Vertical Computer Systems (VCSY) 10-Q 8 Jun 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Jun. 08, 2018
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, 2018
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		1,150,915,201
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash	$ 106,193	$ 62,084
Accounts receivable, net of allowance for bad debts of $139,640 and $234,439	289,511	349,002
Prepaid expenses and other current assets	8,586	5,312
Total current assets	404,290	416,398
Property and equipment, net of accumulated depreciation of $1,045,597 and $1,044,936	8,422	9,211
Intangible assets, net of accumulated amortization of $319,505 and $319,504	6,690	6,690
Deposits and other assets	8,004	8,037
Total assets	427,406	440,336
Current liabilities:
Accounts payable and accrued liabilities	14,728,152	14,122,394
Accounts payable to related parties	168,862	148,760
Deferred revenue	1,762,327	1,752,421
Derivative liabilities	44,652	159,537
Convertible debentures, net of unamortized discounts of $47,729 and $75,705	1,192,272	1,164,295
Notes payable	5,901,919	3,775,703
Notes payable and convertible debt to related parties	308,242	308,242
Total current liabilities	24,106,426	21,431,352
Non-current portion - notes payable		2,158,140
Total liabilities	24,106,426	23,589,492
Convertible Cumulative Preferred stock	10,457,209	10,457,209
Stockholders' Deficit
Common Stock; $.00001 par value; 2,000,000,000 shares authorized; 1,188,415,201 issued and 1,148,415,201 outstanding as of March 31, 2018 and 1,188,095,201 issued and 1,148,095,201 outstanding as of December 31, 2017	11,886	11,883
Treasury stock: 40,000,000 as of March 31, 2018 and December 31, 2017	(400)	(400)
Additional paid-in capital	24,668,667	24,609,424
Accumulated deficit	(58,621,340)	(58,087,916)
Accumulated other comprehensive income - foreign currency translation	364,794	339,051
Total Vertical Computer Systems, Inc. stockholders' deficit	(33,576,393)	(33,127,958)
Non-controlling interest	(559,836)	(478,407)
Total stockholders' deficit	(34,136,229)	(33,606,365)
Total liabilities and stockholders' deficit	427,406	440,336
Series A 4% Convertible Cumulative Preferred Stock [Member]
Current liabilities:
Convertible Cumulative Preferred stock	10,255,185	10,255,185
Series B 10% Convertible Cumulative Preferred stock [Member]
Current liabilities:
Convertible Cumulative Preferred stock	246	246
Series C 4% Convertible Cumulative Preferred stock [Member]
Current liabilities:
Convertible Cumulative Preferred stock	200,926	200,926
Series D 15% Convertible Cumulative 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, 2018	Dec. 31, 2017
Allowance for bad debts	$ 139,640	$ 234,439
Accumulated depreciation, property and equipment	1,045,597	1,044,936
Accumulated amortization	319,505	319,504
Unamortized discounts	$ 47,729	$ 75,705
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	1,188,415,201	1,188,095,201
Common stock, outstanding	1,148,415,201	1,148,095,201
Treasury stock	40,000,000	40,000,000
Series A 4% Convertible Cumulative 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	52,800	52,800
Preferred stock, outstanding	52,800	52,800
Series B 10% Convertible Cumulative 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 4% Convertible Cumulative 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 15% Convertible Cumulative 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, 2018	Mar. 31, 2017
Revenues:
Total Revenues	$ 1,071,528	$ 942,743
Cost of Revenues	(362,477)	(373,552)
Gross Profit	709,051	569,191
Operating Expenses:
Selling, general and administrative expenses	900,443	1,082,185
Depreciation and amortization	788	325
Bad debt expense	(93,143)	(51,022)
Total operating expenses	808,088	1,031,488
Operating loss	(99,037)	(462,297)
Other Income (Expense):
Gain on derivative liabilities	141,532	339,467
Forbearance fees		(3,000)
Interest income	3	15
Interest expense	(409,720)	(558,011)
Net loss before non-controlling interest and income tax expense	(367,222)	(683,826)
Income tax expense	188,536	35,910
Net loss before non-controlling interest	(555,758)	(719,736)
Net (income) loss attributable to non-controlling interest	22,334	(8,671)
Net loss attributable to Vertical Computer Systems, Inc.	(533,424)	(728,407)
Dividends applicable to preferred stock	(155,600)	(151,472)
Net loss available to common stockholders	$ (689,024)	$ (879,879)
Basic and diluted loss per share (in dollars per share)	$ 0	$ 0
Basic weighted average of common shares outstanding (in shares)	1,148,155,646	1,133,430,551
Diluted weighted average of common shares outstanding (in shares)	1,204,514,127	1,216,490,286
Comprehensive loss:
Net loss	$ (555,758)	$ (719,736)
Translation adjustments	25,743	(23,989)
Comprehensive loss	(530,015)	(743,725)
Comprehensive (income) loss attributable to non-controlling interest	22,334	(8,671)
Comprehensive loss attributable to Vertical Computer Systems, Inc.	(507,681)	(752,396)
License and Software [Member]
Revenues:
Total Revenues	10,680
Software Maintenance [Member]
Revenues:
Total Revenues	803,475	807,512
Cloud-based Offering [Member]
Revenues:
Total Revenues	61,262	59,703
Consulting Services [Member]
Revenues:
Total Revenues	188,290	72,771
Other [Member]
Revenues:
Total Revenues	$ 7,821	$ 2,757

Consolidated Statement of Stock

Consolidated Statement of Stockholders' Deficit (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($)	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Other Comprehensive Income [Member]	Non-controlling Interest [Member]	Total
Balances, in beginning at Dec. 31, 2017	$ 11,883	$ (400)	$ 24,609,424	$ (58,087,916)	$ 339,051	$ (478,407)	$ (33,606,365)
Balances, in beginning (in shares) at Dec. 31, 2017	1,188,095,201	(40,000,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Amortization of restricted stock awards			11,874				11,874
Shares issued for vested restricted stock awards	$ 3		(3)
Shares issued for vested restricted stock awards (in shares)	320,000
Issuance of subsidiary shares for debt extension			26,987			(1,208)	25,779
Issuance of subsidiary shares for services			20,385			(3,046)	17,339
Dividends declared but unpaid to non-controlling interest holders						(54,841)	(54,841)
Other comprehensive income translation adjustment					25,743		25,743
Net loss				(533,424)		(22,334)	(555,758)
Balances, ending at Mar. 31, 2018	$ 11,886	$ (400)	$ 24,668,667	$ (58,621,340)	$ 364,794	$ (559,836)	$ (34,136,229)
Balances, ending (in shares) at Mar. 31, 2018	1,188,415,201	(40,000,000)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net loss	$ (555,758)	$ (719,736)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	788	325
Bad debt expense	(93,143)	(51,022)
Amortization of debt discounts	80,404	245,271
Gain on derivative liabilities	(141,532)	(339,467)
Common shares issued to employees		72,000
Amortization of restricted stock awards	11,874	35,167
Amortization of subsidiary restricted stock awards	17,339	46,342
Changes in operating assets and liabilities:
Accounts receivable	147,903	(12,656)
Prepaid expense and other assets	(3,258)	(34,013)
Accounts payable to related parties	20,102	(2,014)
Accounts payable and accrued liabilities	555,483	554,627
Deferred revenue	39,352	70,168
Net cash provided by (used in) operating activities	79,554	(135,008)
Cash flows from investing activities:
Purchase of equipment		(4,745)
Net cash used in investing activities		(4,745)
Cash flows from financing activities:
Borrowings on notes payable		50,000
Payments of notes payable	(31,926)	(4,716)
Net cash provided by (used in) financing activities	(31,926)	45,284
Effect of changes in exchange rates on cash	(3,519)	(14,718)
Net decrease in cash	44,109	(109,187)
Cash, beginning of period	62,084	190,448
Cash, end of period	106,193	81,261
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest	62,766	22,747
Non-cash Investing and Financing Activities:
Common shares issued for vested restricted stock awards	3	5
Debt discount due to subsidiary shares issued for debt extensions	25,779
Derivative liability for conversion of convertible debt		7,245
Common shares issued for conversion of notes and accounts payable		10,109
Debt discount due to derivative liabilities	26,647	17,741
Dividend accrued but unpaid to non-controlling interest holders	$ 54,841	$ 32,500

Organization, Basis of Presenta

Organization, Basis of Presentation and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
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, 2017. The consolidated financial statements include the accounts of the Company and its subsidiaries (collectively, “our”, “we”, the “Company,” “Vertical”, 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”), an 80% owned subsidiary, Ploinks, Inc. (“Ploinks”), an 88% 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 2017 annual report on Form 10-K have been omitted. Revenue Recognition On January 1, 2018, the company adopted ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. There was no impact to the opening balance of accumulated deficit or revenues for the quarter ended March 31, 2018 as a result of applying Topic 606. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer. ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc..). ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue. The Company disaggregates revenue by industry as well as by country to depict the nature and economic characteristics affecting revenue. The following table presents our revenue disaggregated by industry for the three months ended: Industry March 31, 2018 March 31, 2017 Agriculture $ 72,120 $ 97,451 Automotive 7,341 7,053 Distribution 22,535 17,118 Education 243,306 143,398 Financial Services 23,046 18,863 Government 150,428 117,926 Healthcare 290,539 303,602 Manufacturing 57,770 53,307 Manufacturing Services 10,856 7,140 Media 29,027 26,788 Oil and Gas 50,936 46,335 Pulp and Paper Distribution 23,913 32,517 Pulp and Paper Manufacturing 5,186 4,586 Engineering 34,777 33,588 Food Services 4,246 3,932 Government Contractor 45,502 29,139 Total Revenue $ 1,071,528 $ 942,743 The following table presents our revenue disaggregated by country for the three months ended: Country March 31, 2018 March 31, 2017 Canada $ 666,471 $ 560,257 United States 405,057 382,486 Total Revenue $ 1,071,528 $ 942,743 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, 2018 and 2017, common stock equivalents related to warrants and preferred stock were not included in the calculation of the diluted loss per share as their effect would be anti-dilutive. For the three months ended March 31, 2018 and 2017, the Company had 56,358,481 and 83,059,735 potential common shares under convertible notes which were included in the calculation of diluted loss per share. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02,” Leases” (Topic 842) which includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as a finance or an operating lease. New disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases are also required. These disclosures include qualitative and quantitative requirements, providing information about the amounts recorded in the financial statements. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect its adoption of this standard, if any, on our consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC 718. The amendments are effective for fiscal years beginning after December15, 2017 and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company adopted the standard on January 1, 2018 and the amendment did not have a material impact on its consolidated financial statements. In July 2017, the FASB issued ASU No. 2017-11, "Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception". The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The amendments are effective for fiscal years beginning after December 15, 2018 and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the effect its adoption of this standard, if any, on our consolidated financial position, results of operations or cash flows.

Going Concern

Going Concern	3 Months Ended
	Mar. 31, 2018
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, 2018 and 2017 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, 2018, we had negative working capital of approximately $23.7 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, 2018
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, 2018: December 31, 2017 $ 7,098,138 Repayments of third party notes (31,926 ) Debt discounts due to parent stock and warrants and subsidiary stock issued with debt and derivative liabilities from convertible debt (52,426 ) Amortization of debt discounts 80,404 Effect of currency exchange 1 March 31, 2018 $ 7,094,191 During the three months ended March 31, 2018, the Company extended the term of certain warrants to purchase a total of 5,400,000 shares of VCSY common stock (at $0.10 per share) for an additional 1-year period and granted 83,300 shares of the common stock of Ploinks, Inc. to third-party lenders in connection with 3 and 6-month extensions of convertible debentures in the principal amount of $540,000 that were issued in 2015 and 2016. The aggregate fair market value of the Ploinks shares was determined to be $25,779 and was recorded as debt discount and is being amortized through the term of the convertible debenture. The incremental change in the fair value of the extended warrants was immaterial and did not change the conclusion of the debt modification. For additional transactions after March 31, 2018, please see “Subsequent Events” in Note 9. Lakeshore Financing On January 9, 2013, the Company and several of its subsidiaries entered into a loan agreement (the “ Loan Agreement Lakeshore Lakeshore Note The Lakeshore Note was originally 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 Lakeshore a 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 December 31, 2017 or December 31, 2016. Under an amendment of the Lakeshore Note and the Loan Agreement executed on January 31, 2013, Vertical was obligated to transfer 25% of its ownership interest in NOW Solutions in the event certain principal payments were not timely made to Lakeshore. When the last forbearance agreement with Lakeshore expired, Lakeshore became a 25% minority owner of NOW Solutions on October 1, 2013. In December 2014, the Company and Lakeshore entered into an amendment of the Lakeshore Note and the Loan Agreement. In consideration of an extension Lakeshore granted to NOW Solutions 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 SnAPPnet, Inc. In December 2017, the Vertical and NOW Solutions and Lakeshore entered into an amendment (the “2017 Lakeshore Loan Amendment “) to the Loan Agreement and the Lakeshore Note issued to Lakeshore. Pursuant to the terms of this amendment, the principal balance of the Note was amended to $2,291,395, which included (a) all unpaid dividends and outstanding attorneys’ fees in the amount of $250,000 and (b) all outstanding accrued interest in the amount of $414,364. Under the 2017 Lakeshore Loan Amendment, any existing defaults under the Lakeshore Note and related security agreements were cured, the interest rate reverted to the non-default rate of 11% interest per annum, the Lakeshore Note was re-amortized and the term of the Lakeshore Note was extended for an additional 10 years, with monthly installment payments consisting of $31,564 due on the 10 th The 2017 Lakeshore Loan Amendment also provides that if NOW Solutions makes any advance toward net income (less Vertical’s management fee and management allocations) to Vertical, then NOW Solutions shall pay Lakeshore 25% share of such an advance no later than one business day after Vertical receives its 75% percent share. In the event NOW Solutions does not make payment to Lakeshore, the loan will be in default and NOW Solutions has five business days from discovery and notice by Lakeshore to make payment plus a penalty in the amount of 20% of the unpaid 25% share amount. In order to facilitate the execution of the 2017 Lakeshore Loan Amendment which resulted in the cure of any existing defaults under the Loan Agreement and the Note, as well as the release by Lakeshore of the security interests in the SiteFlash assets and the assets of SnAPPnet and Priority Time, the Company issued 2,500,000 VCSY common shares at a fair market value of $35,400 and 300,000 Ploinks common shares at a fair market value of $92,850 to certain third party purchasers of 600,000 shares of VHS Series A Preferred Stock from a member of Lakeshore. The company recorded a loss on debt extinguishment of $128,250 during the year ended December 31, 2017. During the three months ended March 31, 2018 and 2017, the Company, through its subsidiary, accrued dividends of $54,841 and $32,500, respectively, payable to Lakeshore.

Derivative Liabilities and Fair

Derivative Liabilities and Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
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, 2018, 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, 2018, the aggregate fair value of the outstanding derivative liabilities was $44,652. For the three months ended March 31, 2018, the net gain on the change in fair value of derivative liabilities was $141,532. The Company estimated the fair value of the derivative liabilities using the Black-Scholes option pricing model and the following key assumptions during 2018: 2018 Expected dividends 0% Expected terms (years) 0.10 - 2.26 Volatility 94% - 110% Risk-free rate 1.93% - 2.39% 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, 2018 and December 31, 2017: Fair value measurements on a recurring basis Level 1 Level 2 Level 3 As of March 31, 2018: Liabilities Derivative liabilities – convertible debt $ - $ - $ 44,652 As of December 31, 2017: Liabilities Derivatives $ - $ - $ 159,537 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, 2018: Fair value as of December 31, 2017 $ 159,537 Additions recognized as debt discounts 26,647 Gain on change in fair value of derivatives (141,532) Fair value as of March 31, 2018 $ 44,652

Common and Preferred Stock Tran

Common and Preferred Stock Transactions	3 Months Ended
	Mar. 31, 2018
Equity [Abstract]
Common and Preferred Stock Transactions	Note 5. Common and Preferred Stock Transactions During the three months ended March 31, 2018, the Company extended the term of certain warrants to purchase a total of 5,400,000 shares of VCSY common stock (at $0.10 per share) for an additional 1-year period and granted 83,300 shares of the common stock of Ploinks, Inc. to third-party lenders in connection with 3 and 6-month extensions of convertible debentures in the principal amount of $540,000 that were issued in 2015 and 2016. The incremental change in the fair value of the extended warrants was immaterial and did not change the conclusion of the debt modification. During the three months ended March 31, 2018, 320,000 shares of VCSY common stock issued to employees of the Company vested. During the three months ended March 31, 2018, 209,998 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 $11,874 for the three months ended March 31, 2018. As of March 31, 2018, there were 5,740,000 shares of unvested stock compensation awards to employees and 15,500,000 shares of unvested stock compensation awards to non-employees. Stock compensation expense for the amortization of subsidiary’s restricted stock awards was $17,339 for the three months ended March 31, 2018. 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, 2018 concerning stock transactions, please see “Subsequent Events” in Note 9.

Option and Warrant Activity

Option and Warrant Activity	3 Months Ended
	Mar. 31, 2018
Option And Warrant Activity
Option and Warrant Activity	Note 6. Option and Warrant Activity During the three months ended March 31, 2018, the Company extended the term of certain warrants to purchase a total of 5,400,000 shares of VCSY common stock (at $0.10 per share) for an additional 1-year period in connection with 3 and 6-month extensions of convertible debentures in the principal amount of $540,000 that were issued in 2015 and 2016. Option and warrant activities during the three months ended March 31, 2018 is summarized as follows: Incentive Stock Options Non-Statutory Stock Options Warrants Weighted Average Exercise Price Outstanding at December 31, 2017 - - 16,340,000 $0.101 Options/Warrants granted - - - - Options/Warrants exercised - - - - Options/Warrants expired/cancelled - - - - Outstanding at March 31, 2018 - - 16,340,000 $0.101 The weighted average remaining life of the outstanding warrants as of March 31, 2018 was 1.35. The intrinsic value of the exercisable warrants as of March 31, 2018 was $.013.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2018
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, 2018: December 31, 2017 $ 308,242 Amortization of debt discounts — March 31, 2018 $ 308,242 As of March 31, 2018, and December 31, 2017, the Company had accounts payable to employees for unreimbursed expenses and related party contractors in an aggregate amount of $168,862 and $148,760, respectively. The payables are unsecured, non-interest bearing and due on demand. As of March 31, 2018, and December 31, 2017, the Company has accrued payroll to certain current and former employees of $2,839,301 and $2,770,684, respectively. On June 30, 2016, the Company amended an agreement (originally entered into in July 2010) with certain former and current employees of the Company, concerning the deferral of payroll claims of approximately $883,190 for salary earned from 2012 to June 30, 2016 and $1,652,113 for salary earned from 2001 to 2012. The deferral period ended on December 31, 2016 at which time payroll claims of approximately $878,099 for salary earned from 2012 to December 31, 2016 and $1,652,113 for salary earned from 2001 to 2012, remained unpaid and is reflected as a current liability on the Company’s consolidated financial statements. Pursuant to the terms of the amended agreement, each current and former employee who is a party to the agreement (the “Employee(s)”) agreed to defer payment of salary from the date of the agreement (“Salary Deferral”) for a period of three months for salary earned from July 1, 2012 to June 30, 2016 and for a period of six months for salary earned from 2001 to June 30, 2012. In consideration for the Salary Deferral, the Company issued a total 3,500,000 shares of the Company’s common stock during 2016 with the Rule 144 restrictive legend (at a fair market value of $78,750) and agreed to pay each Employee a sum equal to the amount of unpaid salary at December 31, 2003 plus the amount of unpaid salary at the end of any calendar year after 2003 in which such salary was earned, plus a bonus (the “Bonus”) of nine percent interest, compounded annually until such time as the unpaid salary has been paid in full. The Company and the Employees have agreed that the Bonus will be paid from amounts anticipated to be paid to the Company in respect of specified intellectual property assets of the Company. In order to effect the payments due under this agreement, the Company assigned to the Employees a twenty percent interest in any net proceeds (gross proceeds less attorney’s fees and direct costs) derived from infringement claims and any license fees paid by a subsidiary of the Company or third party to the Company regarding (a) U.S. patent #6,826,744 and U.S. patent #7,716,629 (plus any continuation patents) on Adhesive Software’s SiteFlash™ Technology, (b) U.S. patent #7,076,521 (plus any continuation patents) in respect of “Web-Based Collaborative Data Collection System”, and (c) U.S. patent U.S. Patent No. #8,578,266 and #9,405,736 (plus any continuation patents) in respect to “Method and System for Automatically Downloading and Storing Markup Language Documents into a Folder Based Data Structure,” and (d) any license payments made (i) by a subsidiary of the Company to the Company in connection with a licensing or distribution agreement between the Company and such subsidiary or (ii) by third party to the Company in connection with a licensing or distribution agreement between the Company and a third party. Under the terms of this agreement, the Bonus is contingent on payment of unpaid wages. In addition, the Bonus is contingent upon generating revenues from the sources of the twenty percent interests in net proceeds assigned to the current and former employees. The interests that were assigned under the agreement for net proceeds consist of the underlying patents of the SiteFlash™ and Emily™ technologies and licensing under distribution and licensing agreements between the Company and subsidiaries and between the Company and third parties. Currently, there is no foreseeable income to be generated from these sources to which a twenty percent interest can reasonably be projected or otherwise applies to. There is no pending litigation regarding any of these patents. In addition, with respect to any licenses from Vertical to its subsidiaries, the licenses of technology underlying these patents were for a three percent royalty on gross revenues. If there were income, any payments under this agreement would likely be minimal. Currently, there is no income being generated from licensing. No subsidiary is currently offering a product to the market using these licensed technologies nor does Vertical have any agreement to license these technologies to a third party. Since payment of the Bonus is contingent upon first paying all unpaid salary and there are no foreseeable revenues to pay the twenty percent interest in these technologies, it is doubtful at the present time that any Bonus will be paid and therefore the Bonus was not accrued as of March 31, 2018 and December 31, 2017 as this contingent liability is considered remote. Cumulative bonus interest through March 31, 2018 is $4,718,235.

Legal Proceedings

Legal Proceedings	3 Months Ended
	Mar. 31, 2018
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 had agreed to 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 Company made $37,500 in payments due under the settlement agreement through May 7, 2012 and each party had alleged the other party was in breach of the settlement agreement. 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. 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. On September 8, 2017, the court awarded Mr. Wolman a judgment in the amount of $282,299, which accrues interest at the rate of 16% per annum plus attorney’s fees as to be determined by the court. The Company has $311,517 of principal and accrued interest as of March 31, 2018. 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, 2018
Subsequent Events [Abstract]
Subsequent Events	Note 9. Subsequent Events During the period than runs from April 1, 2018 through June 8, 2018, the Company issued an additional 2,500,000 VCSY common shares at a fair market value of $33,000 and an additional 300,000 Ploinks common shares at a fair market value of $92,850 to certain third party purchasers of 600,000 shares of VHS Series A Preferred Stock from a member of Lakeshore In order to facilitate the execution of the 2017 Lakeshore Loan Amendment which resulted in the cure of any existing defaults under the Loan Agreement and the Note, as well as the release by Lakeshore of the security interests in the SiteFlash assets and the assets of SnAPPnet and Priority Time. These additional shares were issued in order to facilitate the execution of the 2017 Lakeshore Loan Amendment which resulted in the cure of any existing defaults under the Loan Agreement and the Note, as well as the release by Lakeshore of the security interests in the SiteFlash assets and the assets of SnAPPnet and Priority Time, when VHS did not meet performance standards As of the filing date, June 8, 2018, the Company is in negotiations to extend the term of certain warrants to purchase VCSY common stock (at $0.10 per share) by granting shares of Ploinks, Inc. common stock to third-party lenders in connection with 3 and 6-month extensions of convertible debentures that were issued in 2015 and 2016.

Organization, Basis of Presen16

Organization, Basis of Presentation and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Revenue Recognition	Revenue Recognition On January 1, 2018, the company adopted ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. There was no impact to the opening balance of accumulated deficit or revenues for the quarter ended March 31, 2018 as a result of applying Topic 606. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer. ASC 606-10-50-5 requires that entities disclose disaggregated revenue information in categories (such as type of good or service, geography, market, type of contract, etc..). ASC 606-10-55-89 explains that the extent to which an entity’s revenue is disaggregated depends on the facts and circumstances that pertain to the entity’s contracts with customers and that some entities may need to use more than one type of category to meet the objective for disaggregating revenue. The Company disaggregates revenue by industry as well as by country to depict the nature and economic characteristics affecting revenue. The following table presents our revenue disaggregated by industry for the three months ended: Industry March 31, 2018 March 31, 2017 Agriculture $ 72,120 $ 97,451 Automotive 7,341 7,053 Distribution 22,535 17,118 Education 243,306 143,398 Financial Services 23,046 18,863 Government 150,428 117,926 Healthcare 290,539 303,602 Manufacturing 57,770 53,307 Manufacturing Services 10,856 7,140 Media 29,027 26,788 Oil and Gas 50,936 46,335 Pulp and Paper Distribution 23,913 32,517 Pulp and Paper Manufacturing 5,186 4,586 Engineering 34,777 33,588 Food Services 4,246 3,932 Government Contractor 45,502 29,139 Total Revenue $ 1,071,528 $ 942,743 The following table presents our revenue disaggregated by country for the three months ended: Country March 31, 2018 March 31, 2017 Canada $ 666,471 $ 560,257 United States 405,057 382,486 Total Revenue $ 1,071,528 $ 942,743
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, 2018 and 2017, common stock equivalents related to warrants and preferred stock were not included in the calculation of the diluted loss per share as their effect would be anti-dilutive. For the three months ended March 31, 2018 and 2017, the Company had 56,358,481 and 83,059,735 potential common shares under convertible notes which were included in the calculation of diluted loss per share.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02,” Leases” (Topic 842) which includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as a finance or an operating lease. New disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases are also required. These disclosures include qualitative and quantitative requirements, providing information about the amounts recorded in the financial statements. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect its adoption of this standard, if any, on our consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC 718. The amendments are effective for fiscal years beginning after December15, 2017 and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company adopted the standard on January 1, 2018 and the amendment did not have a material impact on its consolidated financial statements. In July 2017, the FASB issued ASU No. 2017-11, "Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception". The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The amendments are effective for fiscal years beginning after December 15, 2018 and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the effect its adoption of this standard, if any, on our consolidated financial position, results of operations or cash flows.

Organization, Basis of Presen17

Organization, Basis of Presentation and Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Organization Basis Of Presentation And Significant Accounting Policies Tables
Schedule of revenue disaggregated by industry	The Company disaggregates revenue by industry as well as by country to depict the nature and economic characteristics affecting revenue. The following table presents our revenue disaggregated by industry for the three months ended: Industry March 31, 2018 March 31, 2017 Agriculture $ 72,120 $ 97,451 Automotive 7,341 7,053 Distribution 22,535 17,118 Education 243,306 143,398 Financial Services 23,046 18,863 Government 150,428 117,926 Healthcare 290,539 303,602 Manufacturing 57,770 53,307 Manufacturing Services 10,856 7,140 Media 29,027 26,788 Oil and Gas 50,936 46,335 Pulp and Paper Distribution 23,913 32,517 Pulp and Paper Manufacturing 5,186 4,586 Engineering 34,777 33,588 Food Services 4,246 3,932 Government Contractor 45,502 29,139 Total Revenue $ 1,071,528 $ 942,743
Schedule of revenue disaggregated by country	The following table presents our revenue disaggregated by country for the three months ended: Country March 31, 2018 March 31, 2017 Canada $ 666,471 $ 560,257 United States 405,057 382,486 Total Revenue $ 1,071,528 $ 942,743

Notes Payable (Tables)

Notes Payable (Tables)	3 Months Ended
	Mar. 31, 2018
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, 2018: December 31, 2017 $ 7,098,138 Repayments of third party notes (31,926) Debt discounts due to parent stock and warrants and subsidiary stock issued with debt and derivative liabilities from convertible debt (52,426) Amortization of debt discounts 80,404 Effect of currency exchange 1 March 31, 2018 $ 7,094,191

Derivative Liabilities and Fa19

Derivative Liabilities and Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of fair value of the derivative liabilities using the 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 2018: 2018 Expected dividends 0% Expected terms (years) 0.10 - 2.26 Volatility 94% - 110% Risk-free rate 1.93% - 2.39%
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, 2018 and December 31, 2017: Fair value measurements on a recurring basis Level 1 Level 2 Level 3 As of March 31, 2018: Liabilities Derivative liabilities – convertible debt $ - $ - $ 44,652 As of December 31, 2017: Liabilities Derivatives $ - $ - $ 159,537
Schedule of change in the fair value of the derivative liabilities	The below table presents the change in the fair value of the derivative liabilities during the three months ended March 31, 2018: Fair value as of December 31, 2017 $ 159,537 Additions recognized as debt discounts 26,647 Gain on change in fair value of derivatives (141,532) Fair value as of March 31, 2018 $ 44,652

Option and Warrant Activity (Ta

Option and Warrant Activity (Tables)	3 Months Ended
	Mar. 31, 2018
Option And Warrant Activity
Schedule of option and warrant activity	Option and warrant activities during the three months ended March 31, 2018 is summarized as follows: Incentive Stock Options Non-Statutory Stock Options Warrants Weighted Average Exercise Price Outstanding at December 31, 2017 - - 16,340,000 $0.101 Options/Warrants granted - - - - Options/Warrants exercised - - - - Options/Warrants expired/cancelled - - - - Outstanding at March 31, 2018 - - 16,340,000 $0.101

Related Party Transactions (Tab

Related Party Transactions (Tables)	3 Months Ended
	Mar. 31, 2018
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, 2018: December 31, 2017 $ 308,242 Amortization of debt discounts — March 31, 2018 $ 308,242

Organization, Basis of Presen22

Organization, Basis of Presentation and Significant Accounting Policies (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Total Revenues	$ 1,071,528	$ 942,743
Agriculture [Member]
Total Revenues	72,120	97,451
Automotive [Member]
Total Revenues	7,341	7,053
Distribution [Member]
Total Revenues	22,535	17,118
Education [Member]
Total Revenues	243,306	143,398
Financial Services [Member]
Total Revenues	23,046	18,863
Government [Member]
Total Revenues	150,428	117,926
Healthcare [Member]
Total Revenues	290,539	303,602
Manufacturing [Member]
Total Revenues	57,770	53,307
Manufacturing Services [Member]
Total Revenues	10,856	7,140
Media [Member]
Total Revenues	29,027	26,788
Oil and Gas [Member]
Total Revenues	50,936	46,335
Pulp and Paper Distribution [Member]
Total Revenues	23,913	32,517
Pulp and Paper Manufacturing [Member]
Total Revenues	5,186	4,586
Engineering [Member]
Total Revenues	34,777	33,588
Food Services [Member]
Total Revenues	4,246	3,932
Government Contractor [Member]
Total Revenues	$ 45,502	$ 29,139

Organization, Basis of Presen23

Organization, Basis of Presentation and Significant Accounting Policies (Details 1) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Total Revenues	$ 1,071,528	$ 942,743
UNITED STATES
Total Revenues	405,057	382,486
CANADA
Total Revenues	$ 666,471	$ 560,257

Organization, Basis of Presen24

Organization, Basis of Presentation and Significant Accounting Policies (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Incremental shares from assumed conversion - convertible debt (in shares)	56,358,481	83,059,735
Subsidiaries [Member]
Percentage of ownership	75.00%
SnAPPnet, Inc [Member]
Percentage of ownership	80.00%
Priority Time Systems, Inc. [Member]
Percentage of ownership	80.00%
Ploinks, Inc [Member]
Percentage of ownership	88.00%
Government Internet Systems, Inc [Member]
Percentage of ownership	84.50%

Going Concern (Details Narrativ

Going Concern (Details Narrative)	3 Months Ended
	Mar. 31, 2018USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working capital	$ (23,700,000)

Notes Payable (Details)

Notes Payable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Long-term Debt [Roll Forward]
Amortization of debt discounts	$ 80,404	$ 245,271
Third Party [Member]
Long-term Debt [Roll Forward]
Balance, beginning	7,098,138
Repayments of third party notes	(31,926)
Debt discounts due to parent stock and warrants and subsidiary stock issued with debt and derivative liabilities from convertible debt	(52,426)
Amortization of debt discounts	80,404
Effect of currency exchange	1
Balance, end	$ 7,094,191

Notes Payable (Details Narrativ

Notes Payable (Details Narrative) - USD ($)	Jan. 09, 2013	Jun. 01, 2018	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2014
Accrued dividend			$ (54,841)
Loss on debt extinguishment					$ 128,250
Debt discount amortized			$ 80,404	$ 245,271
Subsidiaries [Member]
Percentage of ownership			75.00%
Ploinks, Inc [Member]
Percentage of ownership			88.00%
Ploinks, Inc [Member] | Employees And Consultant [Member]
Description of warrant term			Company extended the term of certain warrants to purchase a total of 5,400,000 shares of VCSY common stock (at $0.10 per share) for an additional 1-year period and granted 83,300 shares of the common stock of Ploinks, Inc. to third party lenders in connection with 3 and 6-month extensions of convertible debentures in the principal amount of $540,000 that were issued in 2015 and 2016.
Number of shares granted			83,300
Debt discount amortized			$ 25,779
Ploinks, Inc [Member] | Employees And Consultant [Member] | Warrant (Purchase Price of $0.10 per share) [Member]
Debt face amount			$ 540,000
Number of total warrants issued			5,400,000
11% Secured Lakeshore Note Due January 31, 2022 [Member]
Debt frequency of periodic payments	Monthly
Debt periodic payment	$ 24,232
Debt term	10 years
Percentage of assignment of interest in gross revenues generated from licenses of an asset	8.00%
11% Secured Lakeshore Note Due January 31, 2022 [Member] | Subsidiaries [Member]
Percentage of royalty on annual gross revenues	6.00%
Threshold annual gross revenues	$ 5,000,000
11% Secured Lakeshore Note Due January 31, 2022 [Member] | SiteFlash [Member]
Percentage of assignment of interest in gross revenues generated from licenses of an asset	5.00%
11% Secured Lakeshore Note [Member] | 2017 Lakeshore Loan Agreement Amendment [Member]
Debt face amount					2,291,395
Debt periodic payment					$ 31,564
Terms of an amendment of note payable					Under the 2017 Lakeshore Loan Amendment, any existing defaults under the Lakeshore Note and related security agreements were cured, the interest rate reverted to the non-default rate of 11% interest per annum, the Lakeshore Note was re-amortized and the term of the Lakeshore Note was extended for an additional 10 years, with monthly installment payments consisting of $31,564 due on the 10th day of each month, beginning on January 10, 2018. In addition, the security agreements for the SiteFlash assets, the assets of Priority Time, and the assets of SnAPPnet were cancelled and Lakeshore agreed to file notices of termination of all UCC lien statements in connection with these assets.
Outstanding accrued interest					$ 414,364
Terms of any advances to shareholders toward net income					The 2017 Lakeshore Loan Amendment also provides that if NOW Solutions makes any advance toward net income (less Vertical’s management fee and management allocations) to Vertical, then NOW Solutions shall pay Lakeshore 25% share of such an advance no later than one business day after Vertical receives its 75% percent share. In the event NOW Solutions does not make payment to Lakeshore, the loan will be in default and NOW Solutions has five business days from discovery and notice by Lakeshore to make payment plus a penalty in the amount of 20% of the unpaid 25% share amount.
Accrued dividend			$ 54,841	$ 32,500
11% Secured Lakeshore Note [Member] | 2017 Lakeshore Loan Agreement Amendment [Member] | Subsequent Event [Member]
Number of shares issued during the period		2,500,000
Aggregate fair market value		$ 33,000
11% Secured Lakeshore Note [Member] | 2017 Lakeshore Loan Agreement Amendment [Member] | Subsequent Event [Member] | Series A Preferred Stock [Member]
Number of shares of a subsidiary of the parent company purchased by third parties from another third party		600,000
11% Secured Lakeshore Note [Member] | Ploinks, Inc [Member] | 2017 Lakeshore Loan Agreement Amendment [Member] | Subsequent Event [Member]
Number of shares issued during the period		300,000
Aggregate fair market value		$ 92,850
Lakeshore Investments Llc [Member]
Debt face amount	$ 1,759,150
Lakeshore Investments Llc [Member] | 11% Secured Lakeshore Note Due January 31, 2022 [Member] | Priority Time Systems, Inc. [Member]
Percentage of ownership						20.00%

Derivative Liabilities and Fa28

Derivative Liabilities and Fair Value Measurements (Details)	3 Months Ended
	Mar. 31, 2018
Expected Dividends [Member]
Derivative liability, measurement input	0
Expected Term [Member] | Minimum [Member]
Derivative liability, expected terms	1 month 6 days
Expected Term [Member] | Maximum [Member]
Derivative liability, expected terms	2 years 3 months 6 days
Volatility [Member] | Minimum [Member]
Derivative liability, measurement input	94
Volatility [Member] | Maximum [Member]
Derivative liability, measurement input	110
Risk Free Interest Rate [Member] | Minimum [Member]
Derivative liability, measurement input	1.93
Risk Free Interest Rate [Member] | Maximum [Member]
Derivative liability, measurement input	2.39

Derivative Liabilities and Fa29

Derivative Liabilities and Fair Value Measurements (Details 1) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Liabilities
Derivative liabilities - convertible debt	$ 44,652
Stock Derivative [Member] | Level 1 [Member]
Liabilities
Derivative liabilities - convertible debt
Stock Derivative [Member] | Level 2 [Member]
Liabilities
Derivative liabilities - convertible debt
Stock Derivative [Member] | Level 3 [Member]
Liabilities
Derivative liabilities - convertible debt	$ 44,652	$ 159,537

Derivative Liabilities and Fa30

Derivative Liabilities and Fair Value Measurements (Details 2)	3 Months Ended
	Mar. 31, 2018USD ($)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value as of beginning	$ 159,537
Additions recognized as debt discounts	26,647
Gain on change in fair value of derivatives	(141,532)
Fair value as of end	$ 44,652

Derivative Liabilities and Fa31

Derivative Liabilities and Fair Value Measurements (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Outstanding derivative liabilities	$ 44,652
Gain on change in fair value of derivative liabilities	$ 141,532	$ 339,467

Common and Preferred Stock Tr32

Common and Preferred Stock Transactions (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Amortization of restricted stock awards	$ 11,874	$ 35,167
Subsidiaries [Member]
Amortization of restricted stock awards	$ 17,339
Employees And Consultant [Member]
Number of shares vested	320,000
Employees And Consultant [Member] | Ploinks, Inc [Member]
Description of warrant term	Company extended the term of certain warrants to purchase a total of 5,400,000 shares of VCSY common stock (at $0.10 per share) for an additional 1-year period and granted 83,300 shares of the common stock of Ploinks, Inc. to third party lenders in connection with 3 and 6-month extensions of convertible debentures in the principal amount of $540,000 that were issued in 2015 and 2016.
Number of shares granted	83,300
Employees And Consultant [Member] | Ploinks, Inc [Member] | Restricted Stock [Member]
Number of shares vested	209,998
Employees And Consultant [Member] | Warrant (Purchase Price of $0.10 per share) [Member] | Ploinks, Inc [Member]
Number of total warrants issued	5,400,000
Debt face amount	$ 540,000
Employee [Member]
Number of shares non vested	5,740,000
Non Employees [Member]
Number of shares non vested	15,500,000

Option and Warrant Activity (De

Option and Warrant Activity (Details)	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Warrant [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights [Roll Forward]
Balance at beginning	16,340,000
Options/Warrants granted
Options/Warrants exercised
Options/Warrants expired/cancelled
Balance at ending	16,340,000
Class of Warrant or Right, Exercise Price of Warrants or Rights [Roll Forward]
Balance at beginning | $ / shares	$ 0.101
Options/Warrants granted | $ / shares
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]
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 (34

Option and Warrant Activity (Details Narrative)	3 Months Ended
	Mar. 31, 2018USD ($)$ / sharesshares
Weighted average remaining life of outstanding warrants	1 year 4 months 6 days
Intrinsic value of exercisable warrants (in dollars per share) | $ / shares	$ 0.013
Employees And Consultant [Member] | Warrant (Purchase Price of $0.10 per share) [Member] | Ploinks, Inc [Member]
Number of total warrants issued | shares	5,400,000
Debt face amount | $	$ 540,000

Related Party Transactions (Det

Related Party Transactions (Details)	3 Months Ended
	Mar. 31, 2018USD ($)
Related Party Transactions [Abstract]
Balance beginning	$ 308,242
Amortization of debt discounts
Balance ending	$ 308,242

Related Party Transactions (D36

Related Party Transactions (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended		54 Months Ended	60 Months Ended	72 Months Ended	138 Months Ended	144 Months Ended
	May 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2017	Jun. 30, 2012	Dec. 31, 2012	Mar. 31, 2018
Related Party Transaction [Line Items]
Accounts payable to related parties		$ 148,760				$ 148,760			$ 168,862
Percentage of royalty on gross revenues		3.00%
Deferred payroll to former employees		$ 2,770,684				2,770,684			2,839,301
Employees Agreement [Member]
Related Party Transaction [Line Items]
Cumulative bonus interest									$ 4,718,235
Mr. William Mills [Member]
Related Party Transaction [Line Items]
Number of shares issued in lieu of payment	5,000,000
Fair value of stock issued in lieu of payment	$ 100,000
Fees accrued for services rendered	$ 100,000
Employee and Former Employee [Member] | Employees Agreement [Member]
Related Party Transaction [Line Items]
Number of shares isssued during the period			3,500,000
Value of shares issued			$ 78,750
Amount of accrued payroll				$ 883,190	$ 878,099	$ 1,118,561	$ 1,652,113	$ 1,652,113
Percentage of assignment of interest in gross revenues generated from licenses of an asset		20.00%
Description of payments under agreement				In order to effect the payments due under this agreement, the Company assigned to the Employees a twenty percent interest in any net proceeds (gross proceeds less attorney’s fees and direct costs) derived from infringement claims and any license fees paid by a subsidiary of the Company or third party to the Company regarding (a) U.S. patent #6,826,744 and U.S. patent #7,716,629 (plus any continuation patents) on Adhesive Software’s SiteFlash™ Technology, (b) U.S. patent #7,076,521 (plus any continuation patents) in respect of “Web-Based Collaborative Data Collection System”, and (c) U.S. patent U.S. Patent No. #8,578,266 and #9,405,736 (plus any continuation patents) in respect to “Method and System for Automatically Downloading and Storing Markup Language Documents into a Folder Based Data Structure,” and (d) any license payments made (i) by a subsidiary of the Company to the Company in connection with a licensing or distribution agreement between the Company and such subsidiary or (ii) by third party to the Company in connection with a licensing or distribution agreement between the Company and a third party.

Legal Proceedings (Details Narr

Legal Proceedings (Details Narrative) - USD ($)	Sep. 08, 2017	Apr. 12, 2017	Aug. 05, 2012	Dec. 31, 2011	Mar. 31, 2018	Feb. 13, 2017
Subsidiaries [Member]
Loss Contingencies [Line Items]
Interest rate	16.00%
Judgment principal and accrued interest					$ 311,517
Damages sought, value	$ 282,299	$ 282,299
10% Convertible Debentures [Member] | Parker Mills, LLP [Member]
Loss Contingencies [Line Items]
Accrued principal and interest amount					$ 124,583
Interest rate						12.00%
Debt face amount						$ 100,000
One Promissory Note [Member] | Subsidiaries [Member]
Loss Contingencies [Line Items]
Debt face amount		$ 150,000
Debt issue date		Nov. 17, 2009
Two Promissory Note [Member] | Subsidiaries [Member]
Loss Contingencies [Line Items]
Debt face amount		$ 50,000
Debt issue date		Aug. 28, 2014
Litigation Case Against InfiniTek Corporation [Member]
Loss Contingencies [Line Items]
Litigation settlement amount			$ 82,500
Loss contingency accrual payments				$ 37,500

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($)	2 Months Ended
	Jun. 01, 2018	Jun. 08, 2018
Ploinks, Inc [Member] | Warrant [Member]
Share price (in dollars per share)		$ 0.10
2017 Lakeshore Loan Agreement Amendment [Member] | 11% Secured Lakeshore Note [Member]
Number of shares issued during the period	2,500,000
Aggregate fair market value	$ 33,000
2017 Lakeshore Loan Agreement Amendment [Member] | 11% Secured Lakeshore Note [Member] | Series A Preferred Stock [Member]
Number of shares of a subsidiary of the parent company purchased by third parties from another third party	600,000
2017 Lakeshore Loan Agreement Amendment [Member] | 11% Secured Lakeshore Note [Member] | Ploinks, Inc [Member]
Number of shares issued during the period	300,000
Aggregate fair market value	$ 92,850