UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2018
[ ] 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: 000-53661
NORTHSIGHT CAPITAL, INC. |
(Exact name of issuer as specified in its charter) |
Nevada |
| 26-2727362 |
(State or Other Jurisdiction of incorporation or organization) |
| (I.R.S. Employer I.D. No.) |
Scottsdale, AZ 85260 |
(Address of Principal Executive Offices) |
(480) 385-3893 |
(Registrant’s Telephone Number, Including Area Code) |
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 checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) 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, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] | Accelerated filer | [ ] |
Non-accelerated filer | [ ] (Do not check if a smaller reporting company) | Smaller reporting company | [X] |
Emerging growth company | [ ] |
|
|
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
The number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:
Class |
| Outstanding as of May 21, 2018 |
Common Capital Voting Stock, $0.001 par value per share |
| 130,578,741 shares |
Explanatory Note
The sole purpose of this Amendment No. 1 to the Quarterly Report on Form 10-Q (the “Form 10-Q”) of Northsight Capital, Inc. for the quarterly period ended March 31, 2018, filed with the Securities and Exchange Commission on May 21, 2018, is to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to the Form 10-Q provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).
No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.
Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
2
PART II - OTHER INFORMATION
Item 6. Exhibits
Identification of Exhibit
Articles of Incorporation, as amended (1) | |
Bylaws (1) | |
Form of Note issued to Park dated March 29, 2018 (2) | |
Form of Note issued to John Lemak IRA dated March 29, 2018 (2) | |
Form of Note issued to Peak One Opportunity Fund dated January 1, 2018 (3) | |
Purchase agreement issued to Peak One Opportunity Fund dated January 1, 2018 (3) | |
Certification of Principal Executive and Principal Financial Officer as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002 * | |
Certification of Principal Executive and Principal Financial Officer pursuant to 18 U.S.C section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * |
(1)Filed as Exhibits to our Form S-1 Registration Statement on July 11, 2008 and incorporated herein by reference.
(2)Filed as Exhibits to our Form 10K filed on April 2, 2018 and incorporated herein by reference.
(3)Filed as Exhibits to our Form 10Q filed on May 21, 2018 and incorporated herein by reference.
*Filed herewith
**Furnished, not filed
3
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.
NORTHSIGHT CAPITAL, INC.
(Issuer)
Date: | June 20, 2018 |
| By: | /s/John Venners |
|
|
|
| John Venners, EVP Operations and Director |
4
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John Venners, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Northsight Capital, Inc. (the “Registrant”);
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 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 Rule 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.I have disclosed, based on my 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: | June 20, 2108 |
| By: | /s/ John Venners |
|
|
|
| John Venners, EVP Operations and Director |
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 Northsight Capital, Inc. (the “Registrant”) on Form 10-Q for the quarter ending March 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), I, John Venners, EVP Operations and Director of the registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Quarterly 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 Quarterly Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.
|
|
|
|
|
Date: | June 20, 2018 |
| By: | /s/ John Venners |
|
|
|
| John Venners, EVP Operations and Director |
Document and Entity Information - $ / shares |
3 Months Ended | |
|---|---|---|
May 21, 2018 |
Mar. 31, 2018 |
|
| Details | ||
| Registrant Name | NORTHSIGHT CAPITAL, INC. | |
| Registrant CIK | 0001439397 | |
| SEC Form | 10-Q | |
| Period End date | Mar. 31, 2018 | |
| Fiscal Year End | --12-31 | |
| Trading Symbol | ncap | |
| Tax Identification Number (TIN) | 262727362 | |
| Number of common stock shares outstanding | 130,578,741 | |
| Filer Category | Smaller Reporting Company | |
| Current with reporting | Yes | |
| Voluntary filer | No | |
| Well-known Seasoned Issuer | No | |
| Amendment Flag | false | |
| Document Fiscal Year Focus | 2018 | |
| Document Fiscal Period Focus | Q1 | |
| Entity Incorporation, State Country Name | Nevada | |
| Entity Address, Address Line One | 7580 E Gray Rd., Ste 103 | |
| Entity Address, City or Town | Scottsdale | |
| Entity Address, State or Province | AZ | |
| Entity Address, Postal Zip Code | 85260 | |
| City Area Code | 480 | |
| Local Phone Number | 385-3893 | |
| Entity Listing, Par Value Per Share | $ 0.001 |
Consolidated Balance Sheets (March 31, 2018 unaudited) - Parenthetical - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
|---|---|---|
| Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
| Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
| Common Stock, Shares, Issued | 130,578,741 | 121,018,241 |
| Common Stock, Shares, Outstanding | 130,578,741 | 121,018,241 |
| Web development | ||
| Finite-Lived Intangible Assets, Accumulated Amortization | $ 221,539 | $ 207,315 |
| Finite-Lived Intangible Assets | ||
| Finite-Lived Intangible Assets, Accumulated Amortization | $ 27,027 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
| Details | ||
| Revenues | $ 12,763 | $ 3,165 |
| Operating Expenses: | ||
| General administrative | 392,956 | 56,165 |
| Consulting expense - related party | 45,000 | 45,000 |
| Professional fees | 88,833 | 51,933 |
| Rent - related party | 0 | 34,500 |
| Total operating expenses | 526,789 | 187,598 |
| Loss From Operations | (514,026) | (184,433) |
| Other Income (Expense) | ||
| Gain on extinguishment | 62,912 | 0 |
| Interest expense | (32,628) | (17,323) |
| Gain on derivatives | 1,519 | 0 |
| Total other income (expense) | 31,803 | (17,323) |
| Net Loss | $ (482,223) | $ (201,756) |
| Loss per Common Share - Basic and Diluted | $ (0.00) | $ (0.00) |
Note 1 - Organization and Basis of Presentation |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Notes | |
| Note 1 - Organization and Basis of Presentation | NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Organization
Northsight Capital Inc. (“Northsight” or “the Company”) was incorporated in the State of Nevada on May 21, 2008. In May, 2011, Safe Communications, Inc. (n/k/a Kuboo, Inc.) acquired 80% of the Company’s issued and outstanding common stock, and, as a result, became its parent company. On June 25, 2014, the Company completed the acquisition of approximately 7,500 cannabis related Internet domain names, in exchange for which the Company issued 78.5 million shares of its common stock and a promissory note in the principal amount of $500,000. As a result of this transaction, the seller of the domain names became an 81% stockholder of the Company. Kuboo, Inc. continues to be a significant stockholder of the Company. John Venners, our EVP of Operations and a director, is also a director of Kuboo, Inc.
The Company’s principal business is to provide a wide variety of online directories for a broad range of businesses engaged in the lawful sale and distribution of cannabis and hemp related products. Through the acquisition of Crush Mobile (described below), the Company is developing a group of dating sites with a presence in the Latino, Israeli and African American communities. The following constitute the Company’s major product categories: a monthly listing in one or more of the Company’s online directories, paid advertising in one or more of the Company’s online directories, leasing to customers one or more internet domain names for the customer’s exclusive use, and paid and unpaid online dating applications.
In May 2017, we signed a non-binding memorandum of terms to acquire Crush Mobile. On August 8, 2017, we entered into a definitive agreement to acquire all the outstanding membership interests of Crush Mobile, LLC, which was amended by Amendment No. 1 dated January 4, 2018 (as amended, the “Agreement”). As reported in our form 8-K filed with the SEC on January 10, 2018, the Crush acquisition was closed January 8, 2018. Accordingly, Crush’s operations are not included in the financial statements of the company as of December 31, 2017. Under the terms of the Agreement, we acquired all the outstanding membership interests of Crush Mobile, in exchange for an aggregate of approximately 8 million shares of common stock, plus $80,000 in cash, payable within one year of closing. We also agreed to piggy-back registration rights with respect to the shares of common stock issuable to the sellers in connection with the acquisition. In connection with Amendment No. 1 to the Agreement, the parties waived the condition that the Company complete a funding of at least $500,000.
Crush Mobile’s assets consist primarily of trademarks, domain names, mobile dating applications and related software and intellectual property. Crush Mobile, with approximately nine hundred thousand members, has developed a group of dating sites with a presence in the Latino, Israeli and African American communities. Crush will also be incorporating Northsight’s "Joint Lovers" dating app, which concentrates on the Cannabis space, into its dating applications suite.
The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The interim financial statements reflect all adjustments, consisting of normal recurring adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for the three months ended March 31, 2018, are not necessarily indicative of the operating results for the full year.
Principles of Consolidation
The Company and its subsidiary consist of the following entities, which have been consolidated in the accompanying financial statements:
Northsight Capital, Inc. Crush Mobile, LLC
All intercompany balances have been eliminated in consolidation. |
Note 2 - Liquidity/Going Concern |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Notes | |
| Note 2 - Liquidity/Going Concern | NOTE 2 – LIQUIDITY/GOING CONCERN
The Company had net losses of $482,223 for the three months ended March 31, 2018, has accumulated losses of $22,408,518 and has had consistent negative cash flows from operating activities since inception (May 2008). These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. During three months ended March 31, 2018 the Company received a net $165,300 in loans from related party shareholders, and $85,000 from convertible notes to fund operations. Management plans to (i) raise additional capital as soon as possible, to fund continued operations of the Company and (ii) continue its efforts to generate revenues and income from operations.
In the event the Company does not generate sufficient funds from revenues or financing through the issuance of its common stock or from debt financing, the Company will be unable to fully implement its business plan and pay its obligations as they become due, any of which circumstances would have a material adverse effect on its business prospects, financial condition, and results of operations. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities. |
Note 3 - Recent Accounting Pronouncements |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Notes | |
| Note 3 - Recent Accounting Pronouncements | NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
Management believes the impact of recently issued standards and updates, which are not yet effective, will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption.
With the adoption of ASC 606, the Company reviewed its previous revenue recognition policy under ASC 605. The Company determined that there were no material changes resulting from the adoption. Revenue would be recognized when the promised goods or services is provided to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. This is consistent with the revenue recognition policy previously used by the Company. The Company also reviewed the timing and recognition of accounts receivable for which the Company generates revenue and has determined no changes to be made to prior periods. |
Note 4 - Web Development Costs and Domain Names Assets |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||
| Notes | ||||||||||||||||||||||||||||||||||||||||||||||
| Note 4 - Web Development Costs and Domain Names Assets | NOTE 4 – WEB DEVELOPMENT COSTS AND DOMAIN NAMES ASSETS
In accordance with ASC 350-50, during the three months ended March 31, 2018 and the year ended December 31, 2017, the Company did not capitalize any expenses towards the development of multiple websites on which third parties can advertise the sale and distribution of cannabis related products and services: an online “yellow pages.” The Company does not intend to engage in the sale or distribution of marijuana or related products. During the three months ended March 31, 2018 and 2017 the Company recorded website development expenses of $2,438 and $2,218, respectively, which is included in general and administrative expenses on the Company’s consolidated statements of operations.
The Company amortizes these assets over their related useful lives (approximately 1 to 5 years), using a straight-line basis. Assets are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable, or at least annually. Measurement of the amount of impairment, if any, is based upon the difference between the asset's carrying value and estimated fair value. Fair value is determined through various valuation techniques, including market and income approaches as considered necessary. During the three months ended March 31, 2018 and 2017 the Company recorded amortization expense of $14,224 and $18,091, respectively, related to websites previously launched.
|
|||||||||||||||||||||||||||||||||||||||||||||
Note 5 - Goodwill and Other Intangibles |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note 5 - Goodwill and Other Intangibles | NOTE 5 – GOODWILL AND OTHER INTANGIBLES
On January 8, 2018, the Company closed its acquisition of Crush Mobile LLC. Under the terms of the Agreement, we acquired all the outstanding membership interests of Crush Mobile, in exchange for an aggregate 7,904,000 shares of common stock valued at $616,512, plus $80,000 in cash, payable within one year of closing. Crush Mobile’s assets consist primarily of trademarks, domain names, mobile dating applications and related software and intellectual property which the company has initially internally fair valued pending an independent 3rd party valuation.
Goodwill and intangible assets consisted of the following at March 31, 2018 and December 31, 2017:
The Company records amortization expense for intangible assets on a straight-line basis over the estimated life of the related asset (approximately 1-5 years). Goodwill is tested periodically for impairment. The Company recorded amortization expense of $27,027 during the three months ended March 31, 2018. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 6 - Accounts Payable and Accrued Expenses Related Party |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||||||||||||||||||
| Note 6 - Accounts Payable and Accrued Expenses Related Party | NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTY
At March 31, 2018, the Company had a balance in related party accounts payable and accrued expenses of $943,485 which consisted of the following:
|
Note 7 - Notes Payable Related Party |
3 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | ||||||||||||||||
| Notes | ||||||||||||||||
| Note 7 - Notes Payable Related Party | NOTE 7 – NOTES PAYABLE RELATED PARTY
On May 19, 2015, the Company issued Kae Yong Park and her spouse Howard Baer (together, “Park”) a non-interest bearing, unsecured demand promissory note to evidence all unpaid advances received by the Company to that point and to cover all additional advances received afterward. Unpaid principal under the note is due and payable upon the earlier of (i) an “event of default” (as defined), (ii) written demand and (iii) the Company’s receipt of capital (to the extent of net proceeds received) from any capital raising transaction after May 15, 2015, whether in the form of debt, equity or otherwise.
On September 30, 2015, the Company amended and restated its promissory note to Park to include all advances to date and provide certain assets, including all internet domain names, websites and related assets as collateral. Repayment terms remain the same, and Park has to date not enforced the provision requiring repayment upon receipt of net proceeds from capital raising transactions.
During the three months ended March 31, 2018, Park advanced an aggregate of $57,300 on an unsecured basis to the Company for short-term capital needs. During this period, the Company also repaid $7,000 of its debt to Park. At March 31, 2018, the Company had a note payable to Park for these advances of $1,342,657 which is secured by the assets of the Company. Park’s security interest in certain of the Company’s domains, websites and other assets has been subordinated to the security interest granted to John Lemak (and affiliated persons), who is an affiliate of Sandor capital, a significant shareholder, in connection with advances Mr. Lemak and related persons made to the company. Due to the on-demand nature of the amount owed to Park, the company has classified it as a current liability.
The following table summarizes the Company’s balance for these advances for the three months ended March 31, 2018:
On June 23, 2014, the Company issued a $500,000 promissory note in conjunction with the purchase of approximately 7,500 cannabis-related internet domain names. The note originally bore interest at the rate of 3.25% per annum and the first $100,000 of which was payable upon the Company’s receipt of an aggregate of $1,000,000 in funding (whether debt or equity). The remaining $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue (see Note 15 - Commitments and Contingencies).
On July 25, 2014, the Company amended and restated its promissory note in the principal amount of $500,000 owing to Kae Yong Park (the Company’s then majority shareholder) to provide that it would make the first $100,000 installment payment due under the Note on July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Thereafter, Kae Yong Park waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note until August 25, 2014, at which time it was paid. The Company subsequently recaptured all previously recorded interest expense related to the note.
Between December 1, 2016 and March 16, 2017, the Company received aggregate proceeds of $101,299 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which notes were issued bearing 8% interest annually. On April 1, 2017, the Company issued a note for $102,465 consisting of $101,000 in principal and $1,465 in accrued interest for the previous notes. The $299 forgiven as part of the note restructure was recorded as a gain on extinguishment of debt. The note is non-interest bearing, matures on June 30, 2018, as amended, and is unsecured.
Between December 15, 2016 and January 13, 2017, the Company received aggregate proceeds of $41,550 from Sandor Capital, a related party and significant shareholder, for which notes were issued bearing 8% interest annually. On April 1, 2017, the Company issued a note for $42,374 consisting of $41,550 in principal and $824 in accrued interest for the previous notes. The note is non-interest bearing, matures on June 30, 2018, as amended, and is unsecured.
On April 1, 2017, the company renegotiated a $65,000 note to Sandor Capital, a related party and significant shareholder, with interest tied to the performance of its joint venture agreement into a new $71,097 note. The note is non-interest bearing, matures on June 30, 2018, as amended, and is unsecured. At the time of the refinance, the joint venture had not produced positive income, so no interest was due on the note. The $6,097 consideration given on the new note was recorded as a loss on extinguishment of debt.
Between May 1, 2017 and June 29, 2017, the Company received aggregate proceeds of $140,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which notes were issued bearing 8% interest annually. On April 1, 2017, the Company issued a note for $140,000 to restructure the previous notes. The note is non-interest bearing, matures on June 30, 2018 as amended, and is secured by certain domain names and websites owned by the Company.
Between August 1, 2017 and September 28, 2017, the Company received aggregate proceeds of $182,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which several notes were issued bearing 8% interest annually. The notes are non-interest bearing, mature on June 30, 2018, as amended, and secured by certain of the company’s domain name and websites.
Between October 1, 2017 and December 22, 2017, the Company received aggregate proceeds of $170,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which several notes were issued bearing 8% interest annually. The notes mature on June 30, 2018, as amended, and are secured by certain of the company’s domain name and websites.
On February 15, 2018, the Company received $40,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on June 30, 2018 and is secured by certain of the company’s domain name and websites.
On March 29, 2018, the Company received $25,000 from John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on June 30, 2018 and is secured by the Company’s equity interests in Crush Mobile LLC.
On March 29, 2018, the Company received $50,000 from Kae Yong Park and her spouse Howard Baer (together, “Park”), a related party and significant shareholder, for which a note was issued bearing 8% interest annually. The note matures on June 30, 2018 and is secured by the Company’s equity interests in Crush Mobile LLC.
See Note 16 - Subsequent Events |
Note 8 - Notes Payable |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||||||||||||||||||||||||||
| Note 8 - Notes Payable | NOTE 8 – NOTES PAYABLE
Notes
On July 1, 2015, the Company entered into a seven (7) day loan agreement with two parties for aggregate proceeds of $34,900. The note bears interest at the rate of six percent (6%) annually. In addition to the loans, the Company issued an aggregate 349,000 shares of common stock valued at $26,016 and warrants to purchase an aggregate 100,000 shares of the Company’s common stock at an exercise price of $0.25 per share valued at $6,898. The relative fair value of the shares and warrants associated with these notes have been recorded as debt discount to be amortized over the life of the loans. As of March 31, 2018, these notes have not yet been repaid and are in default.
On August 10, 2015, the Company entered into a one hundred twenty (120) day loan agreement with an existing investor for aggregate proceeds of $45,000 (two installments of $22,500 each). The note bears interest at the rate of six percent (6%) annually. As additional consideration for these loans, the Company issued an aggregate 1,200,000 shares of common stock valued at $38,918. The relative fair value of the shares associated with these notes have been recorded as debt discount to be amortized over the life of the loans). As of March 31, 2018, these notes have not yet been repaid and are in default.
Between June 5, 2017 and June 29, 2017 notes payable to a vendor in the aggregate amount of $116,553 were settled with the issuance of 1,631,660 shares of the Company’s common stock (an implied conversion price of $.10 per share). The common stock was valued at $82,049 on the dates of issuance, resulting in a gain on settlement of $76,617.
On January 8, 2018, the Company assumed $80,000 in note payable to a former equity holder through its acquisition of Crush Mobile LLC. The note is non-interest bearing and matures one year from the date of acquisition.
On January 8, 2018, the Company assumed $300,000 in notes payable to former equity holders through its acquisition of Crush Mobile LLC. The notes were concurrently settled at closing through the issuance of 3,000,000 shares of the Company’s common stock. The Company recognized a gain on settlement of $66,000 related to these note settlements.
Convertible Notes
On January 10, 2018, the Company issued a three-year $100,000 convertible zero coupon note for proceeds of $85,000. The note is initially convertible into shares of the Company’s stock at a price of $0.10 per share or a total of 1,000,000 shares. The note contains a provision which, in the event of default, adjusts the conversion price to equal 65% of the lowest closing price for the preceding 20 trading days. At the time the note was signed, the Company was in default on a previous note which triggered this default provision. Consequently, the Company has accounted for this through the creation of a derivative liability initially valued at $19,487 which was recorded as a discount to the debt.
The following table summarizes the Company’s notes and convertible notes payable for the three months ended March 31, 2018:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Note 9 - Derivative Liabilities |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||||||||||||||||||||||||||
| Note 9 - Derivative Liabilities | NOTE 9 – DERIVATIVE LIABILITIES
The Company has identified conversion features embedded within its convertible note issued January 10, 2018 (see Note 8 – Notes Payable), and has determined that the features associated with the embedded conversion option should be accounted for at fair value as a derivative liability. The Company has valued the embedded conversion feature using a Binomial Lattice Model.
The fair value of the conversion feature is summarized as follows:
The Company recorded the day one value of derivative contract associated with the convertible note issuance as a discount to the debt agreement to be amortized over the life of the agreement. The Company recorded a gain on derivatives of $1,519 during the three months ended March 31, 2018.
The fair values at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of March 31, 2018:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Note 10 - Business Acquisition |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note 10 - Business Acquisition | NOTE 10 – BUSINESS ACQUISITION
On January 8, 2018, the Company completed its acquisition of Crush Mobile, LLC (“Crush Mobile”) from its members. Crush Mobile’s assets consist primarily of trademarks, domain names, mobile dating applications and related software and intellectual property. In connection with the closing of the acquisition, the Registrant is issuing an aggregate of 7,904,000 shares of common stock as follows: (i) 4,904,000 shares to the Crush Mobile members and (ii) 3,000,000 shares to certain Crush Mobile creditors (who are also members) in full satisfaction of $300,000 of indebtedness owed to them by Crush Mobile.
The Company applied the acquisition method of accounting to the business combination and has valued each of the assets acquired (cash, accounts receivable, customer lists, and intangible assets) and liabilities. The cash, accounts receivable, intangible assets, accounts payable and notes payable were deemed to be recorded at fair value as of the acquisition date. The preliminary allocation of the purchase price was based on estimates of the fair value of the assets and liabilities assumed based on provisional amounts. The allocation of the excess purchase price is not final and the amounts allocated to intangible assets are subject to change pending the completion of final valuations of certain assets and liabilities. Under the purchase agreement, the Company issued 4,904,000 shares of common stock, and an additional 3,000,000 shares of common stock to satisfy outstanding notes payable.
The following table shows the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
From the date of acquisition on January 8, 2018 to March 31, 2018, Crush Mobile generated total revenue of $8,795. |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 11 - Equity |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Notes | |
| Note 11 - Equity | NOTE 11 – EQUITY
On January 10, 2018, the Company issued 106,500 shares of the Company’s commons stock to a vendor as settlement of a payable balance of $5,219, resulting in a loss on settlement of $3,089.
On January 8, 2018, the Company issued 300,000 shares of the Company’s commons stock valued at $23,400 as a commitment fee to a prospective investor.
On January 8, 2018, the Company issued an aggregate 7,904,000 shares of the Company’s common stock in connection with the closing of the Crush Mobile acquisition (see Note 10 – Business Acquisition).
On January 8, 2018, the Company issued 500,000 shares of the Company’s common stock to Tumbleweed Holdings pursuant to their prior settlement agreement.
On February 16, 2018, the Company issued 500,000 shares valued at $25,500, or $0.05 per share, of the Company’s common stock pursuant to a consulting contract.
On February 21, 2018, the Company issued 250,000 shares valued at $12,500, or $0.05 per share, of the Company’s common stock pursuant to a consulting contract. |
Note 12 - Stock Warrants |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note 12 - Stock Warrants | NOTE 12 – STOCK WARRANTS
The Company has applied fair value accounting for all warrants issued. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model.
A summary of the Company’s warrant activity for the three months ended March 31, 2018 is as follows:
The Company’s outstanding warrants at March 31, 2018 are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 13 - Earnings (Loss) Per Share |
3 Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||
| Notes | |||||||||||||||||
| Note 13 - Earnings (Loss) Per Share | NOTE 13 – EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period.
Since the Company reflected a net loss for the three months ended March 31, 2018 and 2017, respectively, the effect of considering any common stock equivalents, if exercisable, would have been anti-dilutive. Therefore, a separate computation of diluted earnings (loss) per share is not presented.
The Company has the following common stock equivalents as of March 31, 2018:
|
||||||||||||||||
Note 14 - Related Party Transactions |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Notes | |
| Note 14 - Related Party Transactions | NOTE 14 – RELATED PARTY TRANSACTIONS
On April 13, 2016, the Company agreed to amend the promissory note with Kae Yong Park and Howard R. Baer so as to make $564,000 in principal amount due under said Note interest bearing at the rate of 10% per annum, effective January 1, 2016. The remaining principal is non-interest bearing. During the three months ended March 31, 2018, the company incurred interest expense of $13,907 related to this note. At March 31, 2018, the Company has accrued interest owed under this agreement of $126,861.
During the three months ended March 31, 2018, the Company received aggregate proceeds of $65,000 from Sandor Capital, a related party and significant shareholder and John Lemak, its affiliate, for which notes were issued. The notes mature June 30, 2018 and are secured by certain company assets. At March 31, 2018, the Company had accrued interest of $12,660 related to his notes.
During the three months ended March 31, 2018, the Company received proceeds of $50,000 from Kae Yong Park, a significant shareholder, and her spouse, Howard Baer, a related party and significant shareholder for which a note was issued. The note matures June 30, 2018 and is secured by certain company assets. At March 31, 2018, the Company had accrued interest of $22 related to this note.
During the three months ended March 31, 2018, Kae Yong Park, a significant shareholder, and her spouse, Howard Baer (collectively, “Park”), advanced an aggregate of $57,300 on an unsecured basis to the Company for short-term capital needs. During this period, the Company also repaid $7,000 of its secured debt to Park. At March 31, 2018, the Company had a note payable to Park for these advances of $1,342,657 which is secured by the assets of the Company.
During the three months ended March 31, 2018, the Company incurred expenses of $45,000 related to its consulting contract with Howard Baer, the spouse of Kae Yong Park, our significant shareholder. |
Note 15 - Commitments and Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Notes | |
| Note 15 - Commitments and Contingencies | NOTE 15 – COMMITMENTS AND CONTINGENCIES
In May 2014, The Company entered into an asset purchase agreement that requires the Company to pay a monthly royalty equal to six percent of gross monthly revenues over $150,000. The royalty payment is payable for a period of thirty-six months from and after the first month in which the Company’s gross revenues are in excess of $150,000.
On June 23, 2014, the Company issued a $500,000 promissory note in conjunction with the purchase of approximately 7,500 cannabis-related internet domain names. The original note bore interest at the rate of 3.25% per annum and was payable as follows: upon the Company’s receipt of an aggregate of $1,000,000 in funding (whether debt or equity), $100,000 was required to be paid. The remaining $400,000 is payable in thirty-six equal monthly installments, commencing on the fifteenth day following the first month the Company realizes at least $150,000 in gross revenue.
On July 25, 2014, the Company amended and restated its promissory note in the principal amount of $500,000 owing to Kae Yong Park (the Company’s then majority shareholder) to provide that it would make the first $100,000 installment payment due under the Note on July 25, 2014 (earlier than required), in exchange for which Kae Yong Park agreed to waive all interest due over the term of the note. Thereafter, Kae Yong Park waived the requirement that the Company pay the $100,000 due under the Amended and Restated Note until August 25, 2014, at which time it was paid. |
Note 16 - Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Notes | |
| Note 16 - Subsequent Events | NOTE 16 – SUBSEQUENT EVENTS
We have evaluated all events that occurred after the balance sheet date through the date when our financial statements were issued to determine if they must be reported. Management has determined that other than as disclosed below, there were no additional reportable subsequent events to be disclosed.
Loan Advances
Between April 17, 2018 and May 8, 2018, John Lemak, an affiliate of Sandor Capital, a related party and significant shareholder, advanced the Company an aggregate $90,000 to fund business operations.
Between April 3, 2018 and May 15, 2018, Kae Park, a related party and significant shareholder, advanced the Company an aggregate $67,000 to fund business operations. During this same period, the company repaid $30,000 of these advances. |
Note 4 - Web Development Costs and Domain Names Assets: Schedule of Amortization of Website Costs (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||
| Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Amortization of Website Costs |
|
|||||||||||||||||||||||||||||||||||||||||||||
Note 5 - Goodwill and Other Intangibles: Schedule of Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill and Intangible Assets |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 6 - Accounts Payable and Accrued Expenses Related Party: Schedule of related party accounts payable and accrued expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||
| Schedule of related party accounts payable and accrued expenses |
|
Note 7 - Notes Payable Related Party: Schedule of related party Notes Payable (Tables) |
3 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | ||||||||||||||||
| Tables/Schedules | ||||||||||||||||
| Schedule of related party Notes Payable |
|
Note 8 - Notes Payable: Schedule of the Company's notes and convertible notes payable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of the Company's notes and convertible notes payable |
|
||||||||||||||||||||||||||||||||||||||||||||||||
Note 9 - Derivative Liabilities: Schedule of fair value of the conversion feature (Tables) |
3 Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||
| Schedule of fair value of the conversion feature |
|
Note 9 - Derivative Liabilities: Schedule of fair values at the commitment and re-measurement dates for the Company's derivative liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||
| Schedule of fair values at the commitment and re-measurement dates for the Company's derivative liabilities |
|
||||||||||||||||||||||||||||
Note 10 - Business Acquisition: Schedule of estimated fair values of the assets acquired and liabilities assumed (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of estimated fair values of the assets acquired and liabilities assumed |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 12 - Stock Warrants: Schedule of the Company's the Company's warrant activity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of the Company's the Company's warrant activity |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 12 - Stock Warrants: Schedule of the Company's outstanding warrants (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of the Company's outstanding warrants |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 13 - Earnings (Loss) Per Share: Schedule of the Company's common stock equivalents (Tables) |
3 Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||
| Tables/Schedules | |||||||||||||||||
| Schedule of the Company's common stock equivalents |
|
||||||||||||||||
Note 1 - Organization and Basis of Presentation (Details) |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Details | |
| Entity Incorporation, State Country Name | Nevada |
| Entity Incorporation, Date of Incorporation | May 21, 2008 |
Note 2 - Liquidity/Going Concern (Details) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
| Details | |||
| Net Loss | $ (482,223) | $ (201,756) | |
| Accumulated deficit | (22,408,518) | $ (21,926,295) | |
| Loans from related party shareholders | 165,300 | ||
| Convertible notes to fund operations | $ 85,000 | ||
Note 4 - Web Development Costs and Domain Names Assets: Schedule of Amortization of Website Costs (Details) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
Mar. 31, 2018 |
|
| Details | |||
| Web development costs | $ 311,912 | $ 311,912 | |
| Web development costs, Amortization Period | 5 years | ||
| Web development, capitalized costs | 0 | 0 | |
| Web development, accumulated depreciation | (221,539) | (207,315) | |
| Web development, net cost | $ 90,373 | $ 104,597 |
Note 5 - Goodwill and Other Intangibles: Schedule of Goodwill and Intangible Assets (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
| Trademarks | ||
| Intangible Assets, Net (Including Goodwill) | $ 323,665 | $ 0 |
| Estimated Useful Life | 5 years | |
| Software and intellectual property | ||
| Intangible Assets, Net (Including Goodwill) | $ 140,000 | 0 |
| Estimated Useful Life | 3 years | |
| Customer lists | ||
| Intangible Assets, Net (Including Goodwill) | $ 8,905 | 0 |
| Estimated Useful Life | 1 year | |
| Goodwill | ||
| Intangible Assets, Net (Including Goodwill) | $ 295,200 | 0 |
| Estimated Useful Life | 1 year | |
| Total | ||
| Intangible Assets, Net (Including Goodwill) | $ 767,770 | 0 |
| Intangible Assets, Net (Including Goodwill) | 740,743 | 0 |
| Accumulated amortization | $ (27,027) | $ 0 |
Note 6 - Accounts Payable and Accrued Expenses Related Party: Schedule of related party accounts payable and accrued expenses (Details) |
Mar. 31, 2018
USD ($)
|
|---|---|
| Howard Baer - 1 | |
| Amount | $ 400,500 |
| Howard Baer - 2 | |
| Amount | 126,883 |
| John Venners - 1 | |
| Amount | 233,466 |
| John Venners - 2 | |
| Amount | 3,000 |
| Kuboo, Inc. | |
| Amount | 166,976 |
| John Lemak | |
| Amount | 12,660 |
| Amount | $ 943,485 |
Note 7 - Notes Payable Related Party: Schedule of related party Notes Payable (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2018
USD ($)
| |
| Details | |
| Advances, Starting Balance | $ 1,292,357 |
| Advances received from Park | 57,300 |
| Repayments made to Park | (7,000) |
| Advances, Ending Balance | $ 1,342,657 |
Note 8 - Notes Payable (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2018
USD ($)
| |
| Notes Payable - 1 | |
| Debt Instrument, Issuance Date | Jul. 01, 2015 |
| Debt Instrument, Description | Company entered into a seven (7) day loan agreement with two parties for aggregate proceeds of $34,900 |
| Long-term Debt, Fair Value | $ 34,900 |
| Notes Payable - 2 | |
| Debt Instrument, Issuance Date | Aug. 10, 2015 |
| Debt Instrument, Description | Company entered into a one hundred twenty (120) day loan agreement with an existing investor for aggregate proceeds of $45,000 (two installments of $22,500 each) |
| Long-term Debt, Fair Value | $ 45,000 |
| Notes Payable - 3 | |
| Debt Instrument, Description | notes payable to a vendor in the aggregate amount of $116,553 were settled with the issuance of 1,631,660 shares of the Company’s common stock |
| Long-term Debt, Fair Value | $ 116,553 |
| Notes Payable - 3 | Minimum | |
| Debt Instrument, Issuance Date | Jun. 05, 2017 |
| Notes Payable - 3 | Maximum | |
| Debt Instrument, Issuance Date | Jun. 29, 2017 |
| Notes Payable - 4 | |
| Debt Instrument, Issuance Date | Jan. 08, 2018 |
| Debt Instrument, Description | Company assumed $80,000 in note payable to a former equity holder through its acquisition of Crush Mobile LLC |
| Notes Payable - 5 | |
| Debt Instrument, Issuance Date | Jan. 08, 2018 |
| Debt Instrument, Description | Company assumed $300,000 in notes payable to former equity holders through its acquisition of Crush Mobile LLC |
| Long-term Debt, Fair Value | $ 300,000 |
| Notes Payable - 6 | |
| Debt Instrument, Issuance Date | Jan. 10, 2018 |
| Long-term Debt, Fair Value | $ 85,000 |
Note 8 - Notes Payable: Schedule of the Company's notes and convertible notes payable (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2018
USD ($)
| |
| Details | |
| Note, Starting Balance | $ 79,900 |
| Convertible Note Starting Balance | 0 |
| Note proceeds received | 0 |
| Convertible Notes, Proceeds received | 100,000 |
| Notes acquired from business acquisition | 80,000 |
| Repayments on notes | 0 |
| Total Notes | 159,000 |
| Total Convertible Notes | 100,000 |
| Debt discounts | (31,987) |
| Note, Ending Balance | 159,900 |
| Convertible Note Ending Balance | $ 68,013 |
Note 9 - Derivative Liabilities: Schedule of fair value of the conversion feature (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2018
USD ($)
| |
| Details | |
| Derivative Liability, starting balance | $ 0 |
| Day one value of derivatives issued | 19,487 |
| Fair value mark to market adjustment for equity instruments | (1,519) |
| Derivative Liability, ending balance | $ 17,968 |
Note 9 - Derivative Liabilities (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2018
USD ($)
| |
| Details | |
| Gain on derivatives | $ 1,519 |
Note 9 - Derivative Liabilities: Schedule of fair values at the commitment and re-measurement dates for the Company's derivative liabilities (Details) |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Commitment Date | |
| Expected dividends | 0.00% |
| Expected term: | 3 years |
| Risk free interest rate | 2.07% |
| Re-measurement Date | |
| Expected dividends | 0.00% |
| Expected term: | 2 years 5 months 23 days |
| Risk free interest rate | 2.39% |
Note 10 - Business Acquisition: Schedule of estimated fair values of the assets acquired and liabilities assumed (Details) |
Mar. 31, 2018
USD ($)
|
|---|---|
| Details | |
| Purchase Price | $ 382,512 |
| Allocation of Purchase Price | |
| Allocation of Purchase Price - Cash | 4,400 |
| Allocation of Purchase Price - Receivables | 15,000 |
| Allocation of Purchase Price - Trademarks | 323,665 |
| Allocation of Purchase Price - Intellectual property | 140,000 |
| Allocation of Purchase Price - Customer lists | 8,905 |
| Allocation of Purchase Price - Goodwill | 295,200 |
| Allocation of Purchase Price - Accounts payable | (24,658) |
| Allocation of Purchase Price - Debt Obligations | (380,000) |
| Purchase Price | $ 382,512 |
Note 10 - Business Acquisition: Schedule of estimated fair values of the assets acquired and liabilities assumed - Parenthetical (Details) |
Mar. 31, 2018
$ / shares
shares
|
|---|---|
| Details | |
| Purchase Price, shares of common stock | shares | 4,904,000 |
| Purchase Price, shares of common stock, price per share | $ / shares | $ 0.078 |
Note 11 - Equity (Details) - USD ($) |
3 Months Ended | ||||
|---|---|---|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
||||
| Common Stock, Shares, Issued | 130,578,741 | 121,018,241 | |||
| Transaction 1 | |||||
| Sale of Stock, Transaction Date | Jan. 10, 2018 | ||||
| Sale of Stock, Description of Transaction | Company issued 106,500 shares of the Company’s commons stock to a vendor as settlement of a payable balance | ||||
| Common Stock, Shares, Issued | 106,500 | ||||
| Transaction 2 | |||||
| Sale of Stock, Transaction Date | Jan. 08, 2018 | ||||
| Sale of Stock, Description of Transaction | Company issued 300,000 shares of the Company’s commons stock valued at $23,400 as a commitment fee | ||||
| Common Stock, Shares, Issued | 300,000 | ||||
| Common Stock, Value, Subscriptions | $ 23,400 | ||||
| Transaction 3 | |||||
| Sale of Stock, Transaction Date | [1] | Jan. 08, 2018 | |||
| Sale of Stock, Description of Transaction | [1] | Company issued an aggregate 7,904,000 shares of the Company’s common stock in connection with the closing of the Crush Mobile acquisition | |||
| Common Stock, Shares, Issued | [1] | 7,904,000 | |||
| Transaction 4 | |||||
| Sale of Stock, Transaction Date | Jan. 08, 2018 | ||||
| Sale of Stock, Description of Transaction | Company issued 500,000 shares of the Company’s common stock to Tumbleweed Holdings | ||||
| Common Stock, Shares, Issued | 500,000 | ||||
| Transaction 5 | |||||
| Sale of Stock, Transaction Date | Feb. 16, 2018 | ||||
| Sale of Stock, Description of Transaction | Company issued 500,000 shares valued at $25,500, or $0.05 per share, of the Company’s common stock | ||||
| Common Stock, Shares, Issued | 500,000 | ||||
| Common Stock, Value, Subscriptions | $ 25,500 | ||||
| Sale of Stock, Price Per Share | $ 0.05 | ||||
| Transaction 6 | |||||
| Sale of Stock, Transaction Date | Feb. 21, 2018 | ||||
| Sale of Stock, Description of Transaction | Company issued 250,000 shares valued at $12,500, or $0.05 per share, of the Company’s common stock | ||||
| Common Stock, Shares, Issued | 250,000 | ||||
| Common Stock, Value, Subscriptions | $ 12,500 | ||||
| Sale of Stock, Price Per Share | $ 0.05 | ||||
| |||||
Note 12 - Stock Warrants: Schedule of the Company's outstanding warrants (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
| Number Outstanding | 10,980,285 | 11,355,285 |
| Weighted Average Exercise Price | $ 0.06 | $ 0.05 |
| $0.05 - $0.25 | ||
| Number Outstanding | 10,980,285 | |
| Weighted Average Remaining Contractual Life (In years) | 2 years 4 months 13 days | |
| Weighted Average Exercise Price | $ 0.06 | |
| Number Exercisable | 10,980,285 | |
| Weighted Average Exercise Price | $ 0.06 | |
| Intrinsic Value | $ 0 |
Note 13 - Earnings (Loss) Per Share: Schedule of the Company's common stock equivalents (Details) |
Mar. 31, 2018
shares
|
|---|---|
| Details | |
| Warrants (exercise price $0.05 - $0.25/share) | 10,980,285 |
| Convertible debt (exercise price $0.20/share) | 6,129,329 |
| Warrantes and Convertible Debt | 17,109,614 |
Note 14 - Related Party Transactions (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2018
USD ($)
| |
| Proceeds from related party | $ 50,000 |
| Accrued interest due to related party debt | $ 22 |
| Related Party Transaction 2 | |
| Related Party Transaction, Description of Transaction | Company received aggregate proceeds of $65,000 from Sandor Capital, a related party and significant shareholder |
| Related Party Transaction 3 | |
| Related Party Transaction, Description of Transaction | Kae Yong Park, a significant shareholder, and her spouse, Howard Baer (collectively, “Park”), advanced an aggregate of $57,300 on an unsecured basis to the Company for short-term capital needs. |
| Related Party Transaction 4 | |
| Related Party Transaction, Description of Transaction | Company incurred expenses of $45,000 related to its consulting contract with Howard Baer, the spouse of Kae Yong Park, our significant shareholder |
Note 15 - Commitments and Contingencies (Details) |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| In May 2014 | |
| Description of Contingency | The Company entered into an asset purchase agreement that requires the Company to pay a monthly royalty equal to six percent of gross monthly revenues over $150,000. |
| On June 23, 2014 | |
| Description of Contingency | Company issued a $500,000 promissory note in conjunction with the purchase of approximately 7,500 cannabis-related internet domain names. |
| On July 25, 2014 | |
| Description of Contingency | Company amended and restated its promissory note in the principal amount of $500,000 owing to Kae Yong Park (the Company’s then majority shareholder) |
Note 16 - Subsequent Events (Details) |
3 Months Ended |
|---|---|
Mar. 31, 2018 | |
| Event 1 | |
| Subsequent Event, Description | an affiliate of Sandor Capital, a related party and significant shareholder, advanced the Company an aggregate $90,000 |
| Event 1 | Minimum | |
| Subsequent Event, Date | Apr. 17, 2018 |
| Event 1 | Maximum | |
| Subsequent Event, Date | May 08, 2018 |
| Event 2 | |
| Subsequent Event, Description | Kae Park, a related party and significant shareholder, advanced the Company an aggregate $67,000 to fund business operations |
| Event 2 | Minimum | |
| Subsequent Event, Date | Apr. 03, 2018 |
| Event 2 | Maximum | |
| Subsequent Event, Date | May 15, 2018 |