Nevada
|
87-0429198
|
|
(State or Other Jurisdiction
Of Incorporation or Organization)
|
(I.R.S. Employer Identification
Number)
|
|
14515 Briarhills Parkway, Suite 105, Houston, Texas
|
77077
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☒
|
|
(Do not check if a smaller reporting company)
|
June 30, 2016
|
||||||||
(Unaudited)
|
December 31, 2015
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
2,664
|
$
|
5,932
|
||||
Accounts receivable
|
6,012
|
3,022
|
||||||
Inventories, net
|
-
|
20,785
|
||||||
Prepaid expenses and other current assets
|
-
|
13,666
|
||||||
Prepaid consulting services
|
-
|
22,500
|
||||||
Total current assets
|
8,676
|
65,905
|
||||||
Property and equipment, net
|
46,608
|
55,458
|
||||||
Other assets
|
2,701
|
2,701
|
||||||
Total
|
$
|
57,985
|
$
|
124,064
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
2,085,576
|
$
|
2,187,475
|
||||
Accrued interest and penalties payable
|
2,142,928
|
1,265,270
|
||||||
Convertible debentures, net of discount
|
2,748,116
|
2,387,981
|
||||||
Derivative liability
|
4,394,475
|
10,852,906
|
||||||
Notes payable
|
540,328
|
459,801
|
||||||
Current portion of long-term debt, net of discount
|
29,977
|
29,409
|
||||||
Stockholder advances
|
505,548
|
456,376
|
||||||
Total current liabilities
|
12,446,948
|
17,639,218
|
||||||
Long-term debt, net of current portion and discount
|
216,550
|
62,361
|
||||||
Total liabilities
|
12,663,498
|
17,701,579
|
||||||
Commitments and contingencies
|
||||||||
Stockholders' deficit:
|
||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized:
Series AA, 60,000 and 80,000 shares issued and outstanding, respectively |
60
|
80
|
||||||
Series BB, 186,000 shares issued and outstanding
|
186
|
186
|
||||||
Common stock; $0.0025 par value, 2,000,000,000 shares authorized, 487,753,010 and 422,125,005 shares issued and outstanding, respectively
|
1,219,383
|
1,055,313
|
||||||
Additional paid-in capital
|
11,317,926
|
11,299,059
|
||||||
Accumulated deficit
|
(25,143,068
|
)
|
(29,932,153
|
)
|
||||
Total stockholders' deficit
|
(12,605,513
|
)
|
(17,577,515
|
)
|
||||
Total |
$
|
57,985
|
$
|
124,064
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Sales
|
$
|
3,424
|
$
|
833
|
$
|
60,092
|
$
|
1,572
|
||||||||
Cost of sales
|
6,827
|
836
|
26,669
|
1,904
|
||||||||||||
Gross margin (deficit)
|
(3,403
|
)
|
(3
|
)
|
33,423
|
(332
|
)
|
|||||||||
Operating expenses:
|
||||||||||||||||
Selling, general and administrative
|
503,710
|
451,550
|
995,761
|
943,373
|
||||||||||||
Research and development
|
4,210
|
3,981
|
21,432
|
6,393
|
||||||||||||
Depreciation
|
4,425
|
3,500
|
8,850
|
7,000
|
||||||||||||
Total operating expenses
|
512,345
|
459,031
|
1,026,043
|
956,766
|
||||||||||||
Loss from operations
|
(515,748
|
)
|
(459,034
|
)
|
(992,620
|
)
|
(957,098
|
)
|
||||||||
Other income (expense):
|
||||||||||||||||
Interest expense
|
(712,795
|
)
|
(451,566
|
)
|
(1,477,282
|
)
|
(1,118,515
|
)
|
||||||||
Gain (loss) on derivative liability
|
2,828,704
|
(7,126,383
|
)
|
6,694,891
|
(17,068,588
|
)
|
||||||||||
Gain on debt payable in shares
|
222,416
|
-
|
577,265
|
-
|
||||||||||||
Gain (loss) on debt settlement
|
1,951
|
31,616
|
(13,169
|
)
|
11,855
|
|||||||||||
Total other income (expense)
|
2,340,276
|
(7,546,333
|
)
|
5,781,705
|
(18,175,248
|
)
|
||||||||||
Income (loss) before income taxes
|
1,824,528
|
(8,005,367
|
)
|
4,789,085
|
(19,132,346
|
)
|
||||||||||
Provision for income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Net income (loss)
|
$
|
1,824,528
|
$
|
(8,005,367
|
)
|
$
|
4,789,085
|
$
|
(19,132,346
|
)
|
||||||
Net income (loss) per common share:
|
||||||||||||||||
Basic
|
$
|
0.00
|
$
|
(0.03
|
)
|
$
|
0.01
|
$
|
(0.08
|
)
|
||||||
Diluted
|
$
|
0.00
|
$
|
(0.03
|
)
|
$
|
0.00
|
$
|
(0.08
|
)
|
||||||
Weighted average number of
common shares outstanding: |
||||||||||||||||
Basic
|
460,164,835
|
279,277,078
|
448,365,845
|
253,103,538
|
||||||||||||
Diluted
|
1,656,720,994
|
279,277,078
|
1,346,154,565
|
253,103,538
|
Six Months Ended
June 30, |
||||||||
2016
|
2015
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$
|
4,789,085
|
$
|
(19,132,346
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash used in
operating activities: |
||||||||
Depreciation expense
|
8,850
|
7,000
|
||||||
Amortization of debt discount to interest expense
|
580,171
|
808,293
|
||||||
(Gain) loss on derivative liability
|
(6,694,891
|
)
|
17,068,588
|
|||||
(Gain) on debt payable in shares
|
(577,265
|
)
|
-
|
|||||
(Gain) on debt settlement
|
(7,831
|
)
|
(11,855
|
)
|
||||
Interest expense added to stockholder advances
|
-
|
28,460
|
||||||
Common stock issued for services
|
-
|
2,400
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(2,990
|
)
|
7,949
|
|||||
Inventories
|
20,785
|
(4,852
|
)
|
|||||
Prepaid expenses and other current assets
|
22,500
|
(238,600
|
)
|
|||||
Accounts payable and accrued expenses
|
475,366
|
215,532
|
||||||
Accrued interest and penalties payable
|
880,753
|
165,585
|
||||||
Net cash used in operating activities
|
(505,467
|
)
|
(1,083,846
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Increase in note receivable
|
(70,000
|
)
|
-
|
|||||
Repayment of note receivable
|
70,000
|
-
|
||||||
Net cash provided by investing activities
|
-
|
-
|
||||||
Cash flows from financing activities:
|
||||||||
Proceeds from convertible debentures
|
375,000
|
853,547
|
||||||
Proceeds from notes payable
|
128,722
|
468,500
|
||||||
Proceeds from stockholder advances
|
44,199
|
15,000
|
||||||
Payment of debt issuance costs
|
(2,500 | ) | - | |||||
Payments on notes payable
|
(43,222
|
)
|
(25,000
|
)
|
||||
Payments on convertible debentures
|
-
|
(214,850
|
)
|
|||||
Payments on stockholder advances
|
-
|
(13,955
|
)
|
|||||
Net cash provided by financing activities
|
502,199
|
1,083,242
|
||||||
Net decrease in cash
|
(3,268
|
)
|
(604
|
)
|
||||
Cash, beginning of the period
|
5,932
|
604
|
||||||
Cash, end of the period
|
$
|
2,664
|
$
|
-
|
· | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
· | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
· | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivative liability
|
$
|
4,394,475
|
$
|
-
|
$
|
-
|
$
|
4,394,475
|
||||||||
Convertible debentures, net of discount
|
2,748,116
|
-
|
-
|
2,748,116
|
||||||||||||
Current portion of long-term debt, net
of discount |
29,977 |
- |
- |
29,977 |
||||||||||||
Long-term debt, net of current portion
and discount |
216,550 |
- |
- |
216,550 |
||||||||||||
Total liabilities measured at fair value
|
$
|
7,389,118
|
$
|
-
|
$
|
-
|
$
|
7,389,118
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Weighted average number of shares
outstanding - basic |
460,164,835 |
279,277,078 |
448,365,845
|
253,103,538
|
||||||||||||
Dilutive effect of shares issuable for
convertible debt |
1,196,556,159
|
-
|
897,788,720 |
-
|
||||||||||||
Weighted average number of shares
outstanding - dilutive |
1,656,720,994 |
279,277,078
|
1,346,154,565 |
253,103,538
|
Description
|
Date
|
Conversion Price
|
Original Principal Amount
|
Unpaid
Principal Balance |
Term
|
Interest Rate
|
Debenture 1
|
10/10/11
|
$30.00
|
$ 25,000
|
$ 25,000
|
12 months
|
14%
|
Debenture 3
|
2/17/12
|
$30.00
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 4
|
3/9/12
|
$30.00
|
5,000
|
5,000
|
12 months
|
14%
|
Debenture 5
|
3/19/12
|
$30.00
|
5,000
|
5,000
|
12 months
|
14%
|
Debenture 6
|
4/29/12
|
$30.00
|
5,000
|
5,000
|
12 months
|
14%
|
Debenture 7
|
4/25/12
|
$30.00
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 8
|
10/9/12
|
$30.00
|
5,000
|
5,000
|
12 months
|
14%
|
Debenture 10
|
11/15/12
|
$30.00
|
5,000
|
5,000
|
12 months
|
14%
|
Debenture 11
|
11/20/12
|
$30.00
|
2,000
|
2,000
|
12 months
|
14%
|
Debenture 12
|
12/11/12
|
$30.00
|
2,500
|
2,500
|
12 months
|
14%
|
Debenture 14
|
1/5/13
|
$30.00
|
2,500
|
2,500
|
12 months
|
14%
|
Debenture 15
|
2/5/13
|
$30.00
|
2,500
|
2,500
|
12 months
|
14%
|
Debenture 17
|
7/23/13
|
Variable
|
62,000
|
62,000
|
9 months
|
8%
|
Debenture 19
|
7/29/13
|
$30.00
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 22
|
9/4/13
|
Variable
|
50,000
|
50,000
|
12 months
|
8%
|
Debenture 31
|
10/3/13
|
Variable
|
3,750
|
3,750
|
12 months
|
8%
|
Debenture 33
|
10/25/13
|
Variable
|
52,000
|
52,000
|
9 months
|
8%
|
Debenture 34
|
10/25/13
|
Variable
|
30,000
|
47,455
|
9 months
|
8%
|
Debenture 36
|
11/29/13
|
Variable
|
30,000
|
22,800
|
6 months
|
15%
|
Debenture 37
|
11/29/13
|
Variable
|
25,000
|
25,000
|
6 months
|
15%
|
Debenture 39
|
12/2/13
|
Variable
|
25,000
|
15,000
|
6 months
|
15%
|
Debenture 47
|
6/23/13
|
Variable
|
35,000
|
17,500
|
7 months
|
10%
|
Debenture 48
|
6/23/13
|
Variable
|
12,500
|
12,500
|
7 months
|
10%
|
Debenture 49
|
1/12/14
|
Variable
|
26,000
|
26,000
|
12 months
|
22%
|
Debenture 50
|
1/12/14
|
Variable
|
60,000
|
60,000
|
12 months
|
12%
|
Debenture 51
|
2/3/14
|
$0.06
|
50,000
|
46,600
|
2 months
|
14%
|
Debenture 52
|
2/18/14
|
$0.06
|
5,000
|
5,000
|
12 months
|
14%
|
Debenture 53
|
3/17/14
|
Variable
|
25,000
|
23,500
|
12 months
|
18%
|
Debenture 54
|
3/20/14
|
Variable
|
10,000
|
10,000
|
12 months
|
18%
|
Debenture 55
|
3/25/14
|
Variable
|
10,000
|
10,000
|
12 months
|
18%
|
Debenture 56
|
3/28/14
|
Variable
|
55,000
|
55,000
|
12 months
|
18%
|
Debenture 57
|
4/1/14
|
$0.0025
|
50,000
|
800
|
6 months
|
14%
|
Debenture 58
|
4/9/14
|
Variable
|
75,000
|
75,000
|
11 months
|
18%
|
Debenture 59
|
4/10/14
|
Variable
|
60,000
|
60,000
|
11 months
|
18%
|
Debenture 60
|
4/11/14
|
Variable
|
2,272
|
2,272
|
11 months
|
18%
|
Debenture 61
|
4/11/14
|
Variable
|
40,000
|
19,475
|
12 months
|
15%
|
Debenture 62
|
4/16/14
|
Variable
|
30,000
|
8,503
|
24 months
|
12%
|
Debenture 63
|
4/23/14
|
$0.04
|
10,500
|
10,500
|
12 months
|
14%
|
Debenture 64
|
5/8/14
|
$0.06
|
4,000
|
4,000
|
12 months
|
14%
|
Debenture 65
|
5/21/14
|
Variable
|
50,000
|
50,000
|
12 months
|
15%
|
Debenture 68
|
7/11/14
|
$0.01
|
25,000
|
7,500
|
12 months
|
14%
|
Debenture 70
|
7/24/14
|
$0.06
|
48,360
|
48,360
|
12 months
|
14%
|
Debenture 73
|
8/29/14
|
Variable
|
67,595
|
19,966
|
6 months
|
5%
|
Debenture 74
|
9/3/14
|
Variable
|
37,520
|
37,520
|
24 months
|
12%
|
Debenture 75
|
9/8/14
|
$0.01
|
25,000
|
25,000
|
12 months
|
14%
|
Debenture 76
|
9/9/14
|
$0.01
|
36,359
|
36,359
|
12 months
|
14%
|
Debenture 77
|
9/9/14
|
$0.0025
|
8,641
|
811
|
12 months
|
14%
|
Debenture 78
|
9/9/14
|
$0.0025
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 79
|
9/9/14
|
$0.0025
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 80
|
9/9/14
|
$0.0025
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 81
|
9/9/14
|
$0.0025
|
77,595
|
73,845
|
12 months
|
14%
|
Debenture 82
|
9/10/14
|
$0.01
|
8,000
|
8,000
|
12 months
|
14%
|
Debenture 83
|
9/10/14
|
$0.01
|
15,000
|
15,000
|
12 months
|
14%
|
Debenture 85
|
9/17/14
|
Variable
|
5,000
|
5,000
|
6 months
|
5%
|
Debenture 87
|
9/24/14
|
Variable
|
140,995
|
140,995
|
6 months
|
5%
|
Debenture 88
|
10/1/14
|
$0.00025
|
16,378
|
13,878
|
12 months
|
14%
|
Debenture 90
|
10/27/14
|
$0.01
|
50,000
|
50,000
|
12 months
|
14%
|
Debenture 92
|
10/31/14
|
$0.0025
|
63,097
|
63,097
|
12 months
|
16%
|
Debenture 96
|
3/27/15
|
Variable
|
128,460
|
111,670
|
12 months
|
8%
|
Debenture 97
|
1/18/15
|
Variable
|
7,500
|
7,500
|
12 months
|
14%
|
Debenture 98
|
2/12/15
|
$0.0145
|
12,500
|
12,500
|
12 months
|
14%
|
Debenture 99
|
3/31/15
|
$0.01
|
112,972
|
112,972
|
12 months
|
14%
|
Debenture 100
|
2/2/15
|
Variable
|
79,115
|
79,115
|
12 months
|
12%
|
Debenture 101
|
2/2/15
|
Variable
|
45,000
|
45,000
|
12 months
|
12%
|
Debenture 102
|
2/24/15
|
$0.0025
|
10,000
|
9,000
|
12 months
|
14%
|
Debenture 104
|
3/12/15
|
Variable
|
25,000
|
25,000
|
12 months
|
14%
|
Debenture 105
|
3/21/15
|
$0.0025
|
30,000
|
30,000
|
12 months
|
14%
|
Debenture 106
|
1/5/15
|
Variable
|
15,000
|
15,000
|
6 months
|
15%
|
Debenture 107
|
1/5/15
|
Variable
|
15,000
|
5,300
|
6 months
|
15%
|
Debenture 109
|
2/11/15
|
Variable
|
25,000
|
25,000
|
12 months
|
8%
|
Debenture 110
|
2/26/15
|
Variable
|
16,000
|
16,000
|
12 months
|
8%
|
Debenture 111
|
3/4/15
|
Variable
|
27,500
|
27,500
|
12 months
|
8%
|
Debenture 112
|
3/1/15
|
$0.0015
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 114
|
4/2/15
|
Variable
|
26,947
|
24,447
|
12 months
|
8%
|
Debenture 115
|
4/2/15
|
$0.001
|
23,660
|
23,660
|
12 months
|
14%
|
Debenture 116
|
3/31/15
|
Variable
|
14,000
|
14,000
|
6 months
|
15%
|
Debenture 117
|
4/14/15
|
Variable
|
20,000
|
20,000
|
6 months
|
15%
|
Debenture 118
|
4/27/15
|
Variable
|
25,000
|
25,000
|
12 months
|
14%
|
Debenture 119
|
3/31/15
|
Variable
|
14,000
|
14,000
|
6 months
|
15%
|
Debenture 120
|
5/27/15
|
$0.0025
|
7,500
|
7,500
|
12 months
|
14%
|
Debenture 121
|
7/2/15
|
$0.0025
|
175,000
|
175,000
|
12 months
|
14%
|
Debenture 122
|
7/3/15
|
Variable
|
238,894
|
221,894
|
12 months
|
8%
|
Debenture 126
|
9/8/15
|
$0.0025
|
112,663
|
112,663
|
12 months
|
14%
|
Debenture 128
|
9/15/15
|
$0.0025
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 129
|
9/8/15
|
$0.0050
|
2,000
|
2,000
|
12 months
|
14%
|
Debenture 130
|
10/12/15
|
$0.0050
|
15,000
|
15,000
|
12 months
|
14%
|
Debenture 131
|
10/12/15
|
$0.0050
|
20,000
|
20,000
|
12 months
|
14%
|
Debenture 132
|
10/15/15
|
$0.0025
|
10,750
|
10,750
|
12 months
|
14%
|
Debenture 134
|
10/20/15
|
$0.0050
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 135
|
12/5/15
|
$0.0050
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 137
|
12/18/15
|
$0.0050
|
20,000
|
20,000
|
12 months
|
14%
|
Debenture 138
|
1/7/16
|
Variable
|
50,000
|
50,000
|
12 months
|
14%
|
Debenture 139
|
1/11/16
|
Variable
|
25,000
|
25,000
|
12 months
|
14%
|
Debenture 140
|
1/25/16
|
Variable
|
10,000
|
10,000
|
12 months
|
14%
|
Debenture 141
|
1/29/16
|
Variable
|
125,000
|
125,000
|
12 months
|
16%
|
Debenture 146
|
5/10/16
|
Variable
|
50,000
|
50,000
|
12 months
|
14%
|
Total
|
$ 3,206,523
|
2,966,957
|
||||
Less discount
|
(218,841)
|
|||||
Net
|
$ 2,748,116
|
Description
|
Date
|
Conversion Price
|
Original Principal Amount
|
Unpaid Principal Balance
|
Term
|
Interest Rate |
Debenture 123
|
8/24/15
|
Variable
|
$ 34,650
|
$ 24,650
|
24 months
|
8%
|
Debenture 125
|
9/4/15
|
Variable
|
105,000
|
105,000
|
24 months
|
8%
|
Debenture 127
|
9/25/15
|
Variable
|
50,000
|
50,000
|
24 months
|
8%
|
Debenture 133
|
10/20/15
|
Variable
|
100,000
|
100,000
|
24 months
|
8%
|
Debenture 136
|
12/4/15
|
Variable
|
160,000
|
160,000
|
24 months
|
8%
|
Debenture 142
|
1/29/16
|
Variable
|
20,000
|
20,000
|
20 months
|
8%
|
Debenture 143
|
3/3/16
|
Variable
|
30,000
|
30,000
|
18 months
|
8%
|
Debenture 144
|
4/15/16
|
Variable
|
15,000
|
15,000
|
17 months
|
8%
|
Debenture 145
|
4/18/16
|
Variable
|
50,000
|
50,000
|
17 months
|
8%
|
Total
|
$ 564,650
|
554,650
|
||||
Less discount
|
(338,100)
|
|||||
Net
|
$ 216,550
|
Derivative liability at December 31, 2015
|
$
|
10,852,906
|
||
Addition to liability for new debt issued
|
375,000
|
|||
Elimination of liability on conversion
|
(138,540
|
)
|
||
Change in fair value
|
(6,694,891
|
)
|
||
Derivative liability at June 30, 2016
|
$
|
4,394,475
|
Stock price on the valuation date
|
$
|
0.0009
|
||
Conversion price for the debt
|
$
|
0.00025- $0.00068
|
||
Dividend yield
|
0.00
|
%
|
||
Years to maturity
|
0.186 – 1.43
|
|||
Risk free rate
|
0.36% - 0.52
|
%
|
||
Expected volatility
|
165.21%% - 259.99
|
%
|
Long-term convertible debentures, net of discount of $338,100 (see Note 5)
|
$
|
216,550
|
||
Long-term note payable, net of discount of $23
|
29,977
|
|||
Total
|
246,527
|
|||
Current portion
|
29,977
|
|||
Long-term debt
|
$
|
216,550
|
Shares |
Weighted Average
Exercise Price |
Weighted Average Remaining Contract Term
|
||||||||||
Outstanding at December 31, 2015
|
4,977,267
|
$
|
0.03
|
3.25
|
||||||||
Granted
|
-
|
|||||||||||
Exercised
|
-
|
|||||||||||
Expired or cancelled
|
-
|
|||||||||||
Outstanding, vested and exercisable at June 30, 2016
|
4,977,267
|
$
|
0.03
|
2.75
|
· | Increased debt discount and derivative liability by $375,000. |
· | Decreased accrued interest payable by $3,095, decreased convertible debentures by $68,289, decreased debt discount by $19,176, decreased derivative liability by $138,540, increased common stock by $164,070 and increased additional paid-in capital by $18,847 for common shares issued in conversion of debt. |
· | Increased stockholder advances and decreased notes payable by $4,973. |
· | Decreased Series AA preferred stock and increased additional paid-in capital by $20. |
·
|
Decreased prepaid expenses and other current assets and increased debt discount by $13,666.
|
· | Increased additional paid-in capital and debt discount by $71,760 for beneficial conversion feature of convertible notes payable. |
· | Increased debt discount and derivative liability by $812,321. |
· | Decreased stockholder advances and increased convertible debentures by $128,460. |
· | Decreased accrued interest payable by $11,547, decreased convertible debentures by $127,085, decreased debt discount by $47,839, decreased derivative liability by $630,184, increased common stock by $418,487 and increased additional paid-in capital by $293,035 for common shares issued in conversion of debt. |
· | Decreased accrued interest payable by $1,947 and increased convertible debentures by $1,947. |
·
|
our ability to meet production and sales goals;
|
·
|
our ability to raise adequate capital to fund operations;
|
·
|
market developments affecting, and other changes in, the demand for our products
or the introduction of competing products; |
·
|
increases in the price of raw materials used in the production of our dolls;
|
·
|
our ability to develop and market our businesses at a level necessary to implement
our business strategy and our ability to finance our development; |
·
|
the condition of the capital markets generally, which will be affected by interest rates,
foreign currency fluctuations and general economic conditions; |
·
|
the political and economic climate in the foreign or domestic jurisdictions in which
we conduct business; and |
·
|
other United States or foreign regulatory or legislative developments which affect the
demand for our products generally or increase the cost for our products. |
·
|
Business model development and implementation, which consists of advice, counsel
and services in the areas of fund raising strategy, corporate structure, hiring needs, office space acquisition and corporate governance; |
·
|
Financial and accounting which consists of advice, counsel and services in the areas
of developing financial models and corporate accounting systems, corporate structure, quarterly reviews, various day to day accounting and bookkeeping; |
·
|
Product development which consists of advice and counsel in the areas of manufacturer
selections, development process, engineering reviews, prototype development and testing, quality control, logistical support, safety standards compliance and physical packaging design; and |
·
|
Marketing and promotions which consists of advice, counsel and services in the areas of
videography, photography, graphic design, printing, marketing and public relations activities, strategic market research and planning, website development and IT support. |
· | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
· | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
· | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Derivative liability
|
$
|
4,394,475
|
$
|
-
|
$
|
-
|
$
|
4,394,475
|
||||||||
Convertible debentures, net of discount
|
2,748,116
|
-
|
-
|
2,748,116
|
||||||||||||
Current portion of long-term debt, net
of discount |
29,977 |
- |
- |
29,977 |
||||||||||||
Long-term debt, net of current portion
and discount |
216,550 |
- |
- |
216,550 |
||||||||||||
Total liabilities measured at fair value
|
$
|
7,389,118
|
$
|
-
|
$
|
-
|
$
|
7,389,118
|
Exhibit No.
|
Description
|
10.1
|
Form of Convertible Debenture (incorporated by reference to Exhibit 10.7 to our Form 10-K filed on April 14, 2014).
|
10.2
|
Form of Convertible Back End Note*
|
31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14.*
|
31.2
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14*
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.*
|
101.INS
|
XBRL Instance**
|
101.SCH
|
XBRL Schema**
|
101.CAL
|
XBRL Calculations**
|
101.DEF
|
XBRL Definitions**
|
101.LAB
|
XBRL Label**
|
101.PRE
|
XBRL Presentation**
|
ONE WORLD HOLDINGS, INC.
|
||
Date:
August 19, 2016
|
By:
|
/s/ Corinda Joanne Melton
|
Name: Corinda Joanne Melton
|
||
Title: President and Chief Executive Officer
|
||
Date:
August 19, 2016
|
By:
|
/s/ Dennis P. Gauger
|
Name: Dennis P. Gauger
|
||
Title: Chief Financial Officer
|
||
Dated: | |||
|
ONE WORLD HOLDINGS, INC.
|
||
|
|
||
By:
|
|
||
Title: |
|
Date of Conversion:
|
|
Applicable Conversion Price: |
|
Signature:
|
|
|
[Print Name of Holder and Title of Signer] |
Address:
|
|
|
|
SSN or EIN:
|
|
Shares are to be registered in the following name:
|
|
|
|
Name:
|
|
Address:
|
|
Tel:
|
|
Fax: |
|
SSN or EIN:
|
|
|
|
Shares are to be sent or delivered to the following account:
|
|
|
|
Account Name: |
|
Address: |
|
|
|
Date:
August 19, 2016
|
By:
/s/ Corinda Joanne Melton
|
Corinda Joanne Melton
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Date:
August 19, 2016
|
By:
/s/ Dennis P. Gauger
|
Dennis P. Gauger
|
|
Chief Financial Officer
|
|
(Principal Accounting and Financial Officer)
|
Date: August 19, 2016
|
By:
/s/ Corinda Joanne Melton
|
Corinda Joanne Melton
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: August 19, 2016
|
By:
/s/ Dennis P. Gauger
|
Dennis P. Gauger
|
|
Chief Financial Officer
|
|
(Principal Accounting and Financial Officer)
|