UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
____________________________

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number:  000-55030
              ____________________________
 
UMED HOLDINGS, INC.
 (Exact name of registrant as specified in its charter)

Texas
90-0893594
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

6628 Bryant Irvin Road, Suite 250

Fort Worth, TX  76132
(Address of principal executive offices)

(817) 346-6900
(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

þ Yes   oNo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  o      No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filero
Accelerated filero
Non-accelerated filero
Smaller reporting companyþ
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes þ  No

The number of shares of issuer’s common stock, par value $0.0001 per share, outstanding as of November 1, 2015 was 181,542,469.  The number of shares of issuer’s preferred stock, par value $0.0001 per share, outstanding as of August 1, 2015 was 15,126,938.  The registrant has no other classes of securities outstanding.
 

 
 
 
 

UMED HOLDINGS, INC.

INDEX

PART I
  
FINANCIAL INFORMATION
Page
Number
           
   
Item 1:
  
Condensed Financial Statements
  
           
       
Condensed Consolidated Balance Sheets – September 30, 2015 (Unaudited) and December 31, 2014
1
           
       
Condensed Consolidated Statements of Operations - Three Months and Nine Months ended September 30, 2015 and 2014 (Unaudited)
2
           
       
Condensed Consolidated Statements of Cash Flows - Nine Months ended September 30, 2015 and 2014 (Unaudited)
3
           
       
Notes to Condensed Consolidated Financial Statements (Unaudited)
4
           
   
Item 2:
  
Management's Discussion and Analysis of Financial Condition and Results of Operations
16
           
   
Item 3:
  
Quantitative and Qualitative Disclosures About Market Risk
22
           
   
Item 4T:
  
Controls and Procedures
22
           
PART II
  
OTHER INFORMATION
  
           
   
Item 1:
  
Legal Proceedings
23
   
Item 1A:
  
Risk Factors
23
   
Item 2:
  
Unregistered Sales of Equity Securities and Use of Proceeds
23
   
Item 3:
  
Defaults Upon Senior Securities
24
   
Item 4:
  
Submission of Matters to a Vote of Security Holders
24
   
Item 5:
  
Other Information
24
           
   
Item 6:
  
Exhibits
24
           
       
Signatures
24
 
 
 
 
 
 
 
UMED HOLDINGS, INC.
Condensed Consolidated Balance Sheet
(Unaudited)
 
  
  
September 30,
    
December 31,
  
   
2015
    
2014
  
   
 
        
Assets
            
Current Assets
            
Cash
  
$
16,084
    
$
82,400
  
    Total Current Assets
    
16,084
      
82,400
  
                 
Fixed assets
                
Property & equipment
    
4,015
      
88,703
  
Less depreciation
    
3,172
      
14,061
  
     
843
      
74,642
  
Other Assets
                
Mine properties
    
100,000
      
100,000
  
Investments
    
90,000
      
90,000
  
Debt issue costs
    
0
      
55,427
  
Assets related to discontinued operations
    
1,659,512
      
1,752,745
  
      Total Other Assets
    
1,849,512
      
1,998,172
  
           Total Assets
  
$
1,866,439
    
$
2,155,214
  
                 
     Liabilities & Stockholders' Deficit
                
Current Liabilities
                
Accounts payable
  
$
54,919
    
$
34,986
  
Advances from stockholders
    
115,381
      
181,272
  
Accrued management fees
    
1,664,978
      
1,822,677
  
Accrued expenses
    
207,323
      
153.591
  
Note payable
    
63,875
      
0
  
Convertible note payable, net
    
0
      
136,801
  
Derivative liability
    
67,139
      
0
  
Liabilities related to discontinued operations
    
2,117,621
      
1,860,518
  
           Total Current Liabilities
    
4,291,236
      
4,189,845
  
Total Liabilities
    
4,291,236
      
4,189,845
  
                 
Stockholders’ Deficit
                
Preferred stock, 20,000,000 shares authorized, par value $0.0001,
                
15,126,938 issued and outstanding at September 30, 2015 and
                
15,738,894 at December 31, 2014
    
1,513
      
1,574
  
Common stock 300,000,000 shares authorized, par value $0.0001,
                
181,542,469 and 145,559,835 issued and outstanding at
                
September 30, 2015 and December 31, 2014, respectively
    
18,155
      
14,557
  
Additional paid-in capital
    
7,872,930
      
4,679,538
  
Accumulated deficit
    
(10,317,395
)
    
 (6,730,300
)
           Total Stockholders' Deficit
    
(2,424,797
)
    
(2,034,631
)
Total Liabilities & Stockholders' Deficit
  
$
1,866,439
    
$
2,155,214
  
 
The accompanying notes to condensed consolidated financial statements


 
1
 
 

UMED HOLDINGS, INC.
Consolidated Statements of Operations – Unaudited
For the three and nine months ended September 30, 2015 and 2014
 
   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2015
    
2014
    
2015
    
2014
  
                         
Expenses
                        
  General and administrative
   $ 566,310     $ 641,635     $ 2,207,320     $ 1,339,525  
  Research and development
     374,998       52,500       593,725       209,750  
  Depreciation
     99       99       297       297  
Total Expense
     941,407       694,234       2,801,343       1,981,924  
                                 
Operating loss
     (941,407 )     (694,234 )     (2,801,343 )     (1,549,572 )
                                 
Other income (expenses)
                                
  Write off Logistix software
     0       0       (73,500 )     0  
  Gain on derivative
     40,072       0       4,943       0  
  Interest expense
     (52,600 )     (7,653 )     (155,783 )     (9,154 )
Total other expenses
     (12,528 )     (7,653 )     (224,340 )     (9,154 )
                                 
Operating Loss
     (953,935 )     (701,887 )     (3,025,683 )     (1,558,726 )
Loss from discontinued operations, net of tax
     208,946       243,691       561,412       607,388  
                                 
Loss before income taxes
     (1,162,881 )     (945,578 )     (3,587,095 )     (2,166,114 )
                                 
Provision for income taxes
     0       0       0       0  
                                 
Net loss
   $ (1,162,881 )   $ (945,578 )   $ (3,587,095 )   $ (2,166,114 )
                                 
Basic loss per share;
                                
Operating loss
   $ (0.01 )   $ (0.01 )   $ (0.02 )   $ (0.02 )
Loss from discontinued operations
   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
Net loss per share
   $ (0.01 )   $ (0.01 )   $ (0.02 )   $ (0.02 )
                                 
Weighted average shares
                                
Outstanding;
                                
  Basic and diluted
     178,585,952       141,865,632       159,097,739       136,639,210  
                                 

 
 

See accompanying notes to condensed consolidated financial statements
 
 
 
2
 
 
UMED HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows - Unaudited
For the nine months ended September 30, 2015 and 2014
 
   
2015
    
2014
  
Cash Flows from Operating Activities
            
Net Loss
  
$
(3,025,683)
    
$
(1,558,726)
  
                 
Adjustments to reconcile net loss to net cash used in
                
 operating activities:
                
     Depreciation
    
299
      
297
  
     Stock issued for services
    
1,931,011
      
665,871
  
     Warrants
    
0
      
66,617
  
     Write off of Logistix software
    
73,500
      
0
  
     Gain on derivative
    
(4,943)
      
0
  
     Debt issue costs amortized
    
55,427
          
     Changes in operating assets and liabilities:
                
     Accounts payable
    
19,933
      
(3,677)
  
     Accrued management fees
    
(157,699)
      
361,101
  
     Derivative
    
67,139
      
0
  
     Accrued expenses
    
53,732
      
28,897
  
                 
Net Cash Used in Operating Activities
    
(987,284
)
    
(439,620
)
                 
Cash Flows from Investing Activities
    
0
      
0
  
                 
Cash Flows from Financing Activities
                
     Advances from shareholders converted to common stock
    
116,384
      
376,897
  
     Proceeds (Payments) - convertible note payable, net
    
(131,858)
      
144,700
  
     Increase in notes payable
    
63,875
      
0
  
     Proceeds from sale of common stock
    
1,083,643
      
403,465
  
     Debt issue cost
    
0
      
(78,211)
  
Net Cash Provided by Financing Activities
    
1,132,044
      
846,851
  
 
Cash Used in Discontinued Operations
    
 
(211,076)
      
 
(361,706)
  
                 
Net (Decrease) Increase in Cash
    
(66,316)
      
45,525
  
Cash Beginning of Period
    
82,400
      
1,442
  
Cash End of Period
  
$
         16,084
    
$
      46,967
  
                 
                 
Supplemental Disclosure of Cash Flow Information:
                
     Cash Paid during the period for interest
  
$
69,297
    
$
49,009
  
     Cash Paid during the period for taxes
  
$
0
    
$
0
  
     Conversion of preferred stock to common stock
  
$
918
    
$
0
  


The accompanying notes are an integral part of these financial statements
 
 
 
3
 
 

UMED COMPANY HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

UMED Holdings, Inc. (“UMED” or the “Company”) was organized on March 13, 2002 under the laws of the State of Texas as Dynalyst Manufacturing Corporation.  On August 18, 2009, in connection with a merger with Universal Media Corporation, a privately held Nevada company, the Company changed its name to Universal Media Corporation (“Universal Media”).  The company changed its name to UMED Holdings, Inc. on March 23, 2011.
 
UMED’s mission is to operate as a holding company through the acquisition of businesses as wholly-owned subsidiaries that meet some key requirements: (1) solid management that will not have to be replaced in the near future (2) the ability to grow with steady growth to follow and (3) an emphasis on emerging core industry markets, such as energy, metals and agriculture.  It is the Company’s intention to add experienced personnel and select strategic partners to manage and operate the acquired business units.  
 
In September 2010, UMED has acquired 1,440 acres of placer mining claims on Bureau of Land Management land in Mohave County, Arizona. See discussion in Note 3.

In October 2011, UMED has acquired a 49% interest in Jet Regulators, LP, an aircraft maintenance company located at Meacham Field in Fort Worth, Texas.  See discussion in Note 5.
 
In May 2012, the Company acquired 80% of Mamaki Tea & Extract of Hawaii, Inc. (nka Mamaki of Hawaii, Inc.) which owns and operates Wood Valley Plantation a 25 acre Mamaki Tea plantation located in the Kau district of the Island of Hawaii and lies at the foot of Mauna Loa, the Earth’s largest volcano.   On December 31, 2012, the Company acquired the remaining 20% for 500,000 shares of restricted common stock and $127,800 of cash.  Mamaki of Hawaii, Inc. has been sold in November 2015 as discussed further in Note 2.

In August 2012, the Company acquired 100% of Greenway Innovative Energy, Inc., which owns proprietary technology that is capable of converting natural gas to diesel/jet fuels. 


NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES

Principles of Consolidation

The accompanying consolidated financial statements include the financial statements of UMED and its wholly-owned subsidiaries. The Company’s investment in Jet Regulators is accounted for at cost due to its lack of significant influence.  All significant inter-company accounts and transactions were eliminated in consolidation.

 Basis of Presentation
 
The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulations S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.  The balance sheet at December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The net assets and results of operations of Mamaki of Hawaii, Inc. have been reflected as discontinued operations for all periods presented.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014.
 
 
 
4
 
 

The accompanying condensed consolidated financial statements include the accounts of the following entities:
 
Name of Entity
%
  
Entity
Incorporation
Relationship
UMED Holdings, Inc.
    
Corporation
Texas
Parent
Mamaki of Hawaii, Inc.*
100
 %
Corporation
Nevada
Subsidiary
Universal Media Corporation
100
 %
Corporation
Wyoming
Subsidiary
Greenway Innovative Energy, Inc.
100
 %
Corporation
Nevada
Subsidiary
Logistix Technology Systems, Inc.
100
 %
Corporation
Texas
Subsidiary

*  Sold in November 2015
 
Going Concern Uncertainties

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company sustained a loss of $3.6 million for the nine months period ended September 30, 2015 and has a deficit of $10.3 million at September 30, 2015. The ability of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations or on the ability of the Company to obtain necessary financing to fund ongoing operations. Management believes that its current and future plans enable it to continue as a going concern for the next twelve months.
 
To meet these objectives, the Company continues to seek other sources of financing in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any such financing can be obtained on acceptable terms and timely manner, if at all.  The failure to obtain the necessary working capital would have a material adverse effect on the business prospects and, depending upon the shortfall, the Company may have to curtail or cease its operations.

The accompanying condensed consolidated financial statements do not include any adjustment to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

NOTE 3 - RECLASSIFICATION

The December 31, 2014 financial statements amounts have been reclassified to conform to current period presentation as follows;

Balance Sheet Accounts
  
As Previously Stated
    
Reclassification
    
As Reclassification
  
                   
Cash
   $ 82,656     $ (256 )   $ 82,400  
Accounts receivable
     780       (780 )     0  
Prepaid expenses
     32,700       (32,700 )     0  
Land
     150,000       (150,000 )     0  
Buildings
     871,842       (871,842 )     0  
Equipment
     1,084,755       (996,052 )     88,703  
Accumulated depreciation
     (312,946 )     298,885       (14,061 )
Assets related to discontinued operations
     0       1,752,745       1,752,745  
Total
   $ 2,155,214     $ 0     $ 2,155,214  
                         
                         
Accounts payable
   $ 70,568     $ (35,582 )   $ 34,986  
Accrued expenses
     733,316       (579,725 )     153,591  
Term notes
     1,245,211       (1,245,211 )     0  
Liabilities related to discontinued operations
     0       1,860,518       1,860,518  
    $ 2,049,095     $ 0     $ 2,049,095  
                         
 
 

 
 
5
 
 

Statement of Cash Flows Accounts
  
As Previously Stated
    
Reclassification
    
As Reclassification
  
                   
Net Loss
   $ (2,166,114 )   $ 607,388     $ (1,558,726 )
                         
Depreciation
     89,514       (89,217 )     297  
Stock issued for services
     665,871       0       665,871  
Warrants
     66,617       0       66,617  
Accounts receivable
     340       (340 )     0  
Prepaid expenses
     17,912       (17,912 )     0  
Accounts payable
     (18,439 )     14,762       (3,677 )
Accrued management fees
     361,101       0       361,101  
Accrued expenses
     248,345       (219,448 )     28,897  
Net Cash Provided by Operations
     (734,853 )     295,233       (439,620 )
                         
Advances from shareholders
     376,897       0       376,897  
Proceeds from convertible note
     144,700       0       144,700  
Decrease in notes payable
     (66,473 )     66,473       0  
Proceeds from sale of common stock
     403,465       0       403,465  
Debt issue costs
     (78,211 )     0       (78,211 )
Net Cash Provided by Financing
     780,378       0       846,851  
                         
                         
Cash used in discontinued operations
             (361,706 )     (361,706 )
                         
Net Increase in Cash
   $ 45,525     $ 0     $ 45,525  

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting policies applied in the presentation of the condensed consolidated financial statements are as follows:

Property & Equipment

Property and equipment is recorded at cost. Major additions and improvements are capitalized. The cost and related accumulated depreciation of equipment retired or sold are removed from the accounts and any differences between the undepreciated amount and the proceeds from the sale are recorded as a gain or loss on sale of equipment. Depreciation is computed using the straight-line method over the estimated useful life of the assets as follows.

Equipment
5 to 7 years

Impairment of Long-Lived Assets

The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in accordance with ASC Topic 360, “Property, Plant and Equipment.”  An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset or asset group is expected to generate.  If an asset or asset group is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value.  If estimated fair value is less than the book value, the asset is written down to the estimated fair value and an impairment loss is recognized.
 
 
 
6
 
 
Discontinued Operations
 
On November 2, 2015, the Company consumamated on the sale of its wholly owned subsidiary, Mamaki of Hawaii, Inc. (“Mamaki”) to Hawaiian Beverages, Inc. (“HBI”).   Under the agreement, HBI acquired 100% of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty four thousand two hundred seventy five thousand dollars ($84,275) of UMED debts.  HBI paid two hundred forty five thousand five hundred dollars ($245,000) of the two hundred fifty thousand dollars ($250,000) due at closing and will pay three installments of one hundred fifty thousand dollars ($150,000) on each of thirty, sixty and ninety day anniversary of the closing date.

The results of Mamaki are presented as a separate line item in the consolidated statements of operations and the consolidated balance sheets entitled “Assets/Liabilities sold relating to discontinued operations” and “Assets/Liabilities retained related to discontinued operations”. In accordance with EITF 87-24, “Allocation of Interest to Discontinued Operations”, the Company elected to not allocate consolidated interest expense to discontinued operations where the debt is not directly attributable to or related to discontinued operations. All of the financial information in the consolidated financial statements and notes to the consolidated financial statements has been revised to reflect only the results of continued operations. (See Note 7).

Revenue Recognition

The Company has not, to date, generated significant revenues.  The Company plans to recognize revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reported period.  Actual results could differ materially from the estimates.
 
Cash and Cash Equivalent

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  There were no cash equivalents at September 30, 2015 or December 31, 2015.

Segment Information

ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting.  The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance.  The Company determined that is had one operating segment, Mamaki of Hawaii, Inc., in addition to its corporate activities.



 
7
 
 
Mine Exploration and Development Costs

The Company plans to account for mine exploration costs in accordance with Accounting Standards Codification 932, Extractive Activities.  All exploration expenditures are expensed as incurred. Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine’s production capacity and is not considered to shift the mine into the production phase. Amortization of capitalized mine development is computed based on the estimated life of the mine and commences when production, other than production incidental to the mine development process, begins.  Through September 30, 2015, the Company had not incurred any mine development costs.
 
Mine Properties

The Company will account for mine properties in accordance with Accounting Standard Codification 930, Extractive Activities-Mining.  Costs of acquiring mine properties are capitalized by project area upon purchase of the associated claims.  Mine properties are periodically assessed for impairment of value and any diminution in value. The Company had 1,440 acres of placer mining claims at September 30, 2015, which were acquired in December 2010 in exchange for 5,066,000 shares of common stock valued at $100,000.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.
 
The Company has adopted the provisions of FASB ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements.  The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Open tax years subject to IRS examination include 2009 – 2014.

Net Loss Per Share, basic and diluted

Basic loss per share has been computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Shares issuable upon the exercise of warrants (376,100) have been excluded as a common stock equivalent in the diluted loss per share because their effect is anti-dilutive.

Derivative Instruments

The Company accounts for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.  They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.
 
 
 
8
 
 
See Note 8 below for discussion regarding a warrant agreement related to a convertible note, which was repaid on July 22, 2015.

Original Issue Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount (“OID”).  An OID is the difference between the original cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the proceeds received. The OID is amortized into interest expense pro-rata over the term of the Note.

Fair Value of Financial Instruments

The Company's financial instruments, as defined by Accounting Standard Codification subtopic 825-10, Financial Instrument (“ASC 825-10), include cash, accounts payable and convertible note payable.  All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2015.

FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions

The Company’s derivative is valued at level 3.

Stock Based Compensation

The Company follows Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.  

At September 30, 2015, the Company did not have any issued or outstanding stock options.

Concentration and Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash. The Company places its cash with high credit quality institutions.  At times, such deposits may be in excess of the FDIC insurance limit.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $593,725 and $152,500 during the nine months ended September 30, 2015 and 2014. 
 

 
9
 
 
Issuance of Common Stock

The issuance of common stock for other than cash is recorded by the Company at market values.

Impact of New Accounting 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.


NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, their estimated useful lives, and related accumulated depreciation at September 30, 2015 and December 31, 2014, respectively, are summarized as follows:

   
Range of
              
   
Lives in
    
September 30, December 31,
  
   
Years
    
2015
    
2014
  
Equipment
    
5
      
2,032
      
13,220
  
Logistix software
    
5
      
0
      
73,500
  
Furniture and fixtures
    
5
      
1,983
      
1,983
  
             
4,015
      
88,703
  
Less accumulate depreciation
            
(3,172
)
    
(14,061
)
           
$
843
      
74,642
  
                         
Depreciation expense for the period ended
          
$
297
    
$
297
  

During the three months ended June 30, 2015, the Company wrote-off the balance of its Logistix software.
During the three months ended September 30, 2105, the Company wrote-off $11,188 of depreciated assets.

NOTE 6 – INVESTMENTS

Investments consisted of the following at September 30, 2015 and December 31, 2014;
 
    September 30,     December 31,
    2015     2014
Jet Tech LLC
 
In October 2011, the Company acquired a 49% interest in
JetTech LLC which is an aerospace maintenance operation
located at Meacham Airport in Fort Worth, Texas for 600,000
shares of the Company’s restricted common stock. The shares
were valued at $.15 per share.
  
 
 
 
   
 
 
 $ 90,000
  
 
 
 
   
 
 
$ 90,000
         
                                                                   TOTAL INVESTMENTS
  
$ 90,000
  
$ 90,000



 
10
 

 
NOTE 7 – TERM NOTES PAYABLE
 
Term note payable consisted of the following at September 30, 2015 and December 31, 2014:
 
    September 30,   December 31,
    2015   2014
Unsecured note payable (Individual) due January 18, 2016
including interest at 10%
  
 
 
 
 
$ 63,875
  
 
 
 
 
$ 0
         
Term note payable
  
$ 63,875
  
$ 0
 
Accrued interest payable on the term notes payable was $822 and $0 at September 30, 2015 and December 31, 2014, respectively.

NOTE 8 – CONVERTIBLE PROMISSORY NOTE

On September 18, 2014, the Company issued a $158,000 convertible promissory note bearing interest at 10.0% per annum to an accredited investor, payable July 23, 2015, in monthly installments of $31,600 plus accrued interest beginning 6 months after the date of this promissory note.  The note was paid in full on July 22, 2015.  The holder had the right under certain circumstances to convert the note into common stock of the Company at a conversion price equal to 70% of the average of the 3 lowest volume weighted average trading prices during the 20 day period ending on the latest complete trading day prior to the conversion date. 

The Company evaluated the terms of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible Note did not result in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of the common stock. The discount related to the beneficial conversion feature on the note was valued at $154,000 based on its then intrinsic value. The discount related to the beneficial conversion feature ($23,346) is being amortized over the term of the debt (10 months).  For the period ended September 30, 2015, the Company recognized $601 of interest expense related to the amortization of the discount.

In connection with the issuance of the $158,000 note discussed above, the Company recorded debt issue cost and discount as follows:
 
 
●
10.4% cash – which is equivalent to $16,500, and
 
●
,Warrants – having a fair value of $107,212 and recorded on the balance sheet at $67,139 as of
September 30, 2015 which was computed as follows;
 
   
Commitment Date
  
Expected dividends
    
0%
  
Expected volatility
    
789%
  
Expected term: conversion feature
  
4 years
  
Risk free interest rate
    
1.75%
  
 
The debt issue costs were capitalized and amortized through July 22, 2015, when the note was paid in full.

Amortization of debt issue costs for the nine months ended September 30, 2015 was $55,427.  Net debt issue costs at September 30, 2015 was $0, as the note had been paid in full.

The original issue discount pertains to discount taken by lender against the total convertible note of $158,000, resulting in a disbursement of $144,000 to the company.
 
 
 
11
 
 
During the nine months ended September 30, 2015, the Company amortized $8,100 of the original issue discount related to the convertible note.  Original issue discount costs at September 30, 2015 was $0, as the note had been paid in full.

NOTE 9 – ACCRUED EXPENSES

Accrued expenses consisted of the following at September 30, 2015 and December 31, 2014;

     
 2015
      
 2014
  
                 
Accrued consulting fees
  
$
206,500
    
$
144,500
  
Accrued interest expense
    
823
      
9,091
  
Total accrued expenses
  
$
207,323
    
$
153,591
  


NOTE 10– CAPITAL STRUCTURE

The Company is authorized to issue 300,000,000 shares of common stock with a par value of $.0001 per share and 20,000,000 shares of preferred stock with a par value of $.0001 per share.  Each common stock share has one voting right and the right to dividends, if and when declared by the Board of Directors.

Common Stock

At September 30, 2015, there were 181,542,469 shares of common stock issued and outstanding.

During the three month period ended September 30, 2015, the Company issued 3,582,329 shares of restricted common stock to eighteen individuals through private placements for cash of $448,643 at average of $0.1252 per share.

During the three month period ended September 30, 2015, 611,956 preferred shares were converted to 9,179,340 shares of common stock.

During the three month period ended September 30, 2015, the Company issued 2,835,100 shares of restricted common stock for consulting services at a value of $306,011 based on value of the services provided.

Preferred Stock

At September 30, 2015, there were 15,126,938 shares of preferred stock issued and outstanding. Each preferred shares is convertible, at the option of the preferred shareholder, into common stock with 126,938 being convertible at the rate of one preferred share for fifteen shares of common stock, 15,000,000 shares being convertible on a one for one basis (the 15,000,000 shares have voting rights equal to 15 votes per preferred share on all matters voted on by the Company’s shareholders).

During the three month period ended September 30, 2015, 611,956 preferred shares were converted to 9,179,340 shares of common stock.

Stock options, warrants and other rights

At September 30, 2015, the Company has not adopted any employee stock option plans.
 
 
 
12
 
 
NOTE 11 - RELATED PARTY TRANSACTIONS

Shareholders have made advances to the Company in the amounts of $204,884 and $256,823 during the nine months ended September 30, 2015 and 2014, respectively.  The shareholders have elected to convert advances of $182,275 and $376,000 to shares of common stock at market value ($.106 and $.103 per share) and received repayments of $10,000 and $0 during the nine months ended September 30, 2015 and 2014, respectively.

In April 2015, the Company’s then Chief Executive Officer resigned and in his settlement agreement gave up claims to receive deferred compensation, which amounted to $518,300 as discussed in Note 13 below.

In May 2015, the Company issued 13,125,000 shares of restricted common stock to its former CEO, its President and Chief Financial Officer per their employment agreements. The shares were valued at $0.12 per share based on market value.

In July 2015, the Company issued 9,179,340 shares of restricted common stock to its President and Chief Financial Officer for the conversion of 611,956 shares of preferred stock at the rate of fifteen shares of restricted common stock for each share of preferred stock.

In August 2015, the Company’s president guaranteed a $63,875 note payable to an individual.

NOTE 12 – INCOME TAXES

At September 30, 2015 and December 31, 2014, the Company had approximately $4.9 million and $3.5 million, respectively, of net operating losses (“NOL”) carry forwards for federal and state income tax purposes.  These losses are available for future years and expire through 2033.  Utilization of these losses may be severely or completely limited if the Company undergoes an ownership change pursuant to Internal Revenue Code Section 382.  

The provision for income taxes for continuing operations consists of the following components for the nine months ended September 30, 2015 and the year ended December 31, 2014:
 
   
2015
    
2014
  
             
Current
  
$
-
    
$
-
  
Deferred
    
-
      
-
  
   Total tax provision for (benefit from) income taxes
  
$
-
    
$
-
  

A comparison of the provision for income tax expense at the federal statutory rate of 34% for the nine months ended September 30, 2015 and the year ended December 31, 2014 the Company’s effective rate is as follows:
 
   
2015
    
2014
  
             
Federal statutory rate
    
(34.0
) %
    
(34.0
) %
State tax, net of federal benefit
    
(0.0
)
    
(0.0
)
Permanent differences and other including surtax exemption
    
0.0
      
0.0
  
Valuation allowance
    
34.0
      
34.0
  
Effective tax rate
    
0.0
%
    
0.0
%
 

 
13
 
 

The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at September 30, 2015 and December 31, 2014:
 
  
  
2015
    
2014
  
Deferred tax assets
            
Net operating loss carry forwards
  
$
4,862,330
    
$
3,477,275
  
Deferred compensation
    
2,058,036
      
1,966,523
  
Stock based compensation
    
3,026,513
      
1,095,502
  
Other
    
367,929
      
191,000
  
Total
    
10,314,808
      
6,730,300
  
Less valuation allowance
    
(10,314,808
)
    
(6,730,300
)
Deferred tax asset
    
-
      
-
  
Deferred tax liabilities
                
Depreciation and amortization
  
$
-
    
$
-
  
Net long-term deferred tax asset
  
$
-
    
$
-
  
 
The change in the valuation allowance was $3,584,508 and $2,685,346 for the nine months ended September 30, 2015 and the year ended December 31, 2014, respectively.  The Company has recorded a 100% valuation allowance related to the deferred tax asset for the loss from operations, interest expense, interest income and other income subsequent to the change in ownership, which amounted to $10,314,808 and $6,730,300 at September 30, 2015 and December 31, 2014, respectively. 

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, historical taxable income including available net operating loss carry forwards to offset taxable income, and projected future taxable income in making this assessment.

NOTE 13 – DISCONTINUED OPERATIONS
 
In November 2015, the Company completed the sale of its wholly owned subsidiary, Mamaki of Hawaii, Inc, (“Mamaki”) to Hawaiian Beverages, Inc. (“HBI”).  Under the agreement, HBI acquired 100% of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty four thousand two hundred seventy five thousand dollars ($84,275) of UMED debts.  HBI paid two hundred forty five thousand five hundred dollars ($245,500) at closing towards the first installment due of two hundred fifty thousand ($250,000) and will pay three installments of one hundred fifty thousand dollars ($150,000) on each of thirty, sixty and ninety day anniversary of the closing date.

The following are condensed statements of the discontinued operations (Mamaki of Hawaii, Inc.) for the nine months ended September 30, 2015 and 2014:

   
2015
    
2014
  
Sales
   $ 47,275     $ 19,580  
Cost of sales
     8,407       34,277  
Gross profit
     38,868       (14,697 )
                 
Operating Expenses:
                
General and administrative expenses
     395,824       348,135  
Depreciation
     89,218       89,217  
Total Operating Expenses
     485,042       437,352  
Operating Loss
     (446,174 )     (447,049 )
                 
Other Income (Expense)
                
 Interest expense
     (115,238 )     (160,339 )
                 
Loss from discontinued operations
   $ (561,412 )   $ (607,388 )
Loss per share - discontinued operations    $   (0.00 )    $   (0.00 ) 
 
 
 
 
14
 


Assets and liabilities retained relating to discontinued operations (Mamaki of Hawaii, Inc.) consisted of the following at September 30, 2015, September 30, 2014 and December 31, 2014;

   
9/30/2015
    
12/31/2014
  
             
Current assets relating to discontinued operations:
            
Cash
   $ 1,012     $ 256  
Accounts receivable
     5,264       780  
Prepaid expenses and deposits
     23,443       32,700  
Property, plant and equipment, net
     1,629,793       1,719,009  
Total assets related to discontinued operations
   $ 1,659,512     $ 1,752,745  
                 
Current liabilities relating to discontinued operations:
                
Bank overdrafts
   $ 0     $ 4,896  
Notes payable
     1,221,950       1,245,211  
Accounts payable
     42,813       35,582  
Accrued interest payable
     52,304       36,450  
Accrued expenses
     800,554       538,380  
Total liabilities related to discontinued operations
   $ 2,117,621     $ 1,860,518  
 

NOTE 14 – COMMITMENTS

Employment Agreements

In May 2011, the Company entered into employment agreements with its chief executive officer, president and chief financial officer.  The Agreements are for a term of 5 years with compensation of $180,000 the first year, $240,000 the second year, $300,000 the third year, $350,000 the fourth year and the fifth year at a salary commensurate with those in similar industries.  The employment agreements also provide for the officers to receive 1,250,000 shares of restricted common stock annually for each year of the employment agreement.  During the nine months ended September 30, 2015 and 2014, with consent of management, the Company accrued a total of $315,000 and $360,000, respectively, as management fees in accordance with the terms of these agreements.  On April 8, 2015, the Company’s chief executive officer resigned and relinquished his claim to receive $518,300 of deferred compensation.

Leases

In July 2015, the Company reduced its office lease space from 3,500 to 1,800 square feet on a month-to-month basis at $3,200 per month. During the nine months ended September 30, 2015 and 2014, the Company expensed $44,800 and $57,600, respectively, in rent expense.

Legal

From time to time, 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 from time to time that may harm our business. The Company currently is not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results


NOTE 15 – SUBSEQUENT EVENTS

In November 2015, the Company consummated the sale of its wholly owned subsidiary, Mamaki of Hawaii, Inc, (“Mamaki”) to Hawaiian Beverages, Inc. (“HBI”).  Under the agreement, HBI acquired 100% of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty four thousand two hundred seventy five thousand dollars ($84,275) of UMED debts.  HBI has paid so far two hundred forty five thousand five hundred  dollars ($245,500) of the two hundred fifty thousand dollars ($250,000) due at closing and will pay three installments of one hundred fifty thousand dollars ($150,000) on each of thirty, sixty and ninety day anniversary of the closing date.


 
15
 
 
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

Some of the statements made in this Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to the safe harbor provisions of the reform act. Forward-looking statements may be identified by the use of the terminology such as may, will, expect, anticipate, intend, believe, estimate, should or continue or the negatives of these terms or other variations on these words or comparable terminology. To the extent that this report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of our business, you should be aware that our actual financial condition, operating results and business performance may differ materially from that projected or estimated by us in the forward-looking statements. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from their current expectations. These differences may be caused by a variety of factors including, but not limited to, adverse economic conditions, intense competition, including entry of new competitors, inability to obtain sufficient financing to support our operations, progress in research and development activities, variations in costs, fluctuations in foreign currencies against the U.S. dollar in countries where we source products, adverse federal, state and local government regulation, unexpected costs, lower sales and net income (or higher net losses, than forecasted), price increases for equipment, inability to raise prices, failure to obtain new customers, the possible fluctuation and volatility of our operating results and financial condition, inability to carry out marketing and sales plans, loss of key executives and other specific risks that may be alluded to in this report.

The following discussion and analysis of financial condition, results of operations, liquidity and capital resources should be read in conjunction with our audited consolidated financial statements and notes thereto appearing elsewhere in this report, which have been prepared assuming that we will continue as a going concern, and in conjunction with our Annual Form 10-K filed on March 31, 2015.  As discussed in Note 2 to the condensed consolidated financial statements, our recurring net losses and inability to generate sufficient cash flows to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern.  Management’s plans concerning these matters are also discussed in Note 2 to the condensed consolidated financial statements.  This discussion contains forward-looking statements that involve risks and uncertainties, including information with respect to our plans, intentions and strategies for our businesses. Our actual results may differ materially from those estimated or projected in any of these forward-looking statements.

Overview

UMED Holdings, Inc. (“UMED”) was originally incorporated as Dynalyst Manufacturing Corporation (“Dynalyst”) under the laws of the State of Texas on March 13, 2002.

In connection with the merger with Universal Media Corporation (“UMC”), a Nevada corporation, on August 17, 2009, the company changed its name to Universal Media Corporation.   The transaction was accounted for as a reverse merger, and Universal Media Corporation is the acquiring company on the basis that Universal Media Corporation’s senior management became the entire senior management of the merged entity and there was a change of control of Dynalyst.  The transaction is accounted for as recapitalization of Dyanlyst’s capital structure.  In connection with the merger, Dynalyst issued 57,500,000 restricted common shares to stockholders of Universal Media Corporation for 100% of Universal Media Corporation.

On August 18, 2009, Dynalyst approved the amendment of its Articles of Incorporation and filed with the Texas Secretary of State to change the Company’s name to Universal Media Corporation and approved the increase in authorized shares to 300,000,000 shares of common stock, par value $.0001 and 20,000,000 shares of preferred, par value $.0001.



 
16
 
 
On March 23, 2011, Universal Media Corporation approved the amendment of its Articles of Incorporation and filed with the Texas Secretary of State to change the Company’s name to UMED Holdings, Inc.

UMED Holdings, Inc. a Texas corporation, (hereinafter “UMED” or “the Company”) is a holding company with present interest in energy, mining and agriculture.  The Company has established its corporate offices at 8851 Camp Bowie West, Suite 240, Fort Worth, Texas  76116 consisting of approximately 1,800 square feet.

The Company will be unable to pay its obligations in the normal course of business or service its debt in a timely manner throughout 2015 without raising additional debt or equity capital.  There can be no assurance that the Company will raise additional debt or equity capital.

The Company is currently evaluating strategic alternatives that include the following: (i) raising of capital, or (ii) issuance of debt instruments.  This process is ongoing and can be lengthy and has inherent costs.  There can be no assurance that the exploration of strategic alternatives will result in any specific action to alleviate the Company’s 12 month working capital needs or result in any other transaction.

Energy Interest

In August 2012, UMED acquired Greenway Innovative Energy, Inc., filed a patent application, and is conducting research on Gas-to-Liquid (“GTL”) technology.  The Technology is based upon the Fischer-Tropsch (“FT”) conversion system that has been operational in various locations throughout the world since the early 1930s.  Thousands of FT systems have operated during the last 80 years, being most notably responsible for driving energy economies of wartime Nazi Germany and Imperial Japan.  More recently, and for a more sustained period, FT has been responsible for providing much of the motive energy required to meet the needs of the Republic of South Africa, a country recognized as having pushed FT technology much further than any other nation since the development of the process.

Greenway’s research has been centered on developing a portable production-scale FT system (“the Portable Technology”) to accommodate the needs of smaller gas plays that are increasingly beginning to characterize natural gas production within the US and elsewhere.  The Company is currently seeking funding of $40 - $45 million to build the initial (2,000 BPD) GTL unit near an existing pipeline.

The Company has decided to proceed with the building of scaled model unit at a local entity in conjunction with a sponsored research agreement at an estimated costs of $1,500,000.

Mining Interest

In December 2010, UMED acquired the rights to approximately 1,440 acres of placer mining claims in Mohave County, Arizona for 5,066,000 shares of restricted common stock.  Early indications, from samples taken and processed, gives the Company reason to believe that the potential recovery value of the metals located on is significant, but actual mining and processing will determine the ultimate value realized.  The Company is currently seeking funding of $3,000,000 to begin certified assaying, development of a mining plan and the exploration/mining process.
 
Mamaki Tea Farm

On May 2, 2012, the Company acquired 80% of Mamaki of Hawaii, Inc. (formerly Mamaki Tea & Extract, Inc.), a Nevada corporation in exchange for 5,000,000 shares of the Company’s restricted common stock and $150,000 in cash.  On December 31, 2012, the Company acquired the remaining 20% of Mamaki of Hawaii, Inc. for 500,000 shares of its restricted common stock and $127,000 in cash.  See Note 2 to the financial statements for a discussion on the sale of Mamaki of Hawaii, Inc.



 
17
 
 
Results of Operations

Three Months Ended September 30, 2015 Compared to Three Months Ended September 30, 2014
 
Revenues from operations for the three months ended September 30, 2015 and 2014 were $0 and $0, respectively. All revenues were generated from our Mamaki Tea operations.    We reported net operating losses during the three months ended September 30, 2015 and 2014 of $951,347 and $701,887, respectively.

The following table summarizes operating expenses and other income and expenses for the three months ended September 30, 2015 and 2014:
 
   
2015
    
2014
  
             
General and administrative
  
$
566,310
    
$
641,635
  
Research and development
    
374,998
      
52,500
  
Depreciation and amortization
    
99
      
99
  
Net interest expense
    
52,600
      
7,653
  

The table below illustrates our results for the discontinued Mamaki Tea reporting segment for the three months ended September 30, 2015 and 2014, respectively:
 
   
2015
    
2014
  
             
Sales
   $ 11,068     $ 7,595  
Cost of sales
     1,767       17,177  
Gross Profit (Loss)
     9,301       (9,582 )
                 
General and administration  expense
     124,517       121,227  
Depreciation expense
     29,740       29,739  
Operating loss
     (154,257 )     (160,548 )
                 
Other expense
                
Interest expense
     (63,990 )     (83,143 )
                 
Net loss
   $ (208,946 )   $ (243,691 )
                 
   
 
 September 30,
  2015
    
 
 September 30,
  2014
  
                 
Total assets
   $ 1,659,512     $ 1,782,475  
Total liabilities
   $ 2,117,621     $ 1,862,878  

For the three months ended September 30, 2015, general and administrative costs consisted primarily of management and consulting fees of $288,675, rent expense of 6,749, legal expenses of $25,000 and stock based compensation of $208,511.

For the three months ended September 30, 2014, general and administrative costs consisted primarily of management and consulting fees of $237,750, contract labor of $3,350, rent expense of 12,800, stock based compensation of $350,000, mining claims expense of $11,160.

Net operating loss was $953,935 or $0.01 per basic and diluted earnings per share for the three months ended September 30, 2015 compared to $701,887 or $0.01 per share for the three months ended September 30, 2014. The weighted-average number of shares used in the earnings per share for the basic and dilutive computation was 178,585,952 for the three months ended September 30, 2015 and 141,865,632 for the three months ended September 30, 2014.
 
 
 
18
 
 
Nine Months Ended September 30, 2015 Compared to Nine Months Ended September 30, 2014
 
Operating revenues for the nine months ended September 30, 2015 and 2014 were $0 and $0, respectively. All revenues were generated from our Mamaki Tea operations.  We reported net operating losses during the nine months ended September 30, 2015 and 2014 of $3,000,596 and $1,558,726, respectively.

The following table summarizes operating expenses and other income and expenses for the nine months ended September 30, 2015 and 2014:
 
   
2015
    
2014
  
             
General and administrative
  
$
2,207,320
    
$
1,682,660
  
Research and development
    
593,725
      
209,750
  
Depreciation and amortization
    
297
      
89,514
  
Net interest expense
    
155,783
      
169,493
  

The table below illustrates our results for the discontinued Mamaki Tea reporting segment for the nine months ended September 30, 2015 and 2014, respectively:
 
   
2015
    
2014
  
             
Sales
   $ 47,275     $ 19,580  
Cost of sales
     8,405       34,277  
Gross Profit (Loss)
     38,870       (14,697 )
                 
General and administration  expense
     395,826       343,135  
Depreciation expense
     89,218       89,217  
Operating loss
     (446,174 )     (447,049 )
                 
Other expense
                
Interest expense
     (115,238 )     (160,339 )
                 
Net loss
   $ (561,412 )   $ (607,388 )
                 
   
 
 September 30,  
2015
    
 
September 30,  
2014
  
                 
Total assets
   $ 1,659,512     $ 1,782,475  
Total liabilities
   $ 2,117,621     $ 1,862,878  
 
For the nine months ended September 30, 2015, general and administrative costs consisted primarily of management and consulting fees of $672,400 less a credit of $473,300 as the result of prior CEO resigning and forfeiting his accrued compensation, stock based compensation of $1,813,511, rent expense of $45,507, professional fees of $13,756 legal fees of $60,000 and BLM claims of $11,160.

For the nine months ended September 30, 2014, general and administrative costs consisted primarily of management and consulting fees of $797,750, contract labor of $262,193, rent expense of $52,112, legal expenses of $66,337, auditing expenses of $17,500, mining claims expense of $11,160 and patent and research expenses of $209,750.



 
19
 

Net operating loss was $3,025,683 or $0.01 per basic and diluted earnings per share for the nine months ended September 30, 2015 compared to $1,558,726 or $0.01 per share for the nine months ended September 30, 2014. The weighted-average number of shares used in the earnings per share for the basic and dilutive computation was 159,097,739 for the nine months ended September 30, 2015 and 136,639,210 for the nine months ended September 30, 2014.

Liquidity and Capital Resources

Our cash flow from operating, investing and financing activities, as reflected in the consolidated statements of cash flows, is summarized in the following table for the nine months ended September 30:
 
(thousands)    
2015
      
2014
  
Cash provided by (used for):
                
Operating activities
  
$
(987,284
) 
  
$
(439,620)
  
Investing activities
    
0
      
0
  
Financing activities
    
1,132,044
      
846,851
  
Cash used in discontinued operations
    
(211,076)
      
(361,706)
  
(Decrease) Increase in cash
  
$
         (66,316)
    
$
      45,525
  

Our financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business.  Our general business strategy is to first develop the mamaki tea farm to provide the source of revenue to maintain our viability, while seeking capital to construct the first portable GTL Unit and explore and research its existing mining lease properties.  As shown in the accompanying condensed consolidated financial statements, we sustained a net operating loss of $3,025,683 for the nine months ended September 30, 2015 and have a cumulative deficit of $10,317,395 at September 30, 2015.  Although we have managed our liquidity during the nine months ended September 30, 2015 through the sale of common stock, shareholder advances and notes payable, our ability to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and on our ability to obtain necessary financing to fund ongoing operations.

We currently are evaluating strategic alternatives that include the following: (i) raising of new capital, or (ii) issuance of debt instruments.  This process is ongoing and may be lengthy and has inherent costs.  There can be no assurance that the exploration of strategic alternatives will result in any specific action to alleviate the Company’s 12 month working capital needs or result in any other transaction.

We project that approximately $51,000,000 of capital will be needed for all aspects of our business development. We project a need of $45 million to build the first portable GTL Unit, $3,000,000 for our mining exploration plan, and $3,000,000 for general and administration.   Further, until there is a fuller assessment of the mining property, we cannot determine the capital requirements and our operating budgets, if it is decided to pursue full exploration and development. We also will be subject to environmental expenses in connection with these activities.  We will also have the expense of maintaining and defending any patents obtained, our claims, and seeking further patents and claims to be able to garner enough area to make our operations more viable, once we have shown appropriate mineral deposits present in our claims, if at all.  After building the first GTL Unit and determining the commercialability of the mining claims, we will need substantial capital to build additional GTL Units, develop the mining claims, acquire plant and equipment and hire personnel.

We intend to seek equity and revenue participation forms of capital. We do not believe that debt financing is available to the company at this time, partly because we do not have any earnings with which to support debt service or maintain typical debt covenants. We have no firm arrangements for any capital at this time.  Additionally, equity capital for small companies generally and small companies in the oil and gas and mining segments in particular, have a difficult time competing for investors because of the high risk at this stage of development and the fact that the investment is long term.  The market for the transportation fuel and metals that the company believes may be
 
 
 
20
 
 
derived from the GTL Units and from its mining claims also influences investment decisions, such that if there is strong demand, then funds may be relatively more available, but if market demand is not strong or the price of transportation fuels and the metals declines, funding may be unavailable. Additionally, the capital demands of the oil and gas industries present competition for funds for companies in the metals segment.  The failure to obtain the necessary working capital would have a material adverse effect on the business prospects and, depending upon the shortfall, the Company may have to curtail or cease its operations.

Commitments

Employment Contracts
 
In May 2011, we entered into employment agreements with our chief executive officer, president and chief financial officer.  The Agreements are for a term of 5 years with compensation of $180,000 the first year, $240,000 the second year, $300,000 the third year, $350,000 the fourth year and the fifth year at a salary commensurate with those in similar industries.  The employment agreements also provide for the officers to received 1,250,000 shares of restricted common stock annually for each year of the employment agreement.  During the nine months ended September 30, 2015 and 2014, with consent of management, we accrued a total of $315,000 and $360,000, respectively, as management fees in accordance with the terms of these agreements.  On April 8, 2015, our Company’s chief executive officer resigned and relinquished his claim to $518,300 of deferred compensation.

Mining Leases
 
Our minimum commitment for 2015 is approximately $11,160 in annual maintenance fees, which are due September 1, 2015.  Once we enter the production phase, royalties owed to the BLM are equal to 10% of production.
 
Financing
 
Our financing has been provided by advances from shareholders and by issuing shares of its common stock in various private placements to related parties and individuals.  

 
Off-Balance Sheet Arrangements
 
As of September 30, 2015, there were no off-balance sheet arrangements, unconsolidated subsidiaries and commitments or guaranties of other parties.

Going Concern

Our financial statements includes a statement that unless, we obtain financing or generate revenues, there is substantial concern that we will be able to continue as a going concern.  We do not have any current firm prospects for obtaining financing and as part of our business plan we intend to seek operational capital to continue the development of the Mamaki Tea farm and maintain our operations.   Our most immediate source of generating revenues is the Mamaki Tea farm.  Without a short term source of revenue, we may not be able to continue with our business plan and have to curtail our operations and any growth activities.

To date, we have financed our operations from the sale of restricted common stock and advances from shareholders.

We believe that the effect of inflation has not been material during the nine months ended September 30, 2015.



 
21
 
 
Critical Accounting Policies

Our critical accounting policies are identified in our Annual Form 10-K filed on March 31, 2015 in   Management’s Discussion and Analysis of Financial Condition and Results of Operations   under the heading “Critical Accounting Policies.” There were no significant changes to our critical accounting policies during the nine months ended September 30, 2015.

Item 3: Quantitative and Qualitative Disclosures About Market Risk.

Not applicable for small reporting company.

Item 4T: Controls and Procedures.

Disclosure Controls and Procedures

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

●
pertain to the  maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
   
●
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting  principles, and that receipts and expenditures  of the company are being made only in accordance with authorizations of management and directors of the company; and
   
●
provide reasonable assurance regarding prevention or timely detection of  unauthorized  acquisition,  use or disposition of the company's assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In September 2015, we conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in "Internal Control -- Integrated Framework," issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.  Based upon this assessment, we determined that there are material weaknesses affecting our internal control over financial reporting.

The  matters  involving  internal  controls  and  procedures  that our management considers to be material weaknesses under COSO and SEC rules are: (1) lack of a functioning  audit committee and lack of independent  directors on our board of  directors,  resulting in potentially ineffective oversight in the establishment and monitoring of required internal controls and procedures;  (2) inadequate segregation of  duties consistent with control objectives; (3) insufficient written policies and procedures for accounting  and financial reporting with respect to the requirements  and application of US GAAP and SEC disclosure requirements;  and (4) ineffective controls over period end financial disclosure and reporting  processes.  The aforementioned potential material weaknesses were identified by our Chief Financial Officer in connection with the preparation of our financial statements at of September 30, 2015 who communicated the matters to our management and board of directors.


 
22
 

Management believes that the material weaknesses set forth above did not have an effect on our financial results.   However, the lack of a functioning audit committee and lack of a majority of independent directors on our board of directors resulting in potentially ineffective oversight in the establishment and monitoring of required internal controls and procedures, can impact our financial statements.

Management's Remediation Initiatives
 
Although we are unable to meet the standards under COSO because of the limited funds available to a company of our size, we are committed to improving our financial organization. As funds become available, we will undertake to: (1) create positions to segregate duties  consistent with control  objectives,  (2) increase our personnel resources and technical  accounting  expertise within the accounting  function (3) appoint one or more  outside  directors to our board of directors  who shall be appointed to a Company  audit  committee  resulting in a fully  functioning  audit  committee  who will  undertake  the  oversight in the establishment and monitoring of required  internal controls and procedures;  and (4) prepare and implement  sufficient written policies and checklists which will set forth procedures for accounting and financial  reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

We will  continue to monitor and  evaluate  the  effectiveness  of our internal controls and procedures and our  internal  control  over  financial reporting on an ongoing  basis and are  committed to taking  further  action and implementing additional enhancements or improvements,  as necessary and as funds allow.  However, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake.  The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Projections of any evaluation of controls effectiveness to future periods are subject to risks.


Part II – OTHER INFORMATION

Item 1.  Legal Proceedings.

From time to time, we 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 from time to time that may harm our business. We are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results

Item 1A.  Risk Factors

Not required by small reporting company.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.  

During the three month period ended September 30, 2015, the Company issued 3,582,329 shares of restricted common stock to eighteen individuals through private placements for cash of $448,643 at average of $0.1252 per share.

During the three month period ended September 30, 2015, 611,956 preferred shares were converted to 9,179,340 shares of common stock.

During the three month period ended September 30, 2015, the Company issued 2,835,100 shares of restricted common stock for consulting services at a value of $306,011 based on value of the services provided.

The issuance of these shares was exempt from the registration requirements of the Securities Act of 1933 under Section 4 (2) thereof.
 
 
 
23
 

Item 3.  Defaults Upon Senior Securities.  Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders.  

         No matters were submitted for a vote of Security Holders

Item 5.  Other Information.

None

Item 6.   Exhibits.
 
 
Listing of Exhibits:
     
 
31.1
Certification of Chief Executive Officer. 
     
 
31.2
Certification of Chief Financial Officer. 
     
 
32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 
     
 
101 
Interactive data files pursuant to Rule 405 of Regulation S-T. 



Signatures

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
UMED HOLDINGS,  INC.
  
       
       
Date:  November 23,  2015
By:
 /s/ Richard Halden
  
   
Its:  President
  
       
Date:  November 23,  2015
By:
 /s/ Randy Moseley
  
   
Its:  Chief Financial Officer
  





 
24
 

EXHIBIT 31.1

CERTIFICATIONS

I, Richard Halden, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of UMED Holdings, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
 
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d – 15(f)) for the registrant and have:

(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
 
 (a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: November 23,  2015
/s/ Richard Halden
 
Richard Halden, President

EXHIBIT 31.2

CERTIFICATIONS

I, Randy Moseley, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of UMED Holdings, Inc.;


2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d – 15(f))  for the registrant and have:

(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
 
(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: November 23,  2015
/s/ Randy Moseley
 
Randy Moseley, Chief Financial Officer

Exhibit 32.1

Certification Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of UMED Holdings, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities listed below, hereby certifies, pursuant to 18U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:  (i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 
UMED Holdings, Inc.
  
     
Date: November 23,  2015
By: /s/ Richard Halden
  
 
Richard Halden
  
 
President
  
 
(principal executive officer)
  
     
Date: November 23,  2015
By: /s/ Randy Moseley
  
 
Randy Moseley
  
 
Chief Financial Officer
  
 
(principal financial officer)
  

A signed original of this written statement required by Section 906 has been provided to UMED Holdings, Inc. and will be retained by UMED Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

v3.3.0.814
Property, Plant and Equipment values (Details) - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Property, Plant and Equipment values    
Equipment with Range of Lives in 5 Years $ 2,032 $ 13,220
Logistix software with Range of Lives in 5 Years 0 73,500
Furniture and fixtures with Range of Lives in 5 Years 1,983 1,983
Total value of the assets 4,015 88,703
Less accumulate depreciation (3,172) (14,061)
Net value of assets, 843 74,642
Depreciation expense for the period ended $ 297 $ 297

v3.3.0.814
The net deferred tax assets and liabilities (Details) - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Deferred tax assets    
Net operating loss carry forwards $ 4,862,330 $ 3,477,275
Deferred compensation 2,058,036 1,966,523
Stock based compensation 3,026,513 1,095,502
Other 367,929 191,000
Total Deferred tax assets 10,314,808 6,730,300
Less valuation allowance (10,314,808) $ (6,730,300)
Deferred tax asset 0  
Deferred tax liabilities    
Depreciation and amortization 0  
Net long-term deferred tax asset $ 0  

v3.3.0.814
Capital Structure (Details)
Sep. 30, 2015
$ / shares
shares
Company's capital structure  
Company's authorized shares of common stock 300,000,000
Par value of Shares of common stock | $ / shares $ 0.0001
Company's authorized shares of preferred stock 20,000,000
Par value of Shares of preferred stock | $ / shares $ 0.0001
Common Stock  
Shares of common stock issued and outstanding 181,542,469
Preferred Stock  
Shares of preferred stock issued and outstanding 15,126,938
Number of shares convertible at the rate of one preferred share for fifteen shares of common stock 126,938
Number of shares being convertible on a one for one basis 15,000,000

v3.3.0.814
Valuation Allowance and Net Operating Losses Carry Forward (Details) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Valuation Allowance and Net Operating Losses Carry Forward    
Change in the valuation allowance $ 3,584,508 $ 2,685,346
Company has recorded a 100% valuation allowance related to the deferred tax asset for the loss from operations amount 10,314,808 6,730,300
Net operating losses carry forward for federal and state income tax purposes $ 4,900,000 $ 3,500,000

v3.3.0.814
Convertible promissory note debt issue costs as follows (Details)
 9 Months Ended
Sep. 30, 2015
USD ($)
Convertible promissory note debt issue costs as follows  
Company recognized interest expense related to the amortization of the discount $ 601
Convertible promissory note debt issue costs paid in cash equal to a percentage 10.40%
Convertible promissory note debt issue costs paid in cash $ 16,500
Amortization of debt issue costs for the period 55,427
Company recorded original issue discounts for the year 158,000
Disbursement of note to the company 144,000
Company amortized original issue discount related to the convertible note $ 8,100

v3.3.0.814
Going Concern Uncertainties (Details)
Sep. 30, 2015
USD ($)
Going Concern Uncertainties  
Companied sustained loss amounted $ 3,600,000
Company incurred deficit of $ 10,300,000

v3.3.0.814
Condensed Statements Of Discontinued Operations (Details) - USD ($)
 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Condensed Statements Of Discontinued Operations    
Discontinued Operations Sales $ 47,275 $ 19,580
Discontinued Operations Cost of sales 8,407 34,277
Discontinued Operations Gross profit 38,868 (14,697)
Discontinued Operations Operating Expenses:    
Discontinued Operations General and administrative expenses 395,824 348,135
Discontinued Operations Depreciation 89,218 89,217
Discontinued Operations Total Operating Expenses 485,042 437,352
Discontinued Operations Operating Loss (446,174) (447,049)
Discontinued Operations Other Income (Expense)    
Discontinued Operations Interest expense (115,238) (160,339)
Loss from discontinued operations $ (561,412) $ (607,388)

v3.3.0.814
INVESTMENTS (TABLES)
 9 Months Ended
Sep. 30, 2015
INVESTMENTS (TABLES):  
INVESTMENTS (TABLES)

Investments consisted of the following at September 30, 2015 and December 31, 2014;

 

 

 

September 30, 

 

 December 31,

 

 

2015 

 

 2014

Jet Tech LLC

 

In October 2011, the Company acquired a 49% interest in

JetTech LLC which is an aerospace maintenance operation

located at Meacham Airport in Fort Worth, Texas for 600,000

shares of the Company’s restricted common stock. The shares

were valued at $.15 per share.

 

 

 

 

   

 

 

 $ 90,000

 

 

 

 

   

 

 

$ 90,000

 

 

 

 

 

                                                                   TOTAL INVESTMENTS

 

$ 90,000

 

$ 90,000

 

 

v3.3.0.814
Related Party (Details) - USD ($)
 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Related Party    
Shareholders made advances $ 204,884 $ 256,823
Shareholders converted advances into common stock at market value $ 182,275 $ 376,000
Shareholders converted advances into common stock at market value per share $ 0.106 $ 0.103
Received repayments $ 10,000 $ 0

v3.3.0.814
Investments Parentheticals (Details)
Sep. 30, 2015
$ / shares
shares
Investments Parentheticals  
Company acquired interest in JetTech LLC an aerospace maintenance operation 49.00%
Shares of restricted common stock 600,000
Shares of restricted common stock par value | $ / shares $ 0.15

v3.3.0.814
Net Loss Per Share, basic and diluted (Details)
Sep. 30, 2015
shares
Net Loss Per Share, basic and diluted-Details  
Exercise of warrants has been excluded as a common stock equivalent in the diluted loss per share 376,100

v3.3.0.814
The provision for income taxes for continuing operations (Details) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2015
Dec. 31, 2014
The provision for income taxes for continuing operations    
Current income taxes. $ 0 $ 0
Deferred income taxes,. 0 0
Total tax provision for (benefit from) income taxes $ 0 $ 0

v3.3.0.814
SUBSEQUENT TRANSACTIONS (DETAILS)
Nov. 01, 2015
USD ($)
SUBSEQUENT TRANSACTIONS  
HBI acquired of the common stock of Mamaki 100.00%
HBI acquired of the common stock of Mamaki for a price $ 700,000
HBI assumed an amount of UMED debts at acquisition 84,275
HBI paid an amount for acquisition 245,500
Acquisition price due at closing 250,000
Due amount will be paid in three installments on each of thirty, sixty and ninety day anniversary of the closing date. $ 150,000

v3.3.0.814
Accrued expenses consisted of the following (Details) - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Accrued expenses consisted of the following    
Accrued consulting fees $ 206,500 $ 144,500
Accrued interest expense 823 9,091
Total accrued expenses $ 207,323 $ 153,591

v3.3.0.814
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

A summary of significant accounting policies applied in the presentation of the condensed consolidated financial statements are as follows:

 

Property & Equipment

 

Property and equipment is recorded at cost. Major additions and improvements are capitalized. The cost and related accumulated depreciation of equipment retired or sold are removed from the accounts and any differences between the undepreciated amount and the proceeds from the sale are recorded as a gain or loss on sale of equipment. Depreciation is computed using the straight-line method over the estimated useful life of the assets as follows.

 

Equipment

5 to 7 years

 

Impairment of Long-Lived Assets

 

The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in accordance with ASC Topic 360, “Property, Plant and Equipment.”  An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset or asset group is expected to generate.  If an asset or asset group is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value.  If estimated fair value is less than the book value, the asset is written down to the estimated fair value and an impairment loss is recognized.

 

Discontinued Operations
 
On November 2, 2015, the Company consumamated on the sale of its wholly owned subsidiary, Mamaki of Hawaii, Inc. (“Mamaki”) to Hawaiian Beverages, Inc. (“HBI”).   Under the agreement, HBI acquired 100% of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty four thousand two hundred seventy five thousand dollars ($84,275) of UMED debts.  HBI paid two hundred forty five thousand five hundred dollars ($245,000) of the two hundred fifty thousand dollars ($250,000) due at closing and will pay three installments of one hundred fifty thousand dollars ($150,000) on each of thirty, sixty and ninety day anniversary of the closing date.
The results of Mamaki are presented as a separate line item in the consolidated statements of operations and the consolidated balance sheets entitled “Assets/Liabilities sold relating to discontinued operations” and “Assets/Liabilities retained related to discontinued operations”. In accordance with EITF 87-24, “Allocation of Interest to Discontinued Operations”, the Company elected to not allocate consolidated interest expense to discontinued operations where the debt is not directly attributable to or related to discontinued operations. All of the financial information in the consolidated financial statements and notes to the consolidated financial statements has been revised to reflect only the results of continued operations. (See Note 7).

 

 

 

 

 

Revenue Recognition

 

The Company has not, to date, generated significant revenues.  The Company plans to recognize revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

 

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.

 

Use of Estimates

 

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reported period.  Actual results could differ materially from the estimates.

 

Cash and Cash Equivalent

 

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  There were no cash equivalents at September 30, 2015 or December 31, 2015.

 

Segment Information

 

ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting.  The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance.  The Company determined that is had one operating segment, Mamaki of Hawaii, Inc., in addition to its corporate activities.

 

 

 

   

 

Mine Exploration and Development Costs

 

The Company plans to account for mine exploration costs in accordance with Accounting Standards Codification 932, Extractive Activities.  All exploration expenditures are expensed as incurred. Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine’s production capacity and is not considered to shift the mine into the production phase. Amortization of capitalized mine development is computed based on the estimated life of the mine and commences when production, other than production incidental to the mine development process, begins.  Through September 30, 2015, the Company had not incurred any mine development costs.

 

Mine Properties

 

The Company will account for mine properties in accordance with Accounting Standard Codification 930, Extractive Activities-Mining.  Costs of acquiring mine properties are capitalized by project area upon purchase of the associated claims.  Mine properties are periodically assessed for impairment of value and any diminution in value. The Company had 1,440 acres of placer mining claims at September 30, 2015, which were acquired in December 2010 in exchange for 5,066,000 shares of common stock valued at $100,000.

 

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

 

The Company has adopted the provisions of FASB ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements.  The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Open tax years subject to IRS examination include 2009 – 2014.

 

Net Loss Per Share, basic and diluted

 

Basic loss per share has been computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Shares issuable upon the exercise of warrants (376,100) have been excluded as a common stock equivalent in the diluted loss per share because their effect is anti-dilutive.

 

Derivative Instruments

 

The Company accounts for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.  They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

 

If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

 

 

See Note 8 below for discussion regarding a warrant agreement related to a convertible note, which was repaid on July 22, 2015.

 

Original Issue Discount

 

For certain convertible debt issued, the Company provides the debt holder with an original issue discount (“OID”).  An OID is the difference between the original cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the proceeds received. The OID is amortized into interest expense pro-rata over the term of the Note.

 

Fair Value of Financial Instruments

 

The Company's financial instruments, as defined by Accounting Standard Codification subtopic 825-10, Financial Instrument (“ASC 825-10), include cash, accounts payable and convertible note payable.  All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2015.

 

FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

 

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions

 

The Company’s derivative is valued at level 3.

 

Stock Based Compensation

 

The Company follows Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.  

 

At September 30, 2015, the Company did not have any issued or outstanding stock options.

 

Concentration and Credit Risk

 

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash. The Company places its cash with high credit quality institutions.  At times, such deposits may be in excess of the FDIC insurance limit.

 

Research and Development

 

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $593,725 and $152,500 during the nine months ended September 30, 2015 and 2014. 

 

 

Issuance of Common Stock

 

The issuance of common stock for other than cash is recorded by the Company at market values.

 

Impact of New Accounting 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.

 

 

v3.3.0.814
Term notes payable consisted of the following (Details) - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Term notes payable consisted of the following    
Unsecured note payable (Individual) due January 18, 2016 including interest at 10% $ 63,875 $ 0
Term note payable 63,875 0
Accrued interest payable on term notes payable $ 822 $ 0

v3.3.0.814
INCOME TAXES (TABLES)
 9 Months Ended
Sep. 30, 2015
INCOME TAXES (TABLES):  
The provision for income taxes for continuing operations consists of the following components for the years ended December 31

The provision for income taxes for continuing operations consists of the following components for the nine months ended September 30, 2015 and the year ended December 31, 2014:

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Current

 

$

-

 

 

$

-

 

Deferred

 

 

-

 

 

 

-

 

   Total tax provision for (benefit from) income taxes

 

$

-

 

 

$

-

 

A comparison of the provision for income tax expense at the federal statutory rate of 34% for the years ended December 31

A comparison of the provision for income tax expense at the federal statutory rate of 34% for the nine months ended September 30, 2015 and the year ended December 31, 2014 the Company’s effective rate is as follows:

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Federal statutory rate

 

 

(34.0

) %

 

 

(34.0

) %

State tax, net of federal benefit

 

 

(0.0

)

 

 

(0.0

)

Permanent differences and other including surtax exemption

 

 

0.0

 

 

 

0.0

 

Valuation allowance

 

 

34.0

 

 

 

34.0

 

Effective tax rate

 

 

0.0

%

 

 

0.0

%

  

The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at December 31:

The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at September 30, 2015 and December 31, 2014:

 

  

 

2015

 

 

2014

 

Deferred tax assets

 

 

 

 

 

 

Net operating loss carry forwards

 

$

4,862,330

 

 

$

3,477,275

 

Deferred compensation

 

 

2,058,036

 

 

 

1,966,523

 

Stock based compensation

 

 

3,026,513

 

 

 

1,095,502

 

Other

 

 

367,929

 

 

 

191,000

 

Total

 

 

10,314,808

 

 

 

6,730,300

 

Less valuation allowance

 

 

(10,314,808

)

 

 

(6,730,300

)

Deferred tax asset

 

 

-

 

 

 

-

 

Deferred tax liabilities

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

-

 

 

$

-

 

Net long-term deferred tax asset

 

$

-

 

 

$

-

 

v3.3.0.814
ACCRUED EXPENSES (TABLES)
 9 Months Ended
Sep. 30, 2015
ACCRUED EXPENSES (TABLES):  
ACCRUED EXPENSES (TABLES)

Accrued expenses consisted of the following at September 30, 2015 and December 31, 2014;

 

 

 

 

 2015

 

 

 

 2014

 

 

 

 

 

 

 

 

 

 

Accrued consulting fees

 

$

206,500

 

 

$

144,500

 

Accrued interest expense

 

 

823

 

 

 

9,091

 

Total accrued expenses

 

$

207,323

 

 

$

153,591

 

 

 

 

v3.3.0.814
Discontinued Operations Textual(Details)
Nov. 02, 2015
USD ($)
shares
Discontinued Operations Textual  
HBI acquired common stock of Mamaki in percentage 100.00%
HBI acquired common stock of Mamaki | shares 700,000
UMED debts $ 84,275
HBI paid towards the first installment 245,500
HBI was due 250,000
HBI was to pay in three installments $ 150,000

v3.3.0.814
Term notes payable Parentheticals (Details)
Sep. 30, 2015
Term notes payable Parentheticals  
Unsecured note payable interest 10.00%

v3.3.0.814
DISCONTINUED OPERATIONS (TABLES)
 9 Months Ended
Sep. 30, 2015
DISCONTINUED OPERATIONS (TABLES):  
Condensed statements of the discontinued operations

The following are condensed statements of the discontinued operations (Mamaki of Hawaii, Inc.) for the nine months ended September 30, 2015 and 2014:

 

 

 

2015

 

 

2014

 

Sales

 

$

47,275

 

 

$

19,580

 

Cost of sales

 

 

8,407

 

 

 

34,277

 

Gross profit

 

 

38,868

 

 

 

(14,697

)

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

395,824

 

 

 

348,135

 

Depreciation

 

 

89,218

 

 

 

89,217

 

Total Operating Expenses

 

 

485,042

 

 

 

437,352

 

Operating Loss

 

 

(446,174

)

 

 

(447,049

)

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

 Interest expense

 

 

(115,238

)

 

 

(160,339

)

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

$

(561,412

)

 

$

(607,388

)
Assets and liabilities retained relating to discontinued operations

Assets and liabilities retained relating to discontinued operations (Mamaki of Hawaii, Inc.) consisted of the following at September 30, 2015, September 30, 2014 and December 31, 2014;

 

 

 

9/30/2015

 

 

12/31/2014

 

 

 

 

 

 

 

 

Current assets relating to discontinued operations:

 

 

 

 

 

 

Cash

 

$

1,012

 

 

$

256

 

Accounts receivable

 

 

5,264

 

 

 

780

 

Prepaid expenses and deposits

 

 

23,443

 

 

 

32,700

 

Property, plant and equipment, net

 

 

1,629,793

 

 

 

1,719,009

 

Total assets related to discontinued operations

 

$

1,659,512

 

 

$

1,752,745

 

 

 

 

 

 

 

 

 

 

Current liabilities relating to discontinued operations:

 

 

 

 

 

 

 

 

Bank overdrafts

 

$

0

 

 

$

4,896

 

Notes payable

 

 

1,221,950

 

 

 

1,245,211

 

Accounts payable

 

 

42,813

 

 

 

35,582

 

Accrued interest payable

 

 

52,304

 

 

 

36,450

 

Accrued expenses

 

 

800,554

 

 

 

538,380

 

Total liabilities related to discontinued operations

 

$

2,117,621

 

 

$

1,860,518

 

v3.3.0.814
Nature of Operations Textuals (Details) - USD ($)
Dec. 31, 2012
Aug. 31, 2012
May. 31, 2012
Oct. 31, 2011
Sep. 30, 2010
Nature of Operations textuals          
UMED has acquired acres of placer mining claims on Bureau of Land Management land in Mohave County, Arizona.         $ 1,440
UMED acquired a % of interest in Jet Regulators, LP, an aircraft maintenance company located at Meacham Field in Fort Worth, Texas.       49.00%  
Percentage of Shares acquired of Mamaki Tea & Extract of Hawaii, Inc. (nka Mamaki of Hawaii, Inc.)     80.00%    
Company acquired % of Greenway Innovative Energy, Inc.,   100.00%      
Company acquired the remaining 20% shares of restricted common stock of Rig Support Group, Inc., (nka Logistix Technology Systems, Inc. $ 500,000        
Cash paid for acquisition of Mamaki Tea & Extract of Hawaii, Inc. $ 127,800        

v3.3.0.814
RECLASSIFICATION
 9 Months Ended
Sep. 30, 2015
RECLASSIFICATION:  
RECLASSIFICATION

NOTE 3 - RECLASSIFICATION

 

The December 31, 2014 financial statements amounts have been reclassified to conform to current period presentation as follows;

 

Balance Sheet Accounts

 

As Previously Stated

 

 

Reclassification

 

 

As Reclassification

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

82,656

 

 

$

(256

)

 

$

82,400

 

Accounts receivable

 

 

780

 

 

 

(780

)

 

 

0

 

Prepaid expenses

 

 

32,700

 

 

 

(32,700

)

 

 

0

 

Land

 

 

150,000

 

 

 

(150,000

)

 

 

0

 

Buildings

 

 

871,842

 

 

 

(871,842

)

 

 

0

 

Equipment

 

 

1,084,755

 

 

 

(996,052

)

 

 

88,703

 

Accumulated depreciation

 

 

(312,946

)

 

 

298,885

 

 

 

(14,061

)

Assets related to discontinued operations

 

 

0

 

 

 

1,752,745

 

 

 

1,752,745

 

Total

 

$

2,155,214

 

 

$

0

 

 

$

2,155,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

70,568

 

 

$

(35,582

)

 

$

34,986

 

Accrued expenses

 

 

733,316

 

 

 

(579,725

)

 

 

153,591

 

Term notes

 

 

1,245,211

 

 

 

(1,245,211

)

 

 

0

 

Liabilities related to discontinued operations

 

 

0

 

 

 

1,860,518

 

 

 

1,860,518

 

 

 

$

2,049,095

 

 

$

0

 

 

$

2,049,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows Accounts

 

As Previously Stated

 

 

Reclassification

 

 

As Reclassification

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(2,166,114

)

 

$

607,388

 

 

$

(1,558,726

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

89,514

 

 

 

(89,217

)

 

 

297

 

Stock issued for services

 

 

665,871

 

 

 

0

 

 

 

665,871

 

Warrants

 

 

66,617

 

 

 

0

 

 

 

66,617

 

Accounts receivable

 

 

340

 

 

 

(340

)

 

 

0

 

Prepaid expenses

 

 

17,912

 

 

 

(17,912

)

 

 

0

 

Accounts payable

 

 

(18,439

)

 

 

14,762

 

 

 

(3,677

)

Accrued management fees

 

 

361,101

 

 

 

0

 

 

 

361,101

 

Accrued expenses

 

 

248,345

 

 

 

(219,448

)

 

 

28,897

 

Net Cash Provided by Operations

 

 

(734,853

)

 

 

295,233

 

 

 

(439,620

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Advances from shareholders

 

 

376,897

 

 

 

0

 

 

 

376,897

 

Proceeds from convertible note

 

 

144,700

 

 

 

0

 

 

 

144,700

 

Decrease in notes payable

 

 

(66,473

)

 

 

66,473

 

 

 

0

 

Proceeds from sale of common stock

 

 

403,465

 

 

 

0

 

 

 

403,465

 

Debt issue costs

 

 

(78,211

)

 

 

0

 

 

 

(78,211

)

Net Cash Provided by Financing

 

 

780,378

 

 

 

0

 

 

 

846,851

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash used in discontinued operations

 

 

 

 

 

 

(361,706

)

 

 

(361,706

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Increase in Cash

 

$

45,525

 

 

$

0

 

 

$

45,525

 

 

 

 

 

 

 

v3.3.0.814
Basis of presentation (Details)
Sep. 30, 2015
Name of the Entity  
UMED Holdings, Inc. 0.00%
Mamaki of Hawaii, Inc. 100.00%
Universal Media Corporation 100.00%
Greenway Innovative Energy, Inc. 100.00%
Logistix Technology Systems, Inc. 100.00%

v3.3.0.814
Depreciated Assets (Details)
 3 Months Ended
Sep. 30, 2015
USD ($)
Depreciated Assets  
Company wrote-off depreciated assets $ 11,188

v3.3.0.814
Comparison of Provision for income tax expense (Details) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Comparison of Provision for income tax expense    
Federal statutory rate (34.00%) (34.00%)
State tax, net of federal benefit 0.0 0.0
Permanent differences and other including surtax exemption 0.0 0.0
Valuation allowance $ 34.0 $ 34.0
Effective tax rate 0.00% 0.00%

v3.3.0.814
Condensed Consolidated Balance Sheet (Unaudited) - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Current Assets    
Cash $ 16,084 $ 82,400
Total Current Assets 16,084 82,400
Fixed assets    
Property & equipment 4,015 88,703
Less depreciation 3,172 14,061
Total fixed assets 843 74,642
Other Assets    
Mine properties 100,000 100,000
Investments 90,000 90,000
Debt issue costs 0 55,427
Assets related to discontinued operations 1,659,512 1,752,745
Total Other Assets 1,849,512 1,998,172
Total Assets 1,866,439 2,155,214
Current Liabilities    
Accounts payable 54,919 34,986
Advances from stockholders 115,381 181,272
Accrued management fees 1,664,978 1,822,677
Accrued expenses 207,323 154
Note payable 63,875 0
Convertible note payable, net 0 136,801
Derivative 67,139 0
Liabilities related to discontinued operations 2,117,621 1,860,518
Total Current Liabilities 4,291,236 4,189,845
Total Liabilities 4,291,236 4,189,845
Stockholders' Deficit    
Preferred stock, 20,000,000 shares authorized, par value $0.0001,15,126,938 issued and outstanding at September 30, 2015 and15,738,894 at December 31, 2014 1,513 1,574
Common stock 300,000,000 shares authorized, par value $0.0001,181,542,469 and 145,559,835 issued and outstanding at September 30, 2015 and December 31, 2014, respectively 18,155 14,557
Additional paid-in capital 7,872,930 4,679,538
Accumulated deficit (10,317,395) (6,730,300)
Total Stockholders' Deficit (2,424,797) (2,034,631)
Total Liabilities & Stockholders' Deficit $ 1,866,439 $ 2,155,214

v3.3.0.814
Convertible promissory note issues (Details) - USD ($)
Sep. 30, 2015
Sep. 18, 2014
Convertible promissory note issues    
Company issued a convertible promissory note to an accredited investor   $ 158,000
Convertible promissory note bears interest at a rate per annum   10.00%
Monthly instalments payable on note   $ 31,600
Note converted into common stock at conversion price equal to average of 3 lowest volume weighted average trading prices during 20 day   70.00%
The discount related to the beneficial conversion feature on the note valued at an amount based on intrinsic value   $ 154,000
Discount related to beneficial conversion feature is amortized over the term of (10 months)   $ 23,346
Warrants - having a fair value of $ 107,212  
Debt discount of warrants 67,139  
Net debt issue costs 0  
Original issue discount costs $ 0  
Expected dividends 0.00%  
Expected volatility 789.00%  
Expected term: conversion feature(years) 4  
Risk free interest rate 1.75%  

v3.3.0.814
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES {1}
 9 Months Ended
Sep. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Operations

 

UMED Holdings, Inc. (“UMED” or the “Company”) was organized on March 13, 2002 under the laws of the State of Texas as Dynalyst Manufacturing Corporation.  On August 18, 2009, in connection with a merger with Universal Media Corporation, a privately held Nevada company, the Company changed its name to Universal Media Corporation (“Universal Media”).  The company changed its name to UMED Holdings, Inc. on March 23, 2011.

 

UMED’s mission is to operate as a holding company through the acquisition of businesses as wholly-owned subsidiaries that meet some key requirements: (1) solid management that will not have to be replaced in the near future (2) the ability to grow with steady growth to follow and (3) an emphasis on emerging core industry markets, such as energy, metals and agriculture.  It is the Company’s intention to add experienced personnel and select strategic partners to manage and operate the acquired business units.  

 

In September 2010, UMED has acquired 1,440 acres of placer mining claims on Bureau of Land Management land in Mohave County, Arizona. See discussion in Note 3.

 

In October 2011, UMED has acquired a 49% interest in Jet Regulators, LP, an aircraft maintenance company located at Meacham Field in Fort Worth, Texas.  See discussion in Note 5.

 

In May 2012, the Company acquired 80% of Mamaki Tea & Extract of Hawaii, Inc. (nka Mamaki of Hawaii, Inc.) which owns and operates Wood Valley Plantation a 25 acre Mamaki Tea plantation located in the Kau district of the Island of Hawaii and lies at the foot of Mauna Loa, the Earth’s largest volcano.   On December 31, 2012, the Company acquired the remaining 20% for 500,000 shares of restricted common stock and $127,800 of cash.  Mamaki of Hawaii, Inc. has been sold in November 2015 as discussed further in Note 2.

 

In August 2012, the Company acquired 100% of Greenway Innovative Energy, Inc., which owns proprietary technology that is capable of converting natural gas to diesel/jet fuels. 

 

 

 

v3.3.0.814
Commitments Consists of the following (Details) - USD ($)
Apr. 08, 2015
May. 31, 2011
Commitments Consists of the following    
Compensation payable during the first year   $ 180,000
Compensation payable during the second year   240,000
Compensation payable during the third year   300,000
Compensation payable during the fourth and fifth years   $ 350,000
Shares of restricted common stock annually for each year of the employment agreement   1,250,000
Company's chief executive officer resigned and relinquished his claim to receive compensation $ 518,300  

v3.3.0.814
Discontinued Operations (Details)
Nov. 02, 2015
USD ($)
Discontinued Operations  
HBI acquired common stock of Mamaki in percentage 100.00%
HBI acquired common stock of Mamaki $ 700,000
UMED debts 84,275
HBI was to pay 250,000
HBI was to pay in three installments $ 150,000

v3.3.0.814
Basis of Presentation (TABLES)
 9 Months Ended
Sep. 30, 2015
Basis of Presentation (TABLES):  
Basis of Presentation (TABLES)

The accompanying condensed consolidated financial statements include the accounts of the following entities:

 

Name of Entity

%

 

Entity

Incorporation

Relationship

UMED Holdings, Inc.

 

 

Corporation

Texas

Parent

Mamaki of Hawaii, Inc.*

100

 %

Corporation

Nevada

Subsidiary

Universal Media Corporation

100

 %

Corporation

Wyoming

Subsidiary

Greenway Innovative Energy, Inc.

100

 %

Corporation

Nevada

Subsidiary

Logistix Technology Systems, Inc.

100

 %

Corporation

Texas

Subsidiary

 

*  Sold in November 2015

 

v3.3.0.814
Mine Properties (Details)
Sep. 30, 2015
Dec. 31, 2010
USD ($)
shares
Mine Properties    
Mining claims in acres 1,440  
Mining claims acquired in exchange for shares of common stock   5,066,000
Nominal value of common stock | $   $ 100,000

v3.3.0.814
PROPERTY, PLANT AND EQUIPMENT (TABLES)
 9 Months Ended
Sep. 30, 2015
PROPERTY, PLANT AND EQUIPMENT (TABLES):  
PROPERTY, PLANT AND EQUIPMENT (TABLES)

Property, plant and equipment, their estimated useful lives, and related accumulated depreciation at September 30, 2015 and December 31, 2014, respectively, are summarized as follows:

 

 

 

Range of

 

 

 

 

 

 

 

 

 

Lives in

 

 

September 30, December 31,

 

 

 

Years

 

 

2015

 

 

2014

 

Equipment

 

 

5

 

 

 

2,032

 

 

 

13,220

 

Logistix software

 

 

5

 

 

 

0

 

 

 

73,500

 

Furniture and fixtures

 

 

5

 

 

 

1,983

 

 

 

1,983

 

 

 

 

 

 

 

 

4,015

 

 

 

88,703

 

Less accumulate depreciation

 

 

 

 

 

 

(3,172

)

 

 

(14,061

)

 

 

 

 

 

 

$

843

 

 

 

74,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense for the period ended

 

 

 

 

 

$

297

 

 

$

297

 

 

v3.3.0.814
BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES
 9 Months Ended
Sep. 30, 2015
BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES  
BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES

 

NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the financial statements of UMED and its wholly-owned subsidiaries. The Company’s investment in Jet Regulators is accounted for at cost due to its lack of significant influence.  All significant inter-company accounts and transactions were eliminated in consolidation.

 

 Basis of Presentation

 

The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulations S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.  The balance sheet at December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The net assets and results of operations of Mamaki of Hawaii, Inc. have been reflected as discontinued operations for all periods presented.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2014.

 

 

 

 

 

 

The accompanying condensed consolidated financial statements include the accounts of the following entities:

 

Name of Entity

%

 

Entity

Incorporation

Relationship

UMED Holdings, Inc.

 

 

Corporation

Texas

Parent

Mamaki of Hawaii, Inc.*

100

 %

Corporation

Nevada

Subsidiary

Universal Media Corporation

100

 %

Corporation

Wyoming

Subsidiary

Greenway Innovative Energy, Inc.

100

 %

Corporation

Nevada

Subsidiary

Logistix Technology Systems, Inc.

100

 %

Corporation

Texas

Subsidiary

 

*  Sold in November 2015

 

Going Concern Uncertainties

 

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company sustained a loss of $3.6 million for the nine months period ended September 30, 2015 and has a deficit of $10.3 million at September 30, 2015. The ability of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations or on the ability of the Company to obtain necessary financing to fund ongoing operations. Management believes that its current and future plans enable it to continue as a going concern for the next twelve months.

 

To meet these objectives, the Company continues to seek other sources of financing in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any such financing can be obtained on acceptable terms and timely manner, if at all.  The failure to obtain the necessary working capital would have a material adverse effect on the business prospects and, depending upon the shortfall, the Company may have to curtail or cease its operations.

 

The accompanying condensed consolidated financial statements do not include any adjustment to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

 

 

 

v3.3.0.814
Condensed Consolidated Balance Sheets Parentheticals - $ / shares
Sep. 30, 2015
Dec. 31, 2014
Parentheticals    
Preferred Stock, par value $ 0.0001 $ 0.0001
Preferred Stock, shares authorized 20,000,000 20,000,000
Preferred Stock, shares issued 15,126,938 15,738,894
Preferred Stock, shares outstanding 15,126,938 15,738,894
Common Stock, par value $ 0.0001 $ 0.0001
Common Stock, shares authorized 300,000,000 300,000,000
Common Stock, shares issued 181,542,469 145,559,835
Common Stock, shares outstanding 181,542,469 145,559,835

v3.3.0.814
INCOME TAXES
 9 Months Ended
Sep. 30, 2015
INCOME TAXES  
INCOME TAXES

NOTE 12 – INCOME TAXES

 

At September 30, 2015 and December 31, 2014, the Company had approximately $4.9 million and $3.5 million, respectively, of net operating losses (“NOL”) carry forwards for federal and state income tax purposes.  These losses are available for future years and expire through 2033.  Utilization of these losses may be severely or completely limited if the Company undergoes an ownership change pursuant to Internal Revenue Code Section 382.  

 

The provision for income taxes for continuing operations consists of the following components for the nine months ended September 30, 2015 and the year ended December 31, 2014:

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Current

 

$

-

 

 

$

-

 

Deferred

 

 

-

 

 

 

-

 

   Total tax provision for (benefit from) income taxes

 

$

-

 

 

$

-

 

 

A comparison of the provision for income tax expense at the federal statutory rate of 34% for the nine months ended September 30, 2015 and the year ended December 31, 2014 the Company’s effective rate is as follows:

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Federal statutory rate

 

 

(34.0

) %

 

 

(34.0

) %

State tax, net of federal benefit

 

 

(0.0

)

 

 

(0.0

)

Permanent differences and other including surtax exemption

 

 

0.0

 

 

 

0.0

 

Valuation allowance

 

 

34.0

 

 

 

34.0

 

Effective tax rate

 

 

0.0

%

 

 

0.0

%

  

 

 

The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at September 30, 2015 and December 31, 2014:

 

  

 

2015

 

 

2014

 

Deferred tax assets

 

 

 

 

 

 

Net operating loss carry forwards

 

$

4,862,330

 

 

$

3,477,275

 

Deferred compensation

 

 

2,058,036

 

 

 

1,966,523

 

Stock based compensation

 

 

3,026,513

 

 

 

1,095,502

 

Other

 

 

367,929

 

 

 

191,000

 

Total

 

 

10,314,808

 

 

 

6,730,300

 

Less valuation allowance

 

 

(10,314,808

)

 

 

(6,730,300

)

Deferred tax asset

 

 

-

 

 

 

-

 

Deferred tax liabilities

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

-

 

 

$

-

 

Net long-term deferred tax asset

 

$

-

 

 

$

-

 

 

The change in the valuation allowance was $3,584,508 and $2,685,346 for the nine months ended September 30, 2015 and the year ended December 31, 2014, respectively.  The Company has recorded a 100% valuation allowance related to the deferred tax asset for the loss from operations, interest expense, interest income and other income subsequent to the change in ownership, which amounted to $10,314,808 and $6,730,300 at September 30, 2015 and December 31, 2014, respectively. 

 

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, historical taxable income including available net operating loss carry forwards to offset taxable income, and projected future taxable income in making this assessment.

 

 

 

 

v3.3.0.814
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2015
Nov. 01, 2015
Document and Entity Information:    
Entity Registrant Name UMED HOLDINGS, INC.  
Entity Trading Symbol umed  
Document Type 10-Q  
Document Period End Date Sep. 30, 2015  
Amendment Flag false  
Entity Central Index Key 0001572386  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   181,542,469
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Well-known Seasoned Issuer No  
Document Fiscal Year Focus 2015  
Document Fiscal Period Focus Q3  

v3.3.0.814
DISCONTINUED OPERATIONS
 9 Months Ended
Sep. 30, 2015
DISCONTINUED OPERATIONS  
DISCONTINUED OPERATIONS

NOTE 13 – DISCONTINUED OPERATIONS

 

In November 2015, the Company completed the sale of its wholly owned subsidiary, Mamaki of Hawaii, Inc, (“Mamaki”) to Hawaiian Beverages, Inc. (“HBI”).  Under the agreement, HBI acquired 100% of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty four thousand two hundred seventy five thousand dollars ($84,275) of UMED debts.  HBI paid two hundred forty five thousand five hundred dollars ($245,500) at closing towards the first installment due of two hundred fifty thousand ($250,000) and will pay three installments of one hundred fifty thousand dollars ($150,000) on each of thirty, sixty and ninety day anniversary of the closing date.

 

The following are condensed statements of the discontinued operations (Mamaki of Hawaii, Inc.) for the nine months ended September 30, 2015 and 2014:

 

 

 

2015

 

 

2014

 

Sales

 

$

47,275

 

 

$

19,580

 

Cost of sales

 

 

8,407

 

 

 

34,277

 

Gross profit

 

 

38,868

 

 

 

(14,697

)

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

395,824

 

 

 

348,135

 

Depreciation

 

 

89,218

 

 

 

89,217

 

Total Operating Expenses

 

 

485,042

 

 

 

437,352

 

Operating Loss

 

 

(446,174

)

 

 

(447,049

)

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

 Interest expense

 

 

(115,238

)

 

 

(160,339

)

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

$

(561,412

)

 

$

(607,388

)

 

  

 

 

Assets and liabilities retained relating to discontinued operations (Mamaki of Hawaii, Inc.) consisted of the following at September 30, 2015, September 30, 2014 and December 31, 2014;

 

 

 

9/30/2015

 

 

12/31/2014

 

 

 

 

 

 

 

 

Current assets relating to discontinued operations:

 

 

 

 

 

 

Cash

 

$

1,012

 

 

$

256

 

Accounts receivable

 

 

5,264

 

 

 

780

 

Prepaid expenses and deposits

 

 

23,443

 

 

 

32,700

 

Property, plant and equipment, net

 

 

1,629,793

 

 

 

1,719,009

 

Total assets related to discontinued operations

 

$

1,659,512

 

 

$

1,752,745

 

 

 

 

 

 

 

 

 

 

Current liabilities relating to discontinued operations:

 

 

 

 

 

 

 

 

Bank overdrafts

 

$

0

 

 

$

4,896

 

Notes payable

 

 

1,221,950

 

 

 

1,245,211

 

Accounts payable

 

 

42,813

 

 

 

35,582

 

Accrued interest payable

 

 

52,304

 

 

 

36,450

 

Accrued expenses

 

 

800,554

 

 

 

538,380

 

Total liabilities related to discontinued operations

 

$

2,117,621

 

 

$

1,860,518

 

 

 

 

 

 

v3.3.0.814
Consolidated Statements of Operations - Unaudited - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Expenses        
General and administrative $ 566,310 $ 641,635 $ 2,207,320 $ 1,339,525
Research and development 374,998 52,500 593,725 209,750
Depreciation 99 99 297 297
Total Expense 941,407 694,234 2,801,343 1,981,924
Operating loss (941,407) (694,234) (2,801,343) (1,549,572)
Other income (expenses)        
Write off Logistix software 0 0 (73,500) 0
Gain on derivative 40,072 0 4,943 0
Interest expense (52,600) (7,653) (155,783) (9,154)
Total other expenses (12,528) (7,653) (224,340) (9,154)
Operating Loss (953,935) (701,887) (3,025,683) (1,558,726)
Loss from discontinued operations, net of tax 208,946 243,691 561,412 607,388
Loss before income taxes (1,162,881) (945,578) (3,587,095) (2,166,114)
Provision for income taxes 0 0 0 0
Net loss $ (1,162,881) $ (945,578) $ (3,587,095) $ (2,166,114)
Basic loss per share        
Operating Loss, $ (0.01) $ (0.01) $ (0.02) $ (0.02)
Loss from discontinued operations, 0.00 0.00 0.00 0.00
Net loss per share, $ (0.01) $ (0.01) $ (0.02) $ (0.02)
Weighted average shares Outstanding        
Basic and diluted 178,585,952 141,865,632 159,097,739 136,639,210

v3.3.0.814
TERM NOTES PAYABLE
 9 Months Ended
Sep. 30, 2015
TERM NOTES PAYABLE:  
TERM NOTES PAYABLE

NOTE 7 – TERM NOTES PAYABLE

 

Term note payable consisted of the following at September 30, 2015 and December 31, 2014:

 

 

 

September 30,

 

December 31,

 

 

2015

 

2014

Unsecured note payable (Individual) due January 18, 2016

including interest at 10%

 

 

 

 

 

$ 63,875

 

 

 

 

 

$ 0

 

 

 

 

 

Term note payable

 

$ 63,875

 

$ 0

 

Accrued interest payable on the term notes payable was $822 and $0 at September 30, 2015 and December 31, 2014, respectively.

 

v3.3.0.814
INVESTMENTS
 9 Months Ended
Sep. 30, 2015
INVESTMENTS  
INVESTMENTS

NOTE 6 – INVESTMENTS

 

Investments consisted of the following at September 30, 2015 and December 31, 2014;

 

 

 

September 30, 

 

 December 31,

 

 

2015 

 

 2014

Jet Tech LLC

 

In October 2011, the Company acquired a 49% interest in

JetTech LLC which is an aerospace maintenance operation

located at Meacham Airport in Fort Worth, Texas for 600,000

shares of the Company’s restricted common stock. The shares

were valued at $.15 per share.

 

 

 

 

   

 

 

 $ 90,000

 

 

 

 

   

 

 

$ 90,000

 

 

 

 

 

                                                                   TOTAL INVESTMENTS

 

$ 90,000

 

$ 90,000

 

v3.3.0.814
RECLASSIFICATION (TABLES)
 9 Months Ended
Sep. 30, 2015
RECLASSIFICATION (TABLES):  
RECLASSIFICATION (TABLES)

The December 31, 2014 financial statements amounts have been reclassified to conform to current period presentation as follows;

 

Balance Sheet Accounts

 

As Previously Stated

 

 

Reclassification

 

 

As Reclassification

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

82,656

 

 

$

(256

)

 

$

82,400

 

Accounts receivable

 

 

780

 

 

 

(780

)

 

 

0

 

Prepaid expenses

 

 

32,700

 

 

 

(32,700

)

 

 

0

 

Land

 

 

150,000

 

 

 

(150,000

)

 

 

0

 

Buildings

 

 

871,842

 

 

 

(871,842

)

 

 

0

 

Equipment

 

 

1,084,755

 

 

 

(996,052

)

 

 

88,703

 

Accumulated depreciation

 

 

(312,946

)

 

 

298,885

 

 

 

(14,061

)

Assets related to discontinued operations

 

 

0

 

 

 

1,752,745

 

 

 

1,752,745

 

Total

 

$

2,155,214

 

 

$

0

 

 

$

2,155,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

70,568

 

 

$

(35,582

)

 

$

34,986

 

Accrued expenses

 

 

733,316

 

 

 

(579,725

)

 

 

153,591

 

Term notes

 

 

1,245,211

 

 

 

(1,245,211

)

 

 

0

 

Liabilities related to discontinued operations

 

 

0

 

 

 

1,860,518

 

 

 

1,860,518

 

 

 

$

2,049,095

 

 

$

0

 

 

$

2,049,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flows Accounts

 

As Previously Stated

 

 

Reclassification

 

 

As Reclassification

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(2,166,114

)

 

$

607,388

 

 

$

(1,558,726

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

89,514

 

 

 

(89,217

)

 

 

297

 

Stock issued for services

 

 

665,871

 

 

 

0

 

 

 

665,871

 

Warrants

 

 

66,617

 

 

 

0

 

 

 

66,617

 

Accounts receivable

 

 

340

 

 

 

(340

)

 

 

0

 

Prepaid expenses

 

 

17,912

 

 

 

(17,912

)

 

 

0

 

Accounts payable

 

 

(18,439

)

 

 

14,762

 

 

 

(3,677

)

Accrued management fees

 

 

361,101

 

 

 

0

 

 

 

361,101

 

Accrued expenses

 

 

248,345

 

 

 

(219,448

)

 

 

28,897

 

Net Cash Provided by Operations

 

 

(734,853

)

 

 

295,233

 

 

 

(439,620

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Advances from shareholders

 

 

376,897

 

 

 

0

 

 

 

376,897

 

Proceeds from convertible note

 

 

144,700

 

 

 

0

 

 

 

144,700

 

Decrease in notes payable

 

 

(66,473

)

 

 

66,473

 

 

 

0

 

Proceeds from sale of common stock

 

 

403,465

 

 

 

0

 

 

 

403,465

 

Debt issue costs

 

 

(78,211

)

 

 

0

 

 

 

(78,211

)

Net Cash Provided by Financing

 

 

780,378

 

 

 

0

 

 

 

846,851

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash used in discontinued operations

 

 

 

 

 

 

(361,706

)

 

 

(361,706

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Increase in Cash

 

$

45,525

 

 

$

0

 

 

$

45,525

 

 

 

v3.3.0.814
COMMITMENTS
 9 Months Ended
Sep. 30, 2015
COMMITMENTS  
COMMITMENTS

NOTE 14 – COMMITMENTS

 

Employment Agreements

 

In May 2011, the Company entered into employment agreements with its chief executive officer, president and chief financial officer.  The Agreements are for a term of 5 years with compensation of $180,000 the first year, $240,000 the second year, $300,000 the third year, $350,000 the fourth year and the fifth year at a salary commensurate with those in similar industries.  The employment agreements also provide for the officers to receive 1,250,000 shares of restricted common stock annually for each year of the employment agreement.  During the nine months ended September 30, 2015 and 2014, with consent of management, the Company accrued a total of $315,000 and $360,000, respectively, as management fees in accordance with the terms of these agreements.  On April 8, 2015, the Company’s chief executive officer resigned and relinquished his claim to receive $518,300 of deferred compensation.

 

Leases

 

In July 2015, the Company reduced its office lease space from 3,500 to 1,800 square feet on a month-to-month basis at $3,200 per month. During the nine months ended September 30, 2015 and 2014, the Company expensed $44,800 and $57,600, respectively, in rent expense.

 

Legal

 

From time to time, 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 from time to time that may harm our business. The Company currently is not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results

v3.3.0.814
CAPITAL STRUCTURE
 9 Months Ended
Sep. 30, 2015
CAPITAL STRUCTURE  
CAPITAL STRUCTURE

NOTE 10– CAPITAL STRUCTURE

 

The Company is authorized to issue 300,000,000 shares of common stock with a par value of $.0001 per share and 20,000,000 shares of preferred stock with a par value of $.0001 per share.  Each common stock share has one voting right and the right to dividends, if and when declared by the Board of Directors.

 

Common Stock

 

At September 30, 2015, there were 181,542,469 shares of common stock issued and outstanding.

 

During the three month period ended September 30, 2015, the Company issued 3,582,329 shares of restricted common stock to eighteen individuals through private placements for cash of $448,643 at average of $0.1252 per share.

 

During the three month period ended September 30, 2015, 611,956 preferred shares were converted to 9,179,340 shares of common stock.

 

During the three month period ended September 30, 2015, the Company issued 2,835,100 shares of restricted common stock for consulting services at a value of $306,011 based on value of the services provided.

 

Preferred Stock

 

At September 30, 2015, there were 15,126,938 shares of preferred stock issued and outstanding. Each preferred shares is convertible, at the option of the preferred shareholder, into common stock with 126,938 being convertible at the rate of one preferred share for fifteen shares of common stock, 15,000,000 shares being convertible on a one for one basis (the 15,000,000 shares have voting rights equal to 15 votes per preferred share on all matters voted on by the Company’s shareholders).

 

During the three month period ended September 30, 2015, 611,956 preferred shares were converted to 9,179,340 shares of common stock.

 

Stock options, warrants and other rights

 

At September 30, 2015, the Company has not adopted any employee stock option plans.

 

v3.3.0.814
Commitments (Details) - USD ($)
 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Commitment details    
Reduced office lease space from 3,500 to $ 1,800  
Current lease amount per month 3,200  
Rent expenses accrued during the period 44,800 $ 57,600
Company accured total management fee $ 315,000 $ 360,000

v3.3.0.814
CONVERTIBLE PROMISSORY NOTE
 9 Months Ended
Sep. 30, 2015
CONVERTIBLE PROMISSORY NOTE:  
CONVERTIBLE PROMISSORY NOTE

NOTE 8 – CONVERTIBLE PROMISSORY NOTE

 

On September 18, 2014, the Company issued a $158,000 convertible promissory note bearing interest at 10.0% per annum to an accredited investor, payable July 23, 2015, in monthly installments of $31,600 plus accrued interest beginning 6 months after the date of this promissory note.  The note was paid in full on July 22, 2015.  The holder had the right under certain circumstances to convert the note into common stock of the Company at a conversion price equal to 70% of the average of the 3 lowest volume weighted average trading prices during the 20 day period ending on the latest complete trading day prior to the conversion date. 

 

The Company evaluated the terms of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible Note did not result in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of the common stock. The discount related to the beneficial conversion feature on the note was valued at $154,000 based on its then intrinsic value. The discount related to the beneficial conversion feature ($23,346) is being amortized over the term of the debt (10 months).  For the period ended September 30, 2015, the Company recognized $601 of interest expense related to the amortization of the discount.

 

In connection with the issuance of the $158,000 note discussed above, the Company recorded debt issue cost and discount as follows:

 

 

?

10.4% cash – which is equivalent to $16,500, and

 

?

,Warrants – having a fair value of $107,212 and recorded on the balance sheet at $67,139 as of

September 30, 2015 which was computed as follows;

 

 

 

Commitment Date

 

Expected dividends

 

 

0%

 

Expected volatility

 

 

789%

 

Expected term: conversion feature

 

4 years

 

Risk free interest rate

 

 

1.75%

 

 

The debt issue costs were capitalized and amortized through July 22, 2015, when the note was paid in full.

 

Amortization of debt issue costs for the nine months ended September 30, 2015 was $55,427.  Net debt issue costs at September 30, 2015 was $0, as the note had been paid in full.

 

The original issue discount pertains to discount taken by lender against the total convertible note of $158,000, resulting in a disbursement of $144,000 to the company.

 

 

 

During the nine months ended September 30, 2015, the Company amortized $8,100 of the original issue discount related to the convertible note.  Original issue discount costs at September 30, 2015 was $0, as the note had been paid in full.

 

v3.3.0.814
ACCRUED EXPENSES
 9 Months Ended
Sep. 30, 2015
ACCRUED EXPENSES  
ACCRUED EXPENSES

NOTE 9 – ACCRUED EXPENSES

 

Accrued expenses consisted of the following at September 30, 2015 and December 31, 2014;

 

 

 

 

 2015

 

 

 

 2014

 

 

 

 

 

 

 

 

 

 

Accrued consulting fees

 

$

206,500

 

 

$

144,500

 

Accrued interest expense

 

 

823

 

 

 

9,091

 

Total accrued expenses

 

$

207,323

 

 

$

153,591

 

 

 

 

v3.3.0.814
RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 30, 2015
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

NOTE 11 - RELATED PARTY TRANSACTIONS

 

Shareholders have made advances to the Company in the amounts of $204,884 and $256,823 during the nine months ended September 30, 2015 and 2014, respectively.  The shareholders have elected to convert advances of $182,275 and $376,000 to shares of common stock at market value ($.106 and $.103 per share) and received repayments of $10,000 and $0 during the nine months ended September 30, 2015 and 2014, respectively.

 

In April 2015, the Company’s then Chief Executive Officer resigned and in his settlement agreement gave up claims to receive deferred compensation, which amounted to $518,300 as discussed in Note 13 below.

 

In May 2015, the Company issued 13,125,000 shares of restricted common stock to its former CEO, its President and Chief Financial Officer per their employment agreements. The shares were valued at $0.12 per share based on market value.

 

In July 2015, the Company issued 9,179,340 shares of restricted common stock to its President and Chief Financial Officer for the conversion of 611,956 shares of preferred stock at the rate of fifteen shares of restricted common stock for each share of preferred stock.

 

In August 2015, the Company’s president guaranteed a $63,875 note payable to an individual.

 

v3.3.0.814
Property and Equipment-Estimated life (Details)
Sep. 30, 2015
Property and Equipment-Estimated life in years  
Equipment estimated life minimum 5
Equipment estimated life maximum 7

v3.3.0.814
Related Party Transactions (Details) - USD ($)
Aug. 31, 2015
Jul. 31, 2015
May. 31, 2015
Apr. 30, 2015
Related Party Transactions        
Deferred compensation amount       $ 518,300
Company issued shares of restricted common stock to its former CEO, its President and CFO   9,179,340 13,125,000  
Company issued shares of restricted common stock to its former CEO, its President and CFO par value     $ 0.12  
Company issued shares of restricted common stock to its former CEO, its President and CFO for conversion shares of preferred stock rate of fifteen shares   611,956    
President guaranteed note payable to an individual $ 63,875      

v3.3.0.814
ACCOUNTING POLICIES. (POLICIES)
 9 Months Ended
Sep. 30, 2015
Accounting Policies:  
Nature Of Operations

Nature of Operations

 

UMED Holdings, Inc. (“UMED” or the “Company”) was organized on March 13, 2002 under the laws of the State of Texas as Dynalyst Manufacturing Corporation.  On August 18, 2009, in connection with a merger with Universal Media Corporation, a privately held Nevada company, the Company changed its name to Universal Media Corporation (“Universal Media”).  The company changed its name to UMED Holdings, Inc. on March 23, 2011.

 

UMED’s mission is to operate as a holding company through the acquisition of businesses as wholly-owned subsidiaries that meet some key requirements: (1) solid management that will not have to be replaced in the near future (2) the ability to grow with steady growth to follow and (3) an emphasis on emerging core industry markets, such as energy, metals and agriculture.  It is the Company’s intention to add experienced personnel and select strategic partners to manage and operate the acquired business units.  

 

In September 2010, UMED has acquired 1,440 acres of placer mining claims on Bureau of Land Management land in Mohave County, Arizona. See discussion in Note 3.

 

In October 2011, UMED has acquired a 49% interest in Jet Regulators, LP, an aircraft maintenance company located at Meacham Field in Fort Worth, Texas.  See discussion in Note 5.

 

In May 2012, the Company acquired 80% of Mamaki Tea & Extract of Hawaii, Inc. (nka Mamaki of Hawaii, Inc.) which owns and operates Wood Valley Plantation a 25 acre Mamaki Tea plantation located in the Kau district of the Island of Hawaii and lies at the foot of Mauna Loa, the Earth’s largest volcano.   On December 31, 2012, the Company acquired the remaining 20% for 500,000 shares of restricted common stock and $127,800 of cash.  Mamaki of Hawaii, Inc. has been sold in November 2015 as discussed further in Note 2.

 

In August 2012, the Company acquired 100% of Greenway Innovative Energy, Inc., which owns proprietary technology that is capable of converting natural gas to diesel/jet fuels. 

 
Property and Equipment,

Property & Equipment

 

Property and equipment is recorded at cost. Major additions and improvements are capitalized. The cost and related accumulated depreciation of equipment retired or sold are removed from the accounts and any differences between the undepreciated amount and the proceeds from the sale are recorded as a gain or loss on sale of equipment. Depreciation is computed using the straight-line method over the estimated useful life of the assets as follows.

 

Equipment

5 to 7 years
Impairment of Long-Lived Assets,

Impairment of Long-Lived Assets

 

The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in accordance with ASC Topic 360, “Property, Plant and Equipment.”  An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset or asset group is expected to generate.  If an asset or asset group is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value.  If estimated fair value is less than the book value, the asset is written down to the estimated fair value and an impairment loss is recognized.

 
Discontinued Operations, Policy
Discontinued Operations
 
On November 2, 2015, the Company consumamated on the sale of its wholly owned subsidiary, Mamaki of Hawaii, Inc. (“Mamaki”) to Hawaiian Beverages, Inc. (“HBI”).   Under the agreement, HBI acquired 100% of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty four thousand two hundred seventy five thousand dollars ($84,275) of UMED debts.  HBI paid two hundred forty five thousand five hundred dollars ($245,000) of the two hundred fifty thousand dollars ($250,000) due at closing and will pay three installments of one hundred fifty thousand dollars ($150,000) on each of thirty, sixty and ninety day anniversary of the closing date.
The results of Mamaki are presented as a separate line item in the consolidated statements of operations and the consolidated balance sheets entitled “Assets/Liabilities sold relating to discontinued operations” and “Assets/Liabilities retained related to discontinued operations”. In accordance with EITF 87-24, “Allocation of Interest to Discontinued Operations”, the Company elected to not allocate consolidated interest expense to discontinued operations where the debt is not directly attributable to or related to discontinued operations. All of the financial information in the consolidated financial statements and notes to the consolidated financial statements has been revised to reflect only the results of continued operations. (See Note 7).

 
Revenue Recognition,

Revenue Recognition

 

The Company has not, to date, generated significant revenues.  The Company plans to recognize revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

 

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant
Use of Estimates,

 

Use of Estimates

 

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reported period.  Actual results could differ materially from the estimates.
Cash and Cash Equivalent

Cash and Cash Equivalent

 

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  There were no cash equivalents at September 30, 2015 or December 31, 2015.

 
Segment Information, Policy

Segment Information

 

ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting.  The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance.  The Company determined that is had one operating segment, Mamaki of Hawaii, Inc., in addition to its corporate activities.
Mine Exploration and Development Costs

Mine Exploration and Development Costs

 

The Company plans to account for mine exploration costs in accordance with Accounting Standards Codification 932, Extractive Activities.  All exploration expenditures are expensed as incurred. Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized on a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine’s production capacity and is not considered to shift the mine into the production phase. Amortization of capitalized mine development is computed based on the estimated life of the mine and commences when production, other than production incidental to the mine development process, begins.  Through September 30, 2015, the Company had not incurred any mine development costs.
Mine Properties,Policy

Mine Properties

 

The Company will account for mine properties in accordance with Accounting Standard Codification 930, Extractive Activities-Mining.  Costs of acquiring mine properties are capitalized by project area upon purchase of the associated claims.  Mine properties are periodically assessed for impairment of value and any diminution in value. The Company had 1,440 acres of placer mining claims at September 30, 2015, which were acquired in December 2010 in exchange for 5,066,000 shares of common stock valued at $100,000.
Income Taxes,Policy

Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

 

The Company has adopted the provisions of FASB ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements.  The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Open tax years subject to IRS examination include 2009 – 2014.

 
Net Loss Per Share, basic and diluted

Net Loss Per Share, basic and diluted

 

Basic loss per share has been computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Shares issuable upon the exercise of warrants (376,100) have been excluded as a common stock equivalent in the diluted loss per share because their effect is anti-dilutive.
Derivative Instruments

Derivative Instruments

 

The Company accounts for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.  They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

 

If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

 

 

See Note 8 below for discussion regarding a warrant agreement related to a convertible note, which was repaid on July 22, 2015.
Original Issue Discount

Original Issue Discount

 

For certain convertible debt issued, the Company provides the debt holder with an original issue discount (“OID”).  An OID is the difference between the original cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the proceeds received. The OID is amortized into interest expense pro-rata over the term of the Note.
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company's financial instruments, as defined by Accounting Standard Codification subtopic 825-10, Financial Instrument (“ASC 825-10), include cash, accounts payable and convertible note payable.  All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2015.

 

FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

 

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions

 

The Company’s derivative is valued at level 3.

 
Stock Based Compensation

Stock Based Compensation

 

The Company follows Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.  

 

At September 30, 2015, the Company did not have any issued or outstanding stock options.
Concentration and Credit Risk

Concentration and Credit Risk

 

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash. The Company places its cash with high credit quality institutions.  At times, such deposits may be in excess of the FDIC insurance limit.
Research and Development

Research and Development

 

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $593,725 and $152,500 during the nine months ended September 30, 2015 and 2014. 
Issuance of Common Stock

Issuance of Common Stock

 

The issuance of common stock for other than cash is recorded by the Company at market values.
Impact of New Accounting Standards

Impact of New Accounting 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.

 

 

v3.3.0.814
TERM NOTES PAYABLE (TABLES)
 9 Months Ended
Sep. 30, 2015
TERM NOTES PAYABLE (TABLES)  
TERM NOTES PAYABLE (TABLES)

Term note payable consisted of the following at September 30, 2015 and December 31, 2014:

 

 

 

September 30,

 

December 31,

 

 

2015

 

2014

Unsecured note payable (Individual) due January 18, 2016

including interest at 10%

 

 

 

 

 

$ 63,875

 

 

 

 

 

$ 0

 

 

 

 

 

Term note payable

 

$ 63,875

 

$ 0

 

v3.3.0.814
Common Stock transactions (Details)
 3 Months Ended
Sep. 30, 2015
USD ($)
$ / shares
shares
Common Stock transactions  
Company issued shares of restricted common stock to eighteen individuals through private placements for cash 3,582,329
Proceeds of restricted common stock to seven individuals through private placements | $ $ 448,643
Par value of shares issued to seven individuals through private placements | $ / shares $ 0.1252
611,956 Preferred shares were converted to shares of common stock 9,179,340
Company issued shares of restricted common stock for consulting services 2,835,100
Common stock for consulting services valued at | $ $ 306,011

v3.3.0.814
Investments consisted of the following (Details) - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Investments consisted of the following    
Investments made in JetTech LLC $ 90,000 $ 90,000
Total Investments $ 90,000 $ 90,000

v3.3.0.814
Condensed Consolidated Statements of Cash Flows - Unaudited - USD ($)
 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash Flows from Operating Activities    
Net Loss $ (3,025,683) $ (1,558,726)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 299 297
Stock issued for services 1,931,011 665,871
Warrants 0 66,617
Write off of Logistix software 73,500 0
Gain on derivative $ (4,943) 0
Debt issue costs amortized 55,427  
Changes in operating assets and liabilities:    
Accounts payable $ 19,933 (3,677)
Accrued management fees (157,699) 361,101
Derivative 67,139 0
Accrued expenses 53,732 28,897
Net Cash Used in Operating Activities (987,284) (439,620)
Cash Flows from Investing Activities 0 0
Cash Flows from Financing Activities    
Advances from shareholders converted to common stock 116,384 376,897
Proceeds (Payments) - convertible note payable, net (131,858) 144,700
Increase in notes payable 63,875 0
Proceeds from sale of common stock 1,083,643 403,465
Debt issue cost 0 (78,211)
Net Cash Provided by Financing Activities 1,132,044 846,851
Cash Used in Discontinued Operations (211,076) (361,706)
Net (Decrease) Increase in Cash (66,316) 45,525
Cash Beginning of Period 82,400 1,442
Cash End of Period 16,084 46,967
Supplemental Disclosure of Cash Flow Information:    
Cash Paid during the period for interest 69,297 49,009
Cash Paid during the period for taxes 0 0
Conversion of preferred stock to common stock $ 918 $ 0

v3.3.0.814
PROPERTY, PLANT AND EQUIPMENT
 9 Months Ended
Sep. 30, 2015
PROPERTY, PLANT AND EQUIPMENT  
PROPERTY, PLANT AND EQUIPMENT

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment, their estimated useful lives, and related accumulated depreciation at September 30, 2015 and December 31, 2014, respectively, are summarized as follows:

 

 

 

Range of

 

 

 

 

 

 

 

 

 

Lives in

 

 

September 30, December 31,

 

 

 

Years

 

 

2015

 

 

2014

 

Equipment

 

 

5

 

 

 

2,032

 

 

 

13,220

 

Logistix software

 

 

5

 

 

 

0

 

 

 

73,500

 

Furniture and fixtures

 

 

5

 

 

 

1,983

 

 

 

1,983

 

 

 

 

 

 

 

 

4,015

 

 

 

88,703

 

Less accumulate depreciation

 

 

 

 

 

 

(3,172

)

 

 

(14,061

)

 

 

 

 

 

 

$

843

 

 

 

74,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense for the period ended

 

 

 

 

 

$

297

 

 

$

297

 

 

During the three months ended June 30, 2015, the Company wrote-off the balance of its Logistix software.

During the three months ended September 30, 2105, the Company wrote-off $11,188 of depreciated assets.

 

v3.3.0.814
Assets And Liabilities Relating To Discontinued Operations (Details) - USD ($)
Sep. 30, 2015
Dec. 31, 2014
Current assets relating to discontinued operations:    
Discontinued Operations Cash $ 1,012 $ 256
Discontinued Operations Accounts receivable 5,264 780
Discontinued Operations Prepaid expenses and deposits 23,443 32,700
Discontinued Operations Property, plant and equipment, net 1,629,793 1,719,009
Discontinued Operations Total assets related to discontinued operations 1,659,512 1,752,745
Current liabilities relating to discontinued operations:    
Discontinued Operations Bank overdrafts 0 4,896
Discontinued Operations Notes payable 1,221,950 1,245,211
Discontinued Operations Accounts payable 42,813 35,582
Discontinued Operations Accrued interest payable 52,304 36,450
Discontinued Operations Accrued expenses 800,554 538,380
Total liabilities related to discontinued operations $ 2,117,621 $ 1,860,518

v3.3.0.814
CONVERTIBLE PROMISSORY NOTE (TABLES)
 9 Months Ended
Sep. 30, 2015
CONVERTIBLE PROMISSORY NOTE (TABLES):  
CONVERTIBLE PROMISSORY NOTE (TABLES)

In connection with the issuance of the $158,000 note discussed above, the Company recorded debt issue cost and discount as follows:

 

 

?

10.4% cash – which is equivalent to $16,500, and

 

?

,Warrants – having a fair value of $107,212 and recorded on the balance sheet at $67,139 as of

September 30, 2015 which was computed as follows;

 

 

 

Commitment Date

 

Expected dividends

 

 

0%

 

Expected volatility

 

 

789%

 

Expected term: conversion feature

 

4 years

 

Risk free interest rate

 

 

1.75%

 

v3.3.0.814
Research and Development (Details) - USD ($)
 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Research and Development Details    
Company incurred research and development expenses $ 593,725 $ 152,500

v3.3.0.814
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2015
SUBSEQUENT EVENTS  
SUBSEQUENT EVENTS
NOTE 15 – SUBSEQUENT EVENTS
In November 2015, the Company consummated the sale of its wholly owned subsidiary, Mamaki of Hawaii, Inc, (“Mamaki”) to Hawaiian Beverages, Inc. (“HBI”).  Under the agreement, HBI acquired 100% of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty four thousand two hundred seventy five thousand dollars ($84,275) of UMED debts.  HBI has paid so far two hundred forty five thousand five hundred  dollars ($245,500) of the two hundred fifty thousand dollars ($250,000) due at closing and will pay three installments of one hundred fifty thousand dollars ($150,000) on each of thirty, sixty and ninety day anniversary of the closing date.