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Document and Entity Information

v2.4.0.8
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2014
Apr. 15, 2015
Jun. 30, 2014
Document And Entity Information      
Entity Registrant Name STL Marketing Group, Inc.    
Entity Central Index Key 0001569055    
Document Type 10-K    
Document Period End Date Dec. 31, 2014    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Entity Voluntary Filers No    
Entity Well-Known Seasoned Issuer No    
Entity's Current Reporting Status Yes    
Entity Filer Category Smaller Reporting Company    
Entity Public Float     $ 254,894
Entity Common Stock, Shares Outstanding   145,697,286  
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2014    

Consolidated Balance Sheets

v2.4.0.8
Consolidated Balance Sheets (USD $)
Dec. 31, 2014
Dec. 31, 2013
Current Assets    
Cash $ 102 $ 717
Deferred offering costs 84,070 25,000
Total Current Assets 84,172 25,717
Property and Equipment, net 5,755 7,231
Other Assets    
Security deposits 1,135 4,533
Total Other Assets 1,135 4,533
Total Assets 91,062 37,481
Current Liabilities:    
Accounts payable and accrued liabilities 1,062,173 861,022
Accounts payable - related party 385,677 324,252
Notes payable - related party 42,751 73,949
Liability to be settled in stock 114,500 103,333
Liability settlement 18,681   
Notes payable, net of current maturities 60,000 117,100
Current maturities of convertible notes payable, net of discount 978,069 697,688
Derivative liabilities 2,439,998 3,250,672
Total Current Liabilities 5,101,849 5,428,016
Total Liabilities 5,101,849 5,428,016
Commitments and Contingencies      
Stockholders' Deficit    
Common Stock, $0.001 Par Value, 2,600,000,000 Shares Authorized, 59,763,616 Shares Issued and Outstanding at December 31, 2014, 9,281,568 Issued and Outstanding at December 31, 2013 59,764 9,282
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 1,305,726 204,718
Deficit (6,877,278) (6,105,536)
Total Stockholders' Deficit (5,010,787) (5,390,535)
Total Liabilities and Stockholders' Deficit 91,062 37,481
Class A - Preferred Stock [Member]
   
Stockholders' Deficit    
Preferred stock value 1,800,000 1,800,000
Class B - Preferred Stock [Member]
   
Stockholders' Deficit    
Preferred stock value 1,400,000 1,400,000
Class C - Preferred Stock [Member]
   
Stockholders' Deficit    
Preferred stock value      

Consolidated Balance Sheets (Parenthetical)

v2.4.0.8
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 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 59,763,616 9,281,568
Common Stock, shares outstanding 59,763,616 9,281,568
Class A - Preferred Stock [Member]
   
Preferred Stock, par value, percentage 10.00% 10.00%
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
Class B - Preferred Stock [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
Class C - Preferred Stock [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 $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Income Statement [Abstract]    
Revenues      
Cost of revenues      
Gross profit      
Operating expenses    
Compensation 243,304 248,303
Professional fees 284,589 373,630
Selling, general and administrative 135,686 102,281
Total operating expenses 663,579 724,214
Loss from operations (663,579) (724,214)
Other income (expense):    
Interest expense (461,234) (75,451)
Interest expense - discount on notes (407,398) (371,924)
Loss on Settlement Liability (83,428)   
Change in fair value of derivative liabilities 1,369,729 (493,946)
Derivative expense (525,832) (793,097)
Loss on abandonment of land lease      
Other income (expense) - net (108,163) (1,734,418)
Loss before income tax provision (771,742) (2,458,632)
Income tax provision      
Net Income (Loss) $ (771,742) $ (2,458,632)
Net income/(loss) per common share - basic & diluted $ (0.03) $ (0.27)
Weighted average common shares outstanding - basic & diluted 25,456,577 9,041,308

Consolidated Statements of Cash Flows

v2.4.0.8
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Cash Flows From Operating Activities:    
Net Loss $ (771,742) $ (2,458,632)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization 2,116 2,828
Stock based compensation 122,140 5,000
Change in fair value of derivative liabilities (1,369,729) 493,946
Derivative expense 509,902 793,097
Amortization of deferred offering costs 15,930   
Financing fees 83,428   
Interest of debt converted below par 354,920   
(Increase) decrease in:    
Prepaid expenses    399
Increase (decrease) in:    
Accounts payable and accrued liabilities 298,037 336,595
Accounts payable - related party 61,425 123,493
Net Cash Used in Operating Activities (286,175) (331,349)
Cash Flows From Investing Activities:    
Cash acquired in merger    1,131
Purchase of property and equipment (640)   
Loan to related party    13,675
Security deposits 3,398   
Net Cash Provided by (Used in) Investing Activities 2,758 14,806
Cash Flows From Financing Activities:    
Proceeds from related party notes 2,873   
Repayment of related party notes (34,071) (2,925)
Proceeds from issuance of common stock    25,000
Proceeds from convertible notes 314,000 295,000
Net Cash Provided by Financing Activities 282,802 317,075
Net change in cash (615) 532
Cash at beginning of period 717 185
Cash at end of period 102 717
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)
Conversion of convertible notes payable into common stock 142,181 (200,000)
Note payable issued for deferred offering costs 25,000 25,000
Common stock issued for deferred offering costs 50,000   
Liabilities settled in connection with the Liabilities Purchase Agreement $ 165,447   

Consolidated Statements of Stockholders' Deficit

v2.4.0.8
Consolidated Statements of Stockholders' Deficit (USD $)
Class A - Preferred Stock [Member]
Class B - Preferred Stock [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]
Total
Balance at Dec. 31, 2012 $ 1,800,000 $ 1,400,000 $ (232,000) $ (2,466,999) $ 6,680 $ 382,320 $ (1,574,530) $ (684,529)
Balance, shares at Dec. 31, 2012 1,800,000 1,400,000,000     6,680,000      
Effect of merger and recapitalization             1,775 (1,775) (2,072,374) (2,072,374)
Effect of merger and recapitalization, shares           1,774,902      
Purchase of Treasury Shares ($15.00 per share)             (13) (199,987)    (200,000)
Purchase of Treasury Shares ($15.00 per share), shares           (13,333)      
Stock issued for cash ($0.03 per share)         840 24,160    25,000
Stock issued for cash ($0.03 per share), shares         840,000      
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) 9,282 204,718 (6,105,536) (5,390,535)
Balance, shares at Dec. 31, 2013 1,800,000 1,400,000,000     9,281,568      
Stock issued for service ($0.30 per share)         49 14,951    15,000
Stock issued for service ($0.30 per share), shares         48,867      
Stock issued for service ($0.21 per share)         73 14,927     
Stock issued for service ($0.21 per share), shares         73,333      
Stock issued for service ($0.195 per share)         256 49,744     
Stock issued for service ($0.195 per share), shares         256,410      
Stock issued for service ($0.048 per share)         573 26,947    27,520
Stock issued for service ($0.048 per share), shares         573,333      
Stock issued for service ($0.0225 per share)         267 5,733   6,000
Stock issued for service ($0.0225 per share), shares         266,667      
Stock issued for service ($0.0105 per share)         240 2,280    2,520
Stock issued for service ($0.0105 per share), shares         240,000      
Stock issued for service ($0.003 per share)         533 1,067    1,600
Stock issued for service ($0.003 per share), shares         533,333      
Stock issued for conversion of note payable         33,798 473,160    506,958
Stock issued for conversion of note payable, Shares         33,797,238      
Reclassification of derivative liabilities due to conversion of debt           280,158    280,158
Liabilities settled under Liability Purchase Agreement         14,693 232,041    246,734
Liabilities settled under Liability Purchase Agreement, Shares         14,692,867      
Net Profit/(Loss)             (771,742) (771,742)
Balance at Dec. 31, 2014 $ 1,800,000 $ 1,400,000 $ (232,000) $ (2,466,999) $ 59,764 $ 1,305,726 $ (6,877,278) $ (5,010,787)
Balance, shares at Dec. 31, 2014 1,800,000 1,400,000,000     59,763,617      

Consolidated Statements of Stockholders' Deficit (Parenthetical)

v2.4.0.8
Consolidated Statements of Stockholders' Deficit (Parenthetical) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Common Stock, par value $ 0.001 $ 0.001
Purchase fo treasury shares stock, per share   $ 15.00
Stock issued for cash, per share   $ 0.03
Stock issued for services one, per share $ 0.30  
Stock issued for services two, per share $ 0.21  
Stock issued for services three, per share $ 0.195  
Stock issued for services four, per share $ 0.048  
Stock issued for services five, per share $ 0.0225  
Stock issued for services six, per share $ 0.0105  
Stock issued for services seven, per share $ 0.003  
Class A - Preferred Stock [Member]
   
Preferred Stock, par value $ 1.00 $ 1.00
Class B - Preferred Stock [Member]
   
Preferred Stock, par value $ 0.001 $ 0.001
Common Stock Class B [Member]
   
Common Stock, par value $ 0.001 $ 0.001

Nature of Operations and Summary of Significant Accounting Policies

v2.4.0.8
Nature of Operations and Summary of Significant Accounting Policies
12 Months Ended
Dec. 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

 

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 6,666,667 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 100,120,000 shares or 98.26% of the combined entity and the legal acquirer held 1,774,902 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 has recently added the sale and distribution of PBX equipment (VoIP technology) to its original focus in the development of renewable energy projects. As a result our business is the sales and distribution of VoIP PBXs under the brand name PhoneSuite, as well as the prospective sale of electricity through a wind park to a government owned utility company in Costa Rica. The Company continues to evaluate additional opportunities to bolster its revenue stream.

  

Summary of Significant Accounting Policies

 

Principles of Consolidation

 

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

 

Name of consolidated subsidiary/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 %
                 
PhoneSuite Solutions, Inc. (PSS) (4)   Delaware   May, 2014     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.
     
  (4) PSS was incorporated to handle the distribution markets of PhoneSuite products.

 

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 December 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):

 

    December 31, 2014     December 31, 2013  
    Assets     Liabilities     Assets     Liabilities  
                         
Level 1                                
None   $ -     $ -     $ -     $ -  
                                 
Level 2                                
None     -       -       -       -  
                                 
Level 3                                
Derivative Liabilities     -       2,439,998       -       3,250,672  
                                 
    $ -     $ 2,439,998     $ -     $ 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 input 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. 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 sourcing 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 years ended December 31, 2014 and 2013.

 

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 grant-date fair value of the equity instrument issued and are recognized in the statement of operations as compensation over the relevant service period.

 

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 a commitment for performance by the counterparty to earn the equity instrument is reached (a performance commitment).

 

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 consist of conversion features embedded in convertible debentures which meet the criteria for bifurcation from their host contract. These financial instruments are recorded in the balance sheet at fair value. 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 740-10-45, 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 740-10-40 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 740-10-45 for the years ended December 31, 2014 and 2013. The Company believes that all prior periods are still subject to examination by tax authorities.

  

Reverse Stock Split

 

In October 2014, the Company’s board of directors and stockholders approved an amended and restated certificate of incorporation to effect a reverse split of shares of our common stock at a 1-for-15 ratio. The reverse split became effective in March 2015. The par value and the authorized shares of the common and convertible preferred stock were not adjusted as a result of the reverse split. All issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this reverse split for all periods presented.

 

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 years ended December 31, 2014 and December 31, 2013, the Company reported a net loss, and accordingly dilutive instruments were excluded from the net loss per share calculation for such periods.

 

Common stock equivalents are as follows:

 

    December 31, 2014     December 31, 2013  
             
Convertible Debt     151,220,218       12,213,387  
Liability to be settled in common stock (1)     2,422,222       130,718  
Liability to be settled in common stock (exercise price $0.01/share) (2)     4,289,961       484,781  
Common stock equivalents     157,932,401       12,828,886  

 

  (1) Fair value was $54,500 at December 31, 2014 and $43,333 at December 31, 2013. See Note 6.
     
  (2) Fair value was $60,000 at December 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 has not had a material impact on our financial position, results of operations or cash flows.

 

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company is currently evaluating the impact of the new standards.

 

In June 2014, the FASB issued ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements.

 

In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), which provides guidance on management’s responsibility in evaluating whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. The adoption of ASU 2014-15 is not expected to have a material impact on our financial position, results of operations or cash flows.

 

In April 2015, the FASB issued Accounting Standards Update No. 2015-03 , "Interest - Imputation of Interest (Subtopic 835-30)," which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. This guidance will be effective at the beginning of fiscal year 2017. The Company is currently evaluating the impact of the new standards.

 

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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Going Concern
12 Months Ended
Dec. 31, 2014
Going Concern  
Going Concern

Note 2 – Going Concern

 

As reflected in the accompanying condensed consolidated financial statements, the Company had a net loss of $771,742, net cash used in operations of $286,175 and has a working capital deficit of approximately $5,108,000 for the year ended December 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
12 Months Ended
Dec. 31, 2014
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 3 – Property and Equipment

 

Property and equipment are as follows:   December 31, 2014     December 31, 2013  
Furniture and fixtures   $ 4,909     $ 4,909  
Machinery and equipment     8,191       7,551  
Leasehold improvements     2,507       2,507  
      15,607       14,967  
Accumulated depreciation and amortization     (9,852 )     (7,736 )
Property and equipment - net   $ 5,755     $ 7,231  

 

Depreciation expense for the year ended December 31, 2014 and 2013 was $2,116 and $2,828 respectively.

Due from Investment Bank

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Due from Investment Bank
12 Months Ended
Dec. 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 December 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
12 Months Ended
Dec. 31, 2014
Debt Disclosure [Abstract]  
Notes Payable

Note 5 – Notes Payable

 

    December 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. A payment of $1,500 was made as of June 2014, leaving a balance of $10,000 as of December 31, 2014.     10,000       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 were in default. The note was paid in full during the year ended December 31, 2014.     -       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 was in default. The note was paid in full during the year ended December 31, 2014.     -       50,000  
    $ 60,000     $ 117,100  

Liability to be Settled in Stock

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Liability to be Settled in Stock
12 Months Ended
Dec. 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 December 31, 2014 and December 31, 2013, a liability totaling $0 and $43,333 respectively, exists related to these unissued shares. This liability was acquired in the merger. In coordination with Section 3(a)(10) of the Securities Act of 1933, stated by the Circuit Court of the Second Judicial Circuit in Florida, the Company agreed to pay for this debt and therefore moved this debt from the Liability to be Settled in Stock to a Settlement Liability (see Note 7).

 

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 into 70% of the average of the lowest three closing bid prices of the 20 days preceding any conversion

 

At December 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 December 31, 2014 the last remaining months balance of $15,000 has yet to be issued. There is no interest under this agreement.

 

In February of 2014, the Company engaged Lucosky Brookman LLP as its counsel. According to the contract, a portion of the fees from Lucosky Brookman would be paid in restricted common shares. As of December 31, 2014 the Company has fees in the amount of $39,500, which is available to be converted.

Settlement Liability

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Settlement Liability
12 Months Ended
Dec. 31, 2014
Settlement Liability  
Settlement Liability

Note 7 – Settlement Liability

 

In coordination with Section 3(a)(10) of the Securities Act of 1933, stated by the Circuit Court of the Second Judicial Circuit in Florida, the Company agreed to a settlement liability to pay for its outstanding stock liability debt of $43,333. Total payments of $24,652 were made during the year ending December 31, 2014, leaving a balance of $18,681 and $0 as of December 31, 2014 and December 31, 2013 respectively.

Convertible Notes Payable

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Convertible Notes Payable
12 Months Ended
Dec. 31, 2014
Debt Disclosure [Abstract]  
Convertible Notes Payable

Note 8 – Convertible Notes Payable

 

  (A) Convertible Notes Payable

 

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

 

    December 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. These notes are currently in default. As of December 31, 2014, $5,000 of these notes has been converted.     487,000       492,000  
                 
Convertible into 60% of the lowest of any day during the 10 trading days immediately preceding conversion. Note matured in September 2014 and bears a 9.9% interest rate. As of December 31, 2014, $16,641 of this note has been converted, leaving a balance of $10,859.     10,859       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. This note matured in May 2014, bears a 10% interest rate and is currently in default.     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 bears an 8% interest rate. As of December 31, 2014, this note has been converted in full.     -       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 bears an 8% interest rate. As of September 30, 2014, this note has been converted in full.     -       -  
                 
Convertible at a 42% discount of the lowest three closing price during the 15 trading days immediately preceding conversion. Note matures in December 2014 and bears an 8% interest rate. As of September 30, 2014, this note has been converted in full.     -       -  
                 
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 bears an 8% interest rate. As of December 31, 2014, $4,720 of this note has been converted, leaving a balance of $16,780.     16,780       -  
                 
Convertible at a 50% of the lowest closing bid price during the 30 trading days immediately preceding conversion. Note matures in September 2014 and bears a 10% interest rate. As of December 31, 2014, $8,320 of this note has been converted, leaving a balance of $16,680.     16,680       -  

 

Convertible at the lessor of (a) $0.004 or (b) at 40% discount of the lowest trade price during the 25 trading days immediately preceding conversion. Note matures in May 2016, has a 10% OID and bears a one time interest charge of 12% after ninety days (August 2014).     27,500       -  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in March 2015 and bears an 8% interest rate.     32,500       -  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in March 2015 and bears an 8% interest rate.     32,500       -  
                 
Convertible into 50% of the lowest close price during the 10 trading days immediately preceding conversion. Note matures in July 2015 and bears an 8% interest. The Back End convertible note portion of this agreement was cancelled as of December 31, 2014.     40,000       -  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in April 2015 and bears an 8% interest rate.     32,500       -  
                 
Convertible into 50% of the lowest close price during the 10 trading days immediately preceding conversion. Note matures in August 2015 and bears an 8% interest. In connection with this convertible note, the Company issued a Back End convertible note, in the principal amount of $25,000. The Back End Note has the same terms, due dates and conditions the convertible note. This Back End note is secured by a $25,000 Promissory Note to the Company, issued by the Holder. The Company has the right to cancel the Back End note. If it elects to disallow such funding, then the Company’s Back End Note will be cancelled along with the offsetting Holder’s Promissory Note.     25,000       -  
                 
Convertible at the lessor of (a) $0.004 or (b) at 40% discount of the lowest trade price during the 25 trading days immediately preceding conversion. Note matures in September 2016, has a 10% OID and bears a one time interest charge of 12% after ninety days (December 2014).     33,000       -  
    $ 1,084,319     $ 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% -12 %   March 2008 – Sept. 2014
($861,319 is in default as of
December 31, 2014)
 
                     
Borrowings during the year ended December 31, 2014     344,500     8% -12 %   October 2014 – Sept. 2016  
                     
Conversions during the year ended December 31, 2014     (142,181 )            
Convertible Debt Balance as of September 30, 2014     1,084,319              
                     
Debt Discount     (106,250 )            
                     
Convertible Debt Balance as of December 31, 2014 - Net   $ 978,069              

 

  (B) Debt Discount

 

During the year ended December 31, 2014 and 2013, the Company recorded debt discounts totaling $329,336 and $518,489 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 $407,398 and $371,924 during the year ended December 31, 2014 and December 31, 2013, respectively, to interest expense.

 

    December 31, 2014     December 31, 2013  
             
Debt Discount   $ 762,644     $ 575,489  
Amortization of debt discount     (656,394 )     (391,177 )
Debt Discount - net   $ 106,250     $ 184,312  

Derivative Liabilities

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Derivative Liabilities
12 Months Ended
Dec. 31, 2014
Derivative Liability [Abstract]  
Derivative Liabilities

Note 9 – Derivative Liabilities

 

Derivative liability – December 31, 2013   $ 3,250,672  
Fair value mark to market adjustment for convertible instruments     (1,369,726 )
Reduction in fair value due to debt conversions     (280,186 )
Fair value at the commitment date for convertible instruments     839,238  
Derivative liability – December 31, 2014   $ 2,439,998  

 

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 $525,832 and $793,097 for the year ended December 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 December 31, 2014:

 

    Commitment Date     December 31, 2014  
             
Expected dividends:     0 %     0 %
Expected volatility:     238% - 449 %     290% - 959 %
Expected term:     0.50 - 2 years       0.01 – 1.68 year  
Risk free interest rate:     0.08% - 0.37 %     0.03% - 0.67 %

Related Party Transactions

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Related Party Transactions
12 Months Ended
Dec. 31, 2014
Related Party Transactions [Abstract]  
Related Party Transactions

Note 10 – Related Party Transactions

 

(A) Accounts Payable – Related Party

 

As of December 31, 2014 and December 31, 2013 the Company had accounts payable due to board members and companies owned by board members of $385,677 and $324,252. Since April 8, 2010 through December 31, 2014, management and board members have been loaning money to the Company, paying expenses on behalf of the Company and deferring salaries and 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 year ending December 31, 2014 and December 31, 2013 the amounts were $82,500 and $150,000 respectively.

 

(C) Notes Payable – Related Parties

 

The Company executed various promissory notes to related parties since inception. New notes were issued for the year ending December 31, 2014, in the amount of $2,373..

 

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 years ended December 31, 2014 and 2013, the Company repaid $34,071 and $2,925 respectively leaving a balance of $42,751 and $73,949 respectively. The Company is currently in default on $39,877 of these notes.

 

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

 

    December 31, 2014     December 31, 2013  
             
Notes payable   $ 42,751     $ 73,949  
Less: Current maturities     (42,751 )     (73,949 )
Notes payable, net of Current maturities   $ -     $ -  

Retirement Plan

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Retirement Plan
12 Months Ended
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
Retirement Plan

Note 11 – 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. The Company has not contributed to the Plan for the year ended December 31, 2014 and 2013.

Foreign Operations

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Foreign Operations
12 Months Ended
Dec. 31, 2014
Foreign Currency [Abstract]  
Foreign Operations

Note 12 – 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 year periods ended December 31, 2014 and 2013.

Stockholders Deficit

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Stockholders Deficit
12 Months Ended
Dec. 31, 2014
Equity [Abstract]  
Stockholders Deficit

Note 13 – 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 year ended December 31, 2014 the following Common Stock has been issued:

 

- 256,410 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.

 

- 122,200 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.

  

- 2,777,131 Common Stock the Holder of various convertible notes that converted $32,500 in principal and $1,300 in accrued interest for a note with the maturity date of August 2014.

 

- 14,692,867 Common Stock to Tarpon Bay Partners, LLC., pursuant to Section 3(a)(10) of the Securities Act of 1933, stated by the Circuit Court of the Second Judicial Circuit in Florida.

 

- 2,952,307 Common Stock the Holder of various convertible notes that converted $42,500 in principal and $1,700 in accrued interest for a note with the maturity date of October 2014.

 

- 8,468,925 Common Stock the Holder of various convertible notes that converted $32,500 in principal and $1,300 in accrued interest for a note with the maturity date of December 2014.

 

- 7,511,667 Common Stock the Holder of a convertible note that converted $16,641 in principal and $0 in accrued interest for a note with the maturity date of September 2014.

 

- 1,613,333 Common Stock (Restricted) to Investor News Source Consulting, LLC. for services rendered during a four-month period.

 

- 5,903,598 Common Stock to Tarpon Bay Partners, LLC. Holder of a convertible note that converted $8,320 in principal, $2,271 in accrued interest and 2,415 in fees for a note with the maturity date of September 2014.

 

- 835,204 Common Stock the Holder of a convertible note that converted $5,000 in principal and $673 in accrued interest for a note with the maturity date of October 2013.

 

- 5,348,407 Common Stock the Holder of a convertible note that converted $4,720 in principal and $234 in accrued interest for a note with the maturity date of March 2015.

Commitments and Contingencies

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Commitments and Contingencies
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 14 – Commitments and Contingencies

 

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.

 

Rent expense amounted to $20,237 and $44,501 for the year ending December 31, 2014 and December 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 December 31,        
2015       15,256  
2016       13,147  
Total     $ 28,403  

  

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)

 

Liability Purchase Agreement

 

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.

 

Pursuant to the Settlement Agreement, the Company shall issue and deliver to Tarpon shares (the “Settlement Shares”) of the Company’s Common Stock in one of more tranches as necessary, and subject to adjustment and ownership limitations, sufficient to generate proceeds such that the aggregate Remittance Amount (as defined in the Settlement Agreement) equals the Claim.

 

In addition, pursuant to the terms of the Settlement Agreement, the Company issued to Tarpon the Tarpon Initial Note in the principal amount of $25,000. Under the terms of the Tarpon Initial Note, the Company shall pay Tarpon $25,000 on the date of maturity which was May 31, 2014. This Note is convertible by Tarpon into the Company’s Common Shares (See Note 8).

 

Also per the Company’s agreement with Tarpon, the Company issued the Tarpon Success Fee Note in the principal amount of $25,000 in favor of Tarpon as a commitment fee. The Tarpon Success Fee Note is due on September 20, 2014. The Tarpon Success Fee Note is convertible into shares of the Company’s common stock (See Note 8).

 

In connection with the settlement, and during the year ending December 31, 2014, the Company issued Tarpon 14,692,867 shares of Common Stock from which gross proceeds of $246,734 were generated from the sale of the Common Stock. In connection with the transaction, Tarpon received fees of $81,287 and providing payments of $165,447 to settle outstanding vendor payables. A portion of the fees that Tarpon has received, has not been fully documented by Tarpon to the Company as requested, and therefore are in dispute and are pending of file date. For audit purposes, we have recorded these fees as fees paid to Tarpon.

 

Any shares not used by Tarpon are subject to return to the Company. Accordingly, the Company accounts for these shares as issued but not outstanding until the shares have been sold by Tarpon and the proceeds are known. Net proceeds received by Tarpon are included as a reduction to accounts payable or other liability as applicable, as such funds are legally required to be provided to the party Tarpon purchased the debt from.

  

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

v2.4.0.8
Subsequent Events
12 Months Ended
Dec. 31, 2014
Subsequent Events [Abstract]  
Subsequent Events

Note 15 – 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:

 

On March 4, 2015, the Company received notice from the Financial Industry Regulatory Authority (the “FINRA Notice”) that the Company’s application for a 1:15 reverse split was approved. In accordance with the FINRA Notice, the 1:15 reverse split of the Company’s common stock went effective on March 5, 2015.

 

The following conversions have been made;

 

- 5,338,888 Common Stock the Holder of a convertible note that converted $961 in principal and $0 in accrued interest for a note with the maturity date of September 2014.

     

- 5,994,829 Common Stock the Holder of a various convertible notes that converted $2,000 in principal and $98 in accrued interest for a note with the maturity date of August 2015.

     

- 43,180,986 Common Stock the Holder of various convertible notes that converted $17,995 in principal and $0 in accrued interest for a note with the maturity date of March 2015.

     

- 21,848,938 Common Stock the Holder of various convertible notes that converted $7,690 in principal and $389 in accrued interest for a note with the maturity date of March 2015.

     

- 8,450,000 Common Stock the Holder of various convertible notes that converted $1,521 in principal and $0 in accrued interest for a note with the maturity date of May 2016.

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

v2.4.0.8
Nature of Operations and Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 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/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 %
                 
PhoneSuite Solutions, Inc. (PSS) (4)   Delaware   May, 2014     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.
     
  (4) PSS was incorporated to handle the distribution markets of PhoneSuite products.

 

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 December 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):

 

    December 31, 2014     December 31, 2013  
    Assets     Liabilities     Assets     Liabilities  
                         
Level 1                                
None   $ -     $ -     $ -     $ -  
                                 
Level 2                                
None     -       -       -       -  
                                 
Level 3                                
Derivative Liabilities     -       2,439,998       -       3,250,672  
                                 
    $ -     $ 2,439,998     $ -     $ 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 input 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

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. 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 sourcing 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 years ended December 31, 2014 and 2013.

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 grant-date fair value of the equity instrument issued and are recognized in the statement of operations as compensation over the relevant service period.

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 a commitment for performance by the counterparty to earn the equity instrument is reached (a performance commitment).

 

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

 

Derivative financial instruments consist of conversion features embedded in convertible debentures which meet the criteria for bifurcation from their host contract. These financial instruments are recorded in the balance sheet at fair value. 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 740-10-45, 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 740-10-40 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 740-10-45 for the years ended December 31, 2014 and 2013. The Company believes that all prior periods are still subject to examination by tax authorities.

Reverse Stock Split

Reverse Stock Split

 

In October 2014, the Company’s board of directors and stockholders approved an amended and restated certificate of incorporation to effect a reverse split of shares of our common stock at a 1-for-15 ratio. The reverse split became effective in March 2015. The par value and the authorized shares of the common and convertible preferred stock were not adjusted as a result of the reverse split. All issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this reverse split for all periods presented.

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 years ended December 31, 2014 and December 31, 2013, the Company reported a net loss, and accordingly dilutive instruments were excluded from the net loss per share calculation for such periods.

 

Common stock equivalents are as follows:

 

    December 31, 2014     December 31, 2013  
             
Convertible Debt     151,220,218       12,213,387  
Liability to be settled in common stock (1)     2,422,222       130,718  
Liability to be settled in common stock (exercise price $0.01/share) (2)     4,289,961       484,781  
Common stock equivalents     157,932,401       12,828,886  

 

  (1) Fair value was $54,500 at December 31, 2014 and $43,333 at December 31, 2013. See Note 6.
     
  (2) Fair value was $60,000 at December 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 has not had a material impact on our financial position, results of operations or cash flows.

 

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company is currently evaluating the impact of the new standards.

 

In June 2014, the FASB issued ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.” This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements.

 

In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), which provides guidance on management’s responsibility in evaluating whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. The adoption of ASU 2014-15 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)
12 Months Ended
Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Consolidated Subsidiaries or Entities

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

 

Name of consolidated subsidiary/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 %
                 
PhoneSuite Solutions, Inc. (PSS) (4)   Delaware   May, 2014     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.
     
  (4) PSS was incorporated to handle the distribution markets of PhoneSuite products.

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 December 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):

 

    December 31, 2014     December 31, 2013  
    Assets     Liabilities     Assets     Liabilities  
                         
Level 1                                
None   $ -     $ -     $ -     $ -  
                                 
Level 2                                
None     -       -       -       -  
                                 
Level 3                                
Derivative Liabilities     -       2,439,998       -       3,250,672  
                                 
    $ -     $ 2,439,998     $ -     $ 3,250,672  

Schedule of Common Stock Equivalents

Common stock equivalents are as follows:

 

    December 31, 2014     December 31, 2013  
             
Convertible Debt     151,220,218       12,213,387  
Liability to be settled in common stock (1)     2,422,222       130,718  
Liability to be settled in common stock (exercise price $0.01/share) (2)     4,289,961       484,781  
Common stock equivalents     157,932,401       12,828,886  

 

  (1) Fair value was $54,500 at December 31, 2014 and $43,333 at December 31, 2013. See Note 6.
     
  (2) Fair value was $60,000 at December 31, 2014 and $60,000 at December 31, 2013. See Note 6.

Property and Equipment (Tables)

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

Property and equipment are as follows:   December 31, 2014     December 31, 2013  
Furniture and fixtures   $ 4,909     $ 4,909  
Machinery and equipment     8,191       7,551  
Leasehold improvements     2,507       2,507  
      15,607       14,967  
Accumulated depreciation and amortization     (9,852 )     (7,736 )
Property and equipment - net   $ 5,755     $ 7,231  

Notes Payable (Tables)

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

    December 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. A payment of $1,500 was made as of June 2014, leaving a balance of $10,000 as of December 2014.     10,000       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 were in default. The note was paid in full during the year ended December 31, 2014.     -       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 was in default. The note was paid in full during the year ended December 31, 2014.     -       50,000  
    $ 60,000     $ 117,100  

Convertible Notes Payable (Tables)

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

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

 

    December 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. These notes are currently in default. As of December 31, 2014, $5,000 of these notes has been converted.     487,000       492,000  
                 
Convertible into 60% of the lowest of any day during the 10 trading days immediately preceding conversion. Note matured in September 2014 and bears a 9.9% interest rate. As of December 31, 2014, $16,641 of this note has been converted, leaving a balance of $10,859.     10,859       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. This note matured in May 2014, bears a 10% interest rate and is currently in default.     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 bears an 8% interest rate. As of December 31, 2014, this note has been converted in full.     -       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 bears an 8% interest rate. As of September 30, 2014, this note has been converted in full.     -       -  
                 
Convertible at a 42% discount of the lowest three closing price during the 15 trading days immediately preceding conversion. Note matures in December 2014 and bears an 8% interest rate. As of September 30, 2014, this note has been converted in full.     -       -  
                 
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 bears an 8% interest rate. As of December 31, 2014, $4,720 of this note has been converted, leaving a balance of $16,780.     16,780       -  
                 
Convertible at a 50% of the lowest closing bid price during the 30 trading days immediately preceding conversion. Note matures in September 2014 and bears a 10% interest rate. As of December 31, 2014, $8,320 of this note has been converted, leaving a balance of $16,680.     16,680       -  

 

Convertible at the lessor of (a) $0.004 or (b) at 40% discount of the lowest trade price during the 25 trading days immediately preceding conversion. Note matures in May 2016, has a 10% OID and bears a one time interest charge of 12% after ninety days (August 2014).     27,500       -  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in March 2015 and bears an 8% interest rate.     32,500       -  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in March 2015 and bears an 8% interest rate.     32,500       -  
                 
Convertible into 50% of the lowest close price during the 10 trading days immediately preceding conversion. Note matures in July 2015 and bears an 8% interest. The Back End convertible note portion of this agreement was cancelled as of December 31, 2014.     40,000       -  
                 
Convertible at a 42% discount of the lowest three closing prices during the 15 trading days immediately preceding conversion. Note matures in April 2015 and bears an 8% interest rate.     32,500       -  
                 
Convertible into 50% of the lowest close price during the 10 trading days immediately preceding conversion. Note matures in August 2015 and bears an 8% interest. In connection with this convertible note, the Company issued a Back End convertible note, in the principal amount of $25,000. The Back End Note has the same terms, due dates and conditions the convertible note. This Back End note is secured by a $25,000 Promissory Note to the Company, issued by the Holder. The Company has the right to cancel the Back End note. If it elects to disallow such funding, then the Company’s Back End Note will be cancelled along with the offsetting Holder’s Promissory Note.     25,000       -  
                 
Convertible at the lessor of (a) $0.004 or (b) at 40% discount of the lowest trade price during the 25 trading days immediately preceding conversion. Note matures in September 2016, has a 10% OID and bears a one time interest charge of 12% after ninety days (December 2014).     33,000       -  
    $ 1,084,319     $ 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% -12 %   March 2008 – Sept. 2014
($861,319 is in default as of
December 31, 2014)
 
                     
Borrowings during the year ended December 31, 2014     344,500     8% -12 %   October 2014 – Sept. 2016  
                     
Conversions during the year ended December 31, 2014     (142,181 )            
Convertible Debt Balance as of September 30, 2014     1,084,319              
                     
Debt Discount     (106,250 )            
                     
Convertible Debt Balance as of December 31, 2014 - Net   $ 978,069              

Schedule of Debt Discount

    December 31, 2014     December 31, 2013  
             
Debt Discount   $ 762,644     $ 575,489  
Amortization of debt discount     (656,394 )     (391,177 )
Debt Discount - net   $ 106,250     $ 184,312  

Derivative Liabilities (Tables)

v2.4.0.8
Derivative Liabilities (Tables)
12 Months Ended
Dec. 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     (1,369,726 )
Reduction in fair value due to debt conversions     (280,186 )
Fair value at the commitment date for convertible instruments     839,238  
Derivative liability – December 31, 2014   $ 2,439,998  

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 December 31, 2014:

 

    Commitment Date     December 31, 2014  
             
Expected dividends:     0 %     0 %
Expected volatility:     238% - 449 %     290% - 959 %
Expected term:     0.50 - 2 years       0.01 – 1.68 year  
Risk free interest rate:     0.08% - 0.37 %     0.03% - 0.67 %

Related Party Transactions (Tables)

v2.4.0.8
Related Party Transactions (Tables)
12 Months Ended
Dec. 31, 2014
Related Party Transactions [Abstract]  
Schedule of Note Payable to Related Parties

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

 

    December 31, 2014     December 31, 2013  
             
Notes payable   $ 42,751     $ 73,949  
Less: Current maturities     (42,751 )     (73,949 )
Notes payable, net of Current maturities   $ -     $ -  

Commitments and Contingencies (Tables)

v2.4.0.8
Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Future Minimum Lease Payments

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

 

Period Ending December 31,        
2015       15,256  
2016       13,147  
Total     $ 28,403  

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 $)
1 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended
Oct. 31, 2014
Dec. 31, 2014
Dec. 31, 2014
Property And Equipment [Member]
Minimum [Member]
Dec. 31, 2014
Property And Equipment [Member]
Maximum [Member]
Feb. 04, 2013
Versant Corporation [Member]
Feb. 04, 2013
Versant Corporation [Member]
Class B - Preferred Stock [Member]
Oct. 15, 2012
Series A And C Preferred Stock [Member]
Feb. 04, 2013
Class B - Preferred Stock [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 6,666,667 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         $ 200,000        
Number of share unissued           3      
Issuance of common shares class B         7,500,000        
Percentage of granted common shares           100.00%      
Acquisition of held shares               100,120,000  
Number of acquired legally held shares               1,774,902  
Percentage of combined entity shares held by accounting acquirer           98.26%      
Percentage of combined entity shares held by legal acquirer           1.74%      
Property and Equipment estimated useful lives     3 years 7 years          
Percent of likelihood of being realized upon ultimated settlement   greater than fifty (50) percent              
Reverse split of shares

1-for-15 ratio

               

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)
12 Months Ended
Dec. 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%
PhoneSuiteSolutions Inc (PSS) [Member]
 
Name of consolidated subsidiary or entity PhoneSuite Solutions, Inc. (PSS) [4]
State or other jurisdiction of incorporation or organization Delaware
Date of incorporation or formation May 31, 2014
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.
[4] (4) PSS was incorporated to handle the distribution markets of PhoneSuite products.

Nature of Operations and Summary of Significant Accounting Policies - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details)

v2.4.0.8
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Assets, fair value      
Liabilities, fair value 2,439,998 3,250,672
Level 1 [Member]
   
Assets, fair value      
Liabilities, fair value      
Level 2 [Member]
   
Assets, fair value      
Liabilities, fair value      
Level 3 [Member]
   
Assets, fair value      
Liabilities, fair value $ 2,439,998 $ 3,250,672