STOCKHOLDERS' DEFICIT

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

STOCKHOLDERS' DEFICIT

NOTE 8: STOCKHOLDERS' DEFICIT

Preferred Stock

On October 4, 2013, the Company filed a Certificate of Designations under its Amended and Restated Articles of Incorporation (the "Certificate of Designations") with the State of Colorado to (a) designate 200,000 shares of its previously authorized Preferred Stock as Series A Convertible Preferred Stock and (b) designate 1,000 shares of its previously authorized Preferred Stock as Series B Preferred Stock. The Certificate of Designations and their filing were approved by the board of directors of the Company on September 30, 2013 without shareholder approval as provided for in the Company's articles of incorporation and under Colorado law.

Description of Series A Convertible Preferred Stock

The 200,000 shares of Series A Convertible Preferred Stock have the following the designations, rights and preferences: 

· the stated value of each share is $500,

· the holder of the shares will be entitled to vote, on a one-for-one basis, with the holders of our common stock on all corporate matter on which common shareholder are entitled to vote,

· the shares pay quarterly dividends in arrears at the rate of 4% per annum based on the stated value of each share,

· each share is convertible into shares of our common stock at a conversion price of $2,000.00 per share, subject to adjustment, at any time upon : (I) the seventh anniversary of the original issue date of Series A Preferred Stock or (ii) the date the beneficial holder qualifies as a Permanent U.S. resident, whichever occurs earliest,

· the shares are redeemable by us under certain conditions, and

· the conversion price of the Series A Convertible Preferred stock is subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.

Description of Series B Convertible Preferred Stock

The 1,000 shares of Series B Convertible Preferred Stock have the following the designations, rights and preferences: 

· The Company is not permitted to pay or declare dividends or other distributions to the holders of the Series B Preferred Stock, whether in liquidation or otherwise,

· the holder of the shares will be entitled to vote, on a one million-for-one basis, with the holders of our common stock on all corporate matter on which common shareholders are entitled to vote, and

· each share is convertible into one share of our common stock.

On September 30, 2013, the Company issued 1,000 shares of its Series B Preferred Stock to certain related party officers and directors valued at $2,150 based on the common stock quoted trading value of $2.15 (pre-reverse stock split) at the grant date and a one to one conversion rate of the Series B shares into common stock. The certificate of designation does not provide for any adjustment to the quantity or conversion terms of the Series B convertible preferred stock resulting from stock splits or other recapitalization of common stock of the Company. Therefore, all amounts discussed above reflect pre-reverse stock split amounts.

Common Stock

In April 2013, the company issued a cash call in the amount of $50,000.  The Company received $40,000 from the stockholders, and reduced the line of credit balance by $10,000.  The funds were collected to be used for operating expenses.  An additional $200 was contributed by a stockholder to open a new bank account for the Company.

In July 2013, the Company was deemed to have issued 52,503 common shares pursuant to the recapitalization.  The Company also recorded $4,814 of net assets acquired with an offset to additional paid in capital.

On August 21, 2013, 500 shares of common stock were issued for legal services rendered and valued at $490,000 based on the quoted trading price of $980.00 per share on the grant date.

In October 2013, the Company received $20,000 in exchange for 25 shares of common stock issued at the quoted trading price of $800.00 per share on the grant date.

In November and December 2013, the Company issued 4,759 shares upon conversion of certain convertible debenture agreements (See Note 6).

On January 21, 2014, the Company issued 3,607 shares of common stock for services and valued at $100,940 based on the quoted trading price of $28.00 per share on the grant date.

In March 2014 and May 2014, the Company issued an aggregate of 2,363 shares of common stock in exchange for conversion of a $17,452 convertible note (See Note 6).