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Document and Entity Information

v2.4.0.8
Document and Entity Information
3 Months Ended
Mar. 31, 2014
May 20, 2014
Document And Entity Information    
Entity Registrant Name STL Marketing Group, Inc.  
Entity Central Index Key 0001569055  
Document Type 10-Q  
Document Period End Date Mar. 31, 2014  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   180,618,630
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2014  

Consolidated Balance Sheets

v2.4.0.8
Consolidated Balance Sheets (USD $)
Mar. 31, 2014
Dec. 31, 2013
Current Assets    
Cash $ 2,603 $ 717
Prepaid expenses 23,755   
Deferred offering costs 100,000 25,000
Total Current Assets 126,358 25,717
Property and Equipment, net 6,716 7,231
Other Assets    
Security deposits 1,135 4,533
Total Other Assets 1,135 4,533
Total Assets 134,209 37,481
Current Liabilities:    
Accounts payable and accrued liabilities 938,250 861,022
Accounts payable - related party 365,202 324,252
Notes payable - related party 73,949 73,949
Liability to be settled in stock 118,333 103,333
Notes payable, net of current maturities 117,100 117,100
Current maturities of convertible notes payable, net of discount 851,822 697,688
Derivative liabilities 1,357,391 3,250,672
Total Current Liabilities 3,822,047 5,428,016
Total Liabilities 3,822,047 5,428,016
Stockholders' Deficit    
Common Stock, $0.001 Par Value, 2,600,000,000 Shares Authorized, 144,902,678 Shares Issued and Outstanding at March 31, 2014 and 139,223,524 Issued and Outstanding at December 31, 2013 144,903 139,224
Additional paid in capital - Preferred Stock (232,000) (232,000)
Discount on Preferred Stock (2,466,999) (2,466,999)
Additional paid in capital - Common Stock 149,097 74,776
Deficit (2,072,374) (2,072,374)
Accumulated deficit during the development stage (2,410,465) (4,033,162)
Total Stockholders' Deficit (3,687,838) (5,390,535)
Total Liabilities and Stockholders' Deficit 134,209 37,481
Preferred Stock Class A [Member]
   
Stockholders' Deficit    
Preferred stock value 1,800,000 1,800,000
Preferred Stock, Class B [Member]
   
Stockholders' Deficit    
Preferred stock value 1,400,000 1,400,000
Preferred Stock, Class C [Member]
   
Stockholders' Deficit    
Preferred stock value      

Consolidated Balance Sheets (Parenthetical)

v2.4.0.8
Consolidated Balance Sheets (Parenthetical) (USD $)
Mar. 31, 2014
Dec. 31, 2013
Common Stock, par value $ 0.001 $ 0.001
Common Stock, shares authorized 2,600,000,000 2,600,000,000
Common Stock, shares issued 144,902,678 139,223,524
Common Stock, shares outstanding 144,902,678 139,223,524
Preferred Stock Class A [Member]
   
Preferred Stock, par value $ 1.00 $ 1.00
Preferred Stock, shares authorized 1,800,000 1,800,000
Preferred Stock, shares issued 1,800,000 1,800,000
Preferred Stock, shares outstanding 1,800,000 1,800,000
Preferred Stock, Class B [Member]
   
Preferred Stock, par value $ 0.001 $ 0.001
Preferred Stock, shares authorized 1,400,000,000 1,400,000,000
Preferred Stock, shares issued 1,400,000,000 1,400,000,000
Preferred Stock, shares outstanding 1,400,000,000 1,400,000,000
Preferred Stock, Class C [Member]
   
Preferred Stock, par value $ 0.001 $ 0.001
Preferred Stock, shares authorized 125,000 125,000
Preferred Stock, shares issued 0 0
Preferred Stock, shares outstanding 0 0

Consolidated Statements of Operations

v2.4.0.8
Consolidated Statements of Operations (USD $)
3 Months Ended 48 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Income Statement [Abstract]      
Revenues         
Cost of revenues         
Gross profit 0 0 0
Operating expenses      
Compensation 62,607 57,500 875,111
Professional fees 133,209 25,666 1,223,969
Selling, general and administrative 17,510 62,999 347,140
Total operating expenses 213,326 146,165 2,446,220
Loss from operations (213,326) (146,165) (2,446,220)
Other income (expense):      
Interest expense (24,624) (8,295) (107,200)
Interest expense - discount on notes (144,470) (28,546) (516,394)
Change in fair value of derivative liabilities 2,104,406 213,220 1,610,460
Derivative expense (99,289) (312,413) (892,383)
Loss on abandonment of land lease       (58,725)
Other income (expense) - net 1,836,023 (136,034) 35,755
Loss before income tax provision 1,622,697 (282,199) (2,410,465)
Income tax provision         
Net loss $ 1,622,697 $ (282,199) $ (2,410,465)
Net income/(loss) per common share - basic $ 0.01 $ 0.00  
Net income/(loss) per common share - diluted $ 0.00 $ 0.00  
Weighted average common shares outstanding - basic 141,955,408 139,223,524  
Weighted average common shares outstanding - diluted 351,363,416 139,223,524  

Consolidated Statements of Cash Flows

v2.4.0.8
Consolidated Statements of Cash Flows (USD $)
3 Months Ended 48 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Cash Flows From Operating Activities:      
Net loss $ 1,622,697 $ (282,199) $ (2,410,465)
Adjustments to reconcile net loss to net cash used in operating activities      
Depreciation and amortization 515 725 17,025
Stock based compensation 45,000 5,000 270,000
Amortization of debt discount 144,470 28,547 516,395
Change in fair value of derivative liabilities (2,104,406) (213,220) (1,610,460)
Derivative expense 99,289 312,413 892,383
Loss on abandonment of land lease       58,725
(Increase) decrease in:      
Prepaid expenses (23,755) (396) (23,755)
Security deposits 3,398    (1,135)
Increase (decrease) in:      
Accounts payable and accrued liabilities 77,231 72,266 794,193
Accounts payable - related party 40,950 33,704 365,202
Net Cash Used in Operating Activities (94,614) (43,160) (1,131,892)
Cash Flows From Investing Activities:      
Cash acquired in merger    1,131 1,131
Net proceeds from disposition of land lease       67,500
Cash payment for land lease       (135,000)
Purchase of property and equipment       (14,967)
Deposit for acquisition       (25,000)
Loan to related party    13,675 13,675
Net Cash Provided by (Used in) Investing Activities    14,806 (92,661)
Cash Flows From Financing Activities:      
Proceeds from notes       50,000
Proceeds from related party notes       95,428
Repayment of related party notes    (975) (21,479)
Proceeds from related party loans       16,706
Proceeds from issuance of preferred stock       732,001
Stock issuance costs, preferred stock       (232,000)
Proceeds from issuance of common stock    25,000 225,000
Stock issuance costs, common stock       (30,000)
Proceeds from convertible notes 96,500 10,000 391,500
Net Cash Provided by Financing Activities 96,500 34,025 1,227,156
Net change in cash 1,886 5,671 2,603
Cash at beginning of period 717 185   
Cash at end of period 2,603 5,856 2,603
As part of the reverse merger, the Company acquired the following assets and liabilities:      
Cash       1,131
Convertible Debt, Net of Discount       (324,253)
Accounts Payable & Accrued Liabilities       (113,678)
Promissory Notes       (17,100)
Liability to be settled in stock       (98,333)
Reduction of deposit for acquisition       (25,000)
Debt issued in acquisition       (50,000)
Net liabilities acquired & non-cash acquisition costs       (2,072,374)
Convertible notes issued in exchange for common stock       (200,000)
Note payable issued for deferred offering costs 25,000    50,000
Common stock issued for deferred offering costs $ 50,000    $ 50,000

Consolidated Statements of Stockholders' Deficit

v2.4.0.8
Consolidated Statements of Stockholders' Deficit (USD $)
Preferred Stock Class A [Member]
Preferred Stock, Class B [Member]
Additional Paid-In Capital Preferred Stock [Member]
Discount On Preferred Stock [Member]
Common Stock Class B [Member]
Additional Paid-In Capital Common Stock [Member]
Deficit [Member]
Accumulated Deficit During The Development Stage [Member]
Total
Balance at Apr. 08, 2010                         $ 0
Balance, shares at Apr. 08, 2010                     
Founders Stock ($0.001 per share)    1,400,000    (1,399,000)          1,000
Founders Stock ($0.001 per share), shares    1,400,000,000               
Shares of Class B Stock issued to service providers in exchange for services rendered ($0.002 per share)         100,000 119,000     219,000
Shares of Class B Stock issued to service providers in exchange for services rendered ($0.002 per share), shares         100,000,000        
Net Profit/(Loss)               (265,206) (265,206)
Balance at Dec. 31, 2010    1,400,000    (1,399,000) 100,000 119,000    (265,206) (45,206)
Balance, shares at Dec. 31, 2010    1,400,000,000      100,000,000        
Preferred Stock issued for cash 1,800,000     (1,067,999)         732,001
Preferred Stock issued for cash, shares 1,800,000                
Stock issuance costs, preferred stock ($0.41 per share)     (232,000)           (232,000)
Stock issued for cash         200 199,800     200,000
Stock issued for cash, shares         200,000        
Stock issuance costs, common stock           (30,000)     (30,000)
Net Profit/(Loss)               (681,975) (681,975)
Balance at Dec. 31, 2011 1,800,000 1,400,000 (232,000) (2,466,999) 100,200 288,800    (947,181) (57,180)
Balance, shares at Dec. 31, 2011 1,800,000 1,400,000,000     100,200,000        
Net Profit/(Loss)               (627,349) (627,349)
Balance at Dec. 31, 2012 1,800,000 1,400,000 (232,000) (2,466,999) 100,200 288,800    (1,574,530) (684,529)
Balance, shares at Dec. 31, 2012 1,800,000 1,400,000,000     100,200,000        
Stock issued for cash         12,600 12,400     25,000
Stock issued for cash, shares         12,600,000        
Effect of merger and recapitalization         26,624 (26,624) (2,072,374)   (2,072,374)
Effect of merger and recapitalization, shares         26,623,524        
Puchase of Treasury Shares ($1.00 per share)         (200) (199,800)     (200,000)
Puchase of Treasury Shares ($1.00 per share), shares         (200,000)        
Net Profit/(Loss)               (2,458,632) (2,458,632)
Balance at Dec. 31, 2013 1,800,000 1,400,000 (232,000) (2,466,999) 139,224 74,776 (2,072,374) (4,033,162) (5,390,535)
Balance, shares at Dec. 31, 2013 1,800,000 1,400,000,000     13,922,524        
Stock issued for service ($0.020 per share)         733 14,267     15,000
Stock issued for service ($0.020 per share), Shares         733,000        
Stock issued for service ($0.014 per share)         1,100 13,900     15,000
Stock issued for service ($0.014 per share), Shares         1,100,000        
Stock issued for service ($0.013 per share)         3,846 46,154     50,000
Stock issued for service ($0.013 per share), Shares         3,846,154        
Net Profit/(Loss)               1,622,697 1,622,697
Balance at Mar. 31, 2014 $ 1,800,000 $ 1,400,000 $ (232,000) $ (2,466,999) $ 144,903 $ 149,097 $ (2,072,374) $ (2,410,465) $ (3,687,838)
Balance, shares at Mar. 31, 2014 1,800,000 1,400,000,000     144,902,678        

Consolidated Statements of Stockholders' Deficit (Parenthetical)

v2.4.0.8
Consolidated Statements of Stockholders' Deficit (Parenthetical) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Mar. 31, 2014
Dec. 31, 2010
Dec. 31, 2013
Dec. 31, 2011
Statement of Stockholders' Equity [Abstract]        
Stock issued, per share $ 0.020 $ 0.001 $ 0.002 $ 1.00
Stock issued, per share $ 0.014 $ 0.002 $ 1.00 $ 0.41
Stock issued, per share $ 0.013      

Nature of Operations and Summary of Significant Accounting Policies

v2.4.0.8
Nature of Operations and Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Operations and Summary of Significant Accounting Policies

Note 1 – Nature of Operations and Summary of Significant Accounting Policies

 

Nature of Operations

 

STL Marketing Group, Inc.

 

On October 15, 2012, STL Marketing Group, Inc. (“STLK”) entered into a merger agreement with Versant Corporation, a Delaware corporation (“Versant”). The agreement consisted of $75,000 for the Series A and C Preferred Stock. On January 23 and January 29, the respective Boards of Versant and STLK respectively approved the Share Exchange Plan (“SEP”). As a result of the Share Exchange Plan, on February 4, 2013: (1) the STL Marketing holders of Preferred A and Preferred C Series stock, returned their shares to Treasury for the reclassification and restructuring of these shares; (2) STLK’s Preferred Series A, B and C were restructured and amended to reflect the SEP agreed to by the companies; (3) Versant Class X shareholders exchanged their 1,000 Versant Class X Common shares for 1,400,000,000 Preferred Series B STLK Stock; (4) Versant Class A shareholders exchanged their 1,800,000 Versant Class A shares for 1,800,000 Preferred Series A Convertible STLK Stock; (5) of the 200,003 Versant’s Class B Common Stock shareholders, 200,000 shares ($200,000 value) received convertible notes in STLK and the remaining 3 shares ($219,000 value) received 100,000,000 restricted STLK Common Stock; (6) Versant issued 7,500,000 Class B, Common Shares to STL Marketing Group, granting them 100% of the common shares in Versant. Upon finalization of the merger the accounting acquirer held 1,501,800,000 shares or 98.26% of the combined entity and the legal acquirer held 26,623,524 shares of 1.74% of the combined entity.

 

STL Marketing Group, Inc. was a “shell company” prior to the Merger and did not conduct an active trade or business. From and after the consummation of the Merger on February 4, 2013 STL Marketing Group, Inc.’s primary operations consisted of the business and operations of Versant Corporation. Because STL Marketing Group, Inc. was a shell company at the time of the Merger; we filed a general form for registration under Form 10 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

For accounting purposes, the Merger transaction has been accounted for as a reverse acquisition, with STL Marketing Group, Inc. as the acquirer. The consolidated financial statements of STL Marketing Group, Inc. for the fiscal year ended December 31, 2013 represent a continuation of the financial statements of Versant Corporation, with one adjustment, which is to retroactively adjust the legal capital of Versant Corporation to reflect the legal capital of STL Marketing Group, Inc.

 

The Company’s core focus is on the development of renewable energy projects. Our business is the prospective sale of electricity that we plan to generate to a government owned utility company in Costa Rica. In addition, the Company is looking for additional opportunities to bolster its revenue stream.

 

Summary of Significant Accounting Policies

 

The accompanying unaudited interim consolidated financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2013 and 2012, together with Management’s Discussion and Analysis, as contained in the Form 10-K filed on April 15, 2014. The financial information as of December 31, 2013 is derived from the audited financial statements for the year ended December 31, 2013. The interim results for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any future interim periods.

 

Principles of Consolidation

 

The Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of consolidated
subsidiary or entity
  State or other
jurisdiction of
incorporation or
organization
  Date of incorporation or
formation
(date of acquisition, if
applicable)
  Attributable
interest
 
                 
Energia Renovable Versant SRL (ER) (1)   Costa Rica   November 2010     100 %
                 
V Tres Bache SRL (V3) (2)   Costa Rica   November, 2010     100 %
                 
Versant Corporation (VC) (3)   Delaware   April, 2010     100 %

 

  (1) ER was incorporated to establish renewable energy wind parks in Costa Rica. ER is the sole stockholder of V3.
     
  (2) V3 was incorporated to build and operate the first energy development on the Bache site.
     
  (3) VC was incorporated as the original US holding company for the wind development in Costa Rica.

 

All inter-company balances and transactions have been eliminated in consolidation.

 

Use of Estimates and Assumptions

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

 

Fair Value of Financial Instruments

 

The fair value of our financial assets and liabilities reflects our estimate of amounts that we would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of our assets and liabilities, we seek to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

Level 1   Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
Level 2   Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
Level 3   Pricing inputs that are generally unobservable inputs and not corroborated by market data.

 

The following are the major categories of liabilities measured at fair value on a recurring basis at March 31, 2014 and December 31, 2013, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

 

    March 31, 2014     December 31, 2013  
    Assets     Liabilities     Assets     Liabilities  
                         
Level 1                                
None   $ -     $ -     $ -     $ -  
                                 
Level 2                                
None     -       -       -       -  
                                 
Level 3                                
Derivative Liabilities     -       1,357,391       3,250,672       -  
    $ -     $ 1,357,391     $ 3,250,672     $ -  

 

Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements is the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement.

 

Carrying Value, Recoverability and Impairment of Long-Lived Assets

 

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

 

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

  

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

 

The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets.

 

The impairment charges, if any, are included in operating expenses in the accompanying statements of operations. The Company has not recorded any impairment charges during the months ended March 31, 2014 and 2013 or the period April 8, 2010 (inception) to March 31, 2014.

 

Cash

 

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

 

Property and Equipment

 

Property and equipment is stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets, which ranges from three to seven years.

 

Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter.

 

Research and Development

 

Research and development is expensed as incurred.

 

Advertising Costs

 

We expense advertising costs in the period in which they are incurred.

 

Stock-Based Compensation for Obtaining Employee Services

 

The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

 

quity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

 

The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”).

 

Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

 

Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic.

 

Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised.

 

Derivative Financial Instruments

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

 

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.

 

Debt Issue Costs and Debt Discount

 

The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

 

Income Tax Provision

 

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income and Comprehensive Income in the period that includes the enactment date.

 

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 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 Section 740-10-25, 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 should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

 

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

 

Uncertain Tax Positions

 

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the three months ended March 31, 2014 and 2013. The Company believes that all prior periods are still subject to examination by tax authorities.

 

Net Loss per Common Share

 

Basic earnings per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method.

 

During the three months ended March 31, 2013, we reported net loss, and accordingly dilutive instruments were excluded from the net loss per share calculation for such periods. During the three months ended March 31, 2014, we reported net income and accordingly included potentially dilutive instruments in the fully diluted net income per share calculation and the dilutive effect of convertible instruments were determined by application of the if-converted method.

 

Common stock equivalents are as follows:

 

    March 31, 2014     December 31, 2013  
                 
Convertible Debt     252,007,525       183,200,803  
Liability to be settled in common stock (1)     6,140,316       1,960,769  
Liability to be settled in common stock (exercise price $0.01/share) (2)     8,527,635       7,271,718  
Common stock equivalents     266,675,476       192,433,290  

 

  (1) Fair value was $58,333 at March 31, 2014 and $43,333 at December 31, 2013. See Note 6.
     
  (2) Fair value was $60,000 at March 31, 2014 and $60,000 at December 31, 2013. See Note 6.

 

Other Recently Issued, but Not Yet Effective Accounting Pronouncements

 

On July 18, 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, except as follows. The unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets to the extent (a) a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or (b) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax assets for such purpose. The amendments in ASU 20103-11 are effective prospectively for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on our financial position, results of operations or cash flows.

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Going Concern

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3 Months Ended
Mar. 31, 2014
Going Concern  
Going Concern

Note 2 – Going Concern

 

As reflected in the accompanying condensed consolidated financial statements, the Company had a net profit of $1,622,697 and net cash used in operations of $94,614 for the three months ended March 31, 2014. The Company has a deficit accumulated during the development stage of $2,410,465 and a working capital deficit of $3,695,689 at March 31, 2014. The Company does not yet have a history of financial stability. Historically, the principal source of liquidity has been the issuance of debt and equity securities. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The ability of the Company to continue as a going concern is dependent on management’s plans, which include further implementation of its business plan and continuing to raise funds through debt and/or equity raises.

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Property and Equipment

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Property and Equipment
3 Months Ended
Mar. 31, 2014
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 3 – Property and Equipment

 

    March 31, 2014     December 31, 2013  
Property and equipment are as follows:                
Furniture and fixtures   $ 4,909     $ 4,909  
Machinery and equipment     7,551       7,551  
Leasehold improvements     2,507       2,507  
      14,967       14,967  
Accumulated depreciation and amortization     (8,251 )     (7,736 )
Property and equipment - net   $ 6,716     $ 7,231  

 

Depreciation expense for the three months ended March 31, 2014 and 2013 and for the period from April 8, 2010 (inception) through March 31, 2014 was $515, $725 and $8,251, respectively.

Due From Investment Bank

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Due From Investment Bank
3 Months Ended
Mar. 31, 2014
Due From Investment Bank  
Due From Investment Bank

Note 4 – Due From Investment Bank

 

In April 2011, the Company engaged a Costa Rican investment bank, as its exclusive agent to advise the Company on the structuring of corporate openness and equity placement. During 2012 the Company entered into a dispute with the investment bank. The Company contends that the investment bank retained more than the fee allowed by the contract on the sale of equity securities (the “Closings”) that took place during the period April 2011 through December 2011. At March 31, 2014 and December 31, 2013, the Company believes they are owed $195,400 and $195,400, respectively, from the investment bank relating to excess fees withheld from the Closings. Due to the uncertainty surrounding the recoverability of the funds from the investment bank the Company has recorded a full allowance against the receivable. This amount has been recorded in additional paid in capital in the statement of stockholders equity. If the company wins the dispute and actually recovers the funds it will be recorded to additional paid in capital.

Notes Payable

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Notes Payable
3 Months Ended
Mar. 31, 2014
Debt Disclosure [Abstract]  
Notes Payable

Note 5 – Notes Payable

 

    March 31, 2014     December 31, 2013  
In October 2010, a third party loaned the Company $50,000 under a demand note bearing zero interest. This note is in default.   $ 50,000     $ 50,000  
                 
In March 2011, third parties loaned the Company $11,500 under demand notes bearing interest from 8-10% per year. The notes were acquired in the merger and are in default.     11,500       11,500  
                 
In December 2011, third parties loaned the Company $5,600 under demand notes bearing interest at 10%, plus a late fee of an additional 2% per month. The notes were acquired in the merger and are in default.     5,600       5,600  
                 
In February 2013, the Company executed a promissory note in the principal amount of $50,000, bearing an interest rate of 5%, with a default rate of 18%. The payment terms involve two payments of $25,000 each. This note is currently in default.     50,000       50,000  
    $ 117,100     $ 117,100  

Liability to be Settled in Stock

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Liability to be Settled in Stock
3 Months Ended
Mar. 31, 2014
Liability To Be Settled In Stock  
Liability to be Settled in Stock

Note 6 – Liability to be Settled in Stock

 

In March of 2008, the Company entered into an asset purchase agreement to purchase certain tangible and intangible assets for $65,000 in STLK common stock. As of March 31, 2014 and December 31, 2013, a liability totaling $43,333 and $43,333 respectively, exists related to these unissued shares. This liability was acquired in the merger.

 

In August 2012, the Company executed a consulting agreement with a third party to provide various services. Under the terms of the agreement, the consultant would be paid $10,000 per month for six months in the form of free trading shares. The share total is computed as follows:

 

  Earned compensation will accrue interest at 6%; and
     
  Accrued compensation will be convertible at a discount of 70% to market, based upon the average of the lowest 3 closing bid prices of the 20 days preceding any conversion

 

At March 31, 2014, the fully recorded amount of $60,000, remains outstanding and available to be converted. This liability was acquired in the merger.

 

In January of 2014, the Company executed a three-month consulting agreement with a third party to provide strategic planning matters. The consultant would be paid $15,000 per month for three months in the form of restricted common stock, using the average of the last five trading days of the month. As of March 31, 2014 the last remaining months balance of $15,000 has yet to be issued. There is no interest under this agreement.

Convertible Notes Payable

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Convertible Notes Payable
3 Months Ended
Mar. 31, 2014
Debt Disclosure [Abstract]  
Convertible Notes Payable

Note 7 – Convertible Notes Payable

 

  (A) Convertible Notes Payable

 

At March 31, 2014 and December 31, 2013, convertible debt consisted of the following:

 

    March 31, 2014     December 31, 2013  
Convertible into 50% of the average of the lowest three closing prices during the 20 trading days immediately preceding conversion. These notes matured in July 2008 ($75,000), November 2008 ($100,000) and February 2010 ($15,000). These notes bear an interest rate of 8%-10%. These notes were acquired in the merger and are currently in default.   $ 190,000     $ 190,000  
                 
Convertible into 50% of the five day average closing bid prices immediately preceding conversion. This note matured in July 2008. This note has an interest rate of 8%. This note was acquired in the merger and is currently in default.     50,000       50,000  
                 
Convertible into 10% of the average of the lowest three closing prices during the 20 trading days immediately preceding conversion. This note matured in March 2008 and bears a 6% interest rate. This note was acquired in the merger and is currently in default.     40,000       40,000  
                 
Convertible into 75% of the average of the lowest three closing prices during the 20 trading days immediately preceding conversion. These notes matured in May and June of 2010 and bear an 8% interest rate. These notes were acquired in the merger and are currently in default.     25,000       25,000  
                 
Convertible into 50% of the average of the lowest three closing prices during the 10 trading days immediately preceding conversion. Notes mature in July 2013 – May 2014 and bear an 8% interest rate. $257,000 of principal balance is in default as of March 31, 2014 and an additional $135,000 is in default as of May 20, 2014.     492,000       492,000  

 

Convertible into 60% of the lowest of any day during the 10 trading days immediately preceding conversion. Note matures in September 2014 and bears a 9.9% interest rate.     27,500       27,500  
                 
Convertible at the greater (a) $0.015 or (b) at 50% of the lowest closing bid price during the 30 trading days immediately preceding conversion. Note matures in May 2014 and bears a 10% interest rate.     25,000       25,000  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in August 2014 and bear an 8% interest rate.     32,500       32,500  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in October 2014 and bear an 8% interest rate.     42,500       -  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in December 2014 and bear an 8% interest rate.     32,500       -  
                 
Convertible at a 50% discount of the lowest of any day during the 15 trading days immediately preceding conversion. Note matures in March 2015 and bear an 8% interest rate.     21,500       -  
                 
Convertible at the greater (a) $0.015 or (b) at 50% of the lowest closing bid price during the 30 trading days immediately preceding conversion. Note matures in September 2014 and bear a 10% interest rate.     25,000       -  
    $ 1,003,500     $ 882,000  

 

The debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at conversion prices and terms discussed above. The Company classifies embedded conversion features in these notes as a derivative liability due to the discount to market feature, which could require a settlement in shares that cannot be determined until such conversions occur. The Company may not be able to determine if sufficient authorized shares exist in connection with contemplated conversions, which requires liability classification.

 

Convertible debt consisted of the following activity and terms:

 

          Interest Rate   Maturity  
                 
Convertible Debt Balance as of December 31, 2013     882,000     8%-10%     March 2013 – Sept. 2014 ($697,000 of balance is in default as of May 20, 2014)  
Borrowings during the period ended March 31, 2014     121,500     8% -10%     October 2014 –March 2015  
                     
Convertible Debt Balance as of March 31, 2014     1,003,500              
                     
Debt Discount     (151,678 )            
                     
Convertible Debt Balance as of March 31, 2014 net   $ 851,822              

 

  (B) Debt Discount

 

During the three months ended March 31, 2014 and 2013, the Company recorded debt discounts totaling $111,836 and $215,000 respectively.

 

The debt discounts pertain to convertible debt that contains embedded conversion options that are required to be bifurcated and reported at fair value.

 

The Company amortized $144,470 and $28,547 during the three months ended March 31, 2014 and March 31, 2013, respectively, to interest expense.

 

    March 31, 2014     December 31, 2013  
             
Debt Discount   $ 687,325     $ 575,489  
Amortization of debt discount     (535,647 )     (391,177 )
Debt Discount - net   $ 151,678     $ 184,312  

Derivative Liabilities

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Derivative Liabilities
3 Months Ended
Mar. 31, 2014
Derivative Liability [Abstract]  
Derivative Liabilities

Note 8 – Derivative Liabilities

 

Derivative liability – December 31, 2013     3,250,672  
Fair value mark to market adjustment for convertible instruments     (2,104,406 )
Fair value at the commitment date for convertible instruments     211,125  
Derivative liability - March 31, 2014   $ 1,357,391  

 

The Company records debt discount to the extent of the gross proceeds raised, any excess amount is recorded as a derivative expense. The Company recorded a derivative expense of $99,289 and $312,413 for the three months ended March 31, 2014 and 2013.

 

The Company uses the Black-Scholes model to estimate the fair value of its derivative liabilities at the end of each reporting period. The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of March 31, 2014:

 

    Commitment Date     March 31, 2014  
             
Expected dividends:   0%     0%  
Expected volatility:   244% - 449%     58% - 257%  
Expected term:   0.50 - 1 year     0.01 - 0.93 year  
Risk free interest rate:   0.08% - 0.14%     0.03% - 0.13%  

Related Party Transactions

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Related Party Transactions
3 Months Ended
Mar. 31, 2014
Related Party Transactions [Abstract]  
Related Party Transactions

Note 9 – Related Party Transactions

 

(A) Accounts Payable – Related Party

 

As of March 31, 2014 and December 31, 2013 the Company had accounts payable due to board members and companies owned by board members of $365,202 and $324,252. During the period April 8, 2010 through March 31, 2014, management and board members have been loaning money to the Company, paying expenses on behalf of the Company and deferring consulting fees.

 

(B) Related Party Consulting Services

 

The Company incurred consulting expenses to a company that is owned by a board member, and for the period ending March 31, 2014 and March 31, 2013 the amounts were $37,500 and $37,500 respectively.

 

(C) Notes Payable – Related Parties

 

The Company executed various promissory notes to related parties since inception. No new notes were issued for the period ending March 31, 2014.

 

The notes had the following range of terms:

 

  Maturing in 3 months to 1 year;
  Non-interest bearing
  Unsecured
  Default interest rate at 6%, per annum;

 

During the three months ended March 31, 2014 and the year ended December 31, 2013, the Company repaid $0 and $2,925 respectively leaving a balance of $73,949 and $73,949 respectively.

 

The Company is currently in default on all of these notes.

 

Debt under these obligations at March 31, 2014 and December 31, 2013 is as follows:

 

    March 31, 2014     December 31, 2013  
             
Notes payable   $ 73,949     $ 73,949  
Less: Current maturities     (73,949 )     (73,949 )
Notes payable, net of Current maturities   $ -     $ -  

Retirement Plan

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Retirement Plan
3 Months Ended
Mar. 31, 2014
Retirement Plan  
Retirement Plan

Note 10 – Retirement Plan

 

401(k)

 

The Company provided a 401(k) employee savings and retirement plan (the “Plan”). The Plan covered all employees who have completed six months of consecutive service with 160 hours monthly or have completed one year of service. The Company matched 100 percent of a participant’s elective deferrals up to 3 percent of the participant’s compensation, plus 50 percent of the participant’s elective deferrals that exceed 3 percent of the participant’s compensation, up to 5 percent of the participant’s compensation. Total contributions by the Company to the Plan were $0, $0, and $12,349 for the three months ended March 31, 2014 and 2013 and for the period April 8, 2010 (inception) through March 31, 2014, respectively.

Foreign Operations

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3 Months Ended
Mar. 31, 2014
Foreign Currency [Abstract]  
Foreign Operations

Note 11 – Foreign Operations

 

Costa Rica

 

Operations outside the U.S. include subsidiaries in Costa Rica. Foreign operations are subject to risks inherent in operating under different legal systems and various political and economic environments. Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange. These subsidiaries are still in the development stage and have not generated any revenues.

 

The consolidated financial statements of the Company’s subsidiary, located in Costa Rica, are translated from colones, its functional currently, into U.S. dollars, the Company’s functional currency. All foreign currency assets and liabilities are translated at the exchange rate in effect at the reporting date, and all revenue and expenses are translated at the month-end exchange rate. The effects of translating the financial statements of the foreign subsidiary into U.S. dollars are reported as a cumulative translation adjustment, a separate component of the accumulated other comprehensive income (loss) in the consolidated statements of the shareholders’ equity (deficit). Foreign currency transaction gains/losses are reported as a component of other income – net in the consolidated statements of operations. The amount of foreign currency transaction gains and losses and translation adjustments were de minimis during the period ended March 31, 2014.

Stockholders Deficit

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3 Months Ended
Mar. 31, 2014
Equity [Abstract]  
Stockholders Deficit

Note 12 – Stockholders Deficit

 

Common Stock –

 

Common Stock has 2,600,000,000 shares authorized at $0.001 par value. Subject to the foregoing provisions, dividends may be declared on the Common Stock, and each Share of Common Stock shall entitle the holder thereof to one vote in all proceedings in which action shall be taken by stockholders of the Corporation.

 

For the three months ended March 31, 2014 the following Common Stock has been issued:

 

- 3,846,154 Restricted Common Stock to Iconic Holdings, LLC. of Bethesda, MD. Stock was issued against the agreement for an Equity Line of Credit of up to five million dollars ($5,000,000). This is the first of two tranches for their commitment fee of the contract.

 

- 1,833,000 Restricted Common Stock to Uptick Capital, LLC. of Stamford, CT. Stock was issued against services for consulting in strategic planning initiatives to enhance and accelerate the commercialization of the Company’s business objectives.

 

Class A Preferred –

 

Series A Convertible Preferred Stock has 1,800,000 shares authorized and issued, with a $1.00 par value, with each share of the Series A Preferred Stock to have the following rights and privileges:

 

  1. Voting Rights. Each share of the Series A Preferred Stock shall have a one vote per share and the holder(s) of the Series A Preferred Stock shall have the right to vote with the holders of the Company’s Common Stock on all matters that are submitted to the Company’s stockholders.
     
  2. Dividend Rights. Each share of the Series A Preferred Stock shall be entitled to a 10% preferred annual dividend on Par ($0.10 per share) non-cumulative on any dividends, whether ordinary or liquidating that may be declared or paid by this Company.
     
  3. Sinking Fund. No sinking fund shall be established in connection with the retirement of the Series A Preferred Stock.
     
  4. Conversion Rights. At the option of the holder of the Series A Preferred Stock, each share of the Series A Preferred Stock may be converted into the Company’s Common Stock at no discount to average trading price ten days prior to conversion at any time and from time to time after March 1. 2018.

 

Class B Preferred –

 

Series B Preferred Stock has 1,400,000,000 shares authorized and issued, with a $0.001 par value, with each share of the Series B Preferred Stock to have the following rights and privileges:

 

  1. Voting Rights. Each share of the Series B Preferred Stock shall have a 1.6 vote right per share.
     
  2. Dividend Rights. Each share of the Series B Preferred Stock shall be entitled to any non-preferred dividends, whether ordinary or liquidating, that may be declared or paid by this Company.
     
  3. Sinking Fund. No sinking fund shall be established in connection with the retirement of the Series B Preferred Stock.
     
  4. Conversion Rights. The Series B Preferred Stock shall not be entitled to convert into shares of the Company’s Common Stock at anytime.
     
  5. Restricted. Series B Preferred Stock shall be restricted from being traded publicly, sold in part, transferred, encumbered or otherwise put at risk. The stock may be sold only if 100% of the Company is sold to a qualified party that can maintain the legal requirements for renewable energy generation in Costa Rica or if the laws in Costar Rica change allowing this block to be released.

 

Class C Preferred –

 

Series C Preferred Stock has 125,000 shares authorized, with a $0.001 par value, with each share of the Series C Preferred Stock to have the following rights and privileges:

 

  1. Voting Rights. Each share of the Series C Preferred Stock shall have no voting rights.
     
  2. Dividend Rights. Each share of the Series C Preferred Stock shall not be entitled to any dividends, whether ordinary or liquidating, that may be declared or paid by this Company.
     
  3. Sinking Fund. No sinking fund shall be established in connection with the retirement of the Series C Preferred Stock.
     
  4. Conversion Rights. At the option of the holder of the Series C Preferred Stock, each share of the Series C Preferred Stock may be converted into the Company’s Common Stock at a 50% discount to the average of the lowest three (3) trading prices daily volume weighted average prices in the ten trading days immediately prior to the date upon which the convertible preferred stock is converted.

Commitments and Contingencies

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3 Months Ended
Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 13 – Commitments and Contingencies

 

Agreements with Placement Agents and Finders

 

In April 2011, the Company engaged, a Costa Rican investment bank, as its exclusive agent to advise the Company on the structuring of corporate openness and equity placement with the following terms:

 

  To assist the Company in connection with a best efforts private placement of up to $9.5 million of the Company’s equity and/or debt securities
     
  Compensation – a fee in an amount equal to 5% of the aggregate gross proceeds raised

 

A former principal member of the board of directors of the Company is an employee of the investment bank.

 

During the year ended December 31, 2011 the Company paid the investment bank fees of $262,000. The Company is disputing $195,400 of these fees. (See Note 4)

 

On March 19, 2014, the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, entered an order approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement between STL Marketing Group, Inc., a Colorado corporation, and Tarpon Bay Partners, LLC, a Florida limited liability company, in the matter entitled Tarpon Bay Partners, LLC v. STL Marketing Group, Inc. , Case No. 2014-CA-278. Tarpon commenced the Action against the Company on February 6, 2014 to recover an aggregate of $519,282 of past-due accounts payable of the Company, which Tarpon had purchased from certain service providers of the Company pursuant to the terms of separate receivable purchase agreements between Tarpon and each of such vendors, plus fees and costs. The Assigned Accounts relate to certain legal, accounting, and financial services. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Tarpon upon execution of the Order by the Court on March 19, 2014.

 

For more information, please refer to the Company’s Form 8-K filing with the SEC regarding this matter.

 

Currently, the 3(a)(10) process is operating as agreed upon, with shares being issued, sold and the Company’s debts settled as per the terms and conditions in the contract.

 

Operating Leases

 

On November 1, 2010, the Company began leasing office space in Colorado Springs. This lease has been renewed for an additional three-year term. Monthly rent begins at $694 per month and increases over the term of the lease. The Company is also responsible for paying a share of the landlord’s property operating costs. The renewal lease began in November 2013 and expires in October 2016.

 

On February 19, 2011, the Company began leasing mixed use space in Costa Rica. The lease had a three year term. The monthly rent began at $1,800 per month and increased over the term of the lease. This lease expired in February 2014 and was not renewed.

 

On October 1, 2011, the Company began a virtual office lease. The lease had a one year term and renews automatically. Monthly rent begins at $199 per month and increases over the term of the lease. This lease was cancelled in January 2014.

 

Rent expense amounted to $9,542, and $10,374 for the period ending March 31, 2014 and March 31, 2013, respectively and is included in selling, general and administrative expenses in the consolidated statements of operations.

 

Future minimum lease payments under these operating leases are approximately as follows:

 

Period Ending March 31,        
2014     11,024  
2015     15,256  
2016     13,147  
Total   $ 39,426  

 

Litigations, Claims and Assessments

 

The Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. Other than the litigation with Costa Rican Investment Bank, as discussed in Note 4, the Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results.

Subsequent Events

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3 Months Ended
Mar. 31, 2014
Subsequent Events [Abstract]  
Subsequent Events

Note 14 – Subsequent Events

 

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were available to be issued to determine if they must be reported. The Management of the Company determined that there are certain reportable subsequent events to be disclosed as follows.

 

As of May 20, 2014, the Company has increased the outstanding Common Stock as follows:

 

- 27,497,000 Common Stock to Tarpon Bay Partners, LLC. of Naples, FL. Stock was issued pursuant to Section 3(a)(10) of the Securities Act of 1933, stated by the Circuit Court of the Second Judicial Circuit in Florida.

Nature of Operations and Summary of Significant Accounting Policies (Policies)

v2.4.0.8
Nature of Operations and Summary of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Principles of Consolidation

Principles of Consolidation

 

The Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of consolidated
subsidiary or entity
  State or other
jurisdiction of
incorporation or
organization
  Date of incorporation or
formation
(date of acquisition, if
applicable)
  Attributable
interest
 
                 
Energia Renovable Versant SRL (ER) (1)   Costa Rica   November 2010     100 %
                 
V Tres Bache SRL (V3) (2)   Costa Rica   November, 2010     100 %
                 
Versant Corporation (VC) (3)   Delaware   April, 2010     100 %

 

  (1) ER was incorporated to establish renewable energy wind parks in Costa Rica. ER is the sole stockholder of V3.
     
  (2) V3 was incorporated to build and operate the first energy development on the Bache site.
     
  (3) VC was incorporated as the original US holding company for the wind development in Costa Rica.

 

All inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates and Assumptions

Use of Estimates and Assumptions

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The fair value of our financial assets and liabilities reflects our estimate of amounts that we would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of our assets and liabilities, we seek to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

Level 1   Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
Level 2   Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
Level 3   Pricing inputs that are generally unobservable inputs and not corroborated by market data.

 

The following are the major categories of liabilities measured at fair value on a recurring basis at March 31, 2014 and December 31, 2013, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

 

    March 31, 2014     December 31, 2013  
    Assets     Liabilities     Assets     Liabilities  
                         
Level 1                                
None   $ -     $ -     $ -     $ -  
                                 
Level 2                                
None     -       -       -       -  
                                 
Level 3                                
Derivative Liabilities     -       1,357,391       3,250,672       -  
    $ -     $ 1,357,391     $ 3,250,672     $ -  

 

Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements is the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

 

 

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

 

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

  

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

 

The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets.

 

The impairment charges, if any, are included in operating expenses in the accompanying statements of operations. The Company has not recorded any impairment charges during the months ended March 31, 2014 and 2013 or the period April 8, 2010 (inception) to March 31, 2014.

Cash

Cash

 

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Property and Equipment

Property and Equipment

 

Property and equipment is stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets, which ranges from three to seven years.

 

Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter.

Research and Development

Research and Development

 

Research and development is expensed as incurred.

Advertising Costs

Advertising Costs

 

We expense advertising costs in the period in which they are incurred.

Stock-Based Compensation for Obtaining Employee Services

Stock-Based Compensation for Obtaining Employee Services

 

The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

 

The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”).

 

Pursuant to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

 

Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic.

 

Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised.

Derivative Financial Instruments

Derivative Financial Instruments

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments.

 

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model.

Debt Issue Costs and Debt Discount

Debt Issue Costs and Debt Discount

 

The Company may pay debt issue costs, and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Income Tax Provision

Income Tax Provision

 

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income and Comprehensive Income in the period that includes the enactment date.

 

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 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 Section 740-10-25, 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 should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

 

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Uncertain Tax Positions

Uncertain Tax Positions

 

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the three months ended March 31, 2014 and 2013. The Company believes that all prior periods are still subject to examination by tax authorities.

Net Loss per Common Share

Net Loss per Common Share

 

Basic earnings per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method.

 

During the three months ended March 31, 2013, we reported net loss, and accordingly dilutive instruments were excluded from the net loss per share calculation for such periods. During the three months ended March 31, 2014, we reported net income and accordingly included potentially dilutive instruments in the fully diluted net income per share calculation and the dilutive effect of convertible instruments were determined by application of the if-converted method.

 

Common stock equivalents are as follows:

 

    March 31, 2014     December 31, 2013  
                 
Convertible Debt     252,007,525       183,200,803  
Liability to be settled in common stock (1)     6,140,316       1,960,769  
Liability to be settled in common stock (exercise price $0.01/share) (2)     8,527,635       7,271,718  
Common stock equivalents     266,675,476       192,433,290  

 

  (1) Fair value was $58,333 at March 31, 2014 and $43,333 at December 31, 2013. See Note 6.
     
  (2) Fair value was $60,000 at March 31, 2014 and $60,000 at December 31, 2013. See Note 6.

Other Recently Issued, but Not Yet Effective Accounting Pronouncements

Other Recently Issued, but Not Yet Effective Accounting Pronouncements

 

On July 18, 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, except as follows. The unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets to the extent (a) a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or (b) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax assets for such purpose. The amendments in ASU 20103-11 are effective prospectively for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on our financial position, results of operations or cash flows.

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Nature of Operations and Summary of Significant Accounting Policies (Tables)

v2.4.0.8
Nature of Operations and Summary of Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Consolidated Subsidiaries and/or Entities

The Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of consolidated
subsidiary or entity
  State or other
jurisdiction of
incorporation or
organization
  Date of incorporation or
formation
(date of acquisition, if
applicable)
  Attributable
interest
 
                 
Energia Renovable Versant SRL (ER) (1)   Costa Rica   November 2010     100 %
                 
V Tres Bache SRL (V3) (2)   Costa Rica   November, 2010     100 %
                 
Versant Corporation (VC) (3)   Delaware   April, 2010     100 %

 

  (1) ER was incorporated to establish renewable energy wind parks in Costa Rica. ER is the sole stockholder of V3.
     
  (2) V3 was incorporated to build and operate the first energy development on the Bache site.
     
  (3) VC was incorporated as the original US holding company for the wind development in Costa Rica.

Schedule of Liabilities Measured at Fair Value on a Recurring Basis

The following are the major categories of liabilities measured at fair value on a recurring basis at March 31, 2014 and December 31, 2013, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

 

    March 31, 2014     December 31, 2013  
    Assets     Liabilities     Assets     Liabilities  
                         
Level 1                                
None   $ -     $ -     $ -     $ -  
                                 
Level 2                                
None     -       -       -       -  
                                 
Level 3                                
Derivative Liabilities     -       1,357,391       3,250,672       -  
    $ -     $ 1,357,391     $ 3,250,672     $ -  

Schedule of Common Stock Equivalents

Common stock equivalents are as follows:

 

    March 31, 2014     December 31, 2013  
                 
Convertible Debt     252,007,525       183,200,803  
Liability to be settled in common stock (1)     6,140,316       1,960,769  
Liability to be settled in common stock (exercise price $0.01/share) (2)     8,527,635       7,271,718  
Common stock equivalents     266,675,476       192,433,290  

 

  (1) Fair value was $58,333 at March 31, 2014 and $43,333 at December 31, 2013. See Note 6.
     
  (2) Fair value was $60,000 at March 31, 2014 and $60,000 at December 31, 2013. See Note 6.

Property and Equipment (Tables)

v2.4.0.8
Property and Equipment (Tables)
3 Months Ended
Mar. 31, 2014
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment

    March 31, 2014     December 31, 2013  
Property and equipment are as follows:                
Furniture and fixtures   $ 4,909     $ 4,909  
Machinery and equipment     7,551       7,551  
Leasehold improvements     2,507       2,507  
      14,967       14,967  
Accumulated depreciation and amortization     (8,251 )     (7,736 )
Property and equipment - net   $ 6,716     $ 7,231  

Notes Payable (Tables)

v2.4.0.8
Notes Payable (Tables)
3 Months Ended
Mar. 31, 2014
Debt Disclosure [Abstract]  
Schedule of Notes Payable

    March 31, 2014     December 31, 2013  
In October 2010, a third party loaned the Company $50,000 under a demand note bearing zero interest. This note is in default.   $ 50,000     $ 50,000  
                 
In March 2011, third parties loaned the Company $11,500 under demand notes bearing interest from 8-10% per year. The notes were acquired in the merger and are in default.     11,500       11,500  
                 
In December 2011, third parties loaned the Company $5,600 under demand notes bearing interest at 10%, plus a late fee of an additional 2% per month. The notes were acquired in the merger and are in default.     5,600       5,600  
                 
In February 2013, the Company executed a promissory note in the principal amount of $50,000, bearing an interest rate of 5%, with a default rate of 18%. The payment terms involve two payments of $25,000 each. This note is currently in default.     50,000       50,000  
    $ 117,100     $ 117,100  

Convertible Notes Payable (Tables)

v2.4.0.8
Convertible Notes Payable (Tables)
3 Months Ended
Mar. 31, 2014
Debt Disclosure [Abstract]  
Schedule of Convertible Debt

At March 31, 2014 and December 31, 2013, convertible debt consisted of the following:

 

    March 31, 2014     December 31, 2013  
Convertible into 50% of the average of the lowest three closing prices during the 20 trading days immediately preceding conversion. These notes matured in July 2008 ($75,000), November 2008 ($100,000) and February 2010 ($15,000). These notes bear an interest rate of 8%-10%. These notes were acquired in the merger and are currently in default.   $ 190,000     $ 190,000  
                 
Convertible into 50% of the five day average closing bid prices immediately preceding conversion. This note matured in July 2008. This note has an interest rate of 8%. This note was acquired in the merger and is currently in default.     50,000       50,000  
                 
Convertible into 10% of the average of the lowest three closing prices during the 20 trading days immediately preceding conversion. This note matured in March 2008 and bears a 6% interest rate. This note was acquired in the merger and is currently in default.     40,000       40,000  
                 
Convertible into 75% of the average of the lowest three closing prices during the 20 trading days immediately preceding conversion. These notes matured in May and June of 2010 and bear an 8% interest rate. These notes were acquired in the merger and are currently in default.     25,000       25,000  
                 
Convertible into 50% of the average of the lowest three closing prices during the 10 trading days immediately preceding conversion. Notes mature in July 2013 – May 2014 and bear an 8% interest rate. $257,000 of principal balance is in default as of March 31, 2014 and an additional $135,000 is in default as of May 20, 2014.     492,000       492,000  
Convertible into 60% of the lowest of any day during the 10 trading days immediately preceding conversion. Note matures in September 2014 and bears a 9.9% interest rate.     27,500       27,500  
                 
Convertible at the greater (a) $0.015 or (b) at 50% of the lowest closing bid price during the 30 trading days immediately preceding conversion. Note matures in May 2014 and bears a 10% interest rate.     25,000       25,000  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in August 2014 and bear an 8% interest rate.     32,500       32,500  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in October 2014 and bear an 8% interest rate.     42,500       -  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in December 2014 and bear an 8% interest rate.     32,500       -  
                 
Convertible at a 50% discount of the lowest of any day during the 15 trading days immediately preceding conversion. Note matures in March 2015 and bear an 8% interest rate.     21,500       -  
                 
Convertible at the greater (a) $0.015 or (b) at 50% of the lowest closing bid price during the 30 trading days immediately preceding conversion. Note matures in September 2014 and bear a 10% interest rate.     25,000       -  
    $ 1,003,500     $ 882,000  

Schedule of Convertible Debt Activity and Terms

Convertible debt consisted of the following activity and terms:

 

          Interest Rate   Maturity  
                 
Convertible Debt Balance as of December 31, 2013     882,000     8%-10%     March 2013 – Sept. 2014 ($697,000 of balance is in default as of May 20, 2014)  
Borrowings during the period ended March 31, 2014     121,500     8% -10%     October 2014 –March 2015  
                     
Convertible Debt Balance as of March 31, 2014     1,003,500              
                     
Debt Discount     (151,678 )            
                     
Convertible Debt Balance as of March 31, 2014 net   $ 851,822              

Schedule of Debt Discount

The Company amortized $144,470 and $28,547 during the three months ended March 31, 2014 and March 31, 2013, respectively, to interest expense.

 

    March 31, 2014     December 31, 2013  
             
Debt Discount   $ 687,325     $ 575,489  
Amortization of debt discount     (535,647 )     (391,177 )
Debt Discount - net   $ 151,678     $ 184,312  

Derivative Liabilities (Tables)

v2.4.0.8
Derivative Liabilities (Tables)
3 Months Ended
Mar. 31, 2014
Derivative Liability [Abstract]  
Schedule of Derivative Liabilities

Derivative liability – December 31, 2013     3,250,672  
Fair value mark to market adjustment for convertible instruments     (2,104,406 )
Fair value at the commitment date for convertible instruments     211,125  
Derivative liability - March 31, 2014   $ 1,357,391  

Schedule of Assumptions Based Derivative Liabilities

The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions as of March 31, 2014:

 

    Commitment Date     March 31, 2014  
             
Expected dividends:   0%     0%  
Expected volatility:   244% - 449%     58% - 257%  
Expected term:   0.50 - 1 year     0.01 - 0.93 year  
Risk free interest rate:   0.08% - 0.14%     0.03% - 0.13%  

Related Party Transactions (Tables)

v2.4.0.8
Related Party Transactions (Tables)
3 Months Ended
Mar. 31, 2014
Related Party Transactions [Abstract]  
Schedule of Related Party Transactions

Debt under these obligations at March 31, 2014 and December 31, 2013 is as follows:

 

    March 31, 2014     December 31, 2013  
             
Notes payable   $ 73,949     $ 73,949  
Less: Current maturities     (73,949 )     (73,949 )
Notes payable, net of Current maturities   $ -     $ -  

Commitments and Contingencies (Tables)

v2.4.0.8
Commitments and Contingencies (Tables)
3 Months Ended
Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Schedule of future minimum lease payments operating leases

Future minimum lease payments under these operating leases are approximately as follows:

 

Period Ending March 31,        
2014     11,024  
2015     15,256  
2016     13,147  
Total   $ 39,426  

Nature of Operations and Summary of Significant Accounting Policies (Details Narrative)

v2.4.0.8
Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) (USD $)
0 Months Ended 0 Months Ended
Feb. 04, 2013
Versant Corporation [Member]
Feb. 04, 2013
Versant Corporation [Member]
Preferred Stock, Class B [Member]
Oct. 15, 2012
Series A And C Preferred Stock [Member]
Feb. 04, 2013
Preferred Stock, Class B [Member]
Versant Corporation [Member]
Feb. 04, 2013
Preferred Series A Convertible Stock [Member]
Versant Corporation [Member]
Value consisted in merger agreement     $ 75,000    
Business acquisition, number of shares issued       1,400,000,000 1,800,000
Business acquisition of convertible notes receivable, description      

200,003 Versant’s Class B Common Stock shareholders, 200,000 shares ($200,000 value) received convertible notes in STLK and the remaining 3 shares ($219,000 value) received 100,000,000 restricted STLK Common Stock;

 
Number of share held by stock holder equity       200,003  
Number of stock issued during period for acquisition, shares 200,000        
Number of stock issued during period for acquisition, value $ 200,000        
Number of share unissued   3      
Percentage of granted common shares   100.00%      
Acquisition of held shares       1,501,800,000  
Number of acquired legally held shares       26,623,524  
Percentage of combined entity shares held by accounting acquirer   98.26%      
Percentage of combined entity shares held by legal acquirer   1.74%      

Nature of Operations and Summary of Significant Accounting Policies - Schedule of Consolidated Subsidiaries or Entity (Details)

v2.4.0.8
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Consolidated Subsidiaries or Entity (Details)
3 Months Ended
Mar. 31, 2014
Energia Renovable Versant [Member]
 
Name of consolidated subsidiary or entity Energia Renovable Versant SRL (ER) [1]
State or other jurisdiction of incorporation or organization Costa Rica
Date of incorporation or formation Nov. 30, 2010
Attributable interest 100.00%
V Tres Bache [Member]
 
Name of consolidated subsidiary or entity V Tres Bache SRL (V3) [2]
State or other jurisdiction of incorporation or organization Costa Rica
Date of incorporation or formation Nov. 30, 2010
Attributable interest 100.00%
Versant Corporation [Member]
 
Name of consolidated subsidiary or entity Versant Corporation (VC) [3]
State or other jurisdiction of incorporation or organization Delaware
Date of incorporation or formation Apr. 30, 2010
Attributable interest 100.00%
[1] (1) ER was incorporated to establish renewable energy wind parks in Costa Rica. ER is the sole stockholder of V3.
[2] (2) V3 was incorporated to build and operate the first energy development on the Bache site.
[3] (3) VC was incorporated as the original US holding company for the wind development in Costa Rica.