Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Mar. 30, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | VirTra, Inc | |
Entity Central Index Key | 1,085,243 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 7,904,307 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 5,106,205 | $ 3,703,579 |
Accounts receivable, net | 3,011,610 | 3,244,852 |
Inventory, net | 1,689,149 | 1,319,944 |
Unbilled revenue | 1,724,642 | 107,297 |
Prepaid expenses and other current assets | 660,288 | 250,066 |
Total current assets | 12,191,894 | 8,625,738 |
Property and equipment, net | 693,206 | 814,323 |
Investment in MREC | 1,988,174 | 471,928 |
TOTAL ASSETS | 14,873,274 | 9,911,989 |
CURRENT LIABILITIES | ||
Accounts payable | 730,302 | 467,679 |
Accrued compensation and related costs | 1,109,734 | 617,582 |
Accrued expenses and other current liabilities | 227,688 | 194,668 |
Notes payable, current | 11,250 | 11,250 |
Deferred revenue | 2,753,337 | 2,065,905 |
Total current liabilities | 4,832,311 | 3,357,084 |
Long-term liabilities: | ||
Deferred rent liability | 87,861 | 122,126 |
Notes payable, long-term | 11,250 | 22,500 |
Total long-term liabilities | 99,111 | 144,626 |
Total liabilities | 4,931,422 | 3,501,710 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock $0.0001 par value; 2,500,000 authorized; no shares issued or outstanding | ||
Common stock, value | 793 | 793 |
Treasury stock at cost;20,939 shares and no shares outstanding as of September 30, 2017 and December 31, 2016, respectively | (96,633) | |
Additional paid-in capital | 14,964,939 | 14,128,837 |
Accumulated deficit | (4,927,247) | (7,719,351) |
Total stockholders’ equity | 9,941,852 | 6,410,279 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 14,873,274 | 9,911,989 |
Class A Common Stock [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Common stock, value | ||
Class B Common Stock [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Common stock, value |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 7,927,774 | 7,927,774 |
Common stock, shares outstanding | 7,906,835 | 7,927,774 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 2,500,000 | 2,500,000 |
Common stock, shares issued | ||
Common stock, shares outstanding | ||
Class B Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | ||
Common stock, shares outstanding |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUES | ||||
Net sales | $ 4,645,593 | $ 2,993,872 | $ 13,902,215 | $ 12,602,134 |
Royalties/licensing fees | 40,852 | 47,829 | 245,082 | 47,829 |
Total revenue | 4,686,445 | 3,041,701 | 14,147,297 | 12,649,963 |
Cost of sales | 1,573,384 | 1,345,180 | 4,853,796 | 4,856,906 |
Gross profit | 3,113,061 | 1,696,521 | 9,293,501 | 7,793,057 |
OPERATING EXPENSES | ||||
General and administrative | 2,050,395 | 1,401,547 | 5,515,455 | 4,632,048 |
Research and development | 310,848 | 299,288 | 931,954 | 731,630 |
Net operating expense | 2,361,243 | 1,700,835 | 6,447,409 | 5,363,678 |
Income/(loss) from operations | 751,818 | (4,314) | 2,846,092 | 2,429,379 |
OTHER INCOME (EXPENSE) | ||||
Other income | 14,813 | 5,626 | 52,410 | 8,406 |
Other expense | (221) | (2,981) | (4,113) | (2,981) |
Net other income/(loss) | 14,592 | 2,645 | 48,297 | 5,425 |
Income/(loss) before income taxes | 766,410 | (1,669) | 2,894,389 | 2,434,804 |
Provision for income taxes | 24,285 | 8,414 | 102,285 | 73,618 |
NET INCOME/(LOSS) | $ 742,125 | $ (10,083) | $ 2,792,104 | $ 2,361,186 |
Earnings per common share | ||||
Basic | $ 0.09 | $ 0 | $ 0.35 | $ 0.30 |
Diluted | $ 0.09 | $ 0 | $ 0.33 | $ 0.28 |
Weighted average shares outstanding | ||||
Basic | 7,918,114 | 7,916,730 | 7,924,475 | 7,914,093 |
Diluted | 8,337,377 | 7,916,730 | 8,418,275 | 8,552,275 |
Condensed Statement of Stockhol
Condensed Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 793 | $ 14,128,837 | $ (7,719,351) | $ 6,410,279 | ||
Balance, shares at Dec. 31, 2016 | 7,927,774 | |||||
Stock based compensation | 160,351 | 160,351 | ||||
Stock options repurchased | (67,000) | (67,000) | ||||
Stock warrants vested-MREC Investment | 1,516,246 | 1,516,246 | ||||
Stock warrants repurchased-MREC Inv. | (773,495) | (773,495) | ||||
Treasury stock | (96,633) | (96,633) | ||||
Net income | 2,792,104 | 2,792,104 | ||||
Balance at Sep. 30, 2017 | $ 793 | $ 14,964,939 | $ (96,633) | $ (4,927,247) | $ 9,941,852 | |
Balance, shares at Sep. 30, 2017 | 7,927,774 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 2,792,104 | $ 2,361,186 |
Adjustments to reconcile net income to net cash provided (used) in operating activities | ||
Depreciation and amortization | 204,527 | 160,768 |
Stock compensation | 160,351 | 93,990 |
Cash settlement of stock options | 115,550 | 315,224 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 233,241 | (670,444) |
Inventory | (369,206) | (142,313) |
Unbilled revenue | (1,617,346) | |
Prepaid expenses and other current assets | (410,221) | (192,024) |
Accounts payable and other accrued expenses | 787,795 | 33,776 |
Deferred revenue and deferred rent | 653,168 | 609,473 |
Net cash provided by operating activities | 2,549,964 | 2,569,636 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (83,410) | (468,115) |
Net cash used in investing activities | (83,410) | (468,115) |
Cash flows from financing activities: | ||
Repayment of debt | (11,250) | (11,250) |
Common stock issued for option exercise | 16,350 | |
Purchase of treasury stock | (96,633) | 2,981 |
Repurchase of stock options | (182,550) | (505,224) |
Repurchase of stock warrants | (773,495) | |
Net cash used in financing activities | (1,063,928) | (497,143) |
Net increase in cash | 1,402,626 | 1,604,378 |
Cash, beginning of period | 3,703,579 | 3,317,020 |
Cash, end of period | 5,106,205 | 4,921,398 |
Cash paid: | ||
Taxes | 78,000 | 142,930 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Investment in MREC | $ 1,516,246 |
Organization and Business Opera
Organization and Business Operations | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization and Business Operations | NOTE 1. ORGANIZATION AND BUSINESS OPERATIONS VirTra, Inc. (the “Company” or “VirTra”) is engaged in the sale and development of judgmental use of force training simulators and firearms training simulators for law enforcement, military and commercial uses. The Company sells simulators and related products worldwide through a direct sales force and international distribution partners. The original business started in 1993 as Ferris Productions, Inc. In September 2001, Ferris Productions, Inc. merged with GameCom, Inc. to ultimately become VirTra Systems, Inc., a Texas corporation. Effective as of October 1, 2016 (the “Effective Date”), the Company completed a conversion from a Texas corporation to a Nevada corporation pursuant to a Redomestication Plan of Conversion (the “Plan of Conversion”) that was approved by the Company’s Board of Directors on June 23, 2016 and its shareholders on September 16, 2016. On the Effective Date, 7,927,688 shares of common stock of VirTra Systems, Inc., a Texas corporation, were converted into 7,927,688 shares of common stock of VirTra, Inc., a Nevada corporation. No shareholders exercised appraisal rights or dissenters’ rights for such shares in accordance with the Texas Business Organization Code. As part of the Plan of Conversion, the Company filed Articles of Incorporation in Nevada whereby it changed its name from VirTra Systems, Inc. to VirTra, Inc. and revised its capitalization. The Company’s Articles of Incorporation filed in Nevada authorized the Company to issue 62,500,000 shares, of which (1) 60,000,000 shares shall be common stock, par value $0.0001 per share (the “common stock”), of which (a) 50,000,000 shares shall be common stock, par value $0.0001, (b) 2,500,000 shares shall be Class A common stock, par value $0.0001 per share (the “Class A common stock”), and (c) 7,500,000 shares shall be Class B common stock, par value $0.0001 per share (the “Class B common stock”) and (2) 2,500,000 shares shall be Preferred Stock, par value $0.0001 per share, which may, at the sole discretion of the Board of Directors be issued in one or more series (the “Preferred Stock”). The Company also adopted new bylaws as part of the Plan of Conversion. Effective October 20, 2016, the Company effected a 1 for 10 reverse stock split of its issued and outstanding Common Stock and effective February 12, the Company effected a 1 for 2 reverse stock split of its issued and outstanding Common Stock (together the “Reverse Stock Splits”). All references to shares of the Company’s common stock in this report refer to the number of shares of common stock after giving effect to the Reverse Stock Splits. The Company’s corporate office is located in Tempe, Arizona. All transactions in the financial statements and accompanying notes are presented in US Dollars. 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 (“GAAP”) for interim financial information. Certain information and note disclosures normally included in complete annual financial statements prepared in accordance with GAAP have been condensed or omitted. However, the Company believes that the disclosures included in these unaudited condensed financial statements are adequate to make the information presented not misleading. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments, which include normal recurring adjustments, considered necessary for a fair presentation of such interim results. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes for the year ended December 31, 2016 included in the Company’s Post-Qualification Offering Circular Amendment No. 1 to Form 1-A filed with the Securities and Exchange Commission (the “SEC”) on February 21, 2018. Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on net income/(loss). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recent Accounting Pronouncements Between May 2014 and December 2016, the Financial Accounting Standards Board (the “FASB”) issued several Accounting Standard Updates (“ASUs”) on Revenue from Contracts with Customers (Topic 606). These updates will supersede nearly all existing revenue recognition guidance under current GAAP. The core principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. A five-step process has been defined to achieve this core principle, and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standards are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standards in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the standards recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of these standards on its financial statements and expects to adopt the modified retrospective approach. However, the adoption of these new standards will not have a material impact on its revenue recognition as it pertains to current revenue streams, the Company’s financial position or results of operations In February 2016, the FASB issued ASU No. 2016-02 – “Leases (Topic 842)”, which requires leases to put most leases on their balance sheets by recognizing lease assets and lease liabilities for those leases classified as operating leases under previous guidance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on its financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 also impacts the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted only for certain provisions. As the Company wrote-down its Investment in Modern Round to fair value in 2017, the Company believes that the adoption of ASU 2016-01 will not have a material impact on its financial statements, however, the Company will change from the cost method of accounting. In July 2015, the FASB issued ASU No. 2015-11 – “Inventory (Topic 330): Simplifying the Measurement of Inventory”. The amendment’s purpose is to simplify the measurement, reduce costs and increase comparability for inventory measured using first-in, first-out (FIFO) or average cost methods. An entity should measure inventory within the scope of this ASU at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This accounting guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. This standard was adopted on January 1, 2017 and its adoption did not to have a material significant impact on the Company’s financial statement position and results of operations. In November 2015, the FASB issued ASU No. 2015-17 – “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The ASU’s purpose is to require deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position (Balance Sheet). This accounting guidance will become effective beginning in the first quarter of 2017. Early application is permitted. The Company adopted this pronouncement and such adoption did not have a material impact on the Company’s financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02 – “Leases (Topic 842)”, which requires leases to put most leases on their balance sheets by recognizing lease assets and lease liabilities for those leases classified as operating leases under previous guidance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on its financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force), to provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flow. The amendments should be applied using a retrospective transition method, and are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this statement is not expected to have an impact on the Company’s financial position or results of operations. In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014- 09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. As indicated below, the Company does not believe that the adoption of ASU No. 2014-09 will have a material impact on its revenue recognition as it pertains to current revenue streams. In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which is the same time as the amendments in ASU No. 2014-09, and early adoption is permitted. The Company does not expect this amendment to have a material impact on its financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Accounting Standards Codification (“ASC”) 718. The amendments are effective for fiscal years beginning after December 15, 2017, and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company does not expect this amendment to have a material impact on its financial statements. In July 2017, the FASB issued ASU No. 2017-11 – “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815)” I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II simply replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. This ASU is effective for public companies for the annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company does not expect this amendment to have a material impact on its financial statements. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 2. INVENTORY Inventory consisted of the following as of: September 30, 2017 December 31, 2016 Raw materials $ 1,718,367 $ 1,085,519 Finished goods - 251,707 Reserve (29,218 ) (17,282 ) Total inventory $ 1,689,149 $ 1,319,944 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 3. Property and Equipment Property and equipment consisted of the following as of: September 30, 2017 December 31, 2016 Computer equipment $ 818,155 $ 753,987 Furniture and office equipment 196,216 182,969 Machinery and equipment 925,495 925,495 Leasehold improvements 324,313 318,318 Total property and equipment 2,264,178 2,180,768 Less: Accumulated depreciation (1,570,972 ) (1,366,445 ) Property and equipment, net $ 693,206 $ 814,323 Depreciation expense was $65,570 and $64,591 for the three months ended September 30, 2017 and 2016, respectively. Depreciation expense was $204,527 and $160,768 for the nine months ended September 30, 2017 and 2016, respectively. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | NOTE 4. Accrued Expenses Accrued compensation and related costs consisted of the following as of: September 30, 2017 December 31, 2016 Salaries and wages payable $ 431,741 $ 93,832 401(k) contributions payable 16,971 25,729 Accrued paid time off 254,211 190,518 Profit sharing payable 406,811 307,503 Total accrued compensation and related costs $ 1,109,734 $ 617,582 Accrued expenses and other current liabilities consisted of the following as of: September 30, 2017 December 31, 2016 Manufacturer’s warranties $ 135,000 $ 122,000 Taxes payable 61,045 32,668 Other 31,643 40,000 Total accrued expenses and other current liabilities $ 227,688 $ 194,668 Profit Sharing As part of the benefit package maintained by the Company, the Profit Sharing program pays a percentage of Company annual profits as a cash bonus to active and eligible employees. The cash payment is typically split into two equal payments and distributed pro-rata to employees in April and October of the following year. For the nine months ending September 30, 2017 and 2016, the percentage of annual net profit used for estimating the calculations was 15%. Profit sharing expense was $113,976 and $(3,379) for the three months ended September 30, 2017 and 2016, respectively. Profit sharing expense was $403,709 and $325,678 for the nine months ended September 30, 2017 and 2016, respectively. |
Collaboration Agreement
Collaboration Agreement | 9 Months Ended |
Sep. 30, 2017 | |
Collaboration Agreement | |
Collaboration Agreement | NOTE 5. Collaboration Agreement On January 16, 2015, the Company entered into a Co-Venture Agreement (the “Co-Venture Agreement”) with Modern Round, LLC (“Modern Round”), a wholly owned subsidiary of Modern Round Entertainment Corporation (“MREC”), a related party. MREC is a restaurant and entertainment concept centered on its indoor virtual reality shooting experience. The Co-Venture Agreement provides Modern Round access to certain software and equipment relating to the Company’s products in exchange for royalties. The Company received 1,365,789 units, representing a 5% ownership interest in Modern Round on the date of the Co-Venture Agreement. The Company recorded the investment at the estimated fair value of the units and which were valued at $0.10 per unit based on Modern Round’s other membership unit sales. The Co-Venture Agreement also provides the Company with conditional warrants to purchase an additional 5% of Modern Round as of the date of that agreement, at an exercise price of $0.25. On April 14, 2015, Modern Round issued the Company an option to purchase 125,000 units of Modern Round. The option fully vested and became exercisable on the date of grant at an exercise price equal to $0.50 per unit and terminates on the tenth anniversary of the date of grant, if not earlier pursuant to the terms of the option. On December 31, 2015, Modern Round merged with a subsidiary of MREC pursuant to a Plan of Merger (the “Merger Agreement”) and each unit of Modern Round issued and outstanding as of the effective time of the merger automatically converted into the right to receive approximately 1.2277 shares of MREC common stock. As a result of the Merger Agreement, the Company held 1,676,748 shares of MREC common stock, options to purchase 153,459 shares of MREC common stock at an exercise price of $0.41 per share, and conditional warrants to purchase 1,676,747 shares of MREC common stock at an exercise price of $0.20 per share. On October 25, 2016, the Company exercised the conditional warrant and purchased 1,676,747 shares of MREC common stock for $335,349, resulting in the Company’s aggregate holdings of MREC increasing to . The MREC equity securities have been recorded as a cost method investment as the Company does not have the ability to exercise significant influence over MREC. As part of the Co-Venture Agreement, the Company granted 459,691 conditional warrants to affiliates of MREC to purchase 5% of the Company’s capital stock on a fully diluted basis as of the date of the Co-Venture Agreement. The conditional warrants are exercisable commencing at the earlier of the first anniversary of MREC opening its first range facility utilizing VirTra technology or after MREC opening its first range facility utilizing VirTra technology and the payment to the Company of all required US/Canada minimum royalty payments during the first 12-month period. MREC opened its first location on June 1, 2016. The Company also granted 459,691 of additional conditional warrants to affiliates of MREC to purchase another 5% of the Company’s capital stock on a fully diluted basis as of the Agreement date. These conditional warrants are exercisable any time subsequent to MREC’s payment of $2.0 million in cumulative license fees (royalty). Both conditional warrant issuances are for a period of five years with an exercise price of $2.72. These conditional warrants were considered contingent consideration for the equity investment as they did not meet the definition of a derivative under ASC 815. Thus, the contingent consideration was not included in the cost of the equity investment until the contingency was resolved and the warrant became exercisable. On June 1, 2017, the warrants related to the opening of the facility vested and became exercisable at an exercise price equal to $2.72 per unit and terminate on the fifth anniversary of the date of vesting, if not earlier pursuant to the terms of the option. On June 1, 2017, these warrants were recorded at the Black-Scholes Merton fair value using annual volatility of 91.5%, an annual risk free rate of 1.76%, expected term of five years and a fair value of $4.28 a share for a fair value of $1,516,246 as an additional investment in MREC. The Co-Venture Agreement grants MREC an exclusive non-transferrable license to use the Company’s technology solely for use at locations to operate the concept, as defined in the Co-Venture Agreement. The license would become non-exclusive if the first U.S. location is not opened within 24 months of the effective date and at least one location is opened outside the U.S. and Canada within five years of the Co-Venture Agreement date, the respective milestone dates. Throughout the duration of the Co-Venture Agreement, MREC will pay the Company a royalty based on gross revenue, as defined and subject to certain minimum royalties commencing with the first twelve-month period subsequent to the respective milestone date of June 1, 2017. If the total royalty payments for locations in the United States and Canada together do not total at least the minimum royalty amou n |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6. Related Party Transactions During the three months ended September 30, 2017 and 2016, the Company issued 13,750 and 11,250 stock options to the CEO, COO and members of the Board of Directors to purchase shares of common stock at a weighted average purchase price of $3.76 and $4.20, respectively. During the nine months ended September 30, 2017 and 2016, the Company issued 41,250 and 33,750 stock options to the CEO, COO and members of the Board of Directors to purchase shares of common stock at a weighted average purchase price of $4.42 and $3.08, respectively. All options are exercisable within seven years of grant date. During the three and nine months ended September 30, 2017 and 2016, the Company redeemed stock options from the CEO and COO that had previously been awarded. As a result, the Company recorded additional compensation expense as follows: Three Months Ending September 30, Nine Months Ending September 30, 2017 2016 2017 2016 Number of stock options redeemed 30,000 12,500 55,000 237,500 Redemption value $ 97,300 $ 37,500 $ 182,550 $ 505,224 Amount previously expensed (2010 and 2009) (32,000 ) (12,500 ) (67,000 ) (190,000 ) Additional compensation expense $ 65,300 $ 25,000 $ 115,550 $ 315,224 Mr. Mitch Saltz, a member of the Company’s Board of Directors, is also Chairman of the Board of Directors and a majority stockholder of MREC. The Company entered into the Co-Venture Agreement with MREC as disclosed in Note 5. Through the terms of that agreement, the Company owns 3,353,495 shares of MREC common stock representing approximately 9.3% of the issued and outstanding shares of MREC common stock. In addition, the Company recognized license fees (royalties) from MREC of $40,852 and $47,829 for the three months ended September 30, 2017 and 2016, respectively, and $245,082 and $47,829 for the nine months ended September 30, 2017 and 2016, respectively, pursuant to the terms of the Co-Venture Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies The Company’s operating lease obligations relate to the leasing of the Company’s corporate office space located at 7970 South Kyrene Road, Tempe, Arizona 85284, which expires in April 2019, unless renewed and the leasing of the machine shop building located at 2169 East Fifth St., Tempe, Arizona 85284, which expires in March 2018, unless renewed. Future minimum lease payments under non-cancelable operating leases are as follows: Building Lease Schedule 2017 $ 87,651 2018 324,353 2019 105,542 Total $ 517,546 The Company has a deferred rent liability of $87,861 and $122,126 as of September 30, 2017 and December 31, 2016, respectively, relative to the increasing future minimum lease payments. Rent expense was $92,910 and $86,578 for the three months ended September 30, 2017 and 2016, respectively. Rent expense was $229,198 and $146,564 for the nine months ended September 30, 2017 and 2016, respectively. General or Threatened Litigation From time to time, the Company is notified of threatened litigation or that a claim is being made against it. The Company’s policy is to not disclose the specifics of any claim or threatened lawsuit until such complaint is actually served on the Company. On October 20, 2016, a former employee filed a lawsuit in the U.S. District Court, District of Arizona alleging the Company’s failure and/or refusal to pay overtime in violation of 29 U.S.C. Sec. 201, et. seq. and a claim for wrongfully withheld wages under A.R.S. Sec. 23-350 et. seq. The complaint seeks certification of class action status, declaratory relief, damages, interest, attorneys’ fees and such other relief the Court deems just and proper. Additionally, two former and one current employee opted-in to the class action. On September 18, 2017, VirTra entered into a Settlement Agreement and Release of Claims with two parties and on November 30, 2017, VirTra entered into a Settlement Agreement and Release of Claims with the remaining two parties in the outstanding lawsuit agreeing to payments totaling $100,300 in full dismissal of all outstanding complaints against VirTra. The agreement does not constitute an admission that VirTra violated any local, state or federal regulations or engaged in any improper or unlawful conduct or wrongdoing. The US District Court of Arizona, District of Arizona approved Joint Motion Requesting Approval of Settlements on September 25, 2017 and December 7, 2017, respectively, for each settlement agreement. All required settlement payments were completed in accordance with the Settlement Agreements on September 29, 2017 and December 13, 2017. Management believes that the ultimate outcome of this matter did not have a material effect on its earnings, cash flows, or financial position. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Note 8. Stockholders’ Equity Stock Repurchase On October 25, 2016, the Company’s Board of Directors authorized the repurchase of up to $1,000,000 of its common stock through December 31, 2017. Purchases made pursuant to this authorization were to be made in the open market, in privately negotiated transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b-18 of the SEC. The timing, manner, price and amount of any repurchases were to be determined by the Company at its discretion and were to be subject to economic and market conditions, stock price, applicable legal requirements and other factors. During the nine months ended September 30, 2017, the Company repurchased 20,939 shares at a cost of $96,633. For the three month period ending September 30, 2017, VirTra repurchased 17,489 shares of stock to hold in treasury at a total cost basis of $82,834, and for the nine month period ending September 30, 2017 VirTra repurchased 20,939 shares of stock to hold in treasury at a total cost basis of $96,634 pursuant to its Repurchase Program. On October 18, 2017, VirTra suspended its Repurchase Program indefinitely due to its pending Regulation A Offering. The repurchased shares will remain in treasury for future sale. Stock Options The Company periodically issues non-qualified incentive stock options to key employees, officers and directors under a Stock Option Compensation plan approved by the Board of Directors in 2009. Terms of the option grants are at the discretion of the Board of Directors but historically have been seven years. During the three months ended September 30, 2017 and 2016, the Company issued 13,750 and 11,250 stock options, with a weighted average exercise price of $3.76 and $4.20 per share, respectively. During the nine months ended September 30, 2017 and 2016, the Company issued 41,250 and 33,750 stock options, with a weighted average exercise price of $4.42 and $3.08 per share, respectively. On July 1, 2017, the Company granted to members of its Board of Directors options to purchase 13,750 shares of the Company’s common stock at an exercise price of $3.76 and a term of seven years. On July 1, 2017, the Company redeemed from the CEO and COO 12,500 previously awarded expiring stock options for cash totaling $34,000, of which $12,500 had been previously expensed in 2010 with the balance of $21,500 being recognized as additional compensation cost in July 2017. On September 30, 2017, the Company redeemed from the CEO and COO 12,500 previously awarded expiring stock options for cash totaling $50,000, of which $12,500 had been previously expensed in 2010 with the balance of $37,500 being recognized as additional compensation cost in September 2017. 2017 Equity Incentive Plan On August 23, 2017, our board approved, subject to shareholder approval at the annual meeting of shareholders on October 6, 2017, the 2017 Equity Incentive Plan (the “Equity Plan”). The Equity Plan is intended to make available incentives that will assist us to attract, retain and motivate employees, including officers, consultants and directors. We may provide these incentives through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards. A total of 1,187,500 shares of our common stock will be initially authorized and reserved for issuance under the Equity Plan. This reserve will automatically increase on January 1, 2018 and each subsequent anniversary through 2027, by an amount equal to the smaller of (a) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the board. Awards may be granted under the Equity Plan to our employees, including officers, directors or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity. All awards will be evidenced by a written agreement between us and the holder of the award and may include any of the following: stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units and cash-based awards and other stock-based awards. The assumptions used for the periods ended September 30, 2017 and 2016, and the resulting estimates of weighted-average fair value per share of options granted during those periods, are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Volatility 96% to 98% 103% to 105% 96% to 101% 103% to 107% Risk-free interest rate 1-2% 1-2% 1-2% 1-2% Expected term 7 years 7 years 7 years 7 years The following table summarizes all compensation plan stock options as of September 30: September 30, 2017 September 30, 2016 Number of Weighted Number of Weighted Stock Options Exercise Price Stock Options Exercise Price Options outstanding, beginning of year 557,917 $ 1.60 833,967 $ 1.20 Granted 41,250 4.42 33,750 3.08 Redeemed (55,000 ) (1.28 ) (237,500 ) (0.82 ) Exercised - - (15,000 ) (1.10 ) Expired / terminated - - (57,717 ) (1.08 ) Options outstanding, end of period 544,167 $ 2.10 557,500 $ 2.46 Options exercisable, end of period 524,167 $ 2.08 537,500 $ 2.44 Stock compensation expense was $42,376 and $30,000 for the three months ended September 30, 2017 and 2016, respectively. Stock compensation expense was $160,351 and $93,990 for the nine months ended September 30, 2017 and 2016, respectively. There are 20,000 non-vested stock options as of September 30, 2017. Of that amount, 10,000 options will vest equally in Octo ber 2017 and October 2018. Warrants As part of the Co-Venture Agreement, the Company granted 459,691 conditional warrants to affiliates of MREC, a related party, to purchase 5% of the Company’s capital stock on a fully diluted basis. The conditional warrants are exercisable commencing at the earlier of the first anniversary of MREC opening its first range facility utilizing the Company’s technology and the payment of all required minimum royalty/licensing fee payments during the first 12- month period. The Company also granted 459,691 conditional warrants to affiliates of MREC to purchase 5% of the Company’s capital stock on a fully diluted basis, which are exercisable any time subsequent to MREC’s payment of $2.0 million in royalty fees. The conditional warrants have a contractual term of five years and an exercise price of $2.72. On June 1, 2017, the one-year anniversary of MREC opening its first range facility occurred, and the associated warrants were vested. See Note 5. Warrant Redemptions and Co-Venture Agreement Amendment On July 28, 2017, the Company received Notices of Exercise for all 459,691 warrants currently exercisable (the “Tranche 1 Warrants”) from all the MREC affiliate holders electing to purchase warrants pursuant to the terms of the net exercise provision set forth in the Warrant Agreement. Mr. Saltz, a director of the Company and a substantial shareholder of MREC, held 778,243 of the Tranche 1 Warrants prior to the assignment of the warrants to MREC on August 11, 2017. Under the net exercise provision, in lieu of exercising the warrant for cash, the holder may elect to receive shares equal to the value of the warrant (or the portion thereof being exercised) by surrender of the warrant and the Company issuing to holder the number of computed shares. Using the July 28, 2017 OTCQX closing price at $4.36 as fair value and the $2.72 warrant exercise price, upon conversion the 459,691 warrants entitle the holders to receive 172,912 shares of the Company’s common stock without payment of any additional consideration pursuant to the net exercise terms of the Tranche 1 Warrants that are currently exercisable. Effective August 16, 2017, the Company and the MREC affiliate holders entered into an agreement (the “Warrant Buyout Agreement”) whereby the Company acknowledged the assignment of the Tranche 1 Warrants to MREC and agreed to repurchase them at a price of $3.924 per share of common stock issuable by the Company pursuant to the net exercise terms of the Warrants for a total of $678,505. In addition, the Company agreed to repurchase from MREC an additional 459,691 warrants held by MREC that are not currently exercisable (the “Tranche 2 Warrants”). Mr. Saltz held 728,243 of the Tranche 2 Warrants prior to their assignment to MREC on August 11, 2017. The Warrant Buyout Agreement amends the Tranche 2 Warrants to provide for the immediate exercise on a net exercise basis of 48,415 shares of the Company’s common stock. The purchase price for the Tranche 2 Warrants of a total of $94,990 is based on a price of $3.924 per share of common stock issuable on a net exercise basis based on 24,208 shares of the Company’s common stock. The aggregate purchase price of the Tranche 1 Warrants and the Tranche 2 Warrants was $773,495. MREC agreed that proceeds of the warrant redemption, net of applicable taxes, would be used to fund the development of a second stand-alone Modern Round location. In addition, MREC agreed that the minimum royalty due to us during the first 12-month royalty period in order to maintain exclusivity is $118,427. Further, MREC acknowledged that the second 12-month minimum royalty calculation period provided for in the Co-Venture Agreement began on June 1, 2017 and ends on May 31, 2018. Total minimum royalty payments due during this period required to maintain MREC’s exclusive rights under the Co-Venture Agreement are $560,000 including any shortfalls for prior periods being due no later than June 30, 2018. By fully funding the Minimum Royalty Payment, MREC will retain its exclusive license to use the Company’s shooting scenario content and other intellectual property in MREC’s facilities for a future 12-month period in accordance with the Co-Venture Agreement. In addition, on August 16, 2017, we entered into an amendment to the Co-Venture Agreement to permit MREC to sublicense the VirTra Technology to third party operators of stand-alone location-based entertainment companies. MREC agreed to pay us royalties for any such sublicenses in an amount equal to 10% of the revenue paid to MREC in cases where MREC pays for the cost of the equipment for such location or 14% of the revenue paid to MREC in cases where it does not pay for the cost of the equipment. On August 17, 2017, VirTra paid the aggregate purchase price of Tranche 1 Warrants and Tranche 2 Warrants of $773,495 reduced by the minimum royalty payment of $118,427 for net cash payment to MREC totaling $655,068. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9. Subsequent Events Other On September 18, 2017, VirTra entered into a Settlement Agreement and Release of Claims with two parties and on November 30, 2017, VirTra entered into a Settlement Agreement and Release of Claims with the remaining two parties in the outstanding lawsuit agreeing to payments totaling $106,030 in full dismissal of all outstanding complaints against VirTra. The agreement does not constitute an admission that VirTra violated any local, state or federal regulations or engaged in any improper or unlawful conduct or wrongdoing. The US District Court of Arizona, District of Arizona approved Joint Motion Requesting Approval of Settlements on September 25, 2017 and December 7, 2017, respectively, for each settlement agreement. All required settlement payments were completed in accordance with the Settlement Agreements on September 29, 2017 and December 13, 2017. Management believes that the ultimate outcome of this matter did not have a material effect on its earnings, cash flows, or financial position. (See Note 7. Commitments and Contingencies – General or Threatened Litigation) On October 6, 2017, VirTra held its Annual General Meeting and the shareholders approved, in line with the Board of Directors’ recommendations, all proposals presented at the meeting. Shareholders voted to elect all five of the director nominees: Robert D. Ferris, Matthew D. Burlend, Mitchell A. Saltz, Jeffrey D. Brown and Jim Richardson. Additionally, the shareholders approved the VirTra 2017 Equity Incentive Plan. On October 9, 2017, VirTra’s Board of Directors appointed Robert D. Ferris, CEO to continue to serve as the Chairman of the Board of Directors. Additionally, the Board of Directors elected the following officers of the Company: Robert D. Ferris as Chief Executive Officer and President; Matthew D. Burlend as Chief Operating Officer and Vice President; and Judy A. Henry as Chief Financial Officer, Secretary and Treasurer. On October 10, 2017, VirTra applied to list its common stock on the Nasdaq Capital Market upon qualification by the SEC of its planned Regulation A+ offering of common stock with a minimum of $5,000,000 and a maximum of $10,000,000 pursuant to an Offering Statement filed with the SEC on September 11, 2017, as amended. On December 1, 2017, the Company redeemed from the CEO and COO 12,500 previously awarded expiring stock options for cash totaling $62,000, of which $17,500 had been previously expensed in 2011 with the balance of $44,500 being recognized as additional compensation cost in December 2017. On February 12, 2018, VirTra’s Board of Directors unanimously approved a 1-for-2 reverse stock split of the Company’s common stock, par value $0.0001 per share with resulting fractional shares to be rounded up to the next higher whole number of shares. The record date for shareholders entitled to participate in the Reverse Split shall be the market effective date as established by FINRA, which was effectuated on March 2, 2018. Except as otherwise indicated, all references to common stock, share data, per share data and related information depict the 1-for-2 Reverse Stock Split as if it was effective and as if it had occurred at the beginning of the earliest period presented. On March 29, 2018, pursuant to an Offering Circular on Form 1-A, as amended, pursuant to Regulation A, we offered on a “best efforts” basis a minimum of 714,286 shares of common stock and a maximum of 1,428,571 shares of common stock (the “Offered Shares”), par value of $0.0001 per share (the “Common Stock”), at a price per share of Common Stock of $7.00. The minimum offering amount (“Minimum Offering Amount”) was $5,000,000 and the maximum offering amount (“Maximum Offering Amount”) was $10,000,000. We terminated the offering on March 29, 2018. No shares were sold pursuant to the offering. On March 29, 2018, our shares of Common Stock began trading on the Nasdaq Capital Market under the symbol, “VTSI.” |
Organization and Business Ope16
Organization and Business Operations (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 (“GAAP”) for interim financial information. Certain information and note disclosures normally included in complete annual financial statements prepared in accordance with GAAP have been condensed or omitted. However, the Company believes that the disclosures included in these unaudited condensed financial statements are adequate to make the information presented not misleading. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments, which include normal recurring adjustments, considered necessary for a fair presentation of such interim results. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes for the year ended December 31, 2016 included in the Company’s Post-Qualification Offering Circular Amendment No. 1 to Form 1-A filed with the Securities and Exchange Commission (the “SEC”) on February 21, 2018. Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on net income/(loss). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Between May 2014 and December 2016, the Financial Accounting Standards Board (the “FASB”) issued several Accounting Standard Updates (“ASUs”) on Revenue from Contracts with Customers (Topic 606). These updates will supersede nearly all existing revenue recognition guidance under current GAAP. The core principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. A five-step process has been defined to achieve this core principle, and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standards are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standards in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the standards recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of these standards on its financial statements and expects to adopt the modified retrospective approach. However, the adoption of these new standards will not have a material impact on its revenue recognition as it pertains to current revenue streams, the Company’s financial position or results of operations In February 2016, the FASB issued ASU No. 2016-02 – “Leases (Topic 842)”, which requires leases to put most leases on their balance sheets by recognizing lease assets and lease liabilities for those leases classified as operating leases under previous guidance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on its financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 also impacts the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted only for certain provisions. As the Company wrote-down its Investment in Modern Round to fair value in 2017, the Company believes that the adoption of ASU 2016-01 will not have a material impact on its financial statements, however, the Company will change from the cost method of accounting. In July 2015, the FASB issued ASU No. 2015-11 – “Inventory (Topic 330): Simplifying the Measurement of Inventory”. The amendment’s purpose is to simplify the measurement, reduce costs and increase comparability for inventory measured using first-in, first-out (FIFO) or average cost methods. An entity should measure inventory within the scope of this ASU at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This accounting guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. This standard was adopted on January 1, 2017 and its adoption did not to have a material significant impact on the Company’s financial statement position and results of operations. In November 2015, the FASB issued ASU No. 2015-17 – “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The ASU’s purpose is to require deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position (Balance Sheet). This accounting guidance will become effective beginning in the first quarter of 2017. Early application is permitted. The Company adopted this pronouncement and such adoption did not have a material impact on the Company’s financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02 – “Leases (Topic 842)”, which requires leases to put most leases on their balance sheets by recognizing lease assets and lease liabilities for those leases classified as operating leases under previous guidance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on its financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force), to provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flow. The amendments should be applied using a retrospective transition method, and are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this statement is not expected to have an impact on the Company’s financial position or results of operations. In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014- 09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. As indicated below, the Company does not believe that the adoption of ASU No. 2014-09 will have a material impact on its revenue recognition as it pertains to current revenue streams. In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which is the same time as the amendments in ASU No. 2014-09, and early adoption is permitted. The Company does not expect this amendment to have a material impact on its financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Accounting Standards Codification (“ASC”) 718. The amendments are effective for fiscal years beginning after December 15, 2017, and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company does not expect this amendment to have a material impact on its financial statements. In July 2017, the FASB issued ASU No. 2017-11 – “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815)” I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II simply replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. This ASU is effective for public companies for the annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company does not expect this amendment to have a material impact on its financial statements. |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of: September 30, 2017 December 31, 2016 Raw materials $ 1,718,367 $ 1,085,519 Finished goods - 251,707 Reserve (29,218 ) (17,282 ) Total inventory $ 1,689,149 $ 1,319,944 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of: September 30, 2017 December 31, 2016 Computer equipment $ 818,155 $ 753,987 Furniture and office equipment 196,216 182,969 Machinery and equipment 925,495 925,495 Leasehold improvements 324,313 318,318 Total property and equipment 2,264,178 2,180,768 Less: Accumulated depreciation (1,570,972 ) (1,366,445 ) Property and equipment, net $ 693,206 $ 814,323 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Compensation and Related Costs | Accrued compensation and related costs consisted of the following as of: September 30, 2017 December 31, 2016 Salaries and wages payable $ 431,741 $ 93,832 401(k) contributions payable 16,971 25,729 Accrued paid time off 254,211 190,518 Profit sharing payable 406,811 307,503 Total accrued compensation and related costs $ 1,109,734 $ 617,582 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following as of: September 30, 2017 December 31, 2016 Manufacturer’s warranties $ 135,000 $ 122,000 Taxes payable 61,045 32,668 Other 31,643 40,000 Total accrued expenses and other current liabilities $ 227,688 $ 194,668 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Additional Compensation Expenses | During the three and nine months ended September 30, 2017 and 2016, the Company redeemed stock options from the CEO and COO that had previously been awarded. As a result, the Company recorded additional compensation expense as follows: Three Months Ending September 30, Nine Months Ending September 30, 2017 2016 2017 2016 Number of stock options redeemed 30,000 12,500 55,000 237,500 Redemption value $ 97,300 $ 37,500 $ 182,550 $ 505,224 Amount previously expensed (2010 and 2009) (32,000 ) (12,500 ) (67,000 ) (190,000 ) Additional compensation expense $ 65,300 $ 25,000 $ 115,550 $ 315,224 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | Future minimum lease payments under non-cancelable operating leases are as follows: Building Lease Schedule 2017 $ 87,651 2018 324,353 2019 105,542 Total $ 517,546 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The assumptions used for the periods ended September 30, 2017 and 2016, and the resulting estimates of weighted-average fair value per share of options granted during those periods, are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Volatility 96% to 98% 103% to 105% 96% to 101% 103% to 107% Risk-free interest rate 1-2% 1-2% 1-2% 1-2% Expected term 7 years 7 years 7 years 7 years |
Schedule of Stock Options Activity | The following table summarizes all compensation plan stock options as of September 30: September 30, 2017 September 30, 2016 Number of Weighted Number of Weighted Stock Options Exercise Price Stock Options Exercise Price Options outstanding, beginning of year 557,917 $ 1.60 833,967 $ 1.20 Granted 41,250 4.42 33,750 3.08 Redeemed (55,000 ) (1.28 ) (237,500 ) (0.82 ) Exercised - - (15,000 ) (1.10 ) Expired / terminated - - (57,717 ) (1.08 ) Options outstanding, end of period 544,167 $ 2.10 557,500 $ 2.46 Options exercisable, end of period 524,167 $ 2.08 537,500 $ 2.44 |
Organization and Business Ope23
Organization and Business Operations (Details Narrative) - $ / shares | Feb. 12, 2017 | Oct. 20, 2016 | Oct. 01, 2016 | Sep. 30, 2017 | Dec. 31, 2016 |
Number of common stock shares converted | 7,927,688 | ||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Reverse stock split | 1 for 2 reverse stock split | 1 for 10 reverse stock split | |||
Common Stock [Member] | |||||
Common stock, shares authorized | 62,500,000 | 60,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Class A Common Stock [Member] | |||||
Common stock, shares authorized | 2,500,000 | 2,500,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Class B Common Stock [Member] | |||||
Common stock, shares authorized | 7,500,000 | 7,500,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,718,367 | $ 1,085,519 |
Finished goods | 251,707 | |
Reserve | (29,218) | (17,282) |
Total inventory | $ 1,689,149 | $ 1,319,944 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 65,570 | $ 64,591 | $ 204,527 | $ 160,768 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Total property and equipment | $ 2,264,178 | $ 2,180,768 |
Less: Accumulated depreciation | (1,570,972) | (1,366,445) |
Property and equipment, net | 693,206 | 814,323 |
Computer Equipment [Member] | ||
Total property and equipment | 818,155 | 753,987 |
Furniture and Office Equipment [Member] | ||
Total property and equipment | 196,216 | 182,969 |
Machinery and Equipment [Member] | ||
Total property and equipment | 925,495 | 925,495 |
Leasehold Improvements [Member] | ||
Total property and equipment | $ 324,313 | $ 318,318 |
Accrued Expenses (Details Narra
Accrued Expenses (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Payables and Accruals [Abstract] | ||||
Percentage of annual net profit used | 15.00% | 15.00% | ||
Profit sharing expense | $ 113,976 | $ (3,379) | $ 403,709 | $ 325,678 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Compensation and Related Costs (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Salaries and wages payable | $ 431,741 | $ 93,832 |
401(k) contributions payable | 16,971 | 25,729 |
Accrued paid time off | 254,211 | 190,518 |
Profit sharing payable | 406,811 | 307,503 |
Total accrued compensation and related costs | $ 1,109,734 | $ 617,582 |
Accrued Expenses - Schedule o29
Accrued Expenses - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Manufacturer's warranties | $ 135,000 | $ 122,000 |
Taxes payable | 61,045 | 32,668 |
Other | 31,643 | 40,000 |
Total accrued expenses and other current liabilities | $ 227,688 | $ 194,668 |
Collaboration Agreement (Detail
Collaboration Agreement (Details Narrative) - USD ($) | Jun. 01, 2017 | Oct. 25, 2016 | Apr. 14, 2015 | Jan. 16, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2015 |
Ownership percentage | 8.90% | ||||||
Warrant exercise price per share | $ 2.72 | ||||||
Number of option issued to purchase shares | 41,250 | 33,750 | |||||
Options exercisable weighted average exercise price | $ 2.08 | $ 2.44 | |||||
Cumulative license fees | $ 245,082 | $ 47,829 | |||||
Volatility rate | 91.50% | ||||||
Risk free rate | 1.76% | ||||||
Expected term | 5 years | ||||||
Fair value per share | $ 4.28 | ||||||
Fair value, investment | $ 1,516,246 | ||||||
Maximum [Member] | |||||||
Number of warrants to purchase shares of common stock | 3,353,495 | ||||||
Conditional Warrants [Member] | |||||||
Warrant exercise price per share | $ 2.72 | $ 2.72 | |||||
Number of warrants to purchase shares of common stock | 1,676,747 | ||||||
Number of warrants exercised, value | 335,349 | ||||||
Warrants issued to purchase capital stock, percent | 5.00% | 5.00% | |||||
Cumulative license fees | $ 2,000,000 | $ 2,000,000 | |||||
Warrant term | 5 years | 5 years | |||||
Conditional Warrants [Member] | Date of Co Venture Agreement [Member] | |||||||
Number of warrants to purchase shares of common stock | 459,691 | ||||||
Warrants issued to purchase capital stock, percent | 5.00% | ||||||
Conditional Warrants [Member] | Agreement Date [Member] | |||||||
Number of warrants to purchase shares of common stock | 459,691 | ||||||
Warrants issued to purchase capital stock, percent | 5.00% | ||||||
Modern Round [Member] | |||||||
Number of option issued to purchase shares | 125,000 | ||||||
Options exercisable weighted average exercise price | $ 0.50 | ||||||
Co-Venture Agreement [Member] | |||||||
Number of capital units received | 1,365,789 | ||||||
Ownership percentage | 5.00% | 9.30% | |||||
Fair value per unit | $ 0.10 | ||||||
Warrant exercise price per share | $ 0.25 | ||||||
Merger Agreement [Member] | |||||||
Number of option issued to purchase shares | 153,459 | ||||||
Options exercisable weighted average exercise price | $ 0.41 | ||||||
Number of issued and outstanding units converted into common stock | 1.2277 | ||||||
Number of common shares held | $ 1,676,748 | ||||||
Merger Agreement [Member] | Conditional Warrants [Member] | |||||||
Warrant exercise price per share | $ 0.20 | ||||||
Number of warrants to purchase shares of common stock | 1,676,747 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Oct. 25, 2016 | Jan. 16, 2015 | |
Number of stock options issued to purchase common stock | 41,250 | 33,750 | |||||
Weighted average purchase price of stock options issued | $ 4.42 | $ 3.80 | |||||
Options exercisable term | 7 years | ||||||
Common stock shares owned | 7,906,835 | 7,906,835 | 7,927,774 | ||||
Ownership percentage | 8.90% | ||||||
License fees from related party | $ 245,082 | $ 47,829 | |||||
Co-Venture Agreement [Member] | |||||||
Common stock shares owned | 3,353,495 | 3,353,495 | |||||
Ownership percentage | 9.30% | 9.30% | 5.00% | ||||
Co-Venture Agreement [Member] | Modern Round Entertainment Corporation [Member] | |||||||
License fees from related party | $ 245,082 | $ 47,829 | |||||
CEO, COO and Members of Board of Directors [Member] | |||||||
Number of stock options issued to purchase common stock | 13,750 | 11,250 | 41,250 | 33,750 | |||
Weighted average purchase price of stock options issued | $ 3.76 | $ 4.20 | $ 4.42 | $ 3.08 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Additional Compensation Expenses (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |||||
Number of stock options redeemed | 30,000 | 12,500 | 55,000 | 237,500 | |
Redemption value | $ 97,300 | $ 37,500 | $ 182,550 | $ 505,224 | |
Amount previously expensed (2010 and 2009) | (32,000) | (12,500) | (67,000) | (190,000) | |
Additional compensation expense | $ 21,500 | $ 65,300 | $ 25,000 | $ 115,550 | $ 315,224 |
Commitments and Contingencies33
Commitments and Contingencies (Details Narrative) - USD ($) | Nov. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Deferred rent liability | $ 87,861 | $ 87,861 | $ 122,126 | |||
Rent expense | $ 92,910 | $ 86,578 | $ 229,198 | $ 146,564 | ||
Settlement Agreement [Member] | ||||||
Payments for outstanding lawsuit | $ 100,300 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) | Sep. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 87,651 |
2,018 | 324,353 |
2,019 | 105,542 |
Total | $ 517,546 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Aug. 17, 2017 | Aug. 16, 2017 | Jul. 28, 2017 | Jul. 02, 2017 | Oct. 25, 2016 | Apr. 14, 2015 | Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | Aug. 23, 2017 | Jun. 01, 2017 | Jan. 16, 2015 |
Shares repurchased during the period held in treasury cost method | $ (96,633) | ||||||||||||||
Number of stock options issued to purchase common stock | 41,250 | 33,750 | |||||||||||||
Weighted average purchase price of stock options issued | $ 4.42 | $ 3.80 | |||||||||||||
Options exercisable term | 7 years | ||||||||||||||
Number of stock options redeemed shares | 30,000 | 12,500 | 55,000 | 237,500 | |||||||||||
Number of stock options redeemed value | $ 97,300 | $ 37,500 | $ 182,550 | $ 505,224 | |||||||||||
Amount previously expensed | (32,000) | (12,500) | (67,000) | (190,000) | |||||||||||
Additional compensation cost (Stock compensation expense) | $ 21,500 | 65,300 | 25,000 | 115,550 | 315,224 | ||||||||||
Cumulative license fees | 245,082 | 47,829 | |||||||||||||
Warrant exercise price per share | $ 2.72 | ||||||||||||||
Warrants purchase price | $ 773,495 | ||||||||||||||
Minimum royalty due | 118,427 | ||||||||||||||
Royalty payment | $ 655,068 | ||||||||||||||
Modern Round [Member] | |||||||||||||||
Number of stock options issued to purchase common stock | 125,000 | ||||||||||||||
Warrant Buyout Agreement [Member] | Common Stock [Member] | |||||||||||||||
Warrants purchase price | $ 773,495 | ||||||||||||||
Co-Venture Agreement [Member] | |||||||||||||||
Warrant exercise price per share | $ 0.25 | ||||||||||||||
Minimum royalty due | $ 118,427 | ||||||||||||||
Co-Venture Agreement [Member] | Modern Round [Member] | |||||||||||||||
Minimum royalty due | $ 560,000 | ||||||||||||||
Royalty due date | Jun. 30, 2018 | ||||||||||||||
2017 Equity Incentive Plan [Member] | |||||||||||||||
Additional compensation cost (Stock compensation expense) | $ 42,376 | $ 30,000 | $ 160,351 | $ 93,990 | |||||||||||
Number of common stock capital shares reserved for future issuance | 1,187,500 | ||||||||||||||
Percentage of common stock shares issued and outstanding | 3.00% | ||||||||||||||
Number of Non-vested stock options | 20,000 | 20,000 | |||||||||||||
2017 Equity Incentive Plan [Member] | October 2017 [Member] | |||||||||||||||
Number of non-vested stock options vested equally | 10,000 | ||||||||||||||
2017 Equity Incentive Plan [Member] | October 2018 [Member] | |||||||||||||||
Number of non-vested stock options vested equally | 10,000 | ||||||||||||||
Treasury Stock [Member] | |||||||||||||||
Number of shares repurchased | 20,939 | ||||||||||||||
Number of shares repurchased, cost | $ 96,634 | ||||||||||||||
Stock Options [Member] | |||||||||||||||
Number of stock options issued to purchase common stock | 13,750 | 11,250 | 41,250 | 33,750 | |||||||||||
Weighted average purchase price of stock options issued | $ 3.76 | $ 4.20 | $ 4.42 | $ 3.08 | |||||||||||
Conditional Warrants [Member] | |||||||||||||||
Number of warrants granted | 459,691 | ||||||||||||||
Warrants issued to purchase capital stock, percent | 5.00% | 5.00% | |||||||||||||
Cumulative license fees | $ 2,000,000 | $ 2,000,000 | |||||||||||||
Warrant term | 5 years | 5 years | |||||||||||||
Warrant exercise price per share | $ 2.72 | $ 2.72 | $ 2.72 | ||||||||||||
Number of warrants entitle to receive the shares of common stock | 1,676,747 | ||||||||||||||
Number of warrants exercised, value | 335,349 | ||||||||||||||
Tranche 1 Warrants [Member] | |||||||||||||||
Warrant exercise price per share | $ 2.72 | ||||||||||||||
Number of warrants entitle to receive the shares of common stock | 172,912 | ||||||||||||||
Warrants held during the period | 778,243 | ||||||||||||||
Warrants fair value | $ 4.36 | ||||||||||||||
Tranche 1 Warrants [Member] | Warrant Buyout Agreement [Member] | |||||||||||||||
Shares issued price per share | $ 3.924 | ||||||||||||||
Number of warrants exercised, value | 678,505 | ||||||||||||||
Tranche 2 Warrants [Member] | Warrant Buyout Agreement [Member] | |||||||||||||||
Number of warrants entitle to receive the shares of common stock | 459,691 | ||||||||||||||
Warrants held during the period | 728,243 | ||||||||||||||
Shares issued price per share | $ 3.924 | ||||||||||||||
Number of warrants exercised, value | 94,990 | ||||||||||||||
Number of warrants to exercise common stock | 48,415 | ||||||||||||||
Tranche 2 Warrants [Member] | Warrant Buyout Agreement [Member] | Common Stock [Member] | |||||||||||||||
Number of warrants to exercise common stock | 24,208 | ||||||||||||||
Repurchase Program [Member] | |||||||||||||||
Shares repurchased during the period held in treasury | 17,489 | ||||||||||||||
Shares repurchased during the period held in treasury cost method | $ 82,834 | ||||||||||||||
Board of Directors [Member] | |||||||||||||||
Common stock shares authorized to repurchase | 1,000,000 | ||||||||||||||
Number of shares repurchased | 20,939 | ||||||||||||||
Number of shares repurchased, cost | $ 96,633 | ||||||||||||||
Number of stock options issued to purchase common stock | 13,750 | ||||||||||||||
Weighted average purchase price of stock options issued | $ 3.76 | ||||||||||||||
Options exercisable term | 7 years | ||||||||||||||
Chief Executive Officer and Chief Operating Officer [Member] | |||||||||||||||
Number of stock options redeemed shares | 12,500 | ||||||||||||||
Number of stock options redeemed value | $ 34,000 | ||||||||||||||
Amount previously expensed | $ 12,500 | ||||||||||||||
Chief Executive Officer and Chief Operating Officer [Member] | Stock Options [Member] | |||||||||||||||
Number of stock options redeemed shares | 12,500 | ||||||||||||||
Number of stock options redeemed value | $ 50,000 | ||||||||||||||
Amount previously expensed | 12,500 | ||||||||||||||
Additional compensation cost (Stock compensation expense) | $ 37,500 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Expected term | 7 years | 7 years | 7 years | 7 years |
Minimum [Member] | ||||
Volatility | 96.00% | 103.00% | 96.00% | 103.00% |
Risk-free interest rate | 1.00% | 1.00% | 1.00% | 1.00% |
Maximum [Member] | ||||
Volatility | 98.00% | 105.00% | 101.00% | 107.00% |
Risk-free interest rate | 2.00% | 2.00% | 2.00% | 2.00% |
Stockholders' Equity - Schedu37
Stockholders' Equity - Schedule of Stock Options Activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Equity [Abstract] | ||
Options outstanding, beginning of year | 557,917 | 833,967 |
Number of options, Granted / Vested | 41,250 | 33,750 |
Number of options, Redeemed | (55,000) | (237,500) |
Number of options, Exercised | (15,000) | |
Number of options, Expired / terminated | (57,717) | |
Number of options outstanding, end of year | 544,167 | 557,500 |
Number of options exercisable, end of year | 524,167 | 557,500 |
Weighted Exercise Price outstanding, beginning of year | $ 1.60 | $ 1.20 |
Weighted average exercise price, Granted / Vested | 4.42 | 3.80 |
Weighted average exercise price, Redeemed | 1.28 | 0.82 |
Weighted average exercise price, Exercised | 1.10 | |
Weighted average exercise price, Expired / terminated | 1.08 | |
Weighted average exercise price outstanding, end of year | 2.10 | 2.46 |
Weighted average exercise price exercisable, end of year | $ 2.08 | $ 2.44 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 29, 2018 | Feb. 12, 2018 | Dec. 01, 2017 | Nov. 30, 2017 | Nov. 30, 2017 | Oct. 10, 2017 | Jul. 02, 2017 | Feb. 12, 2017 | Oct. 20, 2016 | Dec. 31, 2017 | Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Number of expiring stock options redeemed | 30,000 | 12,500 | 55,000 | 237,500 | ||||||||||||
Number of expiring stock options redeemed for cash | $ 97,300 | $ 37,500 | $ 182,550 | $ 505,224 | ||||||||||||
Amount previously expensed | 32,000 | 12,500 | 67,000 | 190,000 | ||||||||||||
Stock compensation expense | $ 21,500 | $ 65,300 | $ 25,000 | $ 115,550 | $ 315,224 | |||||||||||
Reverse stock split | 1 for 2 reverse stock split | 1 for 10 reverse stock split | ||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Chief Executive Officer and Chief Operating Officer [Member] | ||||||||||||||||
Number of expiring stock options redeemed | 12,500 | |||||||||||||||
Number of expiring stock options redeemed for cash | $ 34,000 | |||||||||||||||
Amount previously expensed | $ (12,500) | |||||||||||||||
Settlement Agreement [Member] | ||||||||||||||||
Payments for outstanding lawsuit | $ 100,300 | |||||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Common stock, par value | $ 0.0001 | |||||||||||||||
Shares issued price per share | $ 7 | |||||||||||||||
Subsequent Event [Member] | Chief Executive Officer and Chief Operating Officer [Member] | ||||||||||||||||
Number of expiring stock options redeemed | 12,500 | |||||||||||||||
Number of expiring stock options redeemed for cash | $ 62,000 | |||||||||||||||
Amount previously expensed | $ 17,500 | |||||||||||||||
Stock compensation expense | $ 44,500 | |||||||||||||||
Subsequent Event [Member] | Board of Directors [Member] | ||||||||||||||||
Reverse stock split | 1-for-2 reverse stock split | |||||||||||||||
Common stock, par value | $ 0.0001 | |||||||||||||||
Subsequent Event [Member] | Minimum [Member] | ||||||||||||||||
Number of common stock shares issued during the period | 714,286 | 5,000,000 | ||||||||||||||
Common stock shares issued during the period, value | $ 5,000,000 | |||||||||||||||
Subsequent Event [Member] | Maximum [Member] | ||||||||||||||||
Number of common stock shares issued during the period | 1,428,571 | 10,000,000 | ||||||||||||||
Common stock shares issued during the period, value | $ 10,000,000 | |||||||||||||||
Subsequent Event [Member] | Settlement Agreement [Member] | ||||||||||||||||
Payments for outstanding lawsuit | $ 106,030 |