., George J. Powell, III, the Company’s Chief Executive Officer and Director, who holds (i) 1,000 shares of Series A Preferred Stock, which provides the holder thereof the right to vote 51% of the vote on all shareholder matters and (ii) 89,115,016 shares of the Company’s outstanding common stock), via a written consent to action without meeting, approved the filing of a Certificate of Amendment to our Articles of Incorporation to increase the authorized common stock of the Company, from one billion (1,000,000,000) shares of common stock, $0.001 par value per share, to one billion, nine hundred and ninety million (1,990,000,000) shares of common stock, $0.001 par value share. The increase in authorized shares is reflected in the balance sheets.

  

On April 13, 2017, the Company filed the April 2017 amendment with the Nevada Secretary of State, which became effective on the same date. 

  

On January 9, 2017, the Company issued 10,000,000 shares of its restricted common stock to its then newly appointed Director and COO, as a signing bonus for his appointment to the Company’s Board of Directors. The shares had a fair market value of $30,000.

  

On February 9, 2017, the Company entered into an Advertising Services Agreement (the “Advertising Agreement”) with Cicero Consulting Group, LLC (“Cicero”), pursuant to which Cicero agreed to provide marketing and advertising services to the Company for a term of six months. In consideration for agreeing to provide those services the Company agreed to issue Cicero 32 million shares of common stock. The value of the 32,000,000 shares is $96,000. Due to the terms of the agreement, $96,000 has been recorded in the statement of operations for the nine months ended September 30, 2017.

  

During the nine months ended September 30, 2017, the Company issued 59,220,554 shares of common stock in settlement of $736,184 of principal and interest indebtedness and recorded a net gain on conversion of $59,616.

  

Series A Preferred Stock 

 

On May 22, 2015, the Company designated a series of Series A Preferred Stock. The holders of the Series A Preferred Stock are not entitled to receive dividends paid on the Company’s common stock. The holders of the Series A Preferred Stock are not entitled to any liquidation preferences. The shares of the Series A Preferred Stock have no conversion rights. The Series A Preferred Stock provide the holder thereof the power to vote on all shareholder matters (including, but not limited to at every meeting of the stockholders of the Company and upon any action taken by stockholders of the Company with or without a meeting) equal to fifty-one percent (51%) of the total vote. Following the third anniversary of the original issuance of the Series A Preferred Stock, the Company has the option with (a) the unanimous consent or approval of all members of the Board of Directors of the Company; (b) the approval of the holders of a majority of the outstanding shares of Series A Preferred Stock; and (c) the approval of any interest or option holder(s) of such Series A Preferred Stock, to redeem any and all outstanding shares of the Series A Preferred Stock by paying the holders a redemption price of $100 per share.

  

Series B Preferred Stock 

 

On December 7, 2015, the Company designated a series of Series B Preferred Stock. The Series B Preferred Stock have an original issue price and liquidation preference (pro rata with the common stock) of $10.00 per share. The Series B Preferred Stock provides the holders thereof the right to convert such shares of Series B Preferred Stock into common stock on a 100-for-one basis, provided that no conversion can result in the conversion of more than that number of shares of Series B Preferred Stock, if any, such that, upon such conversion, the aggregate beneficial ownership of the Company’s common stock of any such holder and all persons affiliated with any such holder as described in Rule 13d-3 is more than 4.99% of the Company’s common stock then outstanding (the “Maximum Percentage”). For so long as any shares of the Series B Convertible Preferred Stock remain issued and outstanding, the holders thereof are entitled to vote that number of votes as equals the number of shares of common stock into which such holder’s aggregate shares of Series B Convertible Preferred Stock are convertible, subject to the Maximum Percentage.

  

On December 7, 2015, the Company entered into an Exchange Agreement (the “Exchange”) with its shareholder, Dr. Eric H. Scheffey, whereby Dr. Scheffey exchanged forty million (40,000,000) shares of the Company’s restricted common stock for 40,000 shares of the Company’s Series B Preferred Stock.

  

On January 4, 2016, the Company sold 25,000 shares of its restricted Series B Preferred Stock in connection with a Subscription Agreement dated December 7, 2015 (the January 1, 2016 payment) and received $250,000. The intrinsic value, the difference between the subscription price and the underlying price of the common stock on the date of the subscription agreement, has been valued at $250,000. Accordingly, this Discount attributable to beneficial conversion privilege of preferred stock has been recorded as a dividend in the current period and an increase in additional paid-in capital.

v3.8.0.1
GOING CONCERN
9 Months Ended
Sep. 30, 2017
Going Concern  
GOING CONCERN

NOTE 8 GOING CONCERN 

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has had only limited revenues since inception. Since inception, it has incurred significant losses to date, and as of September 30, 2017, has an accumulated deficit of $15,734,857 and has a working capital deficit of $2,925,369. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue its operations is uncertain and is dependent upon its ability to implement a business plan sufficient to generate positive cash flow and/or raise capital to fund its operations. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations in the normal course of business. 

v3.8.0.1
SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2017
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 9 SUBSEQUENT EVENTS 

  

During December 2017, we sold a Convertible Promissory Note to More Capital, LLC (“More Capital”). The note had a purchase price of $25,000, a face amount of $32,200, an original issue discount of $4,200, a due date of June 13, 2018 and an interest rate of 10% per annum. We also agreed to pay $3,000 of More Capital’s expenses associated with the transaction. At any time 90 days after the issuance date the principal amount of the note can be converted into our common stock at the option of the holder, subject to a 4.99% beneficial ownership limitation, at a conversion price equal to 50% of the average of the three lowest quoted sales prices for our common stock on the 20 trading days prior to conversion, subject to an additional discount of 10% in the event our common stock is subject to a DTC chill. We can prepay the note subject to certain prepayment penalties. We also provided More Capital a right of first refusal to provide additional funding during the period the note is outstanding. The note is payable by way of daily withdrawals from our bank account in the amount of $134. We also agreed that if we provide any financing source more favorable term(s) than More Capital while the note is outstanding that the More Capital note would, at the option of More Capital, be amended to include such more favorable term(s). The note contains various penalties and liquidated damages upon the occurrence of an event of default.

 

During December 2017, we entered into a Securities Purchase Agreement and sold a 12% Convertible Redeemable Note in the amount of $58,200 to Adar Bays, LLC (“Adar Bays” and the “Adar Bays Note”). The amount owed under the Adar Bays Note is convertible into shares of our common stock at a conversion price equal to 58% of the lowest trading price of our common stock for the 20 trading days prior to conversion, accrues interest at 12% per annum until paid in full, included an original issue discount (OID) of $5,700 and has a due date of December 20, 2018. In the event restrictions are placed on our stock by the Depository Trust Company, the conversion rate would be adjusted to 48% of the lowest trading price of our common stock for the 20 trading days prior to conversion. The note also contains a prohibition on conversion if such conversion would result in Adar Bays holding more than 9.9% of our outstanding stock. The note also contains various penalties and liquidated damages upon the occurrence of an event of default. 

 

We also entered into a second 12% Convertible Redeemable Note with Adar Bay with substantially similar terms as the Adar Bays Note (the “2nd Adar Bays Note”), provided that instead of funding the 2nd Adar Bay Note in cash, in connection with our entry into the 2nd Adar Bay Note, Adar Bay provided us a Collateralized Secured Promissory Note in the amount of $52,500 which represented amounts owed under the note and which note is due December 20, 2018. The note accrues interest at the rate of 12% per annum until paid in full. Amounts due under the Collateralized Secured Promissory Note are offset against amounts due under the 2nd Adar Bays Note until paid in full. We can prepay the note subject to certain prepayment penalties. The note contains various penalties and liquidated damages upon the occurrence of an event of default.

 

During December 2017, we entered into a Securities Purchase Agreement with Carebourn Capital, L.P. (“Carebourn”) and sold Carebourn a 12% Convertible Note in the principal amount of $66,700 (the “Carebourn December 2017 Note”). As part of the purchase agreement, we provided Carebourn a right of first refusal to participate in future offerings for 12 months, subject to certain exceptions. We also paid $8,000 of Carebourn’s expenses associated with the offering. The Carebourn December 2017 Note is convertible into shares of our common stock at any time 90 days after the sale date at a conversion price equal to 58% of the lowest trading price of our common stock for the last 20 trading days prior to conversion (subject to reductions of up to an additional 15% in the conversion price percentage upon the occurrence of certain defaults under the note), accrues interest at 12% per annum, had an OID of $8,700 and a due date of December 18, 2018. We can prepay the note subject to certain prepayment penalties. The note contains various penalties and liquidated damages upon the occurrence of an event of default. The note is payable by way of daily withdrawals from our bank account in the amount of $278, which begin March 1, 2018. We also agreed that if we provide any financing source more favorable term(s) than the note while the note is outstanding that note would, at the option of Carebourn, be amended to include such more favorable term(s). We also provided Carebourn a right of first refusal to provide additional funding during the period the note is outstanding.

 

On December 21, 2017, we filed an Amendment with the Secretary of State of Nevada to increase our authorized number of shares of common stock to 5,000,000,000.

 

Effective on January 2, 2018, Thomas H. Witthuhn, a member of the Company’s Board of Directors and the Chief Operating Officer of the Company resigned as the Chief Operating Officer of the Company.

 

v3.8.0.1
ORGANIZATION AND BASIS OF PRESENTATION (Policies)
9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

Basis of Presentation 

 

The accompanying unaudited interim condensed financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2016.

Going Concern

Going Concern 

 

The Company has generated only limited revenues from operations since inception. Since inception, it has incurred significant losses to date, and as of September 30, 2017, has a working capital deficit of approximately $3,000,000, and an accumulated deficit of approximately $15,700,000. The Company’s ability to continue its operations is uncertain and is dependent upon its ability to implement a business plan sufficient to generate a positive cash flow and/or raise capital to fund its operations. 

 

These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations in the normal course of business. 

Use of Estimates

Use of Estimates 

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and the disclosure of contingent assets and liabilities. These estimates and assumptions are based on the Company’s historical results as well as management’s future expectations. The Company’s actual results could vary materially from management’s estimates and assumptions. Additionally, interim results may not be indicative of the Company’s results for future interim periods, or the Company’s annual results. 

Cash and Cash Equivalents

Cash and Cash Equivalents 

 

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At September 30, 2017, and December 31, 2016, the Company did not have any cash equivalents.

 

Accounts Receivable

Accounts Receivable 

 

Accounts receivable are not collateralized and interest is not accrued on past due accounts. Periodically, management reviews the adequacy of its provision for doubtful accounts based on historical bad debt expense results and current economic conditions using factors based on the aging of its accounts receivable. After management has exhausted all collection efforts, management writes off receivables and the related reserve. Additionally, the Company may identify additional allowance requirements based on indications that a specific customer may be experiencing financial difficulties. Actual bad debt results could differ materially from these estimates.

Inventories

Inventories

 

Inventories are stated at the lower of cost (first-in, first-out) or market. The Company periodically reviews its inventories for indications of slow movement and obsolescence and records an allowance when it is deemed necessary. There was no inventory at September 30, 2017.

Revenue Recognition

Revenue Recognition 

 

The Company recognizes gross sales when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable, and collection is reasonably assured. It recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”). 

Stock Based Compensation

Stock Based Compensation 

 

The Company from time to time issues shares of common stock for services. These issuances have been valued based upon the quoted market price of the shares. 

Disclosure About Fair Value of Financial Instruments

Disclosure About Fair Value of Financial Instruments 

 

The Company estimates that the fair value of all financial instruments at September 30, 2017 and December 31, 2016, do not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying condensed balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange. 

Derivative Financial Instruments

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. 

 

The Company has determined that certain outstanding convertible debt instruments include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible debentures have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period recorded in earnings as “Other income (expense) - gain (loss) on change in derivative liabilities.

  

   Carrying
Value
   Fair Value Measurements 
Using Fair Value Hierarchy
 
       Level 1   Level 2   Level 3 
Derivative liability – December 31, 2016  $1,525,135   $   $   $1,525,135 
Derivative liability – September 30, 2017  $1,899,414   $   $   $1,899,414 
                     
Balance at December 31, 2016                 $1,525,135 
Revaluation of derivative arising from insufficient shares available for issuance                  (300,766)
New embedded derivatives issued with indebtedness                  2,048,072 
Conversion                  (566,593)
Change in derivative liability during the nine months ended September 30, 2017                  (806,434)
Balance September 30, 2017                 $1,899,414 

  

Net Income (Loss) Per Share

Net Income (Loss) Per Share

 

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Any anti-dilutive effects on net income (loss) per share are excluded. The Company has 16,724,126,399 potentially dilutive securities outstanding as of September 30, 2017.

Income Taxes

Income Taxes 

 

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized. 

 

The Company has adopted the provisions of FASB ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Open tax-years subject to IRS examination include 2013 - 2016. 

Recent Accounting Pronouncements

Recent Accounting Pronouncements 

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this ASU supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU No. 2016-02 on its financial statements.

 

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-08 on its financial statements. 

 

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-10 on its financial statements.

v3.8.0.1
ORGANIZATION AND BASIS OF PRESENTATION (Tables)
9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of carrying value and fair value of derivative instruments

The Company has determined that certain outstanding convertible debt instruments include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible debentures have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period recorded in earnings as “Other income (expense) - gain (loss) on change in derivative liabilities.

  

   Carrying
Value
   Fair Value Measurements 
Using Fair Value Hierarchy
 
       Level 1   Level 2   Level 3 
Derivative liability – December 31, 2016  $1,525,135   $   $   $1,525,135 
Derivative liability – September 30, 2017  $1,899,414   $   $   $1,899,414 
                     
Balance at December 31, 2016                 $1,525,135 
Revaluation of derivative arising from insufficient shares available for issuance                  (300,766)
New embedded derivatives issued with indebtedness                  2,048,072 
Conversion                  (566,593)
Change in derivative liability during the nine months ended September 30, 2017                  (806,434)
Balance September 30, 2017                 $1,899,414 

  

v3.8.0.1
FIXED ASSETS, NET (Tables)
9 Months Ended
Sep. 30, 2017
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment

Fixed assets consist of the following equipment:

 

    September 30,
2017
    December 31,
2016
 
             
Computer equipment   $ 16,783     $ 16,783  
      16,783       16,783  
Less accumulated depreciation     (6,339 )     (3,821 )
Total   $ 10,444     $ 12,962  

 

v3.8.0.1
CONVERTIBLE NOTES (Tables)
9 Months Ended
Sep. 30, 2017
Debt Disclosure [Abstract]  
Schedule of assumptions in Black-Scholes Model

The fair value of the described embedded derivative was determined using the Black-Scholes Model with the following assumptions:

 

(1) risk free interest rate of 0.10% to 0.45%
(2) dividend yield of 0%;
(3) volatility factor of 248% to 441%;
(4) an expected life of the conversion feature of 365 days; and
(5) estimated fair value of the Company’s common stock of $0.0001 to $0.008 per share.

 

Schedule of derivative activity

The following table represents the Company’s derivative liability activity for the nine months ended September 30, 2017: 

 

Balance at December 31, 2016   $ 1,525,135  
Revaluation due to insufficient shares available for issuance     (300,766 )
Valuation upon issuance of debts     2,048,072  
Conversion     (566,593 )
Change in derivative liability during the nine months ended September 30, 2017     (806,434 )
Balance September 30, 2017   $ 1,899,414  
v3.8.0.1
DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
9 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of derivative financial instruments associated with convertible promissory notes

The following table presents the components of the Company’s derivative financial instruments associated with convertible promissory notes (See Note 4) which have no observable market data and are derived using the Black-Scholes option pricing model measured at fair value on a recurring basis, using Level 1 and 3 inputs to the fair value hierarchy, at September 30, 2017 and December 31, 2016: 

 

    September 30,
2017
    December 31,
2016
 
Embedded conversion features   $ 1,638,733     $ 963,688  
Insufficient shares     260,681       561,447  
Derivative liability   $ 1,899,414     $ 1,525,135  
v3.8.0.1
LEASE COMMITMENTS (Tables)
9 Months Ended
Sep. 30, 2017
Leases [Abstract]  
Schedule of future minimum rental payments

Future minimum rental payments for the remaining terms are as follows: 

 

Year Ending December 31,     Amount  
2018 – remaining three months     $ 10,314  
2019       41,256  
2020       41,256  
2021       3,438  
Total     $ 96,264  
v3.8.0.1
ORGANIZATION AND BASIS OF PRESENTATION (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation          
Derivative liability, beginning     $ 1,525,135    
Revaluation of derivative arising from insufficient shares available for issuance $ 260,681 $ (905,980) (300,766)    
New embedded derivatives issued with indebtness     2,048,072    
Conversion     (566,593)    
Change in derivative liability 105,990 $ (456,744) (806,434) $ 136,960  
Derivative liability, ending 1,899,414   1,899,414    
Level 3 [Member]          
Derivative liability $ 1,899,414   $ 1,899,414   $ 1,525,135
v3.8.0.1
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Working capital deficit $ 2,925,369  
Accumulated deficit $ (15,734,857) $ (14,540,039)
Potentially dilutive securities 16,724,126,399  
v3.8.0.1
FIXED ASSETS, NET (Details) - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Property, Plant and Equipment [Abstract]    
Computer equipment $ 16,783 $ 16,783
Less accumulated depreciation (6,339) (3,821)
Total $ 10,444 $ 12,962
v3.8.0.1
FIXED ASSETS, NET (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Property, Plant and Equipment [Abstract]    
Depreciation $ 2,518 $ 2,307
v3.8.0.1
NOTES PAYABLE (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2017
Jan. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jul. 31, 2016
Short-term Debt [Line Items]          
Accrued interest $ 126,904   $ 120,232    
Promissory Note Payable [Member] | Asset Purchase Agreement [Member]          
Short-term Debt [Line Items]          
Debt face amount       $ 200,000  
Accrued interest 25,425   10,466    
Debt outstanding amount 200,000   $ 200,000    
Interest rate     10.00% 10.00%  
12% Promissory Note Payable in Default [Member]          
Short-term Debt [Line Items]          
Debt face amount         $ 82,500
Accrued interest 60,899   $ 8,945    
Debt outstanding amount 82,500   82,500    
Original issue debt discount         $ 7,500
12% Promissory Note Payable [Member]          
Short-term Debt [Line Items]          
Debt face amount       $ 10,000  
Accrued interest 0   0    
Debt outstanding amount 0   95    
Original issue debt discount       $ 650  
Interest rate       12.00%  
Promissory Note Payable [Member]          
Short-term Debt [Line Items]          
Debt face amount   $ 20,000      
Accrued interest 0   0    
Debt outstanding amount 0   $ 0    
Interest payment $ 5,000        
Debt maturity date Feb. 15, 2017        
v3.8.0.1
CONVERTIBLE NOTES (Details)
9 Months Ended
Sep. 30, 2017
$ / shares
Dividend yield 0.00%
Expected life of the conversion feature 365 days
Minimum [Member]  
Risk free interest rate 0.10%
Volatility factor 248.00%
Estimated fair value of th company's common stock $ 0.0001
Maximum [Member]  
Risk free interest rate 0.45%
Volatility factor 441.00%
Estimated fair value of th company's common stock $ 0.008
v3.8.0.1
CONVERTIBLE NOTES (Details 1) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]        
Derivative liability, beginning     $ 1,525,135  
Revaluation of derivative arising from insufficient shares available for issuance $ 260,681 $ (905,980) (300,766)  
New embedded derivatives issued with indebtness     2,048,072  
Conversion     (566,593)  
Change in derivative liability 105,990 $ (456,744) (806,434) $ 136,960
Derivative liability, ending $ 1,899,414   $ 1,899,414  
v3.8.0.1
CONVERTIBLE NOTES (Details Narrative) - USD ($)
1 Months Ended 2 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
Aug. 31, 2017
Jul. 31, 2017
Jun. 30, 2017
Jun. 29, 2017
May 31, 2017
Apr. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Dec. 31, 2015
May 31, 2015
Jun. 30, 2017
Sep. 30, 2017
Sep. 30, 2016
Sep. 23, 2016
Jun. 15, 2016
Dec. 03, 2015
May 01, 2014
Accounts payable $ 313,465             $ 341,615           $ 313,465          
Accrued interest 126,904             120,232           126,904          
Convertible debt 503,118             556,388           503,118          
Issuance of shares for convertible debt                           736,184          
Embedded Debt Derivative [Member]                                      
Initial fair value of embedded derivatives       $ 150,415 $ 133,436 $ 32,152 $ 647,139           $ 150,415     $ 108,458 $ 322,660 $ 227,746 $ 500,842
Interest expense derivatives                           1,384,997 $ 431,118        
Embedded Derivative Financial Instruments [Member]                                      
Initial fair value of embedded derivatives         366,458   55,397                        
Convertible Debt - Anubis Capital Partners [Member]                                      
Debt face amount               $ 500,000                      
Debt interest rate               8.00%                      
Common stock issued as payment of principal of debt, shares                     25,000,000                
Common stock issued as payment of principal of debt                     $ 212,500                
Convertible debt $ 187,500             $ 287,500           $ 187,500          
Discounted market price percentage 50.00%                         50.00%          
Convertible Debt - Anubis Capital Partners [Member] | Unrelated Party [Member]                                      
Sale of debt         100,000                            
Convertible Notes [Member]                                      
Debt face amount $ 173,500                         $ 173,500          
Debt interest rate 10.00%                         10.00%          
Accrued interest $ 12,027             12,027           $ 12,027          
Issuance of shares for convertible debt, shares                       14,660,440              
Issuance of shares for convertible debt                       $ 173,500              
Discounted market price percentage 50.00%                         50.00%          
Convertible Note [Member]                                      
Debt face amount                     $ 175,000                
Accounts payable $ 100,517             161,730           $ 100,517          
Accrued interest $ 3,532             $ 0           3,532          
Debt term                     1 year                
Issuance of shares for convertible debt, shares 133,517,700 76,200,000 35,450,000 70,119,900       12,000,000                      
Issuance of shares for convertible debt $ 6,409 $ 3,658 $ 3,403 $ 48,436       $ 13,770                      
Prepayment penalty                     $ 25,000                
Number of trading days                     10 days                
Discounted market price percentage                     32.50%                
Convertible Note #2 [Member]                                      
Debt face amount                   $ 121,325                  
Debt interest rate                   12.00%                  
Debt discount                   $ 15,825                  
Carying amount of debt 0             73,989           0          
Debt term                   1 year                  
Issuance of shares for convertible debt, shares                         62,498,139            
Issuance of shares for convertible debt                         $ 63,427            
Number of trading days                   20 days                  
Discounted market price percentage                   50.00%                  
Carebourn Convertible Note [Member]                                      
Debt face amount             $ 135,575                        
Debt interest rate             12.00%                        
Debt default interest rate             22.00%                        
Debt discount             $ 27,075                        
Accrued interest 0                         0          
Convertible debt 55,117                         55,117          
Debt maturity date             Apr. 17, 2018                        
Number of trading days             20 days                        
Discounted market price percentage             50.00%                        
Costs paid with note sale             $ 8,500                        
Sojourn Debenture [Member]                                      
Debt face amount             $ 32,500                        
Debt interest rate             10.00%                        
Debt default interest rate             18.00%                        
Debt discount             $ 5,000                        
Accrued interest 1,523                         1,523          
Convertible debt 32,500                         32,500          
Debt maturity date             Jan. 12, 2018                        
Number of trading days             20 days                        
Discounted market price percentage             42.00%                        
Percent of principle for repayment after issuance             130.00%                        
Convertible Note #6 [Member]                                      
Debt face amount           $ 35,000                          
Debt interest rate           12.00%                          
Debt discount           $ 3,000                          
Accrued interest 0                         0          
Convertible debt $ 0                         $ 0          
Debt term           1 year                          
Number of trading days           20 days                          
Discounted market price percentage           35.00%                          
Convertible Note #7 [Member]                                      
Debt face amount           $ 100,000                          
Debt interest rate 10.00%         1.20%               10.00%          
Debt discount           $ 9,500                          
Accrued interest $ 3,507                         $ 3,507          
Convertible debt 100,000                         100,000          
Debt term           1 year                          
Number of trading days           20 days                          
Discounted market price percentage           45.00%                          
Convertible Note #8 [Member]                                      
Debt face amount $ 150,000 50,000   $ 100,000                 $ 100,000 $ 150,000          
Debt interest rate 10.00%     1.20%                 1.20% 10.00%          
Debt discount $ 15,250 $ 4,167   $ 11,083                 $ 11,083 $ 15,250          
Accrued interest 2,458                         2,458          
Convertible debt 150,000                         150,000          
Debt term       1 year                              
Number of trading days       20 days                              
Discounted market price percentage       42.00%                 42.00%            
Three Convertible Note #9 [Member]                                      
Debt face amount $ 210,000       210,000                 $ 210,000          
Debt interest rate 8.00%                         8.00%          
Debt discount $ 4,281       $ 20,000                 $ 4,281          
Debt term         1 year                            
Number of trading days         20 days                            
Discounted market price percentage         42.00%                            
Convertible Debt - Anubis Capital Partners [Member]                                      
Debt face amount         $ 100,000                            
Debt interest rate         8.00%                            
Accrued interest 1,916             0           1,916          
Convertible debt $ 89,124             0           89,124          
Debt term         1 year                            
Issuance of shares for convertible debt, shares 86,171,725   33,781,609                                
Issuance of shares for convertible debt $ 4,998   $ 5,878                                
Number of trading days         20 days                            
Discounted market price percentage         58.00%                            
Convertible Note #3 [Member]                                      
Debt face amount                 $ 63,825           $ 63,825        
Debt interest rate                 12.00%           12.00%        
Debt discount                 $ 13,825           $ 13,825        
Convertible debt 13,030             53,481           13,030          
Debt term                 1 year                    
Number of trading days                 20 days                    
Discounted market price percentage                 50.00%           50.00%        
Anubis Capital Partners [Member]                                      
Montly payment for fees                           2,500          
Accounts payable 20,000             20,000           20,000          
Accrued interest $ 11,337             $ 88,795           $ 11,337          
Number of trading days                           20 days          
v3.8.0.1
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - Fair Value, Measurements, Recurring [Member] - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Derivative liability $ 1,899,414 $ 1,525,135
Embedded Debt Derivative [Member]    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Derivative liability 1,638,733 963,688
Insufficent Shares [Member]    
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]    
Derivative liability $ 260,681 $ 561,447
v3.8.0.1
LEASE COMMITMENTS (Details)
Dec. 31, 2016
USD ($)
Year Ending December 31,  
2018 - remaining six months $ 10,314
2019 41,256
2020 41,256
2021 3,438
Total $ 96,264
v3.8.0.1
LEASE COMMITMENTS (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Operating Leased Assets [Line Items]    
Rent expense $ 28,538 $ 35,337
Laguna Beach Office [Member]    
Operating Leased Assets [Line Items]    
Term of lease 60 months  
Rental payment $ 3,438  
Dallas Office [Member]    
Operating Leased Assets [Line Items]    
Term of lease 7 months  
Rental payment $ 2,200  
v3.8.0.1
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)
9 Months Ended
Feb. 09, 2017
Jan. 09, 2017
Jan. 04, 2016
Dec. 07, 2015
Sep. 30, 2017
Aug. 03, 2017
Apr. 12, 2017
Apr. 11, 2017
Dec. 31, 2016
May 22, 2015
Number of authorized shares         5,000,000,000          
Common stock, shares authorized         4,990,000,000   1,990,000,000 1,000,000,000 4,990,000,000  
Common stock, par value (in dollars per share)         $ 0.001   $ 0.001 $ 0.001 $ 0.001  
Preferred stock, shares authorized         10,000,000          
Preferred stock, par value (in dollars per share)         $ 0.001          
Reverse stock split        

one-for-one hundred and one-for-one thousand

         
Stock issued for services $ 96,000       $ 126,000          
Stock issued for services, shares 32,000,000                  
Issuance of shares for debt         736,184          
Advertising expense         96,000          
Amount of debt converted into shares         $ 204,863          
Series A Preferred Stock [Member]                    
Preferred stock, shares authorized         1,000       1,000  
Preferred stock, par value (in dollars per share)         $ 0.001       $ 0.001  
Stock issued for services, shares                  
Redemption price                   $ 100.00
Beneficial ownership percentage                   51.00%
Series B Preferred Stock [Member[                    
Preferred stock, shares authorized         9,999,000       9,999,000  
Preferred stock, par value (in dollars per share)         $ 0.001       $ 0.001  
Stock issued for services, shares                  
Liquidation preference       $ 10.00            
Converted shares issued upon conversion       100            
Shares exchanged in exchange agreement       40,000            
Series B Preferred Stock [Member[ | Maximum [Member]                    
Beneficial ownership percentage       4.99%            
Common Stock [Member]                    
Stock issued for services         $ 42,000          
Stock issued for services, shares         42,000,000          
Shares exchanged in exchange agreement       (40,000,000)            
Issuance of shares for debt         $ 595,220          
Issuance of shares for debt, shares         59,220,554          
CEO and Director [Member] | Series A Preferred Stock [Member]                    
Stock held by majority shareholder - Series A Preferred Stock           1,000 1,000      
Percent of vote on all shareholder matters           51.00%        
CEO and Director [Member] | Common Stock [Member]                    
Percent of vote on all shareholder matters             51.00%      
Shares outstanding to vote on all shareholder matters, shares             89,115,016      
COO and Director [Member] | Restricted Stock [Member]                    
Stock issued as compensation   $ 30,000                
Stock issued as compensation, shares   10,000,000                
Dr. Scheffey [Member] | Series B Preferred Stock [Member[ | Stock Subscription Agreement [Member]                    
Issuance of shares for cash     $ 250,000              
Issuance of shares for cash, shares     25,000              
v3.8.0.1
GOING CONCERN (Details Narrative) - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Going Concern Details Narrative    
Accumulated deficit $ (15,734,857) $ (14,540,039)
Working capital deficit $ 2,925,369  
v3.8.0.1
SUBSEQUENT EVENTS (Details Narrative) - USD ($)
1 Months Ended 9 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Original amount of debt   $ 736,184
Subsequent Event [Member]    
Increase in common shares authorized 5,000,000,000  
Subsequent Event [Member] | 10% Convertible Promissory Note Due on June 13, 2018 [Member] | More Capital, LLC ("More Capital") [Member]    
Original amount of debt $ 25,000  
Face amount $ 32,200  
Maturity date Jun. 13, 2018  
Original issue discount $ 4,200  
Debt interest rate 10.00%  
Number of trading days 20 days  
Percentage of beneficial ownership limitation 4.99%  
Percentage equal to conversion price 50.00%  
Discounted market price percentage 10.00%  
Expenses associated with transaction $ 3,000  
Debt outstanding amount 134  
Subsequent Event [Member] | 12% Convertible Redeemable Note [Member] | Adar Bays, LLC ("Adar Bays" and the "Adar Bays Note") [Member] | Securities Purchase Agreement [Member]    
Face amount $ 58,200  
Maturity date Dec. 20, 2018  
Original issue discount $ 5,700  
Debt interest rate 12.00%  
Number of trading days 20 days  
Revise number of trading days 20 days  
Percentage equal to conversion price 50.00%  
Revise percentage equal to conversion price 48.00%  
Percentage of holding for prohibiting conversion 9.90%  
Subsequent Event [Member] | 12% Convertible Redeemable Note Due on December 20, 2018 [Member] | 2nd Adar Bays Note [Member] | Securities Purchase Agreement [Member]    
Face amount $ 52,500  
Maturity date Dec. 20, 2018  
Debt interest rate 12.00%  
Subsequent Event [Member] | 12% Convertible Redeemable Note Due on December 18, 2018 [Member] | Carebourn Capital, L.P. [Member] | Securities Purchase Agreement [Member]    
Face amount $ 66,700  
Maturity date Dec. 18, 2018  
Original issue discount $ 8,700  
Debt interest rate 12.00%  
Number of trading days 20 days  
Percentage equal to conversion price 50.00%  
Revise percentage equal to conversion price 15.00%  
Expenses associated with transaction $ 8,000  
Periodic payment $ 278