0001493152-18-006663.txt : 20180511 0001493152-18-006663.hdr.sgml : 20180511 20180511162207 ACCESSION NUMBER: 0001493152-18-006663 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 50 CONFORMED PERIOD OF REPORT: 20180331 FILED AS OF DATE: 20180511 DATE AS OF CHANGE: 20180511 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: 18827179 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 March 31, 2018

 

Commission File Number: 000-54942

 

ALLIANCE BIOENERGY PLUS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   45-4944960
(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 [  ]
(Do not check if a smaller reporting company)
  Smaller Reporting Company [X]

 

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

 

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

 

Common Stock $.001 par value

 

There were 130,749,566 shares of common stock outstanding as of May 11, 2018

 

 

 

 
 

 

TABLE OF CONTENTS

 

 

 

PART I – FINANCIAL INFORMATION  
     
ITEM 1. INTERIM FINANCIAL STATEMENTS 3 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION 16 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 20 
ITEM 4. CONTROLS AND PROCEDURES 21 
     
PART II – OTHER INFORMATION  
     
ITEM 1. LEGAL PROCEEDINGS 22 
ITEM 1A. RISK FACTORS 22 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES 23 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 24 
ITEM 4. MINE SAFETY DISCLOSURES 24 
ITEM 5. OTHER INFORMATION 24 
ITEM 6. EXHIBITS 24 
     
SIGNATURES 25 

 

2
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. INTERIM FINANCIAL STATEMENTS

 

Alliance BioEnergy Plus, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

   March 31, 2018   December 31, 2017 
ASSETS          
Current assets          
Cash and cash equivalents  $63,985   $55,076 
Prepaid expenses   337,364    429,242 
TOTAL CURRENT ASSETS   401,349    484,318 
PROPERTY AND EQUIPMENT, AT COST, NET OF ACCUMULATED DEPRECIATION OF $136,915 AND $219,228 AT MARCH 31, 2018 AND DECEMBER 31, 2017, RESPECTIVELY   176,200    177,304 
Other assets          
Security deposits   8,400    21,705 
Capitalized costs   231,553    253,261 
Investment in and advances to an unconsolidated affiliate   3,739,352    3,653,270 
TOTAL OTHER ASSETS   3,979,305    3,928,236 
TOTAL ASSETS  $4,556,854   $4,589,858 
           
LIABILITIES AND STOCKHOLDER’S EQUITY          
Current liabilities          
Accounts payable and accrued liabilities  $681,239   $483,120 
Unearned revenue   60,000    - 
Short term note payable – Related party   2,173,126    2,073,126 
Short term note payable – Other   96,570    96,570 
Convertible debentures payable – Other, net of discount of $127,313 and $138,800   519,163    548,883 
Interest payable – Related party   223,102    192,606 
Interest payable – Other   126,056    144,386 
Derivative liabilities   20,000    234,754 
Current liabilities of discontinued operations   36,148    36,148 
TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES   3,935,404    3,809,593 
           
STOCKHOLDER’S 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; 129,396,233 shares issued and outstanding at March 31, 2018 and 97,540,888 shares issued and outstanding at December 31, 2017   129,396    97,541 
Additional paid-in capital   37,857,626    36,767,654 
Accumulated deficit   (37,365,572)   (36,084,930)
Total stockholder’s equity   621,450    780,265 
TOTAL STOCKHOLDER’S EQUITY  $621,450   $780,265 
           
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY  $4,556,854   $4,589,858 

 

See accompanying notes to financial statements

 

3
 

 

Alliance BioEnergy Plus, Inc.

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

 

   Three Months Ended   Three Months Ended 
   March 31, 2018   March 31, 2017 
Revenue:  $-   $- 
           
Operating expenses:          
General and administrative   623,387    618,454 
Research and development   112,881    195,730 
Total operating expenses   736,268    814,184 
Loss from operations:   (736,268)   (814,184)
           
Other (income) expense:          
Equity loss in an unconsolidated affiliate   19,353    49,101 
Loss on extinguishment of debt   17,150    - 
Change in fair value of derivative liabilities   207,931    (477,000)
Sale of an asset   (3,152)   - 
Interest expense – related party   30,496    30,523 
Interest expense and prepayment penalties – other   272,596    94,716 
Total other income (expense)   (544,374)   302,660 
Loss from continuing operations:  $(1,280,642)  $(511,524)
           
Discontinued operations:          
Loss from discontinued operations   -    - 
Income gain from discontinued operations:  $-   $- 
           
Net loss:  $(1,280,642)  $(511,524)
           
Basic and diluted net loss per share:          
Continuing operations  $(0.01)  $(0.01)
Discontinued operations  $-   $- 
Net loss per share:  $(0.01)  $(0.01)
           
Weighted average common shares outstanding:          
Basic and Diluted   121,592,310    72,151,042 

 

See accompanying notes to financial statements

 

4
 

 

Alliance BioEnergy Plus, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Three Months Ended   Three Months Ended 
   March 31, 2018   March 31, 2017 
Cash flows from operating activities          
Net loss from continuing operations   (1,280,642)   (511,524)
Net income (loss) from discontinued operations   -    - 
Net loss  $(1,280,642)  $(511,524)
Reconciliation of net loss to net cash used in operating activities          
Depreciation and amortization   8,325    18,809 
Capitalized fees   21,708    - 
Amortization of non-cash compensation   98,590    156,816 
Extinguishment of debt   17,150    - 
Change in fair value of derivative liabilities   207,931    (477,000)
Stock based compensation for services   90,791    28,016 
Issuance of warrants for services   1,498    23,404 
Issuance of options awarded under employee, director plan   20,000    30,000 
Equity loss in an unconsolidated affiliate   19,353    49,101 
Unearned revenue   60,000    - 
Changes in operating assets and liabilities          
Prepaid expenses   (6,712)   (14,855)
Accrued interest - other   182,810    94,716 
Accounts payable and accrued liabilities   152,458    137,910 
Net cash (used in) operating activities – continuing operations   (406,740)   (464,607)
Changes in discontinued operations assets and liabilities          
Accounts payable and accrued liabilities   -    - 
Net cash (used in) operating activities – discontinued operations   -    - 
Net cash (used in) operating activities   (406,740)   (464,607)
           
Cash flows from investing activities          
Purchase of property and equipment   (15,221)   (8,000)
Security deposits   13,305    - 
Investment in and advances to an unconsolidated affiliate   (105,435)   (94,159)
Net cash (used in) investing activities – continuing operations   (107,351)   (102,159)
Net cash (used in) investing activities – discontinued operations   -    - 
Net cash (used in) investing activities   (107,351)   (102,159)
           
Cash flows from financing activities          
Proceeds from issuance of common stock   300,000    102,500 
Proceeds from issuance of convertible debt   326,000    417,000 
Proceeds from sale of an asset   8,000    - 
Proceeds from short-term note payable – related party   100,000    20,000 
Repayment of convertible debt   (211,000)   - 
Repayment of short-term note payable – related party   -    (20,000)
Net cash provided by financing activities – continuing operations   523,000    519,500 
Net cash provided by financing activities – discontinued operations   -    - 
Net cash provided by financing activities   523,000    519,500 
           
Net increase (decrease) in cash and cash equivalents   8,909    (47,266)
           
Cash and cash equivalent at beginning of the period   55,076    49,680 
Cash and cash equivalent at end of the period  $63,985   $2,414 
           
Supplemental disclosure of cash flow information          
Cash paid during the period for          
Interest  $76,158   $- 
Taxes   -    - 
           
Supplemental schedule of non-cash activities          
Conversion of convertible debenture to common stock   611,038    - 
Common stock issued as inducement for convertible debt   98,500    27,000 
Warrants issued as inducement for convertible debt   -    33,265 
Common stock issued for future services   -    83,334 
Warrants issued for future services   -    11,702 

 

See accompanying notes to financial statements

 

5
 

 

ALLIANCE BIOENERGY PLUS, INC.

NOTES TO FINANCIAL STATEMENTS

March 31, 2018

 

NOTE 1 – BASIS OF PRESENTATION

 

The consolidated financial statements of the Company present the financial position, results of operations, and cash flows of Alliance Bioenergy Plus, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in comprehensive financial statements have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2017 derives from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

 

The consolidated financial statements as of and for the three months ended March 31, 2018 and 2017, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition and results of operations. The results of operations for the three months ended March 31, 2018 and 2017 are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

 

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 $3,534,055 and may be unable to raise further equity. At March 31, 2018, the Company had incurred accumulated losses of $37,365,572, of which approximately $26,895,464 is non-cash, 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 $7,816,894 from inception through December 31, 2017 and an additional $300,000 in the three months ended March 31, 2018.

 

6
 

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

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 three months ended March 31, 2018, 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 three months ended March 31, 2018:

 

   01/02/18   02/01/18   03/01/18   03/29/18 
Risk-free interest rate   2.25%   2.56%   2.58%   2.56%
Expected life   5 years    5 years    5 years    5 years 
Expected dividends   0%   0%   0%   0%
Expected volatility   133.20%   141.65%   146.21%   147.73%
ALLM common stock fair value  $0.01   $0.02   $0.04   $0.03 

 

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.

 

7
 

 

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.

 

Research and Development

 

The Company expenses all research and development costs as incurred. For the periods ended March 31, 2018 and 2017, the amounts charged to research and development expenses were $112,881 and $195,730, respectively

 

Revenue Recognition

 

The Company follows FASB ASC 605 “Revenue Recognition” and recognizes revenue when it is realized or realizable and earned. The Company’s revenues will be derived principally from the sales of licensing agreements, royalties and eventually corporate owned plants. However, no sales have occurred through those revenue streams to date. The Company considers revenue realized or realizable and earned when all of the following criteria are met:

 

  1. persuasive evidence of an arrangement exists;
  2. the product has been shipped or the services have been rendered to the customer;
  3. the sales price is fixed or determinable; and,
  4. collectability is reasonably assured.

 

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.

 

Accounting for Derivative Instruments

 

The Company issues debentures where the number of shares into which a debenture can be converted is not fixed. For example, when a debenture converts at a discount to market based on the stock price on the date of conversion. In such instances, the embedded conversion option of the convertible debentures is bifurcated from the host contract and recorded at their fair value. In accounting for derivatives, the Company records a liability representing the estimated present value of the conversion feature considering the historic volatility of the Company’s stock, and a discount representing the imputed interest associated with the beneficial conversion feature. The discount is then amortized over the life of the debenture and the derivative liability is adjusted periodically according to stock price fluctuations. At the time of conversion, any remaining derivative liability is charged to additional paid-in capital. For purposes of determining derivative liability, the Company uses Black-Scholes modeling for computing historic volatility.

 

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.

 

8
 

 

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.

 

9
 

 

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)

 

The Company used Level 3 inputs for its valuation methodology for the conversion option liability in determining the fair value using a Black-Scholes option-pricing model with the following assumption inputs:

 

    December 31, 2017    March 31, 2018 
Annual dividend yield   -    - 
Expected life (years)   0.50 – 0.10    0.10 – 0.30  
Risk-free interest rate   1.04% - 0.98%   1.23% - 1.48%
Expected volatility   22% - 156%   21% - 163%

 

   Fair Value Measurements at
December 31, 2017
Using Fair Value Hierarchy
 
   Level 1   Level 2   Level 3 
Liabilities                
Embedded derivative liabilities – (Debenture)              234,754 
Total          $234,754 

 

   Fair Value Measurements at 
   March 31, 2018 
   Using Fair Value Hierarchy 
   Level 1   Level 2   Level 3 
Liabilities             
Embedded derivative liabilities – (Debenture)                20,000 
Total          $20,000 

 

For the three months ended March 31, 2018, the Company recognized a loss of $207,931 on the change in fair value of its derivative liabilities. At March 31, 2018, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 825-10.

 

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 AFFILIATE

 

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 and subsequently acquired the remaining 49% in 2016. 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.

 

10
 

 

The following is a condensed balance sheet of the unconsolidated affiliate as of March 31, 2018 and December 31, 2017 and a comparative statement of operations for the three months ending March 31, 2018 and 2017.

 

Condensed Balance Sheet of Non-Consolidated Affiliate

 

   March 31, 2018   December 31, 2017 
ASSETS          
Current Assets          
Cash and cash equivalents  $75   $100 
Prepaid royalties   35,000    - 
TOTAL ASSETS   35,075    100 
           
LIABILITIES AND STOCKHOLDERS EQUITY          
Current Liabilities          
Accounts payable and accrued liabilities  $596,666   $629,681 
Interest payable   63,930    56,679 
Current notes payable   897,732    798,288 
TOTAL CURRENT LIABILITIES   1,558,328    1,484,648 
           
STOCKHOLDER’S EQUITY          
Accumulated deficit   (1,523,253)   (1,484,548)
TOTAL EQUITY   (1,523,253)   (1,484,548)
           
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY  $35,075   $100 

 

Condensed Statement of Operations of Non-Consolidated Affiliates

 

   Three Months Ended   Three Months Ended 
   March 31, 2018   March 31, 2017 
         
Revenues  $-   $- 
           
Operating Expenses          
Royalties   17,500    17,500 
General and administrative   13,955    74,996 
Total operating expenses   (31,455)   (92,496)
           
Other expenses          
Interest expense   7,250    5,705 
Total other expenses   (7,250)   (5,705)
           
Loss from operations  $(38,705)  $(98,201)

 

NOTE 5 – UNEARNED REVENUE

 

In March 2018, the Company received a $60,000 nonrefundable deposit for a 60-day extension for a license agreement. This payment is to be applied towards the license agreement balance, if and when that agreement is finalized, otherwise the deposit will be earned as a penalty upon the expiration of the 60-day extension.

 

NOTE 6 – 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 and are coming due June 1, 2018. As of March 31, 2018, 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 March 31, 2018, and December 31, 2017, the total interest accrued on the note was $17,021 and $16,146 respectively.

 

11
 

 

In July 2016, the Company issued six (6) short-term notes payable to related parties in conjunction with the Company’s acquisition of the remaining 49% of AMG Energy Group. These notes have a value of $2,002,126 and accrue interest at a rate of six percent (6%) per annum. As of March 31, 2018, and December 31, 2017, the total interest accrued on the notes was $206,081 and $176,460 respectively. All of the notes were due on August 4, 2017 and are currently in default.

 

In February 2018, the Company entered into a short-term loan with Steven Sadaka, with a principal balance of $100,000 due and payable on May 1, 2018. The note does not accrue interest, however the Company provided 2,000,000 inducement shares to secure the note. These inducement shares were valued at $84,000 and are being amortized over the life of the note. If the note is not repaid at maturity, then an additional 5,000,000 shares of common stock will be due.

 

Short Term Notes Payable – Other

 

In July 2016, the Company issued a short-term note payable to a third party in conjunction with the Company’s acquisition of the remaining 49% of AMG Energy Group. The note has a principal balance of $96,570 and accrues interest at a rate of six percent (6%) per annum. As of March 31, 2018 and December 31, 2017, the total interest accrued on the note was $10,017 and $8,588 respectively. The note was due on August 4, 2017 and is currently in default.

 

Convertible Debt

 

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 of the amount funded, totaling an aggregate value of $416,666. 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 holder’s consent. The note is convertible after 180 days at a 25% discount to the lowest trade price in the preceding 10 trading days. Per the warrant coverage feature, 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. The warrant agreement also contains a down-round ratchet provision allowing the holder to increase its warrant count. The number of warrants to issue is calculated by dividing the aggregate value by the lower of $0.30 or the lowest trade price in the 10 preceding trading days. As of December 31, 2017, JMJ Financial has converted $466,080 into 3,670,000 shares of common stock. In addition, JMJ Financial has exercised its warrant agreement ratchet rights, resulting in 3,067,668 warrants outstanding. As of December 31, 2017, the holder had exercised warrants to purchase 11,043 of Company common stock and exercised its cashless conversion feature on the remaining warrants resulting in 1,340,201 shares of common stock issued. As of March 31, 2018, and December 31, 2017, the conversion feature of this debenture carries a derivative liability of $20,000 and $20,000 respectively. This note is currently in default and is accruing compounding quarterly interest at a rate of eighteen percent (18%) per annum. This note is currently under a lock up / trickle out agreement.

 

In April 2017, the Company entered into a convertible debenture with Auctus Fund, LLC with a principal balance of $117,750 due and payable on or before December 22, 2017. The note carries an original issue discount of $17,750, accrues interest at a rate of 12% per annum and is convertible into the Company’s common stock at a 50% discount on the lowest trading price during the twenty-five trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting after 90 days to a maximum of 135% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In the year ended December 31, 2017, principal in the amount of $103,150 converted into 2,200,000 shares of common stock and in the three months ended March 31, 2018, the remaining principal and interest balance of $41,775 converted into 4,016,356 shares of common stock. This note has been fully converted.

 

In April 2017, the Company entered into a convertible debenture with EMA Financial, LLC with a principal balance of $150,000 due and payable on or before March 15, 2018. The note carries an original issue discount of $28,000, accrues interest at a rate of 10% per annum and is convertible into the Company’s common stock at a 35% discount on the lowest trading price during the 15 trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting after 90 days to a maximum of 130% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In the year ended December 31, 2017, principal in the amount of $125,641 converted into 3,750,000 shares of common stock and in the three months ended March 31, 2018, the remaining principal and interest balance of $35,962 converted into 3,706,178 shares of common stock. This note has been fully converted.

 

In May 2017, the Company entered into a convertible debenture with Crown Bridge Partners, LLC with a principal balance of $58,000 due and payable on or before May 4, 2018. The note carries an original issue discount of $9,500, accrues interest at a rate of 10% per annum and is convertible into the Company’s common stock at a 40% discount on the lowest trading price during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 135% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In the year ended December 31, 2017, principal in the amount of $38,124 converted into 1,710,000 shares of common stock and in the three months ended March 31, 2018, the remaining principal and interest balance of $26,538 converted into 2,323,040 shares of common stock. This note has been fully converted.

 

12
 

 

In July 2017, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $110,000 due and payable on January 15, 2018. The note carries an 8% one-time interest charge, a $10,000 original issue discount and a 35% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 150,000 inducement shares to secure the note, and may have to provide additional shares on the note’s 6-month anniversary if the Company’s share price declines. These inducement shares were valued at $54,000 and are being amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due. In the three months ended March 31, 2018, the Company issued 2,040,600 shares of common stock due to a decline in the Company’s share price at the note’s 6-month anniversary date. Concurrently, the full principal and interest balance of $118,800 converted into 7,239,171 shares of common stock. This note has been fully converted.

 

In July 2017, the Company entered into a convertible debenture with Power Up Lending Group, Ltd. with a principal balance of $153,000 due and payable on or before April 30, 2018. The note carries an original issue discount of $3,000 and accrues interest at a rate of 8% per annum and is convertible into the Company’s common stock at a 39% discount on the average of the lowest three trading prices during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 130% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In January 2018, the Company paid the debenture in full with a payment of $206,267, which represented a principal payment of $153,000 and $53,267 in interest and penalties.

 

In August 2017, the Company entered into a convertible debenture with Crown Bridge Partners, LLC with a principal balance of $58,000 due and payable on or before August 2, 2018. The note carries an original issue discount of $7,000, accrues interest at a rate of 10% per annum and is convertible into the Company’s common stock at a 40% discount on the lowest trading price during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 135% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In January 2018, the Company paid the debenture in full with a payment of $80,890, which represented a principal payment of $58,000 and $22,890 in interest and penalties.

 

In November 2017, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $143,000 due and payable on May 30, 2018. The note carries an 8% one-time interest charge, a $43,000 original issue discount and a 35% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 500,000 inducement shares to secure the note, and may have to provide additional shares on the note’s 6-month anniversary if the Company’s share price declines. These inducement shares were valued at $39,500 and are being amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due.

 

In December 2017, the Company entered into a convertible debenture with Power Up Lending Group, Ltd. with a principal balance of $63,000 due and payable on or before September 30, 2018. The note carries an original issue discount of $3,000 and accrues interest at a rate of 8% per annum and is convertible into the Company’s common stock at a 39% discount on the average of the lowest three trading prices during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 130% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days

 

In January 2018, the Company entered into a convertible debenture with Power Up Lending Group, Ltd. with a principal balance of $128,000 due and payable on or before October 20, 2018. The note accrues interest at a rate of eight percent (8.0%) per annum and is convertible into the Company’s common stock at a 39% discount, after 180 days, in whole or in part at the option of the holder. The note also carried a prepayment penalty, adjusting every 30 days to a maximum of one hundred thirty percent (130%) of the then outstanding principal and interest balance due, if the note is paid back within the first one hundred eighty (180) days.

 

In February 2018, the Company entered into a convertible debenture with Crown Bridge Partners, LLC with a principal balance of $58,000 due and payable on or before February 2, 2019. The note carries an original issue discount of $7,000, accrues interest at a rate of 10% per annum and is convertible into the Company’s common stock at a 40% discount on the lowest trading price during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 135% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days.

 

13
 

 

In February 2018, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $165,000 due and payable on September 21, 2018. The note carries an 8% one-time interest charge, a $15,000 original issue discount and a 40% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 500,000 inducement shares to secure the note. These inducement shares were valued at $14,500 and are being amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due.

 

Derivative Liabilities

 

The embedded conversion features of the above convertible notes payable contain discounted conversion prices and should be recognized as derivative instruments. Such embedded conversion features should be bifurcated and accounted for at fair value. As of the three months ended March 31, 2018 and the year ended December 31, 2017, the Company had a derivative liability balance of $20,000 and $234,754, respectively. The Company uses the Black-Scholes option-pricing model to calculate derivate liability.

 

Fair Value of Embedded Derivative Liabilities: 
     
December 31, 2016  $914,000 
Addition   656,119 
Converted   (2,189,373)
Change in fair value   854,008 
As of December 31, 2017  $234,754 
Addition   - 
Converted   (422,685)
Changes in fair value   207,931 
As of March 31, 2018  $20,000 

 

NOTE 7 – STOCKHOLDERS’ EQUITY

 

The total number of shares of capital stock, which the Company has authority to issue, is 510 million, 500 million of which are designated as common stock at $0.001 par value (the “Common Stock”) and 10 million of which are designated as preferred stock par value $0.001 (the “Preferred Stock”). As of March 31, 2018, the Company had 129,396,233 shares of Common Stock issued and outstanding and no shares of Preferred Stock were issued. Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend. The Company has yet to designate any rights, preferences and privileges for any of its authorized Preferred Stock.

 

In January 2018, The Company commenced a new offering of units valued at $0.03 per share. Each unit consists of one share of common stock. Through the date of filing, the Company has sold 10,000,000 units for aggregate proceeds of $300,000.

 

In the three months ended March 31, 2018, the Company issued an aggregate of 2,070,600 shares of its common stock for services valued at $90,791.

 

In the three months ended March 31, 2018, the Company issued an aggregate of 2,500,000 shares of common stock valued at $98,500 as inducements to secure convertible debt notes.

 

In the three months ended March 31, 2018, principal and interest in the amount of $223,075 was converted into 17,284,745 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 conversion, 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 $387,963 was attributed to the beneficial conversion features.

 

14
 

 

In the three months ended March 31, 2018, the Company issued an aggregate of 60,000 warrants for services. Using a Black-Scholes asset-pricing model, these warrants were valued at $1,498. These warrant agreements have terms of five years with exercise prices $0.25 per share.

 

In the three months ended March 31, 2018, the Company issued options under its Employee & Directors Stock Option Plan to purchase an aggregate of 604,942 shares of common stock for a period of five years at an exercise price ranging from $0.04. Using a Black-Scholes asset-pricing model, these agreements were valued at $20,000.

 

In the three months ended March 31, 2018, 168,184 options under the Employee & Director Stock Option Plan expired. In addition, 843,851 Class A and 843,851 Class B warrants also expired.

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Lease

 

The Company has leased office space pursuant to a lease for a period of 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 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 Royal Palm Beach, FL, which serves as the Company’s research and demonstration facility. The lease period is for thirty-six (36) months from December 1, 2017 through January 31, 2020. Annual rent commences at approximately $32,400 per annum and increases on a year-to-year basis by three percent (3.0%) over the prior year.

 

Rent expense for the three months ended March 31, 2018 and March 31, 2017 were $30,397 and $32,071 respectively.

 

NOTE 9 – RELATED PARTY TRANSACTIONS

 

Related Transactions

 

  1. Short-term notes payable and convertible notes issued to related parties are described in NOTE 5.
     
  2. In December 2017, EK Laboratories rented office and warehouse space from Royal Palm Dev I, LLC, a company owned by Joe Walsh who is a greater than 10% shareholder of the Company.

 

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.

 

NOTE 10 – DISCONTINUED OPERATIONS

 

On September 1, 2014, the Company decided to focus on its renewable energy holdings and future energy technologies, and to divest itself of its entertainment-related assets and subsidiaries. The Company made this decision because the entertainment business was no longer commercially viable, whereas the energy business represented a better economic opportunity. Specifically, the Board decided to discontinue 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 Co.); 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.

 

   March 31, 2018   December 31, 2017 
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 

 

15
 

 

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

 

    Three Months Ended
March 31, 2018
    Three Months Ended
March 31, 2017
 
Major line items constituting pretax profit (loss) of discontinued operations          
Revenue   -    - 
Selling, general and administrative   -    - 
Gain (Loss) from discontinued operations  $-   $- 

 

NOTE 11 – SUBSEQUENT EVENTS

 

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

 

On April 18, 2018, the Board of Directors appointed Gerry David as the third independent board member.

 

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. 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”) and the remaining 49% was then acquired in 2016. AMG Energy Group owns a 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.

 

Plan of Operation

 

The Company is focused on the development and commercialization of the licensed technology it controls through its affiliate Carbolosic, LLC. 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 mergers and acquisitions of existing businesses in the renewable energy and sustainable products industries as well as sublicensing its patented technologies that it controls through a master license with the University of Central Florida under affiliate Carbolosic and start-up activities which are focused on development of an increasing revenue stream, secure market share and enhancement of shareholder value.

 

16
 

 

AMG ENERGY GROUP, LLC

 

AMG Energy, a wholly owned subsidiary of the Company, was created for the purpose of holding, managing, and developing the Company’s renewable energy technology enterprises. These interests comprise ownership of: (i) 100% of EK Laboratories, Inc., a Florida corporation (“EK”) (formerly known as Central Florida Institute of Science and Technology, Inc.); and (ii) a 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 acquire existing bioenergy and ethanol plants to install the CTS technology as well as license the technology to prospective licensees. EK was formed to serve as a pilot plant and research facility to further develop the CTS process, its uses, and develop new technologies.

 

ALLIANCE BIO-PRODUCTS, INC.

 

Alliance Bio-Products, a wholly owned subsidiary of the Company, was created for the purpose of acquiring and operating a plant for the installation of the Company’s patented CTS process.

 

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

 

Capital Formation

 

In January 2018, The Company commenced a new offering of units valued at $0.03 per share. Each unit consists of one share of common stock. Through the date of filing, the Company has sold 10,000,000 units for aggregate proceeds of $300,000. The offering is ongoing.

 

From January 1, 2018 through the date of filing, the Company issued an aggregate of 2,090,600 shares of its common stock for services valued at $91,461.

 

From January 1, 2018 through the date of filing, the Company issued an aggregate of 100,000 warrants for services. Using a Black-Scholes asset-pricing model, these warrants were valued at $2,542. These warrant agreements have terms of five years with exercise prices of $0.25 per share.

 

From January 1, 2018 through the date of filing, the Company issued options to its independent directors to purchase an aggregate of 704,942 shares of common stock for a period of five years at an exercise price of $0.04. Using a Black-Scholes asset-pricing model, these agreements were valued at $23,500. In addition, during this same period, 168,184 previously issued options issued to previous board members expired and concurrently, 500,000 options vested. Using a Black-Scholes asset-pricing model, these agreements were valued at $16,005.

 

From January 1, 2018 through the date of filing, principal and interest in the amount of $253,075 was converted into 18,618,078 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 conversion, 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 $401,296 was attributed to the beneficial conversion features.

 

From January 1, 2018 through the date of filing, a combined aggregate 1,687,702 Class A and Class B warrants expired.

 

Going Concern

 

The Company has incurred losses since inception, has a working capital deficiency, and may be unable to raise further equity. At March 31, 2018, the Company had a working capital deficiency of $3,534,055 and had incurred accumulated losses of $37,365,572 of which approximately $26,895,464 is non-cash 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, 2017 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 $7,816,894 through the year ended December 31, 2017, and an additional $300,000 through the date of filing.

 

17
 

 

Results of Operations

 

Comparison of the three month period ended March 31, 2018 to the three month period ended March 31, 2017.

 

For the three months ended March 31, 2018, the Company’s general and administrative expenses increased by approximately $4,933 to $623,387 from $618,454 in the three months ended March 31, 2017. This increase is primarily the result of a $99,274 payroll increase due to increased staffing, while simultaneously reducing professional fees by $81,102 and general office fees by $21,622. Of the $623,387 general and administrative expense, approximately 16% or $121,094 is non-cash equity compensation.

 

For the three months ended March 31, 2018, the Company’s research and development costs decreased by approximately $82,849 to $112,881 from $195,730. This decrease is primarily the result of refocusing the Company’s path to market from a full scale plant to a mobile bolt-on unit.

 

Interest expense increased in the three months ended March 31, 2018 by approximately $177,853 to $303,092 from $125,239 during the three months ended March 31, 2017. The increase was the result of additional short-term notes and also the conversion of notes along with the payment of notes with prepayment penalties.

 

For the three months ended March 31, 2018, the Company’s equity loss in its unconsolidated affiliate decreased $29,748 to $19,353 from $49,101 during the three months ended March 31, 2017.

 

For the three months ended March 31, 2018, the Company recognized a $684,931 change in its derivative liability expense to $207,931 from a gain of $477,000 at March 31, 2017. This change is the result of additional notes that were convertible during the three months ended March 31, 2018, which also resulted in a $17,150 increase in the Company’s loss on extinguishment of debt to $17,150 from $0 at March 31, 2017.

 

During the three months ended March 31, 2018, The Company recognized $3,152 in other income as a result of the sale of a vehicle owned by the Company.

 

Liquidity and Capital Resources

 

Liquidity

 

As of March 31, 2018, the Company had $63,985 in cash and total stockholder’s equity was $621,450. Total debt from continuing operations, including advances, accounts payable and other notes payable at March 31, 2018, together with interest payable thereon, was $3,899,256 an increase of $125,811 from $3,773,445 at December 31, 2017. This increase is primarily attributable to the addition of approximately $198,119 in payables, along with a new $100,000 related party note, while simultaneously reducing the Company’s derivative liability by $214,754.

 

During the three months ended March 31, 2018, the Company’s continuing operating activities used $406,740 in cash. This use can primarily be attributed to approximately $345,000 for payroll and $113,000 for research and development.

 

During the three months ended March 31, 2018, the Company’s investing activities used $107,351 in cash, which $105,435 was advanced to Carbolosic, LLC, for payment of the minimum annual royalty and patent legal fees. In addition, $15,221 was used to purchase additional laboratory equipment, while approximately $13,000 in security deposits were returned to the Company.

 

During the three months ended March 31, 2018, the Company generated $523,000 through its financing activities. This can primarily be attributed to the addition of an aggregate net amount of $426,000 in convertible debt and simultaneously raising $300,000 through its ongoing offerings. During this same time, the Company repaid $211,000 of its convertible debt.

 

18
 

 

Capital Resources

 

At this time, the Company has limited liquidity and capital resources. To continue funding its operations, the Company will need to generate revenue or obtain additional financing for current and future operations. As of the date of filing, the Company has raised $300,000, in addition to $7,816,894 raised through December 31, 2017 for a total capital raise of $8,116,894 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 three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018, or any other period. For further information, refer to the financial statements and footnotes thereto for the period ended December 31, 2017.

 

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.

 

19
 

 

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.

 

Accounting for Derivative Instruments

 

The Company issues debentures where the number of shares into which a debenture can be converted is not fixed. For example, when a debenture converts at a discount to market based on the stock price on the date of conversion. In such instances, the embedded conversion option of the convertible debentures is bifurcated from the host contract and recorded at their fair value. In accounting for derivatives, the Company records a liability representing the estimated present value of the conversion feature considering the historic volatility of the Company’s stock, and a discount representing the imputed interest associated with the beneficial conversion feature. The discount is then amortized over the life of the debenture and the derivative liability is adjusted periodically according to stock price fluctuations. At the time of conversion, any remaining derivative liability is charged to additional paid-in capital. For purposes of determining derivative liability, the Company uses Black-Scholes modeling for computing historic volatility.

 

Research and Development

 

The Company expenses all research and development costs as incurred. For the three months ended March 31, 2018 and 2017, the amounts charged to research and development expenses were $112,881 and $195,730 respectively

 

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.

 

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.

 

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.

 

20
 

 

ITEM 4. CONTROLS AND PROCEDURES

 

(a) Disclosure Controls and Procedures

 

The Company is required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its chief executive officer (also its principal executive officer) and its chief financial officer (also its principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company’s management, including the Company’s President (“President”), the Company’s principal executive officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation the Company’s CEO, President and CFO concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2018 to a reasonable assurance level to enable the Company to record, process, summarize and report information required under the Securities and Exchange Commission’s rules in a timely fashion. This conclusion resulted from the lack of separation of duties within the Company.

 

(b) Management’s Report on Internal Control over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

 

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

 

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

 

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

 

As of March 31, 2018, management assessed the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013) and SEC guidance on conducting such assessments. Based on that evaluation, the Company concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of its internal controls over financial reporting that adversely affected its internal controls and that may be considered to be material weaknesses.

 

The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (i) the lack of a functioning audit committee; (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; (iii) a lack of expertise with US GAAP and SEC rules and regulations for review of critical accounting areas and disclosures and material non-standard transactions; and (iv) lack of effective oversight during the financial close process resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures. The aforementioned material weaknesses were identified by the Company’s management in connection with the review of its financial statements for the three months ended March 31, 2018.

 

21
 

 

Management believes that the material weakness set forth above did not have an effect on its financial results. However, management believes that the lack of a functioning audit committee coupled with not having individuals on staff or retainer with a thorough knowledge of US GAAP and SEC rules and regulations and lack of effective oversight on the financial close process results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in its financial statements in future periods.

 

This quarterly report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by its registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this quarterly report.

 

Remediation Plan

 

Management is sensitive to the issues presented and intends to take appropriate action when the Company’s financial resources permit. Management intends to hire additional support staff when its financial resources permit and it will continue to review and make necessary changes to the overall design of its internal control environment.

 

(c) Reclassification of Prior Period Financial Statements

 

Certain items previously reported have been reclassified to conform with the current period’s presentation.

 

(d) 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, there are no material claims or suits whose outcomes could have a material effect on the Company’s financial statements.

 

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.

 

22
 

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

 

Below is a list of securities sold by the Company from January 1, 2018, through the date of filing which were not registered under the Securities Act.

 

Name of Purchaser 

Date of

Sale

 

Title of

Security

 

Amount of Securities

Sold

   Consideration
John D. Lane  01/01/18  Common Stock   10,000   Professional Services
Crown Bridge Partners, LLC  01/04/18  Common Stock   1,000,000   Convertible Debt Conversion
Auctus Fund  01/04/18  Common Stock   1,500,000   Convertible Debt Conversion
Lucas Hoppel  01/04/18  Common Stock   2,040,600   True Up shares under Debt note
EMA Financial  01/08/18  Common Stock   1,600,000   Convertible Debt Conversion
Vecchitto FLP Valori, LLC  01/09/18  Common Stock   2,500,000   Purchased @ $0.03 per share
Steven Sadaka  01/09/18  Common Stock   2,500,000   Purchased @ $0.03 per share
Richard Bindler Revocable Trust  01/09/18  Common Stock   2,500,000   Purchased @ $0.03 per share
Anthony Santelli, II  01/09/18  Common Stock   2,500,000   Purchased @ $0.03 per share
Lucas Hoppel  01/22/18  Common Stock   2,000,000   Convertible Debt Conversion
EMA Financial  01/25/18  Common Stock   2,106,178   Convertible Debt Conversion
Auctus Fund  01/31/18  Common Stock   1,800,000   Convertible Debt Conversion
John D. Lane  02/01/18  Common Stock   10,000   Professional Services
Lucas Hoppel  02/01/18  Common Stock   1,500,000   Convertible Debt Conversion
Lucas Hoppel  02/06/18  Common Stock   1,000,000   Convertible Debt Conversion
Auctus Fund  02/09/18  Common Stock   716,356   Convertible Debt Conversion
Lucas Hoppel  02/12/18  Common Stock   1,500,000   Convertible Debt Conversion
Lucas Hoppel  02/15/18  Common Stock   1,239,171   Convertible Debt Conversion
Lucas Hoppel  02/21/18  Common Stock   500,000   Inducement to Secure a Debt Note
Steven Sadaka  02/28/18  Common Stock   2,000,000   Inducement to Secure a Debt Note
John D. Lane  03/01/18  Common Stock   10,000   Professional Services
Crown Bridge partners, LLC  03/02/18  Common Stock   1,323,040   Convertible Debt Conversion
John D. Lane  04/01/18  Common Stock   10,000   Professional Services
JMJ Financial  04/24/18  Common Stock   1,333,333   Convertible Debt Conversion
John D. Lane  05/01/08  Common Stock   10,000   Professional Services

 

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(a)(2) of that Act and Rule 506 of Regulation D.

 

23
 

 

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   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.
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

24
 

 

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: May 11, 2018 By: /s/ Daniel de Liege
    Daniel de Liege
    Director, CEO, Acting CFO, President, Secretary and Treasurer
    (Principal Executive Officer)
     
Date: May 11, 2018 By: /s/ Daniel de Liege
    Daniel de Liege
    Director, CEO, Acting CFO, President, Secretary and Treasurer
    (Principal Financial and Accounting Officer)

 

25
 

 

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   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.
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

26
 

 

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 March 31, 2018, 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: May 11, 2018  
   
/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 March 31, 2018, 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: May 11, 2018  
   
/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 March 31, 2018 (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 11th day of May, 2018.

 

  /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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PROPERTY AND EQUIPMENT, AT COST, NET OF ACCUMULATED DEPRECIATION OF $136,915 AND $219,228 AT MARCH 31, 2018 AND DECEMBER 31, 2017, RESPECTIVELY Other assets Security deposits Capitalized costs Investment in and advances to an unconsolidated affiliate TOTAL OTHER ASSETS TOTAL ASSETS LIABILITIES AND STOCKHOLDER’S EQUITY Current liabilities Accounts payable and accrued liabilities Unearned revenue Short term note payable – Related party Short term note payable – Other Convertible debentures payable – Other, net of discount of $127,313 and $138,800 Interest payable – Related party Interest payable – Other Derivative liabilities Current liabilities of discontinued operations TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES STOCKHOLDER’S 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; 129,396,233 shares issued and outstanding at March 31, 2018 and 97,540,888 shares issued and outstanding at December 31, 2017 Additional paid-in capital Accumulated deficit TOTAL STOCKHOLDER’S EQUITY TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY Accumulated depreciation and amortization on property and equipment Convertible debentures payable, discount Preferred stock, par value Preferred stock, shares authorized Preferred stock, shares issued Preferred stock, shares outstanding Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Revenue: Operating expenses: General and administrative Research and development Total operating expenses Loss from operations: Other (income) expense: Equity loss in an unconsolidated affiliate Loss on extinguishment of debt Change in fair value of derivative liabilities Sale of an asset Interest expense – related party Interest expense and prepayment penalties – other Total other income (expense) Loss from continuing operations: Discontinued operations: Loss from discontinued operations Income gain from discontinued operations: Net loss: Basic and diluted net loss per share: Continuing operations Discontinued operations Net loss per share: Weighted average common shares outstanding: Basic and Diluted Statement of Cash Flows [Abstract] Cash flows from operating activities Net loss from continuing operations Net income (loss) from discontinued operations Net loss Reconciliation of net loss to net cash used in operating activities Depreciation and amortization Capitalized fees Amortization of non-cash compensation Extinguishment of debt Stock based compensation for services Issuance of warrants for services Issuance of options awarded under employee, director plan Unearned revenue Changes in operating assets and liabilities Prepaid expenses Accrued interest - other Accounts payable and accrued liabilities Net cash (used in) operating activities – continuing operations Changes in discontinued operations assets and liabilities Accounts payable and accrued liabilities Net cash (used in) operating activities – discontinued operations Net cash (used in) operating activities Cash flows from investing activities Purchase of property and equipment Security deposits Investment in and advances to an unconsolidated affiliate Net cash (used in) investing activities – continuing operations Net cash (used in) investing activities – discontinued operations Net cash (used in) investing activities Cash flows from financing activities Proceeds from issuance of common stock Proceeds from issuance of convertible debt Proceeds from sale of an asset Proceeds from short-term note payable – related party Repayment of convertible debt Repayment of short-term note payable – related party Net cash provided by financing activities – continuing operations Net cash provided by financing activities – discontinued operations Net cash provided by financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalent at beginning of the period Cash and cash equivalent at end of the period Supplemental disclosure of cash flow information Cash paid during the period for Interest Taxes Supplemental schedule of non-cash activities Conversion of convertible debenture to common stock Common stock issued as inducement for convertible debt Warrants issued as inducement for convertible debt Common stock issued for future services Warrants issued for future services Organization, Consolidation and Presentation of Financial Statements [Abstract] Basis of Presentation Going Concern Accounting Policies [Abstract] Summary of Significant Accounting Policies Investments [Abstract] Investment in Unconsolidated Affiliate Revenue Recognition and Deferred Revenue [Abstract] Unearned Revenue Debt Disclosure [Abstract] Debt Equity [Abstract] Stockholders' Equity Commitments and Contingencies Disclosure [Abstract] Commitments and Contingencies Related Party Transactions [Abstract] Related Party Transactions Discontinued Operations and Disposal Groups [Abstract] Discontinued Operations Subsequent Events [Abstract] Subsequent Events Use of Estimates Cash and Cash Equivalents Stock Compensation Stock-based Compensation Valuation Methodology Accounting and Reporting of Discontinued Operations Property and Equipment Research and Development Revenue Recognition Convertible Instruments Accounting for Derivative Instruments Common Stock Purchase Warrants and Other Derivative Financial Instruments Investments in Non-consolidated Affiliates Impairment of Long Lived Assets Income Taxes Profit (Loss) Per Common Share Fair Value Measurements Recent Accounting Pronouncements Schedule of Black-Scholes Option Pricing Models for Warrant-based Stock Compensation Schedule of Fair Value Assumption Inputs Schedule of Fair Value Measured on Recurring Basis Schedule of Condensed Balance Sheet of Non-consolidated Affiliates Schedule of Condensed Statement of Operations of Non-consolidated Affiliates Schedule Fair Value of Embedded Derivative Liabilities Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet Disclosures Working capital deficiency Accumulated losses Non-cash transaction amount Proceeds from issuance of stock Statement [Table] Statement [Line Items] Consolidated Entities [Axis] Property and equipment useful lives Research and development expenses Warrant Based Stock Compensation [Table] Warrant Based Stock Compensation [Line Items] Risk-free interest rate Expected life Expected dividends Expected volatility ALLM common stock fair value Annual dividend yield Expected life (years) Risk-free interest rate Expected volatility Embedded derivative liabilities Total Subsidiary or Equity Method Investee, Sale of Stock by Subsidiary or Equity Investee [Table] Subsidiary, Sale of Stock [Line Items] Entity interest percentage Ownership percentage Schedule of Investments [Table] Schedule of Investments [Line Items] Prepaid royalties TOTAL ASSETS Interest payable Current notes payable TOTAL CURRENT LIABILITIES TOTAL EQUITY TOTAL LIABILITIES AND STOCKHOLDERS EQUITY Revenues Royalties General and administrative Total operating expenses Interest expense Total other expenses Loss from operations Nonrefundable deposit received Schedule of Long-term Debt Instruments [Table] Debt Instrument [Line Items] Extinguishment of Debt [Axis] Principal balance of debt Interest rate on notes payable Accrued interest Debt due date Debt conversion converted instrument shares issued Debt conversion amount Number of shares issued Number of shares issued, value Conversion description Aggregate value of note Issuance of common stock purchase warrant Term of warrant Investment warrants, exercise price Common stock shares converted, value Common stock shares converted Warrant outstanding Derivative liability Debt discount amount Discount rate Debt instrument outstanding, percentage Repayment of debenture Debt principal payments Interest and penalties Derivative liabilities beginning balance Additions Converted Changes in fair value Derivative liabilities ending balance Schedule of Related Party Transactions, by Related Party [Table] Related Party Transaction [Line Items] Number of shares authorized Sale of stock price per share Sale of stock, shares Proceeds from issuance of stock Issuance of common stock for services, shares Shares issued for services, value Common stock issued as inducement for convertible debt, shares Debt conversion, amount Debt conversion, shares Debt beneficial conversion features Issuance of warrants for services, shares Issuance of warrants for services, value Warrant term Warrant exercise price per share Stock option to purchase of common stock shares Stock option term Options exercise price Agreement value of stock option Number of options expired Number of warrants expired Schedule of Operating Leased Assets [Table] Operating Leased Assets [Line Items] Term of lease Lease termination date Annual rent Percentage of increase in rent per year Commitments description Rent expense Title of Individual [Axis] Joe Walsh [Member] Ownership percentage by noncontrolling owners Prepaid expenses Total assets of the discontinued operation Accounts payable and accrued liabilities Total liabilities of the discontinued operation Revenue Selling, general and administrative Gain (Loss) from discontinued operations AMG Energy Group, LLC [Member] Alliance BioEnergy Plus Inc.[Member] AMG Energy Group LLC [Member] Auctus Fund, LLC [Member] Carbolosic Energy 1, LLLP. Carbolosic, LLC [Member] Class A Warrant [Member] Class B Warrant [Member] Common stock issued as inducement for convertible debt. Common stock issued for future services. Common Stock 1 [Member] Conversion of convertible debenture to common stock. The entire policy represents convertible debt during the period [Policy Text Block] Crown Bridge Partners LLC [Member]. Debenture [Member] Discount rate. Debt instrument outstanding, percentage. Directors Stock Option Plan [Member]. EMA Financial, LLC [Member] EK Laboratories Inc [Member] Employee, Director Plan [Member] Employee [Member]. Former Employee [Member] GS Capital Partners, LLC [Member] GS Capital Partners Partners LLC [Member]. Changes in discontinued operations assets and liabilities [Abstract] Interest and penalties. Including the current and noncurrent portions, this element represents the carrying value of interest payable which were initially due after one year or beyond the operating cycle, if longer, and which are not otherwise defined in the taxonomy. Tabular disclosure of investments in and advances to affiliates in statement of operations [Table Text Block]. 07/01/17 [Member] 09/01/17 [Member] 11/01/17 [Member] Issuance Date Five. Issuance Date Four. 10/01/17 [Member] 08/01/17 [Member] Issuance Date One. 06/30/17 [Member] 12/29/17 [Member] Issuance Date Six. 12/01/17 [Member] 08/11/17 [Member] 9/30/17 [Member] Issuance Date Three. 9/15/17 [Member] Issuance Date Two. Issuance of Common stock purchase warrant. Issuance of options awarded under company plan. Issuance of stock and warrants for services or claims shares. Issuance of warrants for services. JMJ Financial [Member] Steven Sadaka [Member] Labry's Fund, LLP [Member] Lease term. Lucas Hoppel [Member] Non Consolidated Affiliates [Member] Non-cash transaction amount. Office Lease [Member] Office Lease [Member] Office Lease Two [Member] The cash outflow for capitalized fees. Percentage of increase in rent per year. Power Up Lending Group, Ltd [Member] Related Party [Member] Series F Warrants [Member] Steven Sadaka [Member] Disclosure of accounting policy for Stock based Compensation Valuation Methodology [Policy Text Block] Stock Subscription Receivable [Member] Term of warrant. Line items represent reporting concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. This table lists the assumptions used in calculations of the Black-Scholes option pricing models for warrant-based stock compensation issued during the period. The line items identify information about the warrant-based stock compensation issued. Warrants issued as inducement for convertible debt. Warrants issued for future services. Working capital deficiency. Increase decrease in discontinued operation accounts payable and accrued liabilities. Common stock issued as inducement for convertible debt, shares. Employee & Directors Stock Option Plan [Member] Short Term Notes Payable [Member] Short Term Loan [Member] Short Term Loan [Member] Third Party [Member] Warrant term. ShortTermMember Assets, Current Assets, Noncurrent Liabilities Stockholders' Equity Attributable to Parent Operating Expenses Interest Expense, Related Party Interest Expense, Other Discontinued Operation, Tax Effect of Income (Loss) from Discontinued Operation During Phase-out Period Discontinued Operation, Income (Loss) from Discontinued Operation During Phase-out Period, Net of Tax Term Of Warrant Issuance Of Warrants For Services Increase (Decrease) in Deferred Revenue Increase (Decrease) in Prepaid Expense Increase (Decrease) in Accounts Payable and Accrued Liabilities Net Cash Provided by (Used in) Continuing Operations IncreaseDecreaseInDiscontinuedOperationAccountsPayableAndAccruedLiabilities Net Cash Provided by (Used in) Discontinued Operations Net Cash Provided by (Used in) Operating Activities Payments to Acquire Property, Plant, and Equipment Payments for Derivative Instrument, Investing Activities Payments for (Proceeds from) Businesses and Interest in Affiliates Net Cash Provided by (Used in) Investing Activities, Continuing Operations Net Cash Provided by (Used in) Investing Activities Repayments of Notes Payable Net Cash Provided by (Used in) Financing Activities, Continuing Operations Net Cash Provided by (Used in) Financing Activities Cash and Cash Equivalents, Period Increase (Decrease) Fair Value Assumptions, Risk Free Interest Rate Fair Value Assumptions, Expected Volatility Rate Royalty Expense Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value Sale of Stock, Consideration Received on Transaction Disposal Group, Including Discontinued Operation, Prepaid and Other Assets Disposal Group, Including Discontinued Operation, Accounts Payable and Accrued Liabilities Disposal Group, Including Discontinued Operation, General and Administrative Expense EX-101.PRE 10 allm-20180331_pre.xml XBRL PRESENTATION FILE XML 11 R1.htm IDEA: XBRL DOCUMENT v3.8.0.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2018
May 11, 2018
Document And Entity Information    
Entity Registrant Name ALLIANCE BIOENERGY PLUS, INC.  
Entity Central Index Key 0001549145  
Document Type 10-Q  
Document Period End Date Mar. 31, 2018  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   130,749,566
Trading Symbol ALLM  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2018  
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.8.0.1
Consolidated Balance Sheets (Unaudited) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Current assets    
Cash and cash equivalents $ 63,985 $ 55,076
Prepaid expenses 337,364 429,242
TOTAL CURRENT ASSETS 401,349 484,318
PROPERTY AND EQUIPMENT, AT COST, NET OF ACCUMULATED DEPRECIATION OF $136,915 AND $219,228 AT MARCH 31, 2018 AND DECEMBER 31, 2017, RESPECTIVELY 176,200 177,304
Other assets    
Security deposits 8,400 21,705
Capitalized costs 231,553 253,261
Investment in and advances to an unconsolidated affiliate 3,739,352 3,653,270
TOTAL OTHER ASSETS 3,979,305 3,928,236
TOTAL ASSETS 4,556,854 4,589,858
Current liabilities    
Accounts payable and accrued liabilities 681,239 483,120
Unearned revenue 60,000
Short term note payable – Related party 2,173,126 2,073,126
Short term note payable – Other 96,570 96,570
Convertible debentures payable – Other, net of discount of $127,313 and $138,800 519,163 548,883
Interest payable – Related party 223,102 192,606
Interest payable – Other 126,056 144,386
Derivative liabilities 20,000 234,754
Current liabilities of discontinued operations 36,148 36,148
TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES 3,935,404 3,809,593
STOCKHOLDER’S 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; 129,396,233 shares issued and outstanding at March 31, 2018 and 97,540,888 shares issued and outstanding at December 31, 2017 129,396 97,541
Additional paid-in capital 37,857,626 36,767,654
Accumulated deficit (37,365,572) (36,084,930)
TOTAL STOCKHOLDER’S EQUITY 621,450 780,265
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY $ 4,556,854 $ 4,589,858
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.8.0.1
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Accumulated depreciation and amortization on property and equipment $ 136,915 $ 219,228
Convertible debentures payable, discount $ 127,313 $ 138,800
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 129,396,233 97,540,888
Common stock, shares outstanding 129,396,233 97,540,888
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.8.0.1
Consolidated Statement of Operations (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Income Statement [Abstract]    
Revenue:
Operating expenses:    
General and administrative 623,387 618,454
Research and development 112,881 195,730
Total operating expenses 736,268 814,184
Loss from operations: (736,268) (814,184)
Other (income) expense:    
Equity loss in an unconsolidated affiliate 9,353 49,101
Loss on extinguishment of debt 17,150
Change in fair value of derivative liabilities 207,931 (477,000)
Sale of an asset (3,152)
Interest expense – related party 30,496 30,523
Interest expense and prepayment penalties – other 272,596 94,716
Total other income (expense) (544,374) 302,660
Loss from continuing operations: (1,280,642) (511,524)
Discontinued operations:    
Loss from discontinued operations  
Income gain from discontinued operations:  
Net loss: $ (1,280,642) $ (511,524)
Basic and diluted net loss per share:    
Continuing operations $ (0.01) $ (0.01)
Discontinued operations
Net loss per share: $ (0.01) $ (0.01)
Weighted average common shares outstanding:    
Basic and Diluted 121,592,310 72,151,042
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.8.0.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Cash flows from operating activities    
Net loss from continuing operations $ (1,280,642) $ (511,524)
Net income (loss) from discontinued operations
Net loss (1,280,642) (511,524)
Reconciliation of net loss to net cash used in operating activities    
Depreciation and amortization 8,325 18,809
Capitalized fees 21,708
Amortization of non-cash compensation 98,590 156,816
Extinguishment of debt 17,150
Change in fair value of derivative liabilities 207,931 (477,000)
Stock based compensation for services 90,791 28,016
Issuance of warrants for services 1,498 23,404
Issuance of options awarded under employee, director plan 20,000 30,000
Equity loss in an unconsolidated affiliate 9,353 49,101
Unearned revenue 60,000
Changes in operating assets and liabilities    
Prepaid expenses (6,712) (14,855)
Accrued interest - other 182,810 94,716
Accounts payable and accrued liabilities 152,458 137,910
Net cash (used in) operating activities – continuing operations (406,740) (464,607)
Accounts payable and accrued liabilities
Net cash (used in) operating activities – discontinued operations
Net cash (used in) operating activities (406,740) (464,607)
Cash flows from investing activities    
Purchase of property and equipment (15,221) (8,000)
Security deposits 13,305
Investment in and advances to an unconsolidated affiliate (105,435) (94,159)
Net cash (used in) investing activities – continuing operations (107,351) (102,159)
Net cash (used in) investing activities – discontinued operations
Net cash (used in) investing activities (107,351) (102,159)
Cash flows from financing activities    
Proceeds from issuance of common stock 300,000 102,500
Proceeds from issuance of convertible debt 326,000 417,000
Proceeds from sale of an asset 8,000
Proceeds from short-term note payable – related party 100,000 20,000
Repayment of convertible debt (211,000)
Repayment of short-term note payable – related party   (20,000)
Net cash provided by financing activities – continuing operations 523,000 519,500
Net cash provided by financing activities – discontinued operations
Net cash provided by financing activities 523,000 519,500
Net increase (decrease) in cash and cash equivalents 8,909 (47,266)
Cash and cash equivalent at beginning of the period 55,076 49,680
Cash and cash equivalent at end of the period 63,985 2,414
Cash paid during the period for    
Interest 76,158
Taxes
Supplemental schedule of non-cash activities    
Conversion of convertible debenture to common stock 611,038
Common stock issued as inducement for convertible debt 98,500 27,000
Warrants issued as inducement for convertible debt 33,265
Common stock issued for future services 83,334
Warrants issued for future services $ 11,702
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.8.0.1
Basis of Presentation
3 Months Ended
Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

NOTE 1 – BASIS OF PRESENTATION

 

The consolidated financial statements of the Company present the financial position, results of operations, and cash flows of Alliance Bioenergy Plus, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in comprehensive financial statements have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2017 derives from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

 

The consolidated financial statements as of and for the three months ended March 31, 2018 and 2017, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition and results of operations. The results of operations for the three months ended March 31, 2018 and 2017 are not necessarily indicative of the results to be expected for any other interim period or for the entire year.

XML 17 R7.htm IDEA: XBRL DOCUMENT v3.8.0.1
Going Concern
3 Months Ended
Mar. 31, 2018
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 $3,534,055 and may be unable to raise further equity. At March 31, 2018, the Company had incurred accumulated losses of $37,365,572, of which approximately $26,895,464 is non-cash, 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 $7,816,894 from inception through December 31, 2017 and an additional $300,000 in the three months ended March 31, 2018.

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

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 three months ended March 31, 2018, 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 three months ended March 31, 2018:

 

    01/02/18     02/01/18     03/01/18     03/29/18  
Risk-free interest rate     2.25 %     2.56 %     2.58 %     2.56 %
Expected life     5 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %
Expected volatility     133.20 %     141.65 %     146.21 %     147.73 %
ALLM common stock fair value   $ 0.01     $ 0.02     $ 0.04     $ 0.03  

 

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.

 

Research and Development

 

The Company expenses all research and development costs as incurred. For the periods ended March 31, 2018 and 2017, the amounts charged to research and development expenses were $112,881 and $195,730, respectively

 

Revenue Recognition

 

The Company follows FASB ASC 605 “Revenue Recognition” and recognizes revenue when it is realized or realizable and earned. The Company’s revenues will be derived principally from the sales of licensing agreements, royalties and eventually corporate owned plants. However, no sales have occurred through those revenue streams to date. The Company considers revenue realized or realizable and earned when all of the following criteria are met:

 

  1. persuasive evidence of an arrangement exists;
  2. the product has been shipped or the services have been rendered to the customer;
  3. the sales price is fixed or determinable; and,
  4. collectability is reasonably assured.

 

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.

 

Accounting for Derivative Instruments

 

The Company issues debentures where the number of shares into which a debenture can be converted is not fixed. For example, when a debenture converts at a discount to market based on the stock price on the date of conversion. In such instances, the embedded conversion option of the convertible debentures is bifurcated from the host contract and recorded at their fair value. In accounting for derivatives, the Company records a liability representing the estimated present value of the conversion feature considering the historic volatility of the Company’s stock, and a discount representing the imputed interest associated with the beneficial conversion feature. The discount is then amortized over the life of the debenture and the derivative liability is adjusted periodically according to stock price fluctuations. At the time of conversion, any remaining derivative liability is charged to additional paid-in capital. For purposes of determining derivative liability, the Company uses Black-Scholes modeling for computing historic volatility.

 

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.

 

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)

 

The Company used Level 3 inputs for its valuation methodology for the conversion option liability in determining the fair value using a Black-Scholes option-pricing model with the following assumption inputs:

 

      December 31, 2017       March 31, 2018  
Annual dividend yield     -       -  
Expected life (years)     0.50 – 0.10       0.10 – 0.30  
Risk-free interest rate     1.04% - 0.98 %     1.23% - 1.48 %
Expected volatility     22% - 156 %     21% - 163 %

 

    Fair Value Measurements at
December 31, 2017
Using Fair Value Hierarchy
 
    Level 1     Level 2     Level 3  
Liabilities                        
Embedded derivative liabilities – (Debenture)                     234,754  
Total                   $ 234,754  

 

    Fair Value Measurements at  
    March 31, 2018  
    Using Fair Value Hierarchy  
    Level 1     Level 2     Level 3  
Liabilities                        
Embedded derivative liabilities – (Debenture)                     20,000  
Total                   $ 20,000  

 

For the three months ended March 31, 2018, the Company recognized a loss of $207,931 on the change in fair value of its derivative liabilities. At March 31, 2018, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 825-10.

 

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 v3.8.0.1
Investment in Unconsolidated Affiliate
3 Months Ended
Mar. 31, 2018
Investments [Abstract]  
Investment in Unconsolidated Affiliate

NOTE 4 – INVESTMENT IN UNCONSOLIDATED AFFILIATE

 

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 and subsequently acquired the remaining 49% in 2016. 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.

 

The following is a condensed balance sheet of the unconsolidated affiliate as of March 31, 2018 and December 31, 2017 and a comparative statement of operations for the three months ending March 31, 2018 and 2017.

 

Condensed Balance Sheet of Non-Consolidated Affiliate

 

    March 31, 2018     December 31, 2017  
ASSETS                
Current Assets                
Cash and cash equivalents   $ 75     $ 100  
Prepaid royalties     35,000       -  
TOTAL ASSETS     35,075       100  
                 
LIABILITIES AND STOCKHOLDERS EQUITY                
Current Liabilities                
Accounts payable and accrued liabilities   $ 596,666     $ 629,681  
Interest payable     63,930       56,679  
Current notes payable     897,732       798,288  
TOTAL CURRENT LIABILITIES     1,558,328       1,484,648  
                 
STOCKHOLDER’S EQUITY                
Accumulated deficit     (1,523,253 )     (1,484,548 )
TOTAL EQUITY     (1,523,253 )     (1,484,548 )
                 
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY   $ 35,075     $ 100  

 

Condensed Statement of Operations of Non-Consolidated Affiliates

 

    Three Months Ended     Three Months Ended  
    March 31, 2018     March 31, 2017  
             
Revenues   $ -     $ -  
                 
Operating Expenses                
Royalties     17,500       17,500  
General and administrative     13,955       74,996  
Total operating expenses     (31,455 )     (92,496 )
                 
Other expenses                
Interest expense     7,250       5,705  
Total other expenses     (7,250 )     (5,705 )
                 
Loss from operations   $ (38,705 )   $ (98,201 )

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
Unearned Revenue
3 Months Ended
Mar. 31, 2018
Revenue Recognition and Deferred Revenue [Abstract]  
Unearned Revenue

NOTE 5 – UNEARNED REVENUE

 

In March 2018, the Company received a $60,000 nonrefundable deposit for a 60-day extension for a license agreement. This payment is to be applied towards the license agreement balance, if and when that agreement is finalized, otherwise the deposit will be earned as a penalty upon the expiration of the 60-day extension.

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
Debt
3 Months Ended
Mar. 31, 2018
Debt Disclosure [Abstract]  
Debt

NOTE 6 – 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 and are coming due June 1, 2018. As of March 31, 2018, 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 March 31, 2018, and December 31, 2017, the total interest accrued on the note was $17,021 and $16,146 respectively.

 

In July 2016, the Company issued six (6) short-term notes payable to related parties in conjunction with the Company’s acquisition of the remaining 49% of AMG Energy Group. These notes have a value of $2,002,126 and accrue interest at a rate of six percent (6%) per annum. As of March 31, 2018, and December 31, 2017, the total interest accrued on the notes was $206,081 and $176,460 respectively. All of the notes were due on August 4, 2017 and are currently in default.

 

In February 2018, the Company entered into a short-term loan with Steven Sadaka, with a principal balance of $100,000 due and payable on May 1, 2018. The note does not accrue interest, however the Company provided 2,000,000 inducement shares to secure the note. These inducement shares were valued at $84,000 and are being amortized over the life of the note. If the note is not repaid at maturity, then an additional 5,000,000 shares of common stock will be due.

 

Short Term Notes Payable – Other

 

In July 2016, the Company issued a short-term note payable to a third party in conjunction with the Company’s acquisition of the remaining 49% of AMG Energy Group. The note has a principal balance of $96,570 and accrues interest at a rate of six percent (6%) per annum. As of March 31, 2018 and December 31, 2017, the total interest accrued on the note was $10,017 and $8,588 respectively. The note was due on August 4, 2017 and is currently in default.

 

Convertible Debt

 

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 of the amount funded, totaling an aggregate value of $416,666. 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 holder’s consent. The note is convertible after 180 days at a 25% discount to the lowest trade price in the preceding 10 trading days. Per the warrant coverage feature, 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. The warrant agreement also contains a down-round ratchet provision allowing the holder to increase its warrant count. The number of warrants to issue is calculated by dividing the aggregate value by the lower of $0.30 or the lowest trade price in the 10 preceding trading days. As of December 31, 2017, JMJ Financial has converted $466,080 into 3,670,000 shares of common stock. In addition, JMJ Financial has exercised its warrant agreement ratchet rights, resulting in 3,067,668 warrants outstanding. As of December 31, 2017, the holder had exercised warrants to purchase 11,043 of Company common stock and exercised its cashless conversion feature on the remaining warrants resulting in 1,340,201 shares of common stock issued. As of March 31, 2018, and December 31, 2017, the conversion feature of this debenture carries a derivative liability of $20,000 and $20,000 respectively. This note is currently in default and is accruing compounding quarterly interest at a rate of eighteen percent (18%) per annum. This note is currently under a lock up / trickle out agreement.

 

In April 2017, the Company entered into a convertible debenture with Auctus Fund, LLC with a principal balance of $117,750 due and payable on or before December 22, 2017. The note carries an original issue discount of $17,750, accrues interest at a rate of 12% per annum and is convertible into the Company’s common stock at a 50% discount on the lowest trading price during the twenty-five trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting after 90 days to a maximum of 135% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In the year ended December 31, 2017, principal in the amount of $103,150 converted into 2,200,000 shares of common stock and in the three months ended March 31, 2018, the remaining principal and interest balance of $41,775 converted into 4,016,356 shares of common stock. This note has been fully converted.

 

In April 2017, the Company entered into a convertible debenture with EMA Financial, LLC with a principal balance of $150,000 due and payable on or before March 15, 2018. The note carries an original issue discount of $28,000, accrues interest at a rate of 10% per annum and is convertible into the Company’s common stock at a 35% discount on the lowest trading price during the 15 trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting after 90 days to a maximum of 130% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In the year ended December 31, 2017, principal in the amount of $125,641 converted into 3,750,000 shares of common stock and in the three months ended March 31, 2018, the remaining principal and interest balance of $35,962 converted into 3,706,178 shares of common stock. This note has been fully converted.

 

In May 2017, the Company entered into a convertible debenture with Crown Bridge Partners, LLC with a principal balance of $58,000 due and payable on or before May 4, 2018. The note carries an original issue discount of $9,500, accrues interest at a rate of 10% per annum and is convertible into the Company’s common stock at a 40% discount on the lowest trading price during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 135% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In the year ended December 31, 2017, principal in the amount of $38,124 converted into 1,710,000 shares of common stock and in the three months ended March 31, 2018, the remaining principal and interest balance of $26,538 converted into 2,323,040 shares of common stock. This note has been fully converted.

 

In July 2017, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $110,000 due and payable on January 15, 2018. The note carries an 8% one-time interest charge, a $10,000 original issue discount and a 35% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 150,000 inducement shares to secure the note, and may have to provide additional shares on the note’s 6-month anniversary if the Company’s share price declines. These inducement shares were valued at $54,000 and are being amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due. In the three months ended March 31, 2018, the Company issued 2,040,600 shares of common stock due to a decline in the Company’s share price at the note’s 6-month anniversary date. Concurrently, the full principal and interest balance of $118,800 converted into 7,239,171 shares of common stock. This note has been fully converted.

 

In July 2017, the Company entered into a convertible debenture with Power Up Lending Group, Ltd. with a principal balance of $153,000 due and payable on or before April 30, 2018. The note carries an original issue discount of $3,000 and accrues interest at a rate of 8% per annum and is convertible into the Company’s common stock at a 39% discount on the average of the lowest three trading prices during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 130% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In January 2018, the Company paid the debenture in full with a payment of $206,267, which represented a principal payment of $153,000 and $53,267 in interest and penalties.

 

In August 2017, the Company entered into a convertible debenture with Crown Bridge Partners, LLC with a principal balance of $58,000 due and payable on or before August 2, 2018. The note carries an original issue discount of $7,000, accrues interest at a rate of 10% per annum and is convertible into the Company’s common stock at a 40% discount on the lowest trading price during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 135% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days. In January 2018, the Company paid the debenture in full with a payment of $80,890, which represented a principal payment of $58,000 and $22,890 in interest and penalties.

 

In November 2017, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $143,000 due and payable on May 30, 2018. The note carries an 8% one-time interest charge, a $43,000 original issue discount and a 35% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 500,000 inducement shares to secure the note, and may have to provide additional shares on the note’s 6-month anniversary if the Company’s share price declines. These inducement shares were valued at $39,500 and are being amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due.

 

In December 2017, the Company entered into a convertible debenture with Power Up Lending Group, Ltd. with a principal balance of $63,000 due and payable on or before September 30, 2018. The note carries an original issue discount of $3,000 and accrues interest at a rate of 8% per annum and is convertible into the Company’s common stock at a 39% discount on the average of the lowest three trading prices during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 130% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days

 

In January 2018, the Company entered into a convertible debenture with Power Up Lending Group, Ltd. with a principal balance of $128,000 due and payable on or before October 20, 2018. The note accrues interest at a rate of eight percent (8.0%) per annum and is convertible into the Company’s common stock at a 39% discount, after 180 days, in whole or in part at the option of the holder. The note also carried a prepayment penalty, adjusting every 30 days to a maximum of one hundred thirty percent (130%) of the then outstanding principal and interest balance due, if the note is paid back within the first one hundred eighty (180) days.

 

In February 2018, the Company entered into a convertible debenture with Crown Bridge Partners, LLC with a principal balance of $58,000 due and payable on or before February 2, 2019. The note carries an original issue discount of $7,000, accrues interest at a rate of 10% per annum and is convertible into the Company’s common stock at a 40% discount on the lowest trading price during the ten trading days prior to conversion, after 180 days, in whole or in part at the option of the holder. The note also carries a prepayment penalty, adjusting every 30 days to a maximum of 135% of the then outstanding principal and interest balance due, if the note is paid back within the first 180 days.

 

In February 2018, the Company entered into a convertible debenture with Lucas Hoppel, with a principal balance of $165,000 due and payable on September 21, 2018. The note carries an 8% one-time interest charge, a $15,000 original issue discount and a 40% conversion discount to the lowest trade price in the prior twenty-five trading days, after 180 days, in whole or in part at the option of the holder. In addition, the Company provided 500,000 inducement shares to secure the note. These inducement shares were valued at $14,500 and are being amortized over the life of the note. The note can be repaid, without prepayment penalties, within the first 90 days. Thereafter, the note will incur a 120% prepayment penalty of the then outstanding principal and interest due.

 

Derivative Liabilities

 

The embedded conversion features of the above convertible notes payable contain discounted conversion prices and should be recognized as derivative instruments. Such embedded conversion features should be bifurcated and accounted for at fair value. As of the three months ended March 31, 2018 and the year ended December 31, 2017, the Company had a derivative liability balance of $20,000 and $234,754, respectively. The Company uses the Black-Scholes option-pricing model to calculate derivate liability.

 

Fair Value of Embedded Derivative Liabilities:  
       
December 31, 2016   $ 914,000  
Addition     656,119  
Converted     (2,189,373 )
Change in fair value     854,008  
As of December 31, 2017   $ 234,754  
Addition     -  
Converted     (422,685 )
Changes in fair value     207,931  
As of March 31, 2018   $ 20,000  

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2018
Equity [Abstract]  
Stockholders' Equity

NOTE 7 – STOCKHOLDERS’ EQUITY

 

The total number of shares of capital stock, which the Company has authority to issue, is 510 million, 500 million of which are designated as common stock at $0.001 par value (the “Common Stock”) and 10 million of which are designated as preferred stock par value $0.001 (the “Preferred Stock”). As of March 31, 2018, the Company had 129,396,233 shares of Common Stock issued and outstanding and no shares of Preferred Stock were issued. Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend. The Company has yet to designate any rights, preferences and privileges for any of its authorized Preferred Stock.

 

In January 2018, The Company commenced a new offering of units valued at $0.03 per share. Each unit consists of one share of common stock. Through the date of filing, the Company has sold 10,000,000 units for aggregate proceeds of $300,000.

 

In the three months ended March 31, 2018, the Company issued an aggregate of 2,070,600 shares of its common stock for services valued at $90,791.

 

In the three months ended March 31, 2018, the Company issued an aggregate of 2,500,000 shares of common stock valued at $98,500 as inducements to secure convertible debt notes.

 

In the three months ended March 31, 2018, principal and interest in the amount of $223,075 was converted into 17,284,745 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 conversion, 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 $387,963 was attributed to the beneficial conversion features.

 

In the three months ended March 31, 2018, the Company issued an aggregate of 60,000 warrants for services. Using a Black-Scholes asset-pricing model, these warrants were valued at $1,498. These warrant agreements have terms of five years with exercise prices $0.25 per share.

 

In the three months ended March 31, 2018, the Company issued options under its Employee & Directors Stock Option Plan to purchase an aggregate of 604,942 shares of common stock for a period of five years at an exercise price ranging from $0.04. Using a Black-Scholes asset-pricing model, these agreements were valued at $20,000.

 

In the three months ended March 31, 2018, 168,184 options under the Employee & Director Stock Option Plan expired. In addition, 843,851 Class A and 843,851 Class B warrants also expired.

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2018
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 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 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 Royal Palm Beach, FL, which serves as the Company’s research and demonstration facility. The lease period is for thirty-six (36) months from December 1, 2017 through January 31, 2020. Annual rent commences at approximately $32,400 per annum and increases on a year-to-year basis by three percent (3.0%) over the prior year.

 

Rent expense for the three months ended March 31, 2018 and March 31, 2017 were $30,397 and $32,071 respectively.

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Related Party Transactions
3 Months Ended
Mar. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 9 – RELATED PARTY TRANSACTIONS

 

Related Transactions

 

  1. Short-term notes payable and convertible notes issued to related parties are described in NOTE 5.
     
  2. In December 2017, EK Laboratories rented office and warehouse space from Royal Palm Dev I, LLC, a company owned by Joe Walsh who is a greater than 10% shareholder of the Company.

 

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 v3.8.0.1
Discontinued Operations
3 Months Ended
Mar. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

NOTE 10 – DISCONTINUED OPERATIONS

 

On September 1, 2014, the Company decided to focus on its renewable energy holdings and future energy technologies, and to divest itself of its entertainment-related assets and subsidiaries. The Company made this decision because the entertainment business was no longer commercially viable, whereas the energy business represented a better economic opportunity. Specifically, the Board decided to discontinue 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 Co.); 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.

 

    March 31, 2018     December 31, 2017  
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
March 31, 2018
      Three Months Ended
March 31, 2017
 
Major line items constituting pretax profit (loss) of discontinued operations                
Revenue     -       -  
Selling, general and administrative     -       -  
Gain (Loss) from discontinued operations   $ -     $ -  

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.8.0.1
Subsequent Events
3 Months Ended
Mar. 31, 2018
Subsequent Events [Abstract]  
Subsequent Events

NOTE 11 – SUBSEQUENT EVENTS

 

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

 

On April 18, 2018, the Board of Directors appointed Gerry David as the third independent board member.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
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 three months ended March 31, 2018, 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 three months ended March 31, 2018:

 

    01/02/18     02/01/18     03/01/18     03/29/18  
Risk-free interest rate     2.25 %     2.56 %     2.58 %     2.56 %
Expected life     5 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %
Expected volatility     133.20 %     141.65 %     146.21 %     147.73 %
ALLM common stock fair value   $ 0.01     $ 0.02     $ 0.04     $ 0.03  

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.

Research and Development

Research and Development

 

The Company expenses all research and development costs as incurred. For the periods ended March 31, 2018 and 2017, the amounts charged to research and development expenses were $112,881 and $195,730, respectively

Revenue Recognition

Revenue Recognition

 

The Company follows FASB ASC 605 “Revenue Recognition” and recognizes revenue when it is realized or realizable and earned. The Company’s revenues will be derived principally from the sales of licensing agreements, royalties and eventually corporate owned plants. However, no sales have occurred through those revenue streams to date. The Company considers revenue realized or realizable and earned when all of the following criteria are met:

 

  1. persuasive evidence of an arrangement exists;
  2. the product has been shipped or the services have been rendered to the customer;
  3. the sales price is fixed or determinable; and,
  4. collectability is reasonably assured.

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.

Accounting for Derivative Instruments

Accounting for Derivative Instruments

 

The Company issues debentures where the number of shares into which a debenture can be converted is not fixed. For example, when a debenture converts at a discount to market based on the stock price on the date of conversion. In such instances, the embedded conversion option of the convertible debentures is bifurcated from the host contract and recorded at their fair value. In accounting for derivatives, the Company records a liability representing the estimated present value of the conversion feature considering the historic volatility of the Company’s stock, and a discount representing the imputed interest associated with the beneficial conversion feature. The discount is then amortized over the life of the debenture and the derivative liability is adjusted periodically according to stock price fluctuations. At the time of conversion, any remaining derivative liability is charged to additional paid-in capital. For purposes of determining derivative liability, the Company uses Black-Scholes modeling for computing historic volatility.

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.

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)

 

The Company used Level 3 inputs for its valuation methodology for the conversion option liability in determining the fair value using a Black-Scholes option-pricing model with the following assumption inputs:

 

      December 31, 2017       March 31, 2018  
Annual dividend yield     -       -  
Expected life (years)     0.50 – 0.10       0.10 – 0.30  
Risk-free interest rate     1.04% - 0.98 %     1.23% - 1.48 %
Expected volatility     22% - 156 %     21% - 163 %

 

    Fair Value Measurements at
December 31, 2017
Using Fair Value Hierarchy
 
    Level 1     Level 2     Level 3  
Liabilities                        
Embedded derivative liabilities – (Debenture)                     234,754  
Total                   $ 234,754  

 

    Fair Value Measurements at  
    March 31, 2018  
    Using Fair Value Hierarchy  
    Level 1     Level 2     Level 3  
Liabilities                        
Embedded derivative liabilities – (Debenture)                     20,000  
Total                   $ 20,000  

 

For the three months ended March 31, 2018, the Company recognized a loss of $207,931 on the change in fair value of its derivative liabilities. At March 31, 2018, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 825-10.

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 v3.8.0.1
Summary of Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2018
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 three months ended March 31, 2018:

 

    01/02/18     02/01/18     03/01/18     03/29/18  
Risk-free interest rate     2.25 %     2.56 %     2.58 %     2.56 %
Expected life     5 years       5 years       5 years       5 years  
Expected dividends     0 %     0 %     0 %     0 %
Expected volatility     133.20 %     141.65 %     146.21 %     147.73 %
ALLM common stock fair value   $ 0.01     $ 0.02     $ 0.04     $ 0.03  

Schedule of Fair Value Assumption Inputs

The Company used Level 3 inputs for its valuation methodology for the conversion option liability in determining the fair value using a Black-Scholes option-pricing model with the following assumption inputs:

 

      December 31, 2017       March 31, 2018  
Annual dividend yield     -       -  
Expected life (years)     0.50 – 0.10       0.10 – 0.30  
Risk-free interest rate     1.04% - 0.98 %     1.23% - 1.48 %
Expected volatility     22% - 156 %     21% - 163 %

Schedule of Fair Value Measured on Recurring Basis

    Fair Value Measurements at
December 31, 2017
Using Fair Value Hierarchy
 
    Level 1     Level 2     Level 3  
Liabilities                        
Embedded derivative liabilities – (Debenture)                     234,754  
Total                   $ 234,754  

 

    Fair Value Measurements at  
    March 31, 2018  
    Using Fair Value Hierarchy  
    Level 1     Level 2     Level 3  
Liabilities                        
Embedded derivative liabilities – (Debenture)                     20,000  
Total                   $ 20,000  

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
Investment in Unconsolidated Affiliate (Tables)
3 Months Ended
Mar. 31, 2018
Investments [Abstract]  
Schedule of Condensed Balance Sheet of Non-consolidated Affiliates

Condensed Balance Sheet of Non-Consolidated Affiliate

 

    March 31, 2018     December 31, 2017  
ASSETS                
Current Assets                
Cash and cash equivalents   $ 75     $ 100  
Prepaid royalties     35,000       -  
TOTAL ASSETS     35,075       100  
                 
LIABILITIES AND STOCKHOLDERS EQUITY                
Current Liabilities                
Accounts payable and accrued liabilities   $ 596,666     $ 629,681  
Interest payable     63,930       56,679  
Current notes payable     897,732       798,288  
TOTAL CURRENT LIABILITIES     1,558,328       1,484,648  
                 
STOCKHOLDER’S EQUITY                
Accumulated deficit     (1,523,253 )     (1,484,548 )
TOTAL EQUITY     (1,523,253 )     (1,484,548 )
                 
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY   $ 35,075     $ 100  

Schedule of Condensed Statement of Operations of Non-consolidated Affiliates

Condensed Statement of Operations of Non-Consolidated Affiliates

 

    Three Months Ended     Three Months Ended  
    March 31, 2018     March 31, 2017  
             
Revenues   $ -     $ -  
                 
Operating Expenses                
Royalties     17,500       17,500  
General and administrative     13,955       74,996  
Total operating expenses     (31,455 )     (92,496 )
                 
Other expenses                
Interest expense     7,250       5,705  
Total other expenses     (7,250 )     (5,705 )
                 
Loss from operations   $ (38,705 )   $ (98,201 )

XML 30 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
Debt (Tables)
3 Months Ended
Mar. 31, 2018
Debt Disclosure [Abstract]  
Schedule Fair Value of Embedded Derivative Liabilities

Fair Value of Embedded Derivative Liabilities:  
       
December 31, 2016   $ 914,000  
Addition     656,119  
Converted     (2,189,373 )
Change in fair value     854,008  
As of December 31, 2017   $ 234,754  
Addition     -  
Converted     (422,685 )
Changes in fair value     207,931  
As of March 31, 2018   $ 20,000  

XML 31 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
Discontinued Operations (Tables)
3 Months Ended
Mar. 31, 2018
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.

 

    March 31, 2018     December 31, 2017  
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
March 31, 2018
      Three Months Ended
March 31, 2017
 
Major line items constituting pretax profit (loss) of discontinued operations                
Revenue     -       -  
Selling, general and administrative     -       -  
Gain (Loss) from discontinued operations   $ -     $ -  

XML 32 R22.htm IDEA: XBRL DOCUMENT v3.8.0.1
Going Concern (Details Narrative) - USD ($)
3 Months Ended 69 Months Ended 72 Months Ended
Mar. 31, 2018
Dec. 31, 2017
Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Working capital deficiency $ 3,534,055   $ 3,534,055
Accumulated losses 37,365,572 $ 36,084,930 37,365,572
Non-cash transaction amount     $ 26,895,464
Proceeds from issuance of stock $ 300,000 $ 7,816,894  
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Research and development expenses $ 112,881 $ 195,730
Change in fair value of derivative liabilities $ 207,931 $ (477,000)
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 v3.8.0.1
Summary of Significant Accounting Policies - Schedule of Black-Scholes Option Pricing Models for Warrant-based Stock Compensation (Details)
3 Months Ended
Mar. 31, 2018
$ / shares
01/02/18 [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 2.25%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 133.20%
ALLM common stock fair value $ 0.01
02/01/18 [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 2.56%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 141.65%
ALLM common stock fair value $ 0.02
03/01/18 [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 2.58%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 146.21%
ALLM common stock fair value $ 0.04
03/29/18 [Member]  
Warrant Based Stock Compensation [Line Items]  
Risk-free interest rate 2.56%
Expected life 5 years
Expected dividends 0.00%
Expected volatility 147.73%
ALLM common stock fair value $ 0.03
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies - Schedule of Fair Value Assumption Inputs (Details) - Level 3 [Member]
3 Months Ended 12 Months Ended
Mar. 31, 2018
Dec. 31, 2017
Annual dividend yield
Minimum [Member]    
Expected life (years) 1 month 6 days 6 months
Risk-free interest rate 1.23% 1.04%
Expected volatility 21.00% 22.00%
Maximum [Member]    
Expected life (years) 3 months 19 days 1 month 6 days
Risk-free interest rate 1.48% 0.98%
Expected volatility 163.00% 156.00%
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies - Schedule of Fair Value Measured on Recurring Basis (Details) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Total $ 20,000 $ 234,754
Level 1 [Member]    
Total
Level 2 [Member]    
Total
Level 3 [Member]    
Total 20,000 234,754
Debenture [Member] | Level 1 [Member]    
Embedded derivative liabilities
Debenture [Member] | Level 2 [Member]    
Embedded derivative liabilities
Debenture [Member] | Level 3 [Member]    
Embedded derivative liabilities $ 20,000 $ 234,754
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.8.0.1
Investment in Unconsolidated Affiliate (Details Narrative)
Dec. 31, 2016
Dec. 26, 2013
AMG Energy Group, LLC [Member]    
Subsidiary, Sale of Stock [Line Items]    
Ownership percentage 49.00%  
AMG Energy Group, LLC [Member]    
Subsidiary, Sale of Stock [Line Items]    
Entity interest percentage   51.00%
Carbolosic, LLC [Member]    
Subsidiary, Sale of Stock [Line Items]    
Entity interest percentage   50.00%
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.8.0.1
Investment in Unconsolidated Affiliate - Schedule of Condensed Balance Sheet of Non-consolidated Affiliates (Details) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Mar. 31, 2017
Dec. 31, 2016
Schedule of Investments [Line Items]        
Cash and cash equivalents $ 63,985 $ 55,076 $ 2,414 $ 49,680
TOTAL ASSETS 4,556,854 4,589,858    
Accounts payable and accrued liabilities 681,239 483,120    
Interest payable 223,102 192,606    
Accumulated deficit (37,365,572) (36,084,930)    
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 4,556,854 4,589,858    
Non Consolidated Affiliates [Member]        
Schedule of Investments [Line Items]        
Cash and cash equivalents 75 100    
Prepaid royalties 35,000    
TOTAL ASSETS 35,075 100    
Accounts payable and accrued liabilities 596,666 629,681    
Interest payable 63,930 56,679    
Current notes payable 897,732 798,288    
TOTAL CURRENT LIABILITIES 1,558,328 1,484,648    
Accumulated deficit (1,523,253) (1,484,548)    
TOTAL EQUITY (1,523,253) (1,484,548)    
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 35,075 $ 100    
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
Investment in Unconsolidated Affiliate - Schedule of Condensed Statement of Operations of Non-consolidated Affiliates (Details) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Schedule of Investments [Line Items]    
Revenues
General and administrative (623,387) (618,454)
Total operating expenses (736,268) (814,184)
Total other expenses (544,374) 302,660
Loss from operations (736,268) (814,184)
Non Consolidated Affiliates [Member]    
Schedule of Investments [Line Items]    
Revenues
Royalties 17,500 17,500
General and administrative 13,955 74,996
Total operating expenses (31,455) (92,496)
Interest expense 7,250 5,705
Total other expenses (7,250) (5,705)
Loss from operations $ (38,705) $ (98,201)
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.8.0.1
Unearned Revenue (Details Narrative) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Revenue Recognition and Deferred Revenue [Abstract]    
Nonrefundable deposit received $ 60,000
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.8.0.1
Debt (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 12 Months Ended
Feb. 28, 2018
Feb. 28, 2018
Jan. 31, 2018
Dec. 31, 2017
Nov. 30, 2017
Aug. 31, 2017
Jul. 31, 2017
May 31, 2017
Apr. 30, 2017
Apr. 25, 2016
Mar. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Jul. 31, 2016
Debt Instrument [Line Items]                            
Debt conversion converted instrument shares issued                     17,284,745      
Debt conversion amount                     $ 223,075      
Derivative liability       $ 234,754             20,000 $ 234,754    
Debt discount amount       $ 138,800             127,313 138,800    
AMG Energy Group, LLC [Member]                            
Debt Instrument [Line Items]                            
Ownership percentage                         49.00%  
Related Party [Member] | Short Term Notes Payable [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt                     $ 71,000      
Interest rate on notes payable                     5.00%      
Accrued interest                     $ 17,021 16,146    
Related Party [Member] | Short Term Notes Payable [Member] | AMG Energy Group, LLC [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt                           $ 2,002,126
Interest rate on notes payable                           6.00%
Accrued interest                     206,081 176,460    
Ownership percentage                           49.00%
Steven Sadaka [Member] | Short Term Loan [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt $ 100,000 $ 100,000                        
Steven Sadaka [Member] | Short Term Loan [Member] | Common Stock [Member]                            
Debt Instrument [Line Items]                            
Debt conversion converted instrument shares issued 5,000,000                          
Steven Sadaka [Member] | Short Term Loan [Member]                            
Debt Instrument [Line Items]                            
Debt conversion converted instrument shares issued 2,000,000                          
Debt conversion amount $ 84,000                          
Third Party [Member] | Short Term Notes Payable [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt                           $ 96,570
Interest rate on notes payable                           6.00%
Accrued interest                     $ 10,017 $ 8,588    
Ownership percentage                           49.00%
JMJ Financial [Member] | Convertible Debt [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt                   $ 555,556        
Interest rate on notes payable                   10.00% 18.00%      
Debt conversion converted instrument shares issued                       1,340,201    
Conversion description                   The note carries a 10% one-time interest charge, a 10% original issue discount, and a 75% warrant coverage of the amount funded, totaling an aggregate value of $416,666. 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 holder’s consent. The note is convertible after 180 days at a 25% discount to the lowest trade price in the preceding 10 trading days.        
Aggregate value of note                   $ 416,666        
Issuance of common stock purchase warrant                   1,388,886   11,043    
Term of warrant                   5 years        
Investment warrants, exercise price                   $ 0.30        
Common stock shares converted, value                     $ 466,080 $ 466,080    
Common stock shares converted                     3,670,000 3,670,000    
Warrant outstanding       3,067,668               3,067,668    
Derivative liability       $ 20,000             $ 20,000 $ 20,000    
Auctus Fund, LLC [Member] | Convertible Debt [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt                 $ 117,750          
Interest rate on notes payable                 12.00%          
Debt due date                 Dec. 22, 2017          
Debt conversion converted instrument shares issued                     4,016,356 2,200,000    
Debt conversion amount                     $ 41,775 $ 103,150    
Debt discount amount                 $ 17,750          
Discount rate                 50.00%          
Debt instrument outstanding, percentage                 135.00%          
EMA Financial, LLC [Member] | Convertible Debt [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt                 $ 150,000          
Interest rate on notes payable                 10.00%          
Debt due date                 Mar. 15, 2018          
Debt conversion converted instrument shares issued                     3,706,178 3,750,000    
Debt conversion amount                     $ 35,962 $ 125,641    
Debt discount amount                 $ 28,000          
Discount rate                 35.00%          
Debt instrument outstanding, percentage                 130.00%          
Crown Bridge Partners, LLC [Member] | Convertible Debt [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt $ 58,000 $ 58,000       $ 58,000   $ 58,000            
Interest rate on notes payable 10.00% 10.00%       10.00%   10.00%            
Debt due date   Feb. 02, 2019       Aug. 02, 2018   May 04, 2018            
Debt conversion converted instrument shares issued                     2,323,040 1,710,000    
Debt conversion amount                     $ 26,538 $ 38,124    
Debt discount amount $ 7,000 $ 7,000       $ 7,000   $ 9,500            
Discount rate   40.00%       40.00%   40.00%            
Debt instrument outstanding, percentage 135.00% 135.00%       135.00%   135.00%            
Repayment of debenture     $ 80,890                      
Debt principal payments     58,000                      
Interest and penalties     22,890                      
Lucas Hoppel [Member] | Convertible Debt [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt $ 165,000 $ 165,000     $ 143,000   $ 110,000              
Interest rate on notes payable 8.00% 8.00%     8.00%   8.00%              
Debt due date   Sep. 21, 2018     May 30, 2018   Jan. 15, 2018              
Debt conversion converted instrument shares issued             150,000       7,239,171      
Debt conversion amount             $ 54,000       $ 118,800      
Number of shares issued   500,000     500,000           2,040,600      
Number of shares issued, value   $ 14,500     $ 39,500                  
Debt discount amount $ 15,000 $ 15,000     $ 43,000   $ 10,000              
Discount rate   40.00%     35.00%   35.00%              
Debt instrument outstanding, percentage 120.00% 120.00%     120.00%   120.00%              
Power Up Lending Group, Ltd [Member] | Convertible Debt [Member]                            
Debt Instrument [Line Items]                            
Principal balance of debt     $ 128,000 $ 63,000     $ 153,000         $ 63,000    
Interest rate on notes payable     8.00% 8.00%     8.00%         8.00%    
Debt due date     Oct. 20, 2018 Sep. 30, 2018     Apr. 30, 2018              
Debt discount amount       $ 3,000     $ 3,000         $ 3,000    
Discount rate     39.00% 39.00%     39.00%              
Debt instrument outstanding, percentage     130.00% 130.00%     130.00%         130.00%    
Repayment of debenture     $ 206,267                      
Debt principal payments     153,000                      
Interest and penalties     $ 53,267                      
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.8.0.1
Debt - Schedule Fair Value of Embedded Derivative Liabilities (Details) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2018
Dec. 31, 2017
Debt Disclosure [Abstract]    
Derivative liabilities beginning balance $ 234,754 $ 914,000
Additions 656,119
Converted (422,685) (2,189,373)
Changes in fair value 207,931 854,008
Derivative liabilities ending balance $ 20,000 $ 234,754
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stockholders' Equity (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended
Jan. 31, 2018
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Related Party Transaction [Line Items]        
Number of shares authorized   510,000,000    
Common stock, shares authorized   500,000,000   500,000,000
Common stock, par value   $ 0.001   $ 0.001
Preferred stock, shares authorized   10,000,000   10,000,000
Preferred stock, par value   $ 0.001   $ 0.001
Common stock, shares issued   129,396,233   97,540,888
Common stock, shares outstanding   129,396,233   97,540,888
Preferred stock, shares issued   0   0
Sale of stock price per share $ 0.03      
Sale of stock, shares 10,000,000      
Proceeds from issuance of stock $ 300,000      
Issuance of common stock for services, shares   2,070,600    
Shares issued for services, value   $ 90,791    
Common stock issued as inducement for convertible debt, shares   2,500,000    
Common stock issued as inducement for convertible debt   $ 98,500 $ 27,000  
Debt conversion, amount   $ 223,075    
Debt conversion, shares   17,284,745    
Debt beneficial conversion features   $ 387,963    
Issuance of warrants for services, shares   60,000    
Issuance of warrants for services, value   $ 1,498    
Warrant term   5 years    
Warrant exercise price per share   $ 0.25    
Class A Warrant [Member]        
Related Party Transaction [Line Items]        
Number of warrants expired   843,851    
Class B Warrant [Member]        
Related Party Transaction [Line Items]        
Number of warrants expired   843,851    
Employee & Directors Stock Option Plan [Member]        
Related Party Transaction [Line Items]        
Stock option to purchase of common stock shares   604,942    
Stock option term   5 years    
Options exercise price   $ 0.04    
Agreement value of stock option   $ 20,000    
Number of options expired   168,184    
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments and Contingencies (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Operating Leased Assets [Line Items]    
Rent expense $ 30,397 $ 32,071
Office Lease [Member]    
Operating Leased Assets [Line Items]    
Term of lease 36 months  
Lease termination date Jul. 31, 2018  
Annual rent $ 48,925  
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]    
Term of lease 36 months  
Lease termination date Jan. 31, 2020  
Annual rent $ 32,400  
Percentage of increase in rent per year 3.00%  
Commitments description Annual rent commences at approximately $32,400 per annum and increases on a year-to-year basis by three percent (3.0%) over the prior year.  
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.8.0.1
Discontinued Operations - Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet Disclosures (Details) - USD ($)
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Discontinued Operations and Disposal Groups [Abstract]      
Prepaid expenses  
Total assets of the discontinued operation  
Accounts payable and accrued liabilities 36,148   36,148
Total liabilities of the discontinued operation 36,148   $ 36,148
Revenue  
Selling, general and administrative  
Gain (Loss) from discontinued operations  
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