Vertical Computer Systems (VCSY) 10-Q 22 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 22, 2017
Document And Entity Information
Entity Registrant Name	VERTICAL COMPUTER SYSTEMS INC
Entity Central Index Key	1,099,509
Document Type	10-Q
Trading Symbol	VCSY
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,133,080,201
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,017

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash	$ 81,261	$ 190,448
Accounts receivable, net of allowance for bad debts of $89,025 and $139,705	432,435	367,278
Prepaid expenses and other current assets	44,337	10,355
Total current assets	558,033	568,081
Property and equipment, net of accumulated depreciation of $1,044,458 and $1,043,397	9,517	5,097
Intangible assets, net of accumulated amortization of $319,533 and $319,513	6,690	6,690
Deposits and other assets	8,000	8,064
Total assets	582,240	587,932
Current liabilities:
Accounts payable and accrued liabilities	12,663,211	12,075,298
Accounts payable to related parties	137,532	139,546
Deferred revenue	1,873,357	1,794,264
Derivative liabilities	685,221	1,014,192
Convertible debentures, net of unamortized discounts of $127,255 and $354,785	1,117,745	899,428
Notes payable	4,999,049	4,953,717
Notes payable and convertible debt to related parties	308,242	308,242
Total current liabilities	21,784,357	21,184,687
Total liabilities	21,784,357	21,184,687
Convertible Cumulative Preferred stock	10,268,523	10,268,523
Stockholders' Deficit
Common Stock; $.00001 par value; 2,000,000,000 shares authorized; 1,172,114,528 issued and 1,132,114,528 outstanding as of March 31, 2017 and 1,167,841,439 issued and 1,127,841,439 outstanding as of December 31, 2016	11,721	11,679
Treasury stock: 40,000,000 as of March 31, 2017 and December 31, 2016	(400)	(400)
Additional paid-in capital	23,843,378	23,672,153
Accumulated deficit	(55,746,082)	(55,017,675)
Accumulated other comprehensive income - foreign currency translation	401,007	424,996
Total Vertical Computer Systems, Inc. stockholders' deficit	(31,490,376)	(30,909,247)
Non-controlling interest	19,736	43,969
Total stockholders' deficit	(31,470,640)	(30,865,278)
Total liabilities and stockholders' deficit	582,240	587,932
Series A Preferred Stock [Member]
Current liabilities:
Convertible Cumulative Preferred stock	10,066,499	10,066,499
Series B Preferred Stock [Member]
Current liabilities:
Convertible Cumulative Preferred stock	246	246
Series C Preferred Stock [Member]
Current liabilities:
Convertible Cumulative Preferred stock	200,926	200,926
Series D Preferred Stock [Member]
Current liabilities:
Convertible Cumulative Preferred stock	$ 852	$ 852

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Allowance for bad debts	$ 89,025	$ 139,705
Accumulated depreciation, property and equipment	1,044,458	1,043,397
Accumulated amortization	319,533	319,513
Unamortized discounts	$ 127,255	$ 354,785
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, authorized	2,000,000,000	2,000,000,000
Common stock, issued	1,172,114,528	1,167,841,439
Common stock, outstanding	1,132,114,528	1,127,841,439
Treasury stock	40,000,000	40,000,000
Series A Preferred Stock [Member]
Preferred stock, dividend rate (as a percent)	4.00%	4.00%
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	250,000	250,000
Preferred stock, issued	51,500	51,500
Preferred stock, outstanding	51,500	51,500
Series B Preferred Stock [Member]
Preferred stock, dividend rate (as a percent)	10.00%	10.00%
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	375,000	375,000
Preferred stock, issued	7,200	7,200
Preferred stock, outstanding	7,200	7,200
Series C Preferred Stock [Member]
Preferred stock, dividend rate (as a percent)	4.00%	4.00%
Preferred stock, par value (in dollars per share)	$ 100	$ 100
Preferred stock, authorized	200,000	200,000
Preferred stock, issued	50,000	50,000
Preferred stock, outstanding	50,000	50,000
Series D Preferred Stock [Member]
Preferred stock, dividend rate (as a percent)	15.00%	15.00%
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized	300,000	300,000
Preferred stock, issued	25,000	25,000
Preferred stock, outstanding	25,000	25,000

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues
Licensing and software		$ 12,000
Software maintenance	807,512	807,795
Cloud-based offering	59,703	43,283
Consulting services	72,771	82,054
Other	2,757	7,811
Total revenues	942,743	952,943
Cost of revenues	(373,552)	(388,156)
Gross profit	569,191	564,787
Operating expenses:
Selling, general and administrative expenses	1,082,185	667,816
Depreciation and amortization	325	108
Bad debt expense (recovery)	(51,022)	6,138
Total operating expenses	1,031,488	674,062
Operating loss	(462,297)	(109,275)
Other Income (Expense):
Gain on derivative liabilities	339,467	28,712
Forbearance fees	(3,000)	(11,100)
Interest income	15	10
Interest expense	(558,011)	(376,967)
Net loss before non-controlling interest and income tax expense	(683,826)	(468,620)
Income tax expense	35,910	75,560
Net loss before non-controlling interest	(719,736)	(544,180)
Net loss attributable to non-controlling interest	(8,671)	(9,148)
Net loss attributable to Vertical Computer Systems, Inc.	(728,407)	(553,328)
Dividend applicable to preferred stock	(151,472)	(147,000)
Net loss applicable to common stockholders	$ (879,879)	$ (700,328)
Basic and diluted loss per share (in dollars per share)	$ 0	$ 0
Basic and diluted weighted average of common shares outstanding (in shares)	1,133,430,551	1,085,680,776
Comprehensive loss
Net loss	$ (719,736)	$ (544,180)
Translation adjustments	(23,989)	(117,481)
Comprehensive loss	(743,725)	(661,661)
Comprehensive income attributable to non-controlling interest	(8,671)	(9,148)
Comprehensive loss attributable to Vertical Computer Systems, Inc.	$ (752,396)	$ (670,809)

Consolidated Statement of Stock

Consolidated Statement of Stockholders' Deficit (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($)	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Other Comprehensive Interest [Member]	Non-controlling Interest [Member]	Total
Balances, in beginning at Dec. 31, 2016	$ 11,679	$ (400)	$ 23,672,153	$ (55,017,675)	$ 424,996	$ 43,969	$ (30,865,278)
Balances, in beginning (in shares) at Dec. 31, 2016	1,167,841,439	(40,000,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Amortization of restricted stock awards			35,167				35,167
Shares issued for vested restricted stock awards	$ 5		(5)
Shares issued for vested restricted stock awards (in shares)	550,000
Shares issued for conversion of convertible debentures	$ 7		10,102				10,109
Shares issued for conversion of convertible debentures (in shares)	723,089
Settlement of derivative liability upon conversion of debt			7,245				7,245
Shares issued to an employee	$ 30		71,970				72,000
Shares issued to an employee (in shares)	3,000,000
Issuance of subsidiary shares for services			46,746			(404)	46,342
Dividends declared but unpaid to non-controlling interest holders						(32,500)
Other comprehensive income translation adjustment					(23,989)		(23,989)
Net loss				(728,407)		8,671	(719,736)
Balances, ending at Mar. 31, 2017	$ 11,721	$ (400)	$ 23,843,378	$ (55,746,082)	$ 401,007	$ 19,736	$ (31,470,640)
Balances, ending (in shares) at Mar. 31, 2017	1,172,114,528	(40,000,000)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net loss	$ (719,736)	$ (544,180)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	325	108
Bad debt expense (recovery)	(51,022)	6,138
Amortization of debt discounts	245,271	90,913
Gain on derivative liabilities	(339,467)	(28,712)
Common stock issued to an employee	72,000
Common stock issued for consulting fees		44,000
Cancellation of common shares issued for loan forbearance		(28,900)
Forfeited restricted stock award compensation		(1,145)
Amortization of restricted stock awards	35,167	12,975
Amortization of subsidiary restricted stock awards	46,342
Changes in operating assets and liabilities:
Accounts receivable	(12,656)	258,520
Prepaid expenses and other assets	(34,013)	754
Accounts payable to related parties	(2,014)	14,992
Accounts payable and accrued liabilities	554,627	338,114
Deferred revenue	70,168	72,749
Net cash provided by (used in) operating activities	(135,008)	236,326
Cash flow from investing activities:
Software development		(143,927)
Purchase of equipment	(4,745)	(3,853)
Net cash used in investing activities	(4,745)	(147,780)
Cash flows from financing activities:
Borrowings on notes payable	50,000
Payments of notes payable	(4,716)	(62,190)
Dividends paid by subsidiary to non-controlling interest		(32,500)
Net cash provided by (used in) financing activities	45,284	(94,690)
Effect of changes in exchange rates on cash	(14,718)	(23,411)
Net change in cash	(109,187)	(29,555)
Cash, beginning of period	190,448	37,141
Cash, end of period	81,261	7,586
Supplemental disclosures of cash flow information:
Cash paid for interest	22,747	107,200
Cash paid for income taxes
Non-cash investing and financing activities:
Common shares issued for vested restricted stock awards	5	5
Reclassification of warrants as derivative liabilities		52,462
Derivative liability for conversion of convertible debt	7,245
Common shares issued for conversion of notes and accounts payable	10,109
Debt discounts due to derivative liabilities	17,741	302,473
Dividend declared but unpaid to non-controlling interest holders	$ 32,500

Organization, Basis of Presenta

Organization, Basis of Presentation and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization, Basis of Presentation and Significant Accounting Policies	Note 1. Organization, Basis of Presentation and Significant Accounting Policies The accompanying unaudited interim consolidated financial statements of Vertical Computer Systems, Inc. (‘we”, “our”, the “Company” or “Vertical”) have been prepared in accordance with accounting principles generally accepted in the United States of America and rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Vertical’s annual report on Form 10-K for the year ended December 31, 2016. The consolidated financial statements include the accounts of the Company and its subsidiaries (collectively, “our”, “we”, the “Company” or “VCSY”, as applicable). Vertical’s subsidiaries which currently maintain daily business operations are NOW Solutions, a 75% owned subsidiary, and SnAPPnet, Inc. (“SnAPPnet”), an 80% owned subsidiary of Vertical. Vertical’s subsidiaries which have minimal operations are Vertical do Brasil, Taladin, Inc. (“Taladin”), and Vertical Healthcare Solutions, Inc. (“VHS”), each of which a wholly-owned subsidiary of Vertical, as well as Priority Time Systems, Inc. (“Priority Time”) a 70% owned subsidiary, Ploinks, Inc. (“Ploinks”), a 91% owned subsidiary and Government Internet Systems, Inc. (“GIS”), an 84.5% owned subsidiary. Vertical’s subsidiaries which are inactive include EnFacet, Inc. (“ENF”), Globalfare.com, Inc. (“GFI”), Pointmail.com, Inc. and Vertical Internet Solutions, Inc. (“VIS”), each of which is a wholly-owned subsidiary of Vertical. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the 2016 annual report on Form 10-K have been omitted. Earnings per share Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of the Company’s common stock outstanding during the period. “Diluted earnings per share” reflects the potential dilution that could occur if our share-based awards and convertible securities were exercised or converted into common stock. The dilutive effect of our share-based awards is computed using the treasury stock method, which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. The dilutive effect of our convertible preferred stock and convertible debentures is computed using the if-converted method, which assumes conversion at the beginning of the year. For the three months ended March 31, 2017 and 2016, common stock equivalents related to the convertible debt, preferred stock and stock derivative liabilities were not included in the calculation of the diluted earnings per share as their effect would be anti-dilutive. Capitalized Software Costs Software costs incurred internally in creating computer software products are expensed until technological feasibility has been established upon completion of a detailed program design. Thereafter, all software development costs are capitalized until the point that the product is ready for sale, and are subsequently reported at the lower of unamortized cost or net realizable value. The Company considers annual amortization of capitalized software costs based on the ratio of current year revenues by product to the total estimated revenues by the product, subject to an annual minimum based on straight-line amortization over the product’s estimated economic useful life, not to exceed five years. The Company periodically reviews capitalized software costs for impairment where the fair value is less than the carrying value. During the three months ended March 31, 2017 and 2016, the Company capitalized an aggregate of $0 and $143,927 respectively, related to software development. Recently Issued Accounting Pronouncements The Company does not expect the adoption of any recently issued accounting pronouncements to have a material impact on the Company’s financial position, operations or cash flows.

Going Concern

Going Concern	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Going Concern	Note 2. Going Concern The accompanying unaudited consolidated financial statements for the three months ended March 31, 2017 and 2016 have been prepared assuming that we will continue as a going concern, and accordingly realize our assets and satisfy our liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not purport to represent realizable or settlement values. As of March 31, 2017, we had negative working capital of approximately $21.2 million and defaulted on substantially all of our debt obligations. These conditions raise substantial doubt about our ability to continue as a going concern. Our management is continuing its efforts to attempt to secure funds through equity and/or debt instruments for our operations, expansion and possible acquisitions, mergers, joint ventures, and/or other business combinations. The Company will require additional funds to pay down its liabilities, as well as finance its expansion plans consistent with anticipated changes in operations and infrastructure. However, there can be no assurance that the Company will be able to secure additional funds and that if such funds are available, whether the terms or conditions would be acceptable to the Company and whether the Company will be able to turn into a profitable position and generate positive operating cash flow. The consolidated financial statements contain no adjustment for the outcome of this uncertainty.

Notes Payable

Notes Payable	3 Months Ended
	Mar. 31, 2017
Notes Payable [Abstract]
Notes Payable	Note 3. Notes Payable The following table reflects our third party debt activity, including our convertible debt, for the three months ended March 31, 2017: December 31, 2016 $ 5,853,145 Borrowings from third parties 50,000 Repayments of third party notes (4,716 ) Conversion of convertible debt principal to common stock (9,213 ) Debt discounts due valuation of derivative liabilities (17,741 ) Amortization of debt discounts 245,271 Effect of currency exchange 48 March 31, 2017 $ 6,116,794 During the three months ended March 31, 2017, $10,109 of principal, interest and legal fees under a convertible note issued in the principal amount of $80,000 was converted into 723,089 common shares. For additional transactions after March 31, 2017 concerning the amendment of the $80,000 convertible note, conversion of the outstanding balance of that note into common shares and the extension of the due date of other convertible debentures, please see “Subsequent Events” in Note 9. Lakeshore Financing On January 9, 2013, NOW Solutions completed a financing transaction in the aggregate amount of $1,759,150, which amount was utilized to pay off existing indebtedness of the Company and NOW Solutions to Tara Financial Services and Robert Farias, a former employee of the Company, and all security interests granted to Tara Financial Services and Mr. Farias were cancelled. In connection with this financing, the Company and several of its subsidiaries entered into a loan agreement (the “ Loan Agreement Lakeshore Lakeshore Note The Lakeshore Note is secured by the assets of the Company’s subsidiaries, NOW Solutions, Priority Time, SnAPPnet, Inc. (“ SnAPPnet As additional consideration for the loan, the Company granted a 5% interest in Net Claim Proceeds (less any attorney’s fees and direct costs) from any litigation or settlement proceeds related to the SiteFlash™ technology to Lakeshore which was increased to 8% under an amendment to the Loan Agreement in 2013. In addition, until the Note is paid in full, NOW Solutions agreed to pay a Lakeshore royalty of 6% of its annual gross revenues in excess of $5 million dollars up to a maximum of $1,759,150. Management has estimated the fair value of the royalty to be nominal as of its issuance date and no royalty was owed as of September 30, 2015 or December 31, 2014. In December 2014, the Company and Lakeshore entered into an amendment of the Lakeshore Note and the Loan Agreement. Under the terms of the amendment, NOW Solutions agreed to make $2,500 weekly advance payments to Lakeshore to be applied to the 25% dividend of NOW Solutions’ net income after taxes in connection with Lakeshore’s 25% minority ownership interest in NOW Solutions. Within 10 business days after the Company files its periodic reports with the SEC, NOW Solutions will also make quarterly payment advances to Lakeshore based on 60% of Lakeshore’s 25% share of NOW Solutions estimated quarterly net income after taxes, less any weekly payment advances received by Lakeshore during the then-applicable quarter and the weekly $2,500 payments shall be increased or decreased based only upon any increases or decreases of maintenance and cloud-based offering fees during the then-completed quarter (but will not decrease below a minimum of $2,500 per week). NOW Solutions shall pay Lakeshore the balance of Lakeshore’s 25% of NOW’s yearly net income after taxes (less any advances) within 10 business days after the Company files it annual 10-K report with the SEC and any payments in excess of Lakeshore’s 25% of NOW yearly profit shall be credited towards future weekly advance payments. The Company also agreed to pay attorney fees of $40,000 and paid fees of $80,000 to a former consultant and employee of the Company who is a member of Lakeshore. In consideration of the extension to cure the default under the Lakeshore Note and the Loan Agreement, the Company transferred a 20% ownership interest in two subsidiaries to Lakeshore: Priority Time Systems, Inc., and in SnAPPnet, Inc.. This resulted in an additional non-controlling interest recognized in the equity of the Company of $391,920 and $99,210 for Priority Time Systems, Inc. and SnAPPnet, Inc., respectively, during 2014. The Company had an option to buy back Lakeshore’s ownership interest in NOW Solutions, Priority Time and SnAPPnet, Inc. (which expired on January 31, 2015). In July 2015, we entered into an agreement with Lakeshore to amend the terms of the Loan Agreement and the Lakeshore Note. Under the terms of the amendment, the Company issued 13,000,000 common shares with the Rule 144 restrictive legend, resulting in a forbearance loss of $455,000 and Ploinks agreed to issue 3,000,000 common shares of its stock to Lakeshore. The fair value of the Ploinks shares was determined to be nominal. Also in July 2015, the Company further amended the Lakeshore Note and the Loan Agreement with Lakeshore. Pursuant to this Agreement, the Company issued 2,000,000 shares of its common stock with the Rule 144 restrictive legend resulting in a forbearance loss of $54,200 and paid $15,000 to Lakeshore as forbearance fees. In August 2015, we entered into an agreement with Lakeshore to amend the terms of the Loan Agreement and the Lakeshore Note. Under the terms of the amendment, the Company issued 7,000,000 shares of its common stock with the Rule 144 restrictive legend resulting in a forbearance loss of $175,700 and Ploinks agreed to issue 2,000,000 common shares of its stock to Lakeshore. The fair value of the Ploinks shares was determined to be nominal. Under the August 2015 agreement, the Company also agreed to make a $500,000 payment for amounts due to Lakeshore under the Lakeshore Note and the Loan Agreement. In the event that the Company did not make the Lakeshore $500,000 payment on or before August 21, 2015, then Lakeshore in lieu of the $500,000 payment, would obtain a purchase option (the “2015 Purchase Option”) to purchase an additional 250 shares of NOW Solutions common stock for a total purchase price of $950,000. In addition, since the Company did not make the $500,000 payment to Lakeshore on or before August 21, 2015, no further payment on the Note was due until January 1, 2016 at which time the Note plus all accrued interest were recalculated and the Note was re-amortized under the same interest rate and terms as the Note and the maturity date of the Note was extended 10 years from January 1, 2016. The Lakeshore note is in default and the Company is currently evaluating solutions to resolve all issues with Lakeshore. During the three months ended March 31, 2017, the Company, through its subsidiary, accrued dividends to Lakeshore of $32,500.

Derivative Liabilities and Fair

Derivative Liabilities and Fair Value Measurements	3 Months Ended
	Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Liabilities and Fair Value Measurements	Note 4. Derivative Liabilities and Fair Value Measurements Derivative liabilities As of March 31, 2017, the Company has convertible notes and common stock warrants associated with the notes that qualify as derivative liabilities under ASC 815. As of March 31, 2017, the aggregate fair value of the outstanding derivative liabilities was $685,221. For the three months ended March 31, 2017, the net gain on the change in fair value of derivative liabilities was $339,467. The Company estimated the fair value of the derivative liabilities using the Black-Scholes option pricing model and the following key assumptions during 2017: 2017 Expected dividends 0% Expected terms (years) 0.10 - 2.71 Volatility 84% - 118% Risk-free rate 0.74% - 1.27% Fair value measurements FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument. The following table provides a summary of the fair value of our derivative liabilities as of March 31, 2017 and December 31, 2016: Fair value measurements on a recurring basis Level 1 Level 2 Level 3 As of March 31, 2017: Liabilities Derivative liabilities – convertible debt $ — $ — $ 685,221 As of December 31, 2016: Liabilities Derivatives $ — $ — $ 1,014,192 The estimated fair value of short-term financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities and deferred revenue approximates their carrying value due to their short-term nature. The Company uses Level 3 inputs to estimate the fair value of its derivative liabilities. The below table presents the change in the fair value of the derivative liabilities during the three months ended March 31, 2017: Fair value as of December 31, 2016 $ 1,014,192 Additions recognized as debt discounts 17,741 Reduction due to settlement upon conversion (7,245 ) Gain on change in fair value of derivatives (339,467 ) Fair value as of March 31, 2017 $ 685,221

Common and Preferred Stock Tran

Common and Preferred Stock Transactions	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Common and Preferred Stock Transactions	Note 5. Common and Preferred Stock Transactions During the three months ended March 31, 2017, the Company granted 3,000,000 VCSY common shares pursuant to a stock award to an employee of the Company and its subsidiaries (at a fair market value of $72,000). During the three months ended March 31, 2017, $10,109 of principal, interest and legal fees under a convertible note issued in the principal amount of $80,000 was converted into 723,089 common shares. During the three months ended March 31, 2017, 550,000 VCSY common shares vested under restricted stock agreements to employees and a consultant of the Company. During the three months ended March 31, 2017, 200,001 shares of the common stock of Ploinks, Inc. issued under restricted stock agreements to consultants and employees of the Company vested. Stock compensation expense for the amortization of restricted stock awards was $35,167 for the three months ended March 31, 2017. As of March 31, 2017, there were 11,575,000 shares of unvested stock compensation awards to employees and 16,000,000 shares of unvested stock compensation awards to non-employees. Stock compensation expense for the amortization of subsidiary’s restricted stock awards was $46,342 for the three months ended March 31, 2017. We have evaluated our convertible cumulative preferred stock under the guidance set out in FASB ASC 470-20 and accordingly classified these shares as temporary equity in the consolidated balance sheets. For additional transactions after March 31, 2017 concerning stock transactions, please see “Subsequent Events” in Note 9.

Option and Warrant Activity

Option and Warrant Activity	3 Months Ended
	Mar. 31, 2017
Option And Warrant Activity
Option and Warrant Activity	Note 6. Option and Warrant Activity Option and warrant activities during the three months ended March 31, 2017 is summarized as follows: Incentive Stock Options Non-Statutory Warrants Weighted Outstanding at December 31, 2016 — — 14,850,000 $ 0.100 Options/Warrants granted — — — — Options/Warrants exercised — — — — Options/Warrants expired/cancelled — — — — Outstanding at March 31, 2017 — — 14,850,000 $ 0.100 The weighted average remaining life of the outstanding warrants as of March 31, 2017 was 2.23. The intrinsic value of the exercisable warrants as of March 31, 2017 was $.0195.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2017
Related Party Transactions [Abstract]
Related Party Transactions	Note 7. Related Party Transactions The following table reflects our related party debt activity, including our convertible debt, for the three months ended March 31, 2017: December 31, 2016 $ 308,242 Amortization of debt discounts — March 31, 2017 $ 308,242 As of March 31, 2017 and December 31, 2016, the Company had accounts payable to employees for unreimbursed expenses and related party contractors in an aggregate amount of $137,532 and $139,546, respectively. The payables are unsecured, non-interest bearing and due on demand.

Legal Proceedings

Legal Proceedings	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Legal Proceedings	Note 8. Legal Proceedings We are involved in the following ongoing legal matters: On December 31, 2011, the Company and InfiniTek corporation (“InfiniTek”) entered into a settlement agreement to dismiss an action filed by the Company against InfiniTek in the Texas State District Court in Fort Worth, Texas, for breach of contract and other claims, a counter claim filed by InfiniTek against the Company for non-payment of amounts claimed the Company owed to InfiniTek, and an action filed by InfiniTek against the Company in California Superior Court in Riverside, California seeking damages for breach of contract and lost profit. Pursuant to the terms of the settlement agreement, Vertical agreed to pay InfiniTek $82,500 in three equal installments with the last payment due by or before August 5, 2012. Upon full payment, InfiniTek shall transfer and assign ownership of the NAVPath software developed by InfiniTek for use with NOW Solutions emPath® software application and Microsoft Dynamics NAV (formerly Navision) business solution platform. The amounts in dispute were included in our accounts payable and accrued liabilities and have been adjusted to the settlement amount of $82,500 at December 31, 2011. The Company has made $37,500 in payments due under the settlement agreement as of the date of this Report and each party is alleging the other party is in breach of the settlement agreement. We intend to resolve all disputes with InfiniTek. On February 13, 2017, the Company was served with a complaint filed by Parker Mills in the Superior Court of the State of California, County of Los Angeles, Central District, for failure to make payment on the outstanding balance due under a $100,000 convertible debenture issued by the Company to Parker Mills. The plaintiff seeks payment of the principal balance due under the convertible debenture of $100,000, interest at the rate of 12% per annum, attorney’s fees and court costs. The Company has $112,985 of principal and interest accrued as of March 31, 2017. We intend to resolve this matter with Parker Mills. This case is styled Parker Mills, LLP v. Vertical Computer Systems, Inc., No. BC649122 On April 12, 2017, NOW Solutions, Inc. was served with a Notice of Motion for Summary Judgment in Lieu of Complaint, which was filed by Derek Wolman in the Supreme Court of the State of New York in County of New York for failure to make outstanding payments on the outstanding balance due under one promissory note in the principal amount of $150,000 (issued on November 17, 2009) and one promissory note in the principal amount of $50,000 (issued on August 28, 2014), both of which were issued by NOW Solutions to Mr. Wolman. The plaintiff seeks a judgment totaling $282,299 (which includes principal and accrued interest), plus additional accrued interest from the date the complaint was filed, attorney’s fees and expenses. The Company has $260,286 of principal and interest accrued as of March 31, 2017. We intend to resolve this matter with Mr. Wolman. This case is styled Derek Wolman v. Now Solutions, Inc., No. 65/502/17.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	Note 9. Subsequent Events During the period from April 1 to May 22, 2017, the Company amended a convertible note originally issued to a third party lender in the principal amount of $80,000 to $90,000, cancelled a $10,000 note payable issued to the third party lender, and converted the $12,312 in outstanding principal and interest of the amended convertible note into 965,673 shares of the Company’s common stock. During the period from April 1 to May 22, 2017, the Company entered into a restricted stock agreement for 120,000 shares of the Company’s common stock with the Rule 144 restrictive legend with an employee of the Company under which the shares vest in equal installments over a 30-month period. During the period from April 1 to May 22, 2017, the Company granted 250,500 shares of the common stock of Ploinks, Inc. to third party lenders in connection with 3 to 6-month extensions of convertible debentures in the principal amount of $885,000 issued in 2015 and 2016. During the period from April 1 to May 22, 2017, the Company granted 300,000 unregistered shares of the common stock of Ploinks, Inc. to an employee of a subsidiary of the Company’s pursuant to a restricted stock agreement with the Company. 150,000 shares vested immediately upon grant of the shares and 150,000 shares will vest in 4 months from the date of grant. During the period from April 1 to May 22, 2017, Ploinks, Inc. granted 60,000 unregistered shares of the common stock of Ploinks, Inc. to an employee of the Company pursuant to a restricted stock agreement with Ploinks, Inc. These shares typically vest over a 30 month period in equal installments and the fair value of the awards is being expensed over this vesting period.

Organization, Basis of Presen16

Organization, Basis of Presentation and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Earnings per share	Earnings per share Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of the Company’s common stock outstanding during the period. “Diluted earnings per share” reflects the potential dilution that could occur if our share-based awards and convertible securities were exercised or converted into common stock. The dilutive effect of our share-based awards is computed using the treasury stock method, which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. The dilutive effect of our convertible preferred stock and convertible debentures is computed using the if-converted method, which assumes conversion at the beginning of the year. For the three months ended March 31, 2017 and 2016, common stock equivalents related to the convertible debt, preferred stock and stock derivative liabilities were not included in the calculation of the diluted earnings per share as their effect would be anti-dilutive.
Capitalized Software Costs	Capitalized Software Costs Software costs incurred internally in creating computer software products are expensed until technological feasibility has been established upon completion of a detailed program design. Thereafter, all software development costs are capitalized until the point that the product is ready for sale, and are subsequently reported at the lower of unamortized cost or net realizable value. The Company considers annual amortization of capitalized software costs based on the ratio of current year revenues by product to the total estimated revenues by the product, subject to an annual minimum based on straight-line amortization over the product’s estimated economic useful life, not to exceed five years. The Company periodically reviews capitalized software costs for impairment where the fair value is less than the carrying value. During the three months ended March 31, 2017 and 2016, the Company capitalized an aggregate of $0 and $143,927 respectively, related to software development.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements The Company does not expect the adoption of any recently issued accounting pronouncements to have a material impact on the Company’s financial position, operations or cash flows.

Notes Payable (Tables)

Notes Payable (Tables)	3 Months Ended
	Mar. 31, 2017
Notes Payable [Abstract]
Schedule of third party debt activity and convertible debt	The following table reflects our third party debt activity, including our convertible debt, for the three months ended March 31, 2017: December 31, 2016 $ 5,853,145 Borrowings from third parties 50,000 Repayments of third party notes (4,716 ) Conversion of convertible debt principal to common stock (9,213 ) Debt discounts due valuation of derivative liabilities (17,741 ) Amortization of debt discounts 245,271 Effect of currency exchange 48 March 31, 2017 $ 6,116,794

Derivative Liabilities and Fa18

Derivative Liabilities and Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of fair value of derivative liabilities using Black-Scholes option pricing model	The Company estimated the fair value of the derivative liabilities using the Black-Scholes option pricing model and the following key assumptions during 2017: 2017 Expected dividends 0% Expected terms (years) 0.10 - 2.71 Volatility 84% - 118% Risk-free rate 0.74% - 1.27%
Schedule of derivative liabilities at fair value	The following table provides a summary of the fair value of our derivative liabilities as of March 31, 2017 and December 31, 2016: Fair value measurements on a recurring basis Level 1 Level 2 Level 3 As of March 31, 2017: Liabilities Derivative liabilities – convertible debt $ — $ — $ 685,221 As of December 31, 2016: Liabilities Derivatives $ — $ — $ 1,014,192
Schedule of change in fair value of derivative liabilities	The below table presents the change in the fair value of the derivative liabilities during the three months ended March 31, 2017: Fair value as of December 31, 2016 $ 1,014,192 Additions recognized as debt discounts 17,741 Reduction due to settlement upon conversion (7,245 ) Gain on change in fair value of derivatives (339,467 ) Fair value as of March 31, 2017 $ 685,221

Option and Warrant Activity (Ta

Option and Warrant Activity (Tables)	3 Months Ended
	Mar. 31, 2017
Option And Warrant Activity Tables
Schedule of option and warrant activity	Option and warrant activities during the three months ended March 31, 2017 is summarized as follows: Incentive Stock Options Non-Statutory Warrants Weighted Outstanding at December 31, 2016 — — 14,850,000 $ 0.100 Options/Warrants granted — — — — Options/Warrants exercised — — — — Options/Warrants expired/cancelled — — — — Outstanding at March 31, 2017 — — 14,850,000 $ 0.100

Related Party Transactions (Tab

Related Party Transactions (Tables)	3 Months Ended
	Mar. 31, 2017
Related Party Transactions [Abstract]
Schedule of related party transactions	The following table reflects our related party debt activity, including our convertible debt, for the three months ended March 31, 2017: December 31, 2016 $ 308,242 Amortization of debt discounts — March 31, 2017 $ 308,242

Organization, Basis of Presen21

Organization, Basis of Presentation and Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Software development		$ 143,927
Computer Software [Member]
Software development	$ 0	$ 143,927
Computer Software [Member] | Minimum [Member]
Estimated life of property and equipment	5 years
NOW Solutions [Member]
Percentage of ownership	75.00%
SnAPPnet, Inc [Member]
Percentage of ownership	80.00%
Priority Time Systems, Inc. [Member]
Percentage of ownership	70.00%
Ploinks, Inc [Member]
Percentage of ownership	91.00%
Government Internet Systems, Inc [Member]
Percentage of ownership	84.50%

Going Concern (Details Narrativ

Going Concern (Details Narrative)	3 Months Ended
	Mar. 31, 2017USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working capital	$ (21,200,000)

Notes Payable (Details)

Notes Payable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Long-term Debt [Roll Forward]
Amortization of debt discounts	$ 245,271	$ 90,913
Third Party [Member]
Long-term Debt [Roll Forward]
Balance, beginning	5,853,145
Borrowings from third parties	50,000
Repayments of third party notes	(4,716)
Conversion of convertible debt principal to common stock	(9,213)
Debt discounts due valuation of derivative liabilities	(17,741)
Amortization of debt discounts	245,271
Effect of currency exchange	48
Balance, end	$ 6,116,794

Notes Payable (Details Narrativ

Notes Payable (Details Narrative) - USD ($)	Jan. 09, 2013	Jul. 31, 2017	Aug. 31, 2015	Jul. 31, 2015	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2014
Debt Instrument [Line Items]
Accrued dividends						$ 32,500
Lakeshore Investments Llc [Member]
Debt Instrument [Line Items]
Accrued dividends					$ 32,500
NOW Solutions [Member]
Debt Instrument [Line Items]
Debt face amount	$ 1,759,150
Percentage of ownership					75.00%
Priority Time Systems, Inc. [Member]
Debt Instrument [Line Items]
Percentage of ownership					70.00%
SnAPPnet, Inc [Member]
Debt Instrument [Line Items]
Percentage of ownership					80.00%
Ploinks, Inc [Member]
Debt Instrument [Line Items]
Percentage of ownership					91.00%
10% Convertible Debentures [Member]
Debt Instrument [Line Items]
Principal amount of debt converted					$ 80,000
Principal and interest payment					$ 10,109
Number of shares converted under a convertible note					723,089
11% Secured Lakeshore Note Due January 31, 2022 [Member]
Debt Instrument [Line Items]
Debt face amount	$ 1,759,150
Debt frequency of periodic payments	Monthly
Debt periodic payment	$ 24,232
Debt term	10 years
Description of collateral	Secured by the assets of the Company’s subsidiaries, NOW Solutions, Priority Time, SnAPPnet, Inc. (“SnAPPnet”) and the Company’s SiteFlash™ technology and cross-collateralized. Upon the aggregate principal payment of $290,000 toward the Lakeshore Note, the Company has the option to have Lakeshore release either the Priority Time collateral or the SiteFlash™ collateral. Upon payment of the aggregate principal of $590,000 toward the Lakeshore Note, Lakeshore shall release either the Priority Time collateral or the SiteFlash™ collateral (whichever is remaining). Upon payment of the aggregate principal of $890,000 toward the Lakeshore Note, Lakeshore shall release the SnAPPnet collateral and upon full payment of the Lakeshore Note, Lakeshore shall release the NOW Solutions collateral.
Percentage of assignment of interest in gross revenues generated from licenses of an asset	8.00%
Percentage of advance on share of net income			60.00%
Number of shares issued for forbearance			7,000,000	13,000,000
Forbearance loss			$ 175,700	$ 455,000
11% Secured Lakeshore Note Due January 31, 2022 [Member] | Stage First Collateral [Member]
Debt Instrument [Line Items]
Principal payment collateral	$ 290,000
11% Secured Lakeshore Note Due January 31, 2022 [Member] | Stage Second Collateral [Member]
Debt Instrument [Line Items]
Principal payment collateral	590,000
11% Secured Lakeshore Note Due January 31, 2022 [Member] | Stage Third Collateral [Member]
Debt Instrument [Line Items]
Principal payment collateral	$ 890,000
11% Secured Lakeshore Note Due January 31, 2022 [Member] | NOW Solutions [Member]
Debt Instrument [Line Items]
Percentage of royalty on annual gross revenues	6.00%
Threshold annual gross revenues	$ 5,000,000
Percentage of net profits as minority owner							25.00%
Weekly advance periodic payment							$ 2,500
Attorney fees							40,000
Payments to employees and former consultant							80,000
11% Secured Lakeshore Note Due January 31, 2022 [Member] | SiteFlash [Member]
Debt Instrument [Line Items]
Percentage of assignment of interest in gross revenues generated from licenses of an asset	5.00%
11% Secured Lakeshore Note Due January 31, 2022 [Member] | Priority Time Systems, Inc. [Member] | Lakeshore Investments Llc [Member]
Debt Instrument [Line Items]
Income (loss) attributable to noncontrolling interest							$ 391,920
Percentage of ownership							20.00%
11% Secured Lakeshore Note Due January 31, 2022 [Member] | SnAPPnet, Inc [Member] | Lakeshore Investments Llc [Member]
Debt Instrument [Line Items]
Income (loss) attributable to noncontrolling interest							$ 99,210
11% Secured Lakeshore Note Due January 31, 2022 [Member] | Ploinks, Inc [Member]
Debt Instrument [Line Items]
Debt periodic payment			$ 500,000
Number of shares issued for forbearance			2,000,000	3,000,000
Number of shares to be purchased under an option			250
Purchase Price of Shares Under an Option			$ 950,000
11% Secured Lakeshore Note Due January 31, 2022 [Member] | Lakeshore Investments Llc [Member]
Debt Instrument [Line Items]
Number of shares issued for forbearance				2,000,000
Forbearance loss				$ 54,200
11% Secured Lakeshore Note Due January 31, 2022 [Member] | Lakeshore Investments Llc [Member] | Convertible Debentures [Member]
Debt Instrument [Line Items]
Aggregate forbearance fees		$ 15,000

Derivative Liabilities and Fa25

Derivative Liabilities and Fair Value Measurements (Details)	3 Months Ended
	Mar. 31, 2017
Expected dividends	0.00%
Minimum [Member]
Expected terms (years)	1 month 6 days
Volatility	84.00%
Risk-free rate	0.74%
Maximum [Member]
Expected terms (years)	2 years 8 months 16 days
Volatility	118.00%
Risk-free rate	1.27%

Derivative Liabilities and Fa26

Derivative Liabilities and Fair Value Measurements (Details 1) - Stock Derivative [Member] - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Level 1 [Member]
Liabilities
Derivative liabilities - convertible debt and warrants
Level 2 [Member]
Liabilities
Derivative liabilities - convertible debt and warrants
Level 3 [Member]
Liabilities
Derivative liabilities - convertible debt and warrants	$ 685,221	$ 1,014,192

Derivative Liabilities and Fa27

Derivative Liabilities and Fair Value Measurements (Details 2)	3 Months Ended
	Mar. 31, 2017USD ($)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value as of December 31, 2016	$ 1,014,192
Additions recognized as debt discounts	17,741
Reduction due to settlement upon conversion	(7,245)
Gain on change in fair value of derivatives	(339,467)
Fair value as of March 31, 2017	$ 685,221

Derivative Liabilities and Fa28

Derivative Liabilities and Fair Value Measurements (Details Narrative)	3 Months Ended
	Mar. 31, 2017USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair value of derivative liabilities	$ 685,221
Gain on change in fair value of derivative liabilities	$ 339,467

Common and Preferred Stock Tr29

Common and Preferred Stock Transactions (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Amortization of subsidiary restricted stock awards	$ 46,342
Restricted Stock [Member]
Stock compensation expense	$ 35,167
Employees [Member]
Number of shares non vested	11,575,000
Non-Employees [Member]
Number of shares non vested	16,000,000
Restricted Stock Agreements [Member] | Employees and Consultant [Member]
Number of shares granted during the period to employees	550,000
Restricted Stock Agreements [Member] | Employees and Consultant [Member] | Ploinks, Inc [Member]
Number of shares granted during the period to employees	200,001
10% Convertible Debentures [Member]
Principal and interest payment	$ 10,109
Principal amount	$ 80,000
Number of shares converted into common shares	723,089
Common Stock [Member]
Number of shares granted during the period to employees	3,000,000
Fair value of shares granted during the period to employees	$ 72,000
Number of shares converted into common shares	723,089

Option and Warrant Activity (De

Option and Warrant Activity (Details)	3 Months Ended
	Mar. 31, 2017$ / sharesshares
Warrant [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights [Roll Forward]
Balance at beginning	14,850,000
Options/Warrants granted
Options/Warrants exercised
Options/Warrants expired/cancelled
Balance at ending	14,850,000
Class of Warrant or Right, Exercise Price of Warrants or Rights [Roll Forward]
Balance at beginning | $ / shares	$ 0.100
Options/Warrants granted | $ / shares
Options/Warrants exercised | $ / shares
Options/Warrants expired/cancelled | $ / shares
Balance at ending | $ / shares	$ 0.100
Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Balance at beginning
Options/Warrants granted
Options/Warrants exercised
Options/Warrants expired/cancelled
Balance at ending
Non-Statutory Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Balance at beginning
Options/Warrants granted
Options/Warrants exercised
Options/Warrants expired/cancelled
Balance at ending

Option and Warrant Activity (31

Option and Warrant Activity (Details Narrative)	3 Months Ended
	Mar. 31, 2017$ / shares
Option And Warrant Activity Details Narrative
Weighted average remaining life of outstanding warrants	2 years 2 months 23 days
Intrinsic value of exercisable warrants (in dollars per share)	$ .0195

Related Party Transactions (Det

Related Party Transactions (Details)	3 Months Ended
	Mar. 31, 2017USD ($)
Related Party Transactions [Abstract]
Balance beginning	$ 308,242
Amortization of debt discounts
Balance ending	$ 308,242

Related Party Transactions (D33

Related Party Transactions (Details Narrative) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Related Party Transactions [Abstract]
Accounts payable to related parties	$ 137,532	$ 139,546

Legal Proceedings (Details Narr

Legal Proceedings (Details Narrative) - USD ($)	Apr. 12, 2017	Feb. 13, 2017	Aug. 05, 2012	Dec. 31, 2011	Mar. 31, 2017	Jan. 09, 2013
Loss Contingencies [Line Items]
Value of new issues during period					$ 72,000
NOW Solutions [Member]
Loss Contingencies [Line Items]
Debt face amount						$ 1,759,150
10% Convertible Debentures [Member] | Parker Mills, LLP [Member]
Loss Contingencies [Line Items]
Value of new issues during period		$ 100,000
Interest rate		12.00%
Principal and interest accrued					112,985
One Promissory Note [Member] | NOW Solutions [Member] | Subsequent Event [Member]
Loss Contingencies [Line Items]
Debt face amount	$ 150,000
Debt issue date	Nov. 17, 2009
Two Promissory Note [Member] | NOW Solutions [Member] | Subsequent Event [Member]
Loss Contingencies [Line Items]
Debt face amount	$ 50,000
Debt issue date	Aug. 28, 2014
Promissory Note Issued on November 17 2009 and August 28 2014 [Member] | NOW Solutions [Member]
Loss Contingencies [Line Items]
Principal and interest accrued					$ 260,286
Promissory Note Issued on November 17 2009 and August 28 2014 [Member] | NOW Solutions [Member] | Subsequent Event [Member]
Loss Contingencies [Line Items]
Damages sought, value	$ 282,299
Litigation Case Against InfiniTek Corporation [Member]
Loss Contingencies [Line Items]
Litigation settlement amount			$ 82,500	$ 82,500
Loss contingency accrual payments				$ 37,500

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($)	2 Months Ended	3 Months Ended
	May 22, 2017	Mar. 31, 2017
10% Convertible Debentures [Member]
Subsequent Event [Line Items]
Principal and interest payment		$ 10,109
Number of shares converted into common shares		723,089
Subsequent Event [Member] | Restricted Stock Agreements [Member] | Employee [Member]
Subsequent Event [Line Items]
Number of shares vested	120,000
Description of vesting rights	Shares vest in equal installments over a 30-month period.
Subsequent Event [Member] | Third Party One [Member] | 10% Convertible Debentures [Member]
Subsequent Event [Line Items]
Debt face amount	$ 90,000
Principle debt amount cancelled	10,000
Principal and interest payment	$ 12,312
Number of shares converted into common shares	965,673
Subsequent Event [Member] | Ploinks, Inc [Member]
Subsequent Event [Line Items]
Debt face amount	$ 885,000
Number of shares granted	250,500
Subsequent Event [Member] | Ploinks, Inc [Member] | Restricted Stock Agreements [Member] | Employee [Member]
Subsequent Event [Line Items]
Description of vesting rights	150,000 shares vested immediately upon grant of the shares and 150,000 shares will vest in 4 months from the date of grant.
Number of shares granted	300,000
Subsequent Event [Member] | Ploinks, Inc [Member] | Restricted Stock Agreements [Member] | Employee [Member]
Subsequent Event [Line Items]
Description of vesting rights	Vest over a 30 month period in equal installments.
Number of shares granted	60,000