0001493152-19-013084.txt : 20190819 0001493152-19-013084.hdr.sgml : 20190819 20190819173027 ACCESSION NUMBER: 0001493152-19-013084 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 51 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190819 DATE AS OF CHANGE: 20190819 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Sun Pacific Holding Corp. CENTRAL INDEX KEY: 0001343465 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 901119774 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-51935 FILM NUMBER: 191037370 BUSINESS ADDRESS: STREET 1: 215 GORDON?S CORNER ROAD STREET 2: SUITE 1A MANALAPAN CITY: MANALAPAN STATE: NJ ZIP: 07726 BUSINESS PHONE: 732-845-0906 MAIL ADDRESS: STREET 1: 215 GORDON?S CORNER ROAD STREET 2: SUITE 1A MANALAPAN CITY: MANALAPAN STATE: NJ ZIP: 07726 FORMER COMPANY: FORMER CONFORMED NAME: EXOlifestyle, Inc. DATE OF NAME CHANGE: 20160928 FORMER COMPANY: FORMER CONFORMED NAME: PF Hospitality Group, Inc. DATE OF NAME CHANGE: 20151202 FORMER COMPANY: FORMER CONFORMED NAME: KALAHARI GREENTECH INC. DATE OF NAME CHANGE: 20081231 10-Q 1 form10-q.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2019

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____________ to _____________

 

Commission File Number: 000-51935

 

Sun Pacific Holding Corp

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada   90-1119774

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

215 Gordons Corner Road, Manalapan, New Jersey   07726
(Address of Principal Executive Office)   (Zip Code)

 

(732) 845-0906

(Registrant’s Telephone Number, Including Area Code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ]   Accelerated filer [  ]
     
Non-accelerated filer [  ]   Smaller reporting company [X]
(Do not check if a smaller reporting company)    
     
Emerging growth company [X]    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]

 

As of August 13, 2019, there were 395,898,624 shares of the registrant’s common stock, $0.0001 par value, outstanding.

 

 

 

   
   

 

SUN PACIFIC HOLDING CORP AND SUBSIDIARIES

 

INDEX

 

    Page
     
PART I - FINANCIAL INFORMATION  
     
Item 1. Financial Statements 4
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 26
     
Item 4. Controls and Procedures 26
     
PART II - OTHER INFORMATION  
     
Item 1. Legal Proceedings 26
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27
     
Item 3. Defaults Upon Senior Securities 31
     
Item 5. Other Information 31
     
Item 6. Exhibits 31
     
Signatures 32

 

 2 
   

 

FORWARD-LOOKING STATEMENTS

 

Except for any historical information contained herein, the matters discussed in this quarterly report on Form 10-Q contain certain “forward-looking statements’’ within the meaning of the federal securities laws. This includes statements regarding our future financial position, economic performance, results of operations, business strategy, budgets, projected costs, plans and objectives of management for future operations, and the information referred to under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

These forward-looking statements generally can be identified by the use of forward-looking terminology, such as “may,’’ “will,’’ “expect,’’ “intend,’’ “estimate,’’ “anticipate,’’ “believe,’’ “continue’’ or similar terminology, although not all forward-looking statements contain these words. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, you are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. Important factors that may cause actual results to differ from projections include, for example:

 

  the success or failure of management’s efforts to implement our business plan;
     
  our ability to fund our operating expenses;
     
  our ability to compete with other companies that have a similar business plan;
     
  the effect of changing economic conditions impacting our plan of operation; and
     
  our ability to meet the other risks as may be described in future filings with the Securities and Exchange Commission (the “SEC”).

 

Unless otherwise required by law, we also disclaim any obligation to update our view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made in this quarterly report on Form 10-Q.

 

When considering these forward-looking statements, you should keep in mind the cautionary statements in this quarterly report on Form 10-Q and in our other filings with the SEC. We cannot assure you that the forward-looking statements in this quarterly report on Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may prove to be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all.

 

 3 
   

 

PART I - FINANCIAL INFORMATION

 

Item 1. FINANCIAL STATEMENTS

 

Condensed Consolidated Balance Sheets as of June 30, 2019 (Unaudited) and December 31, 2018 5
   
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018 (Unaudited) 6
   
Condensed Consolidated Statements of Stockholders’ Deficit for the Six Months Ended June 30, 2019 and 2018 (Unaudited) 7
   
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018 (Unaudited) 8
   
Notes to Condensed Consolidated Financial Statements (Unaudited) 9

 

 4 
   

 

SUN PACIFIC HOLDING CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   June 30, 2019   December 31, 2018 
   (Unaudited)     
ASSETS          
Current Assets:          
Cash and cash equivalents  $112,385   $4,851 
Cash held in escrow   953,297    - 
Cash held in escrow for interest   706,933    - 
Accounts receivable, net of allowance for uncollectable accounts of $145,155   98,699    77,137 
Other current assets   -    7,234 
Total current assets   1,871,314    89,222 
           
Property and Equipment, Net   1,827,913    204,951 
Right-of-use Asset   1,306,454    - 
Deposits   1,715,868    - 
           
Total assets  $6,721,549   $294,173 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current Liabilities:          
Accounts payable  $229,497   $245,125 
Accounts payable, related party   76,512    91,512 
Accrued compensation to officer   687,364    631,166 
Accrued expenses   520,005    203,670 
Accrued expenses, related party   39,123    31,745 
Dividends payable, related party   23,270    18,913 
Advances from related parties   612,024    612,023 
Project financing obligation   260,000    260,000 
Vehicle installment notes payable, current portion   21,631    28,943 
Convertible notes payable, net of discounts   376,926    423,454 
Convertible notes payable, related party, net of discounts   408,974    408,974 
Note payable, net of discounts   5,866,636    - 
Lease liability, current portion   79,903    - 
Total current liabilities   9,201,865    2,955,525 
           
Long Term Liabilities:          
Lease liability, net of current portion   1,234,602    - 
Vehicle installment notes payable, net of current portion   20,867    31,724 
Total long-term liabilities   1,255,469    31,724 
Total liabilities   10,457,334    2,987,249 
           
Commitments and contingencies (see Note 7)          
           
Stockholders’ Deficit:          
Preferred stock $0.0001 par value, 20,000,000 million shares authorized:          
Series A preferred stock: 12,000,000 shares designated; 12,000,000 shares issued and outstanding   1,200    1,200 
Series B preferred stock: 1,000,000 shares designated; -0- shares issued and outstanding, respectively   -    - 
Series C preferred stock: 500,000 shares designated; -0- shares issued and outstanding, respectively   -    - 
Common stock $0.0001 par value, 500,000,000 shares authorized; 277,844,481 and 66,901,354 shares issued and outstanding, respectively   27,784    6,690 
Additional paid in capital   4,161,579    3,948,051 
Accumulated deficit   (7,500,440)   (6,649,017)
Total deficit   (3,309,877)   (2,693,076)
Non-controlling interest in subsidiary   (425,909)   - 
Total stockholders’ deficit   (3,735,785)   (2,693,076)
           
Total liabilities and stockholders’ deficit  $6,721,549   $294,173 

 

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

 

 5 
   

 

SUN PACIFIC HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(Unaudited)

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2019   2018   2019   2018 
                 
Revenues  $101,923   $145,339   $210,288   $266,079 
Cost of Revenues   41,422    93,094    128,415    180,103 
                     
Gross profit   60,501    52,245    81,873    85,976 
                     
Operating expenses:                    
Wages and compensation   81,649    38,201    115,137    220,988 
Professional fees   248,319    263,635    341,621    414,882 
General and administrative   148,182    274,762    296,080    335,317 
Total operating expenses   478,150    576,598    752,838    971,187 
                     
Loss from operations   (417,649)   (524,353)   (670,965)   (885,211)
                     
Other Expenses:                    
Dividend expense - preferred stock   -    (3,125)   -    (6,250)
Interest expense   (288,975)   (106,559)   (606,366)   (110,388)
Total other expense   (288,975)   (109,684)   (606,366)   (116,638)
                     
Net loss  $(706,624)  $(634,037)  $(1,277,331)  $(1,001,849)
                     
Net loss attributable to non-controlling interest   250,165    -    425,909    - 
                     
Net loss attributable to common stockholders  $(456,460)  $(634,037)  $(851,423)  $(1,001,849)
                     
Net Loss Per Common Share - Basic  $(0.00)  $(0.01)  $(0.01)  $(0.02)
                     
Weighted Average Shares Outstanding - Basic   178,912,854    62,663,833    132,454,826    61,786,546 

 

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

 

 6 
   

 

SUN PACIFIC HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(Unaudited)

 

   Series A Preferred Stock   Series C Preferred Stock   Common Stock  

Additional

Paid In

   Accumulated   Non - controlling   Total 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Interest   Deficit 
Six Months Ended June 30, 2018                                        
Balances at December 31, 2017   12,000,000   $1,200    275,000   $28    60,833,030   $6,083   $3,168,626   $(4,873,536)  $-   $(1,697,599)
Issuance of common stock for cash   -    -    -    -    100,000    10    59,990    -    -    60,000 
Issuance of common stock warrants for services   -    -    -    -    -    -    130,641    -    -    130,641 
Net loss   -    -    -    -    -    -    -    (367,811)   -    (367,811)
Balances at March 31, 2018   12,000,000    1,200    275,000    28    60,933,030    6,093    3,359,257    (5,241,347)   -    (1,874,769)
Issuance of common stock for cash   -    -    -    -    1,130,000    113    112,887    -    -    113,000 
Issuance of common stock in settlement of accounts payable   -    -    -    -    668,324    67    84,118    -    -    84,185 
Issuance of common stock warrants with convertible debt   -    -    -    -    -    -    280,019    -    -    280,019 
Beneficial conversion feature on convertible debt   -    -    -    -    -    -    69,981    -    -    69,981 
Net loss   -    -    -    -    -    -    -    (634,037)   -    (634,037)
Balances at June 30, 2018   12,000,000   $1,200    275,000   $28    62,731,354   $6,273   $3,906,262   $(5,875,384)  $-   $(1,961,621)
                                                   
Six Months Ended June 30, 2019                                                  
Balances at December 31, 2018   12,000,000   $1,200    -   $-    66,901,354   $6,690   $3,948,051   $(6,649,017)  $-   $(2,693,076)
Issuance of common stock for conversion of convertible debt   -    -    -    -    53,140,000    5,314    89,299    -    -    94,613 
Net loss   -    -    -    -    -    -    -    (394,963)   (175,744)   (570,707)
Balances at March 31, 2019   12,000,000    1,200    -    -    120,041,354    12,004    4,037,350    (7,043,980)   (175,744)   (3,169,170)
Issuance of common stock for conversion of convertible debt   -    -    -    -    157,803,127    15,780    124,229    -    -    140,009 
Net loss   -    -    -    -    -    -    -    (456,460)   (250,165)   (706,624)
Balances at June 30, 2019   12,000,000   $1,200    -   $-    277,844,481   $27,784   $4,161,579   $(7,500,440)  $(425,909)  $(3,735,785)

 

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

 

 7 
   

 

SUN PACIFIC HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(Unaudited)

 

   2019   2018 
Cash flows from Operating Activities:          
Net loss  $(1,277,331)  $(1,001,849)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation   32,552    78,602 
Amortization of debt discount - interest expense   269,472    83,748 
Conversion fees settled with common stock   16,639    - 
Warrants issued for services   -    130,641 
Common stock issued for services   -    84,184 
Changes in operating assets and liabilities:          
Accounts receivable   (21,562)   36,495 
Deposits and other assets   (1,708,634)   (15,122)
Accounts payable   (15,629)   15,864 
Accounts payable, related party   (15,000)   - 
Accrued compensation to officer   56,198    74,988 
Accrued expenses   330,553    47,375 
Accrued expenses, related party   7,378    - 
Dividends payable, related party   4,357    6,250 
Right-to-use asset and obligation   8,051      
Net cash used in operating activities   (2,312,956)   (458,824)
           
Cash flows from Investing Activities:          
Purchases of property and equipment   (1,655,514)   - 
Net cash used in investing activities   (1,655,514)   - 
           
Cash flows from Financing Activities:          
Proceeds from notes payable released from escrow.   5,753,625    - 
Repayment of advances from related parties   -    (219)
Proceeds from issuance of common stock   -    173,001 
Proceeds from financing obligation   -    260,000 
Proceeds from convertible notes payable, net of issuance costs   -    281,660 
Repayment of vehicle installment notes payable   (18,169)   (11,434)
Net cash provided by financing activities   5,735,456    703,008 
           
Net decrease in cash   1,766,986    244,184 
Cash and restricted cash at beginning of period   4,851    55,740 
Cash and restricted cash at end of period  $1,771,837   $299,924 
           
Supplemental Disclosure of Cash Flow Information:          
Interest paid  $-   $- 
Taxes paid  $-   $- 
           
Supplemental Disclosure of Non-Cash Investing and Financing Activities:          
Discount from note payable  $271,375   $- 
Issuance of common stock for conversion of          
convertible debt  $217,983   $- 
Right of use asset and operating lease liability  $1,338,686   $- 
Convertible debt discounts for beneficial conversion features  $-   $69,981 
Convertible debt discounts for detachable warrants  $-   $280,019 
Settlement of convertible debt through AP  $-   $5,032 
Issuance costs related to convertible debt  $-   $68,340 

 

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

 

 8 
   

 

SUN PACIFIC HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINACNIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(Unaudited)

 

NOTE 1 - DESCRIPTION OF THE BUSINESS

 

Organization

 

The Company was incorporated under the laws of the State of New Jersey on July 28, 2009, as Sun Pacific Power Corporation and together with its subsidiaries, are referred to as the “Company”. On August 24, 2017, the Company entered into an Acquisition Agreement with EXOlifestyle, Inc. whereby the Company became a wholly owned subsidiary of EXOlifestyle, Inc. The acquisition was accounted for as a reverse merger, resulting in the Company being considered the accounting acquirer. Accordingly, the accompanying condensed consolidated financial statements included the accounts of EXOlifestyle, Inc. since August 24, 2017.

 

On October 3, 2017, pursuant to the written consent of the majority of the shareholders in lieu of a meeting, Sun Pacific Holding Corp., f/k/a EXOlifestyle, Inc. (the “Company”) filed a Certificate of Amendment with the state of Nevada to change the name of the Company from EXOlifestyle, Inc. to Sun Pacific Holding Corp. On October 3, 2017, the Company’s board of directors declared a 1 for 50 reverse stock split. All share amounts for all periods presented have been restated to reflect the reverse stock split.

 

Currently, the Company has six (6) subsidiary holdings. Sun Pacific Power Corp which was the initial company that specialized in solar, electrical and general construction, Bella Electric, LLC that in conjunction with the Company operates our electrical contracting work. Bella Electric, LLC is a Pennsylvania limited liability company. The Company also formed Sun Pacific Security Corp., a New Jersey corporation. Currently the Company has not begun operations in the security sector but is reviewing plans to provide residential and commercial security solutions, including installation and monitoring. The Company also formed National Mechanical Group Corp, a New Jersey corporation focused on plumbing operations in the New Jersey and Pennsylvania areas. The Company also formed Street Smart Outdoor Corp, a Wyoming corporation that acts as a holding company for the Company’s state specific operations in unique advertising through solar bus stops, solar trashcans and “street kiosks.” MedRecycler, LLC, is a wholly owned subsidiary duly formed in the state of Nevada. MedRecycler, LLC was created in 2018 to act as a holding company for potential waste to energy projects. MedRecycler, LLC, currently owns 51% of MedRecycler RI, Inc. a Rhode Island Corporation. MedRecycler RI, Inc. was created for the Medical Waste to Energy facility that the Company is attempting to finance and operate in West Warrick, Rhode Island.

 

Description of business

 

Utilizing managements history and contacts in general contracting, coupled with our subject matter expertise and intellectual property (“IP”) knowledge of solar panels and other environmentally friendly technologies, Sun Pacific Holding (“the Company”) is focused on building a “Next Generation” green energy company. The Company offers competitively priced “Next Generation” solar panel and lighting products by working closely with design, engineering, integration and installation firms in order to deliver turnkey solar and other energy efficient solutions. The Company provides solar bus stops, solar trashcans and “street kiosks” that utilize our unique advertising offerings that provide State and local municipalities with costs efficient solutions. The Company provides general, electrical, and plumbing contracting services to a range of both public and commercials customers in support of our goals of expanding our green energy market reach. In conjunction with these general contracting services and as part of our effort to expand our green energy marketplace, we have recently started the process to develop and build out a Waste to Energy plant in the state of Rhode Island and we are also exploring partnerships that will allow the Company to develop additional green energy projects such as solar farms and or other green projects that can utilize the Company’s expertise.

 

 9 
   

 

The Company has been unable to produce positive cashflows since inception resulting in the Company relying heavily upon convertible promissory notes and equity financing. As a result, the Company’s shareholders have suffered from highly dilutive financings.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles of the United States of America (“GAAP”) and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

 

Use of estimates in the preparation of financial statements

 

Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates include the allowance for doubtful accounts and impairment assessments related to long-lived assets.

 

Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly owned, and less-than-wholly owned subsidiaries of which the Company holds a controlling interest. All significant intercompany balances and transactions have been eliminated. Amounts attributable to minority interests in the Company’s less-than-wholly owned subsidiary are presented as non-controlling interest on the accompanying condensed consolidated balance sheets and statements of operations.

 

Cash and cash equivalents

 

For purposes of the consolidated statements of cash flows, cash includes demand deposits and short-term liquid investments with original maturities of three months or less when purchased. As of June 30, 2019, the Federal Deposit Insurance Corporation (FDIC) provided insurance coverage of up to $250,000, per depositor, per institution. At June 30, 2019, none of the Company’s cash balances were in excess of federally insured limits with the exception of $1,660,230 of cash balances held in escrow at UMB Bank, NA under a project fund that the Company’s subsidiary, MedRecycler-RI, Inc. is drawing balances against for the development of its Medical Waste to Energy project in Rhode Island. Any and all withdrawals are strictly controlled by the lending institution, and use of proceeds must be approved prior to release of funds.

 

Accounts Receivable

 

In the normal course of business, we decide to extend credit to certain customers without requiring collateral or other security interests. Management reviews its accounts receivable at each reporting period to provide for an allowance against accounts receivable for an amount that could become uncollectible. This review process may involve the identification of payment problems with specific customers. Periodically we estimate this allowance based on the aging of the accounts receivable, historical collection experience, and other relevant factors, such as changes in the economy and the imposition of regulatory requirements that can have an impact on the industry. These factors continuously change and can have an impact on collections and our estimation process. The Company’s allowance for doubtful accounts totaled $145,055 as of June 30, 2019 and December 31, 2018.

 

 10 
   

 

Leases

 

In February 2016, the FASB issued ASU No. 2016-02 (Topic 842). Topic 842 amends several aspects of lease accounting, including requiring lessees to recognize leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued supplemental adoption guidance and clarification to Topic 842 within ASU 2018-10 “Codification Improvements to Topic 842, Leases” and ASU 2018-11 “Leases (Topic 842): Targeted Improvements.” The new guidance aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. A modified retrospective application is required with an option to not restate comparative periods in the period of adoption.

 

The Company, effective January 1, 2019 has adopted the provisions of the new standard. The Company has operating leases for warehouses and offices. Management evaluates each lease independently to determine the purpose, necessity to its future operations in addition to other appropriate facts and circumstances.

 

We adopted Topic 842 using a modified retrospective approach for all existing leases at January 1, 2019. The adoption of Topic 842 impacted our balance sheet by the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, upon adoption, leases that were classified as operating leases under the previous guidance were classified as operating leases under Topic 842. The lease liability is based on the present value of the remaining lease payments, discounted using a market based incremental borrowing rate as the effective date of January 1, 2019 using current estimates as to lease term including estimated renewals for each operating lease. As of January 1, 2019, the Company recorded an adjustment of approximately $1,339,000 to operating lease right-of-use assets (“ROU”) and the related lease liability (Note 7).

 

Deposits

 

During the six months ended June 30, 2019, the Company made deposits of approximately $1,700,000 pursuant to a purchase of equipment costing approximately $7,200,000, currently expected to be delivered in August 2019 for assembly onsite at MedRecycler-RI, Inc.’s West Warwick, Rhode Island facility.

 

Contingencies

 

Certain conditions may exist as of the date financial statements are issued, which may result in a loss, but which will only be resolved when one or more future events occur or do not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to pending legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed.

 

Fair value of financial instruments

 

The carrying amounts of the Company’s accounts payable, accrued expenses, and shareholder advances approximate fair value due to their short-term nature. The Company’s long-term debt approximates fair value based on prevailing market rates.

 

Property and equipment

 

Property and equipment are stated at cost. Additions and improvements that significantly add to the productive capacity or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over three to five years for vehicles and five to ten years for equipment. Leasehold improvements are amortized over the lesser of the estimated remaining useful life of the asset or the remaining lease term.

 

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Impairment of long-lived assets

 

The Company periodically reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be realizable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. At June 30, 2019 and December 31, 2018, the Company has not identified any such impairment losses.

 

Income taxes

 

Under ASC Topic 740, “Income Taxes”, the Company is required to account for its income taxes through the establishment of a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carry forwards. Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for book and tax purposes during the year.

 

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized for deductible temporary differences and operating losses, and tax credit carry forwards. A valuation allowance is established to reduce that deferred tax asset if it is “more likely than not” that the related tax benefits will not be realized.

 

Revenue recognition

 

100% of the Company’s revenue for the Three and Six months ended June 30, 2019 is recognized based on the Company’s satisfaction of distinct performance obligations identified in each agreement, generally at a point in time as defined by Topic 606, as amended.

 

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This standard replaced most existing revenue recognition guidance and is codified in FASB ASC Topic 606. Effective January 1, 2018, the Company adopted ASU No. 2014-09 using the modified retrospective method. Under the new guidance, the Company recognizes revenue from contracts based on the Company’s satisfaction of distinct performance obligations identified in each agreement. The adoption of the guidance under ASU No. 2014-09 did not result in a material impact on the Company’s consolidated revenues, results of operations, or financial position. As part of the implementation of ASC 606 the Company must present disaggregation of revenues from contracts with customers into categories that depict how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. Quantitative disclosures on the disaggregation of revenue are as follows:

 

   Six Months Ended 
   June 30, 2019   June 30, 2018 
Outdoor Advertising Shelter Revenues  $108,218   $132,094 
Contracting Service Revenues   102,070    133,985 
   $210,288   $266,079 

 

Earnings Per Share

 

Under ASC 260, “Earnings Per Share” (“EPS”), the Company provides for the calculation of basic and diluted earnings per share. Basic EPS includes no dilution and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of securities that could share in the earnings or losses of the entity. For the three months ended June 30, 2019 and 2018, basic and diluted loss per share are the same as the calculation of diluted per share amounts would result in an anti-dilutive calculation. For the three and six months ended June 30, 2019 and 2018, the following potential shares have been excluded from the calculation of diluted loss per share because their impact was anti-dilutive:

 

   2019   2018 
Convertible Debt   292,527,000    37,557,004 
Convertible Debt Subject to Forbearance Agreement   8,179,480    - 
Warrants   309,031,237    7,724,727 
    609,737,717    45,281,731 

 

Recent Accounting Pronouncements.

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.

 

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NOTE 3 - GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the six months ended June 30, 2019 and 2018, the Company incurred losses of $1,277,331 and $1,001,849, respectively, and used $596,091 and $458,824, respectively, of cash in operations. The Company has a working capital deficit of $7,330,551 as of June 30, 2019. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise the additional capital to meet short and long-term operating requirements. Management is continuing to pursue external financing alternatives to improve the Company’s working capital position however additional financing may not be available upon acceptable terms, or at all. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.

 

NOTE 4 – PROPERTY AND EQUIPMENT, NET

 

Property and equipment consisted of the following as of June 30, 2019 and December 31, 2018:

 

   2019   2018 
MedRecycler-RI, Inc. Plant and Equipment  $1,655,514   $- 
Furniture and equipment   271,817    271,817 
Vehicles   189,012    189,012 
Leasehold Improvements   66,077    66,077 
Less: Accumulated Depreciation   (354,507)   (321,955)
Property and equipment, net  $1,827,913   $204,951 

 

Depreciation expenses totaled $32,552 and $78,602 for the six months ended June 30, 2019 and 2018, respectively.

 

NOTE 5 - BORROWINGS

 

Vehicle installment notes payable

 

The Company’s vehicle installment notes payable consist of several installment notes for various vehicles used in the Company’s operations. At June 30, 2019, the notes have annual interest rates between 3.49% and 4.07% and require monthly minimum payments of principal and interest ranging from $370 to $434. The Company’s installment notes are collateralized by the vehicles purchased with the respective installment notes. The notes mature from November 2020 to August 2021. As of June 30, 2019, and December 31, 2018, the balance of the notes totaled $42,498 and $60,667, respectively.

 

Convertible notes payable.

 

On August 24, 2016, the Company issued two two-year unsecured convertible notes payable totaling $200,000 pursuant to a private placement memorandum. The notes matured on August 24, 2018 and have an annual interest rate of 12.5%. At the election of the holder, upon the occurrence of certain events, the notes can be converted into common stock of the Company at a conversion price per share equal to 50% of the average bid price for the 30 consecutive business days prior to conversion. The conversion feature was contingent upon i) the successful filing of a registration statement to become publicly traded, and ii) the company stock has become publicly quoted on the OTC Markets and iii) the conversion price is above $0.10. In connection with the notes, the predecessor Company issued a total of 200,000 shares of Series B preferred stock, which was canceled upon the reverse merger. In August 2018, the holders of the notes agreed to extend the maturity date of the notes to December 31, 2018, in exchange for warrants to acquire 600,000 shares of common stock for an exercise price of $0.31 per share, exercisable over three years. The Company estimated the fair value of the warrants, totaling $16,401, using the Black Scholes Method and recorded an additional discount against the note that was amortized over the extend term of the notes. As of June 30, 2019 and December 31, 2018, the balance of the notes totaled $196,850, and no unamortized discounts remained.

 

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In April 2018, the Company issued convertible notes with an aggregate principal balance of $350,000, for net proceeds after issuance costs which were recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes, of $281,660. The notes mature in April 2019, accrue interest at an annual rate of 10% and are convertible into common stock at a conversion rate equal to the greater of $0.05 and 60% times the lowest trading price of the Company’s common stock during the 18 trading days prior to conversion. In the event of default, if the trading price of the Company’s common stock falls below $0.07, the floor moves to $0.01 and if the price of the Company’s common stock falls to below $0.03, the floor moves to $0.0001. Because the conversion feature is indexed to the Company’s stock, and there is an explicit cap to the total number of shares issuable upon conversion, the Company determine that the embedded conversion option did not require bifurcation and liability presentation. The investors in the notes also received warrants to acquire an aggregate of 6,349,457 shares of common stock for an exercise price of $0.11 per share, exercisable for 2 years. The Company estimated the fair value of the warrants using the Black Scholes model and the following assumptions: volatility – 261.8% to 268.7%; expected term – 2.0 years; dividend rate – 0.0%; risk free rate – 2.49%, and allocated $173,355 of the proceeds to the warrants, which was recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes. Based on the allocation of proceeds to the debt, the Company determined there was a beneficial conversion feature totaling $176,645, which was recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes. During the six months ended June 30, 2019, holder of the notes elected to convert principal, interest, and conversion fees totaling $234,622 into 210,943,127 shares of common stock. During the six months ended June 30, 2019, the Company amortized $156,461 of the discounts. As of June 30, 2019, the notes are carried at $180,076, and no unamortized discounts remain. On July 8, 2019 the Company entered into a settlement agreement with Auctus Fund, LLC, settling all amounts owed pursuant to that convertible promissory note entered into on April 30, 2018 for $150,000. See Note 9.

 

Convertible notes payable, related party

 

On October 23, 2015, a total of $332,474 in advances from a related party was converted into two one-year unsecured convertible notes payable to Nicholas Campanella, Chief Executive Officer of the Company (Note 8). The notes have an annual interest rate of 6% and are currently past due. At the election of the holder, the notes can be converted into common stock of the Company at a conversion price per share equal to 20% of the average bid price for the three consecutive business days prior to conversion. The notes are subject to a forbearance agreement, pursuant to which the holder cannot convert the note until such time as the Company has sufficient authorized and unissued common stock available. See Note 8. As of June 30, 2019 and December 31, 2018, the balances of the notes totaled $332,474. As of June 30, 2019, there was $34,890 of accrued interest on these advances, included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheet.

 

On August 24, 2016, a total of $76,500 in advances from a related party was converted into a two-year unsecured convertible note payable to Nicholas Campanella, Chief Executive Officer of the Company (Note 8), pursuant to a private placement memorandum. The note matured on August 24, 2018, has an annual interest rate of 12.5% and is past due. At the election of the holder, upon the occurrence of certain events, the note can be converted into common stock of the Company at a conversion price per share equal to 50% of the average bid price for the 30 consecutive business days prior to conversion. The notes are subject to a forbearance agreement, pursuant to which the holder cannot convert the note until such time as the Company has sufficient authorized and unissued common stock available. See Note 8. The conversion feature is contingent upon i) the successful filing of a registration statement to become publicly traded, and ii) the company stock has become publicly quoted on the OTC Markets and iii) the conversion price is above $0.10. In connection with this note, the Company issued 75,000 shares of Series B preferred stock. As of June 30, 2019, and December 31, 2018, the balance of the notes was $76,500.

 

Project Financing Obligation

 

In June 2018, the Company received proceeds of $260,000 pursuant to a partnership agreement and related partnership contribution agreements with third party investors, pursuant which investors have agreed to provide financing for no less than (10) ten new bus shelters being installed annually. Each investment in the partnership grants the investor the right to preferential distributions of profits related to the Company’s contract with Rhode Island. The investors receive 100% of the profits from the Rhode Island contract to install 20 bus shelters until 100% of the initial investments are returned. Thereafter, the investors receive 20% of the remaining profits from Rhode Island contract. As of June 30, 2019, no profits have been earned on the Rhode Island contract, no repayments have occurred, and the total amount of investments received totaling $260,000 is reflected on the accompanying condensed consolidated balance sheet as a Project Financing Obligation. During the 2nd quarter of 2019, the Company received from the manufacturer the respective Bus Shelters and presently they are in the process of being assembled and installed accordingly.

 

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Line of credit, related party

 

On October 23, 2015, the Company entered into a line of credit agreement with Nicholas Campanella, Chief Executive officer of the Company, for a total value of $250,000. The line of credit does not bear an interest rate and is payable on demand. As of June 30, 2019, and December 31, 2018, the balance of the debt to related party was $163,157 and is include in advances from related parties on the accompanying condensed consolidated balance sheets.

 

Indenture of Trust

 

In January 2019, MedRecycler, LLC, a 51%-owned subsidiary of Sun Pacific Holding organized in the state of Rhode Island for the development of waste to energy projects in the state of Rhode Island. Currently, MedRecycler-RI, Inc. has entered into an Indenture of Trust in the amount of $6,025,000.00 as bridge financing for a project in West Warwick, Rhode Island. The proceeds from the indenture are held in escrow to be used to (i) to provide for the financing of certain waste to energy facility and related improvements (the “Improvements”); (ii) to provide for the financing or refinancing of certain equipment to be used in connection with the Improvements (the “Equipment” and together with the Improvements, the “Project”); (iii) to provide for the financing of capitalized interest; and (iv) to pay certain costs incurred in connection with the Project. The principal balance of the indenture accrues interest at an annual rate of 12%, payable semi-annually, and matures on January 29, 2020. The Company incurred debt issuance costs of $271,375, which were recorded as a discount against the indenture to be amortized into interest expense through the maturity of the indenture. For the six months ended June 30, 2019, the Company amortized $113,011 of the discount, and as of June 30, 2019, the indenture is carried at $5,866,636, net of unamortized discount of $158,364.

 

The Company’s estimated future maturities of the Company’s debt, as of June 30, 2019, are as follows:

 

Twelve Months Ending June 30,  Amount 
2019  $6,994,162 
2020   16,874 
2021   3,993 
Thereafter   - 
   $7,015,029 

 

NOTE 6 - PREFERRED STOCK AND COMMON STOCK

 

Preferred stock

 

The Company is authorized to issue 20,000,000 shares of $0.0001 par value preferred stock as of June 30, 2019. As of June 30, 2019, the Company has designated 12,000,000 shares of Series A Preferred Stock, 1,000,000 shares of Series B Convertible Preferred Stock, and 500,000 shares of Series C Convertible Stock.

 

Each share of Series A Preferred Stock is entitled to 125 votes on all matters submitted to a vote to the stockholders of the Company, and does not have conversion, dividend or distribution upon liquidation rights. As of June 30, 2019, there were 12,000,000 shares of Series A preferred stock outstanding, and are held by Nicholas Campanella, CEO of the Company. See Note 8.

 

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Common stock

 

During the six months ended June 30, 2019, the Company issued 210,943,127 shares of common stock upon the conversion of convertible debt principal, interest and conversion fees totaling $234,622.

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Employment agreement

 

On December 20, 2014, the Company entered into a five-year employment agreement with Nicholas Campanella, Chief Executive Officer. Under the terms of the agreement, the Company is required to pay a base compensation of $180,000 annually, subject to increases in cost of living and performance bonuses as awarded by the Board of Directors. After 5 years, the agreement is automatically renewed for an additional two years unless terminated by either party. As part of the agreement Mr. Campanella opted to defer, with no interest, the receipt of compensation under the agreement until the Company has the funds to pay its obligation. At June 30, 2019 and December 31, 2018, the Company had accrued compensation of $687,364 and $631,166, respectively, and recorded the related expenses in ‘general and administrative’ on the accompanying condensed consolidated statements of operations.

 

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Leases

 

During March 2017, the Company entered into a five-year lease agreement. Under the terms of the agreement, the Company is obligated to pay monthly rent payments starting at $3,556 and escalating over the life of the lease.

 

The Company entered into a lease in February 2019 for the rental of a 48,167 square foot space in Rhode Island to be used for the Company’s MedRecycler operations. The lease has a term of 123 months commencing on March 1, 2019, requiring annual rental payments totaling $144,501 for the first year, increasing annually to $258,930 in the final year. The lease also requires the Company to pay a portion of the building’s common area maintenance. The Company recorded a right-to-use asset and corresponding obligation equal to the present value of the required lease payments using a discount rate of 12% based on the Company’s incremental borrowing rate.

  

The following is a schedule showing the future minimum lease payments under leases for the next five years and the present value of the minimum lease payments as of June 30, 2019.

 

Remainder of 2019  $118,749 
2020   243,249 
2021   250,317 
2022   217,361 
2023   215,797 
Thereafter   1,286,696 
Total minimum lease payments   2,332,169 
Less: Amount representing interest   (1,017,664)
Present value of minimum lease payments  $1,314,505 

 

For the six months ended June 30, 2019, lease expense was approximately $34,881 inclusive of short-term leases.

 

The related lease balance included in the condensed consolidated balance sheet as of June 30, 2019 were as follows:

 

Assets:    
     
Operating lease right-of use asset  $1,306,454 
      
Liabilities:     
      
Lease liability – current portion  $79,903 
      
Lease liability – long-term portion   1,234,602 
      
Total operating lease liabilities  $1,314,505 

 

NOTE 8 - RELATED PARTY TRANSACTIONS

 

For purposes of these consolidated financial statements, Summit Trading Limited, Zimmerman LLC, the Campanella family, Jody Samuels, Frank Capria, and Triplet Square LLC are considered related parties due to their beneficial ownership (shareholdings or voting rights) in excess of 5%, or their affiliate status, during the years ended December 31, 2018 and 2017. During the years ended December 31, 2018 and 2017, the affiliates made non-interest-bearing advances of $23,506 and $321,127, respectively. The balance of these advances, which are due on demand and include the Line of Credit (See Note 5), totaled $612,023 and $588,517 as of June 30, 2019 and December 31, 2018, respectively. Included in accounts payable related parties as of June 30, 2019 and December 31, 2018, are expenses incurred with these affiliates totaling $76,512 and $91,512, respectively.

 

In January 11, 2019, the Company entered into that certain Forbearance Agreement between the Company and Nicholas Campanella. Mr. Campanella is owed approximately $648,400 in principal and interest on loans and lines of credit issued by the Company. Those debt obligations are currently in default. As consideration for the forbearance of those debts, the Company has agreed to provide a pledge of 100% membership interest in MedRecycler, LLC, and wholly owned subsidiary of the Company organized in the state of Nevada which holds 51,000 shares of MedRecycler-RI, Inc. as security against the moneys owed. The amounts owed to Mr. Campanella date back nearly five years and represent cash payments made by Mr. Campanella to Sun Pacific Power Corp. On April 3, 2019, Mr. Campanella agreed to extend the forbearance until December 31, 2020.

 

In order to secure financing for the MedRecycler-RI, Inc. West Warrick, Rhode Island waste to energy facility, Mr. Campanella agreed that upon initial financing of the project, he shall pledge substantially all of his holdings in the Company, assign his pledges in MedRecycler, LLC, and certain properties held by Mr. Campanella, personally, in order to collateralize the debt obligations. As consideration for his inducement, the Board of Directors has deemed it fair consideration to issue Mr. Campanella 39,000 shares of MedRecycler-RI, Inc. In addition, MedRecycler-RI, Inc. has engaged the services of Marmac Capital Advisors, LLC and Eilers Law Group, P.A. to oversee, negotiate and to facility the financing and capital structure MedRecycler-RI, Inc. As neither party has received compensation for their services for the Company or MedRecycler-RI, Inc. since August of 2018, the Board of Directors has deemed it fair consideration to issue Marmac Capital Advisors, LLC and Eilers Law Group, P.A. 8,000 and 2,000 shares of MedRecycler-RI, Inc., respectively. As a result, the Company shall maintain 51% of the ownership of MedRecycler-RI, Inc. through its MedRecycler, LLC holdings.

 

On February 7, 2019, pursuant to an Indenture of Trust entered into by our subsidiary, MedRecycler-RI, Inc., a Rhode Island corporation and UMB Bank, N.A., a national banking association (“UMB”) (the “Indenture”), Sun Pacific Holding Corp. (the “Company”) entered into that certain Guarantee of Payment and Performance with UMB acting as Trustee, whereby the Company agreed to guarantee any and all payments and/or other obligations owed by MedRecycler-RI, Inc. pursuant to the Indenture.

 

In order to secure the financing described herein, Mr. Campanella, Marmac Capital Advisors, LLC and Eilers Law Group, P.A. have further agreed to pledge, upon funding, 100% of their ownership in MedRecycler-RI, Inc. as well as Mr. Campanella’s assignment of his pledge from the Company of 100% of the membership interests of MedRecycler, LLC. As a result, 100% of MedRecycler-RI, Inc. will be pledged, upon funding, to the lending party as security for the note and/or bond.

 

On May 20, 2019, Nicholas Campanella agreed to forbear any of his rights to convert any portion of his related party debt into common stock until such time that the Company had sufficient authorized shares to honor full conversion of all principal and accrued interest into common stock of the Company.

 

NOTE 9- SUBSEQUENT EVENTS

 

From about July 1, 2019, through August 19, 2019 the Company issued 131,600,000 shares of common stock pursuant to the conversion of a certain convertible debentures, including accrued interest and conversion fees totaling $52,398.

 

On June 21, 2019, the Company issued a six month ten percent interest promissory note in the amount of $200,000.00. The note was funded July 8, 2019. Per the terms of the note, the lender was issued 2,000,000 shares of restricted common stock as an inducement.

 

On July 8, 2019, the Company entered into a settlement agreement with Auctus Fund, LLC settling all amounts owed pursuant to that convertible promissory note entered into on April 30, 2018 for $150,000.00.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. This discussion should be read in conjunction with the other sections of this Form 10-Q, including “Risk Factors,” and the Financial Statements. The various sections of this discussion contain a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Annual Report on Form 10-K. See “Forward-Looking Statements.” Our actual results may differ materially. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

As used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” except where the context otherwise requires, the term “we,” “us,” “our,” or “the Company,” refers to the business of Sun Power Holdings Corp.

 

Company History and Overview

 

Utilizing managements history in general contracting, coupled with our subject matter expertise and intellectual property (“IP”) knowledge of solar panels and other leading-edge technologies, Sun Pacific Holding (“the Company”) is focused on building a “Next Generation” green energy company. The Company offers competitively priced “Next Generation” solar panel and lighting products by working closely with design, engineering, integration and installation firms in order to deliver turnkey solar and other energy efficient solutions. We provide solar bus stops, solar trashcans and “street kiosks” that utilize our unique advertising offerings that provide State and local municipalities with costs efficient solutions. We provide general, electrical, and plumbing contracting services to a range of both public and commercials customers in support of our goals of expanding our green energy market reach. In conjunction with these general contracting services and as part of our effort to expand our green energy marketplace, we have recently started the process to develop and build out a Waste to Energy plant in the State of Rhode Island.

 

Our green energy solutions can be customized to meet most enterprise and/or government mandated regulations and advanced system requirements. Our portfolio of products and services allow our clients to select a solution that enables them to establish a viable standard product offering that focuses on the goals of the client’s entire organization.

 

Currently, the Company has six (6) subsidiary holdings. Sun Pacific Power Corp which was the initial company that specialized in solar, electrical and general construction, Bella Electric, LLC that in conjunction with the Company operates our electrical contracting work. Bella Electric, LLC is a Pennsylvania limited liability company. The Company also formed Sun Pacific Security Corp., a New Jersey corporation. Currently the Company has not begun operations in the security sector but is reviewing plans to provide residential and commercial security solutions, including installation and monitoring. The Company also formed National Mechanical Group Corp, a New Jersey corporation focused on plumbing operations in the New Jersey and Pennsylvania areas. The Company also formed Street Smart Outdoor Corp, a Wyoming corporation that acts as a holding company for the Company’s state specific operations in unique advertising through solar bus stops, solar trashcans and “street kiosks.” MedRecycler, LLC, is a wholly owned subsidiary duly formed in the state of Nevada. MedRecycler, LLC was created in 2018 to act as a holding company for potential waste to energy projects. MedRecycler, LLC, currently owns 51% of MedRecycler RI, Inc. a Rhode Island Corporation. MedRecycler RI, Inc. was created for the Medical Waste to Energy facility that the Company is attempting to finance and operate in West Warrick, Rhode Island.

 

As of today, our principal source of revenues is derived from Street Smart Outdoor Corp. operations in the outdoor advertising business with contracts in place in Rhode Island and Tallahassee, Florida, along with some other minor contracting work. We are currently in discussions with a nationally known outdoor advertising firm to manage and expand our operations, either through a joint venture, partnership, and or a management arrangement as a result of the company’s insufficient working capital and as an option to allow for the expansion of our technologies and or contracts by working with other parties that can bring management expertise and or other resources that may allow us to further optimize our growth strategies.

 

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Sun Pacific Power Corp. continues to make bids for construction projects throughout the Northeast region. However, as of today, we have limited operations in Sun Pacific Power Corp.

 

Bella Electric, LLC and Sun Pacific Security Corp. have generally ceased operations, but we maintain the subsidiaries in case we find opportunities to relaunch our operations.

 

MedRecycler, LLC, a wholly owned subsidiary of Sun Pacific Holding Company currently holds fifty one percent (51%) of MedRecycler-RI, Inc., a corporation formed in the state of Rhode Island for the development of waste to energy projects in the state of Rhode Island. Currently, MedRecycler-RI, Inc. has entered into an Indenture of Trust in the amount of $6,025,000.00 as bridge financing for a project in West Warwick, Rhode Island (the “Rhode Island Project”). The original plan was for a facility in Johnston, Rhode Island, but through our negotiations, determined that the West Warwick location was more suitable. The Indenture of Trust has been secured by all equity holdings in MedRecycler-RI, Inc., all personal holdings of equity in the Company held by Nick Campanella, our CEO and member of the Board of Directors. Mr. Campanella has further pledged personal property located in Manapalan in excess of $1,000,000. Payment for the Indenture of Trust is further guaranteed by the Company and Street Smart Outdoor Corp. Currently, MedRecycler-RI, Inc. has entered into a lease agreement in West Warwick, Rhode Island, has taken preliminary steps to order the equipment and is beginning to engage specialists and staff for building out the Rhode Island Project. In order to secure actual operations of the Rhode Island Project, we estimate that MedRecycler-RI, Inc. must still secure a minimum of $10,500,000 in long term financing. MedRecycler-RI, Inc. is currently negotiating with the state of Rhode Island and potential bond financiers to secure the long-term financing for the Rhode Island Project. Although we anticipate, assuming the long-term financing is secured, the Rhode Island Project may be fully operation as early as the fourth quarter of 2019, but at this time we are estimating an early 2020 time frame for the start of operations as a result of delays closing on long-term financing. all operational earnings will be earmarked for interest, principal repayment, and the fulfillment of other covenants of the long term financing, As we have not secured long term financing, we can make no statement regarding the long term success of the Rhode Island Project, though, even in a best case scenario, the Rhode Island Project may not be cash flow positive until fully operational and proceeds fulfill covenants under the terms of the yet to be finalized debt financing. Through MedRecycler, LLC, the Company owns fifty-one percent (51%) of MedRecycler-RI, Inc., which was pledged by the Company to Mr. Campanella pursuant to a forbearance agreement related to debts owed to Mr. Campanella. The remaining forty nine percent (49%) of MedRecycler-RI, Inc. is held by Nicholas Campanella, personally, Marmac Corporate Advisors, LLC, and Eilers Law Group, P.A., holding thirty nine percent (39%), eight percent (8%), two percent (2%), respectfully. Mr. Campanella received his ownership as consideration for his personal pledges securing the Indenture of Trust, Marmac Corporate Advisors, LLC and Eilers Law Group, P.A. received their respective ownership as consideration for efforts and services performed. One hundred percent (100%) of the ownership of MedRecycler-RI, Inc. has been pledged to bridge financing, including any pledge rights held by Mr. Campanella in MedRecycler, LLC.

 

Currently, the Company has been and is insolvent if you factor in the Company’s debt obligations. Over its history and to augment the Company’s strategy, it has sought out partnerships and other arrangements with professionals and companies at the operating subsidiary level to counter its insolvent state, coupled with the Company’s use of debt and equity financings. The Company continues to look for opportunities that will allow it to partner with others in the form of debt and or equity and other contributions at the subsidiary level, and where possible attempt to keep control of at least fifty one percent (51%) of those subsidiaries. While it will also look for the means to correct its insolvent state at the holding company level, given its current negative economic condition, many parties continue to prefer to work with the Company at an operational subsidiary level. The Company is currently exploring other equity and or debt opportunities to correct its overall insolvent state. Although we continue operations through our subsidiary holdings, revenues generated do not fully produce cash flows sufficient to meet our basic capital requirements. In order to meet our reporting requirements alone, we will have to seek additional capital through debt or equity financing and/or request deferred payment or other in-kind payments for services. Street Smart Outdoor is undercapitalized making expansion of our advertising products highly unlikely or difficult to expand without the use of potential partnerships and or commission only sales representatives. Neither the Company nor Street Smart Outdoor have secured additional financing to support operations. We are attempting to partner or otherwise develop a capital strategy to allow us to grow the outdoor advertising business that includes financing outdoor structures with other parties, in which we arrange financing arrangements, and we continue to look for other professional organizations that we can partner with in expanding our contracts. Our Rhode Island Project currently represents a liability of over $6,000,000 and has yet to commence. It will require additional financing, we estimate, of not less than $10,500,000 to complete the build out of phase one for the facility and $16,500,000 if you include consolidating the current $6,000,000 short term indenture. We have plans upon the successful launch of our phase one to double the capacity of the facility, which will require additional financing. MedRecycler-RI, Inc. has yet to secure any additional financing. Failure to be successful with Rhode Island Project could lead to bankruptcy of the Company.

 

In order to meet certain contractual requirements under promissory notes outstanding and/or in order to recapitalize the common stock of the Company, the Board may recommend to the shareholders a) a reverse stock split; and/or b) an increase in the number of authorized shares of common stock. Such an action could have a dilutive effect on existing shareholders. Currently, Nicholas Campanella, our Chairman and CEO, has super voting rights in the form of his Series A Preferred Stock holdings. Therefore, if the board makes any such recommendation, such actions will be approved by the shareholders of the Company.

 

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Strategic Vision

 

Our objective is to grow our business profitably as a premier green energy-based provider of both product and services to the public and private sectors. We are working to deploy our strategy in building upon our general and other contracting expertise in conjunction with our intellectual property and subject matter expertise in green energy that may allow us to grow a group of profitable business lines in solar, waste to energy, efficient lighting, and other unique energy related areas.

 

Recent advances in a multitude of different yet converging technologies have significantly improved the ability to integrate energy efficient products and solutions into infrastructure related projects. These technological advances decrease the requirements needed to jointly operate a multitude of differing assets, devices, and tools that create new ways to integrate evolving new technologies. This technological change and convergence in energy efficient devices, integrated communications among devices, and societal needs to more effectively and environmentally friendly handle the removal of waste, we believe presents a significant opportunity for us in providing and supporting simple to complex integrated solutions.

 

Our challenges continue to be reaching critical mass in our solar shelter business, expanding into other green energy related projects, completion of the Rhode Island Project and securing operational capital. Except for the bridge financing for the Rhode Island Project, we do not have any existing financing arrangements in place. While the Company has never been adequately funded from inception, the Company has attempted to use debt, equity, and other opportunistic in-kind compensation to further the Company’s strategic vision.

 

Going Concern

 

The Company has an accumulated deficit of approximately $7,500,440 as of June 30, 2019. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and/or obtain additional financing from its stockholders and/or other third parties.

 

In order to further implement its business plan and satisfy its working capital requirements, the Company will need to raise additional capital. There is no guarantee that the Company will be able to raise additional equity or debt financing at acceptable terms, if at all.

 

There is no assurance that the Company will ever be profitable. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

Risk Factors

 

Generally, as a smaller reporting company, we are permitted to omit risk factors. However, we believe the following Risk Factors are material to our business. These do not encompass all risks related to our operations.

 

You should carefully consider the risks described below together with all of the other information included in this annual report before making an investment decision with regard to our securities. The statements contained in or incorporated herein that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment. In addition to the other information provided in this prospectus, you should carefully consider the following risk factors in evaluating our business before purchasing any of our common stock.

 

Risks Related to Our Financial Condition

 

Since our inception, we have been insolvent and have required debt and equity financing to maintain operations.

 

Since our inception, we have failed to create cashflows from revenues sufficient to cover basic costs. As a result, we have relied heavily on debt and equity financing. Equity financing, in particular, has created a dilutive effect on our common stock, which has hampered our ability to attract reasonable financing terms. For the foreseeable future, we will continue to rely upon debt and equity financing to maintain operation of the Company and its subsidiaries.

 

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We have generated minimal revenues from operations, which makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance.

 

As of December 31, 2018, we had generated insufficient revenues. As a consequence, it is difficult, if not impossible, to forecast our future results based upon our historical data. Our projections are based upon our best estimates on future growth. Because of the related uncertainties, we may be hindered in our ability to anticipate and timely adapt to increases or decreases in sales, revenues, or expenses. If we make poor budgetary decisions as a result of unreliable data, we may never become profitable or incur losses, which may result in a decline in our stock price.

 

There is substantial doubt about our ability to continue as a going concern and if we are unable to generate significant revenue or secure additional financing, we may be unable to implement our business plan and grow our business.

 

We are an emerging growth company and are in the process of selling and developing our products. Consequently, we have not generated enough revenues as of the date of this prospectus. We have an accumulated deficit and have incurred operating losses since our inception and expect losses to continue during the remainder of fiscal 2019. Our independent registered public accounting firm has indicated in their report that these conditions raise substantial doubt about our ability to continue as a going concern for a period of 12 months from the issuance date of this report. The continuation of our business as a going concern is dependent upon the continued financial support from our stockholders.

 

There is uncertainty regarding our ability to grow our business to a greater extent than we can with our existing financial resources, also described above, without additional financing. We have no agreements, commitments, or understandings to secure additional financing at this time. Our long-term future growth and success is dependent upon our ability to continue selling our products and services, generate cash from operating activities and obtain additional financing. There is no assurance that we will be able to continue selling our products and services, generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse effect on our ability to grow our business to a greater extent than we can with our existing financial resources, also described above.

 

Expenses required to operate as a public company will reduce funds available to implement our business plan and could negatively affect our stock price and adversely affect our results of operations, cash flow and financial condition.

 

Operating as a public company is more expensive than operating as a private company, including additional funds required to obtain outside assistance from legal, accounting, investor relations, or other professionals that could be costlier than planned. We may also be required to hire additional staff to comply with additional SEC reporting requirements. We anticipate that the cost of SEC reporting will be approximately $100,000 annually. Our failure to comply with reporting requirements and other provisions of securities laws could negatively affect our stock price and adversely affect our results of operations, cash flow and financial condition. If we fail to meet these requirements, we will be unable to secure a qualification for quotation of our securities on the OTCQB, or if we have secured a qualification, we may lose the qualification and our securities would no longer trade on the OTCQB. Further, if we fail to meet these obligations and consequently fail to satisfy our SEC reporting obligations, investors will then own stock in a company that does not provide the disclosure available in quarterly, annual reports and other required SEC reports that would be otherwise publicly available leading to increased difficulty in selling their stock due to our becoming a non-reporting issuer.

 

Our common stock trades below $0.01 and has been from the OTCQB Tier.

 

OTC Markets requires, amongst other things, that in order to qualify for OTCQB listings, an issuer have their common stock trade above $0.01 per share. If the bid price closes below $0.01 for 30 consecutive days, an issuer will be notified of their bid price deficiency and has a 90-day cure period, where by the stock’s closing bid price must be greater than $0.01 for 10 consecutive days. On February 5, 2019, we received notice of our bid price deficiency from OTC Markets, giving us until May 6, 2019 to cure the bid price deficiency. Unfortunately, we failed to cure, and our common stock was dropped to the OTCPink tier. This could adversely affect the Company and our ability to raise funds through equity financing as OTCPink listings are generally deemed to have a greater risk. In addition, our shareholders face the risk that in order to cure the bid price deficiency, the Board of Directors may recommend a reverse stock split to the shareholders. As Nicholas Campanella has a majority of the voting rights, such recommendation would likely be affirmed which could result in the risk of greater dilution to the value of our shareholders.

 

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Risks Related to Our Business

 

We rely on our Chief Executive Officer to operate our business. The loss of our Chief Executive Officer could have a material adverse effect on our business.

 

Our operations are highly dependent upon the efforts of our Chief Executive Officer, Nicholas Campanella. The success of our Company is heavily reliant upon the efforts and resources of Nicholas Campanella. The loss of our Chief Executive Officer would have a material adverse effect on our business, financial condition, and results of operations, particularly if we are unable to hire or relocate and integrate suitable replacements on a timely basis or at all. Further, in order to continue to grow our business, we will need to expand our senior management team. We may be unable to attract or retain these persons. This could hinder our ability to grow our business and could disrupt our operations or otherwise have a material adverse effect on our business.

 

We are unable to attract additional management personnel and members to our Board of Directors.

 

Due to our insolvency, we are unable to dedicate any amount of cashflows to executive salaries and/or directors’ and officers’ insurance, therefore we are unable to attract additional executive personnel or Board Members. Until we can secure, at a minimum directors’ and officers’ insurance, the executive duties shall remain with our Chief Executive Officer.

 

Threatened legal action by disgruntled shareholders and former employees may endanger our ability to raise capital for our ongoing projects through our subsidiary interests and may create additional financial risks.

 

Recently, disgruntled shareholders have threatened potential suit against the Company which has complicated our ability to secure financing. Specifically, our Rhode Island waste to energy project being operated through our subsidiary holding, MedRecycler-RI, Inc. has been complicated by the disclosure of such threatened legal action and could potentially harmed our negotiating position with certain authorities that are required to approve the permanent financing for the project. In addition, a former executive of the Company contacted authorities approving the project, availing their potential legal actions to the negotiation process. These threated legal actions could require the Company to provide additional security or to seek alternative means of financing the project altogether that could necessitate a change in the capital structure of the Subsidiary to allow for the placement of permanent financing. The consequences of these threats could negatively affect the outcome of the project. In addition, defending any threatened legal action could add additional financial risk to the Company.

 

Due to the current debt load of the Company, our credit worthiness may endanger our ability to secure financing.

 

Given the financial condition of the Company, securing financing for a project such as our waste to energy project has been a very difficult task, as has been the case for most fund-raising efforts for the Company. The current debt load and financial performance of the Company could raise creditworthiness issues in the eyes of potential lenders. The current state of the Company’s credit could require the Company to evaluate new corporate and capital structures of our subsidiaries in order to shield our subsidiary interests from the liabilities of the Company. If we fail to present lenders with a credit profile that will meet their standards, large projects, such as our subsidiary project in MedRecycler-RI, Inc. could fail or require new corporate and or capital restructuring. Given that the Company is already heavily in debt, such failure to secure financing and complete the project could require the Company to file for bankruptcy and encumber all of the assets of the Company.

 

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The current ownership has the effect of concentrating voting control with our Chief Executive Officer and his family; this limits our other stockholders’ and your ability to influence corporate matters.

 

Nicholas Campanella currently holds 12,000,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock is entitled to 125 votes per share. As a result, Nicholas Campanella has 1,500,000,000 voting rights. As a result of this concentration of voting power, Nicholas Campanella will have significant influence over the management and affairs of the Company and control over matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as mergers or other sales of the Company or our assets, for the foreseeable future. This concentration of voting control will limit your ability to influence corporate matters and could adversely affect the market price of our Common Stock once a market is established.

 

Our director and officer, Nicholas Campanella will control and make corporate decisions that may differ from those that might be made by the other shareholders.

 

Due to the controlling amount of their share ownership in our Company, Nicholas Campanella will have a significant influence in determining the outcome of all corporate transactions, including the power to prevent or cause a change in control. His interests may differ from the interests of other stockholders and thus result in corporate decisions that are disadvantageous to other shareholders.

 

Our director and officer, Nicholas Campanella, holds substantial debt that is convertible into common stock, resulting in even greater control over the Company.

 

Nicholas Campanella holds convertible promissory notes in excess of $600,000, making Nicholas Campanella the largest creditor of the Company. The convertible promissory notes are convertible into common stock at rate of a 50% discount to market. Our current market cap is lower than $400,000. If Nicholas Campanella were to either convert his promissory notes or foreclose upon the limited assets of the Company, we would likely have to file for bankruptcy.

 

Results of Operations

 

Three Months Ended June 30, 2019 compared to Three Months Ended June 30, 2018

 

Revenues: Revenues decreased by approximately $43,416 from $145,339 for the six months ended June 30, 2018 to $101,923 for the six months ended June 30, 2019 due to delays of our migration away from General Contracting services towards the development of Green Energy Projects including the sale of Solar powered shelters and other energy related projects that derive income from advertising sources. The Company has entered into revenue sharing agreements with the City of Tallahassee, the State of Rhode Island Transportation Authority, and the State of New Jersey, along with others to provide and manage up to approximately 1,700 Solar powered shelters and other related products for a period of up to Ten (10) years that may include providing WiFi Signal Boosters and Advertising in conjunction with the shelters and other related other outdoor related products. Depending upon the timing of installation and advertising revenue generated per shelter and or other advertising-based product, the Company’s Revenue may increase materially from this green energy offering. The Company has recently raised capital to build and deploy up to 20 bus shelters in Rhode Island as part of an income sharing arrangement with an investment group. The Company has recently had 20 bus shelters delivered and is in the process of assembling and deploying the bus shelters into the marketplace. The Company is also presently in the process of adding up to 60 bus benches in the City of Tallahassee and has engaged two new commissioned sales individuals to assist the company in increasing its advertising revenues in the City of Tallahassee market place, along with adding improved sales advertising capabilities in an effort to improve advertising utilization. The Company has also started the process of developing and building in the State of Rhode Island a Waste to Energy Facility. Depending upon the successful completion of raising the necessary capital and completing the facility timely, Revenues may also increase materially from this additional green energy offering. These items along with other revenue generating opportunities under review by the Company may cause dramatic shifts in the Company’s comparative revenue profile of the products and services that the Company provides in the future.

 

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Cost of revenues: Cost of revenues has comparatively remained the same from June 30, 2018 to June 30, 2019 Upon the successful launch and completion of the Company’s Waste to Energy facility and the increase in the Company’s bus shelters and other outdoor advertising producing assets, along with an additional other related construction services, the Company’s Cost of Revenues may increase.

 

Operating Expenses: Operating expenses decreased by approximately $98,448 from $576,598 for the three months ended June 30, 2018 to $478,150 for the three months ended June 30, 2019 due materially to decreases in wages which were slightly offset by an increase in general and administrative expenses that were associated with project development costs for the Company’s Medical Waste to Energy initiative, other development projects associated with green energy development initiatives that the Company is currently exploring. The Company’s Operating expenses may vary quarter to quarter as a result in upfront development costs for permits, engineering reviews, and other costs associated with the Company’s new development projects related to its Medical Waste to Energy projects as well as other projects that it is currently reviewing.

 

Other Expenses: Other Expenses increased by approximately $179,291 from $109,684 for the three months ended June 30, 2018 to $288,975 for the three months ended June 30, 2019 as a result of greater amounts of interest expense as a result of the issuance of convertible debt and other capital related events. Given the Company’s financing requirements in developing its new business models, the Company’s other (income) expenses may increase over time as the Company explores the use of additional debt financing.

 

Net Loss: As a result of the above, Net Loss increased approximately $72,587 from $634,037 for the three months ended June 30, 2018 to $706,624 for the three months ended June 30, 2019.

 

Results of Operations

 

Six Months Ended June 30, 2019 compared to Six Months Ended June 30, 2018

 

Revenues: Revenues decreased by approximately $55,791 from $266,079 for the six months ended June 30, 2018 to $210,288 for the six months ended June 30, 2019 due to delays of our migration away from General Contracting services towards the development of Green Energy Projects including the sale of Solar powered shelters and other energy related projects that derive income from advertising sources. The Company has entered into revenue sharing agreements with the City of Tallahassee, the State of Rhode Island Transportation Authority, and the State of New Jersey, along with others to provide and manage up to approximately 1,700 Solar powered shelters and other related products for a period of up to Ten (10) years that may include providing WiFi Signal Boosters and Advertising in conjunction with the shelters and other related other outdoor related products. Depending upon the timing of installation and advertising revenue generated per shelter and or other advertising-based product, the Company’s Revenue may increase materially from this green energy offering. The Company has recently raised capital to build and deploy up to 20 bus shelters in Rhode Island as part of an income sharing arrangement with an investment group. The Company has recently had 20 bus shelters delivered and is in the process of assembling and deploying the bus shelters into the marketplace. The Company is also presently in the process of adding up to 60 bus benches in the City of Tallahassee and has engaged two new commissioned sales individuals to assist the company in increasing its advertising revenues in the City of Tallahassee market place, along with adding improved sales advertising capabilities in an effort to improve advertising utilization. The Company has also started the process of developing and building in the State of Rhode Island a Waste to Energy Facility. Depending upon the successful completion of raising the necessary capital and completing the facility timely, Revenues may also increase materially from this additional green energy offering. These items along with other revenue generating opportunities under review by the Company may cause dramatic shifts in the Company’s comparative revenue profile of the products and services that the Company provides in the future.

 

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Cost of revenues: Cost of revenues has comparatively remained the same from June 30, 2018 to June 30, 2019 Upon the successful launch and completion of the Company’s Waste to Energy facility and the increase in the Company’s bus shelters and other outdoor advertising producing assets, along with an additional other related construction services, the Company’s Cost of Revenues may increase.

 

Operating Expenses: Operating expenses decreased by approximately $218,349 from $971,187 for the six months ended June 30, 2018 to $752,838 for the six months ended June 30, 2019 due materially to decreases in wages which were slightly offset by an increase in general and administrative expenses that were associated with project development costs for the Company’s Medical Waste to Energy initiative, other development projects associated with green energy development initiatives that the Company is currently exploring. The Company’s Operating expenses may vary quarter to quarter as a result in upfront development costs for permits, engineering reviews, and other costs associated with the Company’s new development projects related to its Medical Waste to Energy projects as well as other projects that it is currently reviewing.

 

Other Expenses: Other Expenses increased by approximately $489,728 from $116,638 for the six months ended June 30, 2018 to $606,366 for the six months ended June 30, 2019 as a result of greater amounts of interest expense as a result of the issuance of convertible debt and other capital related events. Given the Company’s financing requirements in developing its new business models, the Company’s other (income) expenses may increase over time as the Company explores the use of additional debt financing.

 

Net Loss: As a result of the above, Net Loss increased approximately $275,482 from $1,001,849 for the six months ended June 30, 2018 to $1,277,331 for the six months ended June 30, 2019.

 

Continuing Operations, Liquidity and Capital Resources

 

As of June 30, 2019, we had a working capital deficit of approximately $7,330,551. We intend to seek additional financing for our working capital, in the form of equity or debt, to provide us with the necessary capital to accomplish our plan of operation. There can be no assurance that we will be successful in our efforts to raise additional capital.

 

During the six months ended June 30, 2019, we used approximately $596,091 in operating activities driven materially from our operating loss offset by non-cash expenses.

 

During the six months ended June 30, 2019, we used approximately $1,655,514 for the purchase of furniture and equipment.

 

During the six months ended June 30, 2019, we received approximately $2,359,139 from financing proceeds driven materially from the proceeds of the bridge financing for the Waste to Energy project.

 

Off-Balance Sheet Arrangements

 

As of June 30, 2019, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

 

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Not required for smaller reporting companies.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2019. Based on such review and evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2019, the disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act (a) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure and (c) that the Company’s disclosure controls and procedures were not effective as a result of continuing weaknesses in its internal control over financial reporting principally due to the following:

 

  The Company has not established adequate financial reporting monitoring activities to mitigate the risk of management override, specifically because there are few employees and only two officers with management functions and therefore there is lack of segregation of duties.
     
  An outside consultant assists in the preparation of the annual and quarterly financial statements and partners with the Company to ensure compliance with US GAAP and SEC disclosure requirements.
     
  Outside counsel assists the Company and external attorneys to review and editing of the annual and quarterly filings and to ensure compliance with SEC disclosure requirements.

 

At such time as the Company raises additional working capital it plans to add staff, initiate training, add additional subject matter expertise in its finance area so that it may improve it processes, policies, procedures, and documentation of its internal control processes.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that occurred during the fiscal quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

On May 28, 2019, William Singer, our former President and a former Director, filed suit against the Company and our wholly owned subsidiary, Street Smart Outdoor Corp., in Superior Court of New Jersey, Monmouth County, Law Division. Mr. Singer alleges breach of contract and has demanded $450,000.00 in lost wages. The matter is currently pending in Superior Court.

 

From time to time the Company is a party to various legal or administrative proceedings arising in the ordinary course of our business. While any litigation contains an element of uncertainty, we have no reason to believe that the outcome of such proceedings will have a material adverse effect on the financial condition or results of operations of the Company.

 

Currently, the Company is not involved in any other pending or threatened material litigation or other material legal proceedings, nor have we been made aware of any pending or threatened regulatory audits.

 

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There is no material bankruptcy, receivership, or similar proceeding with respect to the Company or any of its significant subsidiaries. However, given the Company’s insolvency, there is a high risk that the Company may be forced to file for bankruptcy if the Company is unable to meet its capital requirements in 2019.

 

The are no proceedings which any director, officer, or affiliate of the Company, any owner of record or beneficially of more than five percent (5%) of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or any of its subsidiaries or has any material interest adverse to the Company or any of its subsidiaries. However, several shareholders have threatened derivative suit against our Board of Directors. As of the date of this filing, no formal suit has been filed.

 

There are no administrative or judicial proceedings arising from any federal, state, or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primary for the purpose of protecting the environment.

 

In addition, no proceeding or action described in this Item 3 were terminated in the past 12 months.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

Note that all issuances described below represent the number of shares issued at the time of issuance. On October 13, 2017, the Company implemented a reverse stock split at a rate of 1:50, rounding fractional shares up to the nearest whole share. Therefore, any issuance described below that occurred before October 13, 2017 represents pre-reverse stock split numbers.

 

On January 10, 2017, the Company issued to each of Randy Romano, the Company’s President, and Vaughan Dugan, the Company’s Chief Executive Officer, 5,000,000 shares of Series A Preferred Stock of the Company (the “Series A Stock”) in return for the payment to the Company from each of Randy Romano and Vaughan Dugan of $500.

 

On December 28, 2016, a holder of a convertible note payable of the Company with an outstanding principal balance of $7,773.60 converted $4,000.00 of the note into 2,601,626 shares of our common stock.

 

The Company issued the securities to the noteholder, Ms. McComb, Mr. Romano and Mr. Dugan in reliance upon exemptions from registration provided by the Securities Act of 1933, as amended.

 

On or about February 28, 2017, we issued 3,812,306 shares of common stock to one entity pursuant to the conversion of a certain convertible debenture at a conversion price of $0.0015375 per share of common stock

 

On or about April 7, 2017, we issued 4,247,381 shares of common stock to one entity pursuant to the conversion of a certain convertible promissory note at a conversion price of $0.0018 per share of common stock.

 

On or about May 5, 2017, we issued 5,000,000 shares of common stock to one entity pursuant to the conversion of a certain convertible debenture at a conversion price of $0.0025 per share of common stock.

 

On or about May 8, 2017, we issued 4,400,000 shares of common stock to one entity pursuant to the conversion of a certain convertible promissory note at a conversion price of $0.00165 per share of common stock.

 

On or about May 15, 2017, we issued 5,200,000 shares of common stock to one entity pursuant to the conversion of a certain convertible debenture at a conversion price of $0.00165 per share of common stock.

 

On or about May 25, 2017, we issued 6,083,000 shares of common stock to one entity pursuant to the conversion of a certain convertible debenture at a conversion price of $0.0014 per share of common stock.

 

On or about May 26, 2017, we issued 6,233,333 shares of common stock to one entity pursuant to the conversion of a certain convertible promissory note at a conversion price of $0.0015 per share of common stock.

 

On or about June 1, 2017 we issued 3,300,000 shares of common stock to one entity pursuant to the conversion of a certain convertible debenture dated June 27, 2015 at a conversion price of $0.00165 per share of common stock.

 

 27 
   

 

On or about June 1, 2017, we issued 6,083,000 shares of common stock to one entity pursuant to the conversion of a certain convertible debenture dated July 20, 2016 at a conversion price of $0.00135 per share of common stock.

 

On or about June 8, 2017, we issued 6,233,333 shares of common stock to one entity pursuant to the conversion of a certain convertible debenture dated June 27, 2015 at a conversion price of $0.0015 per share of common stock.

 

On or about June 12, 2017 we issued 7,425,000 shares of common stock to one entity pursuant to the conversion of a certain convertible debenture dated July 20, 2016 at a conversion price of $0.0011 per share of common stock.

 

On August 17, 2017, the Company agreed to issue to 1,000,000 shares of Series B Preferred stock, 200,000 shares of Series C Preferred stock and 284,215,420 shares of common stock to the respective shareholders of Sun Pacific Power Corp in exchange for services

 

On August 24, 2017, in connection with the reverse merger, the Company issued 5,665,092 shares of common stock to the previous stockholders of the Company.

 

On October 2017, the Company sold 762,500 shares of common stock for gross proceeds of $152,500.

 

On August 24, 2017, in connection with the reverse merger, the Company assumed convertible notes with an aggregate principal balance of $833,787. The notes automatically converted into 17,052,925 shares of common stock on October 3, 2017 upon the effective date of the Company’s reverse split in accordance with the convertible note agreements.

 

On November 9, 2017, the Company issued 12,500 shares of common stock pursuant to subscriptions purchasing share at a rate equal to $0.20 per share

 

On December 5, 2017, the Company issued 1,575,000 shares of common stock pursuant to subscriptions purchasing share at a rate equal to $0.20 per share.

 

On December 19, 2017, the Company issued 258,651 shares of common stock pursuant to subscriptions purchasing shares at a rate equal to $0.20 per share. On the same date, 121,683 shares were issued to Nicholas Campanella for services.

 

On February 20, 2018, the Company issued 1,250,000 shares of common stock to Nicholas Campanella for services. On the same date, 100,000 shares of common stock were issued pursuant to 2 subscription agreements purchasing shares at a rate equal to $0.20 per share.

 

On May 5, 2018, the Company issued 668,324 shares of common stock for settlement of services previously provided.

 

On May 8, 2018, the Company issued 880,000 shares pursuant to subscription agreements purchasing shares of common stock at a rate of $0.20 per share.

 

On November 13, 2018, the Company issued 620,000 shares of common stock pursuant to conversions of certain convertible promissory notes at an average price of $0.013 per share.

 

On November 27, 2018, the Company issued 250,000 shares of common stock pursuant to conversion of a portion of a convertible note at a price of $0.012 per share.

 

On December 6, 2018, the Company issued 500,000 shares of common stock pursuant to a conversion of a portion of a convertible promissory note at a price of $0.005 per share.

 

On December 10, 2018, the Company issued 1,000,000 shares of common stock pursuant to a conversion of a portion of a convertible promissory note at a price of $0.0068 per share.

 

On December 26, 2018, the Company issued 1,300,000 shares of common stock pursuant to a conversion of a portion of a convertible promissory note at a price of $0.005 per share.

 

 28 
   

 

On December 31, 2018, the Company issued 500,000 shares of common stock pursuant to a conversion of a portion of a convertible promissory note at a price of $0.0044 per share.

 

In connection with the reverse merger, the Company issued 2,000,000 shares of Series B Preferred Stock. The Series B Preferred Stock automatically converted into 30,856,553 shares of common stock after giving effect to the reverse stock split that occurred on October 3, 2017.

 

On January 11, 2019 the Company issued 1,500,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0029 per share.

 

On January 17, 2019 the Company issued 2,000,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0033 per share.

 

On January 11, 2019 the Company issued 1,500,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0029 per share.

 

On January 29, 2019 the Company issued 2,000,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0016 per share.

 

On January 30, 2019 the Company issued 3,500,00 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0018 per share.

 

On February 7, 2019 the Company issued 3,750,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0018 per share.

 

On February 12, 2019 the Company issued 3,776,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0016 per share.

 

On February 14, 2019 the Company issued 3,900,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0018 per share.

 

On February 26, 2019 the Company issued 3,776,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0016 per share.

 

On February 27, 2019 the Company issued 4,300,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0018 per share.

 

On March 11, 2019 the Company issued 4,700,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0019 per share.

 

On March 13, 2019 the Company issued 4,000,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0017 per share.

 

On March 20, 2019 the Company issued 5,100,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0017 per share.

 

 29 
   

 

On March 27, 2019 the Company issued 5,400,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0016 per share.

 

On March 27, 2019 the Company issued 5,438,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0014 per share.

 

On April 4, 2019 the Company issued 5,900,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00144 per share.

 

On April 16, 2019 the Company issued 6,000,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00144 per share.

 

On April 26, 2019 the Company issued 5,978,800 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00128 per share.

 

On May 1, 2019 the Company issued 6,700,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.001485 per share.

 

On May 1, 2019 the Company issued 5,978,800 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00132 per share.

 

On May 7, 2019 the Company issued 6,871,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.001 per share.

 

On May 8, 2019 the Company issued 7,700,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.001035 per share.

 

On May 9, 2019 the Company issued 7,700,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.001035 per share.

 

On May 21, 2019 the Company issued 8,400,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0009 per share.

 

On May 21, 2019 the Company issued 8,622,300 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00124 per share.

 

On May 30, 2019 the Company issued 9,300,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0009 per share.

 

On May 31, 2019 the Company issued 9,471,700 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.0008 per share.

 

On June 5, 2019 the Company issued 10,000,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00085 per share.

 

On June 5, 2019 the Company issued 10,408,400 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00076 per share.

 

On June 12, 2019 the Company issued 5,618,833 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00072 per share.

 

On June 13, 2019 the Company issued 11,200,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00072 per share.

 

On June 20, 2019 the Company issued 12,600,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.000495 per share.

 

On June 25, 2019 the Company issued 13,200,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.000495 per share.

 

On July 1, 2019 the Company issued 13,800,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.000495 per share.

 

On July 7, 2019 the Company issued 14,500,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.000495 per share.

 

On July 11, 2019 the Company issued 15,200,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.000495 per share.

 

On July 17, 2019 the Company issued 16,000,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00045 per share.

 

On July 22, 2019 the Company issued 16,800,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00045 per share.

 

On July 30, 2019 the Company issued 17,600,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00045.

 

On August 13, 2019 the Company issued 19,300,000 shares of common stock pursuant to a portion of a convertible promissory note at a price of $0.00045

 

 30 
   

 

The issuances of the above shares of common stock were exempt from the registration requirements of Section 5 of the Securities Act of 1933 (the “Act”) pursuant to Section 4(a)(2) thereto as isolated transactions not involving a public offering. Following the issuances and as of the May 1, 2019, the Registrant has a total of 137,695,497 shares of common stock issued and outstanding.

 

All the offers and sales of securities listed above were made to accredited investors. The issuance of the above securities is exempt from the registration requirements under Rule 4(2) of the Securities Act of 1933, as amended, and/or Rule 506 as promulgated under Regulation D.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 5. Other Information

 

(a) Not applicable.

 

(b) During the quarter ended June 30, 2019, there have not been any material changes to the procedures by which security holders may recommend nominees to the Board of Directors.

 

Item 6. Exhibits

 

Exhibit Number   Description of Exhibit
     
31.1   Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
31.2   Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
32.1   Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
32.2   Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
101.INS   XBRL Instance
     
101.SCH   XBRL Taxonomy Extension Schema
     
101.CAL   XBRL Taxonomy Extension Calculation
     
101.DEF   XBRL Taxonomy Extension Definition
     
101.LAB   XBRL Taxonomy Extension Labels
     
101.PRE   XBRL Taxonomy Extension Presentation

 

 31 
   

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  Sun Pacific Holding Corp.
     
Date: August 16, 2019 By: /s/ Nicholas Campanella
    Nicholas Campanella
    Chief Executive Officer and Chief Financial Officer (principal executive officer, principal accounting officer and principal financial officer)

 

 32 
   

EX-31.1 2 ex31-1.htm

 

Exhibit 31.1

 

CERTIFICATIONS

 

I, Nicholas Campanella, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2019 of Sun Pacific Holding Corp.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 16, 2019  
   
/s/ Nicholas Campanella  
Nicholas Campanella  
Chief Executive Officer  
(principal executive officer)  

 

   
 

 

EX-31.2 3 ex31-2.htm

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, Nicholas Campanella, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2019 of Sun Pacific Holding Corp.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 16, 2019  
   
/s/ Nicholas Campanella  
Nicholas Campanella  
Chief Financial Officer  
(principal financial officer)  

 

   
 

 

EX-32.1 4 ex32-1.htm

 

Exhibit 32.1

 

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of Sun Pacific Holding Corp. (the “Company”) on Form 10-Q for the period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nicholas Campanella, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
   
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

August 16, 2019 /s/ Nicholas Campanella
  Nicholas Campanella
  Chief Executive Officer
  (principal executive officer)

 

   
 

 

EX-32.2 5 ex32-2.htm

 

Exhibit 32.2

 

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of Sun Pacific Holding Corp. (the “Company”) on Form 10-Q for the period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nicholas Campanella, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
   
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

August 16, 2019 /s/ Nicholas Campanella
  Nicholas Campanella
  Chief Financial Officer
  (principal financial officer)

 

   
 

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Document and Entity Information - shares
6 Months Ended
Jun. 30, 2019
Aug. 13, 2019
Document And Entity Information    
Entity Registrant Name Sun Pacific Holding Corp.  
Entity Central Index Key 0001343465  
Document Type 10-Q  
Document Period End Date Jun. 30, 2019  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business Flag true  
Entity Emerging Growth Company true  
Entity Ex Transition Period true  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   395,898,624
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2019  
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.19.2
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Current Assets:    
Cash and cash equivalents $ 112,385 $ 4,851
Cash held in escrow 953,297
Cash held in escrow for interest 706,933
Accounts receivable, net of allowance for uncollectable accounts of $145,155 98,699 77,137
Other current assets 7,234
Total current assets 1,871,314 89,222
Property and Equipment, Net 1,827,913 204,951
Right-of-use Asset 1,306,454
Deposits 1,715,868
Total assets 6,721,549 294,173
Current Liabilities:    
Accounts payable 229,497 245,125
Accounts payable, related party 76,512 91,512
Accrued compensation to officer 687,364 631,166
Accrued expenses 520,005 203,670
Accrued expenses, related party 39,123 31,745
Dividends payable, related party 23,270 18,913
Advances from related parties 612,024 612,023
Project financing obligation 260,000 260,000
Vehicle installment notes payable, current portion 21,631 28,943
Convertible notes payable, net of discounts 376,926 423,454
Convertible notes payable, related party, net of discounts 408,974 408,974
Note payable, net of discounts 5,866,636
Lease liability, current portion 79,903
Total current liabilities 9,201,865 2,955,525
Long Term Liabilities:    
Lease liability, net of current portion 1,234,602
Vehicle installment notes payable, net of current portion 20,867 31,724
Total long-term liabilities 1,255,469 31,724
Total liabilities 10,457,334 2,987,249
Commitments and contingencies (see Note 7)
Stockholders' Deficit:    
Common stock $0.0001 par value, 500,000,000 shares authorized; 277,844,481 and 66,901,354 shares issued and outstanding, respectively 27,784 6,690
Additional paid in capital 4,161,579 3,948,051
Accumulated deficit (7,500,440) (6,649,017)
Total deficit (3,309,877) (2,693,076)
Non-controlling interest in subsidiary (425,909)
Total stockholders' deficit (3,735,785) (2,693,076)
Total liabilities and stockholders' deficit 6,721,549 294,173
Series A Preferred Stock [Member]    
Stockholders' Deficit:    
Preferred stock $0.0001 par value, 20,000,000 million shares authorized: 1,200 1,200
Series B Preferred Stock [Member]    
Stockholders' Deficit:    
Preferred stock $0.0001 par value, 20,000,000 million shares authorized:
Series C Preferred Stock [Member]    
Stockholders' Deficit:    
Preferred stock $0.0001 par value, 20,000,000 million shares authorized:
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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Allowance for uncollectable accounts $ 145,155 $ 145,155
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 20,000,000 20,000,000
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 277,844,481 66,901,354
Common stock, shares outstanding 277,844,481 66,901,354
Series A Preferred Stock [Member]    
Preferred stock, shares authorized 12,000,000 12,000,000
Preferred stock, shares issued 12,000,000 12,000,000
Preferred stock, shares outstanding 12,000,000 12,000,000
Series B Preferred Stock [Member]    
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Series C Preferred Stock [Member]    
Preferred stock, shares authorized 500,000 500,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Income Statement [Abstract]        
Revenues $ 101,923 $ 145,339 $ 210,288 $ 266,079
Cost of Revenues 41,422 93,094 128,415 180,103
Gross profit 60,501 52,245 81,873 85,976
Operating expenses:        
Wages and compensation 81,649 38,201 115,137 220,988
Professional fees 248,319 263,635 341,621 414,882
General and administrative 148,182 274,762 296,080 335,317
Total operating expenses 478,150 576,598 752,838 971,187
Loss from operations (417,649) (524,353) (670,965) (885,211)
Other Expenses:        
Dividend expense - preferred stock (3,125) (6,250)
Interest expense (288,975) (106,559) (606,366) (110,388)
Total other expense (288,975) (109,684) (606,366) (116,638)
Net loss (706,624) (634,037) (1,277,331) (1,001,849)
Net loss attributable to non-controlling interest 250,165 425,909
Net loss attributable to common stockholders $ (456,460) $ (634,037) $ (851,423) $ (1,001,849)
Net Loss Per Common Share - Basic $ 0.00 $ (0.01) $ (0.01) $ (0.02)
Weighted Average Shares Outstanding - Basic 178,912,854 62,663,833 132,454,826 61,786,546
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Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($)
Series A Preferred Stock [Member]
Series C Preferred Stock [Member]
Common Stock [Member]
Additional Paid In Capital [Member]
Accumulated Deficit [Member]
Non-controlling Interest [Member]
Total
Balance at Dec. 31, 2017 $ 1,200 $ 28 $ 6,083 $ 3,168,626 $ (4,873,536) $ (1,697,599)
Balance, shares at Dec. 31, 2017 12,000,000 275,000 60,833,030        
Issuance of common stock for cash $ 10 59,990 60,000
Issuance of common stock for cash, shares 100,000        
Issuance of common stock warrants for services 130,641 130,641
Net loss (367,811) (367,811)
Balance at Mar. 31, 2018 $ 1,200 $ 28 $ 6,093 3,359,257 (5,241,347) (1,874,769)
Balance, shares at Mar. 31, 2018 12,000,000 275,000 60,933,030        
Balance at Dec. 31, 2017 $ 1,200 $ 28 $ 6,083 3,168,626 (4,873,536) (1,697,599)
Balance, shares at Dec. 31, 2017 12,000,000 275,000 60,833,030        
Net loss             (1,001,849)
Balance at Jun. 30, 2018 $ 1,200 $ 28 $ 6,273 3,906,262 (5,875,384) (1,961,621)
Balance, shares at Jun. 30, 2018 12,000,000 275,000 62,731,354        
Balance at Mar. 31, 2018 $ 1,200 $ 28 $ 6,093 3,359,257 (5,241,347) (1,874,769)
Balance, shares at Mar. 31, 2018 12,000,000 275,000 60,933,030        
Issuance of common stock for cash $ 113 112,887 113,000
Issuance of common stock for cash, shares 1,130,000        
Issuance of common stock in settlement of accounts payable $ 67 84,118 84,185
Issuance of common stock in settlement of accounts payable, shares 668,324        
Issuance of common stock warrants with convertible debt 280,019 280,019
Beneficial conversion feature on convertible debt 69,981 69,981
Net loss (634,037) (634,037)
Balance at Jun. 30, 2018 $ 1,200 $ 28 $ 6,273 3,906,262 (5,875,384) (1,961,621)
Balance, shares at Jun. 30, 2018 12,000,000 275,000 62,731,354        
Balance at Dec. 31, 2018 $ 1,200 $ 6,690 3,948,051 (6,649,017) (2,693,076)
Balance, shares at Dec. 31, 2018 12,000,000 66,901,354        
Issuance of common stock for conversion of convertible debt $ 5,314 89,299 94,613
Issuance of common stock for conversion of convertible debt, shares 53,140,000        
Net loss (394,963) (175,744) (570,707)
Balance at Mar. 31, 2019 $ 1,200 $ 12,004 4,037,350 (7,043,980) (175,744) (3,169,170)
Balance, shares at Mar. 31, 2019 12,000,000 120,041,354        
Balance at Dec. 31, 2018 $ 1,200 $ 6,690 3,948,051 (6,649,017) (2,693,076)
Balance, shares at Dec. 31, 2018 12,000,000 66,901,354        
Net loss             (1,277,331)
Balance at Jun. 30, 2019 $ 1,200 $ 27,784 4,161,579 (7,500,440) (425,909) (3,735,785)
Balance, shares at Jun. 30, 2019 12,000,000 277,844,481        
Balance at Mar. 31, 2019 $ 1,200 $ 12,004 4,037,350 (7,043,980) (175,744) (3,169,170)
Balance, shares at Mar. 31, 2019 12,000,000 120,041,354        
Issuance of common stock for conversion of convertible debt $ 15,780 124,229 140,009
Issuance of common stock for conversion of convertible debt, shares 157,803,127        
Net loss (456,460) (250,165) (706,624)
Balance at Jun. 30, 2019 $ 1,200 $ 27,784 $ 4,161,579 $ (7,500,440) $ (425,909) $ (3,735,785)
Balance, shares at Jun. 30, 2019 12,000,000 277,844,481        
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Cash flows from Operating Activities:    
Net loss $ (1,277,331) $ (1,001,849)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 32,552 78,602
Amortization of debt discount - interest expense 269,472 83,748
Conversion fees settled with common stock 16,639
Warrants issued for services 130,641
Common stock issued for services 84,184
Changes in operating assets and liabilities:    
Accounts receivable (21,562) 36,495
Deposits and other assets (1,708,634) (15,122)
Accounts payable (15,629) 15,864
Accounts payable, related party (15,000)
Accrued compensation to officer 56,198 74,988
Accrued expenses 330,553 47,375
Accrued expenses, related party 7,378
Dividends payable, related party 4,357 6,250
Right-to-use asset and obligation 8,051  
Net cash used in operating activities (2,312,956) (458,824)
Cash flows from Investing Activities:    
Purchases of property and equipment (1,655,514)
Net cash used in investing activities (1,655,514)
Cash flows from Financing Activities:    
Proceeds from notes payable released from escrow 5,753,625
Repayment of advances from related parties (219)
Proceeds from issuance of common stock 173,001
Proceeds from financing obligation 260,000
Proceeds from convertible notes payable, net of issuance costs 281,660
Repayment of vehicle installment notes payable (18,169) (11,434)
Net cash provided by financing activities 5,735,456 703,008
Net decrease in cash 1,766,986 244,184
Cash and restricted cash at beginning of period 4,851 55,740
Cash and restricted cash at end of period 1,771,837 299,924
Supplemental Disclosure of Cash Flow Information:    
Interest paid
Taxes paid
Supplemental Disclosure of Non-Cash Investing and Financing Activities:    
Discount from note payable 271,375
Issuance of common stock for conversion of convertible debt 217,983
Right of use asset and operating lease liability 1,338,686
Convertible debt discounts for beneficial conversion features 69,981
Convertible debt discounts for detachable warrants 280,019
Settlement of convertible debt through AP 5,032
Issuance costs related to convertible debt $ 68,340
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Description of the Business
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Description of the Business

NOTE 1 - DESCRIPTION OF THE BUSINESS

 

Organization

 

The Company was incorporated under the laws of the State of New Jersey on July 28, 2009, as Sun Pacific Power Corporation and together with its subsidiaries, are referred to as the “Company”. On August 24, 2017, the Company entered into an Acquisition Agreement with EXOlifestyle, Inc. whereby the Company became a wholly owned subsidiary of EXOlifestyle, Inc. The acquisition was accounted for as a reverse merger, resulting in the Company being considered the accounting acquirer. Accordingly, the accompanying condensed consolidated financial statements included the accounts of EXOlifestyle, Inc. since August 24, 2017.

 

On October 3, 2017, pursuant to the written consent of the majority of the shareholders in lieu of a meeting, Sun Pacific Holding Corp., f/k/a EXOlifestyle, Inc. (the “Company”) filed a Certificate of Amendment with the state of Nevada to change the name of the Company from EXOlifestyle, Inc. to Sun Pacific Holding Corp. On October 3, 2017, the Company’s board of directors declared a 1 for 50 reverse stock split. All share amounts for all periods presented have been restated to reflect the reverse stock split.

 

Currently, the Company has six (6) subsidiary holdings. Sun Pacific Power Corp which was the initial company that specialized in solar, electrical and general construction, Bella Electric, LLC that in conjunction with the Company operates our electrical contracting work. Bella Electric, LLC is a Pennsylvania limited liability company. The Company also formed Sun Pacific Security Corp., a New Jersey corporation. Currently the Company has not begun operations in the security sector but is reviewing plans to provide residential and commercial security solutions, including installation and monitoring. The Company also formed National Mechanical Group Corp, a New Jersey corporation focused on plumbing operations in the New Jersey and Pennsylvania areas. The Company also formed Street Smart Outdoor Corp, a Wyoming corporation that acts as a holding company for the Company’s state specific operations in unique advertising through solar bus stops, solar trashcans and “street kiosks.” MedRecycler, LLC, is a wholly owned subsidiary duly formed in the state of Nevada. MedRecycler, LLC was created in 2018 to act as a holding company for potential waste to energy projects. MedRecycler, LLC, currently owns 51% of MedRecycler RI, Inc. a Rhode Island Corporation. MedRecycler RI, Inc. was created for the Medical Waste to Energy facility that the Company is attempting to finance and operate in West Warrick, Rhode Island.

 

Description of business

 

Utilizing managements history and contacts in general contracting, coupled with our subject matter expertise and intellectual property (“IP”) knowledge of solar panels and other environmentally friendly technologies, Sun Pacific Holding (“the Company”) is focused on building a “Next Generation” green energy company. The Company offers competitively priced “Next Generation” solar panel and lighting products by working closely with design, engineering, integration and installation firms in order to deliver turnkey solar and other energy efficient solutions. The Company provides solar bus stops, solar trashcans and “street kiosks” that utilize our unique advertising offerings that provide State and local municipalities with costs efficient solutions. The Company provides general, electrical, and plumbing contracting services to a range of both public and commercials customers in support of our goals of expanding our green energy market reach. In conjunction with these general contracting services and as part of our effort to expand our green energy marketplace, we have recently started the process to develop and build out a Waste to Energy plant in the state of Rhode Island and we are also exploring partnerships that will allow the Company to develop additional green energy projects such as solar farms and or other green projects that can utilize the Company’s expertise.

 

The Company has been unable to produce positive cashflows since inception resulting in the Company relying heavily upon convertible promissory notes and equity financing. As a result, the Company’s shareholders have suffered from highly dilutive financings.

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles of the United States of America (“GAAP”) and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

 

Use of estimates in the preparation of financial statements

 

Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates include the allowance for doubtful accounts and impairment assessments related to long-lived assets.

 

Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly owned, and less-than-wholly owned subsidiaries of which the Company holds a controlling interest. All significant intercompany balances and transactions have been eliminated. Amounts attributable to minority interests in the Company’s less-than-wholly owned subsidiary are presented as non-controlling interest on the accompanying condensed consolidated balance sheets and statements of operations.

 

Cash and cash equivalents

 

For purposes of the consolidated statements of cash flows, cash includes demand deposits and short-term liquid investments with original maturities of three months or less when purchased. As of June 30, 2019, the Federal Deposit Insurance Corporation (FDIC) provided insurance coverage of up to $250,000, per depositor, per institution. At June 30, 2019, none of the Company’s cash balances were in excess of federally insured limits with the exception of $1,660,230 of cash balances held in escrow at UMB Bank, NA under a project fund that the Company’s subsidiary, MedRecycler-RI, Inc. is drawing balances against for the development of its Medical Waste to Energy project in Rhode Island. Any and all withdrawals are strictly controlled by the lending institution, and use of proceeds must be approved prior to release of funds.

 

Accounts Receivable

 

In the normal course of business, we decide to extend credit to certain customers without requiring collateral or other security interests. Management reviews its accounts receivable at each reporting period to provide for an allowance against accounts receivable for an amount that could become uncollectible. This review process may involve the identification of payment problems with specific customers. Periodically we estimate this allowance based on the aging of the accounts receivable, historical collection experience, and other relevant factors, such as changes in the economy and the imposition of regulatory requirements that can have an impact on the industry. These factors continuously change and can have an impact on collections and our estimation process. The Company’s allowance for doubtful accounts totaled $145,055 as of June 30, 2019 and December 31, 2018.

 

Leases

 

In February 2016, the FASB issued ASU No. 2016-02 (Topic 842). Topic 842 amends several aspects of lease accounting, including requiring lessees to recognize leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued supplemental adoption guidance and clarification to Topic 842 within ASU 2018-10 “Codification Improvements to Topic 842, Leases” and ASU 2018-11 “Leases (Topic 842): Targeted Improvements.” The new guidance aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. A modified retrospective application is required with an option to not restate comparative periods in the period of adoption.

 

The Company, effective January 1, 2019 has adopted the provisions of the new standard. The Company has operating leases for warehouses and offices. Management evaluates each lease independently to determine the purpose, necessity to its future operations in addition to other appropriate facts and circumstances.

 

We adopted Topic 842 using a modified retrospective approach for all existing leases at January 1, 2019. The adoption of Topic 842 impacted our balance sheet by the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, upon adoption, leases that were classified as operating leases under the previous guidance were classified as operating leases under Topic 842. The lease liability is based on the present value of the remaining lease payments, discounted using a market based incremental borrowing rate as the effective date of January 1, 2019 using current estimates as to lease term including estimated renewals for each operating lease. As of January 1, 2019, the Company recorded an adjustment of approximately $1,339,000 to operating lease right-of-use assets (“ROU”) and the related lease liability (Note 7).

 

Deposits

 

During the six months ended June 30, 2019, the Company made deposits of approximately $1,700,000 pursuant to a purchase of equipment costing approximately $7,200,000, currently expected to be delivered in August 2019 for assembly onsite at MedRecycler-RI, Inc.’s West Warwick, Rhode Island facility.

 

Contingencies

 

Certain conditions may exist as of the date financial statements are issued, which may result in a loss, but which will only be resolved when one or more future events occur or do not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to pending legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed.

 

Fair value of financial instruments

 

The carrying amounts of the Company’s accounts payable, accrued expenses, and shareholder advances approximate fair value due to their short-term nature. The Company’s long-term debt approximates fair value based on prevailing market rates.

 

Property and equipment

 

Property and equipment are stated at cost. Additions and improvements that significantly add to the productive capacity or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over three to five years for vehicles and five to ten years for equipment. Leasehold improvements are amortized over the lesser of the estimated remaining useful life of the asset or the remaining lease term.

 

Impairment of long-lived assets

 

The Company periodically reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be realizable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. At June 30, 2019 and December 31, 2018, the Company has not identified any such impairment losses.

 

Income taxes

 

Under ASC Topic 740, “Income Taxes”, the Company is required to account for its income taxes through the establishment of a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carry forwards. Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for book and tax purposes during the year.

 

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized for deductible temporary differences and operating losses, and tax credit carry forwards. A valuation allowance is established to reduce that deferred tax asset if it is “more likely than not” that the related tax benefits will not be realized.

 

Revenue recognition

 

100% of the Company’s revenue for the Three and Six months ended June 30, 2019 is recognized based on the Company’s satisfaction of distinct performance obligations identified in each agreement, generally at a point in time as defined by Topic 606, as amended.

 

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This standard replaced most existing revenue recognition guidance and is codified in FASB ASC Topic 606. Effective January 1, 2018, the Company adopted ASU No. 2014-09 using the modified retrospective method. Under the new guidance, the Company recognizes revenue from contracts based on the Company’s satisfaction of distinct performance obligations identified in each agreement. The adoption of the guidance under ASU No. 2014-09 did not result in a material impact on the Company’s consolidated revenues, results of operations, or financial position. As part of the implementation of ASC 606 the Company must present disaggregation of revenues from contracts with customers into categories that depict how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. Quantitative disclosures on the disaggregation of revenue are as follows:

 

   Six Months Ended 
   June 30, 2019   June 30, 2018 
Outdoor Advertising Shelter Revenues  $108,218   $132,094 
Contracting Service Revenues   102,070    133,985 
   $210,288   $266,079 

 

Earnings Per Share

 

Under ASC 260, “Earnings Per Share” (“EPS”), the Company provides for the calculation of basic and diluted earnings per share. Basic EPS includes no dilution and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of securities that could share in the earnings or losses of the entity. For the three months ended June 30, 2019 and 2018, basic and diluted loss per share are the same as the calculation of diluted per share amounts would result in an anti-dilutive calculation. For the three and six months ended June 30, 2019 and 2018, the following potential shares have been excluded from the calculation of diluted loss per share because their impact was anti-dilutive:

 

   2019   2018 
Convertible Debt   292,527,000    37,557,004 
Convertible Debt Subject to Forbearance Agreement   8,179,480    - 
Warrants   309,031,237    7,724,727 
    609,737,717    45,281,731 

 

Recent Accounting Pronouncements.

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.19.2
Going Concern
6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 3 - GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the six months ended June 30, 2019 and 2018, the Company incurred losses of $1,277,331 and $1,001,849, respectively, and used $596,091 and $458,824, respectively, of cash in operations. The Company has a working capital deficit of $7,330,551 as of June 30, 2019. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise the additional capital to meet short and long-term operating requirements. Management is continuing to pursue external financing alternatives to improve the Company’s working capital position however additional financing may not be available upon acceptable terms, or at all. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.19.2
Property and Equipment, Net
6 Months Ended
Jun. 30, 2019
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net

NOTE 4 – PROPERTY AND EQUIPMENT, NET

 

Property and equipment consisted of the following as of June 30, 2019 and December 31, 2018:

 

   2019   2018 
MedRecycler-RI, Inc. Plant and Equipment  $1,655,514   $- 
Furniture and equipment   271,817    271,817 
Vehicles   189,012    189,012 
Leasehold Improvements   66,077    66,077 
Less: Accumulated Depreciation   (354,507)   (321,955)
Property and equipment, net  $1,827,913   $204,951 

 

Depreciation expenses totaled $32,552 and $78,602 for the six months ended June 30, 2019 and 2018, respectively.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.19.2
Borrowings
6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Borrowings

NOTE 5 - BORROWINGS

 

Vehicle installment notes payable

 

The Company’s vehicle installment notes payable consist of several installment notes for various vehicles used in the Company’s operations. At June 30, 2019, the notes have annual interest rates between 3.49% and 4.07% and require monthly minimum payments of principal and interest ranging from $370 to $434. The Company’s installment notes are collateralized by the vehicles purchased with the respective installment notes. The notes mature from November 2020 to August 2021. As of June 30, 2019, and December 31, 2018, the balance of the notes totaled $42,498 and $60,667, respectively.

 

Convertible notes payable.

 

On August 24, 2016, the Company issued two two-year unsecured convertible notes payable totaling $200,000 pursuant to a private placement memorandum. The notes matured on August 24, 2018 and have an annual interest rate of 12.5%. At the election of the holder, upon the occurrence of certain events, the notes can be converted into common stock of the Company at a conversion price per share equal to 50% of the average bid price for the 30 consecutive business days prior to conversion. The conversion feature was contingent upon i) the successful filing of a registration statement to become publicly traded, and ii) the company stock has become publicly quoted on the OTC Markets and iii) the conversion price is above $0.10. In connection with the notes, the predecessor Company issued a total of 200,000 shares of Series B preferred stock, which was canceled upon the reverse merger. In August 2018, the holders of the notes agreed to extend the maturity date of the notes to December 31, 2018, in exchange for warrants to acquire 600,000 shares of common stock for an exercise price of $0.31 per share, exercisable over three years. The Company estimated the fair value of the warrants, totaling $16,401, using the Black Scholes Method and recorded an additional discount against the note that was amortized over the extend term of the notes. As of June 30, 2019 and December 31, 2018, the balance of the notes totaled $196,850, and no unamortized discounts remained.

 

In April 2018, the Company issued convertible notes with an aggregate principal balance of $350,000, for net proceeds after issuance costs which were recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes, of $281,660. The notes mature in April 2019, accrue interest at an annual rate of 10% and are convertible into common stock at a conversion rate equal to the greater of $0.05 and 60% times the lowest trading price of the Company’s common stock during the 18 trading days prior to conversion. In the event of default, if the trading price of the Company’s common stock falls below $0.07, the floor moves to $0.01 and if the price of the Company’s common stock falls to below $0.03, the floor moves to $0.0001. Because the conversion feature is indexed to the Company’s stock, and there is an explicit cap to the total number of shares issuable upon conversion, the Company determine that the embedded conversion option did not require bifurcation and liability presentation. The investors in the notes also received warrants to acquire an aggregate of 6,349,457 shares of common stock for an exercise price of $0.11 per share, exercisable for 2 years. The Company estimated the fair value of the warrants using the Black Scholes model and the following assumptions: volatility – 261.8% to 268.7%; expected term – 2.0 years; dividend rate – 0.0%; risk free rate – 2.49%, and allocated $173,355 of the proceeds to the warrants, which was recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes. Based on the allocation of proceeds to the debt, the Company determined there was a beneficial conversion feature totaling $176,645, which was recorded as a discount against the debt to be amortized into interest expense through the maturity of the notes. During the six months ended June 30, 2019, holder of the notes elected to convert principal, interest, and conversion fees totaling $234,622 into 210,943,127 shares of common stock. During the six months ended June 30, 2019, the Company amortized $156,461 of the discounts. As of June 30, 2019, the notes are carried at $180,076, and no unamortized discounts remain. On July 8, 2019 the Company entered into a settlement agreement with Auctus Fund, LLC, settling all amounts owed pursuant to that convertible promissory note entered into on April 30, 2018 for $150,000. See Note 9.

 

Convertible notes payable, related party

 

On October 23, 2015, a total of $332,474 in advances from a related party was converted into two one-year unsecured convertible notes payable to Nicholas Campanella, Chief Executive Officer of the Company (Note 8). The notes have an annual interest rate of 6% and are currently past due. At the election of the holder, the notes can be converted into common stock of the Company at a conversion price per share equal to 20% of the average bid price for the three consecutive business days prior to conversion. The notes are subject to a forbearance agreement, pursuant to which the holder cannot convert the note until such time as the Company has sufficient authorized and unissued common stock available. See Note 8. As of June 30, 2019 and December 31, 2018, the balances of the notes totaled $332,474. As of June 30, 2019, there was $34,890 of accrued interest on these advances, included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheet.

 

On August 24, 2016, a total of $76,500 in advances from a related party was converted into a two-year unsecured convertible note payable to Nicholas Campanella, Chief Executive Officer of the Company (Note 8), pursuant to a private placement memorandum. The note matured on August 24, 2018, has an annual interest rate of 12.5% and is past due. At the election of the holder, upon the occurrence of certain events, the note can be converted into common stock of the Company at a conversion price per share equal to 50% of the average bid price for the 30 consecutive business days prior to conversion. The notes are subject to a forbearance agreement, pursuant to which the holder cannot convert the note until such time as the Company has sufficient authorized and unissued common stock available. See Note 8. The conversion feature is contingent upon i) the successful filing of a registration statement to become publicly traded, and ii) the company stock has become publicly quoted on the OTC Markets and iii) the conversion price is above $0.10. In connection with this note, the Company issued 75,000 shares of Series B preferred stock. As of June 30, 2019, and December 31, 2018, the balance of the notes was $76,500.

 

Project Financing Obligation

 

In June 2018, the Company received proceeds of $260,000 pursuant to a partnership agreement and related partnership contribution agreements with third party investors, pursuant which investors have agreed to provide financing for no less than (10) ten new bus shelters being installed annually. Each investment in the partnership grants the investor the right to preferential distributions of profits related to the Company’s contract with Rhode Island. The investors receive 100% of the profits from the Rhode Island contract to install 20 bus shelters until 100% of the initial investments are returned. Thereafter, the investors receive 20% of the remaining profits from Rhode Island contract. As of June 30, 2019, no profits have been earned on the Rhode Island contract, no repayments have occurred, and the total amount of investments received totaling $260,000 is reflected on the accompanying condensed consolidated balance sheet as a Project Financing Obligation. During the 2nd quarter of 2019, the Company received from the manufacturer the respective Bus Shelters and presently they are in the process of being assembled and installed accordingly.

 

Line of credit, related party

 

On October 23, 2015, the Company entered into a line of credit agreement with Nicholas Campanella, Chief Executive officer of the Company, for a total value of $250,000. The line of credit does not bear an interest rate and is payable on demand. As of June 30, 2019, and December 31, 2018, the balance of the debt to related party was $163,157 and is include in advances from related parties on the accompanying condensed consolidated balance sheets.

 

Indenture of Trust

 

In January 2019, MedRecycler, LLC, a 51%-owned subsidiary of Sun Pacific Holding organized in the state of Rhode Island for the development of waste to energy projects in the state of Rhode Island. Currently, MedRecycler-RI, Inc. has entered into an Indenture of Trust in the amount of $6,025,000.00 as bridge financing for a project in West Warwick, Rhode Island. The proceeds from the indenture are held in escrow to be used to (i) to provide for the financing of certain waste to energy facility and related improvements (the “Improvements”); (ii) to provide for the financing or refinancing of certain equipment to be used in connection with the Improvements (the “Equipment” and together with the Improvements, the “Project”); (iii) to provide for the financing of capitalized interest; and (iv) to pay certain costs incurred in connection with the Project. The principal balance of the indenture accrues interest at an annual rate of 12%, payable semi-annually, and matures on January 29, 2020. The Company incurred debt issuance costs of $271,375, which were recorded as a discount against the indenture to be amortized into interest expense through the maturity of the indenture. For the six months ended June 30, 2019, the Company amortized $113,011 of the discount, and as of June 30, 2019, the indenture is carried at $5,866,636, net of unamortized discount of $158,364.

 

The Company’s estimated future maturities of the Company’s debt, as of June 30, 2019, are as follows:

 

Twelve Months Ending June 30,  Amount 
2019  $6,994,162 
2020   16,874 
2021   3,993 
Thereafter   - 
   $7,015,029 
XML 23 R12.htm IDEA: XBRL DOCUMENT v3.19.2
Preferred Stock and Common Stock
6 Months Ended
Jun. 30, 2019
Equity [Abstract]  
Preferred Stock and Common Stock

NOTE 6 - PREFERRED STOCK AND COMMON STOCK

 

Preferred stock

 

The Company is authorized to issue 20,000,000 shares of $0.0001 par value preferred stock as of June 30, 2019. As of June 30, 2019, the Company has designated 12,000,000 shares of Series A Preferred Stock, 1,000,000 shares of Series B Convertible Preferred Stock, and 500,000 shares of Series C Convertible Stock.

 

Each share of Series A Preferred Stock is entitled to 125 votes on all matters submitted to a vote to the stockholders of the Company, and does not have conversion, dividend or distribution upon liquidation rights. As of June 30, 2019, there were 12,000,000 shares of Series A preferred stock outstanding, and are held by Nicholas Campanella, CEO of the Company. See Note 8.

 

Common stock

 

During the six months ended June 30, 2019, the Company issued 210,943,127 shares of common stock upon the conversion of convertible debt principal, interest and conversion fees totaling $234,622.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.19.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Employment agreement

 

On December 20, 2014, the Company entered into a five-year employment agreement with Nicholas Campanella, Chief Executive Officer. Under the terms of the agreement, the Company is required to pay a base compensation of $180,000 annually, subject to increases in cost of living and performance bonuses as awarded by the Board of Directors. After 5 years, the agreement is automatically renewed for an additional two years unless terminated by either party. As part of the agreement Mr. Campanella opted to defer, with no interest, the receipt of compensation under the agreement until the Company has the funds to pay its obligation. At June 30, 2019 and December 31, 2018, the Company had accrued compensation of $687,364 and $631,166, respectively, and recorded the related expenses in ‘general and administrative’ on the accompanying condensed consolidated statements of operations.

 

Leases

 

During March 2017, the Company entered into a five-year lease agreement. Under the terms of the agreement, the Company is obligated to pay monthly rent payments starting at $3,556 and escalating over the life of the lease.

 

The Company entered into a lease in February 2019 for the rental of a 48,167 square foot space in Rhode Island to be used for the Company’s MedRecycler operations. The lease has a term of 123 months commencing on March 1, 2019, requiring annual rental payments totaling $144,501 for the first year, increasing annually to $258,930 in the final year. The lease also requires the Company to pay a portion of the building’s common area maintenance. The Company recorded a right-to-use asset and corresponding obligation equal to the present value of the required lease payments using a discount rate of 12% based on the Company’s incremental borrowing rate.

  

The following is a schedule showing the future minimum lease payments under leases for the next five years and the present value of the minimum lease payments as of June 30, 2019.

 

Remainder of 2019  $118,749 
2020   243,249 
2021   250,317 
2022   217,361 
2023   215,797 
Thereafter   1,286,696 
Total minimum lease payments   2,332,169 
Less: Amount representing interest   (1,017,664)
Present value of minimum lease payments  $1,314,505 

 

For the six months ended June 30, 2019, lease expense was approximately $34,881 inclusive of short-term leases.

 

The related lease balance included in the condensed consolidated balance sheet as of June 30, 2019 were as follows:

 

Assets:    
     
Operating lease right-of use asset  $1,306,454 
      
Liabilities:     
      
Lease liability – current portion  $79,903 
      
Lease liability – long-term portion   1,234,602 
      
Total operating lease liabilities  $1,314,505 
XML 25 R14.htm IDEA: XBRL DOCUMENT v3.19.2
Related Party Transactions
6 Months Ended
Jun. 30, 2019
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 8 - RELATED PARTY TRANSACTIONS

 

For purposes of these consolidated financial statements, Summit Trading Limited, Zimmerman LLC, the Campanella family, Jody Samuels, Frank Capria, and Triplet Square LLC are considered related parties due to their beneficial ownership (shareholdings or voting rights) in excess of 5%, or their affiliate status, during the years ended December 31, 2018 and 2017. During the years ended December 31, 2018 and 2017, the affiliates made non-interest-bearing advances of $23,506 and $321,127, respectively. The balance of these advances, which are due on demand and include the Line of Credit (See Note 5), totaled $612,023 and $588,517 as of June 30, 2019 and December 31, 2018, respectively. Included in accounts payable related parties as of June 30, 2019 and December 31, 2018, are expenses incurred with these affiliates totaling $76,512 and $91,512, respectively.

 

In January 11, 2019, the Company entered into that certain Forbearance Agreement between the Company and Nicholas Campanella. Mr. Campanella is owed approximately $648,400 in principal and interest on loans and lines of credit issued by the Company. Those debt obligations are currently in default. As consideration for the forbearance of those debts, the Company has agreed to provide a pledge of 100% membership interest in MedRecycler, LLC, and wholly owned subsidiary of the Company organized in the state of Nevada which holds 51,000 shares of MedRecycler-RI, Inc. as security against the moneys owed. The amounts owed to Mr. Campanella date back nearly five years and represent cash payments made by Mr. Campanella to Sun Pacific Power Corp. On April 3, 2019, Mr. Campanella agreed to extend the forbearance until December 31, 2020.

 

In order to secure financing for the MedRecycler-RI, Inc. West Warrick, Rhode Island waste to energy facility, Mr. Campanella agreed that upon initial financing of the project, he shall pledge substantially all of his holdings in the Company, assign his pledges in MedRecycler, LLC, and certain properties held by Mr. Campanella, personally, in order to collateralize the debt obligations. As consideration for his inducement, the Board of Directors has deemed it fair consideration to issue Mr. Campanella 39,000 shares of MedRecycler-RI, Inc. In addition, MedRecycler-RI, Inc. has engaged the services of Marmac Capital Advisors, LLC and Eilers Law Group, P.A. to oversee, negotiate and to facility the financing and capital structure MedRecycler-RI, Inc. As neither party has received compensation for their services for the Company or MedRecycler-RI, Inc. since August of 2018, the Board of Directors has deemed it fair consideration to issue Marmac Capital Advisors, LLC and Eilers Law Group, P.A. 8,000 and 2,000 shares of MedRecycler-RI, Inc., respectively. As a result, the Company shall maintain 51% of the ownership of MedRecycler-RI, Inc. through its MedRecycler, LLC holdings.

 

On February 7, 2019, pursuant to an Indenture of Trust entered into by our subsidiary, MedRecycler-RI, Inc., a Rhode Island corporation and UMB Bank, N.A., a national banking association (“UMB”) (the “Indenture”), Sun Pacific Holding Corp. (the “Company”) entered into that certain Guarantee of Payment and Performance with UMB acting as Trustee, whereby the Company agreed to guarantee any and all payments and/or other obligations owed by MedRecycler-RI, Inc. pursuant to the Indenture.

 

In order to secure the financing described herein, Mr. Campanella, Marmac Capital Advisors, LLC and Eilers Law Group, P.A. have further agreed to pledge, upon funding, 100% of their ownership in MedRecycler-RI, Inc. as well as Mr. Campanella’s assignment of his pledge from the Company of 100% of the membership interests of MedRecycler, LLC. As a result, 100% of MedRecycler-RI, Inc. will be pledged, upon funding, to the lending party as security for the note and/or bond.

 

On May 20, 2019, Nicholas Campanella agreed to forbear any of his rights to convert any portion of his related party debt into common stock until such time that the Company had sufficient authorized shares to honor full conversion of all principal and accrued interest into common stock of the Company.

 

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.19.2
Subsequent Events
6 Months Ended
Jun. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

NOTE 9- SUBSEQUENT EVENTS

 

From about July 1, 2019, through August 19, 2019 the Company issued 131,600,000 shares of common stock pursuant to the conversion of a certain convertible debentures, including accrued interest and conversion fees totaling $52,398.

 

On June 21, 2019, the Company issued a six month ten percent interest promissory note in the amount of $200,000.00. The note was funded July 8, 2019. Per the terms of the note, the lender was issued 2,000,000 shares of restricted common stock as an inducement.

 

On July 8, 2019, the Company entered into a settlement agreement with Auctus Fund, LLC settling all amounts owed pursuant to that convertible promissory note entered into on April 30, 2018 for $150,000.00.

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Basis of Presentation

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles of the United States of America (“GAAP”) and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Use of Estimates in the Preparation of Financial Statements

Use of estimates in the preparation of financial statements

 

Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates include the allowance for doubtful accounts and impairment assessments related to long-lived assets.

Consolidation

Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly owned, and less-than-wholly owned subsidiaries of which the Company holds a controlling interest. All significant intercompany balances and transactions have been eliminated. Amounts attributable to minority interests in the Company’s less-than-wholly owned subsidiary are presented as non-controlling interest on the accompanying condensed consolidated balance sheets and statements of operations.

Cash and Cash Equivalents

Cash and cash equivalents

 

For purposes of the consolidated statements of cash flows, cash includes demand deposits and short-term liquid investments with original maturities of three months or less when purchased. As of June 30, 2019, the Federal Deposit Insurance Corporation (FDIC) provided insurance coverage of up to $250,000, per depositor, per institution. At June 30, 2019, none of the Company’s cash balances were in excess of federally insured limits with the exception of $1,660,230 of cash balances held in escrow at UMB Bank, NA under a project fund that the Company’s subsidiary, MedRecycler-RI, Inc. is drawing balances against for the development of its Medical Waste to Energy project in Rhode Island. Any and all withdrawals are strictly controlled by the lending institution, and use of proceeds must be approved prior to release of funds.

Accounts Receivable

Accounts Receivable

 

In the normal course of business, we decide to extend credit to certain customers without requiring collateral or other security interests. Management reviews its accounts receivable at each reporting period to provide for an allowance against accounts receivable for an amount that could become uncollectible. This review process may involve the identification of payment problems with specific customers. Periodically we estimate this allowance based on the aging of the accounts receivable, historical collection experience, and other relevant factors, such as changes in the economy and the imposition of regulatory requirements that can have an impact on the industry. These factors continuously change and can have an impact on collections and our estimation process. The Company’s allowance for doubtful accounts totaled $145,055 as of June 30, 2019 and December 31, 2018.

Leases

Leases

 

In February 2016, the FASB issued ASU No. 2016-02 (Topic 842). Topic 842 amends several aspects of lease accounting, including requiring lessees to recognize leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued supplemental adoption guidance and clarification to Topic 842 within ASU 2018-10 “Codification Improvements to Topic 842, Leases” and ASU 2018-11 “Leases (Topic 842): Targeted Improvements.” The new guidance aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. A modified retrospective application is required with an option to not restate comparative periods in the period of adoption.

 

The Company, effective January 1, 2019 has adopted the provisions of the new standard. The Company has operating leases for warehouses and offices. Management evaluates each lease independently to determine the purpose, necessity to its future operations in addition to other appropriate facts and circumstances.

 

We adopted Topic 842 using a modified retrospective approach for all existing leases at January 1, 2019. The adoption of Topic 842 impacted our balance sheet by the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, upon adoption, leases that were classified as operating leases under the previous guidance were classified as operating leases under Topic 842. The lease liability is based on the present value of the remaining lease payments, discounted using a market based incremental borrowing rate as the effective date of January 1, 2019 using current estimates as to lease term including estimated renewals for each operating lease. As of January 1, 2019, the Company recorded an adjustment of approximately $1,339,000 to operating lease right-of-use assets (“ROU”) and the related lease liability (Note 7).

Deposits

Deposits

 

During the six months ended June 30, 2019, the Company made deposits of approximately $1,700,000 pursuant to a purchase of equipment costing approximately $7,200,000, currently expected to be delivered in August 2019 for assembly onsite at MedRecycler-RI, Inc.’s West Warwick, Rhode Island facility.

Contingencies

Contingencies

 

Certain conditions may exist as of the date financial statements are issued, which may result in a loss, but which will only be resolved when one or more future events occur or do not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to pending legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed.

Fair Value of Financial Instruments

Fair value of financial instruments

 

The carrying amounts of the Company’s accounts payable, accrued expenses, and shareholder advances approximate fair value due to their short-term nature. The Company’s long-term debt approximates fair value based on prevailing market rates.

Property and Equipment

Property and equipment

 

Property and equipment are stated at cost. Additions and improvements that significantly add to the productive capacity or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over three to five years for vehicles and five to ten years for equipment. Leasehold improvements are amortized over the lesser of the estimated remaining useful life of the asset or the remaining lease term.

Impairment of Long-lived Assets

Impairment of long-lived assets

 

The Company periodically reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be realizable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. At June 30, 2019 and December 31, 2018, the Company has not identified any such impairment losses.

Income Taxes

Income taxes

 

Under ASC Topic 740, “Income Taxes”, the Company is required to account for its income taxes through the establishment of a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carry forwards. Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for book and tax purposes during the year.

 

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized for deductible temporary differences and operating losses, and tax credit carry forwards. A valuation allowance is established to reduce that deferred tax asset if it is “more likely than not” that the related tax benefits will not be realized.

Revenue Recognition

Revenue recognition

 

100% of the Company’s revenue for the Three and Six months ended June 30, 2019 is recognized based on the Company’s satisfaction of distinct performance obligations identified in each agreement, generally at a point in time as defined by Topic 606, as amended.

 

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This standard replaced most existing revenue recognition guidance and is codified in FASB ASC Topic 606. Effective January 1, 2018, the Company adopted ASU No. 2014-09 using the modified retrospective method. Under the new guidance, the Company recognizes revenue from contracts based on the Company’s satisfaction of distinct performance obligations identified in each agreement. The adoption of the guidance under ASU No. 2014-09 did not result in a material impact on the Company’s consolidated revenues, results of operations, or financial position. As part of the implementation of ASC 606 the Company must present disaggregation of revenues from contracts with customers into categories that depict how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. Quantitative disclosures on the disaggregation of revenue are as follows:

 

   Six Months Ended 
   June 30, 2019   June 30, 2018 
Outdoor Advertising Shelter Revenues  $108,218   $132,094 
Contracting Service Revenues   102,070    133,985 
   $210,288   $266,079 
Earnings Per Share

Earnings Per Share

 

Under ASC 260, “Earnings Per Share” (“EPS”), the Company provides for the calculation of basic and diluted earnings per share. Basic EPS includes no dilution and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of securities that could share in the earnings or losses of the entity. For the three months ended June 30, 2019 and 2018, basic and diluted loss per share are the same as the calculation of diluted per share amounts would result in an anti-dilutive calculation. For the three and six months ended June 30, 2019 and 2018, the following potential shares have been excluded from the calculation of diluted loss per share because their impact was anti-dilutive:

 

   2019   2018 
Convertible Debt   292,527,000    37,557,004 
Convertible Debt Subject to Forbearance Agreement   8,179,480    - 
Warrants   309,031,237    7,724,727 
    609,737,717    45,281,731 
Recent Accounting Pronouncements

Recent Accounting Pronouncements.

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Schedule of Disaggregation of Revenues

Quantitative disclosures on the disaggregation of revenue are as follows:

 

   Six Months Ended 
   June 30, 2019   June 30, 2018 
Outdoor Advertising Shelter Revenues  $108,218   $132,094 
Contracting Service Revenues   102,070    133,985 
   $210,288   $266,079 
Schedule of Anti-dilutive Earnings Per Share

For the three and six months ended June 30, 2019 and 2018, the following potential shares have been excluded from the calculation of diluted loss per share because their impact was anti-dilutive:

 

   2019   2018 
Convertible Debt   292,527,000    37,557,004 
Convertible Debt Subject to Forbearance Agreement   8,179,480    - 
Warrants   309,031,237    7,724,727 
    609,737,717    45,281,731 
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.19.2
Property and Equipment, Net (Tables)
6 Months Ended
Jun. 30, 2019
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment, Net

Property and equipment consisted of the following as of June 30, 2019 and December 31, 2018:

 

   2019   2018 
MedRecycler-RI, Inc. Plant and Equipment  $1,655,514   $- 
Furniture and equipment   271,817    271,817 
Vehicles   189,012    189,012 
Leasehold Improvements   66,077    66,077 
Less: Accumulated Depreciation   (354,507)   (321,955)
Property and equipment, net  $1,827,913   $204,951 
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.19.2
Borrowings (Tables)
6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Schedule of Estimated Future Maturities

The Company’s estimated future maturities of the Company’s debt, as of June 30, 2019, are as follows:

 

Twelve Months Ending June 30,  Amount 
2019  $6,994,162 
2020   16,874 
2021   3,993 
Thereafter   - 
   $7,015,029 
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.19.2
Commitments and Contingencies (Tables)
6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Future Minimum Lease Payments

The following is a schedule showing the future minimum lease payments under leases for the next five years and the present value of the minimum lease payments as of June 30, 2019.

 

Remainder of 2019  $118,749 
2020   243,249 
2021   250,317 
2022   217,361 
2023   215,797 
Thereafter   1,286,696 
Total minimum lease payments   2,332,169 
Less: Amount representing interest   (1,017,664)
Present value of minimum lease payments  $1,314,505 
Summary of Related Lease Balance

The related lease balance included in the condensed consolidated balance sheet as of June 30, 2019 were as follows:

 

Assets:    
     
Operating lease right-of use asset  $1,306,454 
      
Liabilities:     
      
Lease liability – current portion  $79,903 
      
Lease liability – long-term portion   1,234,602 
      
Total operating lease liabilities  $1,314,505 
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.19.2
Description of the Business (Details Narrative)
Oct. 03, 2017
Jun. 30, 2019
Jan. 31, 2019
MedRecycler, LLC [Member]      
Ownership percentage   51.00% 51.00%
Board of Directors [Member]      
Reverse Stock Split 1 for 50 reverse stock split.    
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Aug. 16, 2019
Jun. 30, 2019
Jun. 30, 2019
Jun. 30, 2018
Dec. 31, 2018
Jan. 02, 2019
Cash held in escrow   $ 953,297 $ 953,297    
Allowance for doubtful accounts   145,155 145,155   145,155  
Operating lease right-of-use assets   1,306,454 1,306,454    
Lease liability   79,903 79,903    
Deposits   $ 1,715,868 1,715,868    
Payments to acquire equipment     1,655,514    
Impairment loss        
Revenue [Member]            
Concentration risk, percentage   100.00% 100.00%      
Subsequent Event [Member] | MedRecycler-RI, Inc. [Member]            
Payments to acquire equipment $ 7,200,000          
ASU 2016-02 [Member]            
Operating lease right-of-use assets           $ 1,339,000
Lease liability           $ 1,339,000
UMB Bank [Member]            
Cash held in escrow   $ 1,660,230 $ 1,660,230      
Maximum [Member]            
FDIC Insurance coverage   $ 250,000 $ 250,000      
Maximum [Member] | Vehicles [Member]            
Property and equipment estimated useful life     5 years      
Maximum [Member] | Equipment [Member]            
Property and equipment estimated useful life     10 years      
Minimum [Member] | Vehicles [Member]            
Property and equipment estimated useful life     3 years      
Minimum [Member] | Equipment [Member]            
Property and equipment estimated useful life     5 years      
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenues (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Revenues $ 101,923 $ 145,339 $ 210,288 $ 266,079
Outdoor Advertising Shelter Revenues [Member]        
Revenues     108,218 132,094
Contracting Service Revenues [Member]        
Revenues     $ 102,070 $ 133,985
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies - Schedule of Anti-dilutive Earnings Per Share (Details) - shares
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Anti-dilutive securities 609,737,717 45,281,731
Warrants [Member]    
Anti-dilutive securities 309,031,237 7,724,727
Convertible Debt [Member]    
Anti-dilutive securities 292,527,000 37,557,004
Convertible Debt Subject to Forbearance Agreement [Member]    
Anti-dilutive securities 8,179,480  
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.19.2
Going Concern (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2018
Mar. 31, 2018
Jun. 30, 2019
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]            
Loss from operations $ (706,624) $ (570,707) $ (634,037) $ (367,811) $ (1,277,331) $ (1,001,849)
Cash used in operations         (2,312,956) $ (458,824)
Working capital deficit $ (7,330,551)       $ (7,330,551)  
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.19.2
Property and Equipment, Net (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Property, Plant and Equipment [Abstract]    
Depreciation expenses $ 32,552 $ 78,602
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.19.2
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Property, Plant and Equipment [Abstract]    
MedRecycler-RI, Inc. Plant and Equipment $ 1,655,514
Furniture and equipment 271,817 271,817
Vehicles 189,012 189,012
Leasehold Improvements 66,077 66,077
Less: Accumulated Depreciation (354,507) (321,955)
Property and equipment, net $ 1,827,913 $ 204,951
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.19.2
Borrowings (Details Narrative) - USD ($)
1 Months Ended 6 Months Ended
Aug. 24, 2016
Oct. 23, 2015
Jan. 31, 2019
Aug. 31, 2018
Jun. 30, 2018
Apr. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Jul. 08, 2019
Dec. 31, 2018
Annual interest rate 12.50%                  
Maturity date Aug. 24, 2018     Dec. 31, 2018            
Conversion of shares description At the election of the holder, upon the occurrence of certain events, the notes can be converted into common stock of the Company at a conversion price per share equal to 50% of the average bid price for the 30 consecutive business days prior to conversion.                  
Conversion price per share $ 0.10                  
Number of shares issued 200,000                  
Number of warrants to purchase shares of common stock       600,000            
Warrant exercise price       $ 0.31            
Warrant exercisable term       3 years            
Estimated fair value of warrants       $ 16,401            
Convertible notes payable             $ 196,850     $ 196,850
Unamortized discount                
Proceeds from convertible notes             $ 281,660    
Debt discount amortized into interest expense             269,472 $ 83,748    
Notes payable             5,866,636    
Accrued expenses, related party             39,123     31,745
Project financing obligation             260,000     260,000
Nicholas Campanella [Member]                    
Annual interest rate 12.50% 6.00%                
Convertible notes payable term 2 years 2 years                
Maturity date Aug. 24, 2018                  
Conversion of shares description At the election of the holder, upon the occurrence of certain events, the note can be converted into common stock of the Company at a conversion price per share equal to 50% of the average bid price for the 30 consecutive business days prior to conversion. At the election of the holder, the notes can be converted into common stock of the Company at a conversion price per share equal to 20% of the average bid price for the three consecutive business days prior to conversion.                
Conversion price per share $ 0.10                  
Number of shares issued 75,000                  
Advance from related party $ 76,500 $ 332,474                
Notes payable             332,474     332,474
Due to related party             76,500     76,500
Nicholas Campanella [Member] | Accounts Payable and Accrued Expenses [Member]                    
Accrued interest             34,890      
MedRecycler, LLC [Member]                    
Annual interest rate     12.00%              
Maturity date     Jan. 29, 2020              
Convertible notes payable             5,866,636      
Unamortized discount             158,364      
Debt discount amortized into interest expense             $ 113,011      
Ownership percentage     51.00%       51.00%      
Bridge financing     $ 6,025,000              
Debt issuance costs     $ 271,375              
Contribution Agreements [Member]                    
Advance from related party         $ 260,000          
Earnings percentage         20.00%          
Project financing obligation             $ 260,000      
Line of Credit Agreement [Member] | Nicholas Campanella [Member]                    
Due to related party             163,157     163,157
Line of credit   $ 250,000                
Subsequent Event [Member] | Settlement Agreement [Member] | Auctus Fund, LLC [Member]                    
Convertible notes payable                 $ 150,000  
Warrants [Member]                    
Proceeds to the warrants issued             173,355      
Debt discount amortized into interest expense             $ 176,645      
Expected Term [Member]                    
Warrants, measurement input, term             2 years      
Dividend Rate [Member]                    
Warrants, measurement input             0.000      
Risk Free Rate [Member]                    
Warrants, measurement input             0.0249      
Private Placement Memorandum [Member]                    
Convertible notes payable term 2 years                  
Unsecured convertible notes payable $ 200,000                  
Minimum [Member] | Volatility [Member]                    
Warrants, measurement input             2.618      
Maximum [Member] | Volatility [Member]                    
Warrants, measurement input             2.687      
Vehicle Installment Notes Payable [Member]                    
Notes maturity description             November 2020 to August 2021      
Notes payable             $ 42,498     $ 60,667
Vehicle Installment Notes Payable [Member] | Minimum [Member]                    
Annual interest rate             3.49%      
Debt periodic payment             $ 370      
Vehicle Installment Notes Payable [Member] | Maximum [Member]                    
Annual interest rate             4.07%      
Debt periodic payment             $ 434      
Convertible Note [Member]                    
Annual interest rate           10.00%        
Notes maturity description           Notes mature in April 2019        
Conversion of shares description           60% times the lowest trading price of the Company's common stock during the 18 trading days prior to conversion.        
Conversion price per share           $ 0.05        
Number of warrants to purchase shares of common stock           6,349,457        
Warrant exercise price           $ 0.11        
Warrant exercisable term           2 years        
Proceeds from convertible notes           $ 350,000        
Interest expense           $ 281,660        
Debt conversion description           In the event of default, if the trading price of the Company’s common stock falls below $0.07, the floor moves to $0.01 and if the price of the Company’s common stock falls to below $0.03, the floor moves to $0.0001.        
Holder [Member]                    
Number of shares issued             210,943,127      
Convertible notes payable             $ 180,076      
Unamortized discount                  
Debt discount amortized into interest expense             156,461      
Note principal amount             $ 234,622      
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.19.2
Borrowings - Schedule of Estimated Future Maturities (Details)
Jun. 30, 2019
USD ($)
Debt Disclosure [Abstract]  
2019 $ 6,994,162
2020 16,874
2021 3,993
Thereafter
Total $ 7,015,029
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.19.2
Preferred Stock and Common Stock (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2019
Dec. 31, 2018
Preferred stock, shares authorized 20,000,000 20,000,000
Preferred stock, par value $ 0.0001 $ 0.0001
Conversion of convertible shares 210,943,127  
Conversion of convertible amount $ 234,622  
Series A Preferred Stock [Member]    
Preferred stock, shares authorized 12,000,000  
Preferred stock voting rights Each share of Series A Preferred Stock is entitled to 125 votes on all matters submitted to a vote to the stockholders of the Company, and does not have conversion, dividend or distribution upon liquidation rights.  
Preferred stock, shares outstanding 12,000,000  
Series B Preferred Stock [Member]    
Preferred stock, shares authorized 1,000,000  
Series C Preferred Stock [Member]    
Preferred stock, shares authorized 500,000  
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.19.2
Commitments and Contingencies (Details Narrative)
1 Months Ended 6 Months Ended
Dec. 20, 2014
USD ($)
Mar. 31, 2017
USD ($)
Jun. 30, 2019
USD ($)
Feb. 28, 2019
ft²
Dec. 31, 2018
USD ($)
Employment Agreement [Member] | Nicholas Campanella [Member]          
Agreement term 5 years        
Payment of base compensation $ 180,000        
Accrued compensation     $ 687,364   $ 631,166
Lease Agreement [Member]          
Lease term   5 years      
Monthly rent payments   $ 3,556      
Lease Agreement [Member] | MedRecycler, LLC [Member]          
Lease term     123 months    
Area of lease | ft²       48,167  
Lease discount rate     12.00%    
Lease expense     $ 34,881    
Lease Agreement [Member] | MedRecycler, LLC [Member] | First Year [Member]          
Monthly rent payments     144,501    
Lease Agreement [Member] | MedRecycler, LLC [Member] | Final Year [Member]          
Monthly rent payments     $ 258,930    
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.19.2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details)
Jun. 30, 2019
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Remainder of 2019 $ 118,749
2020 243,249
2021 250,317
2022 217,361
2023 215,797
Thereafter 1,286,696
Total minimum lease payments 2,332,169
Less: Amount representing interest (1,017,664)
Present value of minimum lease payments $ 1,314,505
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.19.2
Commitments and Contingencies - Summary of Related Lease Balance (Details) - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]    
Operating lease right-of use asset $ 1,306,454
Lease liability - current portion 79,903
Lease liability - long-term portion 1,234,602
Total operating lease liabilities $ 1,314,505  
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.19.2
Related Party Transactions (Details Narrative) - USD ($)
Apr. 03, 2019
Jun. 30, 2019
Jan. 11, 2019
Dec. 31, 2018
Dec. 31, 2017
Non-interest bearing advances       $ 23,506 $ 321,127
Advances from related parties   $ 612,024   612,023  
Accounts payable, related party   $ 76,512   $ 91,512  
Summit Trading Limited, Zimmerman LLC, The Campanella Family, Jody Samuels, Frank Capria, and Triplet Square LLC [Member]          
Beneficial ownership percentage   5.00%      
Mr. Campanella [Member]          
Loan and lines of credit issued principal and interest     $ 648,400    
Mr. Campanella [Member] | MedRecycler, LLC [Member]          
Beneficial ownership percentage   51.00% 100.00%    
Number of shares held by affiliate   39,000 51,000    
Agreement expiration date Dec. 31, 2020        
Mr. Campanella [Member] | Marmac Capital Advisors, LLC [Member]          
Number of shares held by affiliate   8,000      
Mr. Campanella [Member] | Eilers Law Group, P.A [Member]          
Number of shares held by affiliate   2,000      
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.19.2
Subsequent Events (Details Narrative) - USD ($)
2 Months Ended 6 Months Ended
Jul. 08, 2019
Jun. 21, 2019
Aug. 19, 2019
Jun. 30, 2019
Jun. 30, 2018
Aug. 24, 2016
Number of shares issued for conversion       210,943,127    
Debt instrument, interest rate           12.50%
Repayments of notes payable       $ 18,169 $ 11,434  
Promissory Note [Member]            
Debt instrument, term   6 months        
Debt instrument, interest rate   10.00%        
Notes payable   $ 200,000        
Subsequent Event [Member] | Convertible Debenture [Member]            
Number of shares issued for conversion     131,600,000      
Debt instrument, accrued interest and conversion fees     $ 52,398      
Subsequent Event [Member] | Promissory Note [Member]            
Restricted shares issued as an inducement 2,000,000          
Subsequent Event [Member] | Convertible Promissory Note [Member] | Auctus Fund, LLC [Member] | Settlement Agreement [Member]            
Repayments of notes payable $ 150,000          
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