0001493152-16-015082.txt : 20161121 0001493152-16-015082.hdr.sgml : 20161121 20161115145150 ACCESSION NUMBER: 0001493152-16-015082 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 49 CONFORMED PERIOD OF REPORT: 20160930 FILED AS OF DATE: 20161114 DATE AS OF CHANGE: 20161121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCE BIOENERGY PLUS, INC. CENTRAL INDEX KEY: 0001549145 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 454944960 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-54942 FILM NUMBER: 161999299 BUSINESS ADDRESS: STREET 1: 400 N. CONGRESS AVENUE STREET 2: SUITE 130 CITY: WEST PALM BEACH STATE: FL ZIP: 33401 BUSINESS PHONE: (888)607-3555 MAIL ADDRESS: STREET 1: 400 N. CONGRESS AVENUE STREET 2: SUITE 130 CITY: WEST PALM BEACH STATE: FL ZIP: 33401 FORMER COMPANY: FORMER CONFORMED NAME: Alliance Media Group Holdings, Inc. DATE OF NAME CHANGE: 20120504 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

For the Quarter ended September 30, 2016

 

Commission File Number: 000-54942

 

ALLIANCE BIOENERGY PLUS, INC.

 

(Exact name of registrant as specified in its charter)

 

 

Nevada   4 5-4944960
 (State of organization)   (I.R.S. Employer Identification No.)

 

400 N Congress Avenue Suite 130

West Palm Beach, FL 33401

 

(Address of principal executive offices)

 

(888) 607-3555

 

Registrant’s telephone number, including area code

 

 

 

Former address if changed since last report

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [  ] Yes [X] No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [  ] Yes [X] No

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 and Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [  ] No

 

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

 

Large Accelerated Filer [  ]   Accelerated Filer [  ] Non-Accelerated Filer [  ] Smaller Reporting Company [X]
    (Do not check if a
smaller reporting
company)
 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

 

Securities registered under Section 12(g) of the Exchange Act:

 

Common Stock $.001 par value

 

There were 59,344,925 shares of common stock outstanding as of November 14, 2016

 

 

 

   
 

 

TABLE OF CONTENTS

 

 

 

PART I – FINANCIAL INFORMATION
     
ITEM 1. INTERIM FINANCIAL STATEMENTS 3
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION 18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 25
ITEM 4. CONTROLS AND PROCEDURES 25
     
PART II – OTHER INFORMATION
     
ITEM 1. LEGAL PROCEEDINGS 25
ITEM 1A. RISK FACTORS 26
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES 26
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 28
ITEM 4. MINE SAFETY DISCLOSURES 28
ITEM 5. OTHER INFORMATION 28
ITEM 6. EXHIBITS 28
     
SIGNATURES

 

  2 
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. INTERIM FINANCIAL STATEMENTS

 

Alliance BioEnergy Plus, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
         
    September 30, 2016    December 31, 2015 
ASSETS          
Current assets          
Cash and cash equivalents  $1 0,840   $6 2,054 
Prepaid expenses   902,039    743,738 
Deferred financing costs   27,778    54,278 
TOTAL CURRENT ASSETS   940,657    860,070 
PROPERTY AND EQUIPMENT, AT COST, NET OF ACCUMULATED DEPRECIATION OF $115,097 AND $59,919 AT SEPTEMBER 30, 2016 AND DECEMBER 31, 2015, RESPECTIVELY   273,435    310,576 
Other assets          
Security deposits   16,305    18,965 
Capitalized costs   260,497    202,021 
Investment in and advances to unconsolidated affiliates   7,419,619    7,433,024 
TOTAL OTHER ASSETS   7,696,421    7,654,010 
TOTAL ASSETS  $8,910,513   $8,824,656 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accounts payable and accrued liabilities  $431,973   $387,442 
Payable relating to an acquisition – related party   2,031,258    2,031,258 
Short term note payable – related party   71,000    71,000 
Short term note payable – other   -    265,000 
Convertible debentures   555,556    999,000 
Interest payable – related party   11,701    9,036 
Interest payable – other   55,556    83,946 
Current liabilities of discontinued operations   36,148    36,148 
TOTAL CURRENT LIABILITIES   3,193,192    3,882,830 
Long term liabilities          
Long term note payable – Other   -    1,250,000 
TOTAL LONG TERM LIABILITIES   -    1,250,000 
TOTAL LIABILITIES  $3 ,193,192   $5 ,132,830 
           
STOCKHOLDERS’ EQUITY          
Preferred stock; $0.001 par value; 10,000,000 shares authorized; zero shares issued and outstanding   -    - 
Common stock; $0.001 par value; 500,000,000 shares authorized; 55,899,825 shares issued and outstanding at September 30, 2016 and 41,084,279 shares issued and outstanding at December 31, 2015   55,900    41,084 
Stock subscription receivable   (105,000)   (5,000)
Additional paid-in capital   26,323,896    21,160,997 
Accumulated deficit   (19,882,797)   (17,052,797)
Total stockholders’ equity   6,391,999    4,144,284 
Non-controlling interest   (674,678)   (452,458)
TOTAL EQUITY  $5,717,321   $3,691,826 
          
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $8,910,513   $8,824,656 

 

See accompanying notes to financial statements

 

  3 
 

 

Alliance BioEnergy Plus, Inc.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
         
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2016   2015   2016   2015 
Revenues  $-   $-   $-   $- 
                     
Operating expenses:                    
General and administrative   765,657    2,338,663    3,509,162    4,098,510 
Total operating expenses   765,657    2,338,663    3,509,162    4,098,510 
                     
Loss from operations:   (765,657)   (2,338,663)   (3,509,162)   (4,098,510)
                     
Other (income) expense:                    
Equity loss in unconsolidated affiliates   41,104    61,065    124,781    143,338 
Beneficial conversion feature   -    -    92,440    - 
Gain on sale of subsidiary   -    -    (1,163,609)   - 
Interest expense – related party   895    895    2,665    2,655 
Interest expense and prepayment penalties – other   -    84,581    483,656    114,942 
Total other (income) expense   (41,999)   (146,541)   460,067    (260,935)
                     
Loss from continuing operations:  $(807,656)  $(2,485,204)  $(3,049,095)  $(4,359,445)
                     
Discontinued operations:                    
Loss from operations   -    64    3,125    29,081 
Debt forgiveness   -    -    -    (700,000)
Income (Loss) on discontinued operations:  $-   $(64)  $(3,125)  $670,919 
                     
Net loss:   (807,656)   (2,485,268)   (3,052,220)   (3,688,526)
Net loss attributable to non-controlling interest:   (114,758)   (154,244)   (222,220)   (279,673)
Net loss attributable to Company:  $(692,898)  $(2,331,024)  $(2,830,000)  $(3,408,853)
                     
Basic and diluted net loss per share:                    
Continuing operations  $(0.02)  $(0.07)  $(0.06)  $(0.12)
Discontinued operations  $-   $-   $-    $0.02 
Net loss per share:  $(0.02)  $(0.07)  $(0.06)  $(0.10)
                     
Weighted average common shares outstanding:                    
Basic and Diluted   50,677,527    39,081,859    54,688,336    38,636,093 

 

See accompanying notes to financial statements

 

  4 
 

 

Alliance BioEnergy Plus, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    Nine Months Ended    Nine Months Ended 
    September 30, 2016    September 30, 2015 
Cash flows from operating activities          
Net loss from continuing operations   (3,049,095)   (4,359,445)
Net income (loss) from discontinued operations   (3,125)   670,919 
Net loss  $(3,052,220)  $(3,688,526)
Reconciliation of net loss to net cash used in operating activities          
Depreciation and amortization   55,178    97,864 
Amortization of non-cash compensation   584,567    - 
Deferred financing costs   26,500    (187,000)
Sale of subsidiary   (1,163,609)   - 
Beneficial conversion feature   92,440    - 
Stock based compensation for services   339,263    366,296 
Issuance of warrants for services   688,887    1,332,239 
Stock based compensation awarded under employee, director plan   -    240,000 
Issuance of options awarded under employee, director plan   220,720    446,281 
Equity loss in unconsolidated affiliates   124,781    143,338 
Changes in operating assets and liabilities          
Prepaid expenses   14,278    39,558 
Accrued interest – other   8,097    41,204 
Accounts payable and accrued liabilities   173,057    66,437 
Net cash (used in) operating activities – continuing operations   (1,884,936)   (1,773,228)
Changes in discontinued operations assets and liabilities          
Accounts payable and accrued liabilities   -    (1,656)
Legal settlement relating to an acquisition   -    (700,000)
Net cash (used in) operating activities – discontinued operations   (3,125)   (30,737)
Net cash (used in) operating activities   (1,888,061)   (1,803,965)
           
Cash flows from investing activities          
Purchase of property and equipment   (18,037)   (217,084)
Security deposit   2,660    (17,965)
Capitalized fees   (58,476)   - 
Investment in and advances to an unconsolidated affiliate   (111,376)   (103,419)
Net cash (used in) investing activities – continuing operations   (185,229)   (338,468)
Net cash (used in) investing activities – discontinued operations   -    - 
Net cash (used in) investing activities   (185,229)   (338,468)
           
Cash flows from financing activities          
Proceeds from issuance of common stock   2,608,994    850,209 
Proceeds from short-term note payable – other   -    235,000 
Proceeds from issuance of convertible debt   555,556    1,191,000 
Payment of convertible debt   (884,000)   (143,000)
Payment of short-term note payable – other   (265,000)   - 
Disgorgement fees   6,526    - 
Net cash provided by financing activities – continuing operations   2,022,076    2,133,209 
Net cash provided by financing activities – discontinued operations   -    - 
Net cash provided by financing activities   2,022,076    2,133,209 
           
Net increase (decrease) in cash and cash equivalents   (51,214)   (9,224)
           
Cash and cash equivalent at beginning of the period   62,054    205,969 
Cash and cash equivalent at end of the period  $10,840   $196,745 
           
Supplemental disclosure of cash flow information          
Cash paid during the period for          
Interest  $512,046   $59,527 
Taxes   -    - 
           
Supplemental schedule of non-cash activities          
Conversion of convertible debenture to common stock  $333,301   $- 
Common stock issued for future services   203,267    311,154 
Warrants issued for future services   676,757    611,290 
Rescinded warrants   -    (255,612)

 

See accompanying notes to financial statements

 

  5 
 

 

ALLIANCE BIOENERGY PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

September 30, 2016

 

NOTE 1 – ORGANIZATION AND BUSINESS DESCRIPTION

 

Alliance Bioenergy Plus, Inc (the “Company”) is a technology company focused on emerging technologies in the renewable energy, biofuels and new technologies sectors. From inception through December 5, 2014, the Company was known as Alliance Media Group Holdings, Inc. At inception (March 28, 2012), the Company was organized as a vehicle to engage in the commercial production, distribution and exploitation of Motion Pictures and other Entertainment products. However, in December 2013, a wholly owned subsidiary of the Company, AMG Renewables, LLC (“AMG Renewables”), acquired the controlling interest (51%) in AMG Energy Group, LLC (“AMG Energy”), which owns a fifty percent (50%) interest of Carbolosic, LLC (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The Company’s goal in acquiring the interest in AMG Energy was to develop the CTS technology to a commercial scale and then seek to license the technology to prospective licensees. In September 2014, the Company determined to focus all of the Company’s resources and personnel on the Company’s renewable energy holdings and future energy technologies and to divest the Company of its entertainment-related assets and subsidiaries. The Company therefore determined at that time to divest and sell off, close down or discontinue the operations of its entertainment-related subsidiaries. Effective December 5, 2014, amended the Company’s Articles of Incorporation to change the name of the Company to Alliance Bioenergy Plus, Inc., which is more appropriately descriptive of the new business direction of the Company.

 

Commencing in March 2016, the Company commenced action to restructure its energy-related holdings through the following transactions;

 

1)       In March 2016, AMG Renewables, a wholly-owned subsidiary of the Company, sold its interest in Carbolosic Plant 1 to Carbolosic Energy 1, LLLP, an unrelated third party, in exchange for satisfaction of the outstanding $1,250,000 loan and $36,488 interest between Carbolosic Plant 1 and Carbolosic Energy 1, LLLP. In connection with the transaction, an amount which the Company had prepaid to Carbolosic Energy 1, LLLP ($122,879) for future marketing and interest was eliminated in the sale.

 

2)       AMG Renewables, a wholly-owned subsidiary of the Company entered into an agreement to acquire, by merger, the remaining 49% of AMG Energy Solutions, Inc. (“Solutions”) which it did not previously own by issuing 8,700,000 shares of new Company common stock to the holders of the minority interest in Solutions. Prior to the completion of this transaction, Solutions owned 43% of AMG Energy and two other parties controlled 6% of AMG Energy. As of September 30, 2016, this merger had yet to be completed as certain conditions had yet to be satisfied. The Company believes that this transaction will be completed in the 4th quarter of 2016. Following the merger, the Company will own 94% of AMG Energy, which in turn will own 100% of EK Laboratories, Inc. and 50% of Carbolosic. At the same time, the Company has agreed to acquire the remaining 6% of AMG Energy from the remaining two parties in exchange for issuance of an aggregate of 1,540,094 shares of Company common stock. In addition, the remaining balance owed under the original transaction has been renegotiated at aggregate principal balance of $2,098,696 bearing an interest rate of six percent (6%) per annum and maturing on July 20, 2017.

 

3)       Following completion of the foregoing merger, AMG Renewables and AMG Energy, would both then be wholly-owned subsidiaries of the Company, having agreed to enter into a merger transaction whereby AMG Energy is the surviving company. Thereafter, AMG Energy would become the holding company for all of the energy holdings of the Company (EK Laboratories, Inc. and a 50% interest in Carbolosic, which includes certain licensing rights in North America and Africa) and the existence of AMG Renewables will terminate.

 

Plan of Operation

 

The Company is focused on one industry – Renewable Energy. Through its wholly-owned subsidiary, AMG Energy, the Company owns Ek Laboratories, Inc. and a 50% interest in Carbolosic (which includes certain licensing rights in North America and Africa). The Company has a strategy that includes growth in its energy-related activities as well as mergers and acquisitions and start-up activities which are focused on development of an increasing revenue stream, secure market share and enhancement of shareholder value.

 

  6 
 

 

AMG ENERGY GROUP, LLC

 

AMG Energy was created for the purpose of managing and developing the Company’s renewable energy technology enterprises. Through a series of transactions described in ORGANIZATION AND BUSINESS DESCRIPTION, above, the Company anticipates that in the 4th quarter of 2016 AMG Energy will become a wholly-owned subsidiary of the Company and the Company’s sole holding company for all of its energy interests. These interests would comprise ownership of 100% of EK Laboratories, Inc., a Florida corporation (“EK”) formerly known as Central Florida Institute of Science and Technology, Inc. and a fifty percent (50%) interest in Carbolosic, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The Company’s goal is to develop this CTS technology to a commercial scale and then seek to license the technology to prospective licensees. EK was formed to serve as a demonstration and research facility to further develop the CTS process, its uses, and develop new technologies.

 

In addition, AMG Energy has entered into a series of agreements with various unrelated third parties, wherein AMG Energy sublicensed the CTS technology to Naldogen (Pty) Ltd., an existing South African company, which has been renamed Carbolosic Energy SA PTY LTD (“Carbolosic SA”). Carbolosic SA shall be solely devoted to exploitation of the CTS technology in South Africa, Lesotho, Swaziland and Botswana and the term of the sublicense is coterminous with the master license (i.e. through July 1, 2032). The consideration for the grant of the sublicense is $25,000,000 (“License Fee”), which was to be paid or guaranteed by March 1, 2016. In addition to the license fee, the sublicense holder will pay AMG Energy a royalty of 3.5% of the revenues on the first CTS plant developed and a 5.0% royalty on the revenues of additional plants developed. Until the $25,000,000 payment has been received, the Company does not consider all of the events required under the agreement to have been completed. Therefore the Company has not recorded any of the fee in the accompanying financial statements. Contemporaneously, Carbolosic SA’s shareholders entered into an agreement whereby, among other matters, it was agreed that ownership of Carbolosic SA shall be 43.5% for Tes Projects (Pty) Ltd, a South African company (“Tes”), 24.5 % for Spearhead Capital Ltd, a Seychelles company (“Spearhead”), 7.5% for Jupiter Trust, a South African Trust (“Jupiter”) and 24.5% for the Company. TES, Spearhead and Jupiter are all unrelated to the Company. The interests of Tes and Jupiter are delivered in consideration of the funding or guarantee of funding of the License Fee; Spearhead’s interest is in consideration of facilitating the Sublicense transaction; and the Company’s interest is in exchange for the delivery to Carbolosic SA of a 24.5% interest in one of the Company’s CTS sugar extracting plants to be developed in the United States. In February 2016, due to economic and political turmoil in South Africa, members of Tes Projects (Pty) Ltd and Jupiter Trust resigned from management and from the Board of Carbolosic SA and returned all ownership interest in Carbolosic SA to the Carbolosic SA treasury. Spearhead Capital intends to continue operations of Carbolosic SA but at this time there is no guarantee that they will be successful in securing the needed funds or contracts to do so. The Company will continue to evaluate its position in Africa to determine the strategy it intends to pursue.

 

Carbolosic Plant 1 was created in October 2014 for the purpose of being a full-scale facility for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing located in Palm Beach County, FL. In March 2016, Carbolosic Plant 1 was sold to Carbolosic Energy 1, LLLP, a non-related third party, in exchange for satisfaction of the outstanding $1,250,000 loan and accrued interest between Carbolosic Plant 1 and Carbolosic Energy 1, LLLP.

 

The Company believes that its management and consultants have significant experience in the bio-fuels, renewable energy and chemical manufacturing industries. As of the date of filing, the Company has not generated any revenues from its renewable energy business.

 

NOTE 2 – GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has not generated any revenue, has incurred losses since inception, has a working capital deficiency of $2,252,535 and may be unable to raise further equity. At September 30, 2016 the Company had incurred accumulated losses of $19,882,797 since its inception. The Company expects to incur significant additional liabilities in connection with its start-up activities. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities when they become due and to generate sufficient revenues from its operations to pay its operating expenses. These financial statements do not include any adjustments related to the recoverability and classifications of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty. There are no assurances that the Company will continue as a going concern.

 

  7 
 

 

Management believes that the Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of stock or borrow additional funds. The Company’s inability to obtain additional cash could have a material adverse effect on its financial position, results of operations, and its ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty

 

The Company intends to raise additional capital, sell licenses to its CTS technology and continue constructing its full scale demonstration facility which, once operational, is expected to generate cash flow in amounts sufficient to cover the Company’s operating expenses and debt service.

 

Through its private offerings, the Company raised $3,730,390 from inception through December 31, 2015 and raised an additional $2,708,994, of which $100,000 is recorded as a stock subscription receivable, in the nine months ended September 30, 2016.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of the Company’s majority-owned subsidiaries over which the Company exercises control. Intercompany transactions and balances were eliminated in consolidation.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, after elimination of intercompany accounts and transactions. Investments in business entities in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The Company’s proportionate share of net income or loss of the entity is recorded in the Consolidated Statements of Operations

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted 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 as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of impairment assessment of identifiable intangible assets and valuation allowance for deferred tax assets. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.

 

Cash and Cash Equivalents

 

All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents.

 

Stock Compensation

 

The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation” (formerly referred to as SFAS No. 123(R)). Share-based payments to consultants, service providers and other non-employees are accounted for in accordance with ASC Topic 718, ASC Topic 505, “Equity Payments to Non-Employees” or other applicable authoritative guidance.

 

  8 
 

 

Stock-based Compensation Valuation Methodology

 

Stock-based compensation resulting from the issuance of common stock is calculated by reference to the valuation of the stock on the date of issuance, the expense being recognized as the compensation is earned. Stock-based compensation expenses related to employee options and warrants granted to non-employees are recognized as the stock options and warrants are earned. The fair value of the stock options or warrants granted is estimated at the grant date, using the Black-Scholes option pricing model, and the expense is recognized on a straight-line basis over the shorter of the period over which services are to be received or the life of the option or warrant. The grant date fair value of employee share options and similar instruments is estimated using the Black-Scholes option pricing model on the basis of the fair value of the underlying common stock on the measurement date, adjusted for the unique characteristics of those equity instruments, using the assumptions noted in the table below. The fair value of the common stock is determined by the then-prevailing closing market price. Expected volatility was based on the historical volatility of the Company’s closing day market price per share. The expected term of options and warrants was based upon the life of the option, and the risk-free rate used was based on the U.S. Treasury Daily Yield Curve Rate.

 

The stock compensation issued for services during the nine months ended September 30, 2016, was valued on the date of issuance. The following assumptions were used in calculations of the Black-Scholes option-pricing models for warrant-based stock compensation issued in the nine months ended September 30, 2016:

 

   01/01/16   01/04/16   01/25/16   02/01/16   03/01/16   03/25/16   03/31/16   04/01/16   04/16/16 
Risk-free interest rate   1.76%   1.73%   1.47%   1.38%   1.31%   1.91%   1.21%   1.24%   1.22%
Expected life   5 years    5 years    5 years    5 years    5 years    10 years    5 years    5 years    5 years 
Expected dividends   0%   0%   0%   0%   0%   0%   0%   0%   0%
Expected volatility   175.11%   174.97%   176.42%   175.99%   175.28%   176.15%   175.87%   175.70%   174.48%
ALLM common stock fair value  $0.30   $0.30   $0.40   $0.37   $0.33   $0.33   $0.30   $0.30   $0.28 

 

   04/28/16   04/29/16   05/01/16   06/01/16   06/30/16   07/01/16   08/01/16   09/30/16 
Risk-free interest rate   1.28%   1.28%   1.28%   1.39%   1.01%   1.00%   1.06%   1.14%
Expected life   5 years    5 years    5 years    5 years    5 years    5 years    5 years    5 years 
Expected dividends   0%   0%   0%   0%   0%   0%   0%   0%
Expected volatility   173.48%   173.51%   173.51%   174.01%   165.31%   165.40%   164.69%   156.06%
ALLM common stock fair value  $0.26   $0.23   $0.23   $0.36   $0.36   $0.39   $0.35   $0.26 

 

Accounting and Reporting of Discontinued Operations

 

As required by the FASB ASC Subtopic 205.20, per ASU 2014-08, Discontinued Operations, a component of an entity or a group of components of an entity, or a business or nonprofit activity can be classified as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (i) the criteria in paragraph 205.20.45.1E to be classified as held for sale is met (ii) the component is disposed of by sale, or (iii) the component is disposed of other than by sale in accordance with paragraph 360.10.45.15 (for example, by abandonment or in a distribution to owners in a spinoff). Certain components to be disposed of other than by sale shall continue to be classified as “held and used” until it is disposed of, per the requirements of ASC Subtopic 360.10. Depreciation on these assets ceases upon their classification as “held and used.” The Company adopted ASU No. 2014-08 effective September 1, 2014.

 

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets, generally 5 to 7 years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.

 

Convertible Instruments

 

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

 

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

 

  9 
 

 

The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

 

Common Stock Purchase Warrants and Other Derivative Financial Instruments

 

The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide it with a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to its own stock as defined in ASC 815-40 (“Contracts in Entity’s Own Equity”). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses the classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

 

Non-controlling interest in consolidated subsidiaries

 

The accompanying consolidated financial statements include the accounts of Alliance BioEnergy Plus, Inc. and those subsidiaries that the Company has the ability to control either through voting rights or means other than voting rights. For these subsidiaries, the Company records 100% of the revenues, expenses, cash flows, assets and liabilities in its consolidated financial statements. For subsidiaries that the Company controls but hold less than 100% ownership, a non-controlling interest is recorded in the consolidated income statement to reflect the non-controlling interest’s share of the net income (loss), and a non-controlling interest is recorded in the consolidated balance sheet to reflect the non-controlling interest’s share of the net assets of the subsidiary.

 

Investments in non-consolidated affiliates

 

Investments in non-consolidated affiliates are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment are accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.

 

The Company’s investment in Carbolosic, LLC is accounted for using the equity method of accounting. The Company monitors its investment for impairment at least annually and make appropriate reductions in the carrying value if it determines that an impairment charge is required based on qualitative and quantitative information.

 

Impairment of Long Lived Assets

 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, the Company compares the carrying amount of the asset group to future undiscounted net cash flows, excluding interest costs, expected to be generated by the asset group and their ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.

 

Income Taxes

 

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

  10 
 

 

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.

 

Profit (Loss) per Common Share:

 

Basic profit (loss) per share amounts have been calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share has been calculated using the weighted-average number of common shares plus the potentially dilutive effect of securities such as outstanding options and warrants. The computation of potential common shares has been performed using the treasury stock method. The warrants and options are antidilutive for all periods presented. When net loss is reported, diluted and basic net loss per share amounts are the same as the impact of potential common shares is antidilutive.

 

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, payables to related parties, and accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

 

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

 

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.

 

NOTE 4 – INVESTMENT IN UNCONSOLIDATED AFFILIATES

 

On December 26, 2013, AMG Renewables, LLC, a Florida limited liability company (“AMG Renewables”), a wholly-owned subsidiary of the Company, acquired the controlling interest (51%) in AMG Energy Group, LLC a Florida limited liability company (“AMG Energy”) from certain related parties. AMG Energy owns a fifty percent (50%) interest of Carbolosic, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The results of AMG Renewables and AMG Energy are consolidated in the Company’s financial statements. AMG Energy’s investment in Carbolosic is accounted for using the equity method of accounting.

 

  11 
 

 

On May 13, 2015, The Company entered an agreement with Carbolosic SA’s shareholders whereby, among other matters, it was agreed that ownership of Carbolosic SA shall be 43.5% for Tes Projects (Pty) Ltd, a South African company (“Tes”), 24.5 % for Spearhead Capital Ltd, a Seychelles company (“Spearhead”), 7.5% for Jupiter Trust, a South African Trust (“Jupiter”) and 24.5% for Alliance BioEnergy Plus, Inc. TES, Spearhead and Jupiter are all unrelated to the Company. The interests of Tes and Jupiter are delivered in consideration of the funding or guarantee of funding of the License Fee; Spearhead’s interest is in consideration of facilitating the Sublicense transaction; and the Company’s interest is in exchange for the delivery to Carbolosic SA of a 24.5% interest in one of the Company’s CTS sugar extracting plants to be developed in the United States. The Company’s investment in Carbolosic SA is accounted for using the equity method of accounting.

 

The following is a condensed balance sheet of the unconsolidated affiliates as of September 30, 2016 and December 31, 2015 and a comparative statement of operations for the three and nine months ending September 30, 2016 and 2015.

 

Condensed Balance Sheet of Non-Consolidated Affiliates
         
    September 30, 2016    December 31, 2015 
ASSETS          
Current Assets          
Cash and cash equivalents  $389   $83 
Total Current Assets   389    83 
Other Assets          
Prepaid Expenses   -    - 
Total Other Assets   -    - 
TOTAL ASSETS  $389   $83 
           
LIABILITIES AND STOCKHOLDERS EQUITY          
Current Liabilities          
Accounts payable and accrued liabilities  $344,222   $238,399 
Interest payable   26,322    12,864 
Current notes payable   640,942    539,189 
TOTAL CURRENT LIABILITIES   1,011,486    790,452 
           
STOCKHOLDERS EQUITY          
Accumulated deficit   (1,011,097)   (790,369)
TOTAL EQUITY   (1,011,097)   (790,369)
           
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY  $389   $83 

 

Condensed Statement of Operations of Non-Consolidated Affiliate
                 
   Three months ended   Nine months ended 
   Sep 30, 2016   Sep 30, 2015   Sep 30, 2016   Sep 30,2015 
                 
Revenues  $-   $-   $-   $- 
                     
Operating Expenses                    
Royalties   17,500    10,000    52,500    30,000 
General and administrative   59,671    98,789    180,933    238,408 
Total operating expenses   (77,171)   (108,789)   (233,433)   (268,408)
                     
Other expenses                    
Interest expense   5,037    3,182    13,641    8,110 
Total other expenses   (5,037)   (3,182)   (13,641)   (8,110)
                     
Loss from operations  $(82,208)  $(111,971)  $(247,074)  $(276,518)

 

NOTE 5 – DEBT

 

Short Term Notes Payable - Related Parties

 

Throughout 2013, the Company issued unsecured short-term notes payable to various related parties, including officers and directors of the Company, with a term of one year, which have since been extended. At September 30, 2016 there was one consolidated note outstanding to Palm Beach Energy Solutions, LLC. The note has an outstanding principal balance of $71,000 and bears interest at a rate of 5% per annum. As of September 30, 2016 and December 31, 2015, the total interest accrued on the note was $11,701 and $9,036 respectively.

 

  12 
 

 

Short Term Notes Payable – Other

 

On July 7, 2015, the Company entered into a six month (6) promissory note with St. George Investments, LLC with a face amount of $265,000 less an original issue discount of $65,000. This note does not accrue interest. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the company repaid this note in full. The total amount paid was $306,890, which represented a $265,000 principal balance and $41,890 in default interest and early payment penalties.

 

Long Term Notes Payable – Other

 

During the year ended December 31, 2014, Carbolosic Plant 1, LLC, a wholly owned subsidiary, entered into an agreement with Carbolosic Energy 1, LLLP to begin receiving long term loans, pursuant to the U.S. EB-5 Immigrant Investor Program, to develop a CTS demonstration facility. These loans were to be issued in multiple advances, each in an amount greater than or equal to $500,000 up to the target loan amount of $33,000,000. The initial term on each of these loans was five (5) years from the date of each advance and bear interest at a rate of 4.31% per annum. The Company could earn a 0.51% rate discount if the first five years of interest due to lender was paid within 15 days of each advance. In addition, these loans could not be prepaid and were secured by all assets of the Company. The Company received two (2) long term notes payable, with a combined principal balance of $1,250,000 in the year ended December 31, 2014. The company had taken advantage of the 0.51% rate discount on one of these notes payable, with a principal amount of $500,000, and issued a $95,000 interest payment to the Lender on December 9, 2014. In January 2015, the Company made a $4,162 interest payment towards the second note. In March 2016, Carbolosic Plant 1 was sold to Carbolosic Energy 1, LLLP, a non-related third party, in exchange for satisfaction of the outstanding $1,250,000 loan and $36,488 interest. In connection with the transaction, an amount which the Company had prepaid to Carbolosic Energy 1, LLLP ($122,879) for future marketing and interest was eliminated in the sale.

 

Convertible Debt

 

On June 30, 2015, the Company entered into a convertible debenture with Iconic Holdings, LLC with a principal balance of $165,000 due on or before June 30, 2016. This note provided for “guaranteed” interest of ten percent (10.0%) of the principal balance outstanding. This note could only be prepaid within the first 180 days along with a prepayment penalty of one hundred ten percent (110%) and increasing ten percent (10%) every sixty (60) days to a maximum of one hundred thirty percent (130%). After 180 days, the note could be converted into the Company’s common stock at a conversion rate equal to sixty percent (60%) of the lowest trading price during the preceding 15 consecutive trading days prior to date of conversion. In addition, in order to obtain this note, the Company issued Iconic Holdings, LLC a five (5) year common stock purchase warrant agreement for up to 50,000 shares with an exercise price of $0.75 per share. These warrants were fully granted and vested at time of issuance and are being amortized over the life of the agreement. In January 2016, Iconic Holdings, LLC converted $95,000 of the principal balance into 891,042 shares of unrestricted common stock and the remaining balance of the note was repaid in full. The total amount paid was $140,950, which represented a $70,000 principal payment and $70,950 in interest and early payment penalties.

 

On July 10, 2015, the Company entered into a convertible debenture with JSJ Investments, Inc with a principal balance of $150,000 due on or before January 10, 2016. The note accrues interest at a rate of twelve percent (12%) per annum and is convertible into the Company’s common stock one hundred eighty (180) days after the maturity date. After the maturity date, the note cannot be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In April 2016, the Company paid the debenture in full with a payment of $239,055, which represented a $150,000 principal payment and $89,055 in interest and penalties.

 

  13 
 

 

On July 10, 2015 the Company entered into a secured convertible debenture with Group 10 Holdings, LLC with a principal balance of $275,000, less a ten percent (10%) original issue discount and was due on or before July 10, 2016. Group10 Holdings, LLC was granted a security interest in the South African agreement sub-licensed by AMG Energy Group. This note accrued interest at a rate of twelve percent (12%) per annum and was convertible into the Company common stock one hundred eighty (180) days after the issuance date in whole or in part at the option of the holder at a conversion price equal to forty-two cents ($0.42); provided, however, that if the closing price was less than forty cents ($0.40) for any three (3) consecutive trading days, then the conversion price shall adjust to the lowest trading day price during the thirty-five (35) trading days prior, less a forty-five percent (45%) discount. Repayment of the note included a prepayment penalty if the note was paid back within the first one hundred eighty (180) days and could not be repaid after day one hundred eighty (180) without the holders consent. The prepayment penalty if paid back within the first ninety (90) days was equal to one hundred five percent (105%) of the principal balance; paid between day ninety-one (91) and day one hundred twenty (120) the prepayment penalty was equal to one hundred fifteen percent (115%) of the principal balance; paid between day one hundred twenty-one (121) and day one hundred seventy-nine (179) the prepayment penalty increased to one hundred twenty-five percent (125%) of the principal balance. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, Group 10 Holdings, LLC converted $20,000 of its principal balance into 157,418 shares of unrestricted common stock and the Company paid the remaining debenture in full with a payment of $340,468, which represented a $255,000 principal payment and $85,068 in interest and early payment penalties.

 

On July 27, 2015, the Company entered into a convertible debenture with Adar Bays, LLC with a principal balance of $100,000 due on or before March 27, 2016. The note accrued interest at a rate of eight percent (8%) per annum and was convertible into the Company’s common stock commencing on the 6 month anniversary of the note. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the Company paid the debenture in full with a payment of $149,022, which represented a $100,000 principal payment and $49,022 in interest and early payment penalties.

 

On July 27, 2015, the Company entered into a convertible debenture with Union Capital, LLC with a principal balance of $100,000 due on or before March 27, 2016. The note accrued interest at a rate of eight percent (8%) per annum and was convertible into the Company’s common stock commencing on the 6 month anniversary of the note, in whole or in part at the option of the holder. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the Company paid the debenture in full with a payment of $148,748, which represented a $100,000 principal payment and $48,748 in interest and early payment penalties.

 

On July 27, 2015, the Company entered into a convertible debenture with LG Capital Funding, LLC with a principal balance of $105,000 due on or before March 27, 2016. The note accrued interest at a rate of eight percent (8%) per annum and was convertible into the Company’s common stock commencing on the 6 month anniversary of the note, in whole or in part at the option of the. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the Company paid the debenture in full with a payment of $156,462, which represented a $105,000 principal payment and $51,462 in interest and early payment penalties.

 

  14 
 

 

On August 10, 2015, the Company entered into a convertible debenture with Vis Vires Group, Inc. with a principal balance of $104,000 due and payable on or before May 4, 2016. The note accrued interest at a rate of eight percent (8.0%) per annum and was convertible into the Company’s common stock, after 180 days, in whole or in part at the option of the holder. The note also carried a prepayment penalty of one hundred thirty percent (130%) of the then outstanding principal and interest balance due, if the note was paid back within the first one hundred eighty (180) days. In January 2016, the Company paid the note in full with a payment of $139,303, which represented a $104,000 principal payment and $35,303 in interest and early payment penalties.

 

On April 25, 2016, the Company entered into a 12 month convertible debenture with JMJ Financial with a principal balance of $555,556. The note carries a 10% one-time interest charge, a 10% original issue discount and a 75% warrant coverage. The note may only be paid up to 98% of the balance due within the first 180 days at a 30% premium. After 180 days, the note cannot be repaid without the holders consent. The note is convertible after 180 days at a 25% discount to the lowest trade price in the preceding 10 trading days. To obtain the note, the Company issued the investor 1,388,886 warrants with a 5 year term and a cashless exercise price equal to the lesser of $0.30 per share or the lowest trade price in the 10 preceding trading days. As of September 30, 2016, using a Black-Scholes asset pricing model, these warrants were valued at $333,145.

 

NOTE 6 – STOCKHOLDERS’ EQUITY

 

In November 2015, the Company commenced a new offering of units valued at eight-five (85%) percent of the average of the last three days closing market share price. Each unit consists of one (1) share of common stock, one (1) three-year Series C warrant convertible to .5 common share at an exercise price of $0.45 and one (1) three-year series D warrant convertible to .5 common share at an exercise price of $0.65. At December 31, 2015, the Company had sold 960,897 units for aggregate proceeds of $312,000. During the nine months ended September 30, 2016 the company sold an additional 500,000 units for aggregate proceeds of $89,000. The offering is ongoing.

 

During the nine months ended September 30, 2016, an additional $115,000 of the Company’s convertible debt converted to 1,048,460 shares of common stock. The company assesses the value of the beneficial conversion feature of its convertible debt by determining the intrinsic value of such conversions, under ASC 470, at the time of issuance. At the time of issuance of the convertible debt instruments set out above, the fair value of the stock was greater than the conversion price, and therefore a total value of $218,301 was attributed to the beneficial conversion feature.

 

In January 2016, the Company commenced a new offering of units valued at $0.24 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. During the nine months ended September 30, 2016, the Company has sold 4,535,517 units for aggregate proceeds of $1,088,524, of which $100,000 is recorded as a stock subscription receivable. The offering is ongoing.

 

In March 2016, the Company commenced a new offering of units valued at $765,735. Each unit consists of three million seven hundred seventeen thousand seven hundred eighty-five (3,717,785) shares of common stock and four million five hundred thousand (4,500,000) five-year series F warrants convertible to one (1) share of common stock each at an exercise price of $0.25. During the nine months ended September 30, 2016, the Company has sold 2 units totaling 7,435,570 shares of common stock and 9,000,000 warrants for aggregate proceeds of $1,531,470.

 

During the nine months ended September 30, 2016, the Company issued 1,296,000 shares of Company common stock for services valued at $542,530.

 

During the nine months ended September 30, 2016, the Company issued an aggregate of 5,338,886 warrants for services. Using a Black-Scholes asset pricing model, these warrants were valued at $1,365,644. These warrant agreements have terms ranging from three years (3) to five years (5) with exercise prices ranging from forty-five cents ($0.45) to two dollars ($2.00) per share.

 

During the nine months ended September 30, 2016, the Company issued options to its independent directors to purchase an aggregate of 150,974 shares of common stock for a period of three (3) years at an average exercise price of $0.45. In addition, the Company also approved employee stock options to purchase 250,000 shares of common stock at an average exercise price of $0.30 and a term of five (5) years. In addition, 333,334 options issued under an employment agreement became fully vested. Using a Black-Scholes asset pricing model, these agreements were valued at $220,720.

 

  15 
 

 

During the nine months ended September 30, 2016, the Company received $6,526 in disgorgement from certain shareholders and officers.

 

NOTE 7 – SEGMENT INFORMATION

 

The company operates in one segment and does not have any revenue to date.

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Lease

 

The Company has leased office space pursuant to a lease for a period of thirty-six (36) months from August 5, 2015 through July 31, 2018. Annual rent commenced at approximately $48,925 per annum and increases on a year-to-year basis by three percent (3%) over the Base Year. In addition, the Company is obligated to pay an amount equal to 3.76% of the operating expenses of the building together with sales tax on all amounts.

 

EK Laboratories leases office and warehouse space in Longwood, FL, which serves as the Company’s research and demonstration facility. The lease period is for thirty-six (36) months from February 1, 2015 through January 31, 2018. Annual rent commences at approximately $70,620 per annum and increases on a year-to-year basis by five percent (5%) over the prior year. The Company also has the right to purchase the property during the lease term.

 

Rent expense for the three months ended September 30, 2016 and September 30, 2015 was $31,775 and $35,149 respectively. Rent expense for the nine months ended September 30, 2016 and September 30 2015 was $94,787 and $111,985 respectively.

 

NOTE 9 – RELATED PARTY TRANSACTIONS

 

Related Transactions

 

1)       Mark W. Koch, Daniel de Liege and Johan Sturm are principals of AMG Energy Solutions, Inc, which owns 43% of AMG Energy Group, LLC. The company owns the remaining 51% of AMG Energy Group, LLC (see NOTE 4, above). Mark W. Koch and Johan Sturm are greater than 5% shareholders in the Company.

 

2)       Short-term notes payable issued to related parties are described in NOTE 5.

 

3)       In January 2015, the Company entered into a consulting agreement with a company owned by Mark W. Koch named Prelude Motorsports, Inc, which calls for semi-monthly payments of $10,000. Under the terms of the consulting agreement, the consultant will review and provide input on a variety of areas including corporate structure, marketing materials, website and promotional pieces; provide introductions to various organizations and individuals who might support the Company’s business development efforts. This agreement was cancelled on March 31, 2016.

 

4)       On April 16, 2016, the Company entered into a 33 month consulting agreement with a company owned by Mark W. Koch named CK Energy, which calls for semi-monthly payment of $9,860 through September 2016. The agreement also provides the consultant with 500,000 warrants exercisable at $0.50, 1,000,000 warrants exercisable at $0.75 and 1,000,000 warrants exercisable at $1.00 all with a five year term. Using a Black-Scholes asset pricing model, these warrants have been valued at $643,245 and are being amortized over the life of the agreement. Under the terms of the consulting agreement, the consultant will review and provide input on a variety of areas including corporate structure, marketing materials, website and promotional pieces; provide introductions to various organizations and individuals who might support the Company’s business development efforts.

 

5)       On July 21, 2016, the Company entered into a series of transactions with certain related parties to acquire the remaining 49% of AMG Energy Group, LLC for an aggregate of 10,240,094 shares of Company common stock and a restructuring of the balance due under the original cash payable. The final details of these transactions are expected to be completed by year end.

 

The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.

 

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NOTE 10 – DISCONTINUED OPERATIONS

 

On September 1, 2014, the Company determined the need to focus its resources and personnel on the Company’s renewable energy holdings and future energy technologies and to divest the company of its entertainment-related assets and subsidiaries. The principal reasons for such action is the expense, liability and losses that have been generated by the entertainment-related assets and to provide a clear focus and direction to the Company moving forward. Specifically, the Board approved the divesting, selling off, closing down or discontinuing of the operations of its entertainment-related subsidiaries, including but not limited to Prelude Pictures Entertainment, LLC, AMG Live, LLC, AMG Restaurant Operations, LLC (including The New York Sandwich Company, LLC), AMG Music, LLC, AMG Releasing, LLC and AMG Television, LLC.

 

Below is a reconciliation of the total assets and liabilities of the discontinued operations, which are presented separately on the balance sheet.

 

    September 30, 2016    December 31, 2015 
           
Carrying amounts of major classes of assets included as part of discontinued operations          
Prepaid expenses   -    - 
Total assets of the discontinued operation  $-   $- 
           
Carrying amounts of major classes of liabilities included as part of discontinued operations          
Accounts payable and accrued liabilities  $36,148   $36,148 
Total liabilities of the discontinued operation  $36,148   $36,148 

 

Below is a reconciliation of the net loss of the discontinued operations, which are presented separately on the statement of operations.

 

   Three months ended   Nine months ended 
   Sep 30, 2016   Sep 30, 2015   Sep 30, 2016   Sep 30, 2015 
Major line items constituting pretax profit (loss) of discontinued operations                
Revenue   -    -         - 
Selling, general and administrative   -    (64)   (3,125)   (29,081)
Debt forgiveness from legal settlement   -    -         700,000 
Gain (Loss) from discontinued operations  $-   $(64)  $(3,125)  $670,919 

 

NOTE 11 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the financial statements were available to be issued. Based on this evaluation, the Company has identified the following subsequent events:

 

In October 2016, the Company commenced a new offering of units valued at $0.20 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. Since October 1, 2016, the Company has sold 675,000 units for aggregate proceeds of $135,000. The offering is ongoing

 

In October 2016, JMJ Financial converted $402,750 of its convertible debenture into 2,685,000 shares of Company common stock, however the restrictive Legend remained. In addition, JMJ Financial also exercised warrants to purchase 20,000 shares of common stock for aggregate proceeds of $3,675. Under the terms of the warrant agreement, the rights to purchase common stock were increased to 2,763,273 shares with a 5-year term and exercise price of $0.15. The Company disputes the validity of these transactions based on an agreed upon amendment to the Stock Purchase Agreement that no conversion was to occur within the first 180 days. The Company and JMJ are currently negotiating to resolve this matter.

 

Since October 1, 2016, the Company has issued 65,100 shares of common stock for services valued at $16,276.

 

Since October 1, 2016, the Company has received $10,000 of the outstanding stock subscription receivable.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

 

The following discussion should be read in conjunction with our unaudited financial statements and the notes thereto.

 

Forward-Looking Statements

 

This quarterly report contains forward-looking statements and information relating to the Company that are based on the beliefs of its management as well as assumptions made by, and information currently available to, its management. When used in this report, the words “believe,” “anticipate,” “expect,” “estimate,” “intend”, “plan” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. These statements reflect management’s current view of the Company concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that the Company desires to effect; Securities and Exchange Commission regulations which affect trading in the securities of “penny stocks”; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. The accompanying information contained in this registration statement, including, without limitation, the information set forth under the heading “Management’s Discussion and Analysis and Plan of Operation -- Risk Factors” identifies important additional factors that could materially adversely affect actual results and performance. You are urged to carefully consider these factors. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the foregoing cautionary statement.

 

Business Overview

 

Alliance Bioenergy Plus, Inc (the “Company”) is a technology company focused on emerging technologies in the renewable energy, biofuels and new technologies sectors. From inception through December 5, 2014, the Company was known as Alliance Media Group Holdings, Inc. At inception (March 28, 2012), the Company was organized as a vehicle to engage in the commercial production, distribution and exploitation of Motion Pictures and other Entertainment products. However, in December 2013, a wholly owned subsidiary of the Company, AMG Renewables, LLC (“AMG Renewables”), acquired the controlling interest (51%) in AMG Energy Group, LLC (“AMG Energy”), which owns a fifty percent (50%) interest of Carbolosic, LLC (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The Company’s goal in acquiring the interest in AMG Energy is to develop the CTS technology to a commercial scale and then seek to license the technology to prospective licensees. In September 2014, the Company determined to focus all of the Company’s resources and personnel on the Company’s renewable energy holdings and future energy technologies and to divest the Company of its entertainment-related assets and subsidiaries. The principal reason for such action was the recognition that the Company’s entertainment-related assets were generating substantial losses and contributing little value compared to the potential management saw in the energy-related activities and to provide a clear focus and direction to the Company moving forward. The Company therefore determined at that time to divest and sell off, close down or discontinue the operations of its entertainment-related subsidiaries. Subsequently, the Company determined that the name Alliance Media Group Holdings, Inc. was no longer relevant to the new business direction of the Company and, effective December 5, 2014, amended the Company’s Articles of Incorporation to change the name of the Company to Alliance Bioenergy Plus, Inc., which is more appropriately descriptive of the new business direction of the Company.

 

Plan of Operation

 

The Company is focused on one industry – Renewable Energy. Through its wholly-owned subsidiary, AMG Renewables, LLC, which in turn owns controlling interests in AMG Energy Group, LLC, and EK Laboratories, Inc., the Company has a strategy that includes growth in its energy-related activities as well as mergers and acquisitions and start-up activities which are focused on development of an increasing revenue stream, secure market share and enhancement of shareholder value.

 

AMG RENEWABLES, LLC

 

AMG Renewables, LLC, a Florida limited liability company (“AMG Renewables”), is a wholly-owned subsidiary of the Company, created for the purpose of managing and developing the Company’s renewable energy technology enterprises. AMG Renewables has two majority owned subsidiaries, AMG Energy Group, LLC, a Florida limited liability company (“AMG Energy”) and Ek Laboratories, Inc, a Florida corporation (“EK”).

 

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    On December 26, 2013, AMG Renewables acquired the controlling interest (51%) in AMG Energy Group from certain related parties for a consideration comprising $2,200,000 cash and delivery of 7,266,000 shares of Company Common Stock. In connection with the transaction, an amount which the Company owed to AMG Energy ($214,894) for various loans and consulting fees was eliminated in the acquisition. On December 26, 2013, 7,000,000 shares of Company common stock were delivered to AMG Energy Solutions, Inc. (a related party) and the remaining 266,000 shares of Company common stock were delivered on June 18, 2014 to Wellington Asset Holdings, Inc. As of the date of filing, the Company has paid $168,742 of the $2,200,000 cash payable on account of this transaction, and as of such date, has not yet paid the remaining amount, which amount has been recorded on the books of the Company as a related party payable relating to an acquisition.
   
  On July 21, 2016, the Company entered into a series of transactions with certain related parties to acquire the remaining 49% of AMG Energy Group, LLC for an aggregate of 10,240,094 shares of Company common stock and a restructuring of the balance due under the original cash payable. The final details of these transactions are expected to be completed by year-end.
     
  Carbolosic Plant 1, LLC was created in October 2014 as a wholly owned subsidiary of AMG Renewables for the purpose of being a full scale facility for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. In March 2016, Carbolosic Plant 1 was sold to Carbolosic Energy 1, LLLP, a non-related third party, in exchange for satisfaction of the outstanding $1,250,000 loan and $36,488 interest between Carbolosic Plant 1 and Carbolosic Energy 1, LLLP. In connection with the transaction, an amount which the Company had prepaid to Carbolosic Energy 1, LLLP ($122,879) for future marketing and interest was eliminated in the sale.
     
  AMG Energy owns a fifty percent (50%) interest of Carbolosic, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The Company’s goal is to develop this CTS technology to a commercial scale and then seek to license the technology to prospective licensees.

 

On May 13, 2015, AMG Energy entered into a series of agreements with various unrelated third parties, wherein AMG Energy sublicensed the CTS technology to Naldogen (Pty) Ltd., an existing South African company, which will be renamed Carbolosic Energy SA PTY LTD (“Carbolosic SA”). Carbolosic SA shall be solely devoted to exploitation of the CTS technology in South Africa, Lesotho, Swaziland and Botswana and the term of the sublicense is coterminous with the master license (i.e. through July 1, 2032). The consideration for the grant of the sublicense is $25,000,000 (“License Fee”), which was to be paid or guaranteed by March 1, 2016. In addition to the license fee, the sublicense holder will pay AMG Energy a royalty of 3.5% of the revenues on the first CTS plant developed and a 5.0% royalty on the revenues of additional plants developed. Until the $25,000,000 payment has been received, the Company does not consider all of the events required under the agreement to have been completed. Therefore the Company has not recorded and of the fee in the accompanying financial statements.

 

Contemporaneously, Carbolosic SA’s shareholders entered into an agreement whereby, among other matters, it was agreed that ownership of Carbolosic SA shall be 43.5% for Tes Projects (Pty) Ltd, a South African company (“Tes”), 24.5 % for Spearhead Capital Ltd, a Seychelles company (“Spearhead”), 7.5% for Jupiter Trust, a South African Trust (“Jupiter”) and 24.5% for Alliance BioEnergy Plus, Inc. TES, Spearhead and Jupiter are all unrelated to the Company. The interests of Tes and Jupiter are delivered in consideration of the funding or guarantee of funding of the License Fee; Spearhead’s interest is in consideration of facilitating the Sublicense transaction; and the Company’s interest is in exchange for the delivery to Carbolosic SA of a 24.5% interest in one of the Company’s CTS sugar extracting plants to be developed in the United States.

 

In February 2016, due to economic and political turmoil in South Africa, members of Tes Projects (Pty) Ltd and Jupiter Trust resigned from management and from the Board of Carbolosic SA and returned all ownership interest in Carbolosic SA to the Carbolosic SA treasury. Spearhead Capital intends to continue operations of Carbolosic SA but at this time there is no guarantee that they will be successful in securing the needed funds or contracts to do so. The Company will evaluate its position in Africa in the coming months and decide on a path forward.

 

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On July 29, 2015, Alliance BioEnergy Plus, Inc. (the “Company”) entered into two agreements with Renewable Resources Development of America, LLC (“RRDA”) related to the development of facilities by RRDA in North and South America which will utilize the Company’s Cellulose to Sugar (“CTS”) technology. RRDA is engaged in construction and finance of facilities for municipal solid waste recovery and plastics, metals and paper recycling, chemical extraction from ore for manufacturing and cellulose material conversion into sugars for manufacture of bio-fuels, bio-plastics and other products. In connection with its business plan, RRDA is developing facilities using cellulose conversion technology.

 

In this regard, the Company and RRDA entered into a Non-Exclusive Development Agreement (“Development Agreement”) pursuant to which RRDA will utilize the CTS technology in the plants it develops. Under the Development Agreement, the Company would license its intellectual property to RRDA and provide certain consulting and educational services to RRDA. The specific terms of the license have yet to be determined. It is currently RRDA’s plan to develop up to 56 plants.

 

In addition, the Company and RRDA simultaneously entered into a Finance Agreement (“Finance Agreement”) pursuant to which the Company would receive $4 million cash in exchange for the following: (a) RRDA shall receive a number of shares of Company Common Stock such that at the closing of the financing RRDA would own ten percent (10%) of the number of issued and outstanding shares of the Common Stock of the Company; (b) RRDA would receive a Warrant to purchase two (2) million shares of Company Common Stock on terms to be agreed; (c) the license fee payable to the Company on account of the first plant being developed by RRDA in Georgia would be waived and (d) RRDA will designate two (2) persons to be appointed to the Company’s Board of Directors.

 

In March 2016, the Company canceled the Finance Agreement with RRDA due to a lack of funding in a timely manner. The Development Agreement remains in effect and any opportunities brought to the Company under this agreement will be subject to the same terms and conditions as any other license opportunity, including the proposed plant in Vidalia, Georgia.

 

    EK Laboratories, Inc., was created in December 2014 under the name Central Florida Institute of Science and Technology, Inc. and changed its name to Ek Laboratories, Inc. on June 05, 2015. EK was formed as a wholly owned subsidiary of AMG Energy, to serve as a demonstration and research facility to further develop the CTS process, its uses, and develop new technologies.

 

AMG ENERGY GROUP, LLC

 

AMG Energy was created for the purpose of managing and developing the Company’s renewable energy technology enterprises. Through a series of transactions described in ORGANIZATION AND BUSINESS DESCRIPTION, above, the Company anticipates that in the 4th quarter of 2016 AMG Energy will become a wholly-owned subsidiary of the Company and the Company’s sole holding company for all of its energy interests. These interests would comprise ownership of 100% of EK Laboratories, Inc., a Florida corporation (“EK”) formerly known as Central Florida Institute of Science and Technology, Inc. and a fifty percent (50%) interest in Carbolosic, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The Company’s goal is to develop this CTS technology to a commercial scale and then seek to license the technology to prospective licensees. EK was formed to serve as a demonstration and research facility to further develop the CTS process, its uses, and develop new technologies.

 

Capital Formation

 

From January 1, 2016 through the date of filing, the Company has issued 1,361,100 shares of Company common stock for services valued at $558,806.

 

From January 1, 2016 through the date of filing, the Company issued an aggregate of 3,950,000 warrants for services. Using a Black-Scholes asset-pricing model, these warrants were valued at $1,032,499. These warrant agreements have terms of five years (5) with exercise prices ranging from forty-five cents ($0.45) to two dollars ($2.00) per share.

 

From January 1, 2016 through the date of filing, the Company issued options to its independent directors to purchase an aggregate of 150,974 shares of common stock for a period of three (3) years at an average exercise price of $0.45. In addition, the Company also approved employee stock options to purchase 250,000 shares of common stock at an average exercise price of $0.35 and a five-year (5) term. In addition, 333,334 options became fully vested during the period. Using a Black-Scholes asset-pricing model, these agreements were valued at $220,720.

 

  20 
 

 

In November 2015, the Company commenced a new offering of units valued at eight-five (85%) percent of the average of the last three days closing market share price. Each unit consists of one (1) share of common stock, one (1) three-year Series C warrant convertible to .5 common share at an exercise price of $0.45 and one (1) three-year series D warrant convertible to .5 common share at an exercise price of $0.65. From January 1, 2016 through the date of filing, the company has sold 500,000 units for aggregate proceeds of $89,000. The offering is ongoing.

 

In January 2016, the Company commenced a new offering of units valued at $0.24 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. As of the date of filing, the Company has sold 4,535,517 units for aggregate proceeds of $1,088,524, of which $90,000 is recorded as a stock subscription receivable. The offering is ongoing.

 

In March 2016, the Company commenced a new offering of units valued at $765,735. Each unit consists of three million seven hundred seventeen thousand seven hundred eighty-five (3,717,785) shares of common stock and four million five hundred thousand (4,500,000) five-year series F warrants convertible to one (1) share of common stock each at an exercise price of $0.25. As of the date of filing, the Company has sold 2 units totaling 7,435,570 shares of common stock and 9,000,000 warrants for aggregate proceeds of $1,531,470.

 

From January 1, 2016 through the date of filing, $115,000 of the Company’s convertible debt converted to 1,048,460 shares of common stock. The company assesses the value of the beneficial conversion feature of its convertible debt by determining the intrinsic value of such conversions, under ASC 470, at the time of issuance. At the time of issuance of the convertible debt instruments set out above, the fair value of the stock was greater than the conversion price, and therefore a total value of $218,301 was attributed to the beneficial conversion feature.

 

In April 2016, the Company issued 1,388,886 warrants to acquire a convertible note. Each warrant is convertible into one (1) share of common stock at an exercise price of $0.30 per share or the lowest trade price in the preceding 10 trading days. The term on these warrants is 5 years. Using a Black-Sholes asset pricing model, the warrants were valued at $333,145.

 

In October 2016, the Company commenced a new offering of units valued at $0.20 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. Since October 1, 2016, the Company has sold 675,000 units for aggregate proceeds of $135,000. The offering is ongoing

 

In October 2016, JMJ Financial converted $402,750 of its convertible debenture into 2,685,000 shares of Company common stock, however the restrictive Legend remained. In addition, JMJ Financial also exercised warrants to purchase 20,000 shares of common stock for aggregate proceeds of $3,675. Under the terms of the warrant agreement, the rights to purchase common stock were increased to 2,763,273 shares with a 5-year term and exercise price of $0.15. The Company disputes the validity of these transactions based on an agreed upon amendment to the Stock Purchase Agreement that no conversion was to occur within the first 180 days. The Company and JMJ are currently negotiating to resolve this matter.

 

Going Concern

 

The Company has incurred losses since inception, has a working capital deficiency, and may be unable to raise further equity. At September 30, 2016 the Company had a working capital deficiency of $2,252,535 and had incurred accumulated losses of $19,882,797 since its inception. The Company expects to incur significant additional losses in connection with its continued start-up activities. As a result, the report of the Company’s independent registered public accounting firm on the Company’s financial statements for the period ended December 31, 2015 contains an emphasis of matter paragraph regarding the Company’s ability to continue as a going concern based upon recurring operating losses and its need to obtain additional financing to sustain operations. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities when they become due and to generate sufficient revenues from its operations to pay its operating expenses. Furthermore, these financial statements do not include any adjustments related to the recoverability and classifications of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.

 

Through its private offerings, the Company raised $1,162,209 for the year ended December 31, 2015 and an additional $2,708,994, of which $100,000 is recorded as a stock subscription receivable, in the nine months ended September 30, 2016.

 

Results of Operations

 

Comparison of the period ended September 30, 2016 to September 30, 2015

 

For the three months ended September 30, 2016, the Company’s general and administrative expenses decreased by approximately $1,573,006 to $765,657 from $2,338,663 in the three months ended September 30, 2015. This increase is primarily the result of a $1,259,491 decrease in professional fees and a $158,380 decrease in payroll fees. Of the $765,657 general and administrative expense, approximately 30% or $230,586 is non-cash equity compensation.

 

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During the nine months ended September 30, 2016, the Company’s general and administrative expenses decreased by approximately $589,348 to $3,509,162 from $4,098,510 in the nine months ended September 30, 2015. This decrease is primarily the result of $847,900 decrease in professional fees and a $235,080 decrease in payroll, while simultaneously increasing loan fees by $438,348. Of the $3,509,162 general and administrative expense, approximately 54% or $1,906,351 is non-cash equity compensation.

 

Interest expense decreased in the three months ended September 30, 2016 by approximately $84,581 to $895 from $85,476 during the three months ended September 30, 2015. The decrease was the result of the Company not holding any interest accruing convertible notes.

 

During the nine months ended September 30, 2016, the Company’s interest expense increased by approximately $368,724 to $486,321 from $117,597 during the nine months ended September 30, 2015. This increase is the result of 10 notes having been repaid, with early payment penalties, during the nine months ended September 30 2016 and only 3 notes repaid during the nine months ended September 30, 2015.

 

For the three months ended September 30, 2016, the Company’s equity loss in its unconsolidated affiliates decreased $19,961 to $41,104 from $61,065 during the three months ended September 30, 2015.

 

During the nine months ended September 30, 2016 the Company’s equity loss in its unconsolidated affiliate decreased $18,557 to $124,781 from $143,338 during the nine months ended September 30, 2015. The decrease is primarily attributed to a reduction in travel and professional fees.

 

The Company’s discontinued operations did not have any activity for the three months ended September 30, 2016, compared to a $64 loss incurred in the three months ended September 30, 2015. During the nine months ended September 30, 2016 the Company’s discontinued operations decreased $25,956 to 3,125 from $29,081 during the nine months ended September 30, 2015. These amounts are the result of the Company’s decision in September 2014 to divest the Company of its entertainment-related assets and subsidiaries and to focus all of the Company’s resources and personnel on the Company’s renewable energy holdings and future energy technologies.

 

Research and development (R&D) expenses for the three months ended September 30, 2016 were $7,877 as opposed to $6,088 for the three months ended September 30, 2015 and for the nine months ended September 30, 2016, R&D expenses were $15,008 as opposed to $24,551 during the nine months ended September 30, 2015. The decrease in R&D expenses is the result of the opening of Ek Laboratories, Inc. in June 2015 and its initial bulk purchases of gasses and other fine grade materials used in the CTS process.

 

Liquidity and Capital Resources

 

Liquidity

 

As of September 30, 2016 the Company had $10,840 in cash and total stockholders’ equity was $6,391,999. Total debt from continuing operations, including advances, accounts payable and other notes payable at September 30, 2016, together with interest payable thereon, was $3,157,044 a decrease of $1,939,638 from $5,096,682 at December 31, 2015. This decrease is attributable to the satisfaction of $1,250,000 in long-term debt, the repayment of $1,264,000 in convertible debt and the recent addition of a $555,556 convertible note.

 

During the nine months ended September 30, 2016, the Company’s continuing operating activities used $1,884,936 in cash. This use can be attributed to the sale of Carbolosic Plant 1 which resulted in an aggregate net amount of $1,163,609.

 

During the nine months ended September 30, 2016 the Company’s investing activities used $185,229 in cash, which $111,376 was advanced to Carbolosic, LLC mainly for payment of the minimum annual royalty and $58,476 was used towards capitalized engineering and development plans.

 

During the nine months ended September 30, 2016, the Company generated $2,022,076 through its financing activities. This can primarily be attributed to the retirement of $884,000 in convertible debt and $265,000 in notes payable, while simultaneously raising $2,708,994 through its ongoing offerings and securing $555,556 in convertible debt.

 

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Capital Resources

 

At this time, the Company has limited liquidity and capital resources. To continue funding the Company’s operations, the company will need to generate revenue and/or will require additional funding for ongoing operations and to finance such projects it may identify. As of September 30, 2016, the Company has raised $2,708,994, of which $100,000 is recorded as a stock subscription receivable, in addition to $3,730,390 raised through December 31, 2015 for a total of $6,339,384 through its private placement offerings. However, there is no guarantee that the company will be able to raise any additional capital on terms acceptable to the Company.

 

The inability to obtain this funding either in the near term and/or longer term will materially affect the ability of the Company to implement its business plan of operations and jeopardize the viability of the Company. In that case, the Company may need to reevaluate and revise its operations.

 

Critical Accounting Policies

 

Basis of Presentation

 

The accompanying consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) for interim financial information set forth in Regulation S-X and include the assets, liabilities, revenues and expenses of the Company’s majority-owned subsidiaries over which the Company exercises control. Intercompany transactions and balances were eliminated in consolidation. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 or any other period. For further information, refer to the financial statements and footnotes thereto for the period ended December 31, 2015.

 

Principles of Consolidation

 

The Company’s consolidated financial statements include the accounts of the Company and its subsidiaries, after elimination of intercompany accounts and transactions. Investments in business entities in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The Company’s proportionate share of net income or loss of the entity is recorded in the Consolidated Statements of Earnings.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted 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 as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of impairment assessment of identifiable intangible assets and valuation allowance for deferred tax assets. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.

 

Stock Compensation

 

The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation” (formerly referred to as SFAS No. 123(R)). Share-based payments to consultants, service providers and other non-employees are accounted for under in accordance with ASC Topic 718, ASC Topic 505, “Equity Payments to Non-Employees” or other applicable authoritative guidance

 

Convertible Instruments

 

The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

 

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

 

  23 
 

 

The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

 

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.

 

In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer in a development stage that in prior years it had been in the development stage.

 

The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 states that a development stage entity does not meet the condition in paragraph 810-10-15-14(a) to be a variable interest entity if (1) the entity can demonstrate that the equity invested in the legal entity is sufficient to permit it to finance the activities that it is currently engaged in and (2) the entity’s governing documents and contractual arrangements allow additional equity investments. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company adopted ASU No. 2014-10 effective July 31, 2014.

 

Off-Balance Sheet Arrangements

 

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Seasonality

 

The Company’s operating results are not affected by seasonality.

 

Inflation

 

The Company’s business and operating results are not affected in any material way by inflation.

 

  24 
 

 

Contractual Obligations

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

(a)        Evaluation of Disclosure Controls and Procedures

 

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a-15(e)) as of the end of the quarterly period covered by this report, have concluded that our disclosure controls and procedures are not effective to reasonably ensure that material information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s Rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The principal basis for this conclusion is the lack of segregation of duties within our financial function and the lack of an operating Audit Committee.

 

(b)       Changes in Internal Control over Financial Reporting

 

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the fiscal period to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

The Company is subject, from time to time, to litigation, claims and suits arising in the ordinary course of business. As of the date of filing, the only material litigation, claims or suits whose outcomes could have a material effect on the Company’s financial statements are as follows:

 

Creative Licensing Litigation.

 

During 2013, the Company’s wholly-owned subsidiary, AMG Television, LLC (“AMG Television”), had entered into agreements (collectively, the “Creative Licensing Agreement”) to acquire (i) the partially completed American Idol style reality series World Star (formerly Recreating A Legend) for a $600,000 cash payment plus 1,600,000 shares of Company Common Stock and (ii) the completed documentary Making of a Saint: The Journey to Sainthood for a $100,000 cash payment plus 267,000 shares of Company Common Stock. Subsequently, on April 25, 2014, the Company and AMG Television notified the sellers that it was rescinding both transactions due to a breach of the Creative Licensing Agreement in that the sellers misled AMG Television regarding the status and ownership of the rights and failed to provide agreed documentation required in order to permit exploitation of the projects. In the legal action filed in the Circuit Court of the 15th Judicial Circuit in Palm Beach County Florida (Alliance Media Group Holdings, Inc. and AMG Television, LLC v. Creative Licensing International, LLC, et. al. case no. 502014CA005033XXXXMBAF), the Company and AMG Television allege that Creative Licensing International, LLC and 28 individual defendants (including Roy A. Sciacca and Lisa Colletti) breached the Creative Licensing Agreement and fraudulently induced AMG Television to enter into the Creative Licensing Agreement. The Company and AMG Television amended their complaint in the matter on May 14, 2014. The Company and AMG Television are seeking the rescission of the Creative Licensing Agreement, return of the Company stock issued and cash delivered in connection therewith and other and further damages suffered by the Company in an amount to be determined at the time of trial. As of December 31, 2014, The Company and AMG Television had reached settlements (the “Settlement”) with seven of the twenty-eight named defendants and the Company had canceled a net of 116,872 shares of common stock which have been tendered to the Company. In February 2015, the Company reached a settlement of the case with respect to the principal defendants, Roy A. Sciacca and Lisa Colletti whereby Sciacca and Colletti agreed to return an aggregate of 960,215 shares of previously issued stock to the Company and the Company agreed to issue 500,000 new shares of stock to them. In connection with the Settlement with Sciacca and Colletti, the Company has recovered a net of 497,555 shares issued in connection with the Creative Licensing transaction. In the aggregate, the Company has now recovered 614,424 of the 1.867 million shares issued in connection with the transaction. In addition, in connection with the Settlement, the Company recovered an additional 500,000 of the 800,000 shares of Company stock which had been previously issued in connection with payment for purported management services to be provided by certain of the defendants. The Company continues to believe that its position in the litigation is well-taken and supported by the facts and will continue to proceed with respect to the remaining defendants. The litigation is in its early stages and the Company cannot project whether it will achieve a successful result in connection with the remainder of the action or any other related actions. Discovery has yet to be commenced and no trial date has been set. If the matter is taken to conclusion, the Company could incur additional legal expenses in an amount which cannot be determined or estimated at this time. 

 

  25 
 

 

Other than the aforementioned matter, there are no other legal proceedings which are pending or have been threatened against the Company or any of its officers, directors or control persons of which management is aware.

 

ITEM 1A. RISK FACTORS.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

 

Below is a list of securities sold by us from January 1, 2016 through the date of filing which were not registered under the Securities Act.

 

Name of Purchaser       Amount of Securities  
Security   Date of Sale   Title of   Sold   Consideration
                 
Luna Consultant Group, LLC   01/01/16   Common Stock   10,000   Professional services
Mimi Galbo   01/04/16   Common Stock   2,500   Professional services
James Dryer   01/04/16   Common Stock   2,500   Professional services
Iconic Holdings, LLC   01/06/16   Common Stock   233,147   Note conversion
Richard Bindler Revocable Trust   01/08/16   Common Stock   100,000   Purchased @ $0.23 per share
Group 10 Holdings, LLC   01/13/16   Common Stock   157,418   Note conversion
Richard Bindler Revocable Trust   01/20/16   Common Stock   150,000   Purchased @ $0.17 per share
Steven Sadaka   01/20/16   Common Stock   250,000   Purchased @ $0.17 per share
Iconic Holdings, LLC   01/22/16   Common Stock   657,895   Note conversion
Luna Consultant Group, LLC   01/25/16   Common Stock   400,000   Professional services
Rolnick Family LP   01/26/16   Common Stock   100,000   Purchased @ $0.24 per share
Fedelta Capitello, LLC   01/27/16   Common Stock   100,000   Purchased @ $0.24 per share
Matthew & Casey Shore   01/27/16   Common Stock   100,000   Purchased @ $0.24 per share
Nancy Burgess & David Gross   01/29/16   Common Stock   100,000   Purchased @ $0.24 per share
Jason Taylor   01/29/16   Common Stock   200,000   Purchased @ $0.24 per share
David Kantor   02/02/16   Common Stock   208,333   Purchased @ $0.24 per share
Oren Kantor   02/02/16   Common Stock   208,334   Purchased @ $0.24 per share
Carbolosic Energy 1, LLLP   03/17/16   Common Stock   3,717,785   Purchased @ $0.21 per share
USREDA, LLC   03/17/16   Common Stock   3,717,785   Purchased @ $0.21 per share
A.J. Enterprises, LLP   03/30/16   Common Stock   208,334   Purchased @ $0.24 per share
Dale A. Morrell   04/14/16   Common Stock   108,433   Purchased @ $0.24 per share

 

  26 
 

 

Robert Stephens Cates   04/19/16   Common Stock   100,000   Purchased @ $0.24 per share
Steven Sadaka   04/28/16   Common Stock   250,000   Professional Services
Jacob Consulting, LLC   04/29/16   Common Stock   650,000   Professional Services
Bindler Investment Group, LLC   05/04/16   Common Stock   100,000   Purchased @ $0.24 per share
Richard Bindler Revocable Trust   05/04/16   Common Stock   150,000   Purchased @ $0.24 per share
James Dryer   05/04/16   Common Stock   80,000   Professional Services
Mimi Galbo   05/04/16   Common Stock   80,000   Professional Services
Kent Jones   05/06/16   Common Stock   200,000   Purchased @ $0.24 per share
New Direction IRA, Inc. FBO Kent Jones   05/06/16   Common Stock   200,000   Purchased @ $0.24 per share
Steven Nelson   05/11/16   Common Stock   (250,000)  Rescinded Common Stock
Mishawn Nelson   05/11/16   Common Stock   (200,000)  Rescinded Common Stock
Major League Services Investment & Holdings Corp.   05/31/16   Common Stock   52,083   Purchased @ $0.24 per share
James Dryer   06/04/16   Common Stock   5,000   Professional Services
Mimi Galbo   06/04/16   Common Stock   5,000   Professional Services
Nancy Burgess & David Gross   06/10/16   Common Stock   150,000   Purchased @ $0.24 per share
Alissa Shapiro   06/17/16   Common Stock   100,000   Purchased @ $0.24 per share
Gavriele Kantor   06/17/16   Common Stock   100,000   Purchased @ $0.24 per share
James Dryer   07/04/16   Common Stock   5,000   Professional Services
Mimi Galbo   07/04/16   Common Stock   5,000   Professional Services
Harry Grossman   07/04/16   Common Stock   20,000   Professional Services
Newport Coast Securities, Inc.   07/13/16   Common Stock   75,000   Professional Services
John D. Lane   07/14/16   Common Stock   100,000   Purchased @ $0.24 per share
Process Engineering Associates   07/21/16   Common Stock   100,000   Professional Services
John D. Lane   07/27/16   Common Stock   250,000   Purchased @ $0.24 per share
Michael & Roslynn Levine   07/27/16   Common Stcok   100,000   Purchased @ $0.24 per share
Gerard Vincent David   08/01/16   Common Stock   100,000   Purchased @ $0.24 per share
Newport Coast Securities, Inc.   08/01/16   Common Stock   20,000   Professional Services
Toby & Kim David   08/05/16   Common Stock   50,000   Purchased @ $0.24 per share
Steven Sadaka   08/23/16   Common Stock   250,000   Purchased @ $0.24 per share
Nancy Burgess & David Gross   08/31/16   Common Stock   250,000   Purchased @ $0.24 per share
Fedelta Capitello, LLC   08/31/16   Common Stock   250,000   Purchased @ $0.24 per share
TPL Investments, LLC   08/31/16   Common Stock   100,000   Purchased @ $0.24 per share
Harry Grossman   08/31/16   Common Stock   8,000   Professional Services
AES Capital Partners   08/31/16   Common Stock   500,000   Purchased @ $0.24 per share
Newport Coast Securities, Inc   09/01/16   Common Stock   20,000   Professional Services
Richard Bindler Revocable Trust   09/13/16   Common Stock   100,000   Purchased @ $0.24 per share
Harry Grossman   09/30/16   Common Stock   8,000   Professional Services
Freedom Investors Corp.   10/01/16   Common Stock   32,600   Professional Services
JMJ Financial   10/24/16   Common Stock   2,685,000   Note Conversion
JMJ Financial   10/24/16   Common Stock   20,000   Exercised Warrants
Steven Sadaka   10/25/16   Common Stock   125,000   Purchased @ $0.20 per share
Mark & Michelle Viner   10/25/16   Common Stock   125,000   Purchased @ $0.20 per share
Audie & Eileen Rolnick   10/31/16   Common Stock   50,000   Purchased @ $0.20 per share
Freedom Investors Corp.   11/01/16   Common Stock   20,000   Professional Services
Flagler Communications Group   

11/01/16

  

Common Stock

   

12,500

  

Professional Services

Bruce Greenberg   11/03/16   Common Stock   250,000   Purchased @ $0.20 per share
John Orlando   

11/09/16

  

Common Stock

   

125,000

  

Purchased @ $0.20 per share

 

The securities issued in the above mentioned transactions were issued in connection with private placements exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, pursuant to the terms of Section 4(2) of that Act and Rules 505 and 506 of Regulation D.

 

  27 
 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

Exhibit No.   Description
     
31.1   Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2   Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

 

101.INS

101.SCH

101.CAL

101.DEF

101.LAB

101.PRE

 

Certification of Principal Executive Officer and Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

 

  28 
 

 

SIGNATURES

 

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

  ALLIANCE BIOENERGY PLUS, INC.
           
Date: November 14, 2016 By: /s/ Daniel de Liege
    Daniel de Liege
   

Director, CEO, Acting CFO, President, Secretary and Treasurer

(Principal Executive Officer)

     
Date: November 14, 2016 By: /s/ Daniel de Liege
    Daniel de Liege
   

Director, CEO, Acting CFO, President, Secretary and Treasurer

(Principal Financial and Accounting Officer)

 

  29 
 

 

EXHIBIT INDEX

 

Exhibit No.   Description
     
31.1   Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2   Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

 

101.INS

101.SCH

101.CAL

101.DEF

101.LAB

101.PRE

 

Certification of Principal Executive Officer and Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

 

  30 
 

EX-31.1 2 ex31-1.htm

 

EXHIBIT 31.1

 

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

I, Daniel de Liege, certify that:

 

  1. I have reviewed this Form 10-Q for the period ended September 30, 2016 of Alliance BioEnergy Plus, Inc.;
     
  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

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

 

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

 

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

 

Date: November 14, 2016  
   
/s/ Daniel de Liege  
Daniel de Liege  
Principal Executive Officer  

 

   
 

EX-31.2 3 ex31-2.htm

 

EXHIBIT 31.2

 

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

I, Daniel de Liege, certify that:

 

  1. I have reviewed this Form 10-Q for the period ended September 30, 2016 of Alliance BioEnergy Plus, Inc.;

 

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

 

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

 

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

 

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

 

Date: November 14, 2016  
   
/s/ Daniel de Liege  
Daniel de Liege  
Principal Financial and Accounting Officer  

 

   
 

 

 

EX-32.1 4 ex32-1.htm

 

Exhibit 32.1

 

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

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

 

The undersigned, Daniel de Liege, the Chief Executive Officer, Chief Financial Officer, Director, President, Secretary and Treasurer of ALLIANCE BIOENERGY PLUS, INC. (the “Company”), DOES HEREBY CERTIFY that:

 

1. The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

 

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

 

IN WITNESS WHEREOF, each of the undersigned has executed this statement this 14th day of November, 2016.

 

  /s/ Daniel de Liege
  Daniel de Liege
  Principal Executive Officer
  Principal Financial and Accounting Officer

 

A signed original of this written statement required by Section 906 has been provided to ALLIANCE BIOENERGY PLUS, INC. and will be retained by ALLIANCE BIOENERGY PLUS, INC. and furnished to the Securities and Exchange Commission or its staff upon request.

 

   
 

 

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In addition to the license fee, the sublicense holder will pay AMG Energy a royalty of 3.5% of the revenues on the first CTS plant developed and a 5.0% royalty on the revenues of additional plants developed. The Company believes that this transaction will be completed in the 4th quarter of 2016. Following the merger, the Company will own 94% of AMG Energy, which in turn will own 100% of EK Laboratories, Inc. and 50% of Carbolosic. At the same time, the Company has agreed to acquire the remaining 6% of AMG Energy from the remaining two parties in exchange for issuance of an aggregate of 1,540,094 shares of Company common stock. In addition, the remaining balance owed under the original transaction has been renegotiated at aggregate principal balance of $2,098,696 bearing an interest rate of six percent (6%) per annum and maturing on July 20, 2017. 2252535 2708994 3730390 0.0176 0.0173 0.0147 0.0138 0.0131 0.0191 0.0121 0.0124 0.0122 0.0128 0.0128 0.0128 0.0139 0.0101 0.0100 0.0106 0.0114 P5Y P5Y P5Y P5Y P5Y P10Y P5Y P5Y P5Y P5Y P5Y P5Y P5Y P5Y P5Y P5Y P5Y 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.7511 1.7497 1.7642 1.7599 1.7528 1.7615 1.7587 1.7570 1.7448 1.7348 1.7351 1.7351 1.7401 1.6531 1.6540 1.6469 1.5606 0.30 0.30 0.40 0.37 0.33 0.33 0.30 0.30 0.28 0.26 0.23 0.23 0.36 0.36 0.39 0.35 0.26 P5Y P7Y 36488 1250000 122879 2017-07-20 0.06 0.05 0.0800 0.0800 0.0800 0.0800 0.1200 0.1200 0.1000 0.0431 25000000 640942 539189 -17500 -10000 -52500 -30000 5037 3182 13641 8110 71000 555556 104000 105000 100000 100000 150000 275000 265000 165000 1250000 500000 9036 11701 The Company’s common stock, after 180 days, in whole or in part at the option of the holder. The note also carried a prepayment penalty of one hundred thirty percent (130%) of the then outstanding principal and interest balance due, if the note was paid back within the first one hundred eighty (180) days. The Company’s common stock one hundred eighty (180) days after the maturity date. After the maturity date, the note cannot be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. The Company common stock one hundred eighty (180) days after the issuance date in whole or in part at the option of the holder at a conversion price equal to forty-two cents ($0.42); provided, however, that if the closing price was less than forty cents ($0.40) for any three (3) consecutive trading days, then the conversion price shall adjust to the lowest trading day price during the thirty-five (35) trading days prior, less a forty-five percent (45%) discount. Repayment of the note included a prepayment penalty if the note was paid back within the first one hundred eighty (180) days and could not be repaid after day one hundred eighty (180) without the holders consent. The prepayment penalty if paid back within the first ninety (90) days was equal to one hundred five percent (105%) of the principal balance; paid between day ninety-one (91) and day one hundred twenty (120) the prepayment penalty was equal to one hundred fifteen percent (115%) of the principal balance; paid between day one hundred twenty-one (121) and day one hundred seventy-nine (179) the prepayment penalty increased to one hundred twenty-five percent (125%) of the principal balance. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. The Company entered into a six month (6) promissory note with St. George Investments, LLC with a face amount of $265,000 less an original issue discount of $65,000. This note does not accrue interest. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the company repaid this note in full. The total amount paid was $306,890, which represented a $265,000 principal balance and $41,890 in default interest and early payment penalties. The Company’s common stock commencing on the 6 month anniversary of the note. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. The Company’s common stock commencing on the 6 month anniversary of the note, in whole or in part at the option of the. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. The Company’s common stock commencing on the 6 month anniversary of the note, in whole or in part at the option of the holder. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. 41890 95000 239055 139303 149022 340468 306890 148748 156462 140950 P5Y P1Y The initial term on each of these loans was five (5) years from the date of each advance and bear interest at a rate of 4.31% per annum. The Company could earn a 0.51% rate discount if the first five years of interest due to lender was paid within 15 days of each advance. In addition, these loans could not be prepaid and were secured by all assets of the Company. The Company received two (2) long term notes payable, with a combined principal balance of $1,250,000 in the year ended December 31, 2014. 0.0051 0.0051 95000 36488 4162 122879 The note carries a 10% one-time interest charge, a 10% original issue discount and a 75% warrant coverage. The note may only be paid up to 98% of the balance due within the first 180 days at a 30% premium. After 180 days, the note cannot be repaid without the holders consent. The note is convertible after 180 days at a 25% discount to the lowest trade price in the preceding 10 trading days.</div> The rate equal to the lower of eighteen percent (18.0%) per annum or the highest rate permitted by law. This note could only be prepaid within the first 180 days along with a prepayment penalty of one hundred ten percent (110%) and increasing ten percent (10%) every sixty (60) days to a maximum of one hundred thirty percent (130%). After 180 days, the note could be converted into the Company's common stock at a conversion rate equal to sixty percent (60%) of the lowest trading price during the preceding 15 consecutive trading days prior to date of conversion. Due and payable on or before May 4, 2016. Due on or before July 10, 2016. Due on or before January 10, 2016 Due on or before March 27, 2016. Due on or before March 27, 2016. Due on or before March 27, 2016. Due on or before June 30, 2016 1388886 50000 P5Y P5Y P5Y 0.30 0.75 2.00 0.45 0.30 0.45 49022 48748 35303 51462 85068 70950 89055 157418 891042 195924 4535517 1048460 2685000 20000 95000 25000 1088524 115000 402750 150000 104000 100000 255000 100000 105000 70000 1365644 333145 5338886 1296000 65100 65000 10 New offering of units valued at $0.24 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. New offering of units valued at $765,735. 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Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. Since October 1, 2016, the Company has sold 550,000 units for aggregate proceeds of $110,000. The offering is ongoing 2016 <p style="margin: 0pt"></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 1 &#150; ORGANIZATION AND BUSINESS DESCRIPTION</b></p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&#160;</p> <p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Alliance Bioenergy Plus, Inc (the &#147;Company&#148;) is a technology company focused on emerging technologies in the renewable energy, biofuels and new technologies sectors. From inception through December 5, 2014, the Company was known as Alliance Media Group Holdings, Inc. At inception (March 28, 2012), the Company was organized as a vehicle to engage in the commercial production, distribution and exploitation of Motion Pictures and other Entertainment products. However, in December 2013, a wholly owned subsidiary of the Company, AMG Renewables, LLC (&#147;AMG Renewables&#148;), acquired the controlling interest (51%) in AMG Energy Group, LLC (&#147;AMG Energy&#148;), which owns a fifty percent (50%) interest of Carbolosic, LLC (&#147;Carbolosic&#148;), which holds an exclusive worldwide license to the University of Central Florida&#146;s patented technology (U.S. Patent 8,062,428) known as &#147;CTS&#153;&#148;. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. 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Document and Entity Information - shares
9 Months Ended
Sep. 30, 2016
Nov. 14, 2016
Document And Entity Information    
Entity Registrant Name ALLIANCE BIOENERGY PLUS, INC.  
Entity Central Index Key 0001549145  
Document Type 10-Q  
Document Period End Date Sep. 30, 2016  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   59,344,925
Trading Symbol ALLM  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2016  
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.5.0.2
Consolidated Balance Sheets (Unaudited) - USD ($)
Sep. 30, 2016
Dec. 31, 2015
Current assets    
Cash and cash equivalents $ 10,840 $ 62,054
Prepaid expenses 902,039 743,738
Deferred financing costs 27,778 54,278
TOTAL CURRENT ASSETS 940,657 860,070
PROPERTY AND EQUIPMENT, AT COST, NET OF ACCUMULATED DEPRECIATION OF $115,097 AND $59,919 AT SEPTEMBER 30, 2016 AND DECEMBER 31, 2015, RESPECTIVELY 273,435 310,576
Other assets    
Security deposits 16,305 18,965
Capitalized costs 260,497 202,021
Investment in and advances to unconsolidated affiliates 7,419,619 7,433,024
TOTAL OTHER ASSETS 7,696,421 7,654,010
TOTAL ASSETS 8,910,513 8,824,656
Current liabilities    
Accounts payable and accrued liabilities 431,973 387,442
Payable relating to an acquisition - related party 2,031,258 2,031,258
Short term note payable - related party 71,000 71,000
Short term note payable - other 265,000
Convertible debentures 555,556 999,000
Interest payable - related party 11,701 9,036
Interest payable - other 55,556 83,946
Current liabilities of discontinued operations 36,148 36,148
TOTAL CURRENT LIABILITIES 3,193,192 3,882,830
Long term liabilities    
Long term note payable - Other 1,250,000
TOTAL LONG TERM LIABILITIES 1,250,000
TOTAL LIABILITIES 3,193,192 5,132,830
STOCKHOLDERS' EQUITY    
Preferred stock; $0.001 par value; 10,000,000 shares authorized; zero shares issued and outstanding
Common stock; $0.001 par value; 500,000,000 shares authorized; 55,899,825 shares issued and outstanding at September 30, 2016 and 41,084,279 shares issued and outstanding at December 31, 2015 55,900 41,084
Stock subscription receivable (105,000) (5,000)
Additional paid-in capital 26,323,896 21,160,997
Accumulated deficit (19,882,797) (17,052,797)
Total stockholders' equity 6,391,999 4,144,284
Non-controlling interest (674,678) (452,458)
TOTAL EQUITY 5,717,321 3,691,826
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,910,513 $ 8,824,656
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.5.0.2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
Sep. 30, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]    
Net of accumulated depreciation and amortization on property and equipment $ 115,097 $ 59,919
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 55,899,825 41,084,279
Common stock, shares outstanding 55,899,825 41,084,279
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.5.0.2
Consolidated Statement of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Income Statement [Abstract]        
Revenues    
Operating expenses:        
General and administrative 765,657 2,338,663 $ 3,509,162 $ 4,098,510
Total operating expenses 765,657 2,338,663 3,509,162 4,098,510
Loss from operations: (765,657) (2,338,663) (3,509,162) (4,098,510)
Other (income) expense:        
Equity loss in unconsolidated affiliates 41,104 61,065 124,781 143,338
Beneficial conversion feature 92,440
Gain on sale of subsidiary (1,163,609)
Interest expense - related party 895 895 2,665 2,655
Interest expense and prepayment penalties - other 84,581 483,656 114,942
Total other (income) expense (41,999) (146,541) 460,067 (260,935)
Loss from continuing operations: (807,656) (2,485,204) (3,049,095) (4,359,445)
Discontinued operations:        
Loss from operations 64 3,125 29,081
Debt forgiveness (700,000)
Income (Loss) on discontinued operations: (64) (3,125) 670,919
Net loss: (807,656) (2,485,268) (3,052,220) (3,688,526)
Net loss attributable to non-controlling interest: (114,758) (154,244) (222,220) (279,673)
Net loss attributable to Company: $ (692,898) $ (2,331,024) $ (2,830,000) $ (3,408,853)
Basic and diluted net loss per share:        
Continuing operations $ (0.02) $ (0.07) $ (0.06) $ (0.12)
Discontinued operations 0.02
Net loss per share: $ (0.02) $ (0.07) $ (0.06) $ (0.10)
Weighted average common shares outstanding:        
Basic and Diluted 50,677,527 39,081,859 54,688,336 38,636,093
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.5.0.2
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Cash flows from operating activities    
Net loss from continuing operations $ (3,049,095) $ (4,359,445)
Net income (loss) from discontinued operations (3,125) 670,919
Net loss (3,052,220) (3,688,526)
Reconciliation of net loss to net cash used in operating activities    
Depreciation and amortization 55,178 97,864
Amortization of non-cash compensation 584,567
Deferred financing costs 26,500 (187,000)
Sale of subsidiary (1,163,609)
Beneficial conversion feature 92,440
Stock based compensation for services 339,263 366,296
Issuance of warrants for services 688,887 1,332,239
Stock based compensation awarded under employee, director plan 240,000
Issuance of options awarded under employee, director plan 220,720 446,281
Equity loss in unconsolidated affiliates 124,781 143,338
Changes in operating assets and liabilities    
Prepaid expenses 14,278 39,558
Accrued interest - other 8,097 41,204
Accounts payable and accrued liabilities 173,057 66,437
Net cash (used in) operating activities - continuing operations (1,884,936) (1,773,228)
Changes in discontinued operations assets and liabilities    
Accounts payable and accrued liabilities (1,656)
Legal settlement relating to an acquisition (700,000)
Net cash (used in) operating activities - discontinued operations (3,125) (30,737)
Net cash (used in) operating activities (1,888,061) (1,803,965)
Cash flows from investing activities    
Purchase of property and equipment (18,037) (217,084)
Security deposit 2,660 (17,965)
Capitalized fees (58,476)
Investment in and advances to an unconsolidated affiliate (111,376) (103,419)
Net cash (used in) investing activities - continuing operations (185,229) (338,468)
Net cash (used in) investing activities - discontinued operations
Net cash (used in) investing activities (185,229) (338,468)
Cash flows from financing activities    
Proceeds from issuance of common stock 2,608,994 850,209
Proceeds from short-term note payable - other 235,000
Proceeds from issuance of convertible debt 555,556 1,191,000
Payment of convertible debt (884,000) (143,000)
Payment of short-term note payable - other (265,000)
Disgorgement fees 6,526
Net cash provided by financing activities - continuing operations 2,022,076 2,133,209
Net cash provided by financing activities - discontinued operations
Net cash provided by financing activities 2,022,076 2,133,209
Net increase (decrease) in cash and cash equivalents (51,214) (9,224)
Cash and cash equivalent at beginning of the period 62,054 205,969
Cash and cash equivalent at end of the period 10,840 196,745
Cash paid during the period for    
Interest 512,046 59,527
Taxes
Supplemental schedule of non-cash activities    
Conversion of convertible debenture to common stock 333,301
Common stock issued for future services 203,267 311,154
Warrants issued for future services 676,757 611,290
Rescinded warrants $ (255,612)
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.5.0.2
Organization and Business Description
9 Months Ended
Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Business Description

NOTE 1 – ORGANIZATION AND BUSINESS DESCRIPTION

 

Alliance Bioenergy Plus, Inc (the “Company”) is a technology company focused on emerging technologies in the renewable energy, biofuels and new technologies sectors. From inception through December 5, 2014, the Company was known as Alliance Media Group Holdings, Inc. At inception (March 28, 2012), the Company was organized as a vehicle to engage in the commercial production, distribution and exploitation of Motion Pictures and other Entertainment products. However, in December 2013, a wholly owned subsidiary of the Company, AMG Renewables, LLC (“AMG Renewables”), acquired the controlling interest (51%) in AMG Energy Group, LLC (“AMG Energy”), which owns a fifty percent (50%) interest of Carbolosic, LLC (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The Company’s goal in acquiring the interest in AMG Energy was to develop the CTS technology to a commercial scale and then seek to license the technology to prospective licensees. In September 2014, the Company determined to focus all of the Company’s resources and personnel on the Company’s renewable energy holdings and future energy technologies and to divest the Company of its entertainment-related assets and subsidiaries. The Company therefore determined at that time to divest and sell off, close down or discontinue the operations of its entertainment-related subsidiaries. Effective December 5, 2014, amended the Company’s Articles of Incorporation to change the name of the Company to Alliance Bioenergy Plus, Inc., which is more appropriately descriptive of the new business direction of the Company.

 

Commencing in March 2016, the Company commenced action to restructure its energy-related holdings through the following transactions;

 

1)       In March 2016, AMG Renewables, a wholly-owned subsidiary of the Company, sold its interest in Carbolosic Plant 1 to Carbolosic Energy 1, LLLP, an unrelated third party, in exchange for satisfaction of the outstanding $1,250,000 loan and $36,488 interest between Carbolosic Plant 1 and Carbolosic Energy 1, LLLP. In connection with the transaction, an amount which the Company had prepaid to Carbolosic Energy 1, LLLP ($122,879) for future marketing and interest was eliminated in the sale.

 

2)       AMG Renewables, a wholly-owned subsidiary of the Company entered into an agreement to acquire, by merger, the remaining 49% of AMG Energy Solutions, Inc. (“Solutions”) which it did not previously own by issuing 8,700,000 shares of new Company common stock to the holders of the minority interest in Solutions. Prior to the completion of this transaction, Solutions owned 43% of AMG Energy and two other parties controlled 6% of AMG Energy. As of September 30, 2016, this merger had yet to be completed as certain conditions had yet to be satisfied. The Company believes that this transaction will be completed in the 4th quarter of 2016. Following the merger, the Company will own 94% of AMG Energy, which in turn will own 100% of EK Laboratories, Inc. and 50% of Carbolosic. At the same time, the Company has agreed to acquire the remaining 6% of AMG Energy from the remaining two parties in exchange for issuance of an aggregate of 1,540,094 shares of Company common stock. In addition, the remaining balance owed under the original transaction has been renegotiated at aggregate principal balance of $2,098,696 bearing an interest rate of six percent (6%) per annum and maturing on July 20, 2017.

 

3)       Following completion of the foregoing merger, AMG Renewables and AMG Energy, would both then be wholly-owned subsidiaries of the Company, having agreed to enter into a merger transaction whereby AMG Energy is the surviving company. Thereafter, AMG Energy would become the holding company for all of the energy holdings of the Company (EK Laboratories, Inc. and a 50% interest in Carbolosic, which includes certain licensing rights in North America and Africa) and the existence of AMG Renewables will terminate.

 

Plan of Operation

 

The Company is focused on one industry – Renewable Energy. Through its wholly-owned subsidiary, AMG Energy, the Company owns Ek Laboratories, Inc. and a 50% interest in Carbolosic (which includes certain licensing rights in North America and Africa). The Company has a strategy that includes growth in its energy-related activities as well as mergers and acquisitions and start-up activities which are focused on development of an increasing revenue stream, secure market share and enhancement of shareholder value.

 

AMG ENERGY GROUP, LLC

 

AMG Energy was created for the purpose of managing and developing the Company’s renewable energy technology enterprises. Through a series of transactions described in ORGANIZATION AND BUSINESS DESCRIPTION, above, the Company anticipates that in the 4th quarter of 2016 AMG Energy will become a wholly-owned subsidiary of the Company and the Company’s sole holding company for all of its energy interests. These interests would comprise ownership of 100% of EK Laboratories, Inc., a Florida corporation (“EK”) formerly known as Central Florida Institute of Science and Technology, Inc. and a fifty percent (50%) interest in Carbolosic, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The Company’s goal is to develop this CTS technology to a commercial scale and then seek to license the technology to prospective licensees. EK was formed to serve as a demonstration and research facility to further develop the CTS process, its uses, and develop new technologies.

 

In addition, AMG Energy has entered into a series of agreements with various unrelated third parties, wherein AMG Energy sublicensed the CTS technology to Naldogen (Pty) Ltd., an existing South African company, which has been renamed Carbolosic Energy SA PTY LTD (“Carbolosic SA”). Carbolosic SA shall be solely devoted to exploitation of the CTS technology in South Africa, Lesotho, Swaziland and Botswana and the term of the sublicense is coterminous with the master license (i.e. through July 1, 2032). The consideration for the grant of the sublicense is $25,000,000 (“License Fee”), which was to be paid or guaranteed by March 1, 2016. In addition to the license fee, the sublicense holder will pay AMG Energy a royalty of 3.5% of the revenues on the first CTS plant developed and a 5.0% royalty on the revenues of additional plants developed. Until the $25,000,000 payment has been received, the Company does not consider all of the events required under the agreement to have been completed. Therefore the Company has not recorded any of the fee in the accompanying financial statements. Contemporaneously, Carbolosic SA’s shareholders entered into an agreement whereby, among other matters, it was agreed that ownership of Carbolosic SA shall be 43.5% for Tes Projects (Pty) Ltd, a South African company (“Tes”), 24.5 % for Spearhead Capital Ltd, a Seychelles company (“Spearhead”), 7.5% for Jupiter Trust, a South African Trust (“Jupiter”) and 24.5% for the Company. TES, Spearhead and Jupiter are all unrelated to the Company. The interests of Tes and Jupiter are delivered in consideration of the funding or guarantee of funding of the License Fee; Spearhead’s interest is in consideration of facilitating the Sublicense transaction; and the Company’s interest is in exchange for the delivery to Carbolosic SA of a 24.5% interest in one of the Company’s CTS sugar extracting plants to be developed in the United States. In February 2016, due to economic and political turmoil in South Africa, members of Tes Projects (Pty) Ltd and Jupiter Trust resigned from management and from the Board of Carbolosic SA and returned all ownership interest in Carbolosic SA to the Carbolosic SA treasury. Spearhead Capital intends to continue operations of Carbolosic SA but at this time there is no guarantee that they will be successful in securing the needed funds or contracts to do so. The Company will continue to evaluate its position in Africa to determine the strategy it intends to pursue.

 

Carbolosic Plant 1 was created in October 2014 for the purpose of being a full-scale facility for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing located in Palm Beach County, FL. In March 2016, Carbolosic Plant 1 was sold to Carbolosic Energy 1, LLLP, a non-related third party, in exchange for satisfaction of the outstanding $1,250,000 loan and accrued interest between Carbolosic Plant 1 and Carbolosic Energy 1, LLLP.

 

The Company believes that its management and consultants have significant experience in the bio-fuels, renewable energy and chemical manufacturing industries. As of the date of filing, the Company has not generated any revenues from its renewable energy business.

XML 17 R7.htm IDEA: XBRL DOCUMENT v3.5.0.2
Going Concern
9 Months Ended
Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 2 – GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has not generated any revenue, has incurred losses since inception, has a working capital deficiency of $2,252,535 and may be unable to raise further equity. At September 30, 2016 the Company had incurred accumulated losses of $19,882,797 since its inception. The Company expects to incur significant additional liabilities in connection with its start-up activities. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities when they become due and to generate sufficient revenues from its operations to pay its operating expenses. These financial statements do not include any adjustments related to the recoverability and classifications of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty. There are no assurances that the Company will continue as a going concern.

 

Management believes that the Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of stock or borrow additional funds. The Company’s inability to obtain additional cash could have a material adverse effect on its financial position, results of operations, and its ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty

 

The Company intends to raise additional capital, sell licenses to its CTS technology and continue constructing its full scale demonstration facility which, once operational, is expected to generate cash flow in amounts sufficient to cover the Company’s operating expenses and debt service.

 

Through its private offerings, the Company raised $3,730,390 from inception through December 31, 2015 and raised an additional $2,708,994, of which $100,000 is recorded as a stock subscription receivable, in the nine months ended September 30, 2016.

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2016
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of the Company’s majority-owned subsidiaries over which the Company exercises control. Intercompany transactions and balances were eliminated in consolidation.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, after elimination of intercompany accounts and transactions. Investments in business entities in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The Company’s proportionate share of net income or loss of the entity is recorded in the Consolidated Statements of Operations

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted 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 as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of impairment assessment of identifiable intangible assets and valuation allowance for deferred tax assets. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.

 

Cash and Cash Equivalents

 

All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents.

 

Stock Compensation

 

The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation” (formerly referred to as SFAS No. 123(R)). Share-based payments to consultants, service providers and other non-employees are accounted for in accordance with ASC Topic 718, ASC Topic 505, “Equity Payments to Non-Employees” or other applicable authoritative guidance.

 

Stock-based Compensation Valuation Methodology

 

Stock-based compensation resulting from the issuance of common stock is calculated by reference to the valuation of the stock on the date of issuance, the expense being recognized as the compensation is earned. Stock-based compensation expenses related to employee options and warrants granted to non-employees are recognized as the stock options and warrants are earned. The fair value of the stock options or warrants granted is estimated at the grant date, using the Black-Scholes option pricing model, and the expense is recognized on a straight-line basis over the shorter of the period over which services are to be received or the life of the option or warrant. The grant date fair value of employee share options and similar instruments is estimated using the Black-Scholes option pricing model on the basis of the fair value of the underlying common stock on the measurement date, adjusted for the unique characteristics of those equity instruments, using the assumptions noted in the table below. The fair value of the common stock is determined by the then-prevailing closing market price. Expected volatility was based on the historical volatility of the Company’s closing day market price per share. The expected term of options and warrants was based upon the life of the option, and the risk-free rate used was based on the U.S. Treasury Daily Yield Curve Rate.

 

The stock compensation issued for services during the nine months ended September 30, 2016, was valued on the date of issuance. The following assumptions were used in calculations of the Black-Scholes option-pricing models for warrant-based stock compensation issued in the nine months ended September 30, 2016:

 

    01/01/16     01/04/16     01/25/16     02/01/16     03/01/16     03/25/16     03/31/16     04/01/16     04/16/16  
Risk-free interest rate     1.76 %     1.73 %     1.47 %     1.38 %     1.31 %     1.91 %     1.21 %     1.24 %     1.22 %
Expected life     5 years       5 years       5 years       5 years       5 years       10 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %
Expected volatility     175.11 %     174.97 %     176.42 %     175.99 %     175.28 %     176.15 %     175.87 %     175.70 %     174.48 %
ALLM common stock fair value   $ 0.30     $ 0.30     $ 0.40     $ 0.37     $ 0.33     $ 0.33     $ 0.30     $ 0.30     $ 0.28  

 

    04/28/16     04/29/16     05/01/16     06/01/16     06/30/16     07/01/16     08/01/16     09/30/16  
Risk-free interest rate     1.28 %     1.28 %     1.28 %     1.39 %     1.01 %     1.00 %     1.06 %     1.14 %
Expected life     5 years       5 years       5 years       5 years       5 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %
Expected volatility     173.48 %     173.51 %     173.51 %     174.01 %     165.31 %     165.40 %     164.69 %     156.06 %
ALLM common stock fair value   $ 0.26     $ 0.23     $ 0.23     $ 0.36     $ 0.36     $ 0.39     $ 0.35     $ 0.26  

 

Accounting and Reporting of Discontinued Operations

 

As required by the FASB ASC Subtopic 205.20, per ASU 2014-08, Discontinued Operations, a component of an entity or a group of components of an entity, or a business or nonprofit activity can be classified as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (i) the criteria in paragraph 205.20.45.1E to be classified as held for sale is met (ii) the component is disposed of by sale, or (iii) the component is disposed of other than by sale in accordance with paragraph 360.10.45.15 (for example, by abandonment or in a distribution to owners in a spinoff). Certain components to be disposed of other than by sale shall continue to be classified as “held and used” until it is disposed of, per the requirements of ASC Subtopic 360.10. Depreciation on these assets ceases upon their classification as “held and used.” The Company adopted ASU No. 2014-08 effective September 1, 2014.

 

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets, generally 5 to 7 years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.

 

Convertible Instruments

 

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

 

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

 

The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

 

Common Stock Purchase Warrants and Other Derivative Financial Instruments

 

The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide it with a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to its own stock as defined in ASC 815-40 (“Contracts in Entity’s Own Equity”). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses the classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

 

Non-controlling interest in consolidated subsidiaries

 

The accompanying consolidated financial statements include the accounts of Alliance BioEnergy Plus, Inc. and those subsidiaries that the Company has the ability to control either through voting rights or means other than voting rights. For these subsidiaries, the Company records 100% of the revenues, expenses, cash flows, assets and liabilities in its consolidated financial statements. For subsidiaries that the Company controls but hold less than 100% ownership, a non-controlling interest is recorded in the consolidated income statement to reflect the non-controlling interest’s share of the net income (loss), and a non-controlling interest is recorded in the consolidated balance sheet to reflect the non-controlling interest’s share of the net assets of the subsidiary.

 

Investments in non-consolidated affiliates

 

Investments in non-consolidated affiliates are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment are accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.

 

The Company’s investment in Carbolosic, LLC is accounted for using the equity method of accounting. The Company monitors its investment for impairment at least annually and make appropriate reductions in the carrying value if it determines that an impairment charge is required based on qualitative and quantitative information.

 

Impairment of Long Lived Assets

 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, the Company compares the carrying amount of the asset group to future undiscounted net cash flows, excluding interest costs, expected to be generated by the asset group and their ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.

 

Income Taxes

 

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.

 

Profit (Loss) per Common Share:

 

Basic profit (loss) per share amounts have been calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share has been calculated using the weighted-average number of common shares plus the potentially dilutive effect of securities such as outstanding options and warrants. The computation of potential common shares has been performed using the treasury stock method. The warrants and options are antidilutive for all periods presented. When net loss is reported, diluted and basic net loss per share amounts are the same as the impact of potential common shares is antidilutive.

 

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, payables to related parties, and accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

 

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

 

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.5.0.2
Investment in Unconsolidated Affiliates
9 Months Ended
Sep. 30, 2016
Investments [Abstract]  
Investment in Unconsolidated Affiliates

NOTE 4 – INVESTMENT IN UNCONSOLIDATED AFFILIATES

 

On December 26, 2013, AMG Renewables, LLC, a Florida limited liability company (“AMG Renewables”), a wholly-owned subsidiary of the Company, acquired the controlling interest (51%) in AMG Energy Group, LLC a Florida limited liability company (“AMG Energy”) from certain related parties. AMG Energy owns a fifty percent (50%) interest of Carbolosic, LLC, a Delaware limited liability company (“Carbolosic”), which holds an exclusive worldwide license to the University of Central Florida’s patented technology (U.S. Patent 8,062,428) known as “CTS™”. The CTS technology is a mechanical/chemical, dry process for converting cellulose material into sugar for use in the biofuels industry as well as other fine chemical manufacturing. The results of AMG Renewables and AMG Energy are consolidated in the Company’s financial statements. AMG Energy’s investment in Carbolosic is accounted for using the equity method of accounting.

 

On May 13, 2015, The Company entered an agreement with Carbolosic SA’s shareholders whereby, among other matters, it was agreed that ownership of Carbolosic SA shall be 43.5% for Tes Projects (Pty) Ltd, a South African company (“Tes”), 24.5 % for Spearhead Capital Ltd, a Seychelles company (“Spearhead”), 7.5% for Jupiter Trust, a South African Trust (“Jupiter”) and 24.5% for Alliance BioEnergy Plus, Inc. TES, Spearhead and Jupiter are all unrelated to the Company. The interests of Tes and Jupiter are delivered in consideration of the funding or guarantee of funding of the License Fee; Spearhead’s interest is in consideration of facilitating the Sublicense transaction; and the Company’s interest is in exchange for the delivery to Carbolosic SA of a 24.5% interest in one of the Company’s CTS sugar extracting plants to be developed in the United States. The Company’s investment in Carbolosic SA is accounted for using the equity method of accounting.

 

The following is a condensed balance sheet of the unconsolidated affiliates as of September 30, 2016 and December 31, 2015 and a comparative statement of operations for the three and nine months ending September 30, 2016 and 2015.

 

Condensed Balance Sheet of Non-Consolidated Affiliates
             
      September 30, 2016       December 31, 2015  
ASSETS                
Current Assets                
Cash and cash equivalents   $ 389     $ 83  
Total Current Assets     389       83  
Other Assets                
Prepaid Expenses     -       -  
Total Other Assets     -       -  
TOTAL ASSETS   $ 389     $ 83  
                 
LIABILITIES AND STOCKHOLDERS EQUITY                
Current Liabilities                
Accounts payable and accrued liabilities   $ 344,222     $ 238,399  
Interest payable     26,322       12,864  
Current notes payable     640,942       539,189  
TOTAL CURRENT LIABILITIES     1,011,486       790,452  
                 
STOCKHOLDERS EQUITY                
Accumulated deficit     (1,011,097 )     (790,369 )
TOTAL EQUITY     (1,011,097 )     (790,369 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY   $ 389     $ 83  

 

Condensed Statement of Operations of Non-Consolidated Affiliate
                         
    Three months ended     Nine months ended  
    Sep 30, 2016     Sep 30, 2015     Sep 30, 2016     Sep 30,2015  
                         
Revenues   $ -     $ -     $ -     $ -  
                                 
Operating Expenses                                
Royalties     17,500       10,000       52,500       30,000  
General and administrative     59,671       98,789       180,933       238,408  
Total operating expenses     (77,171 )     (108,789 )     (233,433 )     (268,408 )
                                 
Other expenses                                
Interest expense     5,037       3,182       13,641       8,110  
Total other expenses     (5,037 )     (3,182 )     (13,641 )     (8,110 )
                                 
Loss from operations   $ (82,208 )   $ (111,971 )   $ (247,074 )   $ (276,518 )

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.5.0.2
Debt
9 Months Ended
Sep. 30, 2016
Debt Disclosure [Abstract]  
Debt

NOTE 5 – DEBT

 

Short Term Notes Payable - Related Parties

 

Throughout 2013, the Company issued unsecured short-term notes payable to various related parties, including officers and directors of the Company, with a term of one year, which have since been extended. At September 30, 2016 there was one consolidated note outstanding to Palm Beach Energy Solutions, LLC. The note has an outstanding principal balance of $71,000 and bears interest at a rate of 5% per annum. As of September 30, 2016 and December 31, 2015, the total interest accrued on the note was $11,701 and $9,036 respectively.

 

Short Term Notes Payable – Other

 

On July 7, 2015, the Company entered into a six month (6) promissory note with St. George Investments, LLC with a face amount of $265,000 less an original issue discount of $65,000. This note does not accrue interest. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the company repaid this note in full. The total amount paid was $306,890, which represented a $265,000 principal balance and $41,890 in default interest and early payment penalties.

 

Long Term Notes Payable – Other

 

During the year ended December 31, 2014, Carbolosic Plant 1, LLC, a wholly owned subsidiary, entered into an agreement with Carbolosic Energy 1, LLLP to begin receiving long term loans, pursuant to the U.S. EB-5 Immigrant Investor Program, to develop a CTS demonstration facility. These loans were to be issued in multiple advances, each in an amount greater than or equal to $500,000 up to the target loan amount of $33,000,000. The initial term on each of these loans was five (5) years from the date of each advance and bear interest at a rate of 4.31% per annum. The Company could earn a 0.51% rate discount if the first five years of interest due to lender was paid within 15 days of each advance. In addition, these loans could not be prepaid and were secured by all assets of the Company. The Company received two (2) long term notes payable, with a combined principal balance of $1,250,000 in the year ended December 31, 2014. The company had taken advantage of the 0.51% rate discount on one of these notes payable, with a principal amount of $500,000, and issued a $95,000 interest payment to the Lender on December 9, 2014. In January 2015, the Company made a $4,162 interest payment towards the second note. In March 2016, Carbolosic Plant 1 was sold to Carbolosic Energy 1, LLLP, a non-related third party, in exchange for satisfaction of the outstanding $1,250,000 loan and $36,488 interest. In connection with the transaction, an amount which the Company had prepaid to Carbolosic Energy 1, LLLP ($122,879) for future marketing and interest was eliminated in the sale.

 

Convertible Debt

 

On June 30, 2015, the Company entered into a convertible debenture with Iconic Holdings, LLC with a principal balance of $165,000 due on or before June 30, 2016. This note provided for “guaranteed” interest of ten percent (10.0%) of the principal balance outstanding. This note could only be prepaid within the first 180 days along with a prepayment penalty of one hundred ten percent (110%) and increasing ten percent (10%) every sixty (60) days to a maximum of one hundred thirty percent (130%). After 180 days, the note could be converted into the Company’s common stock at a conversion rate equal to sixty percent (60%) of the lowest trading price during the preceding 15 consecutive trading days prior to date of conversion. In addition, in order to obtain this note, the Company issued Iconic Holdings, LLC a five (5) year common stock purchase warrant agreement for up to 50,000 shares with an exercise price of $0.75 per share. These warrants were fully granted and vested at time of issuance and are being amortized over the life of the agreement. In January 2016, Iconic Holdings, LLC converted $95,000 of the principal balance into 891,042 shares of unrestricted common stock and the remaining balance of the note was repaid in full. The total amount paid was $140,950, which represented a $70,000 principal payment and $70,950 in interest and early payment penalties.

 

On July 10, 2015, the Company entered into a convertible debenture with JSJ Investments, Inc with a principal balance of $150,000 due on or before January 10, 2016. The note accrues interest at a rate of twelve percent (12%) per annum and is convertible into the Company’s common stock one hundred eighty (180) days after the maturity date. After the maturity date, the note cannot be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In April 2016, the Company paid the debenture in full with a payment of $239,055, which represented a $150,000 principal payment and $89,055 in interest and penalties.

 

On July 10, 2015 the Company entered into a secured convertible debenture with Group 10 Holdings, LLC with a principal balance of $275,000, less a ten percent (10%) original issue discount and was due on or before July 10, 2016. Group10 Holdings, LLC was granted a security interest in the South African agreement sub-licensed by AMG Energy Group. This note accrued interest at a rate of twelve percent (12%) per annum and was convertible into the Company common stock one hundred eighty (180) days after the issuance date in whole or in part at the option of the holder at a conversion price equal to forty-two cents ($0.42); provided, however, that if the closing price was less than forty cents ($0.40) for any three (3) consecutive trading days, then the conversion price shall adjust to the lowest trading day price during the thirty-five (35) trading days prior, less a forty-five percent (45%) discount. Repayment of the note included a prepayment penalty if the note was paid back within the first one hundred eighty (180) days and could not be repaid after day one hundred eighty (180) without the holders consent. The prepayment penalty if paid back within the first ninety (90) days was equal to one hundred five percent (105%) of the principal balance; paid between day ninety-one (91) and day one hundred twenty (120) the prepayment penalty was equal to one hundred fifteen percent (115%) of the principal balance; paid between day one hundred twenty-one (121) and day one hundred seventy-nine (179) the prepayment penalty increased to one hundred twenty-five percent (125%) of the principal balance. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, Group 10 Holdings, LLC converted $20,000 of its principal balance into 157,418 shares of unrestricted common stock and the Company paid the remaining debenture in full with a payment of $340,468, which represented a $255,000 principal payment and $85,068 in interest and early payment penalties.

 

On July 27, 2015, the Company entered into a convertible debenture with Adar Bays, LLC with a principal balance of $100,000 due on or before March 27, 2016. The note accrued interest at a rate of eight percent (8%) per annum and was convertible into the Company’s common stock commencing on the 6 month anniversary of the note. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the Company paid the debenture in full with a payment of $149,022, which represented a $100,000 principal payment and $49,022 in interest and early payment penalties.

 

On July 27, 2015, the Company entered into a convertible debenture with Union Capital, LLC with a principal balance of $100,000 due on or before March 27, 2016. The note accrued interest at a rate of eight percent (8%) per annum and was convertible into the Company’s common stock commencing on the 6 month anniversary of the note, in whole or in part at the option of the holder. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the Company paid the debenture in full with a payment of $148,748, which represented a $100,000 principal payment and $48,748 in interest and early payment penalties.

 

On July 27, 2015, the Company entered into a convertible debenture with LG Capital Funding, LLC with a principal balance of $105,000 due on or before March 27, 2016. The note accrued interest at a rate of eight percent (8%) per annum and was convertible into the Company’s common stock commencing on the 6 month anniversary of the note, in whole or in part at the option of the. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the Company paid the debenture in full with a payment of $156,462, which represented a $105,000 principal payment and $51,462 in interest and early payment penalties.

 

On August 10, 2015, the Company entered into a convertible debenture with Vis Vires Group, Inc. with a principal balance of $104,000 due and payable on or before May 4, 2016. The note accrued interest at a rate of eight percent (8.0%) per annum and was convertible into the Company’s common stock, after 180 days, in whole or in part at the option of the holder. The note also carried a prepayment penalty of one hundred thirty percent (130%) of the then outstanding principal and interest balance due, if the note was paid back within the first one hundred eighty (180) days. In January 2016, the Company paid the note in full with a payment of $139,303, which represented a $104,000 principal payment and $35,303 in interest and early payment penalties.

 

On April 25, 2016, the Company entered into a 12 month convertible debenture with JMJ Financial with a principal balance of $555,556. The note carries a 10% one-time interest charge, a 10% original issue discount and a 75% warrant coverage. The note may only be paid up to 98% of the balance due within the first 180 days at a 30% premium. After 180 days, the note cannot be repaid without the holders consent. The note is convertible after 180 days at a 25% discount to the lowest trade price in the preceding 10 trading days. To obtain the note, the Company issued the investor 1,388,886 warrants with a 5 year term and a cashless exercise price equal to the lesser of $0.30 per share or the lowest trade price in the 10 preceding trading days. As of September 30, 2016, using a Black-Scholes asset pricing model, these warrants were valued at $333,145.

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stockholders' Equity
9 Months Ended
Sep. 30, 2016
Equity [Abstract]  
Stockholders' Equity

NOTE 6 – STOCKHOLDERS’ EQUITY

 

In November 2015, the Company commenced a new offering of units valued at eight-five (85%) percent of the average of the last three days closing market share price. Each unit consists of one (1) share of common stock, one (1) three-year Series C warrant convertible to .5 common share at an exercise price of $0.45 and one (1) three-year series D warrant convertible to .5 common share at an exercise price of $0.65. At December 31, 2015, the Company had sold 960,897 units for aggregate proceeds of $312,000. During the nine months ended September 30, 2016 the company sold an additional 500,000 units for aggregate proceeds of $89,000. The offering is ongoing.

 

During the nine months ended September 30, 2016, an additional $115,000 of the Company’s convertible debt converted to 1,048,460 shares of common stock. The company assesses the value of the beneficial conversion feature of its convertible debt by determining the intrinsic value of such conversions, under ASC 470, at the time of issuance. At the time of issuance of the convertible debt instruments set out above, the fair value of the stock was greater than the conversion price, and therefore a total value of $218,301 was attributed to the beneficial conversion feature.

 

In January 2016, the Company commenced a new offering of units valued at $0.24 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. During the nine months ended September 30, 2016, the Company has sold 4,535,517 units for aggregate proceeds of $1,088,524, of which $100,000 is recorded as a stock subscription receivable. The offering is ongoing.

 

In March 2016, the Company commenced a new offering of units valued at $765,735. Each unit consists of three million seven hundred seventeen thousand seven hundred eighty-five (3,717,785) shares of common stock and four million five hundred thousand (4,500,000) five-year series F warrants convertible to one (1) share of common stock each at an exercise price of $0.25. During the nine months ended September 30, 2016, the Company has sold 2 units totaling 7,435,570 shares of common stock and 9,000,000 warrants for aggregate proceeds of $1,531,470.

 

During the nine months ended September 30, 2016, the Company issued 1,296,000 shares of Company common stock for services valued at $542,530.

 

During the nine months ended September 30, 2016, the Company issued an aggregate of 5,338,886 warrants for services. Using a Black-Scholes asset pricing model, these warrants were valued at $1,365,644. These warrant agreements have terms ranging from three years (3) to five years (5) with exercise prices ranging from forty-five cents ($0.45) to two dollars ($2.00) per share.

 

During the nine months ended September 30, 2016, the Company issued options to its independent directors to purchase an aggregate of 150,974 shares of common stock for a period of three (3) years at an average exercise price of $0.45. In addition, the Company also approved employee stock options to purchase 250,000 shares of common stock at an average exercise price of $0.30 and a term of five (5) years. In addition, 333,334 options issued under an employment agreement became fully vested. Using a Black-Scholes asset pricing model, these agreements were valued at $220,720.

 

During the nine months ended September 30, 2016, the Company received $6,526 in disgorgement from certain shareholders and officers.

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Segment Information
9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Information

NOTE 7 – SEGMENT INFORMATION

 

The company operates in one segment and does not have any revenue to date.

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
Commitments and Contingencies
9 Months Ended
Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Lease

 

The Company has leased office space pursuant to a lease for a period of thirty-six (36) months from August 5, 2015 through July 31, 2018. Annual rent commenced at approximately $48,925 per annum and increases on a year-to-year basis by three percent (3%) over the Base Year. In addition, the Company is obligated to pay an amount equal to 3.76% of the operating expenses of the building together with sales tax on all amounts.

 

EK Laboratories leases office and warehouse space in Longwood, FL, which serves as the Company’s research and demonstration facility. The lease period is for thirty-six (36) months from February 1, 2015 through January 31, 2018. Annual rent commences at approximately $70,620 per annum and increases on a year-to-year basis by five percent (5%) over the prior year. The Company also has the right to purchase the property during the lease term.

 

Rent expense for the three months ended September 30, 2016 and September 30, 2015 was $31,775 and $35,149 respectively. Rent expense for the nine months ended September 30, 2016 and September 30 2015 was $94,787 and $111,985 respectively.

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
Related Party Transactions
9 Months Ended
Sep. 30, 2016
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 9 – RELATED PARTY TRANSACTIONS

 

Related Transactions

 

1)       Mark W. Koch, Daniel de Liege and Johan Sturm are principals of AMG Energy Solutions, Inc, which owns 43% of AMG Energy Group, LLC. The company owns the remaining 51% of AMG Energy Group, LLC (see NOTE 4, above). Mark W. Koch and Johan Sturm are greater than 5% shareholders in the Company.

 

2)       Short-term notes payable issued to related parties are described in NOTE 5.

 

3)       In January 2015, the Company entered into a consulting agreement with a company owned by Mark W. Koch named Prelude Motorsports, Inc, which calls for semi-monthly payments of $10,000. Under the terms of the consulting agreement, the consultant will review and provide input on a variety of areas including corporate structure, marketing materials, website and promotional pieces; provide introductions to various organizations and individuals who might support the Company’s business development efforts. This agreement was cancelled on March 31, 2016.

 

4)       On April 16, 2016, the Company entered into a 33 month consulting agreement with a company owned by Mark W. Koch named CK Energy, which calls for semi-monthly payment of $9,860 through September 2016. The agreement also provides the consultant with 500,000 warrants exercisable at $0.50, 1,000,000 warrants exercisable at $0.75 and 1,000,000 warrants exercisable at $1.00 all with a five year term. Using a Black-Scholes asset pricing model, these warrants have been valued at $643,245 and are being amortized over the life of the agreement. Under the terms of the consulting agreement, the consultant will review and provide input on a variety of areas including corporate structure, marketing materials, website and promotional pieces; provide introductions to various organizations and individuals who might support the Company’s business development efforts.

 

5)       On July 21, 2016, the Company entered into a series of transactions with certain related parties to acquire the remaining 49% of AMG Energy Group, LLC for an aggregate of 10,240,094 shares of Company common stock and a restructuring of the balance due under the original cash payable. The final details of these transactions are expected to be completed by year end.

 

The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts.

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
Discontinued Operations
9 Months Ended
Sep. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

NOTE 10 – DISCONTINUED OPERATIONS

 

On September 1, 2014, the Company determined the need to focus its resources and personnel on the Company’s renewable energy holdings and future energy technologies and to divest the company of its entertainment-related assets and subsidiaries. The principal reasons for such action is the expense, liability and losses that have been generated by the entertainment-related assets and to provide a clear focus and direction to the Company moving forward. Specifically, the Board approved the divesting, selling off, closing down or discontinuing of the operations of its entertainment-related subsidiaries, including but not limited to Prelude Pictures Entertainment, LLC, AMG Live, LLC, AMG Restaurant Operations, LLC (including The New York Sandwich Company, LLC), AMG Music, LLC, AMG Releasing, LLC and AMG Television, LLC.

 

Below is a reconciliation of the total assets and liabilities of the discontinued operations, which are presented separately on the balance sheet.

 

      September 30, 2016       December 31, 2015  
                 
Carrying amounts of major classes of assets included as part of discontinued operations                
Prepaid expenses     -       -  
Total assets of the discontinued operation   $ -     $ -  
                 
Carrying amounts of major classes of liabilities included as part of discontinued operations                
Accounts payable and accrued liabilities   $ 36,148     $ 36,148  
Total liabilities of the discontinued operation   $ 36,148     $ 36,148  

 

Below is a reconciliation of the net loss of the discontinued operations, which are presented separately on the statement of operations.

 

    Three months ended     Nine months ended  
    Sep 30, 2016     Sep 30, 2015     Sep 30, 2016     Sep 30, 2015  
Major line items constituting pretax profit (loss) of discontinued operations                        
Revenue     -       -               -  
Selling, general and administrative     -       (64 )     (3,125 )     (29,081 )
Debt forgiveness from legal settlement     -       -               700,000  
Gain (Loss) from discontinued operations   $ -     $ (64 )   $ (3,125 )   $ 670,919  

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
Subsequent Events
9 Months Ended
Sep. 30, 2016
Subsequent Events [Abstract]  
Subsequent Events

NOTE 11 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date the financial statements were available to be issued. Based on this evaluation, the Company has identified the following subsequent events:

 

In October 2016, the Company commenced a new offering of units valued at $0.20 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. Since October 1, 2016, the Company has sold 675,000 units for aggregate proceeds of $135,000. The offering is ongoing

 

In October 2016, JMJ Financial converted $402,750 of its convertible debenture into 2,685,000 shares of Company common stock, however the restrictive Legend remained. In addition, JMJ Financial also exercised warrants to purchase 20,000 shares of common stock for aggregate proceeds of $3,675. Under the terms of the warrant agreement, the rights to purchase common stock were increased to 2,763,273 shares with a 5-year term and exercise price of $0.15. The Company disputes the validity of these transactions based on an agreed upon amendment to the Stock Purchase Agreement that no conversion was to occur within the first 180 days. The Company and JMJ are currently negotiating to resolve this matter.

 

Since October 1, 2016, the Company has issued 65,100 shares of common stock for services valued at $16,276.

 

Since October 1, 2016, the Company has received $10,000 of the outstanding stock subscription receivable.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2016
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The accompanying consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and include the assets, liabilities, revenues and expenses of the Company’s majority-owned subsidiaries over which the Company exercises control. Intercompany transactions and balances were eliminated in consolidation.

Principles of Consolidation

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, after elimination of intercompany accounts and transactions. Investments in business entities in which the Company lacks control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The Company’s proportionate share of net income or loss of the entity is recorded in the Consolidated Statements of Operations

Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted 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 as of the dates presented and reported amounts of revenues and expenses during the reporting periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of impairment assessment of identifiable intangible assets and valuation allowance for deferred tax assets. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

 

All highly liquid investments with maturities of three months or less at the date of purchase are considered to be cash equivalents.

Stock Compensation

Stock Compensation

 

The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation” (formerly referred to as SFAS No. 123(R)). Share-based payments to consultants, service providers and other non-employees are accounted for in accordance with ASC Topic 718, ASC Topic 505, “Equity Payments to Non-Employees” or other applicable authoritative guidance.

Stock-based Compensation Valuation Methodology

Stock-based Compensation Valuation Methodology

 

Stock-based compensation resulting from the issuance of common stock is calculated by reference to the valuation of the stock on the date of issuance, the expense being recognized as the compensation is earned. Stock-based compensation expenses related to employee options and warrants granted to non-employees are recognized as the stock options and warrants are earned. The fair value of the stock options or warrants granted is estimated at the grant date, using the Black-Scholes option pricing model, and the expense is recognized on a straight-line basis over the shorter of the period over which services are to be received or the life of the option or warrant. The grant date fair value of employee share options and similar instruments is estimated using the Black-Scholes option pricing model on the basis of the fair value of the underlying common stock on the measurement date, adjusted for the unique characteristics of those equity instruments, using the assumptions noted in the table below. The fair value of the common stock is determined by the then-prevailing closing market price. Expected volatility was based on the historical volatility of the Company’s closing day market price per share. The expected term of options and warrants was based upon the life of the option, and the risk-free rate used was based on the U.S. Treasury Daily Yield Curve Rate.

 

The stock compensation issued for services during the nine months ended September 30, 2016, was valued on the date of issuance. The following assumptions were used in calculations of the Black-Scholes option-pricing models for warrant-based stock compensation issued in the nine months ended September 30, 2016:

 

    01/01/16     01/04/16     01/25/16     02/01/16     03/01/16     03/25/16     03/31/16     04/01/16     04/16/16  
Risk-free interest rate     1.76 %     1.73 %     1.47 %     1.38 %     1.31 %     1.91 %     1.21 %     1.24 %     1.22 %
Expected life     5 years       5 years       5 years       5 years       5 years       10 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %
Expected volatility     175.11 %     174.97 %     176.42 %     175.99 %     175.28 %     176.15 %     175.87 %     175.70 %     174.48 %
ALLM common stock fair value   $ 0.30     $ 0.30     $ 0.40     $ 0.37     $ 0.33     $ 0.33     $ 0.30     $ 0.30     $ 0.28  

 

    04/28/16     04/29/16     05/01/16     06/01/16     06/30/16     07/01/16     08/01/16     09/30/16  
Risk-free interest rate     1.28 %     1.28 %     1.28 %     1.39 %     1.01 %     1.00 %     1.06 %     1.14 %
Expected life     5 years       5 years       5 years       5 years       5 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %
Expected volatility     173.48 %     173.51 %     173.51 %     174.01 %     165.31 %     165.40 %     164.69 %     156.06 %
ALLM common stock fair value   $ 0.26     $ 0.23     $ 0.23     $ 0.36     $ 0.36     $ 0.39     $ 0.35     $ 0.26

Accounting and Reporting of Discontinued Operations

Accounting and Reporting of Discontinued Operations

 

As required by the FASB ASC Subtopic 205.20, per ASU 2014-08, Discontinued Operations, a component of an entity or a group of components of an entity, or a business or nonprofit activity can be classified as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (i) the criteria in paragraph 205.20.45.1E to be classified as held for sale is met (ii) the component is disposed of by sale, or (iii) the component is disposed of other than by sale in accordance with paragraph 360.10.45.15 (for example, by abandonment or in a distribution to owners in a spinoff). Certain components to be disposed of other than by sale shall continue to be classified as “held and used” until it is disposed of, per the requirements of ASC Subtopic 360.10. Depreciation on these assets ceases upon their classification as “held and used.” The Company adopted ASU No. 2014-08 effective September 1, 2014.

Property and Equipment

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets, generally 5 to 7 years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.

Convertible Instruments

Convertible Instruments

 

The Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

 

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

 

The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

Common Stock Purchase Warrants and Other Derivative Financial Instruments

Common Stock Purchase Warrants and Other Derivative Financial Instruments

 

The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide it with a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to its own stock as defined in ASC 815-40 (“Contracts in Entity’s Own Equity”). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses the classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

Non-controlling Interest in Consolidated Subsidiaries

Non-controlling interest in consolidated subsidiaries

 

The accompanying consolidated financial statements include the accounts of Alliance BioEnergy Plus, Inc. and those subsidiaries that the Company has the ability to control either through voting rights or means other than voting rights. For these subsidiaries, the Company records 100% of the revenues, expenses, cash flows, assets and liabilities in its consolidated financial statements. For subsidiaries that the Company controls but hold less than 100% ownership, a non-controlling interest is recorded in the consolidated income statement to reflect the non-controlling interest’s share of the net income (loss), and a non-controlling interest is recorded in the consolidated balance sheet to reflect the non-controlling interest’s share of the net assets of the subsidiary.

Investments in Non-consolidated Affiliates

Investments in non-consolidated affiliates

 

Investments in non-consolidated affiliates are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company’s ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company’s proportionate share of the investees’ net income or losses after the date of investment. When net losses from an investment are accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company’s share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.

 

The Company’s investment in Carbolosic, LLC is accounted for using the equity method of accounting. The Company monitors its investment for impairment at least annually and make appropriate reductions in the carrying value if it determines that an impairment charge is required based on qualitative and quantitative information.

Impairment of Long Lived Assets

Impairment of Long Lived Assets

 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable, the Company compares the carrying amount of the asset group to future undiscounted net cash flows, excluding interest costs, expected to be generated by the asset group and their ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the impairment to be recognized is measured by the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.

Income Taxes

Income Taxes

 

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented.

Profit (Loss) per Common Share

Profit (Loss) per Common Share:

 

Basic profit (loss) per share amounts have been calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share has been calculated using the weighted-average number of common shares plus the potentially dilutive effect of securities such as outstanding options and warrants. The computation of potential common shares has been performed using the treasury stock method. The warrants and options are antidilutive for all periods presented. When net loss is reported, diluted and basic net loss per share amounts are the same as the impact of potential common shares is antidilutive.

Fair Value Measurements

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, payables to related parties, and accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

 

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

 

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.

XML 28 R18.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2016
Accounting Policies [Abstract]  
Schedule of Black-scholes Option Pricing Models for Warrant-based Stock Compensation

The following assumptions were used in calculations of the Black-Scholes option-pricing models for warrant-based stock compensation issued in the nine months ended September 30, 2016:

 

    01/01/16     01/04/16     01/25/16     02/01/16     03/01/16     03/25/16     03/31/16     04/01/16     04/16/16  
Risk-free interest rate     1.76 %     1.73 %     1.47 %     1.38 %     1.31 %     1.91 %     1.21 %     1.24 %     1.22 %
Expected life     5 years       5 years       5 years       5 years       5 years       10 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %
Expected volatility     175.11 %     174.97 %     176.42 %     175.99 %     175.28 %     176.15 %     175.87 %     175.70 %     174.48 %
ALLM common stock fair value   $ 0.30     $ 0.30     $ 0.40     $ 0.37     $ 0.33     $ 0.33     $ 0.30     $ 0.30     $ 0.28  

 

    04/28/16     04/29/16     05/01/16     06/01/16     06/30/16     07/01/16     08/01/16     09/30/16  
Risk-free interest rate     1.28 %     1.28 %     1.28 %     1.39 %     1.01 %     1.00 %     1.06 %     1.14 %
Expected life     5 years       5 years       5 years       5 years       5 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %     0 %     0 %     0 %     0 %
Expected volatility     173.48 %     173.51 %     173.51 %     174.01 %     165.31 %     165.40 %     164.69 %     156.06 %
ALLM common stock fair value   $ 0.26     $ 0.23     $ 0.23     $ 0.36     $ 0.36     $ 0.39     $ 0.35     $ 0.26

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.5.0.2
Investment in Unconsolidated Affiliates (Tables)
9 Months Ended
Sep. 30, 2016
Investments [Abstract]  
Schedule of Condensed Balance Sheet of Non-consolidated Affiliates

The following is a condensed balance sheet of the unconsolidated affiliates as of September 30, 2016 and December 31, 2015 and a comparative statement of operations for the three and nine months ending September 30, 2016 and 2015.

 

Condensed Balance Sheet of Non-Consolidated Affiliates
             
      September 30, 2016       December 31, 2015  
ASSETS                
Current Assets                
Cash and cash equivalents   $ 389     $ 83  
Total Current Assets     389       83  
Other Assets                
Prepaid Expenses     -       -  
Total Other Assets     -       -  
TOTAL ASSETS   $ 389     $ 83  
                 
LIABILITIES AND STOCKHOLDERS EQUITY                
Current Liabilities                
Accounts payable and accrued liabilities   $ 344,222     $ 238,399  
Interest payable     26,322       12,864  
C urrent notes payable     640,942       539,189  
TOTAL CURRENT LIABILITIES     1,011,486       790,452  
                 
STOCKHOLDERS EQUITY                
Accumulated deficit     (1,011,097 )     (790,369 )
TOTAL EQUITY     (1,011,097 )     (790,369 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY   $ 389     $ 83

Schedule of Condensed Statement of Operations of Non-consolidated Affiliates

Condensed Statement of Operations of Non-Consolidated Affiliate
                         
    Three months ended     Nine months ended  
    Sep 30, 2016     Sep 30, 2015     Sep 30, 2016     Sep 30,2015  
                         
Revenues   $ -     $ -     $ -     $ -  
                                 
Operating Expenses                                
Royalties     17,500       10,000       52,500       30,000  
General and administrative     59,671       98,789       180,933       238,408  
Total operating expenses     (77,171 )     (108,789 )     (233,433 )     (268,408 )
                                 
Other expenses                                
Interest expense     5,037       3,182       13,641       8,110  
Total other expenses     (5,037 )     (3,182 )     (13,641 )     (8,110 )
                                 
Loss from operations   $ (82,208 )   $ (111,971 )   $ (247,074 )   $ (276,518 )

XML 30 R20.htm IDEA: XBRL DOCUMENT v3.5.0.2
Discontinued Operations (Tables)
9 Months Ended
Sep. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet Disclosures

Below is a reconciliation of the total assets and liabilities of the discontinued operations, which are presented separately on the balance sheet.

 

      September 30, 2016       December 31, 2015  
                 
Carrying amounts of major classes of assets included as part of discontinued operations                
Prepaid expenses     -       -  
Total assets of the discontinued operation   $ -     $ -  
                 
Carrying amounts of major classes of liabilities included as part of discontinued operations                
Accounts payable and accrued liabilities   $ 36,148     $ 36,148  
Total liabilities of the discontinued operation   $ 36,148     $ 36,148  

 

Below is a reconciliation of the net loss of the discontinued operations, which are presented separately on the statement of operations.

 

    Three months ended     Nine months ended  
    Sep 30, 2016     Sep 30, 2015     Sep 30, 2016     Sep 30, 2015  
Major line items constituting pretax profit (loss) of discontinued operations                        
Revenue     -       -               -  
Selling, general and administrative     -       (64 )     (3,125 )     (29,081 )
Debt forgiveness from legal settlement     -       -               700,000  
Gain (Loss) from discontinued operations   $ -     $ (64 )   $ (3,125 )   $ 670,919

XML 31 R21.htm IDEA: XBRL DOCUMENT v3.5.0.2
Organization and Business Description (Details Narrative) - USD ($)
1 Months Ended 9 Months Ended
Mar. 31, 2016
Sep. 30, 2016
Dec. 26, 2013
AMG Energy Group LLC [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   51.00% 51.00%
Business acquisition description   The consideration for the grant of the sublicense is $25,000,000 (“License Fee”), which was to be paid or guaranteed by March 1, 2016. In addition to the license fee, the sublicense holder will pay AMG Energy a royalty of 3.5% of the revenues on the first CTS plant developed and a 5.0% royalty on the revenues of additional plants developed.  
License fee   $ 25,000,000  
Carbolosic Energy LLC [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   50.00%  
Carbolosic Energy One LLLP [Member]      
Subsidiary, Sale of Stock [Line Items]      
Sale of plant in exchange of outstanding loan $ 1,250,000    
Loan interest 36,488    
Prepaid future marketing and interest 122,879    
Cash consideration for acquisition $ 1,250,000    
Amg Energy Solutions Inc [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   49.00%  
Common stock issued for acquisition   8,700,000  
Business acquisition description   The Company believes that this transaction will be completed in the 4th quarter of 2016. Following the merger, the Company will own 94% of AMG Energy, which in turn will own 100% of EK Laboratories, Inc. and 50% of Carbolosic. At the same time, the Company has agreed to acquire the remaining 6% of AMG Energy from the remaining two parties in exchange for issuance of an aggregate of 1,540,094 shares of Company common stock. In addition, the remaining balance owed under the original transaction has been renegotiated at aggregate principal balance of $2,098,696 bearing an interest rate of six percent (6%) per annum and maturing on July 20, 2017.  
Cash consideration for acquisition   $ 2,098,696  
Loans maturity date   Jul. 20, 2017  
Amg Energy [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   43.00%  
Loans interest rate percentage   6.00%  
Other Two Related Party [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   6.00%  
Common stock issued for acquisition   1,540,094  
EK Laboratories Inc [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   100.00%  
Science and Technology Inc [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   50.00%  
Carbolosic SA [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   43.50%  
Tes Projects [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   24.50%  
Spearhead Capital Ltd [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   7.50%  
Jupiter Trust [Member]      
Subsidiary, Sale of Stock [Line Items]      
Controlling interest, percentage   24.50%  
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
Going Concern (Details Narrative) - USD ($)
9 Months Ended 45 Months Ended
Sep. 30, 2016
Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Working capital deficiency $ 2,252,535  
Accumulated losses (19,882,797) $ (17,052,797)
Proceeds from issuance of stock 2,708,994 $ 3,730,390
Stock subscription receivable $ 100,000  
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies (Details Narrative)
9 Months Ended
Sep. 30, 2016
Subsidiaries [Member]  
Percentage of revenues, expenses, cash flows, assets and liabilities 100.00%
Percentage of controls held less than ownership 100.00%
Minimum [Member]  
Property and equipment useful lives 5 years
Maximum [Member]  
Property and equipment useful lives 7 years
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies - Schedule of Black-scholes Option Pricing Models for Warrant-based Stock Compensation (Details)
9 Months Ended
Sep. 30, 2016
$ / shares
Issuance Date One [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.76%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 175.11%
ALLM common stock fair value $ 0.30
Issuance Date Two [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.73%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 174.97%
ALLM common stock fair value $ 0.30
Issuance Date Three [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.47%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 176.42%
ALLM common stock fair value $ 0.40
Issuance Date Four [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.38%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 175.99%
ALLM common stock fair value $ 0.37
Issuance Date Five [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.31%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 175.28%
ALLM common stock fair value $ 0.33
Issuance Date Six [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.91%
Expected life 10 years
Expected dividends 0.00%
Expected volatility 176.15%
ALLM common stock fair value $ 0.33
Issuance Date Seven [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.21%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 175.87%
ALLM common stock fair value $ 0.30
Issuance Date Eight [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.24%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 175.70%
ALLM common stock fair value $ 0.30
Issuance Date Nine [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.22%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 174.48%
ALLM common stock fair value $ 0.28
Issuance Date Ten [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.28%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 173.48%
ALLM common stock fair value $ 0.26
Issuance Date Eleven [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.28%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 173.51%
ALLM common stock fair value $ 0.23
Issuance Date Twelve [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.28%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 173.51%
ALLM common stock fair value $ 0.23
Issuance Date Thirteen [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.39%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 174.01%
ALLM common stock fair value $ 0.36
Issuance Date Fourteen [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.01%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 165.31%
ALLM common stock fair value $ 0.36
Issuance Date Fifteen [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.00%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 165.40%
ALLM common stock fair value $ 0.39
Issuance Date Sixteen [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.06%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 164.69%
ALLM common stock fair value $ 0.35
Issuance Date Seventeen [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 1.14%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 156.06%
ALLM common stock fair value $ 0.26
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.5.0.2
Investment in Unconsolidated Affiliates (Details Narrative)
Sep. 30, 2016
May 13, 2015
Dec. 26, 2013
AMG Energy Group LLC [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage 51.00%   51.00%
Carbolosic, LLC [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage     50.00%
Tes Projects [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage 24.50%    
Tes Projects [Member] | Carbolosic Energy Sa Pty Ltd [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage   43.50%  
Spearhead Capital Ltd [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage 7.50%    
Spearhead Capital Ltd [Member] | Carbolosic Energy Sa Pty Ltd [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage   24.50%  
Jupiter Trust [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage 24.50%    
Jupiter Trust [Member] | Carbolosic Energy Sa Pty Ltd [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage   7.50%  
Alliance BioEnergy Plus Inc.[Member] | Carbolosic Energy Sa Pty Ltd [Member]      
Subsidiary, Sale of Stock [Line Items]      
Entity interest percentage   24.50%  
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.5.0.2
Investment in Unconsolidated Affiliates - Schedule of Condensed Balance Sheet of Non-consolidated Affiliates (Details) - USD ($)
Sep. 30, 2016
Dec. 31, 2015
Sep. 30, 2015
Dec. 31, 2014
Schedule of Investments [Line Items]        
Cash and cash equivalents $ 10,840 $ 62,054 $ 196,745 $ 205,969
Total Current Assets 940,657 860,070    
Total Other Assets 7,696,421 7,654,010    
TOTAL ASSETS 8,910,513 8,824,656    
Accounts payable and accrued liabilities 431,973 387,442    
Interest payable 11,701 9,036    
TOTAL CURRENT LIABILITIES 3,193,192 3,882,830    
Accumulated deficit (19,882,797) (17,052,797)    
TOTAL EQUITY 5,717,321 3,691,826    
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 8,910,513 8,824,656    
Non Consolidated Affiliates [Member]        
Schedule of Investments [Line Items]        
Cash and cash equivalents 389 83    
Total Current Assets 389 83    
Prepaid Expenses    
Total Other Assets    
TOTAL ASSETS 389 83    
Accounts payable and accrued liabilities 344,222 238,399    
Interest payable 26,322 12,864    
Current notes payable 640,942 539,189    
TOTAL CURRENT LIABILITIES 1,011,486 790,452    
Accumulated deficit (1,011,097) (790,369)    
TOTAL EQUITY (1,011,097) (790,369)    
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 389 $ 83    
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.5.0.2
Investment in Unconsolidated Affiliates - Schedule of Condensed Statement of Operations of Non-consolidated Affiliates (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Schedule of Investments [Line Items]        
Revenues    
General and administrative (765,657) (2,338,663) $ (3,509,162) $ (4,098,510)
Total operating expenses (765,657) (2,338,663) (3,509,162) (4,098,510)
Total other expenses (41,999) (146,541) 460,067 (260,935)
Loss from operations (765,657) (2,338,663) (3,509,162) (4,098,510)
Non Consolidated Affiliates [Member]        
Schedule of Investments [Line Items]        
Revenues
Royalties 17,500 10,000 30,000 52,500
General and administrative 59,671 98,789 238,408 180,933
Total operating expenses (77,171) (108,789) (268,408) (233,433)
Interest expense 5,037 3,182 8,110 13,641
Total other expenses (5,037) (3,182) (8,110) (13,641)
Loss from operations $ (82,208) $ (111,971) $ (276,518) $ (247,074)
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.5.0.2
Debt (Details Narrative) - USD ($)
1 Months Ended 9 Months Ended
Apr. 16, 2016
Mar. 30, 2016
Jan. 31, 2016
Aug. 10, 2015
Jul. 27, 2015
Jul. 10, 2015
Jul. 07, 2015
Dec. 09, 2014
Apr. 30, 2016
Apr. 25, 2016
Dec. 31, 2015
Sep. 30, 2015
Jan. 31, 2015
Dec. 31, 2014
Sep. 30, 2016
Debt Instrument [Line Items]                              
Principal loan amount                     $ 1,250,000      
Term of warrant 5 years                            
Issuance of common stock for services, shares                             1,365,644
Warrant [Member]                              
Debt Instrument [Line Items]                              
Issuance of common stock for services, shares                             5,338,886
Related Party [Member] | Notes Payable [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt                             $ 71,000
Interest rate on notes payable                             5.00%
Accrued interest                     $ 9,036       $ 11,701
Term of debt                             1 year
George Investments Llc [Member] | Short Term Notes Payable Other [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt             $ 265,000                
Short term notes payable description             The Company entered into a six month (6) promissory note with St. George Investments, LLC with a face amount of $265,000 less an original issue discount of $65,000. This note does not accrue interest. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note. In January 2016, the company repaid this note in full. The total amount paid was $306,890, which represented a $265,000 principal balance and $41,890 in default interest and early payment penalties.                
Debt discount amount             $ 65,000                
Commission percentage             $ 10                
Interest paid     $ 41,890                        
Percentage of broker commission paid             10.00%                
Total amount paid     306,890                        
Vis Vires Group Inc [Member] | Convertible Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt       $ 104,000                      
Interest rate on notes payable       8.00%                      
Short term notes payable description       The Company’s common stock, after 180 days, in whole or in part at the option of the holder. The note also carried a prepayment penalty of one hundred thirty percent (130%) of the then outstanding principal and interest balance due, if the note was paid back within the first one hundred eighty (180) days.                      
Total amount paid     139,303                        
Maturity date, description       Due and payable on or before May 4, 2016.                      
Interest and penalties     35,303                        
Principal payment in amount     104,000                        
Group Ten Holdings Llc [Member] | Convertible Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt           $ 275,000                  
Interest rate on notes payable           12.00%                  
Short term notes payable description           The Company’s common stock one hundred eighty (180) days after the maturity date. After the maturity date, the note cannot be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note.                  
Total amount paid     340,468                        
Maturity date, description           Due on or before July 10, 2016.                  
Interest and penalties     $ 85,068                        
Common stock shares converted     157,418                        
Common stock shares converted, value     $ 20,000                        
Principal payment in amount     255,000                        
Jsj Investments Inc [Member] | Convertible Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt           $ 150,000                  
Interest rate on notes payable           12.00%                  
Short term notes payable description           The Company common stock one hundred eighty (180) days after the issuance date in whole or in part at the option of the holder at a conversion price equal to forty-two cents ($0.42); provided, however, that if the closing price was less than forty cents ($0.40) for any three (3) consecutive trading days, then the conversion price shall adjust to the lowest trading day price during the thirty-five (35) trading days prior, less a forty-five percent (45%) discount. Repayment of the note included a prepayment penalty if the note was paid back within the first one hundred eighty (180) days and could not be repaid after day one hundred eighty (180) without the holders consent. The prepayment penalty if paid back within the first ninety (90) days was equal to one hundred five percent (105%) of the principal balance; paid between day ninety-one (91) and day one hundred twenty (120) the prepayment penalty was equal to one hundred fifteen percent (115%) of the principal balance; paid between day one hundred twenty-one (121) and day one hundred seventy-nine (179) the prepayment penalty increased to one hundred twenty-five percent (125%) of the principal balance. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note.                  
Total amount paid                 $ 239,055            
Maturity date, description           Due on or before January 10, 2016                  
Interest and penalties                 89,055            
Common stock shares converted   195,924                          
Common stock shares converted, value   $ 25,000                          
Principal payment in amount                 $ 150,000            
Adar Bays Llc [Member] | Convertible Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt         $ 100,000                    
Interest rate on notes payable         8.00%                    
Short term notes payable description         The Company’s common stock commencing on the 6 month anniversary of the note. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note.                    
Total amount paid     149,022                        
Maturity date, description         Due on or before March 27, 2016.                    
Interest and penalties     49,022                        
Principal payment in amount     100,000                        
Union Capital Llc [Member] | Convertible Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt         $ 100,000                    
Interest rate on notes payable         8.00%                    
Short term notes payable description         The Company’s common stock commencing on the 6 month anniversary of the note, in whole or in part at the option of the holder. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note.                    
Total amount paid     148,748                        
Maturity date, description         Due on or before March 27, 2016.                    
Interest and penalties     48,748                        
Principal payment in amount     100,000                        
Lg Capital Funding Llc [Member] | Convertible Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt         $ 105,000                    
Interest rate on notes payable         8.00%                    
Short term notes payable description         The Company’s common stock commencing on the 6 month anniversary of the note, in whole or in part at the option of the. The note also carried a payment premium, wherein if the note was paid before the ninetieth (90) day, then a premium of one hundred thirty-five percent (135%) in addition to outstanding interest was due. If paid between day ninety-one (91) and one hundred fifty-one (151) the premium increased to one hundred forty percent (140%) and if paid between day one hundred fifty-two (152) and the maturity date, then the premium increased to one hundred forty-five percent (145%). After the maturity date, the note could not be repaid without the holder’s consent. In addition, a ten percent (10%) broker commission was paid to Wellington Shields & Co. LLC, which is being amortized over the life of the note.                    
Total amount paid     156,462                        
Maturity date, description         Due on or before March 27, 2016.                    
Interest and penalties     51,462                        
Principal payment in amount     105,000                        
Related Party One [Member] | Convertible Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt                       $ 165,000      
Interest rate on notes payable                       10.00%      
Total amount paid     140,950                        
Conversion description                       The rate equal to the lower of eighteen percent (18.0%) per annum or the highest rate permitted by law. This note could only be prepaid within the first 180 days along with a prepayment penalty of one hundred ten percent (110%) and increasing ten percent (10%) every sixty (60) days to a maximum of one hundred thirty percent (130%). After 180 days, the note could be converted into the Company's common stock at a conversion rate equal to sixty percent (60%) of the lowest trading price during the preceding 15 consecutive trading days prior to date of conversion.      
Maturity date, description                       Due on or before June 30, 2016      
Issuance of common stock purchase warrant                       50,000      
Term of warrant                       5 years      
Investment warrants, exercise price                       $ 0.75      
Interest and penalties     $ 70,950                        
Common stock shares converted     891,042                        
Common stock shares converted, value     $ 95,000                        
Principal payment in amount     $ 70,000                        
Carbolosic Plant 1 Llc [Member] | Notes Payable, Other Payables [Member]                              
Debt Instrument [Line Items]                              
Principal loan amount   1,250,000                          
Discount rate               0.51%              
Interest amount   36,488           $ 95,000              
Prepaid interest relating to advance   $ 122,879                          
Carbolosic Plant 1 Llc [Member] | Notes Payable One [Member]                              
Debt Instrument [Line Items]                              
Interest amount                         $ 4,162    
JMJ Financial [Member] | Convertible Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt                   $ 555,556          
Conversion description                   The note carries a 10% one-time interest charge, a 10% original issue discount and a 75% warrant coverage. The note may only be paid up to 98% of the balance due within the first 180 days at a 30% premium. After 180 days, the note cannot be repaid without the holders consent. The note is convertible after 180 days at a 25% discount to the lowest trade price in the preceding 10 trading days.          
Issuance of common stock purchase warrant                   1,388,886          
Term of warrant                   5 years          
Investment warrants, exercise price                   $ 0.30          
JMJ Financial [Member] | Convertible Debt [Member] | Warrant [Member]                              
Debt Instrument [Line Items]                              
Issuance of common stock for services, shares                             333,145
Long-term Debt [Member]                              
Debt Instrument [Line Items]                              
Principal balance of debt               500,000           $ 1,250,000  
Interest rate on notes payable                           4.31%  
Interest paid               $ 95,000              
Term of debt                           5 years  
Description of long term debt                           The initial term on each of these loans was five (5) years from the date of each advance and bear interest at a rate of 4.31% per annum. The Company could earn a 0.51% rate discount if the first five years of interest due to lender was paid within 15 days of each advance. In addition, these loans could not be prepaid and were secured by all assets of the Company. The Company received two (2) long term notes payable, with a combined principal balance of $1,250,000 in the year ended December 31, 2014.  
Principal loan amount                           $ 33,000,000  
Discount rate                           0.51%  
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stockholders' Equity (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
Mar. 30, 2016
Jan. 31, 2016
Dec. 31, 2015
Nov. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Related Party Transaction [Line Items]                
Beneficial conversion features         $ (92,440)
Stock subscription receivable             $ (100,000)  
Issuance of common stock for services, shares             1,365,644  
Shares issued for services, value             $ 5,338,886  
Value of assets using Black Scholes Method             220,720  
Amount received through disgorgement             $ 6,526  
Director [Member]                
Related Party Transaction [Line Items]                
Term of excercise price             3 years  
Exercise price             $ 0.45  
Purchase of common stock shares             150,974  
IPO [Member]                
Related Party Transaction [Line Items]                
Description of shares issued new offering       New offering of units valued at eight-five (85%) percent of the average of the last three days closing market share price. Each unit consists of one (1) share of common stock, one (1) three-year Series C warrant convertible to .5 common share at an exercise price of $0.45 and one (1) three-year series D warrant convertible to .5 common share at an exercise price of $0.65.        
Sale of stock, shares     960,897       500,000  
Proceeds from issuance of stock     $ 312,000       $ 89,000  
Amount of convertible note converted             $ 115,000  
Convertible debt converted, shares             1,048,460  
Beneficial conversion features             $ 218,301  
Ipo One [Member]                
Related Party Transaction [Line Items]                
Description of shares issued new offering   New offering of units valued at $0.24 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45.            
Amount of convertible note converted             $ 1,088,524  
Convertible debt converted, shares             4,535,517  
Stock subscription receivable             $ 100,000  
Ipo Two [Member]                
Related Party Transaction [Line Items]                
Description of shares issued new offering New offering of units valued at $765,735. Each unit consists of three million seven hundred seventeen thousand seven hundred eighty-five (3,717,785) shares of common stock and four million five hundred thousand (4,500,000) five-year series F warrants convertible to one (1) share of common stock each at an exercise price of $0.25.              
Proceeds from issuance of stock             $ 1,531,470  
Issuance of common stock for services, shares             1,296,000  
Shares issued for services, value             $ 542,530  
Common Stock [Member] | Ipo Two [Member]                
Related Party Transaction [Line Items]                
Sale of stock, shares             7,435,570  
Warrant [Member]                
Related Party Transaction [Line Items]                
Issuance of common stock for services, shares             5,338,886  
Shares issued for services, value             $ 1,365,644  
Warrant [Member] | Ipo Two [Member]                
Related Party Transaction [Line Items]                
Sale of stock, shares             9,000,000  
Minimum [Member] | Warrant [Member]                
Related Party Transaction [Line Items]                
Term of excercise price             3 years  
Exercise price             $ 0.45  
Maximum [Member] | Warrant [Member]                
Related Party Transaction [Line Items]                
Term of excercise price             5 years  
Exercise price             $ 2.00  
Employee Stock Option [Member]                
Related Party Transaction [Line Items]                
Term of excercise price             5 years  
Options vested         333,334   333,334  
Exercise price             $ 0.30  
Purchase of common stock shares             250,000  
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.5.0.2
Segment Information (Details Narrative)
9 Months Ended
Sep. 30, 2016
Segment
Segment Reporting [Abstract]  
Number of operating segment 1
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.5.0.2
Commitments and Contingencies (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Operating Leased Assets [Line Items]        
Rent expense $ 31,775 $ 35,149 $ 94,787 $ 111,985
Office Lease [Member]        
Operating Leased Assets [Line Items]        
Lease termination date     Jul. 31, 2018  
Annual rent     $ 48,925  
Term of lease     36 months  
Percentage of increase in rent per year     3.00%  
Commitments description     The Company is obligated to pay an amount equal to 3.76% of the operating expenses of the building together with sales tax on all amounts  
Office Lease One [Member]        
Operating Leased Assets [Line Items]        
Lease termination date     Jan. 31, 2018  
Annual rent     $ 70,620  
Term of lease     36 months  
Percentage of increase in rent per year     5.00%  
Commitments description     Annual rent commences at approximately $70,620 per annum and increases on a year-to-year basis by five percent (5%) over the prior year.  
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.5.0.2
Related Party Transactions (Details Narrative) - USD ($)
1 Months Ended
Jul. 21, 2016
Apr. 16, 2016
Jan. 31, 2015
Sep. 30, 2016
Dec. 26, 2013
Related Party Transaction [Line Items]          
Semi-monthly payments per consultant   $ 9,860 $ 10,000    
Consulting agreement term   33 months      
Term of warrant   5 years      
Consulting agreement description   The agreement also provides the consultant with 500,000 warrants exercisable at $0.50, 1,000,000 warrants exercisable at $0.75 and 1,000,000 warrants exercisable at $1.00 all with a five year term.      
Amortized value   $ 643,245      
AMG Energy Group LLC [Member]          
Related Party Transaction [Line Items]          
Entity interest percentage       51.00% 51.00%
Mark W Koch Daniel De Liege And Johan Sturm [Member]          
Related Party Transaction [Line Items]          
Affiliate company, percentage       43.00%  
Entity interest percentage       5.00%  
AMG Energy Group LLC [Member]          
Related Party Transaction [Line Items]          
Affiliate company, percentage 49.00%        
Sale of stock, shares 10,240,094        
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.5.0.2
Discontinued Operations - Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet Disclosures (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Discontinued Operations and Disposal Groups [Abstract]          
Prepaid expenses    
Total assets of the discontinued operation    
Accounts payable and accrued liabilities 36,148   36,148   36,148
Total liabilities of the discontinued operation 36,148   36,148   $ 36,148
Revenue  
Selling, general and administrative (64) (3,125) (29,081)  
Debt forgiveness from legal settlement 700,000  
Gain (Loss) from discontinued operations $ (64) $ (3,125) $ 670,919  
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.5.0.2
Subsequent Events (Details Narrative) - USD ($)
1 Months Ended 9 Months Ended
Oct. 01, 2016
Oct. 31, 2016
Sep. 30, 2016
Subsequent Event [Line Items]      
Issuance of common stock for services, shares     1,365,644
Shares issued for services, value     $ 5,338,886
Stock subscription receivable     $ (100,000)
Subsequent Event [Member] | JMJ Financial [Member]      
Subsequent Event [Line Items]      
Convertible debt converted, shares   2,685,000  
Convertible debt converted, value   $ 402,750  
Warrants to purchase of common stock   20,000  
Proceeds from issuance of warrants   $ 3,675  
Warrant agreements term   5 years  
Exercise price of warrants   $ 0.15  
Subsequent Event [Member] | JMJ Financial [Member] | Maximum [Member]      
Subsequent Event [Line Items]      
Warrants to purchase of common stock   2,763,273  
Subsequent Event [Member] | Common Stock [Member]      
Subsequent Event [Line Items]      
Unit price per share   $ 0.20  
Common stock ecercise price   $ 0.45  
Unit description   In October 2016, the Company commenced a new offering of units valued at $0.20 per share. Each unit consist of one (1) share of common stock and one (1) five-year Series E warrant convertible to one (1) common share at an exercise price of $0.45. Since October 1, 2016, the Company has sold 550,000 units for aggregate proceeds of $110,000. The offering is ongoing  
Sale of units, shares   675,000  
Sale of stock, value   $ 135,000  
Issuance of common stock for services, shares 65,100    
Shares issued for services, value $ 16,276    
Stock subscription receivable $ 10,000    
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