Vertical Computer Systems (VCSY) 10-Q 21 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 21, 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	Jun. 30, 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		1,150,335,201
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,017

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets
Cash	$ 79,375	$ 190,448
Accounts receivable, net of allowance for bad debts of $75,524 and $139,705 as of June 30, 2017 and December 31, 2016, respectively	239,117	367,278
Prepaid expenses and other current assets	14,660	10,355
Total current assets	333,152	568,081
Property and equipment, net of accumulated depreciation of $1,043,962 and $1,043,397 as of June 30, 2017 and December 31, 2016, respectively	4,454	5,097
Intangible assets, net of accumulated amortization of $319,505 and $319,513 as of June 30, 2017 and December 31, 2016, respectively	6,690	6,690
Deposits and other	7,997	8,064
Total assets	352,293	587,932
Current liabilities:
Accounts payable and accrued liabilities	13,033,408	12,075,298
Accounts payable to related parties	162,500	139,546
Deferred revenue	1,612,517	1,794,264
Derivative liabilities	396,674	1,014,192
Convertible debentures, net of unamortized discounts of $43,034 and $354,785 as of June 30, 2017 and December 31, 2016, respectively	1,261,966	899,428
Notes payable	5,078,987	4,953,717
Notes payable and convertible debt to related parties	308,242	308,242
Total current liabilities	21,854,294	21,184,687
Total liabilities	21,854,294	21,184,687
Convertible Cumulative Preferred stock	10,305,193	10,268,523
Stockholders' Deficit
Common Stock; $.00001 par value; 2,000,000,000 shares authorized 1,175,980,201 issued and 1,135,980,201 outstanding as of June 30, 2017 and 1,167,841,439 issued and 1,127,841,439 outstanding as of December 31, 2016	11,760	11,679
Treasury stock: 40,000,000 as of June 30, 2017 and December 31, 2016	(400)	(400)
Additional paid-in-capital	23,863,405	23,672,153
Accumulated deficit	(56,331,390)	(55,017,675)
Accumulated other comprehensive income - foreign currency translation	389,816	424,996
Total Vertical Computer Systems, Inc. stockholders' deficit	(32,066,809)	(30,909,247)
Non-controlling interest	259,615	43,969
Total stockholders' deficit	(31,807,194)	(30,865,278)
Total liabilities and stockholders' deficit	352,293	587,932
Series A Preferred Stock [Member]
Current liabilities:
Convertible Cumulative Preferred stock	10,103,169	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 ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Allowance for bad debts	$ 75,524	$ 139,705
Accumulated depreciation, property and equipment	1,043,962	1,043,397
Accumulated amortization	319,505	319,513
Unamortized discounts	$ 43,034	$ 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	1,175,980,201	1,167,841,439
Common stock, outstanding	1,135,980,201	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	52,500	51,500
Preferred stock, outstanding	52,500	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		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues
Licensing and software	$ 517		$ 517	$ 12,000
Software maintenance	789,264	821,813	1,596,776	1,629,608
Cloud-based offering	65,964	81,183	125,667	124,466
Consulting services	103,721	65,943	176,492	147,997
Other	140	720	2,897	8,531
Total revenues	959,606	969,659	1,902,349	1,922,602
Cost of revenues	(439,243)	(376,308)	(812,795)	(764,464)
Gross profit	520,363	593,351	1,089,554	1,158,138
Operating expenses:
Selling, general and administrative expenses	897,074	808,832	1,979,259	1,476,648
Depreciation and amortization	325	325	650	433
Bad debt expense (recovery)	(13,645)	5,789	(64,667)	11,927
Total operating expenses	883,754	814,946	1,915,242	1,489,008
Operating Loss	(363,391)	(221,595)	(825,688)	(330,870)
Other Income (Expense):
Gain (loss) on derivative liabilities	280,431	(139,747)	619,898	(111,035)
Gain on debt extinguishment		35,969		35,969
Forbearance fees	(3,000)	(6,000)	(6,000)	(17,100)
Interest income	1	8	16	18
Interest expense	(460,592)	(526,078)	(1,018,603)	(903,045)
Net loss before non-controlling interest and income tax expense	(546,551)	(857,443)	(1,230,377)	(1,326,063)
Income tax expense	84,289	27,196	120,199	102,756
Net loss before non-controlling interest	(630,840)	(884,639)	(1,350,576)	(1,428,819)
Net loss (income) attributable to non-controlling interest	45,532	(20,192)	36,861	(29,340)
Net loss attributable to Vertical Computer Systems, Inc.	(585,308)	(904,831)	(1,313,715)	(1,458,159)
Dividends applicable to preferred stock	(154,933)	(147,000)	(306,405)	(294,000)
Net loss available to common stockholders	$ (740,241)	$ (1,051,831)	$ (1,620,120)	$ (1,752,159)
Basic and diluted net loss per share (in dollars per share)	$ 0	$ 0	$ 0	$ 0
Basic and diluted weighted average of common shares outstanding (in shares)	1,133,335,130	1,100,964,575	1,132,475,119	1,093,322,674
Comprehensive loss
Net loss	$ (630,840)	$ (884,639)	$ (1,350,576)	$ (1,428,819)
Translation adjustments	(11,191)	(56,717)	(35,180)	(174,198)
Comprehensive loss	(642,031)	(941,356)	(1,385,756)	(1,603,017)
Comprehensive (income) loss attributable to non-controlling interest	45,532	(20,192)	36,861	(29,340)
Comprehensive loss attributable to Vertical Computer Systems, Inc.	$ (596,499)	$ (961,548)	$ (1,348,895)	$ (1,632,357)

Consolidated Statement of Stock

Consolidated Statement of Stockholders' Deficit (Unaudited) - 6 months ended Jun. 30, 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			67,494				67,494
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	$ 17		22,404				22,421
Shares issued for conversion of convertible debentures (in shares)	1,688,762
Shares issued for convertible debentures	$ 6		7,068				7,074
Shares issued for convertible debentures (in shares)	600,000
Settlement of derivative liability upon conversion of debt			19,566				19,566
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			123,997			(2,705)	121,292
Dividends declared but unpaid to non-controlling interest holders						(65,000)	(65,000)
Shares and subsidiary shares issued for equity subscriptions	$ 20		164,055			(1,196)	162,879
Shares and subsidiary shares issued for equity subscriptions (in shares)	2,000,000
Other comprehensive income translation adjustment					(35,180)		(35,180)
Issuance of shares for services	$ 3		4,197				4,200
Issuance of shares for services (in shares)	300,000
Issuance of subsidiary shares for debt extensions			35,441			(3,527)	31,914
Adjustment to non-controlling interest			(324,935)			324,935
Net loss				(1,313,715)		(36,861)	(1,350,576)
Balances, ending at Jun. 30, 2017	$ 11,760	$ (400)	$ 23,863,405	$ (56,331,390)	$ 389,816	$ 259,615	$ (31,807,194)
Balances, ending (in shares) at Jun. 30, 2017	1,175,980,201	(40,000,000)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities
Net loss	$ (1,350,576)	$ (1,428,819)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	650	433
Amortization of debt discounts	372,210	306,064
Cancellation of common shares issued for loan forbearance		(28,900)
Forfeited restricted stock award compensation		(1,145)
Common shares issued to an employee	72,000
Gain on debt extinguishment		(35,969)
Common shares issued for services	4,200	66,550
Loss (gain) on derivatives	(619,898)	111,035
Bad debt expense (recovery)	(64,667)	11,927
Stock compensation	188,786	141,306
Changes in operating assets and liabilities:
Accounts receivable	196,296	259,246
Prepaid expenses and other assets	(4,418)	45,516
Accounts payable and accrued liabilities	887,531	556,147
Accounts payable to related parties	22,954	26,634
Deferred revenue	(213,270)	(114,705)
Net cash used in operating activities	(508,202)	(84,680)
Cash flow from investing activities:
Software development		(250,184)
Purchase of property and equipment		(3,801)
Net cash used in investing activities		(253,985)
Cash flows from financing activities:
Borrowings on notes payable	180,000	61,900
Payments of notes payable	(44,705)	(63,699)
Borrowings on convertible debentures	60,000	635,000
Issuance of preferred stock	200,000
Dividends paid by subsidiary to non-controlling interest		(150,000)
Net cash provided by financing activities	395,295	483,201
Effect of changes in exchange rates on cash	1,834	(85,240)
Net change in cash	(111,073)	59,296
Cash, beginning of period	190,448	37,141
Cash, end of period	79,375	96,437
Supplemental disclosures of cash flow information:
Cash paid for interest	22,759	172,618
Non-cash investing and financing activities:
Common shares issued for vested incentive restricted stock	5	5
Issuance of shares for settlement of accounts payable and related party accounts payable		137,500
Issuance of shares for note principal and interest	22,421	146,500
Settlement of derivative liability upon conversion of debt	19,566	26,362
Reclassification of warrants as derivative liabilities		108,539
Debt discount due to derivative liabilities	18,653	353,885
Debt discount due to shares and warrants issued with debt	9,916	162,651
Debt discount due to subsidiary shares issued for debt extensions	31,914
Non-controlling interest adjustment to interest	324,935
Reclassification of debt to convertible debt	10,000
Dividends declared but unpaid to non-controlling interest holders	$ 65,000

Organization, Basis of Presenta

Organization, Basis of Presentation and Significant Accounting Policies	6 Months Ended
	Jun. 30, 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 90% 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 six months ended June 30, 2017 and 2016, common stock equivalents related to the convertible debentures, convertible debt and preferred stock and stock derivative liability 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 six months ended June 30, 2017 and 2016, the Company capitalized an aggregate of $0 and $250,184 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	6 Months Ended
	Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Going Concern	Note 2. Going Concern The accompanying unaudited consolidated financial statements for the six months ended June 30, 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 June 30, 2017, we had negative working capital of approximately $21.5 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	6 Months Ended
	Jun. 30, 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 six months ended June 30, 2017: December 31, 2016 $ 5,853,145 Borrowings from third parties 240,000 Repayments of third party notes (44,705 ) Conversion of convertible debt principal to common stock (19,213 ) Debt discounts due valuation of derivative liabilities (21,495 ) Debt discounts due to convertible debt extensions (31,914 ) Debt discounts due to issuance of warrants and common stock (7,074 ) Amortization of debt discounts 372,210 Effect of currency exchange (1 ) June 30, 2017 $ 6,340,953 During the six months ended June 30, 2017, the Company borrowed $180,000 from a third party lender at 10% interest per annum of which $40,000 was repaid. During the six months ended June 30, 2017, the Company issued a convertible debenture in the principal amount of $60,000 to a third party lender for a loan made to the Company in the same amount. The debt accrues interest at 10% per annum and is due one year from the date of issuance. Beginning six months after issuance of the debenture and provided that the lowest closing price of the common stock for each of the 5 trading days immediately preceding the conversion date has been $0.03 or higher, the holder of the respective debenture may convert the debenture into shares of common stock at a price per share of 80% of the average per share price of the Company’s common stock for the 5 trading days preceding the notice of conversion date using the 3 lowest closing prices. In connection with the loan, the Company also issued a total of 600,000 shares of common stock of the Company to the lender with the Rule 144 restrictive legend and 3-year warrants under which each lender may purchase in aggregate a total of 600,000 unregistered shares of common stock of the Company at a purchase price of $0.10 per share. In connection with the issuance of shares of common stock and warrants, the Company recorded a discount of $9,916 against the face value of the loan based on the relative fair market value of the common stock and full fair market value of the warrants. The warrants are accounted for as a derivative liability. The discount is being amortized over twelve months and $54 of amortization expense was recognized for the six months ended June 30, 2017. During the six months ended June 30, 2017, $22,421 of principal, interest and legal fees under a convertible note issued in the principal amount of $90,000 was converted into 1,688,762 common shares. In May 2017, the Company amended the convertible note originally issued to a third party lender in the principal amount of $80,000 to $90,000 and cancelled a $10,000 note payable issued to the third party lender. This convertible note has been paid in full. 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 six months ended June 30, 2017, NOW Solutions, a subsidiary of the Company, accrued dividends to Lakeshore of $65,000. For additional transactions after June 30, 2017 concerning notes payable, please see “Subsequent Events” in Note 9.

Derivative liability and fair v

Derivative liability and fair value measurements	6 Months Ended
	Jun. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative liability and fair value measurements	Note 4. Derivative liability and fair value measurements Derivative liabilities As of June 30, 2017, the Company has convertible notes and common stock warrants that qualify as derivative liabilities under ASC 815. As of June 30, 2017, the aggregate fair value of the outstanding derivative liabilities was $396,674. For the six months ended June 30, 2017, the net gain on the change in fair value of derivative liabilities was $619,898. 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) 0.07 - 3.00 Volatility 103% - 118 % Risk-free rate 1.24% - 1.55 % 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 June 30, 2017 and December 31, 2016: Fair value measurements on a recurring basis Level 1 Level 2 Level 3 As of June 30, 2017: Liabilities Derivative liabilities – convertible debt and warrants $ — $ — $ 396,674 As of December 31, 2016: Liabilities None $ — $ — $ 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 six months ended June 30, 2017: Fair value as of December 31, 2016 $ 1,014,192 Additions recognized as debt discounts 21,495 Additions recognized in equity financing 451 Reduction due to settlement upon conversion (19,566 ) Gain on change in fair value of derivatives (619,898 ) Fair value as of June 30, 2017 $ 396,674

Common and Preferred Stock Tran

Common and Preferred Stock Transactions	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
Common and Preferred Stock Transactions	Note 5. Common and Preferred Stock Transactions In May 2017, the Company granted 300,000 unregistered shares of its common stock with the Rule 144 restrictive legend and 50,000 shares of Ploinks, Inc. common stock to a consultant of the Company and its subsidiaries pursuant to a consulting agreement with the Company. The aggregate fair market value of the VCSY common stock grant was determined to be $4,200 based on the quoted market price of VCSY stock at date of grant and Ploinks, Inc. common stock grant was determined to be $5,400 based on a third party valuation of Ploinks stock. In addition, the Company agreed to issue up to 2,000,000 common shares of the Company and 200,000 shares of Ploinks, Inc. common stock pursuant to restricted performance stock agreements with the consultant. These shares may vest over a term of 3 years and are based upon the Consultant achieving certain performance criteria. During the six months ended June 30, 2017, the Company issued a convertible debenture in the principal amount of $60,000 to a third party lender for a loan made to the Company in the same amount. The debt accrues interest at 10% per annum and is due one year from the date of issuance. Beginning six months after issuance of the debenture and provided that the lowest closing price of the common stock for each of the 5 trading days immediately preceding the conversion date has been $0.03 or higher, the holder of the respective debenture may convert the debenture into shares of common stock at a price per share of 80% of the average per share price of the Company’s common stock for the 5 trading days preceding the notice of conversion date using the 3 lowest closing prices. In connection with the loan, the Company also issued a total of 600,000 shares of common stock of the Company to the lender with the Rule 144 restrictive legend and 3-year warrants under which each lender may purchase in aggregate a total of 600,000 unregistered shares of common stock of the Company at a purchase price of $0.10 per share. In connection with the issuance of shares of common stock and warrants, the Company recorded a discount of $9,916 against the face value of the loan based on the relative fair market value of the common stock and full fair market value of the warrants. The warrants are accounted for as a derivative liability. The discount is being amortized over twelve months and $54 of amortization expense was recognized for the six months ended June 30, 2017. During the six months ended June 30, 2017, the Company entered into a subscription agreement under which a third party subscriber purchased 1,000 shares of VCSY Series A Preferred Stock for $200,000. In connection with the purchase of the VCSY Series A Preferred Stock, the subscribers also received a total of 2,000,000 shares of common stock of the Company with the Rule 144 restrictive legend, 100,000 shares of common stock of Ploinks, Inc., 2-year warrants under which the subscribers may purchase an aggregate total of 150,000 unregistered shares of common stock of the Company at a purchase price of $0.10 per share and 2-year warrants under which the subscribers may purchase an aggregate total of 150,000 unregistered shares of common stock of the Company at a purchase price of $0.20 per share. The allocated fair market value of the VCSY Series A Preferred Stock issued to the subscribers was $36,670. Each share of VCSY Series A Preferred Stock is convertible into 500 shares of the Company’s common stock. The allocated fair market value of all common shares of the Company issued to the subscribers was $22,800. The allocated fair market value of all common shares of Ploinks, Inc. issued to the subscribers was $1,196. The fair market value of all warrants issued to the subscribers was $451 (which was calculated using the Black-Sholes model). The warrants were accounted for as derivative liabilities (see Note 4). During the six months ended June 30, 2017, the Company granted 295,500 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 $1,035,000 issued in 2015 and 2016. The aggregate fair market value of the awards was determined to be $31,914 and was recorded as debt discount, and is being amortized through the term of the convertible debenture. During the six months ended June 30, 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 six months ended June 30, 2017, $22,421 of principal, interest and legal fees under a convertible note issued in the principal amount of $90,000 was converted into 1,688,762 common shares. In May 2017, the Company had amended this convertible note originally issued to a third party lender in the principal amount of $80,000 to $90,000 and cancelled a $10,000 note payable issued to the third party lender. This convertible note has been paid in full. During the six months ended June 30, 2017, the Company entered into a restricted stock agreement to grant 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. The fair value of the shares was $2,208 based on the quoted market price of VCSY stock on the grant date and $368 was amortized to expense during the six months ended June 30, 2017. During the six months ended June 30, 2017, 550,000 VCSY common shares vested under restricted stock agreements to employees and a consultant of the Company. During the six months ended June 30, 2017, Ploinks, Inc. entered into a restricted stock agreement to grant 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. The fair value of the shares was $6,480 based on a third party valuation of Ploinks stock and $1,082 was amortized to expense during the six months ended June 30, 2017. During the six months ended June 30, 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 (as noted below) and 150,000 shares will vest in 4 months from the date of grant. The fair value of the shares was $32,400 based on a third party valuation of Ploinks stock and $22,127 was amortized to expense during the six months ended June 30, 2017. During the six months ended June 30, 2017, 350,001 shares of the common stock of Ploinks, Inc. issued under restricted stock agreements to consultants and employees of the Company and a subsidiary of the Company vested. Stock compensation expense for the amortization of restricted stock awards was $67,494 for the six months ended June 30, 2017. As of June 30, 2017, there were 11,695,000 shares of unvested stock compensation awards to employees and 16,000,000 shares of unvested stock compensation awards to non-employees. 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 June 30, 2017 concerning stock transactions, please see “Subsequent Events” in Note 9.

Option and Warrant Activity

Option and Warrant Activity	6 Months Ended
	Jun. 30, 2017
Option And Warrant Activity
Option and Warrant Activity	Note 6. Option and Warrant Activity Option and warrant activities during the six months ended June 30, 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 — — 900,000 $ 0.117 Options/Warrants exercised — — — — Options/Warrants expired/cancelled — — — — Outstanding at June 30, 2017 — — 15,750,000 $ 0.101 The weighted average remaining life of the outstanding warrants as of June 30, 2017 was 1.98. The intrinsic value of the exercisable warrants as of June 30, 2017 was $.0139. For additional transactions after June 30, 2017 concerning warrants and stock options, please see Subsequent Events” in Note 9.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2017
Related Party Transactions [Abstract]
Related Party Transactions	Note 7. Related Party Transactions Related party debt, including our convertible debt was $308,242 as of June 30, 2017 and December 31, 2016. As of June 30, 2017 and December 31, 2016, the Company had accounts payable to employees for unreimbursed expenses and related party contractors in an aggregate amount of $162,500 and $139,546, respectively. The payables are unsecured, non-interest bearing and due on demand.

Legal Proceedings

Legal Proceedings	6 Months Ended
	Jun. 30, 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. In June 2017, the court entered a default judgment against the Company. 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 June 30, 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	6 Months Ended
	Jun. 30, 2017
Subsequent Events [Abstract]
Subsequent Events	Note 9. Subsequent Events In July 2017, the United States Patent and Trademark office issued a patent (Patent No. 9710425) for the invention titled “Mobile Proxy Server for Internet Server Having a Dynamic IP Address” for Claims 1-20. The term “IP” stands for “Internet Protocol,” which is the principal communications protocol for the Internet. This patented technology is incorporated in the Ploinks SPC™ and the Company’s core communication platform. In July 2017, the Company granted 500,000 unregistered shares of its common stock with the Rule 144 restrictive legend and 30,000 shares of common stock of Ploinks, Inc. to a consultant of the Company and its subsidiaries pursuant to a consulting agreement with the Company. During the period that runs from July 1, 2017 through August 21, 2017, the Company issued a convertible debenture in the principal amount of $50,000 to a third party lender for a loan made to the Company in the same amount. The debt accrues interest at 10% per annum and is due one year from the date of issuance. Beginning six months after issuance of the debenture and provided that the lowest closing price of the common stock for each of the 5 trading days immediately preceding the conversion date has been $0.03 or higher, the holder of the debenture may convert the debenture into shares of common stock at a price per share of 80% of the average per share price of the Company’s common stock for the 5 trading days preceding the notice of conversion date using the 3 lowest closing prices. In connection with the loan, the Company also issued a total of 500,000 shares of common stock of the Company to the lender with the Rule 144 restrictive legend and 3-year warrants under which the lender may purchase up to 500,000 unregistered shares of common stock of the Company at a purchase price of $0.10 per share. During the period that runs from July 1, 2017 through August 21, 2017, the Company entered into a subscription agreement under which a third party subscriber purchased 300 shares of VCSY Series A Preferred Stock for $60,000. In connection with the purchase of the VCSY Series A Preferred Stock, the subscriber also received a total of 600,000 shares of common stock of the Company with the Rule 144 restrictive legend, 30,000 shares of common stock of Ploinks, Inc., 2-year warrants under which the subscriber may purchase an aggregate total of 45,000 unregistered shares of common stock of the Company at a purchase price of $0.10 per share and 2-year warrants under which the subscriber may purchase an aggregate total of 45,000 unregistered shares of common stock of the Company at a purchase price of $0.20 per share. During the period that runs from July 1, 2017 through August 21, 2017, the Company granted 4,500 shares of common stock of Ploinks, Inc. to a third party lender in connection with a 6-month extension of a convertible debenture in the principal amount of $15,000 issued in 2016. During the period that runs from July 1, 2017 through August 21, 2017, the Company made payments of $126,500 of principal and interest due under a convertible debenture in the principal amount of $115,000 issued by the Company to a third party lender. This convertible debenture has been paid in full. During the period that runs from July 1, 2017 through August 21, 2017, 250,000 VCSY common shares issued under restricted stock agreements to an employee of the Company vested. During the period that runs from July 1, 2017 through August 21, 2017, 80,000 common shares of stock of Ploinks, Inc. issued under restricted stock agreements to an employee of the Company vested.

Organization, Basis of Presen16

Organization, Basis of Presentation and Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 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 six months ended June 30, 2017 and 2016, common stock equivalents related to the convertible debentures, convertible debt and preferred stock and stock derivative liability 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 six months ended June 30, 2017 and 2016, the Company capitalized an aggregate of $0 and $250,184 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)	6 Months Ended
	Jun. 30, 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 six months ended June 30, 2017: December 31, 2016 $ 5,853,145 Borrowings from third parties 240,000 Repayments of third party notes (44,705 ) Conversion of convertible debt principal to common stock (19,213 ) Debt discounts due valuation of derivative liabilities (21,495 ) Debt discounts due to convertible debt extensions (31,914 ) Debt discounts due to issuance of warrants and common stock (7,074 ) Amortization of debt discounts 372,210 Effect of currency exchange (1 ) June 30, 2017 $ 6,340,953

Derivative Liabilities and Fair

Derivative Liabilities and Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 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) 0.07 - 3.00 Volatility 103% - 118 % Risk-free rate 1.24% - 1.55 %
Schedule of derivative liabilities at fair value	The following table provides a summary of the fair value of our derivative liabilities as of June 30, 2017 and December 31, 2016: Fair value measurements on a recurring basis Level 1 Level 2 Level 3 As of June 30, 2017: Liabilities Derivative liabilities – convertible debt and warrants $ — $ — $ 396,674 As of December 31, 2016: Liabilities None $ — $ — $ 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 six months ended June 30, 2017: Fair value as of December 31, 2016 $ 1,014,192 Additions recognized as debt discounts 21,495 Additions recognized in equity financing 451 Reduction due to settlement upon conversion (19,566 ) Gain on change in fair value of derivatives (619,898 ) Fair value as of June 30, 2017 $ 396,674

Option and Warrant Activity (Ta

Option and Warrant Activity (Tables)	6 Months Ended
	Jun. 30, 2017
Option And Warrant Activity
Schedule of option and warrant activity	Option and warrant activities during the six months ended June 30, 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 — — 900,000 $ 0.117 Options/Warrants exercised — — — — Options/Warrants expired/cancelled — — — — Outstanding at June 30, 2017 — — 15,750,000 $ 0.101

Organization, Basis of Presen20

Organization, Basis of Presentation and Significant Accounting Policies (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Software development		$ 250,184
Computer Software [Member]
Software development	$ 0	$ 250,184
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	90.00%
Government Internet Systems, Inc [Member]
Percentage of ownership	84.50%

Going Concern (Details Narrativ

Going Concern (Details Narrative)	6 Months Ended
	Jun. 30, 2017USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working capital	$ (21,500,000)

Notes Payable (Details)

Notes Payable (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Long-term Debt [Roll Forward]
Repayments of third party notes	$ (40,000)
Amortization of debt discounts	372,210	$ 306,064
Third Party [Member]
Long-term Debt [Roll Forward]
Balance, beginning	5,853,145
Borrowings from third parties	240,000
Repayments of third party notes	(44,705)
Conversion of convertible debt principal to common stock	(19,213)
Debt discounts due valuation of derivative liabilities	(21,495)
Debt discounts due to convertible debt extensions	(31,914)
Debt discounts due to issuance of warrants and common stock	(7,074)
Amortization of debt discounts	372,210
Effect of currency exchange	(1)
Balance, end	$ 6,340,953

Notes Payable (Details Narrativ

Notes Payable (Details Narrative) - USD ($)	Jan. 09, 2013	Aug. 31, 2015	Jul. 31, 2015	Dec. 31, 2014	Jun. 30, 2017	Jun. 30, 2016	May 31, 2017
Debt Instrument [Line Items]
Debt discount amortized					$ 372,210	$ 306,064
Accrued dividends						150,000
Borrowings on notes payable					$ 180,000	$ 61,900
Interest rate					10.00%
Repayments of third party notes					$ 40,000
Lakeshore Investments Llc [Member]
Debt Instrument [Line Items]
Accrued dividends					$ 65,000
NOW Solutions [Member]
Debt Instrument [Line Items]
Debt face amount	$ 1,759,150
Percentage of ownership					75.00%
Common Stock And Warrants [Member]
Debt Instrument [Line Items]
Debt discount amortized					$ 9,916
Amortization expense					54
10% Convertible Debentures [Member]
Debt Instrument [Line Items]
Debt face amount					90,000
Principal and interest payment					$ 22,421
Number of shares converted under a convertible note					1,688,762
Principal amount of debt converted					$ 80,000
10% Convertible Debentures [Member] | Third Party Lender [Member]
Debt Instrument [Line Items]
Debt face amount					$ 60,000		$ 90,000
Description of convertible debt					Beginning six months after issuance of the debenture and provided that the lowest closing price of the common stock for each of the 5 trading days immediately preceding the conversion date has been $0.03 or higher, the holder of the respective debenture may convert the debenture into shares of common stock at a price per share of 80% of the average per share price of the Company’s common stock for the 5 trading days preceding the notice of conversion date using the 3 lowest closing prices.
Number of shares issued during the period					600,000
Principle debt amount cancelled							$ 10,000
10% Convertible Debentures [Member] | Third Party Lender [Member] | Warrant [Member]
Debt Instrument [Line Items]
Warrant term					3 years
Purchase price (in dollars per share)					$ 0.10
Number of total warrants					600,000
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
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 liability and fair24

Derivative liability and fair value measurements (Details)	6 Months Ended
	Jun. 30, 2017
Expected dividends	0.00%
Minimum [Member]
Expected terms (years)	25 days
Volatility	103.00%
Risk-free rate	1.24%
Maximum [Member]
Expected terms (years)	3 years
Volatility	118.00%
Risk-free rate	1.55%

Derivative liability and fair25

Derivative liability and fair value measurements (Details 1) - Stock Derivative [Member] - USD ($)	Jun. 30, 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	$ 396,674	$ 1,014,192

Derivative liability and fair26

Derivative liability and fair value measurements (Details 2)	6 Months Ended
	Jun. 30, 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	21,495
Additions recognized in equity financing	451
Reduction due to settlement upon conversion	(19,566)
Gain on change in fair value of derivatives	(619,898)
Fair value as of March 31, 2017	$ 396,674

Derivative liability and fair27

Derivative liability and fair value measurements (Details Narrative)	6 Months Ended
	Jun. 30, 2017USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair value of derivative liabilities	$ 396,674
Gain on change in fair value of derivative liabilities	$ 619,898

Common and Preferred Stock Tr28

Common and Preferred Stock Transactions (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	May 31, 2017	Jun. 30, 2017	Jun. 30, 2016
Value of shares issued for services		$ 4,200
Fair value stock issued			$ 137,500
Debt discount amortized		372,210	306,064
Stock compensation expense		188,786	$ 141,306
Restricted Stock [Member]
Stock compensation expense		$ 67,494
Employees [Member]
Number of shares non vested		11,695,000
Non-Employees [Member]
Number of shares non vested		16,000,000
10% Convertible Debentures [Member]
Debt face amount		$ 90,000
Principal and interest payment		22,421
Principal amount		$ 90,000
Number of shares converted into common shares		1,688,762
10% Convertible Debentures [Member] | Third Party Lender [Member]
Debt face amount	$ 90,000	$ 60,000
Description of convertible debt		Beginning six months after issuance of the debenture and provided that the lowest closing price of the common stock for each of the 5 trading days immediately preceding the conversion date has been $0.03 or higher, the holder of the respective debenture may convert the debenture into shares of common stock at a price per share of 80% of the average per share price of the Company’s common stock for the 5 trading days preceding the notice of conversion date using the 3 lowest closing prices.
Number of shares granted during the period to employees		600,000
Principle debt amount cancelled	$ 10,000
10% Convertible Debentures [Member] | Third Party Lender [Member] | Warrant [Member]
Warrant term		3 years
Purchase price (in dollars per share)		$ 0.10
Number of total warrants		600,000
Ploinks, Inc [Member] | Third Party Lender [Member]
Number of shares granted		295,500
Ploinks, Inc [Member] | Convertible Debentures [Member] | Third Party Lender [Member]
Debt discount amortized		$ 31,914
Principal amount		$ 1,035,000
Consultant [Member]
Vesting period	3 years
Consulting Agreement [Member] | Consultant [Member] | Ploinks, Inc [Member]
Number of shares issued for services	50,000
Restricted Performance Stock Agreements [Member] | Consultant [Member] | Ploinks, Inc [Member]
Number of share that may be issued for services	200,000
Subscription Agreements [Member] | Third Party Subscriber [Member] | Series A Preferred Stock [Member]
Number of preferred shares purchased and issued		1,000
Fair value stock issued		$ 36,670
Description of conversion terms		Each share of VCSY Series A Preferred Stock is convertible into 500 shares of the Company’s common stock.
Amount of financing raised		$ 200,000
Subscription Agreements [Member] | Ploinks, Inc [Member] | Warrant [Member] | Third Party Subscriber [Member]
Fair value of warrant		$ 451
Restricted Stock Agreements [Member] | Consultant [Member] | Ploinks, Inc [Member]
Number of shares granted during the period to employees		350,001
Restricted Stock Agreements [Member] | Employees and Consultant [Member]
Number of shares granted during the period to employees		550,000
Restricted Stock Agreements [Member] | Employee [Member]
Value of shares issued for services		$ 2,208
Number of shares vested		120,000
Amortized expense		$ 368
Restricted Stock Agreements [Member] | Employee [Member] | Ploinks, Inc [Member]
Value of shares issued for services		$ 32,400
Number of shares granted		300,000
Description of vesting rights		150,000 shares vested immediately upon grant of the shares (as noted below) and 150,000 shares will vest in 4 months from the date of grant.
Amortized expense		$ 22,127
Restricted Stock Agreements [Member] | Employee [Member] | Ploinks, Inc [Member]
Value of shares issued for services		$ 6,480
Number of shares granted		60,000
Description of vesting rights		Vest over a 30 month period in equal installments.
Amortized expense		$ 1,082
Unregistered Common Stock [Member] | Warrant (Purchase Price of $0.10 per share) [Member] | Third Party Subscriber [Member]
Warrant term		2 years
Number of shares that may be purchased under warrants		150,000
Unregistered Common Stock [Member] | Warrant (Purchase Price of $0.20 per share) [Member] | Third Party Subscriber [Member]
Warrant term		2 years
Number of shares that may be purchased under warrants		150,000
Unregistered Common Stock [Member] | Consulting Agreement [Member] | Consultant [Member]
Number of shares issued for services	300,000
Value of shares issued for services	$ 4,200
Unregistered Common Stock [Member] | Consulting Agreement [Member] | Consultant [Member] | Ploinks, Inc [Member]
Value of shares issued for services	$ 5,400
Unregistered Common Stock [Member] | Restricted Performance Stock Agreements [Member] | Consultant [Member]
Number of share that may be issued for services	2,000,000
Common Stock And Warrants [Member]
Debt discount amortized		$ 9,916
Amortization expense		54
Common Stock [Member]
Value of shares issued for services		$ 3
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		1,688,762
Common Stock [Member] | Subscription Agreements [Member] | Third Party Subscriber [Member]
Number of shares granted during the period to employees		2,000,000
Fair value stock issued		$ 22,800
Common Stock [Member] | Subscription Agreements [Member] | Ploinks, Inc [Member] | Third Party Subscriber [Member]
Number of shares granted during the period to employees		100,000
Fair value stock issued		$ 1,196

Option and Warrant Activity (De

Option and Warrant Activity (Details)	6 Months Ended
	Jun. 30, 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	900,000
Options/Warrants exercised
Options/Warrants expired/cancelled
Balance at ending	15,750,000
Class of Warrant or Right, Exercise Price of Warrants or Rights [Roll Forward]
Balance at beginning | $ / shares	$ 0.100
Options/Warrants granted | $ / shares	0.117
Options/Warrants exercised | $ / shares
Options/Warrants expired/cancelled | $ / shares
Balance at ending | $ / shares	$ 0.101
Incentive Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning
Options/Warrants granted
Options/Warrants exercised
Options/Warrants expired/cancelled
Outstanding at ending
Non-Statutory Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at beginning
Options/Warrants granted
Options/Warrants exercised
Options/Warrants expired/cancelled
Outstanding at ending

Option and Warrant Activity (30

Option and Warrant Activity (Details Narrative)	6 Months Ended
	Jun. 30, 2017$ / shares
Option And Warrant Activity
Weighted average remaining life of outstanding warrants	1 year 11 months 23 days
Intrinsic value of exercisable warrants (in dollars per share)	$ 0.0139

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Related Party Transactions [Abstract]
Accounts payable to related parties	$ 162,500	$ 139,546
Related party debt	$ 308,242	$ 308,242

Legal Proceedings (Details Narr

Legal Proceedings (Details Narrative) - USD ($)	Apr. 12, 2017	Feb. 13, 2017	Aug. 05, 2012	Dec. 31, 2011	Mar. 31, 2017	Jun. 30, 2017	Jan. 09, 2013
Loss Contingencies [Line Items]
Value of new issues during period						$ 72,000
Interest rate						10.00%
NOW Solutions [Member]
Loss Contingencies [Line Items]
Debt face amount							$ 1,759,150
10% Convertible Debentures [Member]
Loss Contingencies [Line Items]
Debt face amount						$ 90,000
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]
Loss Contingencies [Line Items]
Debt face amount	$ 150,000
Debt issue date	Nov. 17, 2009
Two Promissory Note [Member] | NOW Solutions [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]
Damages sought, value	$ 282,299
Principal and interest accrued						$ 260,286
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 ($)	1 Months Ended	2 Months Ended	6 Months Ended
	Jul. 31, 2017	Aug. 21, 2017	Jun. 30, 2017	May 31, 2017
Subsequent Event [Line Items]
Value of shares issued			$ 72,000
10% Convertible Debentures [Member]
Subsequent Event [Line Items]
Debt face amount			90,000
Principal and interest payment			$ 22,421
Number of shares converted into common shares			1,688,762
10% Convertible Debentures [Member] | Third Party Lender [Member]
Subsequent Event [Line Items]
Debt face amount			$ 60,000	$ 90,000
Principle debt amount cancelled				$ 10,000
Description of convertible debt			Beginning six months after issuance of the debenture and provided that the lowest closing price of the common stock for each of the 5 trading days immediately preceding the conversion date has been $0.03 or higher, the holder of the respective debenture may convert the debenture into shares of common stock at a price per share of 80% of the average per share price of the Company’s common stock for the 5 trading days preceding the notice of conversion date using the 3 lowest closing prices.
Number of shares issued during the period			600,000
Ploinks, Inc [Member] | Third Party Lender [Member]
Subsequent Event [Line Items]
Number of shares granted			295,500
Unregistered Common Stock [Member] | Third Party Subscriber [Member] | Warrant (Purchase Price of $0.10 per share) [Member]
Subsequent Event [Line Items]
Warrant term			2 years
Number of shares that may be purchased under warrants			150,000
Unregistered Common Stock [Member] | Third Party Subscriber [Member] | Warrant (Purchase Price of $0.20 per share) [Member]
Subsequent Event [Line Items]
Warrant term			2 years
Number of shares that may be purchased under warrants			150,000
Common Stock [Member]
Subsequent Event [Line Items]
Number of shares converted into common shares			1,688,762
Number of shares issued during the period			3,000,000
Value of shares issued			$ 30
Subsequent Event [Member] | Third Party Lender [Member]
Subsequent Event [Line Items]
Description of convertible debt		Beginning six months after issuance of the debenture and provided that the lowest closing price of the common stock for each of the 5 trading days immediately preceding the conversion date has been $0.03 or higher, the holder of the debenture may convert the debenture into shares of common stock at a price per share of 80% of the average per share price of the Company’s common stock for the 5 trading days preceding the notice of conversion date using the 3 lowest closing prices.
Number of shares issued during the period		500,000
Subsequent Event [Member] | 10% Convertible Debentures [Member]
Subsequent Event [Line Items]
Debt face amount		$ 115,000
Subsequent Event [Member] | 10% Convertible Debentures [Member] | Third Party Lender [Member]
Subsequent Event [Line Items]
Debt face amount		50,000
Principal and interest payment		126,500
Subsequent Event [Member] | Ploinks, Inc [Member] | Third Party Lender [Member]
Subsequent Event [Line Items]
Debt face amount		$ 15,000
Number of shares granted		4,500
Subsequent Event [Member] | Consulting Agreement [Member] | Consultant [Member] | Ploinks, Inc [Member]
Subsequent Event [Line Items]
Number of shares granted	30,000
Subsequent Event [Member] | Restricted Stock Agreements [Member] | Employee [Member]
Subsequent Event [Line Items]
Number of shares vested		250,000
Subsequent Event [Member] | Restricted Stock Agreements [Member] | Employee [Member] | Ploinks, Inc [Member]
Subsequent Event [Line Items]
Number of shares vested		80,000
Subsequent Event [Member] | Subscription Agreements [Member] | Third Party Subscriber [Member] | Series A Preferred Stock [Member]
Subsequent Event [Line Items]
Number of shares issued during the period		300
Amount of financing raised		$ 60,000
Subsequent Event [Member] | Unregistered Common Stock [Member] | Third Party Subscriber [Member] | Warrant (Purchase Price of $0.10 per share) [Member]
Subsequent Event [Line Items]
Warrant term		2 years
Number of shares that may be purchased under warrants		45,000
Subsequent Event [Member] | Unregistered Common Stock [Member] | Third Party Subscriber [Member] | Warrant (Purchase Price of $0.20 per share) [Member]
Subsequent Event [Line Items]
Warrant term		2 years
Number of shares that may be purchased under warrants		45,000
Subsequent Event [Member] | Unregistered Common Stock [Member] | Third Party Lender [Member]
Subsequent Event [Line Items]
Warrant price (in dollars per share)		$ 0.10
Warrant term		3 years
Number of total warrants		500,000
Subsequent Event [Member] | Unregistered Common Stock [Member] | Consulting Agreement [Member] | Consultant [Member]
Subsequent Event [Line Items]
Number of shares granted	500,000
Subsequent Event [Member] | Common Stock [Member] | Subscription Agreements [Member] | Third Party Subscriber [Member]
Subsequent Event [Line Items]
Number of shares issued during the period		600,000
Subsequent Event [Member] | Common Stock [Member] | Subscription Agreements [Member] | Ploinks, Inc [Member] | Third Party Subscriber [Member]
Subsequent Event [Line Items]
Number of shares issued during the period		30,000