Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | CHASE PACKAGING CORP | |
Entity Central Index Key | 0001025771 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 60,682,172 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Emerging Growth Company | false | |
Entity Small Business | true |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 741,093 | $ 755,871 |
TOTAL ASSETS | 741,093 | 755,871 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 11,467 | 3,269 |
TOTAL CURRENT LIABILITIES | 11,467 | 3,269 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY : | ||
Common stock, $.10 par value 200,000,000 shares authorized; 59,079,759 shares issued and 58,582,172 outstanding as of March 31, 2019; and 59,079,759 shares issued and 58,582,172 outstanding as of December 31, 2018 | 5,907,978 | 5,907,978 |
Treasury Stock, $.10 par value 497,587 shares as of March 31, 2019 and December 31, 2018 | (49,759) | (49,759) |
Additional paid-in capital | 386,374 | 386,374 |
Accumulated deficit | (5,514,967) | (5,491,991) |
TOTAL STOCKHOLDER'S EQUITY | 729,626 | 752,602 |
TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY | 741,093 | 755,871 |
Series A Convertible Preferred stock [Member] | ||
STOCKHOLDERS' EQUITY : | ||
PREFERRED STOCK, value |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
STOCKHOLDERS' EQUITY : | ||
Preferred Stock, Par Value | $ 1 | $ 1 |
Preferred Stock, Shares Authorized | 4,000,000 | 4,000,000 |
Preferred Stock, Liquidation Preference, Value | $ 0 | $ 0 |
Common Stock, Par Value | $ 0.10 | $ 0.10 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares Issued | 59,079,759 | 59,079,759 |
Common Stock, Shares, Outstanding | 58,582,172 | 58,582,172 |
Treasury Stock, Par Value | $ 0.10 | $ 0.10 |
Treasury Stock, Shares | 497,587 | 497,587 |
Series A Convertible Preferred stock [Member] | ||
STOCKHOLDERS' EQUITY : | ||
Preferred Stock, Shares Authorized | 50,000 | 50,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Statements Of Operations | ||
NET SALES | ||
EXPENSES: | ||
General and administrative expense | 25,106 | 13,474 |
LOSS FROM OPERATIONS | (25,106) | (13,474) |
OTHER INCOME (EXPENSE) | ||
Interest and other income | 2,130 | 1,528 |
TOTAL OTHER INCOME (EXPENSE) | 2,130 | 1,528 |
LOSS BEFORE INCOME TAXES | (22,976) | (11,946) |
Provision for income taxes | ||
NET LOSS | $ (22,976) | $ (11,946) |
BASIC AND DILUTED LOSS PER COMMON SHARE | $ 0 | $ 0 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 58,582,172 | 15,536,275 |
CONDENSED STATEMENT OF CHANGES
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’S EQUITY (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Total |
Beginning Balance, Shares at Dec. 31, 2017 | 36,562 | 16,033,862 | (497,587) | |||
Beginning Balance, Amount at Dec. 31, 2017 | $ 2,067,776 | $ 1,603,387 | $ 2,623,189 | $ (5,448,400) | $ (49,759) | $ 796,193 |
Net loss | (11,946) | (11,946) | ||||
Ending Balance, Shares at Mar. 31, 2018 | 36,562 | 16,033,862 | (497,587) | |||
Ending Balance, Amount at Mar. 31, 2018 | $ 2,067,776 | $ 1,603,387 | 2,623,189 | (5,460,346) | $ (49,759) | 784,247 |
Beginning Balance, Shares at Dec. 31, 2018 | 59,079,759 | (497,587) | ||||
Beginning Balance, Amount at Dec. 31, 2018 | $ 5,907,978 | 386,374 | (5,491,991) | $ (49,759) | 752,602 | |
Net loss | (22,976) | (22,976) | ||||
Ending Balance, Shares at Mar. 31, 2019 | 59,079,759 | (497,587) | ||||
Ending Balance, Amount at Mar. 31, 2019 | $ 5,907,978 | $ 386,374 | $ (5,514,967) | $ (49,759) | $ 729,626 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (22,976) | $ (11,946) |
Change in assets and liabilities: | ||
Accounts payable and accrued expenses | 8,198 | (6,125) |
Net cash used in operating activities | (14,778) | (18,071) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
NET INCREASE (DECREASE) IN CASH | (14,778) | (18,071) |
Cash, at beginning of period | 755,871 | 805,743 |
CASH, END OF PERIOD | 741,093 | 787,672 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for: Interest | ||
Cash paid for: Income taxes |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 1 - BASIS OF PRESENTATION | Chase Packaging Corporation (“the Company”), a Texas Corporation, previously manufactured woven paper mesh for industrial applications, polypropylene mesh fabric bags for agricultural use, and distributed agricultural packaging manufactured by other companies. Management’s plans for the Company include securing a merger or acquisition, raising additional capital, and other strategies designed to optimize shareholder value. However, no assurance can be given that management will be successful in its efforts. The failure to achieve these plans will have a material adverse effect on the Company’s financial position, results of operations, and ability to continue as a going concern. The interim condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation and a reasonable understanding of the information presented. The Interim Condensed Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-Q should be read in conjunction with the financial statements and the related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, previously filed with the SEC. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of financial position as of March 31, 2019, results of operations for the three months ended March 31, 2019 and 2018, and cash flows for the three months ended March 31, 2019 and 2018, as applicable, have been made. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future periods. The accounting policies followed by the Company are set forth in Note 3 to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018, which is incorporated herein by reference. Specific reference is made to that report for a description of the Company’s securities and the notes to financial statements. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 2 - NEW ACCOUNTING PRONOUNCEMENTS | Recently Adopted Accounting Pronouncements Leases Leases (Topic 842). Recent Accounting Pronouncements – To Be Adopted Intangibles, Goodwill and Other ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement — The Company does not believe that other standards, which have been issued but are not yet effective, will have a significant impact on its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments that are readily convertible into cash with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. The Company maintains its cash and cash equivalents balances with high credit quality financial institutions. As of March 31, 2019, and December 31, 2018, the Company had cash in insured accounts in the amount of $241,093 and $46,713, respectively, and cash equivalents (US treasury bills) held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $500,000 and $709,158 respectively. Income Taxes The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry forwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured assuming 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 results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that such asset will be realized. The Company adopted FASB Interpretation of “Accounting for Uncertainty in Income Taxes”. There was no impact on the Company’s financial position, results of operations, or cash flows as a result of implementing this guidance. At March 31, 2019, and December 31, 2018, the Company evaluated its tax positions and did not have any unrecognized tax benefits. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company currently has no federal or state tax examinations in progress. |
BASIC AND DILUTED NET LOSS PER
BASIC AND DILUTED NET LOSS PER COMMON SHARE | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 4 - BASIC AND DILUTED NET LOSS PER COMMON SHARE | Basic loss per common share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding. Diluted loss per share is computed by dividing the net loss by the sum of the weighted-average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the exercise of common stock equivalents. We have excluded 6,909,000 and 6,909,000 common stock equivalents (preferred stock, warrants and stock options) from the calculation of diluted loss per share for the three months ended March 31, 2019 and 2018 respectively, which, if included, would have an antidilutive effect. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 5 - INCOME TAXES | On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”), which significantly changed U.S. tax law. The Act lowered the Company’s U.S. statutory federal income tax rate from 35% to 21% effective January 1, 2018, while also imposing a deemed repatriation tax on previously deferred foreign income. The Act also created a new minimum tax on certain future foreign earnings. The Act will impact the Company’s income tax expense (benefit) from continuing operations in future periods (approximate 25% effective combined federal and state corporate tax rate). The Company has recorded a full valuation allowance on its net deferred tax assets and therefore any impact on the value of the company’s deferred tax assets will be offset by a change in the valuation allowance. Our tax provision is determined using an estimate of our annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. The 2019 and 2018 annual effective tax rate is estimated to be a combined 25%, respectively for the U.S. combined federal and state statutory tax rates. We review tax uncertainties in light of changing facts and circumstances and adjust them accordingly. As of March 31, 2019 and December 31, 2018, there were no tax contingencies or unrecognized tax positions recorded. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting, and the amounts recognized for income tax purposes. The significant components of deferred tax assets (at an approximate 25% effective tax rate) as of March 31, 2019 and December 31, 2018, respectively, are as follows: March 31, 2019 December 31, 2018 Deferred tax assets and valuation allowances consist of: Deferred tax assets: Net operating loss carry forwards $ 318,000 $ 312,000 Less valuation allowance (318,000 ) (312,000 ) Net deferred tax assets $ - $ - We have a net operating loss carry forward for federal and state tax purposes of approximately $1,272,000 at March 31, 2019, that is potentially available to offset future taxable income. The Company had approximately $38,000 in net operating losses expire in the current year. The Act changes the rules on net operating loss carry forwards. The 20-year limitation was eliminated for losses incurred after January 1, 2018, giving the taxpayer the ability to carry forward losses indefinitely. However, utilization of net operating loss carry forward arising after January 1, 2018, will now be limited to 80 percent of taxable income. For financial reporting purposes, no deferred tax asset was recognized because at March 31, 2019 and December 31, 2018, management estimates that it is more likely than not that substantially all of the net operating losses will expire unused. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. The timing and manner in which we can utilize our net operating loss carry forward and future income tax deductions in any year may be limited by provisions of the Internal Revenue Code regarding the change in ownership of corporations. Such limitation may have an impact on the ultimate realization of our carry forwards and future tax deductions. Section 382 of the Internal Revenue Code (“Section 382”) imposes limitations on a corporation’s ability to utilize net operating losses if it experiences an “ownership change.” In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. Any unused annual limitation may be carried over to later years, and the amount of the limitation may under certain circumstances be increased by the built-in gains in assets held by us at the time of the change that are recognized in the five-year period after the change. Upon review of the ownership shifts, there has not been an ownership change as defined under Section 382. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 (SAB 118) which addresses income tax accounting implications of the 2017 Tax Act. The purpose of SAB 118 was to address any uncertainty or diversity of view in applying ASC Topic 740, Income Taxes in the reporting period in which the 2017 Tax Act was enacted. SAB 118 addresses situations where the accounting is incomplete for certain income tax effects of the 2017 Tax Act upon issuance of a company’s financial statements for the reporting period which include the enactment date. SAB 118 allows for a provisional amount to be recorded if it is a reasonable estimate of the impact of the 2017 Tax Act. Additionally, SAB 118 allows for a measurement period to finalize the impacts of the 2017 Tax Act, not to extend beyond one year from the date of enactment. The Company has completed the accounting for the tax effects of the 2017 Tax Act in 2018. As a result, the amount of the deferred tax assets considered realizable was reduced 100% by a valuation allowance. The following is a reconciliation of the tax derived by applying the statutory rate to the earnings before income taxes, and comparing that to the recorded income tax (expense) benefits: Three months ended March 31, 2019 2018 Tax benefits (expense) at statutory rate 25 % 25 % Unrecognized tax benefits (expense) of current period tax losses (25 )% (25 )% Effective tax rate - - The Company had no uncertain tax positions that would necessitate recording of a tax related liability. The Company’s tax returns for the years ended December 31, 2018, 2017, 2016 and 2015 are open for examination under Federal Statute of Limitations. |
PRIVATE PLACEMENT OFFERING
PRIVATE PLACEMENT OFFERING | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 6 - PRIVATE PLACEMENT OFFERING | On September 7, 2007, the Company completed a private placement, pursuant to which 13,334 units (the “Units”) were sold at a per Unit cash purchase price of $150, for a total subscribed amount of $2,000,100. Each Unit consists of: (1) one share of Series A 10% convertible preferred stock, par value $1.00, stated value $100 (the “Preferred Stock”); (2) 500 shares of the Company’s common stock, par value $0.10 (the “Common Stock”); and (3) 500 warrants (the “Warrants”) exercisable into Common Stock on a one-for-one basis. The proceeds of $2,000,100 were allocated to the instruments as follows: Warrant liabilities $ 141,027 Redeemable and Convertible Preferred Stock 1,388,367 Common Stock 470,706 Total allocated gross proceeds: $ 2,000,100 Warrants 2017 Extension of Warrant Terms On August 24, 2017, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2019. The exercise price and all other terms of the original warrant agreement remain the same. The warrants modification expense of $31,478 was computed as the incremental value of the modified warrants over the unmodified warrants on the modification date using a per share price of $0.15 per share, which was the contemporaneous private placement offering price. Assumptions used in the Black Scholes option-pricing model for these warrants were as follows: Average risk-free interest rate 1.27 % Average expected life- years 2 Expected volatility 135.42 % Expected dividends 0 % As of March 31, 2019, warrants to purchase 6,909,000 shares were outstanding, having exercise prices at $0.15 and an expiration date of September 7, 2019. Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Outstanding at December 31, 2018 6,909,000 $ 0.15 0.68 Granted - - - Exercised - - - Forfeited/expired - - - Outstanding at March 31, 2019 6,909,000 $ 0.15 0.44 Exercisable at March 31, 2019 6,909,000 $ 0.15 0.44 As of March 31, 2019 and December 31, 2018, the average remaining contractual life of the outstanding warrants was 0.44 years and 0.68 year, respectively. The warrants will expire on September 7, 2019. Series A 10% Convertible Preferred Stock On December 31, 2018, all 36,562 Series A 10% Convertible Preferred Stocks were converted to 43,045,897 restricted Common stock, including 6,456,882 restricted Common stock paid for preferred shares dividend of $261,504. As of March 31, 2019, there was no preferred stock outstanding. The principal terms of the Series A 10% Convertible Preferred Stock were as follows: Voting rights Dividend rights Conversion rights Redemption rights – Liquidation entitlement At any time on or after August 2, 2011, the Holders of 66 2/3% or more of the Preferred Stock then outstanding could have requested liquidation of their Preferred Stock. In the event that, at the time of such requested liquidation, the Company’s cash funds (in excess of a $50,000 reserve fund) then available to effect such requested liquidation were inadequate for such purpose, then such requested liquidation should have taken place (on a rateable basis) only to the extent such excess cash funds were available for such purpose. Other provisions |
DIVIDENDS
DIVIDENDS | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 7 - DIVIDENDS | On December 31, 2018, all 36,562 Series A 10% Convertible Preferred Stocks were converted to 43,045,897 restricted Common stock, including 6,456,882 restricted Common stock paid for preferred shares dividend of $261,504. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 8 - STOCKHOLDERS' EQUITY | The Company’s 2008 Stock Awards Plan was approved April 9, 2008 by the Board of Directors and ratified at the Company’s annual meeting of stockholders held on June 3, 2008. The 2008 Plan became effective June 24, 2008 and terminated on June 24, 2018. Subject to certain adjustments, the number of shares of Common Stock that could be issued pursuant to awards under the 2008 Plan was 2,000,000 shares. A maximum of 80,000 shares may be granted in any one year in any form to any one participant, of which a maximum of (i) 50,000 shares may be granted to a participant in the form of stock options and (ii) 30,000 shares may be granted to a participant in the form of Common Stock or restricted stock. The 2008 Plan was administered by a committee of the Board of Directors. Employees, including any employee who is also a director or an officer, consultants, and outside directors of the Company are eligible to participate in the 2008 Plan. The 2008 Stock Awards Plan expired June 24, 2018; the Board of directors has not adopted a new stock awards plan. The following table summarizes all stock option activity under the expired plan: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at January 1, 2019 - $ - - $ - Granted - - - - Exercised - - - - Forfeited/expired - - - - Outstanding at March 31, 2019 - $ - - $ - Exercisable at March 31, 2019 - $ - - $ - |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 9 - FAIR VALUE MEASUREMENTS | ASC 820, “Fair Value Measurements and Disclosure,” (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are described below: Level 1 Inputs — Unadjusted quoted prices in active markets for identical assets or liabilities that is accessible by the Company; Level 2 Inputs — Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 Inputs — Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants. There were no transfers in or out of any level during the three months ended March 31, 2019 and the year ended December 31, 2018. Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in the Company’s balance sheets, the Company has elected not to record any other assets or liabilities at fair value, as permitted by ASC 820. No events occurred during the year ended December 31, 2018 which would require adjustment to the recognized balances of assets or liabilities which are recorded at fair value on a nonrecurring basis. The Company determines fair values for its investment assets as follows: Cash equivalents at fair value — the Company’s cash equivalents, at fair value, consist of money market funds — marked to market. The Company’s money market funds are classified within Level 1 of the fair value hierarchy since they are valued using quoted market prices from an exchange. The following tables provide information on those assets measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018, respectively: Carrying Amount In Balance Sheet March 31, Fair Value March 31, Fair Value Measurement Using 2019 2019 Level 1 Level 2 Level 3 Assets: Treasury Bills $ 500,000 $ 500,000 $ 500,000 Money Market Funds 241,093 241,093 241,093 Total Assets $ 741,093 $ 741,093 $ 741,093 $ — $ — Carrying Amount In Balance Sheet December 31, Fair Value December 31, Fair Value Measurement Using 2018 2018 Level 1 Level 2 Level 3 Assets: Treasury Bills $ 709,158 $ 709,158 $ 709,158 Money Market Funds 46,713 46,713 46,713 Total Assets $ 755,871 $ 755,871 $ 755,871 $ — $ — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 10 - COMMITMENTS AND CONTINGENCIES | The Company’s Board of Directors has agreed to pay the Company’s Chief Financial Officer an annual salary of $17,000. No other officers or directors of the Company receive compensation other than reimbursement of out-of-pocket expenses incurred in connection with Company business and development. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 11 - SUBSEQUENT EVENTS | Effective April 2, 2019, the Company’s Board of Directors appointed two new members of the Board, John A. Forbes and Mark C. Neilson. Effective April 10, 2019, the Company’s Board of Directors approved the issuance of 300,000 shares of the Company’s common stock to each of the six (6) members of the Board of Directors and to the Company’s Principal Executive, Financial and Accounting Officer (a total of 2,100,000 shares in the aggregate) for 2019 services to the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary Of Significant Accounting Policies | |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | The Company considers all highly liquid investments that are readily convertible into cash with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. The Company maintains its cash and cash equivalents balances with high credit quality financial institutions. As of March 31, 2019, and December 31, 2018, the Company had cash in insured accounts in the amount of $241,093 and $46,713, respectively, and cash equivalents (US treasury bills) held in financial institutions that were uninsured by Federal Deposit Insurance Corporation in the amount of approximately $500,000 and $709,158 respectively. |
Income Taxes | The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry forwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured assuming 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 results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that such asset will be realized. The Company adopted FASB Interpretation of “Accounting for Uncertainty in Income Taxes”. There was no impact on the Company’s financial position, results of operations, or cash flows as a result of implementing this guidance. At March 31, 2019, and December 31, 2018, the Company evaluated its tax positions and did not have any unrecognized tax benefits. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company currently has no federal or state tax examinations in progress. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes Tables Abstract | |
Summary of deferred tax assets | March 31, 2019 December 31, 2018 Deferred tax assets and valuation allowances consist of: Deferred tax assets: Net operating loss carry forwards $ 318,000 $ 312,000 Less valuation allowance (318,000 ) (312,000 ) Net deferred tax assets $ - $ - |
Summary of income tax (expense) benefits | Three months ended March 31, 2019 2018 Tax benefits (expense) at statutory rate 25 % 25 % Unrecognized tax benefits (expense) of current period tax losses (25 )% (25 )% Effective tax rate - - |
PRIVATE PLACEMENT OFFERING (Tab
PRIVATE PLACEMENT OFFERING (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Allocated to the instruments as follows | Warrant liabilities $ 141,027 Redeemable and Convertible Preferred Stock 1,388,367 Common Stock 470,706 Total allocated gross proceeds: $ 2,000,100 |
Schedule of Share-based Compensation, Warrant Options | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Outstanding at December 31, 2018 6,909,000 $ 0.15 0.68 Granted - - - Exercised - - - Forfeited/expired - - - Outstanding at March 31, 2019 6,909,000 $ 0.15 0.44 Exercisable at March 31, 2019 6,909,000 $ 0.15 0.44 |
2017 Extension of Warrant Terms [Member] | |
Assumptions used in Black Scholes option-pricing model | Average risk-free interest rate 1.27 % Average expected life- years 2 Expected volatility 135.42 % Expected dividends 0 % |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders Equity | |
Schedule of option activities | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at January 1, 2019 - $ - - $ - Granted - - - - Exercised - - - - Forfeited/expired - - - - Outstanding at March 31, 2019 - $ - - $ - Exercisable at March 31, 2019 - $ - - $ - |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurements | |
Assets and liabilities measured at fair value on a recurring basis | The following tables provide information on those assets measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018, respectively: Carrying Amount In Balance Sheet March 31, Fair Value March 31, Fair Value Measurement Using 2019 2019 Level 1 Level 2 Level 3 Assets: Treasury Bills $ 500,000 $ 500,000 $ 500,000 Money Market Funds 241,093 241,093 241,093 Total Assets $ 741,093 $ 741,093 $ 741,093 $ — $ — Carrying Amount In Balance Sheet December 31, Fair Value December 31, Fair Value Measurement Using 2018 2018 Level 1 Level 2 Level 3 Assets: Treasury Bills $ 709,158 $ 709,158 $ 709,158 Money Market Funds 46,713 46,713 46,713 Total Assets $ 755,871 $ 755,871 $ 755,871 $ — $ — |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Summary Of Significant Accounting Policies Details Narrative Abstract | ||
Cash, FDIC insured | $ 241,093 | $ 46,713 |
Cash, FDIC uninsured | $ 500,000 | $ 709,158 |
BASIC AND DILUTED NET LOSS PE_2
BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details Narrative) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Basic And Diluted Net Loss Per Common Share | ||
Common stock equivalents (preferred stock and warrants) | 6,909,000 | 6,909,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carry forwards | $ 318,000 | $ 312,000 |
Less valuation allowance | (318,000) | (312,000) |
Net deferred tax assets |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Taxes Details 1Abstract | ||
Tax benefits (expense) at statutory rate | 25.00% | 25.00% |
Unrecognized tax benefits (expense) of current period tax losses | (25.00%) | (25.00%) |
Effective tax rate |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Income Taxes Details Narrative Abstract | |
Net operating loss carry-forwards | $ 1,272,000 |
Net operating loss | $ 38,000 |
PRIVATE PLACEMENT OFFERING (Det
PRIVATE PLACEMENT OFFERING (Details) | Mar. 31, 2019USD ($) |
Private Placement Offering | |
Warrants liabilities | $ 141,027 |
Redeemable and Convertible Preferred Stock | 1,388,367 |
Common Stock | 470,706 |
Total allocated gross proceeds: | $ 2,000,100 |
PRIVATE PLACEMENT OFFERING (D_2
PRIVATE PLACEMENT OFFERING (Details 1) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Private Placement Offering Details 3Abstract | |
Average risk-free interest rate | 1.27% |
Average expected life- years | 2 years |
Expected volatility | 135.42% |
Expected dividends | 0.00% |
PRIVATE PLACEMENT OFFERING (D_3
PRIVATE PLACEMENT OFFERING (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of Warrants | ||
Number of warrants/options outstanding, beginning | 6,909,000 | |
Granted during the year | ||
Exercised during the year | ||
Forfeited/expired during the year | ||
Number of warrants/options outstanding, ending | 6,909,000 | 6,909,000 |
Number of warrants exercisable during the year | $ 6,909,000 | |
Weighted Average Exercise Price | ||
Weighted average exercise price outstanding, beginning | $ 0.15 | |
Granted during the year | ||
Exercised during the year | ||
Forfeited/expired during the year | ||
Weighted average exercise price outstanding, ending | 0.15 | $ 0.15 |
Weighted average exercisable price | $ 0.15 | |
Weighted Average Remaining Contractual Life (Years) | ||
Weighted average remaining contractual life outstanding, beginning | 8 months 5 days | |
Granted during the year | ||
Exercised during the year | ||
Forfeited/expired during the year | ||
Weighted average remaining contractual life outstanding, ending | 5 months 9 days | 8 months 5 days |
Weighted avergage exercisable remaining contractual life | 5 months 9 days |
PRIVATE PLACEMENT OFFERING (D_4
PRIVATE PLACEMENT OFFERING (Details Narrative) | Sep. 07, 2007USD ($)Unit$ / sharesshares | Aug. 24, 2017USD ($)$ / sharesshares | Mar. 31, 2019$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Number of warrants/options outstanding, beginning | 6,909,000 | 6,909,000 | ||
Weighted average exercise price outstanding | $ / shares | $ 0.15 | $ 0.15 | ||
Expiry date | Sep. 7, 2019 | |||
Number of units sold | Unit | 13,334 | |||
Number of units sold, per unit | $ / shares | $ 150 | |||
Number of units sold for gross proceeds | $ | $ 2,000,100 | |||
Percentage of convertible preferred stock | 10.00% | |||
Preferred Stock, Par Value | $ / shares | $ 1 | $ 1 | 1 | |
Preferred Stock, Stated value | $ | $ 100 | |||
Common Stock, Par Value | $ / shares | $ 0.10 | $ 0.10 | $ 0.10 | |
Share issued | 500 | |||
Warrants modification expense | $ | $ 31,478 | |||
Average remaining contractual life | 5 months 9 days | 8 months 5 days | ||
Series A 10% Convertible Preferred Stock [Member] | ||||
Liquidation entitlement description | Series A 10% Convertible Preferred Stock shall be entitled to receive, in preference to the holders of common stock, an amount equal to $100 per share of Series A 10% Convertible Preferred Stock plus all accrued and unpaid dividends. | |||
Warrant (Member) | 2017 Extension of Warrant Terms [Member] | ||||
Number of warrants/options outstanding, beginning | 6,909,000 | |||
Expiry date | Sep. 7, 2019 | |||
Warrants modification expense | $ | $ 31,478 | |||
Per share price | $ / shares | $ 0.15 | |||
Series A Convertible Preferred stock [Member] | ||||
Convertible preferred stock, shares converted | 36,562 | |||
Series A Convertible Preferred stock [Member] | Dividend [Member] | ||||
Conversion of convertible preferred stock, shares issued | 6,456,882 | |||
Convertible preferred stock, dividend converted | $ | $ 261,504 | |||
Series A Convertible Preferred stock [Member] | Restricted Stock [Member] | ||||
Conversion of convertible preferred stock, shares issued | 43,045,897 |
DIVIDENDS (Details Narrative)
DIVIDENDS (Details Narrative) - Series A Convertible Preferred stock [Member] | Dec. 31, 2018USD ($)shares |
Convertible preferred stock, shares converted | 36,562 |
Dividend [Member] | |
Conversion of convertible preferred stock, shares issued | 6,456,882 |
Convertible preferred stock, dividend converted | $ | $ 261,504 |
Restricted Stock [Member] | |
Conversion of convertible preferred stock, shares issued | 43,045,897 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of Options | ||
Number of warrants/options outstanding, beginning | 6,909,000 | |
Number of Options, Exercised | ||
Number of Options, Forfeited/expired | ||
Number of warrants/options outstanding, ending | 6,909,000 | 6,909,000 |
Weighted Average Exercise Price | ||
Weighted average exercise price outstanding, beginning | $ 0.15 | |
Weighted Average Exercise Price, Forfeited/expired | ||
Weighted average exercise price outstanding, ending | $ 0.15 | $ 0.15 |
Weighted Average Remaining Contractual Life (Years) | ||
Weighted Average Remaining Contractual Life (Years), Ending | 5 months 9 days | 8 months 5 days |
Weighted Average Remaining Contractual Life (Years), Exercisable | 8 months 5 days | |
Director [Member] | ||
Number of Options | ||
Number of warrants/options outstanding, beginning | ||
Number of Options, Granted | ||
Number of Options, Exercised | ||
Number of Options, Forfeited/expired | ||
Number of warrants/options outstanding, ending | ||
Number of warrants/options, Exercisable | ||
Weighted Average Exercise Price | ||
Weighted average exercise price outstanding, beginning | ||
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited/expired | ||
Weighted average exercise price outstanding, ending | ||
Weighted Average Exercise Price, Exercisable | ||
Weighted Average Remaining Contractual Life (Years) | ||
Weighted Average Remaining Contractual Life (Years), Beginning | 0 years | |
Weighted Average Remaining Contractual Life (Years), Ending | 0 years | |
Weighted Average Remaining Contractual Life (Years), Exercisable | 0 years | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value outstanding, beginning | ||
Aggregate Intrinsic Value outstanding, ending | ||
Aggregate Intrinsic Value , Exercisable |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - shares | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 24, 2008 |
Common stock, shares issued | 59,079,759 | 59,079,759 | |
2008 Stock Awards Plan [Member] | |||
Common stock, shares issued | 2,000,000 | ||
Maximum shares granted | 80,000 | ||
Restricted Stock [Member] | |||
Maximum shares granted | 30,000 | ||
Stock options [Member] | |||
Maximum shares granted | 50,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets at fair value on recurring basis | $ 741,093 | $ 755,871 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets at fair value on recurring basis | ||
Fair Value, Inputs, Level 3 [Member] | ||
Assets at fair value on recurring basis | ||
Fair Value [Member] | ||
Assets at fair value on recurring basis | 741,093 | 755,871 |
Carrying Value [Member] | ||
Assets at fair value on recurring basis | 741,093 | 755,871 |
Treasury Bills [Member] | ||
Assets at fair value on recurring basis | 500,000 | 709,158 |
Treasury Bills [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets at fair value on recurring basis | 500,000 | 709,158 |
Treasury Bills [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets at fair value on recurring basis | ||
Treasury Bills [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets at fair value on recurring basis | ||
Treasury Bills [Member] | Carrying Value [Member] | ||
Assets at fair value on recurring basis | 500,000 | 709,158 |
Money Market Funds [Member] | ||
Assets at fair value on recurring basis | 241,093 | 46,713 |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets at fair value on recurring basis | 241,093 | 46,713 |
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets at fair value on recurring basis | ||
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets at fair value on recurring basis | ||
Money Market Funds [Member] | Carrying Value [Member] | ||
Assets at fair value on recurring basis | $ 241,093 | $ 46,713 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Chief Financial Officer [Member] | |
Annual salary | $ 17,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | Apr. 10, 2019shares |
Principal Executive Financial And Accounting Officer [Member] | |
Common stock shares issued for services | 2,100,000 |
Director [Member] | Six Members [Member] | |
Common stock shares issued for services | 300,000 |