Nevada
|
|
46-1845946
|
(State or other jurisdiction
of incorporation or organization)
|
|
IRS I.D.
|
808 A South Huntington Street
Syracuse, Indiana 46567
|
(Address of principal executive offices)
(800) 931 5662
(Registrant’s telephone number, including area code)
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
Emerging growth company ☐
|
PART I
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|
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Item 1.
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3
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|
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|
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Item 1A.
|
11
|
|
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Item 1B.
|
11
|
|
|
|
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Item 2.
|
11
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|
|
|
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Item 3.
|
11
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|
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|
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Item 4.
|
12
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|
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|
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PART II
|
|
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Item 5.
|
13
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|
|
|
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Item 6.
|
15
|
|
|
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Item 7.
|
15
|
|
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Item 7A.
|
20
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|
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Item 8.
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20
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|
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Item 9.
|
20
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|
|
|
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Item 9A.
|
21
|
|
|
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Item 9B.
|
22
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|
|
|
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PART III
|
|
|
Item 10.
|
23
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|
|
|
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Item 11.
|
27
|
|
|
|
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Item 12.
|
28
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|
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|
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Item 13.
|
29
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|
|
|
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Item 14.
|
29
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|
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PART IV
|
|
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Item 15.
|
30
|
|
|
|
|
|
|
|
50
|
1. |
There were 51,416,425 options to purchase common stock of the Company and 17,974,960 warrants to purchase common stock of the Company. There were no other options, warrants or other instruments convertible into equity of the Company; and
|
2. |
There were 232,624,960 shares of the Company’s common stock held by approximately 243 shareholders of record.
|
·
|
Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;
|
|
|
·
|
Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;
|
|
|
·
|
Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and
|
|
|
·
|
Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account.
|
Name
|
Age
|
Position
|
||
Richard Mikles
|
60
|
Chairman
|
||
David Baker
|
41
|
Director and Chief Executive Officer
|
||
Arthur Fillmore
|
69
|
Director and General Counsel
|
||
Kevin Harrington
|
61
|
Director
|
||
William McMahon
|
65
|
Director and Interim Chief Financial Officer
|
||
Jennifer Peek
|
48
|
Director and Audit Committee Chair
|
||
Nicole Strothman
|
39
|
Director
|
||
Name
|
|
Age
|
|
Position
|
Dave Baker
|
|
41
|
|
Chief Executive Officer
|
William McMahon
|
|
65
|
|
Interim Chief Financial Officer
|
Name
|
Position
|
Fees Earned or Paid in Cash
|
Option Awards
|
Stock Awards
|
All other Compensation
|
Total Compensation
|
||||||||||||||||
Richard Mikles
|
Chairman
|
$
|
250,577
|
$
|
672,800
|
$
|
923,377
|
|||||||||||||||
Arthur Fillmore
|
Director and General Counsel
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||
Kevin Harrington
|
Director
|
$
|
174,167
|
$
|
100,000
|
$
|
274,167
|
|||||||||||||||
Nicole Strothman
|
Director and Secretary
|
$
|
76,410
|
$
|
-
|
$
|
76,410
|
|||||||||||||||
Jennifer Peek
|
Audit Committee Chair
|
$
|
18,375
|
$
|
76,350
|
$
|
94,725
|
(1) |
Mr. Fillmore’s firm, AEGIS Professional Group, was granted 2,000,000 options to purchase shares of the Company’s common stock upon Mr. Fillmore’s appointment as director and General Counsel to the Company on December 31, 2016. These options have a strike price of $0.10 and an expiration of three years from the date of issue.
|
(2) |
Mr. Fillmore was granted 3,000,000 shares of Company common stock upon his appointment as director and General Counsel to the Company on December 31, 2016. These shares were valued at $120,000 ($0.04 per share, the closing price of the trading price on that date).
|
(3) |
Mr. Mikles was granted 3,000,000 shares of Company common stock upon his appointment as Chairman of the Board and 2,000,000 shares of Company common stock upon the execution of his consulting agreement. These shares were valued at $500,000 ($0.10 per share, the closing price of the trading price on that date).
|
(4) |
Mr. Mikles was granted 9,000,000 options to purchase share of the Company’s common stock, upon Mr. Mikles appointment as Chairman of the Board and upon the execution of his consulting agreement. 4,000,000 options have a strike price of $0.10 per share and vest equally over 8 quarters and have an expiration of three years from the date of issue. 5,000,000 options have a strike price of $0.10 per shares and vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company and an expiration of three years from the date of issue. On July 13, 2017, the Company amended and extended a consulting agreement, originally executed on January 23, 2017. Under the amended and extended agreement, the Company issued 1,6000,000 shares of common stock to Mr. Mikles, valued at its trading price of $0.11 per share, which vested immediately.
|
(5) |
Mr. Harrington was issued 2,000,000 shares of Company common stock upon his appointment as director on January 27, 2017. These shares were valued at $100,000 ($0.10 per share, the closing price of the trading price on that date).
|
(6) |
Mr. Harrington was granted 4,000,000 options to purchase shares of the Company’s common stock. These options have a strike price of $0.10 per share and vest equally over 8 quarters and have an expiration of three years from the date of issue.
|
(7) |
On February 2, 2017, upon the execution of a consulting agreement, Nicole Strothman, through Venture Legal Services PLC, was granted 2,000,000 options to purchase shares of the Company’s common stock. These options have a strike price of $0.10 per shares and vest quarterly one option for every two dollars of revenue recognized by the Company and an expiration of three years from the date of issue.
|
(8) |
On September 19, 2017, the Company appointed Jennifer Peek to its Board of Directors and as its Audit Committee chair. Ms. Peek was granted 1,500,000 shares of Company common stock. These shares were valued at $0.0509, the closing trading price on that date.
|
(9) |
Ms. Peek was also granted 1,500,000 options to purchase shares of common stock of the Company at a price of $0.10 per share. The options vest equally over 8 quarters and have an expiration of three years from the date of issue.
|
Name
|
Position
|
Year
|
Salary
|
Bonus
|
Option Award
|
Stock Grants
|
Total Compensation
|
|||||||||||||||||
Christopher J. Floyd
|
CEO, CFO
|
2016
|
17,000.00
|
17,000.00
|
||||||||||||||||||||
2017
|
70,329.00
|
269,700.00
|
340,029.00
|
|||||||||||||||||||||
David J. Baker
|
COO, CEO
|
2016
|
23,077.00
|
10,000.00
|
275,000.00
|
300,500.00
|
608,577.00
|
|||||||||||||||||
2017
|
102,493.67
|
40,000.00
|
69,866.00
|
500,000.00
|
712,359.67
|
|||||||||||||||||||
Ryan Smith
|
COO
|
2016
|
-
|
|||||||||||||||||||||
2017
|
51,881.81
|
56,250.00
|
300,000.00
|
408,131.81
|
(1) |
Mr. Baker received a grant of 5,000,000 options to purchase shares of common stock of the Company in conjunction with his employment agreement. These options have a strike price of $0.10 per share and a three year expiration.
|
(2) |
Mr. Baker received a grant of 500,000 shares of the Company’s common stock upon executing his employment agreement on September 28, 2016. These shares were valued at $30,500 ($0.061 per share, the closing price of the trading price on that date). Mr. Baker received a grant of 4,500,000 shares of the Company’s common stock upon his promotion to Chief Operating Officer on December 1, 2016. These shares were valued at $270,000 ($0.060 per share, the closing price of the trading price on that date).
|
(3) |
On May 15, 2017, Mr. Baker was granted 5,000,000 shares of common stock of the Company in conjunction with his employment as Chief Executive Officer of the Company.
|
(4) |
Mr. Baker was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one options for every two dollars of revenue recognized by the Company and have an expiration of three years from the date of issue.
|
(5) |
On July 10, 2017, Mr. Smith entered into an employment agreement with the Company as Senior Vice President. He was granted 3,000,000 shares of common stock of the Company.
|
(6) |
Mr. Smith was granted 7,000,000 options to purchase common stock of the Company at $0.10 per shares. The options have a three-year expiration and vest quarterly one options for every two dollars of revenue recognized by the Company.
|
Number of
|
Total
|
|||||||||||||||
Name and Address
|
Shares
|
Outstanding
|
Beneficial
|
Percent of
|
||||||||||||
of Beneficial Owner
|
Owned
|
Options Owned
|
Ownership
|
Class
|
||||||||||||
Dave Baker
|
20,000,000
|
10,000,000
|
30,000,000
|
13.10
|
%
|
|||||||||||
Chief Executive Officer
|
||||||||||||||||
Syracuse, IN
|
||||||||||||||||
B2 Opportunity Fund
|
18,124,614
|
-
|
18,124,614
|
7.91
|
%
|
|||||||||||
Las Vegas, NV
|
||||||||||||||||
C&M Baskin Investments, Inc.
|
17,448,335
|
-
|
17,448,335
|
7.62
|
%
|
|||||||||||
Livingston, TX
|
||||||||||||||||
David J. Miller
|
11,766,495
|
-
|
11,766,495
|
5.14
|
%
|
|||||||||||
Fountain Hills, AZ
|
||||||||||||||||
Richard Mikles
|
8,800,000
|
9,000,000
|
17,800,000
|
7.77
|
%
|
|||||||||||
Chairman and Director
|
||||||||||||||||
Homes Beach, FL
|
||||||||||||||||
Arthur Fillmore
|
3,000,000
|
666,666
|
3,666,666
|
0.016
|
% | |||||||||||
General Counsel and Director
|
||||||||||||||||
Ryan Smith
|
3,000,000
|
7,000,000
|
10,000,000
|
4.37
|
%
|
|||||||||||
Larwill, IN
|
||||||||||||||||
Kevin Harrington
|
2,000,000
|
4,000,000
|
6,000,000
|
2.62
|
%
|
|||||||||||
St. Petersburg, FL
|
||||||||||||||||
Venture Legal Services PLLC
|
333,333
|
2,000,000
|
2,333,333
|
1.02
|
%
|
|||||||||||
Tampa, FL
|
||||||||||||||||
Jennifer Peek
|
1,500,000
|
1,500,000
|
3,000,000
|
1.31
|
%
|
|||||||||||
Kansas City, MO
|
||||||||||||||||
Officers & Directors
|
18,633,333
|
24,166,666
|
42,799,999
|
18.69
|
%
|
|||||||||||
As a Group
|
CONTENTS:
|
|
|
|
31
|
|
|
|
33
|
|
|
|
34
|
|
|
|
35
|
|
|
|
36
|
|
|
|
37
|
|
December 31,
|
|||||||
|
2017
|
2016
|
||||||
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
$
|
116,481
|
$
|
40,507
|
||||
Accounts receivable, net
|
112,818
|
79,612
|
||||||
Prepaid expenses
|
35,365
|
3,750
|
||||||
Inventory
|
444,606
|
192,105
|
||||||
Total current assets
|
709,270
|
315,974
|
||||||
|
||||||||
Building, equipment and furniture, net
|
364,093
|
2,567
|
||||||
Intangible assets, net
|
1,845
|
1,845
|
||||||
|
||||||||
TOTAL ASSETS
|
$
|
1,075,208
|
$
|
320,386
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$
|
431,267
|
$
|
284,930
|
||||
Accrued expenses
|
179,628
|
139,336
|
||||||
Customer deposits
|
39,453
|
6,605
|
||||||
Advances
|
-
|
60,000
|
||||||
Loan, building
|
225,000
|
-
|
||||||
Loans from related parties
|
171,518
|
135,749
|
||||||
Total current liabilities
|
1,046,866
|
626,620
|
||||||
|
||||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
|
||||||||
STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
Preferred stock, $0.0001 par value, 100,000,000
authorized shares; no shares issued and outstanding
|
-
|
-
|
||||||
Common stock, $0.0001 par value; 500,000,000 shares
authorized; 230,724,960 and 193,150,000 shares issued and
227,624,960 and 193,150,000 shares outstanding at December 31, 2017 and December 31, 2016, respectively
|
23,072
|
19,315
|
||||||
Additional paid-in-capital
|
12,444,488
|
7,626,099
|
||||||
Accumulated deficit
|
(12,439,218
|
)
|
(7,951,648
|
)
|
||||
Total stockholders’ equity (deficit)
|
28,342
|
(306,234
|
)
|
|||||
|
||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
$
|
1,075,208
|
$
|
320,386
|
|
For the Year Ended
|
|||||||
|
December 31,
|
December 31,
|
||||||
|
2017
|
2016
|
||||||
|
||||||||
Revenue
|
$
|
1,225,867
|
$
|
196,828
|
||||
Cost of revenue
|
980,996
|
151,546
|
||||||
Gross profit
|
244,871
|
45,282
|
||||||
|
||||||||
Selling, general and administrative expenses
|
4,138,249
|
1,033,595
|
||||||
|
||||||||
Loss from operations
|
(3,893,378
|
)
|
(988,313
|
)
|
||||
|
||||||||
Other income (expense)
|
||||||||
Other income
|
-
|
7,137
|
||||||
Interest (expense)
|
(594,192
|
)
|
-
|
|||||
Total other income (expense)
|
(594,192
|
)
|
7,137
|
|||||
|
||||||||
Provision for income taxes
|
-
|
-
|
||||||
|
||||||||
Net loss
|
$
|
(4,487,570
|
)
|
$
|
(981,176
|
)
|
||
|
||||||||
Net loss per common share - basic and diluted
|
$
|
(0.02
|
)
|
$
|
(0.00
|
)
|
||
|
||||||||
Weighted average number of shares outstanding
during the year - basic and diluted
|
214,644,216
|
197,543,151
|
|
Total
|
|||||||||||||||||||
|
Additional
|
Stockholders’
|
||||||||||||||||||
|
Common Stock
|
Paid in
|
Accumulated
|
Equity
|
||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit
|
(Deficit)
|
|||||||||||||||
|
||||||||||||||||||||
Balance at December 31, 2015
|
330,000,000
|
$ |
33,000
|
$ |
7,897,200
|
$ |
(6,970,472
|
)
|
$ |
959,728
|
||||||||||
|
||||||||||||||||||||
(149,950,000
|
)
|
(14,995
|
)
|
(1,004,897
|
)
|
-
|
(1,019,892
|
)
|
||||||||||||
|
||||||||||||||||||||
Contributed services
|
-
|
-
|
10,760
|
-
|
10,760
|
|||||||||||||||
|
||||||||||||||||||||
Shares issued for services
|
13,100,000
|
1,310
|
925,190
|
-
|
926,500
|
|||||||||||||||
|
||||||||||||||||||||
Deferred compensation
|
-
|
-
|
(208,333
|
)
|
-
|
(208,333
|
)
|
|||||||||||||
|
||||||||||||||||||||
Stock options
|
-
|
-
|
6,180
|
-
|
6,180
|
|||||||||||||||
|
||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(981,176
|
)
|
(981,176
|
)
|
|||||||||||||
|
||||||||||||||||||||
Balance at December 31, 2016
|
193,150,000
|
|
19,315
|
|
7,626,099
|
|
(7,951,648
|
)
|
|
(306,234
|
)
|
|||||||||
Warrants issued with debt
|
-
|
-
|
97,417
|
-
|
97,417
|
|||||||||||||||
|
||||||||||||||||||||
Shares and options issued for services
|
22,650,000
|
2,265
|
3,084,006
|
-
|
3,086,271
|
|||||||||||||||
506b Offering
|
||||||||||||||||||||
Stock and warrants issued for cash
|
10,600,000
|
1,059
|
793,941
|
795,000
|
||||||||||||||||
Stock and warrants issued for debt conversion
|
4,324,960
|
433
|
843,025
|
843,458
|
||||||||||||||||
Net loss
|
-
|
-
|
-
|
(4,487,570
|
)
|
(4,487,570
|
)
|
|||||||||||||
Balance at December 31, 2017
|
230,724,960
|
$
|
23,072
|
$
|
12,444,488
|
$
|
(12,439,218
|
)
|
$
|
28,342
|
|
For the Year Ended
|
|||||||
|
December 31,
|
December 31,
|
||||||
|
2017
|
2016
|
||||||
|
||||||||
CASH FLOWS USED IN OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(4,487,570
|
)
|
$
|
(981,176
|
)
|
||
Adjustments to reconcile net loss to net cash
used in operating activities:
|
||||||||
Depreciation and amortization
|
11,025
|
2,732
|
||||||
Common stock and options issued for services
|
3,086,271
|
724,347
|
||||||
Common stock and warrants issued for interest
|
588,273
|
-
|
||||||
Contributed services
|
-
|
10,760
|
||||||
Accounts receivable
|
(80,983
|
)
|
(79,612
|
)
|
||||
Inventory
|
(252,501
|
)
|
(192,104
|
)
|
||||
Prepaid expenses
|
(31,615
|
)
|
(3,750
|
)
|
||||
Accounts payable & accrued expenses
|
200,754
|
365,399
|
||||||
Customer deposits
|
32,848
|
6,605
|
||||||
Net cash used in operating activities
|
(933,498
|
)
|
(146,799
|
)
|
||||
|
||||||||
CASH FLOWS USED IN INVESTING ACTIVITIES:
|
||||||||
Purchase of fixed assets
|
(99,774
|
)
|
(2,800
|
)
|
||||
Net cash used in investing activities
|
(99,774
|
)
|
(2,800
|
)
|
||||
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from common stock
|
795,000
|
-
|
||||||
Advances from third parties
|
(60,000
|
)
|
60,000
|
|||||
Proceeds from advances from related parties
|
374,246
|
128,827
|
||||||
Net cash provided by financing activities
|
1,109,246
|
188,827
|
||||||
|
||||||||
INCREASE IN CASH
|
75,974
|
39,228
|
||||||
|
||||||||
CASH, BEGINNING OF YEAR
|
40,507
|
1,279
|
||||||
|
||||||||
CASH, END OF YEAR
|
$
|
116,481
|
$
|
40,507
|
Supplemental Disclosures
|
||||||||
Interest paid in cash for the period
|
$
|
-
|
$
|
-
|
||||
Income taxes paid in cash for the period
|
$
|
-
|
$
|
-
|
||||
|
||||||||
Non-cash investing and financing activities:
|
||||||||
Warrants issued with debt
|
$
|
97,417
|
$
|
-
|
||||
Purchase of building with note
|
$
|
225,000
|
$
|
-
|
||||
Repayment of debt with common stock and options
|
$
|
843,458
|
$
|
-
|
||||
Purchase of recreational vehicle in exchange for receivable payment
|
$
|
47,776
|
||||||
Transfer of assets and liabilities to related party for return of common shares
|
$
|
-
|
$
|
1,019,892
|
|
December 31, 2017
|
December 31, 2016
|
||||||
Loans with related parties:
|
||||||||
Znergy, Inc. officers and stockholders
|
$
|
171,518
|
$
|
135,749
|
|
December 31, 2017
|
December 31, 2016
|
||||||||||||||
|
Number of Options
|
Weighted Average
Exercise Price
|
Number of Options
|
Weighted Average
Exercise Price
|
||||||||||||
|
||||||||||||||||
Options outstanding at beginning of year
|
2,400,000
|
$
|
0.10
|
-
|
$
|
0.10
|
||||||||||
Changes during the year:
|
||||||||||||||||
Granted - at market price
|
13,000,000
|
$
|
0.10
|
2,400,000
|
$
|
0.10
|
||||||||||
Exercised
|
-
|
-
|
||||||||||||||
Forfeited
|
1,000,000
|
$
|
0.10
|
-
|
$
|
0.10
|
||||||||||
Options outstanding at end of year
|
14,400,000
|
$
|
0.10
|
2,400,000
|
$
|
0.10
|
||||||||||
Options exercisable at end of year
|
6,675,002
|
$
|
0.10
|
-
|
$
|
0.10
|
||||||||||
Weighted average fair value of options granted during the year
|
$
|
1,087,000
|
$
|
0.10
|
$
|
100,800
|
$
|
0.10
|
|
December 31, 2017
|
December 31, 2016
|
||||||||||||||
|
Number of Options
|
Weighted Average
Exercise Price
|
Number of Options
|
Weighted Average
Exercise Price
|
||||||||||||
|
||||||||||||||||
Options outstanding at beginning of year
|
5,000,000
|
$
|
0.10
|
-
|
$
|
0.10
|
||||||||||
Changes during the year:
|
||||||||||||||||
Granted - at market price
|
35,800,000
|
$
|
0.10
|
5,000,000
|
$
|
0.10
|
||||||||||
Exercised
|
-
|
-
|
||||||||||||||
Expired/Forfeit
|
9,458,906
|
$
|
0.10
|
-
|
$
|
0.10
|
||||||||||
Options outstanding at end of year
|
31,341,094
|
$
|
0.10
|
5,000,000
|
$
|
0.10
|
||||||||||
Options exercisable at end of year
|
3,917,052
|
$
|
0.10
|
112,359
|
$
|
0.10
|
||||||||||
Weighted average fair value of options granted during the year
|
$
|
3,114,600
|
$
|
0.10
|
$
|
275,000
|
$
|
0.10
|
Non-exercisable options
|
||||||||
|
Number
Issued
|
Average
Exercise
Price
|
||||||
|
||||||||
Total non-exercisable options outstanding - December 31, 2016
|
7,287,641
|
|||||||
Options issued
|
48,800,000
|
0.10
|
||||||
Options expired
|
(10,346,547
|
)
|
0.10
|
|||||
Options cancelled
|
-
|
0.10
|
||||||
Options vested
|
(10,592,054
|
)
|
0.10
|
|||||
Total non-exercisable options outstanding - December 31, 2017
|
35,149,040
|
|
Weighted
|
|||||||
|
Number
|
Average
|
||||||
|
Of
|
Exercise
|
||||||
|
Warrants
|
Price
|
||||||
|
||||||||
Warrants outstanding at beginning of year
|
-
|
|||||||
Changes during the year:
|
||||||||
Granted
|
16,924,960
|
$
|
0.15
|
|||||
Exercised
|
-
|
|||||||
Expired
|
-
|
|||||||
Warrants outstanding at end of year
|
16,924,960
|
$
|
0.15
|
|||||
Warrants exercisable at end of year
|
16,924,960
|
Accumulated deficit
|
$
|
12,439,218
|
||
Shares and options issued for services
|
(4,418,951
|
)
|
||
Shares issued for purchased research in acquisition
|
(5,988,000
|
)
|
||
Operating loss available to offset income
|
$
|
2,032,267
|
Income Tax at Statutory Rate
|
34
|
%
|
||
Effect of Valuation Allowance
|
(34
|
%)
|
||
|
-
|
Exhibit No.
|
Description
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
31
|
|
|
|
32
|
|
|
|
101 INS
|
XBRL Instance Document*
|
|
|
101 SCH
|
XBRL Schema Document*
|
|
|
101 CAL
|
XBRL Calculation Linkbase Document*
|
|
|
101 DEF
|
XBRL Definition Linkbase Document*
|
|
|
101 LAB
|
XBRL Labels Linkbase Document*
|
|
|
101 PRE
|
XBRL Presentation Linkbase Document*
|
Dated: June 6, 2018
|
By: /s/ David Baker
|
|
David Baker
|
|
CEO and Director
|
|
(Principal Executive Officer)
|
|
|
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 the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
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.
|
Dated: June 6, 2018
|
By: /s/ David Baker
|
|
David Baker
Chief Executive Officer
(Principal Executive Officer)
|
Dated: June 6, 2018
|
By: /s/ David Baker
|
|
David Baker
|
|
Chief Executive Officer,
|
|
Document And Entity Information - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
May 25, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Znergy, Inc. | |
Document Type | 10-K | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 232,624,960 | |
Entity Public Float | $ 12,874,695 | |
Amendment Flag | false | |
Entity Central Index Key | 0001568875 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Preferred stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 230,724,960 | 193,150,000 |
Common stock, shares outstanding | 227,624,960 | 193,150,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenue | $ 1,225,867 | $ 196,828 |
Cost of revenue | 980,996 | 151,546 |
Gross profit | 244,871 | 45,282 |
Selling, general and administrative expenses | 4,138,249 | 1,033,595 |
Loss from operations | (3,893,378) | (988,313) |
Other income (expense) | ||
Other income | 0 | 7,137 |
Interest (expense) | (594,192) | 0 |
Total other income (expense) | (594,192) | 7,137 |
Provision for income taxes | 0 | 0 |
Net loss | $ (4,487,570) | $ (981,176) |
Net loss per common share - basic and diluted (in Dollars per share) | $ (0.02) | $ 0.00 |
Weighted average number of shares outstanding during the year - basic and diluted (in Shares) | 214,644,216 | 197,543,151 |
NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION Znergy, Inc., (formerly Mazzal Holding Corp., formerly Boston Investment and Development Corp.) is a Nevada corporation (the “Company”), incorporated on January 23, 2013. The original business plan of the Company was the construction and management of multi-family home developments and the subsequent sale thereof. On October 26, 2015 the Company acquired Global ITS, Inc. and its wholly owned subsidiary, Znergy, Inc. in order to expand into the Energy Efficiency (EE) marketplace, focusing on commercial lighting and green project financing. On February 9, 2016, the Company agreed to sell to the Mazzal Trust the real property which the Trust had previously sold to the Company and the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company’s common stock owned by the Trust. The Company is now focused solely on the EE marketplace with an emphasis on LED retrofitting and installing new lamps. The Company determined that Global ITS, Inc. served no purpose for the Company. It held no assets or operations, had been dormant for over a year. On October 1, 2017, the Company sold 100% of its shares in Global to Peter Peterson, a shareholder of the Company and a creditor of Global for a nominal amount. Basis of Presentation The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Znergy (FL) and Znergy Holdings (FL). All intercompany transactions have been eliminated in consolidation. |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2 – 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 at the date of the financial statements and the reported amounts or revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates, judgments, and assumptions used in these consolidated financial statements include those related to revenues, accounts receivable and related allowances, contingencies, and the fair values of stock-based compensation. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate. Cash The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation. Revenue Recognition The Company accounts for revenue using the "completed contract method" in accordance with ASC 605-35. Under this method, contract costs are accumulated as deferred assets and billings and/or cash receipts are recorded to a deferred revenue liability account during the contract period, but no revenues, costs, or profits are recognized in operations until the completion of the contract. Costs include direct material, direct labor, subcontract labor, and allocable indirect costs. All unallocable indirect costs and corporate general and administrative costs are charged in the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. The deferred asset (accumulated contract costs) in excess of the deferred liability (billings and/or cash received) is classified as a current asset under "Costs in excess of billings on uncompleted contracts." The deferred liability (billings and/or cash received) in excess of the deferred asset (accumulated contract costs) is classified under current liabilities as "Billings in excess of costs on uncompleted contracts." A contract is considered complete when accepted by the customer. The Company quotes its customers the total costs of product installation and materials minus the expected rebates, if any, from a given utility. For projects larger than $10,000, rebates must be pre-approved by the utility. Rebate revenue is recognized when collectability is assured which is when payment is received by the Company. Accounts receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on their assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance account and a credit to accounts receivable. Inventory Inventory consists of a variety of LED lamps, all of which are valued at the lower of actual costs from our suppliers or market. Building, equipment and furniture, net Real estate assets are stated at cost less accumulated depreciation and amortization. Furniture, fixtures and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed on the straight-line basis over the estimated useful lives of the assets, ranging from 3-5 years. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are removed from the accounts. Impairment Long-Lived Assets For purposes of recognition and measurement of an impairment loss, a long-lived asset or assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses the impairment of long-lived assets (including identifiable intangible assets) annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When management determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we test for any impairment based on a projected undiscounted cash flow method. Projected future operating results and cash flows of the asset or asset group are used to establish the fair value used in evaluating the carrying value of long-lived and intangible assets. The Company estimates the future cash flows of the long-lived assets using current and long-term financial forecasts. The carrying amount of a long-lived asset is not recoverable if its carrying amount exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If this were the case, an impairment loss would be recognized. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value. At December 31, 2017 and 2016, the Company believes that no impairment of its long-lived assets is required. Accounts payable and accrued expenses Accounts payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. Loss per share The Company computes net loss per share in accordance with ASC 260, “Earnings Per Share” ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potential dilutive common shares, which comprise options granted to employees. At December 31, 2017 and 2016, any potentially dilutive shares (consisting of 45,741,094 options) were not considered in the calculation of the loss per share as their effect would be anti-dilutive. Stock-Based Compensation Certain employees, officers, directors, and consultants of the Company participate in incentive plans that provide for granting stock options and performance-based awards. Time based stock options generally vest in equal increments over a two-year period and expire on the third anniversary following the date of grant. Performance-based stock options vest once the applicable performance conditions are satisfied. The Company recognizes stock-based compensation for equity awards granted to employees, officers, directors and consultants as Selling, general and administrative expense in the consolidated statements of operations. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. For performance-based stock options, compensation is recognized once the applicable performance condition is satisfied. The fair value of restricted stock awards is equal to the closing price of the Company’s stock on the date of grant multiplied by the number of shares awarded. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. Income taxes In accordance with FASB ASC 740, “Income Taxes” (“ASC 740”), deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. The Company has recorded a valuation allowance against its deferred tax assets based on the history of losses incurred. ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. As of December 31, 2017, the Company does not believe a liability for any unrecognized tax benefits exists. The Company has not filed required income tax returns to date. While for federal income tax purposes the net operating losses would eliminate the federal income tax liability, we may be subject to penalties and minimum state income tax. All tax periods from inception remain open to examination by taxing authorities due to the non-filing and the net operating losses. The Tax Cuts and Jobs Act (the “Tax Act”) was signed into law on December 22, 2017. The Tax Act changed many aspects of U.S. corporate income taxation and included a reduction of the corporate income tax rate from 35% to 21%. The Company will continue to assess its provisions for income tax as future guidance is issued but does not currently anticipate significant revisions will be necessary. Any such revisions will be treated in accordance with the measurement period guidance outlined in Staff Accounting Bulletin No. 118, Net Income (Loss) Per Common Share. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, or ASU 2014-09. Pursuant to this update, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this update are currently effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and are to be applied retrospectively, or on a modified retrospective basis. Early application is not permitted. In July 2015, the FASB approved a one-year deferral of the effective date for annual reporting periods beginning after December 15, 2017 with early adoption permitted for annual periods beginning after December 15, 2016. We have determined that adopting ASU 2014-09 does not have a material impact on our consolidated financial statements. On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except for short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. On March 30, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. Adoption of this standard did not have any material effect on the Company’s financial statements. On May 10, 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718), which was issued to clarify and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. An entity may change the terms or conditions of a share-based payment award for many different reasons. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment aware require an entity to apply modification accounting in Topic 718. The amendments in the update are effective for all entities for annual periods, and interim periods within those annual periods beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (10) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company,” we have the option to delay adoption of new or revised accounting standards until those standards would otherwise apply to private companies, until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period for complying with such new or revised accounting standards. We have elected to opt out of this extended transition period. As noted, this election is irrevocable. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
NOTE 3 - GOING CONCERN |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Substantial Doubt about Going Concern [Text Block] | NOTE 3 – GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of December 31, 2017, the Company has a working capital deficit of $337,596, insufficient cash resources to meet its planned business objectives and accumulated deficit of $12,439,218. The Company intends to fund operations through debt and equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through May 2019. The Company is dependent upon, among other things, obtaining additional financing to continue operations and to execute its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings. No assurances can be made that management will be successful in pursuing any of these strategies. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
NOTE 4 - INTANGIBLE ASSETS |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Intangible Assets Disclosure [Text Block] | NOTE 4 – INTANGIBLE ASSETS The Company was granted a federally registered trademark for “ZNERGY”. The cost of applying for and prosecuting this trademark was $1,845 which cost was accounted for as an intangible asset. |
NOTE 5 - REAL ESTATE HELD FOR SALE AND DEVELOPMENT |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Real Estate [Abstract] | |
Real Estate Disclosure [Text Block] | NOTE 5 – REAL ESTATE HELD FOR SALE AND DEVELOPMENT On July 22, 2017, the Company entered into a purchase agreement for a property located at 808A South Huntington Street, Syracuse, Indiana. The purchase price was $255,000 of which $30,000 was paid on July 22, 2017 with the balance of $225,000 due 180 days after closing. There was no interest accruing on the debt. The square footage of the building is approximately 2,348 and has 27 storage units which generate approximately $19,000 per year in rental income. The Company closed on the property on September 1, 2017 (See Note 12). |
NOTE 6 - LOANS FROM RELATED PARTY |
12 Months Ended | |||||||||||||||||||||||||||
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Disclosure Text Block [Abstract] | ||||||||||||||||||||||||||||
Short-term Debt [Text Block] | NOTE 6 – LOANS FROM RELATED PARTIES
On November 6, 2017, the Company executed an unsecured promissory note in the amount of $25,000 payable to Christopher J Floyd. This note was payable on December 15, 2017 with accrued interest at 8% per annum. The note was paid in full on November 22, 2017. On November 15, 2017, the Company executed an unsecured promissory note in the amount of $50,000, payable to the Company’s chairman, Rick Mikles. The note was payable on December 1, 2017 with interest at 4% per annum. On December 1, 2017, the payment date was extended to June 1, 2018. On November 27, 2017, the Company executed an unsecured promissory note in the amount of $200,000, payable to Mr. Wayne Miller, a shareholder of the Company. The note was due and payable with interest of $2,000 on December 31, 2017. The note was repaid in full, with interest on December 22, 2017. Under the note agreement, the Company issued warrants to purchase 1,000,000 shares at an exercise price of $0.15 per share. The warrants expire on the first anniversary date of the initial exercise date of the warrants. On December 6, 2017, the Company executed an unsecured promissory note in the amount of $150,000 payable to Mr. Wayne Miller, a shareholder of the Company. The note was due and payable on March 12, 2018, with interest of $6,000. Under the note agreement, the Company issued warrants to purchase 1,000,000 shares at an exercise price of $0.15 per share. The warrants expire on the first anniversary date of the initial exercise date of the warrants. As of the date of this Report, the principal balance remains unpaid. Pursuant to the terms of the note, there was a 15-day grace period granted, which ended on March 27, 2018, at which a 15% penalty on the unpaid balance became due and payable along with the unpaid principal and any accrued interest. |
NOTE 7 - STOCKHOLDERS' EQUITY (DEFICIT) |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT) On February 9, 2016, the Company agreed to sell to the Mazzal Trust the real property which the Trust had previously sold to the Company and the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company’s common stock owned by the Trust. These shares returned to the Company were canceled. On June 6, 2016, the Company issued 5,000,000 shares of common stock for future services registered on Form S-8. These shares were valued at $500,000, based on the trading price of the shares on the date of grant. The value of these shares has been booked as Deferred Compensation which is being amortized over the one-year term of the agreement. On September 28, 2016, the Company entered into an employment agreement with Dave Baker (see Note 11) to serve as our Senior Vice President. As part of the agreement, Mr. Baker was granted 500,000 shares of common stock of the Company, vested immediately, which shares were valued at $30,500 based on the trading price of the shares on the date of grant and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share (the “Options”). The Options have a three-year expiration and vest one option for every two dollars in revenue recognized by the Company. On November 12, 2016, in conjunction with the execution of an Advisory Agreement, the Company issued to Renitia Bertoluzzi 100,000 shares of its common stock, vested immediately, which shares were valued at $6,000 based on the trading price of the shares on the date of grant and options to purchase up to 400,000 shares of common stock of the Company at a price of $0.10 per share. The options vest in equal amounts over the eight quarters following the date of execution of the Advisory Agreement. On December 1, 2016, in conjunction with his promotion to Chief Operating Officer, the Company issued to Dave Baker 4,500,000 shares of its common stock, vested immediately, which shares were valued at $270,000 based the trading price of the shares on the date of grant. On December 31, 2016 the Company appointed Arthur Fillmore to the board of directors as well as General Counsel to the Company. In conjunction with his appointment, the Company issued to Mr. Fillmore 3,000,000 shares of its common stock vested immediately, which shares were valued at $120,000 based on the trading price of the shares on the date of grant. Concomitantly, the Company entered into a consulting agreement with Mr. Fillmore’s employer, AEGIS Professional. This consulting agreement has a term of three years. Upon executing the agreement, the Company issued AEGIS Professional an option to purchase 2,000,000 shares of its common stock at $0.10 per share and a term of 3-years with immediate vesting. On January 25, 2017 the Company appointed Richard Mikles as Chairman of the board of directors and issued to Mr. Mikles 3,000,000 shares of its common stock, valued at its trading price on the date of the grant of $300,000, which vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue. Concomitantly, the Company entered into a consulting agreement with Mr. Mikles to provide marketing, strategic, and organizational services to the Company. Upon execution of this consulting agreement the Company issued 2,000,000 shares of common stock, valued at its trading price on the date of the grant of $200,000, which vested immediately, and 5,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options to vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company. On January 27, 2017 the Company appointed Kevin Harrington to its Board of Directors and issued 2,000,000 shares of its common stock, valued at its trading price on the date of the grant of $100,000, which vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue. On February 2, 2017 the Company entered into a consulting agreement with Venture Legal Services, PLC, to provide legal and strategic advisory services for the Company. In conjunction with the execution of this agreement, the Company granted Venture options to purchase up to 2,000,000 shares of its common stock at a price of $0.10 per share. The options have an expiration of three years from the date of issue and vest quarterly one option for every two dollars of revenue recognized by the Company. On May 15, 2017, the Company entered into an employment agreement with Mr. Baker, as the Company’s CEO. Mr. Baker was granted 5,000,000 shares of common stock of the Company, valued at its trading price on the date of the grant of $500,000, which vested immediately, and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company. On May 15, 2017, the Company entered into an employment agreement with Mr. Floyd, as the Company’s CFO. Mr. Floyd was granted 10,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company. On November 15, 2017, the Company terminated the employment agreement, effective December 31, 2017 and entered into an amended agreement, pursuant to which Mr. Floyd would be paid a salary through the effective date of the termination and for four consecutive calendar months thereafter. In addition, Mr. Floyd forfeited his unvested options of 9,313,955 shares and the Company issued 3,000,000 shares of its common stock, valued at its trading price on the date of the grant of $269,700, which vested immediately. On June 1, 2017, the Company entered into a service agreement with a provider of investor relations services. Under the agreement, the Company issued 1,000,000 shares of common stock to the provider, valued at its trading price on the date of the grant of $98,000, vesting 500,000 on June 1, 2017, 250,000 shares on October 1, 2017 and 250,000 shares on January 1, 2018. On June 13, 2017, the Company entered into a service agreement with a provider of bookkeeping, accounting, payroll and human resources services. Under the agreement, the Company issued 250,000 shares of common stock to the provider, valued at its trading price at the date of the grant of $30,000, which vested immediately, and 1,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest evenly over two years. On August 30, 2017, the Company granted 600,000 performance-based options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company from customers referred directly by the service provider. On June 19, 2017, the Company entered into an agreement with Profit Motivators and the Company granted 600,000 performance-based options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company from customers referred directly by Profit Motivators. On July 10, 2017 the Company entered into an employment agreement with Ryan Smith, to serve as Senior Vice President of the Company. The agreement has a term of three years, and Mr. Smith’s employment with the Company is on an at-will basis. The agreement specifies an annual base salary of $100,000 and a performance-based bonus within 45 days from the end of the Company’s fiscal year as determined by the Compensation Committee of the Board of Directors. In addition, Mr. Smith was granted 3,000,000 shares of common stock of the Company, valued at its trading price at the date of the grant of $300,000, which vested immediately, and was granted 7,000,000 options to purchase common stock of the Company at $0.10 per share. The Options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company. On July 13, 2017, the Company entered into a service agreement with a provider of tax services. Under the agreement, the Company issued 100,000 shares of common stock to the provider, valued at its trading price on the date of the grant of $10,800, which vested immediately, and 400,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest evenly over two years. On August 30, 2017, The Company granted 600,000 performance-based options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company from customers referred directly by the provider of tax services. On July 13, 2017, the Company amended and extended a consulting agreement, originally executed on January 23, 2017, with its Chairman, Rick Mikles. Under the amended and extended agreement, the Company issued 1,600,000 shares of common stock to Mr. Mikles, valued at its trading price on the date of the grant of $172,800, which vested immediately. On August 31, 2017, the Company entered into an advisory agreement with Donald Herrmann. Under the agreement, the Company issued 100,000 shares of common stock to Mr. Herrmann, valued at its trading price on the date of the grant of $6,550, which vested immediately, and 900,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest evenly over two years. On September 19, 2017, the Company appointed Jennifer Peek to its Board of Directors and as its Audit Committee Chair and issued 1,500,000 shares of its common stock, valued at its trading price on the date of the grant of $76,350, which vested immediately, and 1,500,000 options to purchase shares of common stock of the Company at a price of $0.10 per share. The options vest equally over eight quarters and having an expiration of three years from the date of issue. On November 1, 2017, the Company entered into a service agreement with a provider for information technology related services. Under the agreement, the Company issued 100,000 shares of common stock to the provider, valued at its trading price at the date of the grant of $13,492, which vested immediately, and 500,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest evenly over two years. The Company has entered into employment agreements with its sales representatives, either as independent contractors or employees of the Company. The employees or contractors have at will contracts to provide sales and sales support services. In addition to a salary and commission, the Company has issued options to purchase common stock of the Company. The expiration periods range from 1-3 years, with options to purchase shares at $0.10 per share vesting over 3 years. The options granted in the aggregate total 5,700,000 shares of which 5,000,000 shares are performance-based options that vest one options for every two dollars of revenue recognized by the Company and 700,000 are time-based options which vest over 8 quarters, to a total of 8 individuals. During the period ended June 30, 2017 the Company completed a private offering of common stock and warrants to accredited and unaccredited investors for gross proceeds of $1,119,372 which securities were offered under Regulation D, Rule 506(b) of the Securities and Exchange Act of 1933. The Company accepted subscriptions, in the aggregate, for 14,924,960 shares of common stock and one-year warrants to purchase 14,924,960 shares of common stock of which 10,600,000 shares of its common stock and 10,600,000 warrants were issued for $795,000 in cash and 4,324,960 shares of its common stock and 4,324,960 warrants were issued for $324,372 in the conversion of debt. Investors received one-year fully vested warrant to purchase up to 100% of the number of shares purchased in the offering. The warrants have an exercise price of $0.15 per share. The purchase price for each share of common stock together with the warrants was $0.075. For the debt converted, the difference between the amount of debt converted and the fair value of the common stock and warrants issued of $519,085 has been charged to interest expense. Stock Options Options - Time Vesting On January 15, 2015 the Company adopted the 2015 Stock Option and Restricted Stock Plan (the “Plan”). In connection with adopting the Plan, the Voting Shareholders also approved a resolution that up to 45,000,000 shares of the Company’s common stock may be issued under the terms and conditions of the Plan. That is, at its discretion, the Board of Directors may elect to have issued to directors, employees and consultants it deems deserving, up to 45,000,000 newly issued shares of the Company’s common stock, options to purchase our common stock, or some combination thereof. If the Board of Directors decides to issue shares of common stock or options to purchase the Company’s common stock, the issuance of such securities would not affect the rights of the holders of the currently outstanding common stock, except for affects incidental to increasing the number of outstanding shares of common stock, such as dilution of the earnings per share and voting rights of current holders of common stock. There were 2,400,000 options issued and outstanding as of December 31, 2016. The following table shows the stock option activity during the years ended December 31, 2017 and 2016:
Options issued were valued using the Black-Sholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.49% average risk-free rate and 243.75% average volatility. Costs incurred in respect of stock based compensation for employees, advisors and consultants for the twelve month periods ended December 31, 2017 and December 31, 2016 were $406,933 and $79,900, respectively. Unrecognized compensation costs related to options was $633,967 which is expected to be recognized ratably over approximately 21 months. Options - Performance Vesting There were 5,000,000 options issued and outstanding as of December 31, 2016. The options vest based on Company performance with one option vesting for every two dollars of revenue, vesting quarterly. The following table shows the stock option activity during the years ended December 31, 2017 and 2016:
Options issued were valued using the Black-Sholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.98% average risk-free rate and 246% average volatility. Costs incurred in respect of stock based compensation for employees, advisors and consultants for the twelve months ended December 31, 2017 was $384,940. Unrecognized compensation costs related to options was $2,503,990 which is expected to be recognized ratably over approximately 24 months. As of December 31, 2017, none of the currently exercisable stock options had intrinsic value. The intrinsic value of each option share is the difference between the fair market value of our common stock and the exercise price of such option share to the extent it is “in-the-money”. Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the year and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation is based on the assumed market value of our common stock on December 31, 2017 of $0.04 per share. There were no in-the-money options outstanding and exercisable as of December 31, 2017, since the exercise prices of the stock options outstanding and expected to vest were all greater than the fair value of our common stock. The following table presents changes in the number of non-exercisable options during 2017:
Warrants There were no warrants issued and outstanding as of December 31, 2016. The following table shows the warrant activity during the period ended December 31, 2017:
Warrants issued were valued using the Black-Scholes model assuming zero dividends, a $0.15 strike price, 1-year expiration, risk-free rate and volatility were calculated as of the respective dates of the issuance. Costs incurred for warrants issued to related parties for the conversion of debt were recorded as interest expense and were $0 and $367,662 for years ended December 31, 2016 and December 31, 2017, respectively. |
NOTE 8 - INCOME TAXES |
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | NOTE 8 – INCOME TAXES No provision was made for federal income taxes since the Company has net operating losses for which the related deferred tax asset has been offset by a full valuation allowance. At December 31, 2017, the Company had operating loss carryforwards of approximately $2,032,267 as shown in the table below:
The net operating loss carry-forwards may be used to reduce taxable income through the year 2035. The principal difference between the net operating loss for book purposes and income tax purposes results from non-cash charges to operations related to common shares issued for services and acquisitions that are not currently deductible for income tax purposes. The availability of the Company’s net operating loss carry-forwards are subject to significant limitation if there is more than 50% positive change in the ownership of the Company’s stock.
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NOTE 9 - SALE OF REAL ESTATE AND RETIREMENT OF COMMON STOCK |
12 Months Ended |
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Dec. 31, 2017 | |
Sale of Real Estate and Retirement of Common Sotck [Abstract] | |
Sale of Real Estate and Retirement of Common Sotck [Text Block] | NOTE 9 – SALE OF REAL ESTATE AND RETIREMENT OF COMMON STOCK On February 9, 2016, the Company agreed to sell to the Mazzal Trust (the “Trust”) all of its real property with a carrying value of $1,897,000 and the Trust assumed the related party loan with a carrying value of $860,743 and accounts payable and accrued expenses with a carrying value of $16,364. In exchange the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company’s common stock owned by the Trust and the Company canceled the 149,950,000 shares of common stock conveyed by the Trust. In connection with his sale of his and Mr. Telsi’s shares, Mr. Trabelsi appointed Christopher J. Floyd to the Board of Directors of the Company. Mr. Trabelsi also appointed Mr. Floyd as the CEO, CFO, and Secretary of the Company. Following Mr. Trabelsi’s appointment of Mr. Floyd to the boards of directors and as an officer of the Company, Mr. Trabelsi resigned from all positions with the Company effective immediately. |
NOTE 10 - LEGAL ISSUES |
12 Months Ended |
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Dec. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Legal Matters and Contingencies [Text Block] | NOTE 10 – LEGAL ISSUES 16(b) Litigation On September 26, 2016, Registrant filed in the United States District Court for the Middle District of Florida a Complaint against defendants The Mazzal Trust, Nissim S. Trabelsi and Shawn Telsi (collectively the “Defendants”), seeking the disgorgement of profits obtained by Defendants and certain of their shareholder affiliates defined under Rule 16a-1(a)(1) under the Exchange Act defined below (collectively, the “Group”) through “short swing profits” in violation of Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, Registrant alleged that the Group acted under the guidance and control of the Defendants, whose individual defendants had filed forms 3 and 4 with the Securities and Exchange Commission (the “SEC”, declaring themselves to be “insiders” for the purpose of Section 16(b). The Group owned 100% of the shares of Registrant at the time that members of the group were engaged in the sale and purchase of such shares. The sales and purchases referenced all occurred with six months of other sales and purchases, subjecting Defendants to disgorge to Registrant all profits made by the Group in such sales and purchases. As detailed in paragraphs 16-22 of the Complaint, the total profits received by the Group is $1,695,689. Accordingly, Registrant has demanded the return of all such profits to Registrant plus the statutory payment of attorneys’ fees. On August 24, 2017, the Plaintiff received a Clerk’s Entry of Default against Nissim Trabelsi. The Plaintiff filed a Motion for Default Judgment for damages against Trabelsi on September 13, 2017, which to date has not been addressed by the Court. On March 5, 2018, Nissim Trabelsi filed a notice of bankruptcy. The Plaintiff is still pursuing its options in the Case and the Court has yet to address the service issues with the Mazzal Trust. VStock Transfer Communications On January 26, 2017, the Company received an email from its transfer agent, VStock Transfer, LLC, (“VStock”) informing the Company that it had been served with a Summons and Complaint (B2 Opportunity Fund (“B2”) v. Trabelsi et al. - Index No.:17-CV-10043, the “Claim”) and further stating that the Company was obligated to indemnify VStock for fees and expenses incurred in defending the Claim. The Company responded on February 24, 2017 stating that (1) we reviewed the Transfer Agent and Registrar Agreement between Mazzal and VStock dated May 20, 2014 and that in Article VI(c) of that agreement it states that indemnification will not be offered if the acts of VStock constitute bad faith or gross negligence, (2) we reviewed the lawsuit filed by B2 against VStock and others and find that VStock’s actions constitute gross negligence and perhaps bad faith, and we therefore deny indemnification of VStock relating to the Claim, and (3) should VStock take any action to seek indemnification by Znergy in any manner, Znergy will either join B2 in its lawsuit or will file an action on its own. The Company terminated its agreement with VStock. Management cannot at this time estimate what, if any, financial impact this matter will have on the Company. |
NOTE 11 - COMMITMENTS AND CONCENTRATIONS |
12 Months Ended |
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Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 11 – COMMITMENTS AND CONCENTRATIONS The revenue reported by the Company are from sales of LED installations, product sales and rebate income. For the year ended December 31, 2017, 64% of the Company's revenue was generated by one customer and 21% of accounts receivable is from one customer. For the year ended December 31, 2016, 82% of the Company's revenue was generated by one customer and 91% of its accounts receivable, consisting of rebates, was due from one utility. The Company purchases substantially all of its inventory from one supplier. The Company does not have any commitments with this supplier for minimum purchases. The Company has no long-term leases. It has a warehouse lease which terminates in December 2018. The Company’s inventory is stored in that location. The Company owned its office building until February 2018 when the building was sold to the Company’s Chairman. The Company is currently negotiating the terms of a lease for the office space. The Company has employment agreements with its employees. Except as noted, the agreements are “at-will”. The Company entered into an employment agreement with Dave Baker to become the Company’s Chief Operating Officer. Mr. Baker’s agreement, dated September 28, 2016, had a term of three years, an annual base salary of $100,000 which salary to be reviewed by the Compensation Committee of the Board of Directors, a signing bonus of $10,000 and a bonus in January 2017 equal to 6% of the total revenue generated by Mr. Baker in the fourth quarter of 2016 which bonus was paid on January 20th, 2017 in the amount of $10,928 (6% of $182,127). In addition, Mr. Baker was granted 500,000 shares of common stock of the Company, vested immediately, and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These Options have a three-year expiration and vest one option for every two dollars of revenue recognized by the Company. On December 1, 2016, Mr. Baker was promoted from Senior Vice President to Chief Operating Officer and granted a further 4,500,000 shares of the Company’s common stock, which vested immediately. On May 15, 2017 Mr. Baker was promoted from Chief Operating Officer to Chief Executive Officer. His annual base salary remained at $100,000, he was granted a $6,000 signing bonus and granted a further 5,000,000 shares of the Company’s common stock, which vested immediately and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest one option for every two dollars of revenue recognized by the Company. In December 2017, the compensation committee of the board of directors awarded Mr. Baker a bonus of $40,000, which was partially paid in December and the balance was paid in January 2018. |
NOTE 12 - SUBSEQUENT EVENTS |
12 Months Ended |
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Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 12 – SUBSEQUENT EVENTS On January 8, 2018, the Company executed an unsecured promissory note in the amount of $150,000 payable to Mr. Wayne Miller, a shareholder of the Company. The note was due and payable on April 8, 2018, with interest of $6,000. Under the note agreement, the Company issued warrants to purchase 1,000,000 shares at an exercise price of $0.15 per share. The warrants expire on the first anniversary date of the initial exercise date of the warrants. As of the date of this Report, the principal and one interest payment of $3,000 remains unpaid. Pursuant to the terms of the note, there was a 15-day grace period, which ended on April 23, 2018 at which time the principal and unpaid interest is due. If payment is not made after on or before that date, a 15% penalty of the unpaid balance becomes due and payable along with the unpaid principal and interest. On February 12, 2018, the Company entered into an employment agreement with Rick Mikles, the Company’s Chairman, to become Chief Marketing Officer. The agreement has a three-year term, an annual base salary of $26,000 and a quarterly payment based on 3% of the quarterly revenue recognized by the Company. Mr. Mikles was granted 5,000,000 shares of the Company’s common stock, which vested immediately and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest one options for every two dollars of revenue recognized by the Company. On February 15, 2018, the Company executed a $25,000 promissory note in the amount of $25,000 payable to Rick Mikles, the Company’s Chairman and secured by the Company’s inventory. The note is due and payable on June 1, 2018 together with interest at 4% per annum. On March 2, 2018, the Company executed a $200,000 unsecured promissory note in the amount of $200,000 payable to Rick Mikles, the Company’s Chairman. The note is due on June 1, 2018 together with interest of $2,500. On March 9, 2018, the Company settled the outstanding mortgage through a sale of the building to the Company’s chairman, Rick Mikles, who purchased the building for the balance of the mortgage which was $225,000 as the Company failed to make the scheduled $225,000 payment when due. On March 16th, a quitclaim was recorded to Rick Mikles as the new owner of the building. Mr. Mikles and the Company are negotiating the terms of a lease for the office space. On March 22, 2018, the Company executed an unsecured promissory note in the amount of $50,000 payable to Paul Ladd, a shareholder. The note was due and payable on May 21, 2018 together with interest of $1,000 and as of the date of this report remains unpaid. On May 11, 2018, the Company received $30,000 as a short-term advance from its Chairman, Rick Mikles and on May 18, 2018, the Company received an additional $50,000 as a short term advance from its Chairman, Rick Mikles. |
Accounting Policies, by Policy (Policies) |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | 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 at the date of the financial statements and the reported amounts or revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates, judgments, and assumptions used in these consolidated financial statements include those related to revenues, accounts receivable and related allowances, contingencies, and the fair values of stock-based compensation. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company accounts for revenue using the "completed contract method" in accordance with ASC 605-35. Under this method, contract costs are accumulated as deferred assets and billings and/or cash receipts are recorded to a deferred revenue liability account during the contract period, but no revenues, costs, or profits are recognized in operations until the completion of the contract. Costs include direct material, direct labor, subcontract labor, and allocable indirect costs. All unallocable indirect costs and corporate general and administrative costs are charged in the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. The deferred asset (accumulated contract costs) in excess of the deferred liability (billings and/or cash received) is classified as a current asset under "Costs in excess of billings on uncompleted contracts." The deferred liability (billings and/or cash received) in excess of the deferred asset (accumulated contract costs) is classified under current liabilities as "Billings in excess of costs on uncompleted contracts." A contract is considered complete when accepted by the customer. The Company quotes its customers the total costs of product installation and materials minus the expected rebates, if any, from a given utility. For projects larger than $10,000, rebates must be pre-approved by the utility. Rebate revenue is recognized when collectability is assured which is when payment is received by the Company. |
Receivables, Policy [Policy Text Block] | Accounts receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on their assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance account and a credit to accounts receivable. |
Inventory, Policy [Policy Text Block] | Inventory Inventory consists of a variety of LED lamps, all of which are valued at the lower of actual costs from our suppliers or market. |
Property, Plant and Equipment, Policy [Policy Text Block] | Building, equipment and furniture, net Real estate assets are stated at cost less accumulated depreciation and amortization. Furniture, fixtures and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed on the straight-line basis over the estimated useful lives of the assets, ranging from 3-5 years. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are removed from the accounts. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment Long-Lived Assets For purposes of recognition and measurement of an impairment loss, a long-lived asset or assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses the impairment of long-lived assets (including identifiable intangible assets) annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When management determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we test for any impairment based on a projected undiscounted cash flow method. Projected future operating results and cash flows of the asset or asset group are used to establish the fair value used in evaluating the carrying value of long-lived and intangible assets. The Company estimates the future cash flows of the long-lived assets using current and long-term financial forecasts. The carrying amount of a long-lived asset is not recoverable if its carrying amount exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If this were the case, an impairment loss would be recognized. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value. At December 31, 2017 and 2016, the Company believes that no impairment of its long-lived assets is required. |
Accounts Payable and Accrued Liabilities Disclosure, Policy [Policy Text Block] | Accounts payable and accrued expenses Accounts payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. |
Earnings Per Share, Policy [Policy Text Block] | Loss per share The Company computes net loss per share in accordance with ASC 260, “Earnings Per Share” ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potential dilutive common shares, which comprise options granted to employees. At December 31, 2017 and 2016, any potentially dilutive shares (consisting of 45,741,094 options) were not considered in the calculation of the loss per share as their effect would be anti-dilutive. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Certain employees, officers, directors, and consultants of the Company participate in incentive plans that provide for granting stock options and performance-based awards. Time based stock options generally vest in equal increments over a two-year period and expire on the third anniversary following the date of grant. Performance-based stock options vest once the applicable performance conditions are satisfied. The Company recognizes stock-based compensation for equity awards granted to employees, officers, directors and consultants as Selling, general and administrative expense in the consolidated statements of operations. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. For performance-based stock options, compensation is recognized once the applicable performance condition is satisfied. The fair value of restricted stock awards is equal to the closing price of the Company’s stock on the date of grant multiplied by the number of shares awarded. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. |
Income Tax, Policy [Policy Text Block] | Income taxes In accordance with FASB ASC 740, “Income Taxes” (“ASC 740”), deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. The Company has recorded a valuation allowance against its deferred tax assets based on the history of losses incurred. ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. As of December 31, 2017, the Company does not believe a liability for any unrecognized tax benefits exists. The Company has not filed required income tax returns to date. While for federal income tax purposes the net operating losses would eliminate the federal income tax liability, we may be subject to penalties and minimum state income tax. All tax periods from inception remain open to examination by taxing authorities due to the non-filing and the net operating losses. The Tax Cuts and Jobs Act (the “Tax Act”) was signed into law on December 22, 2017. The Tax Act changed many aspects of U.S. corporate income taxation and included a reduction of the corporate income tax rate from 35% to 21%. The Company will continue to assess its provisions for income tax as future guidance is issued but does not currently anticipate significant revisions will be necessary. Any such revisions will be treated in accordance with the measurement period guidance outlined in Staff Accounting Bulletin No. 118, Net Income (Loss) Per Common Share. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, or ASU 2014-09. Pursuant to this update, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this update are currently effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and are to be applied retrospectively, or on a modified retrospective basis. Early application is not permitted. In July 2015, the FASB approved a one-year deferral of the effective date for annual reporting periods beginning after December 15, 2017 with early adoption permitted for annual periods beginning after December 15, 2016. We have determined that adopting ASU 2014-09 does not have a material impact on our consolidated financial statements. On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases except for short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. On March 30, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. Adoption of this standard did not have any material effect on the Company’s financial statements. On May 10, 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718), which was issued to clarify and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation – Stock Compensation, to a change to the terms or conditions of a share-based payment award. An entity may change the terms or conditions of a share-based payment award for many different reasons. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment aware require an entity to apply modification accounting in Topic 718. The amendments in the update are effective for all entities for annual periods, and interim periods within those annual periods beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (10) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company,” we have the option to delay adoption of new or revised accounting standards until those standards would otherwise apply to private companies, until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period for complying with such new or revised accounting standards. We have elected to opt out of this extended transition period. As noted, this election is irrevocable. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
NOTE 6 - LOANS FROM RELATED PARTY (Tables) |
12 Months Ended | |||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||
Disclosure Text Block [Abstract] | ||||||||||||||||||||||||||||
Schedule of Short-term Debt [Table Text Block] |
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NOTE 7 - STOCKHOLDERS' EQUITY (DEFICIT) (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] |
The following table shows the stock option activity during the years ended December 31, 2017 and 2016:
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Share-based Compensation, Stock Options, Activity [Table Text Block] |
The following table presents changes in the number of non-exercisable options during 2017:
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Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] |
The following table shows the warrant activity during the period ended December 31, 2017:
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NOTE 8 - INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||
Summary of Operating Loss Carryforwards [Table Text Block] |
At December 31, 2017, the Company had operating loss carryforwards of approximately $2,032,267 as shown in the table below:
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
The availability of the Company’s net operating loss carry-forwards are subject to significant limitation if there is more than 50% positive change in the ownership of the Company’s stock
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NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details) - shares |
Feb. 09, 2016 |
Mar. 13, 2013 |
---|---|---|
Disclosure Text Block [Abstract] | ||
Stock Repurchased and Retired During Period, Shares | 149,950,000 | |
Stock Issued During Period, Shares, Acquisitions | 150,000,000 |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares |
12 Months Ended | ||
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Dec. 22, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 45,741,094 | 45,741,094 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | 34.00% |
Minimum [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Maximum [Member] | |||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | |||
Property, Plant and Equipment, Useful Life | 5 years |
NOTE 3 - GOING CONCERN (Details) - USD ($) |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working Capital (Deficit) | $ (337,596) | |
Retained Earnings (Accumulated Deficit) | $ (12,439,218) | $ (7,951,648) |
NOTE 4 - INTANGIBLE ASSETS (Details) |
12 Months Ended |
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Dec. 31, 2017
USD ($)
| |
Disclosure Text Block [Abstract] | |
Finite-lived Intangible Assets Acquired | $ 1,845 |
NOTE 5 - REAL ESTATE HELD FOR SALE AND DEVELOPMENT (Details) |
12 Months Ended | ||
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Jul. 22, 2017
USD ($)
ft²
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Dec. 31, 2017
USD ($)
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Dec. 31, 2016
USD ($)
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NOTE 5 - REAL ESTATE HELD FOR SALE AND DEVELOPMENT (Details) [Line Items] | |||
Property, Plant and Equipment, Additions | $ 255,000 | ||
Payments to Acquire Property, Plant, and Equipment | $ 30,000 | $ 99,774 | $ 2,800 |
Area of Real Estate Property (in Square Feet) | ft² | 2,348 | ||
Number of Units in Real Estate Property | 27 | ||
Operating Leases, Income Statement, Minimum Lease Revenue | $ 19,000 | ||
Payments Due 180 Days After Closing [Member] | |||
NOTE 5 - REAL ESTATE HELD FOR SALE AND DEVELOPMENT (Details) [Line Items] | |||
Payments to Acquire Property, Plant, and Equipment | $ 225,000 |
NOTE 6 - LOANS FROM RELATED PARTY (Details) - Schedule of Related Party Loans - USD ($) |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Znergy, Inc. [Member] | Affiliated Entity [Member] | ||
Short-term Debt [Line Items] | ||
Znergy, Inc. officers and stockholders | $ 171,518 | $ 135,749 |
NOTE 7 - STOCKHOLDERS' EQUITY (DEFICIT) (Details) - Schedule of Share-based Compensation, Stock Options, Activity - $ / shares |
12 Months Ended | ||||||||
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Sep. 19, 2017 |
Aug. 31, 2017 |
Feb. 02, 2017 |
Jan. 27, 2017 |
Jan. 25, 2017 |
Dec. 31, 2016 |
Nov. 12, 2016 |
Sep. 28, 2016 |
Dec. 31, 2017 |
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Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | |||||||||
Total non-exercisable options outstanding - December 31, | 7,287,641 | ||||||||
Options issued | 1,500,000 | 900,000 | 2,000,000 | 4,000,000 | 5,000,000 | 2,000,000 | 400,000 | 5,000,000 | 48,800,000 |
Options issued (in Dollars per share) | $ 200,000 | $ 0.10 | |||||||
Options expired | (10,346,547) | ||||||||
Options expired (in Dollars per share) | $ 0.10 | ||||||||
Options cancelled | 0 | ||||||||
Options cancelled (in Dollars per share) | $ 0.10 | ||||||||
Options vested | (10,592,054) | ||||||||
Options vested (in Dollars per share) | $ 0.10 | ||||||||
Total non-exercisable options outstanding - December 31, | 7,287,641 | 35,149,040 |
NOTE 7 - STOCKHOLDERS' EQUITY (DEFICIT) (Details) - Schedule of Stockholders' Equity Note, Warrants or Rights |
12 Months Ended | |
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Jun. 30, 2017
shares
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Dec. 31, 2017
shares
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Schedule of Stockholders' Equity Note, Warrants or Rights [Abstract] | ||
Warrants outstanding at beginning of year | 0 | |
Changes during the year: | ||
Granted | 14,924,960 | 16,924,960 |
Granted | 0.15 | |
Exercised | 0 | |
Expired | 0 | |
Warrants outstanding at end of year | 16,924,960 | |
Warrants outstanding at end of year | 0.15 | |
Warrants exercisable at end of year | 16,924,960 |
NOTE 8 - INCOME TAXES (Details) |
12 Months Ended |
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Dec. 31, 2017
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Operating Loss Carryforwards | $ 2,032,267 |
Operating Loss Carryforwards, Expiration Year | 2035 |
NOTE 8 - INCOME TAXES (Details) - Summary of Operating Loss Carryforwards - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
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Summary of Operating Loss Carryforwards [Abstract] | ||
Accumulated deficit | $ 12,439,218 | $ 7,951,648 |
Shares and options issued for services | (4,418,951) | |
Shares issued for purchased research in acquisition | (5,988,000) | |
Operating loss available to offset income | $ 2,032,267 |
NOTE 8 - INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation |
12 Months Ended | ||
---|---|---|---|
Dec. 22, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | |||
Income Tax at Statutory Rate | 21.00% | 35.00% | 34.00% |
Effect of Valuation Allowance | (34.00%) | ||
0.00% |
NOTE 9 - SALE OF REAL ESTATE AND RETIREMENT OF COMMON STOCK (Details) - USD ($) |
Feb. 09, 2016 |
Mar. 13, 2013 |
---|---|---|
NOTE 9 - SALE OF REAL ESTATE AND RETIREMENT OF COMMON STOCK (Details) [Line Items] | ||
Stock Repurchased During Period, Shares | 149,950,000 | |
Stock Issued During Period, Shares, Acquisitions | 150,000,000 | |
Stock Repurchased and Retired During Period, Shares | 149,950,000 | |
Majority Shareholder [Member] | ||
NOTE 9 - SALE OF REAL ESTATE AND RETIREMENT OF COMMON STOCK (Details) [Line Items] | ||
Fair Value of Assets Acquired | $ 1,897,000 | |
Liabilities Assumed | 860,743 | |
Related Party Transaction, Amounts of Transaction | $ 16,364 |
NOTE 10 - LEGAL ISSUES (Details) |
Sep. 26, 2016
USD ($)
|
---|---|
Registrant Vs. the Group [Member] | |
NOTE 10 - LEGAL ISSUES (Details) [Line Items] | |
Loss Contingency, Damages Sought, Value | $ 1,695,689 |
The Group [Member] | |
NOTE 10 - LEGAL ISSUES (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 100.00% |
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