EHOS Ehouse Global Inc (CE)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

  X . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2015

 

      . TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT OF 1934

 

For the transition period from ___________ to _____________

 

Commission file number 333-158584

EHOUSE GLOBAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada		90-1066766
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
9974 Scripps Ranch Blvd. # 182 San Diego, CA		92131
(Address of Principal Executive Offices)		(Zip Code)

 

	858-459-0770
	(Issuer's telephone number, including area code)

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   X . No       .  .

 

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   X . No       .

 

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

 

Large accelerated filer        .		Accelerated filer	.
Non-accelerated filer          .		Smaller reporting company	X .

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934) (check one): Yes       . No   X .   .

 

The number of shares of the Registrant’s Common Stock outstanding as of May 19, 2015 was 1,012,706,304, all of one class, $0.001 par value per share.  

 

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EHOUSE GLOBAL, INC.

  

Table of Contents

  

PART I-- FINANCIAL INFORMATION

 

		Page
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Control and Procedures	16

 

PART II-- OTHER INFORMATION

 

Item 1	Legal Proceedings	17
Item 1A	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	17

  

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EHOUSE GLOBAL, INC.

PART 1 – FINANCIAL STATEMENTS

TABLE OF CONTENTS

 

Contents	Page
Balance Sheets as of March 31, 2015 and December 31, 2014 (Unaudited)	4
Statements of Operations for the Three Months Ended March 31, 2015 and 2014 (Unaudited)	5
Statement of Changes in Stockholders’ Deficit for the Three Months Ended March 31, 2015 (Unaudited)	6
Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014 (Unaudited)	7
Notes to the Financial Statements (Unaudited)	8

 

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ITEM 1. Financial Information

 

EHOUSE GLOBAL, INC.

dba Nutraliquids

Balance Sheets

(Unaudited)

 

					March 31,		December 31,
					2015		2014
ASSETS
Current Assets
	Cash			$	367	$	907
	Debt issuance costs, net of accumulated amortization				987		3,972
		Total Current Assets			1,354		4,879
	Furniture and equipment, net of accumulated depreciation				990		935
		Total Assets		$	2,344	$	5,813
LIABILITIES
Current Liabilities
	Accounts payable & accrued expenses			$	159,184	$	55,031
	Notes payable - related party				75,000		75,000
	Convertible debt, net of debt discount of $68,362 and $75,117, respectively				348,597		384,592
	Derivative liabilities - warrants				12,422		24,826
	Current portion of derivative liabilities - debt				1,337,341		524,361
		Total Current Liabilities			1,932,544		1,063,810
Non-current Liabilities
	Convertible debt, net of debt discount of $42,786 and $51,846, respectively				36,378		24,285
	Derivative liabilities - debt				234,539		-
		Total Liabilities			2,203,461		1,088,095
Commitments and contingencies
STOCKHOLDERS' DEFICIT
Preferred stock:  $0.001 par value, 1,000,000 shares authorized, 600,000 and 600,000 shares issued and outstanding					600		600
Common stock: $0.001 par value, 5,000,000,000 shares authorized; 679,983,283 and 13,095,733 shares issued and outstanding at March 31, 2015 and December 31, 2014					679,983		13,096
Additional paid-in capital					1,836,204		2,082,280
Accumulated deficit					(4,717,904)		(3,178,258)
		Total Stockholders' Deficit			(2,201,117)		(1,082,282)
		Total Liabilities and Stockholders’ Deficit		$	2,344	$	5,813

 

The accompanying notes are an integral part of these unaudited financial statements.

 

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EHOUSE GLOBAL, INC.

dba Nutraliquids

Statements of Operations

For the Three Months Ended March 31, 2015 and 2014

(Unaudited)

			For the Three Months Ended
			March 31,		March 31,
			2015		2014
Operating Expenses:
	General and administrative expenses	$	414,558	$	426,032
	Total operating expenses		414,558		426,032
Other Expense:
	Interest expense		(43,146)		(1,066,811)
	Change in fair value of derivative liabilities		(1,081,942)		(68,818)
	Total other expense		(1,125,088)		(1,135,629)
			(1,539,646)		(1,561,661)
Net loss before taxes
Income taxes			-		-
Net loss		$	(1,539,646)	$	(1,561,661)
Net loss per common share:		$	(0.01)	$	(0.01)
Basic and diluted
Weighted average number of common shares outstanding:			177,902,310		115,620,378
Basic and diluted

 

 

The accompanying notes are an integral part of these unaudited financial statements.

 

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EHOUSE GLOBAL, INC.

dba Nutraliquids

Statement of Changes in Stockholder’s Deficit

For the Three Months Ended March 31, 2015

(Unaudited)

 

The accompanying notes are an integral part of these unaudited financial statements.

 

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EHOUSE GLOBAL, INC.

dba Nutraliquids

Statements of Cash Flows

For the Three Months Ended March 31, 2015 and 2014

(Unaudited)

 

		March 31,		March 31,
		2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,539,646)	$	(1,561,661)
Adjustments to reconcile net loss to net cash used in operating activities :
Stock-based compensation		273,750		62,500
Preferred stock issued for services		-		191,131
Amortization of debt issuance costs		2,985		3,494
Amortization of debt discount		21,898		71,549
Fair value of derivative liabilities in excess of convertible debt		13,884		979,168
Change in fair value of derivative liabilities		1,081,942		68,818
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		104,147		10,655
Net cash used in operating activities		(41,040)		(174,248)
CASH FROM INVESTING ACTIVITIES
Purchase of equipment		-		(1,180)
Net cash used in investing activities		-		(1,180)
CASH FROM FINANCING ACTIVITIES
Debt issuance costs paid		-		(5,750)
Proceeds from convertible notes payable		40,500		248,500
Net cash provided by financing activities		40,500		242,750
NET INCREASE (DECREASE) IN CASH		(540)		67,322
CASH AT BEGINNING OF PERIOD		907		14,779
CASH AT END OF PERIOD	$	367	$	82,101
Supplementary disclosure of cash flow information
Cash paid during the period for:
Interest	$	998	$	-
Income taxes	$	-	$	-
Supplementary disclosure of non-cash investing and financing activities:
Non-cash additions to convertible note balance	$	-	$	5,000
Change in classification of derivative liabilities from debt to equity associated with debt conversions	$	90,295	$	293,545
Note payable reclassified to convertible debt	$	-	$	100,000
Shares issued in conversion of convertible debt and accrued interest	$	56,766	$	67,872
Debt discount on convertible notes accounted for as derivative liabilities	$	29,584	$	248,500

 

The accompanying notes are an integral part of these unaudited financial statements.

 

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EHOUSE GLOBAL, INC.

dba Nutraliquids

Notes to Financial Statements

(Unaudited)

 

NOTE 1 - BASIS OF PRESENTATION

 

Ehouse Global, Inc. was incorporated under the laws of the Commonwealth of Massachusetts on February 11, 2005, and became a corporation in the State of Nevada on January 7, 2009. It changed its name to Ehouse Global, Inc. (the “Company”) in January, 2013.

EHouse Global, Inc. (the “Company”) prepared these financial statements in accordance with both accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Therefore, the financial statements do not include all disclosures required by generally accepted accounting principles. However, the Company has recorded all transactions and adjustments necessary to present fairly the financial statements included in this Form 10-Q. The adjustments made are normal and recurring. The following notes describe only the material changes in accounting policies, account details or financial statement notes during the first three months of 2015. Therefore, please read these financial statements and notes to the financial statements together with the audited financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2014. The income statement for the three months ended March 31, 2015 cannot necessarily be used to project results for the full year.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information.  Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

 

It is management's opinion, however, that all material adjustments (consisting of normal and recurring adjustments) have been made which are necessary for a fair financial statements presentation.  The results for the interim period are not necessarily indicative of the results to be expected for the year.

Reclassifications

Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

 

The Company considers all highly liquid instruments with a maturity of three months or less to be cash and cash equivalents.

Furniture and Equipment

 

Furniture and equipment are stated at cost, less accumulated depreciation.  Expenditures for maintenance and repairs are charged to expense as incurred.  Depreciation is provided using the straight-line method over the estimated useful life of three to seven years.

Debt Issuance Costs and Debt Discount

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

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Original Issuance Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

Derivative Financial Instruments

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

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale date of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

·

Level 1:  Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

·

Level 2:  Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

·

Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

   

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses, approximate their fair values because of the current nature of these instruments. Debt approximates fair value based on interest rates available for similar financial arrangements. Derivative liabilities which have been bifurcated from host convertible debt agreements are presented at fair value.

The following are the major categories of liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014, using quoted prices in active markets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):

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

Income Taxes

Deferred income tax assets and liabilities are provided for based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Stock-based Compensation

 

Measurement of the cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award (with limited exceptions).

Net Loss Per Common Share

 

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period.

The computation of basic and diluted loss per share at March 31, 2015 excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

		March 31, 2015
Convertible debt		10,234,155,858
Warrant		79,125,238
Total		10,313,281,096

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New Accounting Standards

 

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 amends previous guidance to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company plans to adopt ASU No.2015-03 regarding the presentation of debt issuance cost from fiscal year 2016.

Subsequent Events

 

The Company evaluates subsequent events from the date of the balance sheet through the date when the financial statements are issued or available to be issued for disclosure consideration.

 

NOTE 3 - GOING CONCERN

 

The accompanying unaudited financial statements have been prepared assuming that we will continue as a going concern. As reflected in the accompanying financial statements, we have very limited financial resources, with working capital and net stockholders’ deficits and had generated no revenue through March 31, 2015.

 

We have actively developed and plan to introduce sixteen different liquid nutritional products into the market. While we are undertaking our business plan to generate additional revenues, our cash position may not be sufficient to support our basic business plan and product distribution efforts. Management believes that the actions presently underway to introduce our products to the marketplace have a realistic chance of succeeding. While we believe in the viability of our strategy to increase revenues and in our ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to achieve profitable operations or obtain adequate financing.

 

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

 

NOTE 4 - CONVERTIBLE DEBT

On various dates from November 27, 2013 through March 2, 2015, the Company issued convertible promissory notes totaling $951,081. At the time of issuance, the notes were evaluated and were determined to contain embedded conversion options that must be bifurcated and reported at fair value with original issue discounts. As a result, a derivative discount on convertible promissory notes was recorded, which net of discount amortization for the three months ended March 31, 2015 amounted to $111,148.

Description		March 31, 2015		December 31, 2014
20 convertible promissory notes in amounts ranging from $9,000 to $112,000, with maturity dates ranging from 2014 to August 2016, bearing interest ranging from 0% to 12% per annum, convertible into common stock at variable conversion prices ranging from 25% of the lowest price in the prior 20 trading days to 60% of the lowest price in the prior 25 trading days. The Company expects all debt will be converted to common shares.	$	951,081	$	934,081
Less: debt discount		(815,040)		(783,956)
Less: conversions		(454,958)		(398,241)
Add: amortization of debt discount		703,892		656,993
Balance of convertible debt, net		384,975		408,877
Less: current portion		(348,597)		(384,592)
Long-term convertible debt, net	$	36,378	$	24,285

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Debt Issuance Costs

 

The following is a summary of the change in the Company’s debt issuance costs for the three months ended March 31, 2015:

 

		March 31, 2015
Debt issuance costs		$	26,250
Accumulated amortization of debt issuance costs			(25,263)
Debt issuance costs - net		$	987

Debt Discount

 

During the three months ended March 31, 2015, the Company recorded debt discounts totaling $31,084.

 

The Company amortized debt discount of $46,898 during the three months ended March 31, 2015.

Debt discount consisted of the following at March 31, 2015:

 

		March 31, 2015
Debt discount		$	815,040
Accumulated amortization of debt discount			(703,892)
Debt discount - net		$	111,148

 

Derivative Liabilities

 

The Company identified the conversion features embedded within its convertible debts as financial derivatives. The Company has determined that the embedded conversion option should be accounted for at fair value.

 

The following schedule shows the change in fair value of the derivative liabilities during the three months ended March 31, 2015:

Derivative liabilities - December 31, 2014		$	549,187
Add fair value at the commitment date for convertible notes issued during the current quarter			43,468
Reclassification of derivative liabilities associated with convertible debt that ceased being a derivative liability to additional paid-in capital			(90,295)
Fair value mark to market adjustment for derivatives			1,081,942
Derivative liabilities - March 31, 2015			1,584,302
Less: current portion			(1,349,763)
Long-term derivative liabilities		$	234,539

The Company recorded the debt discount to the extent of the gross proceeds raised, and expensed immediately the remaining value of the derivative as it exceeded the gross proceeds of the note. The Company recorded derivative interest expenses for the three months ended March 31, 2015 of $13,884.

 

The fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following management assumptions during the current quarter:

 

Assumption	Commitment Date	Remeasurement Date
Expected dividends:	0%	0%
Expected volatility:	218.07% - 653.42%	434.44% - 672.48%
Expected term (years):	0.76 - 1 years	0.083 - 1.35 years
Risk free interest rate:	0.18% - 0.22%	0.17%-0.28%

 

NOTE 5 - NOTE PAYABLE – RELATED PARTY

 

The Company’s President has made a loan of $75,000 to the Company. The loan is interest-free and due upon demand.

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NOTE 6 - STOCKHOLDERS’ DEFICIT

 

Common Stock

 

On January 14, 2015, the Company issued 150,000 shares and 600,000 shares to two marketing companies for investment IR. The stock shares valued at $3,750 based upon the quoted closing trading price on the date of issuance.

On February 26, 2015, the Company issued 300,000,000 shares to its CEO as bonus, the total issued shares valued at $270,000 based upon the quoted closing trading price on the date of issuance.

Throughout the three months ended March 31, 2015, the Company issued common stock totaling 366,137,550 shares in conversion of convertible debt and a portion of accrued interest. The total conversion value is $56,766.

NOTE 7 - SUBSEQUENT EVENTS

 

On May 12, 2015, the Board of Directors of EHouse Global, Inc. (the “Company”) approved the reverse stock split of the issued and outstanding shares of common stock on a 1-for-3000 basis. The reverse stock split is pending FINRA approval.

 

From April 6, 2015 to May 4, 2015, the Company issued common stock totaling 332,723,021 shares in conversion of convertible debt and a portion of accrued interest. The total conversion value is $14,048

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Note Regarding Forward-Looking Statements

 

Except for the historical information contained herein, the matters addressed in this Item 2 constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are subject to a variety of risks and uncertainties, including those discussed below under the heading "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q, that could cause actual results to differ materially from those anticipated by the Company's management. The Private Securities Litigation Reform Act of 1995 (the "Act") provides certain "safe harbor" provisions for forward-looking statements. All forward-looking statements made in this Quarterly Report on Form 10-Q are made pursuant to the Act. The Company undertakes no obligation to publicly release the results of any revisions to its forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected events.  The Company cautions readers that important factors may affect the Company’s actual results and could cause such results to differ materially from forward-looking statements made by or on behalf of the Company.  These factors include the Company’s lack of historically profitable operations, dependence on key personnel, the success of the Company’s business, ability to manage anticipated growth and other factors identified in the Company's filings with the Securities and Exchange Commission, press releases and/or other public communications. Unless the context otherwise requires, the words “EHouse,” the "Company," "we," "us" and "our" refer to EHouse Global, Inc.

 

Operations

 

EHouse Global, Inc. dba Nutraliquids is a start-up company that commenced formal operations on November 16, 2010. Prior to commencing formal operations, its President, Scott Corlett, and some colleagues incurred costs of approximately $500,000 to develop the idea of creating a comprehensive line of natural liquid dietary aids and nutritional supplements which could be packaged and sold in single serving pouches. These costs were incurred prior to the commencement of the formal operations and are not included in any of the Company’s financial statements.

 

Since commencing formal operations, the Company has continued developing the product line, developed marketing approaches and has located entities to manufacture products and packaging and distribute finished products. While no written agreements have been executed, the Company is confident that it has the operational structure in place.

 

From a marketing perspective, we will emphasize large supermarket and other convenience store chains and will also sell product on the Internet. The emphasis since developing the product line has been to obtain sources of debt and/or equity financing to enable the production and distribution of our products as well as undertaking a formal marketing program. We are actively seeking such funds but cannot provide a likely forecast as to the timing or success of our efforts. We will commence production and distribution as soon as funds are available to us.

 

Results of Operations

 

For the three months ended March 31, 2015 and March 31, 2014

 

A summary of our operations for the three months ended March 31, 2015 and 2014 follows:

 

		March 31, 2015				March 31, 2014
Revenue		$	-			$	-
Operating expenses			414,558				426,032
Other expense			(1,125,088)				(1,135,629)
Net loss		$	(1,539,646)			$	(1,561,661)

 

Other Income (Expense) for the three months ended March 31, 2015 consists of the following:

 

			2015				2014
Interest expense		$	(43,146)			$	(1,066,811)
Change in fair value of derivative liabilities			(1,081,942)				(68,818)
Total		$	(1,125,088)			$	(1,135,629)

 

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Revenues

 

In the three months ended March 31, 2015 and 2014, the Company generated $0 in revenue.

 

Operating Expenses

 

Operating expenses for the three months ended March 31, 2015 and 2014, were $414,558 and $426,032, respectively. The decrease of $11,474 was primarily due to a decrease in management consulting fees of $75,000, offset by an increase in officer compensation and various fees of $63,000.

 

Other Expenses

 

Other expenses for the three months ended March 31, 2015 and 2014, were $1,125,088 and $1,135,629, respectively. For the three months ended March 31, 2015, the other expenses consisted of interest expenses of $43,146 and changes in fair value of derivative liabilities of $1,081,942. For the three months ended March 31, 2014, the other expenses consisted of interest expenses of $1,066,811 and changes in fair value of derivative liabilities of $68,818. The decrease of $10,541 was primarily due to a decrease of $1,020,000 in interest expense and debt related amortization as a result of conversions during the current period, offset by an increase of $1,010,000 related to changes in the fair value of derivative liabilities as a result of newly issued convertible notes.

 

Net Loss

 

Net losses for the three months ended March 31, 2015 and 2014 were $1,539,646 and $1,561,661, respectively. The decrease of $22,015 was primarily due to the items discussed above.

Liquidity

 

The Company has $367 of cash on hand as of March 31, 2015. We currently have very limited cash to continue operations for 12 months.

 

We intend to rely upon the issuance of common stock and loans and advances from shareholders to fund administrative expenses pending acquisition of an operating company. However, our shareholders are under no obligation to provide such funding, and there can be no assurance, however, that any of the contemplated financing arrangements described herein will be available and, if available, can be obtained on terms favorable to the Company.

 

As discussed above, the Company had a net loss of $1,539,646 for the three months ended March 31, 2015. The Company also had a stockholder's deficit of $2,201,117 and a working capital deficiency of $2,164,739 as of March 31, 2015, and cash used in operations for the three month period ended March 31, 2015 was $41,040 compared to $174,248 for the three months ended March 31, 2014. The decrease of $133,208 was primarily due to a lower net loss, higher stock-based compensation, and higher change in fair value of derivative liabilities in the current period.

The Company had cash proceeds from financing activities for the three months ended March 31, 2015 of $40,500 compared to $242,750 for the three months ended March 31, 2014. The decrease of $202,250 was primarily due to lower proceeds from convertible debt in the current period.

The Company cannot provide any assurances about the likelihood or timing of being successful in obtaining funding. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of December 31, 2014 that states that our lack of resources causes substantial doubt about our ability to continue as a going concern. No assurances can be given that we will generate sufficient revenue or obtain any financing that may be necessary in order to continue as a going concern.

 

Off Balance Sheet Arrangements

 

We do not have any transactions, arrangements and other relationships with unconsolidated entities that will affect our liquidity or capital resources. We have no special purpose entities that provide off-balance sheet financing, liquidity or market or credit risk support, nor do we engage in swap agreements, or outsourcing of research and development services, that could expose us to liability that is not reflected on the face of our financial statements.

 

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Recently Issued Accounting Pronouncements

 

There were no new accounting pronouncements that had  a significant impact on the Company’s operating results or financial position. The Company will adopt the ASU2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, part of the Financial Accounting Standards Board’s (“FASB”) simplification initiative, from Fiscal year 2016.

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with generally accepted accounting principles requires us to make judgments, estimates and assumptions in the preparation of our consolidated financial statements and accompanying notes. Actual results could differ from those estimates. We believe there have been no significant changes in our critical accounting policies as discussed in our Annual Report on Form 10-K for the year ended December 31, 2014.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure controls and procedures are controls and other procedures that are designed to provide reasonable assurances that information required to be disclosed by the Company in its periodic reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurances that information required to be disclosed by the Company in its periodic reports that are filed under the Exchange Act is accumulated and communicated to our Principal Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Evaluation of disclosure controls and procedures.

 

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of management including our Principal Executive Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, the Company's Principal Executive Officer has concluded that the Company's disclosure controls and procedures are not effective as of March 31, 2015 in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. This conclusion is based on findings that constitute material weaknesses. A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.

 

Changes in internal controls over financial reporting.

 

There were no changes in the Company's internal controls over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 

 

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PART II: OTHER INFORMATION

 

ITEM 1 - LEGAL PROCEEDINGS

 

No legal proceedings were initiated by or served upon the Company in the three-month period ended March 31, 2015.

 

From time to time the Company may be named in claims arising in the ordinary course of business.  Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

 

ITEM 1A - RISK FACTORS

 

Not required of smaller reporting companies.

 

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 14, 2015, the Company issued 150,000 shares and 600,000 shares to two marketing companies for investment IR. The stock shares valued at $3,750 based upon the quoted closing trading price on the date of issuance.

On February 26, 2015, the Company issued 300,000,000 shares to its CEO as bonus, the total issued shares valued at $270,000 based upon the quoted closing trading price on the date of issuance.

Throughout the three months ended March 31, 2015, the Company issued common stock totaling 366,137,550 shares in conversion of convertible debt and a portion of accrued interest. The total conversion value is $56,766.

All shares were issued in reliance upon Section 4(2) of the Securities Act of 1933. No underwriters were used in any of the above-referenced sales.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4 - MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 - OTHER INFORMATION

 

None.

 

ITEM 6 - EXHIBITS

Exhibit Number		Description
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

*In accordance with SEC Release 33-8238, Exhibits 32.1 is being furnished and not filed.

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Signature

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	EHouse Global, Inc.
	(Registrant)
	/s/ Scott Corlett
	Scott Corlett
	Title: President and Chief Financial Officer
	May 19, 2015

 

 

18

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER,

PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

 

I, Scott Corlett, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of EHouse Global, 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. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls 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;

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5. 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 (or persons performing the equivalent function):

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal controls 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 controls over financial reporting.

 

Dated: May 19, 2015	By:	/s/ Scott Corlett
		Scott Corlett Chief Executive Officer (Principal Executive Officer and interim Principal Financial Officer)

 

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Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.SC. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of EHouse Global, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Scott Corlett, chief executive officer of the Company, certifies, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

 

(1)  

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)  

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 19, 2015	By:	/s/ Scott Corlett
		Scott Corlett Chief Executive Officer (Principal Executive Officer and interim Principal Financial Officer)

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.