UNITED STATES | ||||||
SECURITIES AND EXCHANGE COMMISSION | ||||||
Washington, D. C. 20549 | ||||||
Form 10-K | ||||||
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF | ||||||
THE SECURITIES EXCHANGE ACT OF 1934 | ||||||
For the Fiscal year ended December 31, 2015 | ||||||
Commission File Number: 000-53949 | ||||||
HDS International Corp. | ||||||
(Exact name of registrant as specified in its charter) | ||||||
Nevada | 26-3988293 | |||||
(State or other jurisdiction of incorporation) | (IRS Employer Identification Number) | |||||
2130 N. Lincoln Park West, Suite 8N | ||||||
Chicago, Illinois | 60614 | |||||
(Address of principal executive offices and Zip Code) | (Zip Code) | |||||
(773) 698-6047 | ||||||
(Registrant's telephone number, including area code) | ||||||
Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to section 12(g) of the Act: | |||||
NONE | COMMON STOCK |
Large Accelerated Filer
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[ ]
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Accelerated Filer
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[ ]
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Non-accelerated Filer (Do not check if a smaller reporting company)
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[ ]
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Smaller Reporting Company
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[x]
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 4.
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ITEM 5.
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MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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2015
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High Bid
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Low Bid
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||||||
First Quarter, Ending March 31
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$ | 0.0001 | $ | 0.0001 | ||||
Second Quarter, Ending June 30
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$ | 0.0002 | $ | 0.0001 | ||||
Third Quarter, Ending September 30
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$ | 0.0001 | $ | 0.0001 | ||||
Fourth Quarter, Ending December 31
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$ | 0.0003 | $ | 0.0002 | ||||
2014
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High Bid
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Low Bid
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||||||
First Quarter, Ending March 31
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$ | 0.0039 | $ | 0.0012 | ||||
Second Quarter, Ending June 30
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$ | 0.0035 | $ | 0.001 | ||||
Third Quarter, Ending September 30
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$ | 0.0014 | $ | 0.0005 | ||||
Fourth Quarter, Ending December 31
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$ | 0.0008 | $ | 0.0001 | ||||
Plan category
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Number of securities issued upon
exercise of outstanding options,
warrants and rights
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Weighted-average exercise
price of outstanding options,
warrants and rights
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Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a))
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|||||||||
(a)
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(b)
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(c)
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||||||||||
Equity compensation plans approved by security holders
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0 | 0 | 0 | |||||||||
Equity compensation plans not approved by security holders
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0 | 0 | 30,000,000 | |||||||||
Total
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0 | 0 | 30,000,000 |
●
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1,468,871,393 are freely tradable without restrictions (commonly referred to as the "public float")
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●
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479,885,496 are currently subject to the restrictions and sale limitations imposed by Rule 144.
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a)
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On April 9, 2014, we issued 8,571,429 common shares for the conversion of $12,000 of principal of the June 7, 2013 convertible debenture.
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b)
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On October 21, 2014, we issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture.
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c)
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On October 28, 2014, we issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture.
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d)
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On November 21, 2014, we issued 15,500,000 common shares for the conversion of $1,240 of principal of the June 7, 2013 convertible debenture.
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e)
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On November 26, 2014, we issued 19,000,000 common shares for the conversion of $1,520 of principal of the July 15, 2013 convertible debenture.
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f)
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On December 2, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture.
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g)
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On December 4, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture.
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h)
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On December 9, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture.
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i)
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On February 6, 2015, we issued 28,000,000 common shares upon the issuance of $1,400 of principal of the July 15, 2013 convertible debenture.
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j)
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On February 10, 2015, we issued 28,000,000 common shares upon the conversion of $1,400 of principal of the July 15, 2013 convertible debenture.
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k)
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On February 13, 2015, we issued 31,000,000 common shares upon the issuance of $1,550 of principal of the July 15, 2013 convertible debenture.
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l)
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On February 18, 2015, we issued 31,000,000 common shares upon the conversion of $1,550 of principal of the July 15, 2013 convertible debenture.
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m)
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On February 23, 2015, we issued 31,000,000 common shares upon the issuance of $1,550 of principal of the July 15, 2013 convertible debenture.
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n)
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On March 2, 2015, we issued 35,000,000 common shares upon the conversion of $1,750 of principal of the July 15, 2013 convertible debenture.
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o)
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On March 3, 2015, we issued 37,000,000 common shares upon the issuance of $1,850 of principal of the July 15, 2013 convertible debenture.
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p)
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On March 5, 2015, we entered into settlement and general mutual release agreements with our former president and director and two of our consultants. Pursuant to the settlement and release agreements, we agreed to issue 180,285,000 shares of common stock for the settlement of all amounts owing to these parties.
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q)
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On March 9, 2015, we issued 13,350,000 newly-issued shares of Class B preferred stock and 200,000,000 newly-issued share of restricted shares of common stock under the Strategic Expansion Agreement to SirenGPS. Additionally, under the Strategic Expansion Agreement, we issued to HOEL 342,150,496 newly-issued restricted shares of common stock. Also under the Expansion Agreement, we issued 274,300 newly-issued shares of Class B preferred stock to a designee of the Licensor.
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r)
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On March 13, 2015, we issued 75,000,000 common shares upon the issuance of $3,750 of principal of the July 15, 2013 convertible debenture.
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s)
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On March 17, 2015, we issued 75,000,000 common shares upon the issuance of $3,750 of principal of the July 15, 2013 convertible debenture.
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t)
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On March 18, 2015, we issued 83,000,000 common shares upon the issuance of $1,490 of principal of the July 15, 2013 convertible debenture and $2,660 of accrued and unpaid interest. Refer to Note 3(b).
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u)
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On March 24, 2015, we issued 87,000,000 common shares upon the issuance of $4,350 of principal of the October 4, 2013 convertible debenture.
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v)
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On March 25, 2015, we issued 87,000,000 common shares upon the issuance of $4,350 of principal of the October 4, 2013 convertible debenture.
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w)
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On April 1, 2015, we consented to the further assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were previously assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, the New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The Purchaser also entered into an agreement with JABRO, granting the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015.
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x)
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On April 1, 2015, we issued a draw-down convertible promissory note to a non-related party in the principal amount of up to $600,000. Under the terms of the promissory note, the amount is unsecured, bears interest at 10% per annum, and is due on April 1, 2016. The note is convertible into shares of common stock at a conversion rate of 50% of the average of the three lowest end of day closing prices of our common stock for the twenty-five trading days prior to the date the holder elects to convert all or part of the promissory note. This agreement was terminated subsequent to year-end.
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y)
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On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock, respectively, into 1,050,000 shares and 1,165,000 shares of Class B Preferred Stock, respectively. This agreement was terminated subsequent to year-end.
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z)
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On April 6, 2015, we executed a Common Stock Purchase Warrant with Iconic Holdings, LLC, a west coast-based institutional investor (the "Purchaser"), providing the Purchaser the right to purchase our shares of common stock by investing up to $50,000 into new shares of common stock at a price of $0.001 per share. On April 2, 2015, we entered into an equity line of credit (ELOC) agreement that permits us to "put" shares to the Purchaser at a 20% discount to the lowest trading price over the five consecutive trading days immediately succeeding the applicable Put Notice Date. The ELOC requires the filing of a registration statement prior to the funds becoming available to us Once the registration is filed, funding under the ELOC occurs at our discretion. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016.
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aa) On April 10, 2015, the Company issued 149,844,444 common shares upon the issuance of $6,743 of principal of the February 18, 2014 convertible debenture.
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ITEM 7.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
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1.
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Complete the 2.0 destination site www.good-gaming.com and launch the world’s premiere online destination site for social networking and tournaments for cash and prizes to 205 million eSports amateur players.
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2.
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Enhance the platform with 3.0 features to integrate with mobile networks and offer other value-added features.
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3.
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File provisional patent application to protect the 2.0 Mercenary System, which offers a marketplace for the purchase and/or exchange of virtual goods and gaming labor.
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4.
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Add a suite of online games that subscribers can play for free or for fees depending on their status on the system..
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5.
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The Company will need to raise additional capital to move from the relaunch phase this spring-summer and fully fund its plan into 2017.
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6.
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Obtain the backing of corporate sponsors for cash and prizes and to provide advertising during tournaments and to its subscribers on the systems. To this end, Good Gaming already has verbal indications of interest for such sponsorships and advertising, but buyers of ad inventory are waiting to inspect the Company’s 2.0 platform.
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7.
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The Company intends to continue to expand its Advisory Board with industry professionals that can further help refine the site, facilitate introductions to sponsors and strategic partners, and add credibility to the business.
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December 31, 2015
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December 31, 2014
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|||||||
Current Assets
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$ | - | $ | 1,093 | ||||
Current Liabilities
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639,852 | 1,435,785 | ||||||
Working Capital (Deficit)
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(639,852 | ) | (1,434,692 | ) |
For the year ended
December 31, 2015
$
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For the year ended
December 31, 2014
$
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|||||||
Cash Flows from (used in) Operating Activities
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(73 | ) | (20,016 | ) | ||||
Cash Flows from (used in) Investing Activities
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– | – | ||||||
Cash Flows from (used in) Financing Activities
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- | 26,718 | ||||||
Net Increase (decrease) in Cash During Period
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(73 | ) | (3,298 | ) |
a)
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On or around February 18, 2016, a special meeting of the shareholders of the Company was called to change the name of the Company to “Good Gaming, Inc.” The Company subsequently effected the name change with the Secretary of State of Nevada and has submitted an application to FINRA for a name change and ticker change, both of which are pending with a requirement that the Company bring its SEC filings current.
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b)
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On or around February 18, 2016, a minimum funding threshold had been achieved by CMG on behalf of the Good Gaming transaction. Therefore, CMG sold Good Gaming’s assets including intellectual property, software code, computer equipment, brand name and trademarks to the Company.
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c)
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On or around February 18, 2016, the Company executed a settlement agreement with a lender which lowered their amounts due from approximately $100,000 to $25,000 and fixed its conversion price. Additionally, as part of the agreement, the lender funded $100,000 new monies to the Company. Separately, management has negotiated the purchase of a second lender’s debt for $50,000 and aims to consummate that transaction as soon as possible.
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d)
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On or around February 18, 2016, management terminated plans to effectuate a share increase to 10 billion, a reverse split of 1-30, and approve 50 billion share stock option plan.
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e)
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On or around February 18, 2016, Paul Rauner resigned his positions of CEO and Director. Additionally, a special meeting of the shareholders of the Company was called, at which time they appointed Vikram Grover to the same positions.
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f)
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On or around February 22, 2016, a special meeting of the shareholders of the Company was called to appoint Barbara Laken and David Dorwart to the Board of Directors and to appoint Barbara Laken as the Company’s Corporate Secretary.
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ITEM 8.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Index to Consolidated Financial Statements | Page | |||
14
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Report of Independent Registered Public Accounting Firm – M&K CPAs, PLLC | 15 | |||
16
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17
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18
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19
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20
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HDS International Corp
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Consolidated Balance Sheets
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(Expressed in U. S. Dollars
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||||||||
December 31,
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December 31,
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|||||||
2015
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2014
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|||||||
ASSETS
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Current Assets
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Cash
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$ | - | $ | 73 | ||||
Current Portion of deferred financing costs
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- | 1,020 | ||||||
Total Current Assets
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- | 1,093 | ||||||
Total Assetrs
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$ | - | $ | 1,093 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
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||||||||
Current Liabilities
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||||||||
Accountspayable and accrued liabilities
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$ | 96,141 | $ | 728,581 | ||||
Accountspayable and accrued liabilities - related party
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6,670 | 304,962 | ||||||
Note Payable – related party, currently in default
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- | 300,000 | ||||||
Convertible debentures, net of unamortized discount of $0 and $36,088, respectively
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83,300 | 31,952 | ||||||
Derivative liability
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453,741 | 70,290 | ||||||
Toital Current Liabilities
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639,852 | 1,435,785 | ||||||
Convertible debentures, long-term
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50,000 | |||||||
Total Liabilities
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689,852 | 1,435,785 | ||||||
Stockholders' Deficit
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Class A Preferred Stock
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Authorized: 25,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 7,500,000 shares
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7,500 | 7,500 | ||||||
Class B Preferred Stock
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Authorized: 25,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 15,839,300 and 0 shares, respectively
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15,839 | - | ||||||
Common Stock
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Authorized: 2,000,000,000 common shares, with a par value of $0.001 per share Issued and outstanding: 1,995,290,000 and 571,564,504 shares, respectively
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1,995,290 | 571,564 | ||||||
Additional paid-in capital
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309,592 | 296,785 | ||||||
Accumulated deficit
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(3,018,073 | ) | (2,310,541 | ) | ||||
Total Stockholders' deficit
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(689,852 | ) | (1,434,692 | ) | ||||
Total liabilities and stockholders' deficit
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$ | - | $ | 1,093 | ||||
The accompanying notes are an integral part of these consolidated financial statements
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HDS International Corp
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||||||||
Consolidated Statements of Operations
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||||||||
(Expressed in U. S. Dollars
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||||||||
For the Year Ended
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||||||||
December 31,
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||||||||
2015
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2014
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|||||||
Revenues
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$ | - | $ | - | ||||
Operating Expenses
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||||||||
Consulting fees
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98,694 | 384,000 | ||||||
General and administrative
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97,925 | 2,945 | ||||||
Profeesionsl fees
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43,800 | 33,463 | ||||||
Transfer agent fees
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- | 185 | ||||||
Total Operating Expenses
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240,419 | 420,593 | ||||||
Net Loss Before Other Expenses
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(240,419 | ) | (420,593 | ) | ||||
Other Expenses
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Interest expense
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37,159 | 108,546 | ||||||
Loss on Change in fair value of derivitive liability
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429,954 | 78,680 | ||||||
Total Other Expenses
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467,113 | 187,226 | ||||||
Net Loss
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$ | (707,532 | ) | $ | (607,819 | ) | ||
Net Loss Per Share, Basic and Diluteded
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$ | - | $ | - | ||||
Weigted Average Shares Outstanding
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1,549,334,532 | 406,443,367 | ||||||
The accompanying notes are an integral part of these consolidated financial statements
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HDS International Corp
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Consolidated Statements of Cash Flows
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(Expressed in U. S. Dollars
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||||||||
For the Year Ended
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||||||||
December 31,
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||||||||
2015
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2014
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|||||||
Operating Activities
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||||||||
Net Loss
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$ | (707,532 | ) | $ | (607,819 | ) | ||
Adjustment to reconcile net loss to
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||||||||
net cash used in operating activities
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Accretion of debt discount
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15,052 | 63,399 | ||||||
Amortization of deferred financing costs
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1,020 | 6,165 | ||||||
Loss on change in fair value of derivitive liability
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429,954 | 78,680 | ||||||
Changes in operating asstes and liabilities
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||||||||
Accounts payable and accrued liabilities
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90,276 | 279,559 | ||||||
Accounts payable and accrued liabilities-related parties
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37,857 | 150,000 | ||||||
Net Cash Provided by (Used in) Operating Activities
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(133,373 | ) | (30,016 | ) | ||||
Financing activities
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Proceeds from Convertible debenturee, net of financing costs
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133,300 | 15,000 | ||||||
Proceeds from related parties
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- | 11,718 | ||||||
Net Cash Provided by (Used in) Financing activities
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133,300 | 26,718 | ||||||
Change in Cash
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(73 | ) | (3,298 | ) | ||||
Cash, Beginning of Period
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73 | 3,371 | ||||||
Cash, End of period
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$ | - | $ | 73 | ||||
Non-cash investing andd financing activities
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Adjustment to Derivative liabilitiy
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$ | 429,954 | $ | 53,911 | ||||
Common shares issued for conversion of debt
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$ | 1,436,534 | $ | 39,960 | ||||
Debt Discount due to beneficial conversion feature
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$ | 186.397 | $ | 15,500 | ||||
The accompanying notes are an integral part of these consolidated financial statements
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HDS International Corp
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Consolidated Statements of Stockholders' Deficit
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(Expressed in U. S. Dollars
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||||||||||||||||||||||||||||||||||||
Deficit
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Accumulated
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||||||||||||||||||||||||||||||||||||
Preferred Stock
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Additional
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During the
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||||||||||||||||||||||||||||||||||
Class A
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Class B
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Common Stock
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Paid-in
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Developmenmt
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Shares
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Amount
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Shares
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Amount
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Shares
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Amount
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Capital
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Stage
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Total
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||||||||||||||||||||||||||||
Balance, December 31, 2013
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7,500,000 | $ | 7,500 | - | $ | - | 377,203,075 | $ | 377,203 | $ | 381,775 | $ | (1,702,722 | ) | $ | (936,244 | ) | |||||||||||||||||||
Fair value of beneficial conversion recorded on issuance of convertible debt
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- | - | - | - | - | - | 15,500 | - | 15,500 | |||||||||||||||||||||||||||
Common shares issued for conversion of debt
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- | - | - | - | 194,361,429 | 194,361 | (100,490 | ) | - | 93,871 | ||||||||||||||||||||||||||
Net loss for the year
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- | - | - | - | - | - | - | (607,819 | ) | (607,819 | ) | |||||||||||||||||||||||||
Balance, December 31, 2014
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7,500,000 | 7,500 | - | - | 571,564,504 | 571,564 | 296,785 | (2,310,541 | ) | (1,434,692 | ) | |||||||||||||||||||||||||
Common shares issued for conversion of debt
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- | - | - | - | 1,845,725,496 | 1,845,726 | (409,192 | ) | - | 1,436,534 | ||||||||||||||||||||||||||
Shares Cancelled
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- | - | - | - | (422,000,000 | ) | (422,000 | ) | 422,000 | - | - | |||||||||||||||||||||||||
Preferred shares issued
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- | - | 15,839,300 | 15,839 | - | - | - | - | 15,839 | |||||||||||||||||||||||||||
Net loss for the year
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- | - | - | - | - | - | - | (707,532 | ) | (707,532 | ) | |||||||||||||||||||||||||
Balance December 31, 2015
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7,500,000 | 7,500 | 15,839,300 | 15,839 | 1,995,290,000 | 1,995,290 | 309,593 | (3,018,073 | ) | (689,851 | ) | |||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
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1.
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Nature of Operations and Continuance of Business
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2.
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Summary of Significant Accounting Policies
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a)
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Basis of Presentation and Principles of Consolidation
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b)
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These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31.
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(c)
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Use of Estimates
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(d)
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Cash and Cash Equivalents
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(e)
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Intangible Assets
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2.
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Summary of Significant Accounting Policies (continued)
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(f)
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Impairment of Long-Lived Assets
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(g)
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Beneficial Conversion Features
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(h)
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Derivative Liability
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(i)
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Basic and Diluted Net Loss Per Share
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(j)
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Income Taxes
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(k)
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Comprehensive Loss
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(l)
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Financial Instruments
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2.
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Summary of Significant Accounting Policies (continued)
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l)
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Financial Instruments (continued)
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Balance, December 31, 2014 | Conversions | Changes in Fair Values | Balance, December 31, 2015 | |||||||||||||
Derivative Liability | $ | 70,290 | $ | (64,767 | ) | $ | 448,218 | $ | 453,741 |
m)
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Recent Accounting Pronouncements
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3.
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Debt
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a)
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On June 7, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on December 7, 2014. The note is convertible into shares of common stock 180 days after the date of issuance (December 4, 2013) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at December 31, 2014, the Company recorded accrued interest of $3,191 (2013 - $1,475), which has been included in accounts payable and accrued liabilities.
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b)
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On February 18, 2014, the Company entered into a $15,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on August 20, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (August 17, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at December 31, 2014, the Company recorded accrued interest of $1,074, which has been included in accounts payable and accrued liabilities.
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|
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $15,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended June 30, 2015, the Company had amortized $590 (December, 31, 2014 - $2,431) of the debt discount to interest expense. As at December 31, 2015, the carrying value of the debenture was $nil (December, 31, 2014 - $nil).
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c)
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On July 15, 2013, the Company entered into a $27,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on January 16, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (January 11, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at December 31, 2014, the Company recorded accrued interest of $3,077 (2013 -
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d)
|
On October 4, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on July 8, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (April 2, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at December 31, 2014, the Company recorded accrued interest of $3,227 (2013 - $627), which has been included in accounts payable and accrued liabilities.
|
3.
|
Debt (continued)
|
e)
|
On April 15, 2015, the Company entered into a $100,000 convertible debenture with a non-related party. During the quarter ended June 30, 2015 The Company received the first $50,000 payment. The remaining $50,000 payment will be made at the request of the borrower. No additional payments have been made as of June 30, 2015. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and is due on October 16, 2016. The note is convertible into shares of common stock any time after the maturity date at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As of December 310, 2015, the Company recorded accrued interest of $3,894 (December, 31, 2014 $0), which has been included in accounts payable and accrued liabilities.
|
f)
|
On April 1, 2015, we entered into a transaction with Iconic Holdings, LLC (the "Purchaser"), whereby Iconic Holdings agreed to provide up to $600,000 through a structured convertible promissory note (the "Note"), with funds to be received in tranches. The note bears interest of 10% and is due April 1, 2016. The initial proceeds of $40,000 was received on April 9, 2015, with $30,000 remitted and delivered to us, $4,000 retained by the Purchaser as an original issue discount, and $6,000 retained by the Purchaser for legal expenses. Subsequent to year-end 2015 the $600,000 facility has since been terminated and restructured.
|
g)
|
On April 1, 2015, we consented to the further assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were initially assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February Note bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The Purchaser also entered into an agreement with JABRO, granting the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015. Subsequent to year-end 2015, the Asher Notes have been restructured.
|
4.
|
Derivative Liabilities
|
A summary of the activity of the derivative liability is shown below:
|
||||
Balance, December, 2013
|
$ | 45,521 | ||
Derivative loss due to new issuances
|
105,816 | |||
Adjustment for conversion
|
(53,911 | ) | ||
Mark to market adjustment at December 31, 2014
|
(27,136 | ) | ||
Balance, December 31, 2014
|
70,290 | |||
Adjustment for conversion
|
(64,767 | ) | ||
Mark to market adjustment at December 31, 2015
|
50,894 | |||
Balance, December 31, 2015
|
$ | 56,417 |
5.
|
Common Stock
|
a)
|
On March 5, 2015, the Company issued 200,000,000 common shares with a par value of $200,000 pursuant to a license agreement with a third party to acquire the rights to technologies related to emergency management and communications. As the transaction resulted in a change of control, the par value of the license was allocated to additional paid-in capital. As a result of the completion of the transaction, SirenGPS and Paul Rauner are deemed related parties.
|
b)
|
On March 5, 2015, the Company issued 106,050,000 common shares with a fair value of $21,210 for the settlement of accounts payable of $733,500 owing to consultants resulting in a gain on settlement of debt of $712,290. As the transaction was pursuant to the agreement which resulted in a change of control, the gain has been recorded to additional paid-in capital.
|
c)
|
On March 5, 2015, the Company issued 342,150,496 common shares with a fair value of $68,430 for the settlement of $300,000 of principal and $107,479 of accrued interest owing to a company controlled by the former President and CEO of the Company. The transaction resulted in a gain on settlement of debt of $339,049 which was recorded against additional paid-in capital. Refer to Note 7 (a).
|
d)
|
On March 5, 2015, the Company issued 74,235,000 common shares with a fair value of $14,847 for the settlement of $215,225 owing to the former President and CEO and companies under his control. The transaction resulted in a gain on settlement of debt of $200,378 which was recorded against additional paid-in capital. Refer to Notes 7 and 8.
|
e)
|
During the period ended March 31, 2015, the Company issued 454,000,000 common shares for the conversion of $20,040 of principal and $2,660 of accrued interest of the July 15, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion.
|
f)
|
During the period ended March 31, 2015, the Company issued 174,000,000 common shares for the conversion of $8,700 of principal of the October 4, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion.
|
g)
|
During the period ended June 30, 2015 the Company issued 298,912,445 common shares for the conversion of $25,505 of Principal and interest of the February convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion.
|
h)
|
On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock owned by them into 1,050,000 shares of Class B Preferred Stock, and 1,165,000 shares of Class B Preferred Stock, respectively, in order to facilitate the closing of the other transactions herein described.
|
5.
|
Common Stock (continued)
|
a)
|
On April 9, 2014, the Company issued 8,571,429 common shares for the conversion of $12,000 of principal of the June 7, 2013 convertible debenture. Refer to Note 3(a).
|
b)
|
On October 21, 2014, the Company issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture. Refer to Note 3(a).
|
c)
|
On October 28, 2014, the Company issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture. Refer to Note 3(a).
|
d)
|
On November 21, 2014, the Company issued 15,500,000 common shares for the conversion of $1,240 of principal of the June 7, 2013 convertible debenture. Refer to Note 3(a).
|
e)
|
On November 26, 2014, the Company issued 19,000,000 common shares for the conversion of $1,520 of principal of the July 15, 2013 convertible debenture. Refer to Note 3(b).
|
f)
|
On December 2, 2014, the Company issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. Refer to Note 3(b).
|
g)
|
On December 4, 2014, the Company issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. Refer to Note 3(b).
|
h)
|
On December 9, 2014, the Company issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. Refer to Note 3(b).
|
6.
|
Preferred Stock
|
7.
|
Related Party Transactions
|
a)
|
As at December 31, 2014, the Company owes $300,000 (2013 - $300,000) to a company controlled by former officers and directors of the Company. The amount owing is unsecured, bears interest at 10% per annum, and is due on August 16, 2012, currently in default. As at December 31, 2014, the Company has recorded accrued interest of $102,219 (2013 - $72,219) which has been included in accounts payable and accrued liabilities – related party.
|
b)
|
As at December 31, 2014, the Company owes $15,225 (2013 - $10,225) to companies under common control by former officers and directors of the Company which has been included in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand.
|
c)
|
During the year ended December 31, 2014, the Company has incurred $120,000 (2013 - $45,000) to the former President and CEO of the Company for consulting services. As at December 31, 2014, the Company recorded a related party accounts payable of $180,000 (2013 - $60,000), which has been included in accounts payable and accrued liabilities – related party. The amounts owing are unsecured, non-interest bearing, and due on demand.
|
d)
|
As at December 31, 2014, the Company owes $7,518 (2013 – $800) to the former President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
|
e)
|
As at December 31, 2015, the Company owes $570 (December 31, 2014 – $0) to the President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
|
f)
|
As at December31, 2015, the Company owes $6,100 (December 31, 2014 – $0) to the President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
|
8.
|
Commitments
|
a)
|
On October 12, 2011, the Company entered into a verbal consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On July 18, 2012, the Board of Directors reviewed the consulting agreement and authorized an increase to the monthly consulting fee from $3,000 to $3,750 per month beginning July 2012. On October 1, 2012, the Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $3,000 per month beginning October 2012. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,000 to $500 per month effective January 1, 2014. All these related party amounts and commitments have since been settled for cash or stock. This commitment was settled in stock and/or cash as part of the SirenGPS change of control in Februyary 2016.
|
9.
|
Income Taxes
|
2015 | 2014 | |||||||
Income tax recovery at statutory rate | $ | 195,612 | $ | 158,351 | ||||
Valuation allowance change | (195,612 | ) | (158,351 | ) | ||||
Provision for income taxes | $ | - | $ | - |
2015 | 2014 | |||||||
Income tax recovery at statutory rate | $ | 824,952 | $ | 629,340 | ||||
Valuation allowance change | (824,952 | ) | (629,340 | ) | ||||
Provision for income taxes | $ | - | $ | - |
10.
|
Subsequent Events
|
a)
|
On or around February 18, 2016, a special meeting of the shareholders of the Company was called to change the name of the Company to “Good Gaming, Inc.” The Company subsequently effected the name change with the Secretary of State of Nevada and has submitted an application to FINRA for a name change and ticker change, both of which are pending with a requirement that the Company bring its SEC filings current.
|
b)
|
On or around February 18, 2016, a minimum funding threshold had been achieved by CMG on behalf of the Good Gaming transaction. Therefore, CMG sold Good Gaming’s assets including intellectual property, software code, computer equipment, brand name and trademarks to the Company.
|
c)
|
On or around February 18, 2016, the Company executed a settlement agreement with a lender which lowered their amounts due from approximately $100,000 to $25,000 and fixed its conversion price. Additionally, as part of the agreement, the lender funded $100,000 new monies to the Company. Separately, management has negotiated the purchase of a second lender’s debt for $50,000 and aims to consummate that transaction as soon as possible.
|
d)
|
On or around February 18, 2016, management terminated plans to effectuate a share increase to 10 billion, a reverse split of 1-30, and approve 50 billion share stock option plan.
|
e)
|
On or around February 18, 2016, Paul Rauner resigned his positions of CEO and Director. Additionally, a special meeting of the shareholders of the Company was called, at which time they appointed Vikram Grover to the same positions.
|
f)
|
On or around February 22, 2016, a special meeting of the shareholders of the Company was called to appoint Barbara Laken and David Dorwart to the Board of Directors and to appoint Barbara Laken as the Company’s Corporate Secretary.
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
1.
|
We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management's view that such a committee, including a financial expert member, is an utmost important entity level control over the Company's financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management's activities.
|
2.
|
We did not maintain appropriate cash controls – As of December 31, 2015, we do not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on our bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that we have limited transactions in our bank accounts.
|
3.
|
We did not implement appropriate information technology controls – As at December 31, 2015, we retain copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of our data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors.
|
1.
|
Our Board of Directors will nominate an audit committee or a financial expert on our Board of Directors.
|
2.
|
We will appoint additional personnel to assist with the preparation of our monthly financial reporting, including preparation of the monthly bank reconciliations.
|
|
ITEM 9B.
|
OTHER INFORMATION.DATA
|
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
Name
|
Age
|
Position
|
|||
Paul Rauner (resigned February 18, 2016) |
46
|
President, Principal Executive Officer, Secretary, Treasurer, Principal Financial Officer, Principal Accounting Officer and sole Member of our Board of Directors | |||
Vikram Grover (as of February 18, 2016) | 46 | President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer and Member of our Board of Directors | |||
Barbara Laken | 61 | Director, Secretary | |||
David Dorwart | 57 | Director |
|
1.A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
|
2.
|
Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
3.
|
The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities;
|
i)
|
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
|
ii)
|
Engaging in any type of business practice; or
|
iii)
|
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
|
4.
|
The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity;
|
5.
|
Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
|
6.
|
Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
|
7.
|
Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
|
i)
|
Any Federal or State securities or commodities law or regulation; or
|
ii)
|
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or
|
iii)
|
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
|
8.
|
Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
|
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
Executive Officer Compensation Table | ||||||||||
Non-Equity
|
Nonqualified Deferred
|
|||||||||
Name and
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards
|
Incentive Plan Compensation
|
Compensation Earnings
|
All Other Compensation
|
Total
|
||
Principal Position
|
Year
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Paul Rauner
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0 [1]
|
0
|
|
President/CEO/CFO
|
2014
|
0
|
0
|
0
|
0
|
0
|
0
|
0 [1]
|
|
0 |
Tassos Recachinas
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
President/CEO/CFO (Resigned 3-9-2015)
|
2014
|
60,000
|
0
|
0
|
0
|
0
|
0
|
60,000 [1]
|
120,000
|
Executive Officer Compensation Table | ||||||||||
Non-Equity
|
Nonqualified Deferred
|
|||||||||
Name and
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards
|
Incentive Plan Compensation
|
Compensation Earnings
|
All Other Compensation
|
Total
|
||
Principal Position
|
Year
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Paul Rauner
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0 1]
|
0
|
|
President/CEO/CFO
|
2014
|
0
|
0
|
0
|
0
|
0
|
0
|
0 1]
|
|
0 |
Tassos Recachinas
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
President/CEO/CFO (Resigned 3-9-2015)
|
2014
|
60,000
|
0
|
0
|
0
|
0
|
0
|
60,000 [1]
|
120,000
|
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Number of | Percentage | Number of Class A | Percentage | Number of Class B | Percentage | |||||||||||||||||||
Name and Address Beneficial Owner | Common Shares | of Ownership | Preferred Shares (1)(2) | of Ownership | Preferred Shares (1)(3) | of Ownership | ||||||||||||||||||
CMG Holdings Group, Inc, - OTC CMGO (5) | 0 | 0.00 | % | 0 | 0.00 | % | 14,400,000 | 60.76 | % | |||||||||||||||
2130N. Lincoln Park West, Suite 8N | ||||||||||||||||||||||||
Chicago, IL 60614 | ||||||||||||||||||||||||
Number of | Percentage | Number of Class A | Percentage | Number of Class B | Percentage | |||||||||||||||||||
Name and Address Beneficial Owner | Common Shares | of Ownership | Preferred Shares (1)(2) | of Ownership | Preferred Shares (1)(3) | of Ownership | ||||||||||||||||||
Paul Rauner | 0 | 0.00 | % | 7,500.000 | (4) | 100.00 | % | 800,000 | 3.38 | % | ||||||||||||||
9272 Olive Boulevard | ||||||||||||||||||||||||
St. Louis, MO 63132 | ||||||||||||||||||||||||
Vikram Grover | 0 | 0.00 | % | 0 | 0.00 | % | 859,073 | 3.62 | % | |||||||||||||||
111 N 4th Avenue | ||||||||||||||||||||||||
St. Charles, IL 60174 | ||||||||||||||||||||||||
Barbara Laken (5) | 0 | 0.00 | % | 0 | 0.00 | % | 0 | 0.00 | % | |||||||||||||||
2130N. Lincoln Park West, Suite 8N | ||||||||||||||||||||||||
Chicago, IL 60614 | ||||||||||||||||||||||||
David Dorwart | 0 | 0.00 | % | 0 | 0.00 | % | 0 | 0.00 | % | |||||||||||||||
11011 Brooklet Dr., Suite 220 | ||||||||||||||||||||||||
Houston, TX 77099 | ||||||||||||||||||||||||
All officers and directors as a group | 0 | 0.00 | % | 0 | 100.00 | % | 1,659,073 | 7.00 | % |
|
[1] Our Articles of Incorporation authorize us to issue up to 50,000,000 shares of preferred stock, $0.001 par value. Of the 50,000,000 authorized shares of preferred stock, the total number of shares of Class A Preferred Shares the Corporation shall have the authority to issue is Twenty Five Million (25,000,000), with a stated par value of $0.001 per share, and the total number of shares of Class B Preferred Shares the Corporation shall have the authority to issue is Twenty Five Million (25,000,000), with a stated par value of $0.001 per share. Our Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. We believe that the Board of Directors' power to set the terms of, and our ability to issue, preferred stock will provide flexibility in connection with possible financing or acquisition transactions in the future. The issuance of preferred stock, however, could adversely affect the voting power of holders of common stock and decrease the amount of any liquidation distribution to such holders. The presence of outstanding preferred stock could also have the effect of delaying, deterring or preventing a change in control of our company.
|
|
[2] As of May 26, 2016, we had 7,500,000 shares of our Class A preferred stock issued and outstanding. The 7,500,000 issued and outstanding shares of Class A Preferred Stock are convertible into shares of common stock at a rate of 20 common shares for each one Class A Preferred Share.
|
|
[3] As of May 26, 2016, we had 23,698,873 shares of Class B preferred stock issued and outstanding. The 23,698,873 issued and outstanding shares of Class B Preferred Stock are convertible into shares of common stock at a rate of 200 common shares for each one Class B Preferred Share. If all of our Class A Preferred Stock and Class B Preferred Stock was converted into shares of common stock, the number of issued and outstanding shares of our common stock will increase by 4,889,774,800 shares.
|
|
[4] Owned by Siren GPS, a private corporation owned and controlled by Paul Rauner, our former officer and director.
|
|
[5]Barbara Laken, one of our directors is the wife of Glenn Laken Chairman and CEO of CMG Holdings Group, Inc,.our majority and control shareholder.
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
-
|
Disclosing such transactions in reports where required;
|
-
|
Disclosing in any and all filings with the SEC, where required;
|
-
|
Obtaining disinterested directors consent; and
|
-
|
Obtaining shareholder consent where required.
|
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
(1)
|
Audit and Audit Related Fees
|
FISCAL YEAR ENDED DECEMBER 31, | AMOUNT | PRINCIPAL ACCOUNTING FIRM | |||
2015 | $ | 5,500.00 | ENTERPRISE CPAS | ||
2014 | $ | 10,750.00 | M&K CPAS, PLC |
(2)
|
Tax Fees
|
FISCAL YEAR ENDED DECEMBER 31, | AMOUNT | PRINCIPAL ACCOUNTING FIRM | |||
2015 | $ | - | ENTERPRISE CPAS | ||
2014 | $ | - | M&K CPAS, PLC |
(3)
|
All Other Fees
|
FISCAL YEAR ENDED DECEMBER 31, | AMOUNT | PRINCIPAL ACCOUNTING FIRM | |||
2015 | $ | - | ENTERPRISE CPAS | ||
2014 | $ | - | M&K CPAS, PLC |
(4)
|
Our audit committee's pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approved all accounting related activities prior to the performance of any services by any accountant or auditor.
|
(5)
|
The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full time, permanent employees was 0%.
|
|
ITEM 15.
|
EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES.
|
Exhibit | Incorporated by reference | Filed | |||
Number | Form | Date | Number | herewith | |
3.1 | Articles of Incorporation. | S-1 | 3/24/09 | 3.1 | |
3.2
|
Bylaws.
|
S-1
|
3/24/09
|
3.2
|
|
3.3
|
Amended and Restated Articles of Incorporation.
|
8-K
|
6/14/11
|
3.1a
|
|
3.4
|
Amended and Restated Articles of Incorporation.
|
8-K
|
8/17/11
|
3.1
|
|
10.1 | Exchange Note Purchase Agreement between Jabro Funding Corp. and Iconic Holdings, LLC dated March 31, 2015. | 10-K | 4/15/15 | 10.1 | |
10.2 | Exchange Note Purchase Agreement with Iconic Holdings, LLC dated April 1,2015. | 10-K | 4/15/15 | 10.2 | |
10.3 | Convertible Promissory Note with Iconic Holdings, LLC dated April 1, 2015. | 10-K | 4/15/15 | 10.3 | |
10.4 | Investment Agreement (ELOC) and Registration Rights Agreement with Iconic Holdings, LLC dated April 2, 2015. | 10-K | 4/15/15 | 10.4 | |
10.5 | Common Stock Purchase Warrant with Iconic Holdings, LLC dated April 6, 2015. | 10-K | 4/15/15 | 10.5 | |
10.6 | Stock Conversion and Subscription Agreement with Hillwinds Ocean Energy, LLC dated April 3, 2015. | 10-K | 4/15/15 | 10.6 | |
10.7 | Stock Conversion and Subscription Agreement with SirenGPS, Inc. dated April 3, 2015. | 10-K | 4/15/15 | 10.7 | |
10.8
|
Promissory Note issued to HGT Capital LLC. dated April 15, 2015
|
8-K
|
4/21/15
|
10.1
|
|
14.1
|
Code of Ethics.
|
10-K
|
3/29/11
|
14.1
|
|
21.1
|
List of subsidiaries
|
S-1/A-1
|
1/17/13
|
21.1
|
|
X
|
|||||
X
|
|||||
101.INS | XBRL Instance Document. | X | |||
101.SCH | XBRL Taxonomy Extension – Schema. | X | |||
101.CAL | XBRL Taxonomy Extension – Calculations. | X | |||
101.LAB | XBRL Taxonomy Extension – Labels. | X | |||
101.PRE | XBRL Taxonomy Extension – Presentation. | X | |||
101.DEF | XBRL Taxonomy Extension – Definition. | X |
SIGNATURES | |||||
Pursuant to the requirements of Section 13 or 15(d) 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 on this 15 th day of May, 2016. | |||||
HDS INTERNATIONAL CORP. | |||||
(the "Registrant") | |||||
Date: May 26, 2015 | By: | /s/VIKRAM GROVER | |||
President, Director, Chief Executive Officer & Chief Financial Officer | |||||
(Principal Executive Officer) | |||||
(Principal Financial Officer and Principal Accounting Officer) | |||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the date indicated. | |||||
Signature | Title | Date | |||
/s/VIKRAM GROVER |
President, Director, Chief Executive Officer & Chief Financial Officer
|
May 26, 2016 | |||
Vikram Grover | (Principal Executive Officer) | ||||
(Principal Financial Officer and Principal Accounting Officer) | |||||
/s/BARBARA LAKEN | Director | May 26, 2016 | |||
Barbara Laken | |||||
/s/ DAVID DORWART | Director | May 26, 2016 | |||
David Dorwart |
Exhibit | Incorporated by reference | Filed | |||
Number | Form | Date | Number | herewith | |
3.1
|
Articles of Incorporation.
|
S-1
|
3/24/09
|
3.1
|
|
3.2
|
Bylaws.
|
S-1
|
3/24/09
|
3.2
|
|
3.3
|
Amended and Restated Articles of Incorporation.
|
8-K
|
6/14/11
|
3.1a
|
|
3.4
|
Amended and Restated Articles of Incorporation.
|
8-K
|
8/17/11
|
3.1
|
|
10.1 | Exchange Note Purchase Agreement between Jabro Funding Corp. and Iconic Holdings, LLC dated March 31, 2015. | 10-K | 4/15/15 | 10.1 | |
10.2 | Exchange Note Purchase Agreement with Iconic Holdings, LLC dated April 1,2015. | 10-K | 4/15/15 | 10.2 | |
10.3 | Convertible Promissory Note with Iconic Holdings, LLC dated April 1, 2015. | 10-K | 4/15/15 | 10.3 | |
10.4 | Investment Agreement (ELOC) and Registration Rights Agreement with Iconic Holdings, LLC dated April 2, 2015. | 10-K | 4/15/15 | 10.4 | |
10.5 | Common Stock Purchase Warrant with Iconic Holdings, LLC dated April 6, 2015. | 10-K | 4/15/15 | 10.5 | |
10.6 | Stock Conversion and Subscription Agreement with Hillwinds Ocean Energy, LLC dated April 3, 2015. | 10-K | 4/15/15 | 10.6 | |
10.7 | Stock Conversion and Subscription Agreement with SirenGPS, Inc. dated April 3, 2015. | 10-K | 4/15/15 | 10.7 | |
10.8
|
Promissory Note issued to HGT Capital LLC. dated April 15, 2015
|
8-K
|
4/21/15
|
10.1
|
|
14.1
|
Code of Ethics.
|
10-K
|
3/29/11
|
14.1
|
|
21.1
|
List of subsidiaries
|
S-1/A-1
|
1/17/13
|
21.1
|
|
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
|||
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
101.INS | XBRL Instance Document. | X | |||
101.SCH | XBRL Taxonomy Extension – Schema. | X | |||
101.CAL | XBRL Taxonomy Extension – Calculations. | X | |||
101.LAB | XBRL Taxonomy Extension – Labels. | X | |||
101.PRE | XBRL Taxonomy Extension – Presentation. | X | |||
101.DEF | XBRL Taxonomy Extension – Definition. | X |
1.
|
I have reviewed this Form 10-K for the year ended December 31, 2015 of HDS International 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.
|
I am 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.
|
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.
|
(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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Document And Entity Information |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | HDS International Corp. |
Document Type | 10-K |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | shares | 1,995,290,000 |
Entity Public Float | $ | $ 1,995,290 |
Amendment Flag | false |
Entity Central Index Key | 0001454742 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Smaller Reporting Company |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2015 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Convertible debentures, net of unamortized discount | $ 0 | $ 36,088 |
Common Stock, authorized (in Shares) | 2,000,000,000 | 2,000,000,000 |
Common Stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, issued (in Shares) | 1,995,290,000 | 571,564,504 |
Common Stock, outstanding (in Shares) | 1,995,290,000 | 571,564,504 |
Class A Preferred Stock | ||
Preferred stock, authorized (in Shares) | 25,000,000 | 25,000,000 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, issued (in Shares) | 7,500,000 | 7,500,000 |
Preferred stock, outstanding (in Shares) | 7,500,000 | 7,500,000 |
Class B Preferred Stock | ||
Preferred stock, authorized (in Shares) | 25,000,000 | 25,000,000 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, issued (in Shares) | 15,839,300 | 0 |
Preferred stock, outstanding (in Shares) | 15,839,300 | 0 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Statement [Abstract] | ||
Revenues | ||
Operating Expenses | ||
Consulting fees | $ 98,694 | $ 384,000 |
General and administrative | 97,925 | 2,945 |
Professional fees | $ 43,800 | 33,463 |
Transfer agent fees | 185 | |
Total Operating Expenses | $ 240,419 | 420,593 |
Net Loss Before Other Expenses | (240,419) | (420,593) |
Other Expenses | ||
Interest expense | 37,159 | 108,546 |
Loss on Change in fair value of derivative liability | 429,954 | 78,680 |
Total Other Expenses | 467,113 | 187,226 |
Net Loss | $ (707,532) | $ (607,819) |
Net Loss Per Share, Basic and Diluted | ||
Weighted Average Shares Outstanding | 1,549,334,532 | 406,443,367 |
Nature of Operations and Continuance of Business |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Nature of Operations and Continuance of Business |
HDS International Corp. (the "Company") was incorporated on November 3, 2008 under the laws of the State of Nevada. The Company plans to engage in the business of providing emergency management services through a license agreement. A substantial portion of the Company's activities has involved developing a business plan and establishing contacts and visibility in the marketplace and the Company has not generated any revenue to date.
On June 11, 2012, HDS Energy and Ecosystems NB, Ltd., the Company's wholly owned subsidiary, was incorporated in the Province of New Brunswick, Canada to manage the operations and other business development efforts.
Going Concern
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated no revenues to date and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of December 31, 2015, the Company had a working capital deficiency of $639,852 and an accumulated deficit of $3,018,073. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
|
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
The consolidated financial statements for the periods ending December 31, 2014 and 2013 include the accounts of the Company, and HDS Energy and Ecosystems NB, Ltd., the Company's wholly owned subsidiary, effective June 11, 2012. All intercompany transactions and balances have been eliminated on consolidation.
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31.
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the fair values of convertible debentures, derivative liability, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of December 31, 2015 and 2014, the Company had no cash equivalents.
Intangible
assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives
of the respective assets, generally from fifteen to twenty years.
Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is records at is fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations.
The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At December 31, 2015, the Company had 90,000,000 (2014 – 1,572,180,000) potentially dilutive shares from outstanding convertible debentures.
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
ASC 220, Comprehensive Income , establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 2015 and 2014, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
ASC 820, "Fair Value Measurements" and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that
Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis were presented on the Company's balance sheet as at December 31, 2015 and 2014 as follows:
The carrying values of all of our other financial instruments, which include accounts payable and accrued liabilities, and amounts due to related parties approximate their current fair values because of their nature and respective maturity dates or durations.
The Company has limited operations and is considered to be in the development stage. During the year ended December 31, 2015, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements . The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Debt |
12 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
Debt |
Convertible Debentures
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the year ended December 31, 2014, the Company issued 25,277,857 common shares for the conversion of $32,500 of this debenture. During the year ended December 31, 2014, the Company had amortized $28,384 (2013 - $4,116) of the debt discount to interest expense. As at December 31, 2014, the carrying value of the debenture was $nil (2013 - $4,116).
On December 4, 2013, the note became convertible resulting in the Company recording a derivative liability of $46,532 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at December 31, 2014, the Company revalued the derivative liability to its fair value resulting in the Company recording $115 (2013 - $1,011) as a loss on change in fair value of derivative liabilities. As at December 31, 2014, the fair value of the derivative liability was $1,605 (2013 - $45,521). Refer to Note 4.
$1,019), which has been included in accounts payable and accrued liabilities.
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $27,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the year ended December 31, 2014, the Company issued 23,312,500 common shares for the conversion of $7,460 of this debenture. During the year ended December 31, 2014, the Company had amortized $22,461 (2013 - $2,779) of the debt discount to interest expense. As at December 31, 2014, the carrying value of the debenture was $17,780 (2013 - $2,779).
On January 11, 2014, the note became convertible resulting in the Company recording a derivative liability of $36,272 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at December 31, 2014, the Company revalued the derivative liability to its fair value resulting in the Company recording $23,331 (2013 - $nil) as a gain on change in fair value of derivative liabilities. As at December 31, 2014, the fair value of the derivative liability was $3,061 (2013 - $nil). Refer to Note 4.
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the year ended December 31, 2014, the Company had amortized $10,123 (2013 - $1,618) of the debt discount to interest expense. As at December 31, 2014, the carrying value of the debenture was $11,741 (2013 - $1,618).
On April 2,
2014, the note became convertible resulting in the Company recording a derivative liability of $47,794 with a corresponding
adjustment to loss on change in fair value of derivative liabilities. As at December 31, 2014, the Company revalued the derivative
liability to its fair value resulting in the Company recording $2,882 (2013 - $nil) as a gain on change in fair value of derivative
liabilities. As at December 31, 2014, the fair value of the derivative liability was $44,912 (2013 - $nil). Refer to Note 4.
The Purchaser has the right to convert the outstanding principal amount and interest under the Note in whole or in part into shares of common stock at a price equal to 50% of the average of the lowest three end of day closing prices of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note.
The Note may be prepaid according to the following schedule: Between 1 and 90 days from the date of execution, the Note may be prepaid for 135% of face value plus accrued interest. Between 91 and 180 days from the date of execution, the Note may be prepaid for 145% of face value plus accrued interest. After 180 days from the date of execution until the Due Date, the Note may not be prepaid without written consent from the Purchaser.
|
Derivative Liabilities |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Liabilities |
The Company records the fair value of the of the conversion price of the convertible debentures disclosed in Notes 3(a) and 3(b) in accordance with ASC 815, Derivatives and Hedging . The fair value of the derivative was calculated using a multi-nominal lattice model performed by an independent qualified business valuator. The fair value of the derivative liability is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the year ended Dec ember 31, 2015 , the Company recorded a loss on the change in fair value of derivative liability of $32,630 ( 2014 - $78,680 ). As at December 31, 2015 , the Company recorded a derivative liability of $ 56,417 ( 2013 - $70,290).
The following inputs and assumptions were used to value the convertible debentures outstanding during the period ended December 31, 2015 and 2014 :
The underlying stock price of $0.0014 was used as the fair value of the common stock as at December 31, 2013.
The underlying stock price of $0.0013 was used as the fair value of the common stock as at June 30, 2015. The principal of the debenture on the June 7, 2013 date of issuance was $32,500.
The balance of the principal and interest of the June 7, 2013 debenture on December 4, 2013, the date the June 7, 2013 debenture became convertible, was $33,775.
The balance of the principal and interest of the June 7, 2013 debenture on December 31, 2013 was $33,975.
The balance of the principal and interest of the June 7, 2013 debenture on December 31, 2014 was $3,191.
The principal of the debenture on the July 15, 2013 date of issuance was $27,500.
The balance of the principal and interest of the July 15, 2013 debenture on January 11, 2014, the date the July 15, 2013 debenture became convertible, was $28,579.
The balance of the principal and interest of the July 15, 2013 debenture on December 31, 2014 was $23,117.
The principal of the debenture on the October 4, 2013 date of issuance was $32,500.
The balance of the principal and interest of the October 4, 2013 debenture on April 2, 2014, the date the October 4, 2013 debenture became convertible, was $33,782.
The balance of the principal and interest of the October 4, 2013 debenture on December 31, 2014 was $35,727.
The principal of the debenture on the February 18, 2014 date of issuance was $15,500.
The balance of the principal and interest of the February 18, 2014 debenture on August 17, 2014, the date the February 18, 2014 debenture became convertible, was $16,112.
The balance of the principal and interest of the February 18
The Holder would redeem based on availability of alternative financing 0% of the time increasing 1.0% monthly to a maximum of 10%.
The Holder would automatically convert the note at maturity if the registration (after 120 days) was effective and the Company is not in default.
The projected annual volatility for each valuation period was based on the historic volatility of the Company of 176% as at December 31, 2013, 175% as at January 11, 2014, 176% as at June 30, 2014, 176% as at August 17, 2014, 170% as at September 30, 2014, 2014, 166% as at October 26, 2014, 168% as at December 2, 2014, 170% as at December 4, 2014, 172% as at December 9, 2014, 183% as at December 31, 2014, 203% as at February 6, 2015, 206% as at February 10, 2015, 209% as at February 13, 2015, 212% as at February 18, 2015, 216% as at February 23, 2015, 222% as at March 2, 2015, 223% as at March 3, 2015, 238% as at March 16, 2015, 240% as at March 17, 2015, 244% as at March 19, 2015, 249% as at March 24, 2015, 251% as at March 25, 2015, and 259% as at March 31, 2015.
An event of default would occur 0% of the time, increasing to 1.0% per month to a maximum of 5%. To date, the debenture is not in default nor converted by the Holder.
|
Common Stock |
12 Months Ended | |||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||
Common Stock |
Share Transactions for the Year Ended December 31, 2015:
All were converted within the original terms, so no gains (losses) were recorded.
Share Transactions for the Year Ended December 31, 2014:
All were converted within the original terms, so no gains (losses) were recorded. |
Related Party Transactions |
12 Months Ended | ||||||||||||||
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Dec. 31, 2015 | |||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||
Related Party Transactions |
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Commitments |
12 Months Ended | ||||
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Dec. 31, 2015 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments |
October 2012. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,000 to $500 per month effective January 1, 2014.
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Income Taxes |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
The Company has a net operating loss carried forward of $3,018,073 available to offset taxable income in future years which commence expiring in fiscal 2029.
The income tax benefit has been computed by applying the weighted average income tax rates of Canada (federal and provincial statutory rates) and of the United States (federal and state rates) of 27% and 27%, respectively, to the net loss before income taxes calculated for each jurisdiction. The tax effect of the significant temporary differences, which comprise future tax assets and liabilities, are as follows:
The significant components of deferred income tax assets and liabilities at December 31, 2015 and 2014 are as follows:
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited. |
Subsequent Events |
12 Months Ended | ||||||||||||||
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Dec. 31, 2015 | |||||||||||||||
Subsequent Events [Abstract] | |||||||||||||||
Subsequent Events |
We have evaluated subsequent events through the date of issuance of the financial statements, and did not have any material recognizable subsequent events after December 31, 2015, except for the following:
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
Basis of Presentation |
The consolidated financial statements for the periods ending December 31, 2014 and 2013 include the accounts of the Company, and HDS Energy and Ecosystems NB, Ltd., the Company's wholly owned subsidiary, effective June 11, 2012. All intercompany transactions and balances have been eliminated on consolidation.
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31.
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Use of Estimates |
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the fair values of convertible debentures, derivative liability, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
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Cash and Cash Equivalents |
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of December 31, 2015 and 2014, the Company had no cash equivalent |
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Intangible Assets |
Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally from fifteen to twenty years. |
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Impairment of Long-Lived Assets |
Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. |
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Beneficial Conversion Features |
From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. |
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Derivative Liability |
From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is records at is fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations. |
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Basic and Diluted Net Loss Per Share |
The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At December 31, 2015, the Company had 90,000,000 (2014 – 1,572,180,000) potentially dilutive shares from outstanding convertible debentures. |
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Income Taxes |
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. |
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Comprehensive Loss |
ASC 220, Comprehensive Income , establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 2015 and 2014, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. |
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Financial Instruments |
ASC 820, "Fair Value Measurements" and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that
Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis were presented on the Company's balance sheet as at December 31, 2015 and 2014 as follows:
The carrying values of all of our other financial instruments, which include accounts payable and accrued liabilities, and amounts due to related parties approximate their current fair values because of their nature and respective maturity dates or durations. |
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Recent Accounting Pronouncements |
The Company has limited operations and is considered to be in the development stage. During the year ended December 31, 2015, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements . The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Summary of Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis |
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Derivative Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liability |
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Income tax benefit |
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Deferred income tax assets and liabilities |
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Nature of Operations and Continuance of Business (Details Narrative) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working captial deficiency | $ 639,852 | |
Accumulated deficit | $ (3,018,073) | $ (2,310,541) |
Summary of Significant Accounting Policies (Details) - shares |
12 Months Ended | |
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Dec. 31, 2015 |
Dec. 31, 2014 |
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Summary Of Significant Accounting Policies Details | ||
Earnings Per Share, Potentially Dilutive Securities | 90,000,000 | 1,572,180,000 |
Summary of Significant Accounting Policies (Details) - Assets and Liabilities Measured on a Recurring Basis (USD $) |
12 Months Ended |
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Dec. 31, 2015
USD ($)
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Assets and liabilities measured at fair value on a recurring basis [Rollforward] | |
Derivative Liability, beginning | $ 70,290 |
New Issuances | |
Conversions | $ (64,767) |
Changes in Fair Values | 448,218 |
Derivative Liability, ending | $ 453,741 |
Debt (Details) (Parenthetical) |
12 Months Ended |
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Dec. 31, 2015 | |
Convertible Debenture, April 1, 2015 [Member] | |
Debt Conversion [Line Items] | |
Terms | The Purchaser has the right to convert the outstanding principal amount and interest under the Note in whole or in part into shares of common stock at a price equal to 50% of the average of the lowest three end of day closing prices of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note.
The Note may be prepaid according to the following schedule: Between 1 and 90 days from the date of execution, the Note may be prepaid for 135% of face value plus accrued interest. Between 91 and 180 days from the date of execution, the Note may be prepaid for 145% of face value plus accrued interest. After 180 days from the date of execution until the Due Date, the Note may not be prepaid without written consent from the Purchaser. |
Derivative Liabilities - Derivative liability (Details) - USD ($) |
12 Months Ended | |
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Dec. 31, 2015 |
Dec. 31, 2014 |
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Derivative Liability [Rollforward] | ||
Derivative Liability (in Dollars) , beginning | $ 70,290 | $ 45,521 |
Derivative loss due to new issuances | 105,816 | |
Adjustment for conversion | $ (64,767) | (53,911) |
Mark to market adjustment | 50,894 | (27,136) |
Derivative Liability (in Dollars), ending | $ 56,417 | $ 70,290 |
Derivative Liabilities (Details Narrative) - USD ($) |
12 Months Ended | |
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Dec. 31, 2015 |
Dec. 31, 2014 |
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Derivative [Line Items] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Gain (Loss) Included in Earnings (in Dollars) | $ 32,630 | $ 78,680 |
Fair Value Assumptions, Exercise Price (in Dollars per share) | $ 0.0014 | |
Minimum [Member] | ||
Derivative [Line Items] | ||
Fair Value Assumptions, Risk Free Interest Rate | 0.00% | |
Fair Value Assumptions, Risk Free Interest Rate monthly increase | 1.00% | |
Fair Value Inputs, Probability of Default | 0.00% | |
Maximum [Member] | ||
Derivative [Line Items] | ||
Fair Value Assumptions, Risk Free Interest Rate | 10.00% | |
Fair Value Inputs, Probability of Default | 5.00% |
Derivative Liabilities Inputs and Assumptions(Details Narrative) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Derivative [Line Items] | |||
Stock price | $ 0.0013 | $ 0.0014 | |
Convertible Debenture, June 7, 2013 [Member] | |||
Derivative [Line Items] | |||
Convertible Denbenture, Face Amount | $ 32,500 | ||
Converible Debenture date of conversion, value | 33,775 | ||
Covertible Debenture, Value | $ 3,191 | 33,975 | |
Convertible Debenture, July 15, 2013 [Member] | |||
Derivative [Line Items] | |||
Convertible Denbenture, Face Amount | 27,500 | ||
Converible Debenture date of conversion, value | 28,579 | ||
Covertible Debenture, Value | 23,117 | ||
Convertible Debenture, October 4, 2013 [Member] | |||
Derivative [Line Items] | |||
Convertible Denbenture, Face Amount | $ 32,500 | ||
Converible Debenture date of conversion, value | 33,782 | ||
Covertible Debenture, Value | 35,727 | ||
Convertible Debenture, February 18, 2014 [Member] | |||
Derivative [Line Items] | |||
Convertible Denbenture, Face Amount | 15,500 | ||
Converible Debenture date of conversion, value | $ 16,112 |
Derivative Liabilities Additional(Details Narrative) |
1 Months Ended | 12 Months Ended | |||||||||||||||||||||
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Mar. 31, 2015 |
Mar. 26, 2015 |
Mar. 24, 2015 |
Mar. 20, 2015 |
Mar. 18, 2015 |
Mar. 16, 2015 |
Mar. 04, 2015 |
Mar. 02, 2015 |
Feb. 23, 2015 |
Feb. 18, 2015 |
Feb. 13, 2015 |
Feb. 06, 2015 |
Dec. 31, 2014 |
Dec. 09, 2014 |
Dec. 04, 2014 |
Dec. 02, 2014 |
Feb. 10, 2014 |
Jan. 11, 2014 |
Oct. 26, 2014 |
Sep. 30, 2014 |
Aug. 17, 2014 |
Jun. 30, 2014 |
Dec. 31, 2013 |
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Derivative Liabilities Additionaldetails Narrative | |||||||||||||||||||||||
Fair Value Assumptions, Expected Volatility Rate | 259.00% | 251.00% | 249.00% | 244.00% | 240.00% | 238.00% | 223.00% | 222.00% | 216.00% | 212.00% | 209.00% | 203.00% | 183.00% | 172.00% | 170.00% | 168.00% | 206.00% | 175.00% | 166.00% | 170.00% | 176.00% | 176.00% | 176.00% |
Related Party Transactions (Details Narrative) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Company controlled by former officers and directors [Member] | |||
Accounts Payable, Related Parties | $ 300,000 | $ 300,000 | |
Accrued interest | 102,219 | 72,219 | |
Company under common control by former officers and directors [Member] | |||
Accounts Payable, Related Parties | 15,225 | 10,225 | |
Former President and CEO [Member] | |||
Due to Officers or Stockholders | 120,000 | 45,000 | |
Accounts Payable, Related Parties | 180,000 | 60,000 | |
Accounts Payable, Reimbursed expenses | $ 7,518 | $ 800 | |
President and CEO [Member] | |||
Accounts Payable, Related Parties | $ 570 | ||
President and CEO Additional[Member] | |||
Accounts Payable, Related Parties | $ 6,100 |
Commitments (Details Narrative) - USD ($) |
Apr. 09, 2014 |
Oct. 02, 2012 |
Jul. 18, 2012 |
Oct. 12, 2011 |
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Commitments and Contingencies Disclosure [Abstract] | ||||
Consulting Agreement, monthly | $ 500 | $ 3,000 | $ 3,750 | $ 3,000 |
Income Taxes - Income tax benefit (Details) - USD ($) |
12 Months Ended | |
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Dec. 31, 2015 |
Dec. 31, 2014 |
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Income Tax Disclosure [Abstract] | ||
Income tax recovery at statutory rate | $ 195,612 | $ 158,351 |
Valuation allowance change | $ (195,612) | $ (158,351) |
Provision for income taxes |
Income Taxes - Deferred income tax assets and liabilities (Details) - USD ($) |
12 Months Ended | |
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Dec. 31, 2015 |
Dec. 31, 2014 |
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Income Tax Disclosure [Abstract] | ||
Income tax recovery at statutory rate | $ 824,952 | $ 629,340 |
Valuation allowance change | $ (824,952) | $ (629,340) |
Provision for income taxes |
Income Taxes (Details Narrative) |
12 Months Ended |
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Dec. 31, 2015
USD ($)
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Income Tax Disclosure [Abstract] | |
Net operating loss carryforward | $ 3,018,073 |
Expiration date | Dec. 31, 2029 |
Statutory rate | 27.00% |
Subsequent Events (Details Narrative) |
1 Months Ended |
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Feb. 18, 2016
USD ($)
shares
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Subsequent Event [Line Items] | |
Share increase | shares | 10,000,000 |
Reverse stock split | 1-30 |
Share increase approval | shares | 50,000,000 |
Agreement 1 [Member] | |
Subsequent Event [Line Items] | |
Debt Conversion, Original Debt, Amount | $ 100,000 |
Debt settlement agreement | 25,000 |
Agreement 2 [Member] | |
Subsequent Event [Line Items] | |
Debt settlement agreement | $ 50,000 |