Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 08, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | VRME | |
Entity Registrant Name | VerifyMe, Inc. | |
Entity Central Index Key | 1,104,038 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 96,270,888 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,341,401 | $ 693,001 |
Prepaid expenses and other current assets | 31,234 | 18,668 |
Inventory | 9,768 | |
TOTAL CURRENT ASSETS | 2,382,403 | 711,669 |
OTHER ASSETS | ||
Patents and Trademarks, net of accumulated amortization of $242,365 and $237,331 as of March 31, 2018 and December 31, 2017 | 187,298 | 191,507 |
TOTAL ASSETS | 2,569,701 | 903,176 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 513,191 | 923,202 |
Notes payable | 50,000 | 50,000 |
Common stock payable | 122,478 | |
TOTAL CURRENT LIABILITIES | 563,191 | 1,095,680 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock of $.001 par value; 675,000,000 authorized; 92,945,925 and 53,873,872 issued, 92,595,385 and 53,523,332 shares outstanding as of March 31, 2018 and December 31, 2017 | 92,944 | 53,522 |
Additional paid in capital | 59,481,371 | 56,198,126 |
Treasury stock as cost (350,540 shares at March 31, 2018 and December 31, 2017) | (113,389) | (113,389) |
Accumulated deficit | (57,454,721) | (56,331,088) |
STOCKHOLDERS' EQUITY (DEFICIT) | 2,006,510 | (192,504) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 2,569,701 | 903,176 |
Series A Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Convertible Preferred Stock | 305 | 325 |
STOCKHOLDERS' EQUITY (DEFICIT) | 305 | 325 |
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Convertible Preferred Stock | ||
STOCKHOLDERS' EQUITY (DEFICIT) |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Accumulated amortization, patent and trademarks | $ 242,366 | $ 242,366 |
Net of discount on note payable | $ 50,000 | $ 50,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 675,000,000 | 675,000,000 |
Common stock, shares issued | 92,945,925 | 53,873,872 |
Common stock, shares outstanding | 92,595,385 | 53,523,332 |
Treasury stock, shares | 350,540 | 350,540 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 37,564,767 | 37,564,767 |
Preferred stock, shares issued | 304,778 | 324,778 |
Preferred stock, shares outstanding | 304,778 | 324,778 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 85 | 85 |
Preferred stock, shares issued | 0.85 | 0.92 |
Preferred stock, shares outstanding | 0.85 | 0.92 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
OPERATING EXPENSES | |||
General and administrative | [1] | $ 495,574 | $ 142,061 |
Legal and accounting | 133,704 | 9,044 | |
Payroll expenses | [1] | 92,051 | 22,810 |
Research and development | 12,196 | 8,669 | |
Sales and marketing | 8,042 | 5,921 | |
Total operating expenses | 741,567 | 188,505 | |
LOSS BEFORE OTHER INCOME (EXPENSE) | (741,567) | (188,505) | |
OTHER (EXPENSE) INCOME | |||
Interest expenses, net | (791) | (66,544) | |
Settlement agreement with shareholders | (779,000) | ||
Gain on accounts payable forgiveness | 397,725 | ||
Change in fair value of warrants | (28,256) | ||
Change in fair value of embedded derivative liability | (21,282) | ||
TOTAL OTHER INCOME (EXPENSE) | (382,066) | (116,082) | |
NET LOSS | $ (1,123,633) | $ (304,587) | |
LOSS PER SHARE | |||
BASIC | $ (0.01) | $ (0.04) | |
DILUTED | $ (0.01) | $ (0.04) | |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | |||
BASIC | 76,278,102 | 8,397,976 | |
DILUTED | 76,278,102 | 8,397,976 | |
[1] | Includes share related payments of $289,903 and $51,597 for the three months ended March 31, 2018 and 2017, respectively. |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,123,633) | $ (304,587) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 32,644 | |
Fair value of options and warrants issued in exchange for services | 205,969 | 51,597 |
Fair value of restricted stock and restricted stock units issued in exchange for services | 51,290 | |
Gain on accounts payable forgiveness | (397,725) | |
Share-based payment for settlement agreement with shareholders | 279,000 | |
Accretion of discount on notes payable | 64,529 | |
Change in fair value of warrant liability | 28,256 | |
Change in fair value of embedded derivative liability | 21,282 | |
Amortization and depreciation | 5,034 | (2,212) |
Changes in operating assets and liabilities: | ||
Inventory | (9,768) | 1,535 |
Prepaid expenses and other current assets | (12,566) | 300 |
Accounts payable and accrued expenses | (12,286) | (5,122) |
Net cash used in operating activities | (982,041) | (144,422) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of patents | (825) | |
Net cash used in investing activities | (825) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of related party notes payable | 145,000 | |
Proceeds from exercise of warrants | 1,476,489 | |
Proceeds from sale of common stock | 1,154,777 | |
Net cash provided by financing activities | 2,631,266 | 145,000 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,648,400 | 578 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 693,001 | 22,644 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 2,341,401 | 23,222 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid during the year for: Interest | ||
Cash paid during the year for: Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Cashless Exercise of Stock Options | 4,028 | |
Common Stock and Warrants Issued for Common Stock Payable | 122,478 | |
Warrants issued as discount to notes payable | 119,651 | |
Series A Convertible Preferred Stock [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Convertible Preferred Stock converted to common stock | 400 | $ 660 |
Series B Convertible Preferred Stock [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Convertible Preferred Stock converted to common stock | $ 599 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business The Company was incorporated in the State of Nevada on November 10, 1999. The Company is based in Rochester, New York and its common stock, par value $0.001 per share (the “Common Stock”), is traded on the over-the-counter market and quoted on the OTCQB. The Company is a technology pioneer in the anti-counterfeiting industry. This broad market encompasses counterfeiting of physical and material goods and products, as well as counterfeiting of identity in digital transactions. The Company is able to deliver security solutions for identification and authentication of people, products and packaging in a variety of applications in the security field for physical transactions and owns digital patents which are in the same field. The products can be used to manage and issue secure credentials, including national IDs, passports, driver licenses and access control credentials, as well as comprehensive authentication security software to secure physical and logical access to facilities, computer networks, internet sites and mobile applications. The accompanying unaudited condensed interim financial statements (the “Interim Statements”) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by generally accepted accounting principles for complete financial statements are not included herein. The Interim Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission (the “SEC”) on April 16, 2018. The accompanying interim financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The interim results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any future interim periods. The Company’s activities are subject to significant risks and uncertainties, including the need to secure additional funding to further develop the Company’s patents. Basis of Presentation The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States of America. Basic and Diluted Net Income per Share of Common Stock The Company follows FASB ASC 260, “Earnings Per Share,” when reporting Earnings Per Share resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss for each of the years presented, common stock equivalents, including preferred stock, stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and diluted loss per share were the same. For the three months ended March 31, 2018 and 2017, there were shares potentially issuable, that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the years presented. For the three months ended March 31, 2018 there were approximately 63,471,000 anti-dilutive shares consisting of 32,143,000 relating to warrants, 18,014,000 relating to options and 13,314,000 relating to preferred share agreements. For the three months ended March 31, 2017 there were approximately 37,613,000 anti-dilutive shares consisting of 16,466,000 relating to warrants, 3,958,000 relating to options and 17,189,000 relating to preferred share agreements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases |
PATENTS AND TRADEMARKS
PATENTS AND TRADEMARKS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents and Trademark | NOTE 2 – PATENTS AND TRADEMARKS The current patent portfolio consists of 11 granted patents. Accordingly, costs associated with the registration and legal defense of these patents have been capitalized and are amortized on a straight-line basis over the estimated lives of the patents which were determined to be 17 to 19 years. During the three months ended March 31, 2018 and 2017, the Company capitalized $825 and $0 of patent costs and trademarks. Amortization expense for patents and trademarks was $5,034 and $(2,212) for the three months ended March 31, 2018 and 2017. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 3 – INCOME TAXES Income tax expense was $0 for the three and nine months ended March 31, 2018 and 2017. As of January 1, 2018, the Company had no unrecognized tax benefits, and accordingly, the Company did not recognize interest or penalties during 2018 related to unrecognized tax benefits. There has been no change in unrecognized tax benefits during the three months ended March 31, 2018, and there was no accrual for uncertain tax positions as of March 31, 2018. Tax years from 2013 through 2017 remain subject to examination by major tax jurisdictions. There is no income tax benefit for the losses for the three months ended March 31, 2018 and 2017, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2018 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 4– NOTES PAYABLE Notes payable consist of the following as of March 31, 2018 and December 31, 2017: March 31, 2018 December 31, 2017 Series A notes payable; interest at 8% per annum; principal and $ 50,000 $ 50,000 Net 50,000 50,000 Less: current portion (50,000 ) (50,000 ) Balance $ - $ - At March 31, 2018 and On October 28, 2009 the Company issued an unsecured note payable for $50,000. The note and accrued interest at 8% per annum were due in full in October 2011. The holder has never demanded payment. As of December 31, 2017, 1,749,683 shares of common stock and 1,749,683 of warrants issuable upon conversion for $120,000 principal and $2,478 accrued interest had not yet been issued in relation to the conversion of related party note payable held by a member of the Board, and as such the amount has been recorded as Common Stock payable included on the Balance Sheets as of December 31, 2017. During the three months ended March 31, 2018, those shares of common stock and warrants were issued and delivered. Pursuant to ASC 470-50- 40 Modifications and Extinguishments, the Company assessed the nature of the transaction and based on its assessment concluded it is a capital transaction in essence, and as such accounted for it through Additional Paid-In Capital with no gain or loss recognized in the Income Statement during the period. Interest expense including accretion of debt discount for the three months ended March 31, 2018 and 2017 was $1,000 and $66,544. |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2018 | |
CONVERTIBLE PREFERRED STOCK [Abstract] | |
CONVERTIBLE PREFERRED STOCK | NOTE 5 – CONVERTIBLE PREFERRED STOCK The Company has outstanding Series A Preferred Stock (the “Series A”) and Series B Preferred Stock (the “Series B”). As of March 31, 2018, there were 37,564,767 authorized and 304,778 outstanding shares of Series A and 85 authorized and 0.85 outstanding shares of Series B. Each share of Series A and B has limited voting rights, is entitled to participate with the common stock on liquidation and holders of Series A and B have beneficial ownership limitations. Series A Convertible Preferred Stock During the three months ended March 31, 2018, 20,000 shares of Series A Convertible Preferred Stock were converted into 400,000 shares of the Company’s common Stock. Series B Convertible Preferred Stock During the three months ended March 31, 2018, 0.07 shares of Series B Convertible Preferred Stock were converted into 599,362 shares of the Company’s common Stock. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 6 – STOCKHOLDERS’ EQUITY For the three months ended March 31, 2018 and 2017, the Company expensed $8,376 and $0 relative to restricted stock units. For the three months ended March 31, 2018 and 2017, the Company expensed $42,914 and $0 relative to restricted stock awards. During the quarter ended March 31, 2018, the Company granted 300,000 restricted stock awards to a director of the company for their services, vesting equally over a one year period. On September 8, 2017, the Company entered into a consulting agreement stipulating partial payment in restricted common stock. During the quarter ended March 31, 2018, 120,000 shares have been issued in relation to this agreement. These shares were valued at the closing price of the Company’s common stock as they became due for a total of $32,644 for the three months ended March 31, 2018. In 2017 the Company authorized a private placement with a maximum offering amount of $2,100,000 allowing investors to purchase units consisting of 715,000 shares of common stock and 715,000 five-year warrants exercisable at $0.15 per share. In January 2018 the Company’s Board of Directors increased the size of the private placement by an additional amount beyond the $2,100,000 limit. For the three months ended March 31, 2018, the Company has raised gross proceeds of $1,154,777 for the purchase of 16,513,311 shares of common stock and 16,513,311 warrants. Of these amounts, gross proceeds of $530,777 for the purchase of 7,590,111 shares of common stock and 7,590,111 warrants related to directors of and relatives of the directors of the Company. In January 2018, the Chairman of the Board of Directors, made a cashless exercise of 5,000,000 options related to services in 2017, whereby the Chairman disposed of 972,222 shares to the Company as part of his exercise, amounting to an issuance of 4,027,778 shares, see Note 7. On January 30, 2018, the Company authorized a 30-day offer, beginning on February 20, 2018, to the holders of the Company’s outstanding warrants exercisable at $0.15 to exercise their warrants at $0.10. This authorization was since extended until the latter of 30 days after the receipt of all Investment Letters, as defined below, in connection with the Settlement Shares, as defined below, or June 30, 2018. For the three months ended March 31, 2018, 14,607,583 shares of warrants were exercised and a total of 14,607,583 shares of common stock were issued for gross proceeds of $1,460,758. Included in the above amounts are gross proceeds of $1,089,098 from directors which resulted in 10,890,983 warrants converted into the issuance of 10,890,983 common stock. In January 2018, a member of the Board exercised 104,876 warrants with an exercise price of $0.15 and a total of 104,876 shares of common stock were issued for gross proceeds of $15,731. On March 31, 2018, the Company entered into a Confidential Settlement Agreement (the “Settlement Agreement”) with Paul Klapper, a member of the Company’s Board, Stephen Silver, PFK Development Group, Ltd. (“PFKD”) and certain other parties named in the Settlement Agreement. Pursuant to the terms of the Settlement Agreement, the Company (i) paid a total of $500,000 (the “Settlement Amount”) to PFKD and Mr. Silver and (ii) issued them each 500,000 shares of the Company’s common stock (the “Settlement Shares”). The shares were valued at $279,000 whereby $139,500 related to common stock issued to a related party and $139,500 related to common stock issued to a third party. The Settlement Agreement provides for cancellation as of March 31, 2018 of certain revenue sharing agreements between the Company and each of Mr. Klapper, Mr. Silver and PFKD, and terminates the Company’s obligation to issue warrants to purchase 3.7 million shares of the Company’s common stock at an exercise price of $0.40 per share. Mr. Klapper joined the Board of Directors on July 14, 2017 and resigned as of March 31, 2018. The Company is currently in the process of collecting letters (the “Investment Letters”), mailed by Mr. Klapper to the investors in Mr. Klapper’s funds, in order to insure that the transfer of the securities under Section 4(a)(1½) of the Securities Act of 1933 is valid. The Settlement Shares were issued pursuant to a Stock Purchase Agreement entered into in connection with the closing of the Settlement Agreement. The Company also entered into a Registration Rights Agreement with certain parties named therein with respect to the Settlement Shares and certain other shares of the Company’s common stock specified in the Registration Rights Agreement and the Settlement Agreement. In January 2018, the Company issued 1,749,683 shares of common stock and 1,749,683 shares of warrants with an exercise price of $0.15 to Mr. Klapper relating to the Note payable conversion that took place in June 2017. See Note 4. On March 28, 2018, the Company accelerated the vesting of 150,000 shares of restricted common stock owned by Mr. Klapper. |
STOCK OPTIONS, RESTRICTED STOCK
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Warrants | NOTE 7– STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS During 2013, the Company adopted a new incentive compensation plan (the “2013 Plan”). Under the 2013 Plan, the Company is authorized to grant awards of stock options, restricted stock, restricted stock units and other stock-based awards of up to an aggregate of 20,000,000 shares of common stock. The 2013 Plan is intended to permit stock options granted to employees under the 2013 Plan to qualify as Incentive Stock Options. All options granted under the 2013 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be Non-Statutory Stock Options. On November 14, 2017, the Executive Committee of the Company’s Board of Directors (the “Executive Committee”) adopted the 2017 Equity Incentive Plan (the “Plan”) which covers the potential issuance of 13 million shares of common stock. The Plan provides that directors, officers, employees, and consultants of the Company will be eligible to receive equity incentives under the Plan at the discretion of the Board or the Board’s Compensation Committee. The Board’s Compensation Committee may adopt rules and regulations to carry out the terms of the Plan. The Plan terminates on November 14, 2027 unless sooner terminated. The Plan is administered by a committee of the Board (“Compensation Committee”) which determines the persons to whom awards will be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the Plan. In connection with Incentive Stock Options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company). The aggregate fair market value (determined at the time of the grant) of stock for which an employee may exercise Incentive Stock Options under all plans of the Company shall not exceed $1,000,000 per calendar year. If any employee shall have the right to exercise any options in excess of $100,000 during any calendar year, the options in excess of $100,000 shall be deemed to be Non-Statutory Stock Options, including prices, duration, transferability and limitations on exercise. The Company issued Non-Statutory Stock Options pursuant to contractual agreements with non-employees. Options granted under the agreements are expensed when the related service or product is provided. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value represent management’s best estimates and involve inherent uncertainties and judgments. For the three months ended March 31, 2018 and March 31, 2017 the Company expensed $205,969 and $51,597 with respect to the options. The following table presents the weighted-average assumptions used to estimate the fair value of the stock options granted during the three months ended March 31, 2018: The following table presents the weighted-average assumptions used to estimate the fair value of the stock options granted during the three months ended March 31, 2018: Risk Free Interest Rate 2.39 % Expected Volatility 201.48 % Expected Life (in years) 5.0 Dividend Yield 0 % Weighted average estimated fair value of options during the period $ 0.18 Options Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price (in years) (1) Balance as of December 31, 2017 22,013,529 $ 0.11 Granted 1,000,000 0.21 Exercised (5,000,000 ) 0.07 Balance March 31, 2018 18,013,529 $ 0.13 Exercisable at March 31, 2018 15,513,529 $ 0.14 4.6 $ 2,795,335 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at each respective period. As of March 31, 2018, the aggregate intrinsic value of options exercised under the Company’s stock option plans was $2,795,335. In the quarter ended March 31, 2018, the Company amended the consulting agreement held with its Chief Operating Officer and granted 1,000,000 stock options with an exercise price of $0.2102 with 500,000 stock options vesting immediately and the remaining 500,000 stock options vesting on February 28, 2019 subject to continuing to provide consulting services. In January 2018, the Chairman of the Board made a cashless exercise of 5,000,000 options related to services in 2017, whereby the Chairman disposed of 972,222 shares to the Company as part of his exercise, amounting to an issuance of 4,027,778 shares, see Note 6. The following table summarizes the activities for the Company’s unvested stock options for the three months Unvested Options Weighted - Average Grant Number of Unvested Date Exercise Price Options Balance December 31, 2017 2,666,666 $ 0.06 Granted 1,000,000 0.21 Vested (1,166,666 ) 0.11 Balance March 31, 2018 2,500,000 $ 0.10 The following table summarizes the activities for the Company’s warrants for the three months Warrants Outstanding Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in 000's) Balance, December 31, 2017 32,292,580 $ 0.30 Granted 18,262,994 0.15 Exercised (14,712,459 ) 0.10 Cancelled/Forfeited (4,950,000 ) 0.40 Balance, March 31, 2018 30,893,116 $ 0.22 4.4 Exercisable at March 31, 2018 30,893,116 $ 0.22 4.4 $ 5,515 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.28 for our common stock on March 31, 2018. For the three months ended March 31, 2018, the Company has raised gross proceeds of $1,154,777 for the purchase of 16,513,311 shares of common stock and 16,513,311 warrants in relation to the private placement. See Note 6. In January 2018, the Company issued 1,749,683 shares of common stock and 1,749,683 shares of warrants with an exercise price of $0.15 to Mr. Klapper relating to the Note payable conversion that took place in June 2017. Additionally, 3,700,000 warrants were forfeited. See Note 4. For the three months ended March 31, 2018, 14,607,583 shares of warrants were exercised and a total of 14,607,583 shares of common stock issued for gross proceeds of $1,460,758 pursuant to the warrant discount program. See Note 6. In January 2018, a member of the Board exercised 104,876 warrants with an exercise price of $0.15 and a total of 104,876 shares of common stock were issued for gross proceeds of $15,731, see Note 6. During the three months ended March 31, 2018 an additional 1,250,000 warrants were forfeited in relation to a note payable conversion occurring in the prior year. All warrants were vested on the date of grant. |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 8 – RELATED PARTIES As of March 31, 2018 the Company had $566 due from related party included in Prepaid expenses and other current assets on the Balance Sheet. As of March 31, 2018 the Company had $30,000 due to related party included in Accounts payable and accrued expenses on the Balance Sheet. This related to a fee to a Director for his services rendered in connection with procuring the Settlement Agreement described in Note 6. As of December 31, 2017 the Company did not have any amounts due from or to related parties. |
DEBT FORGIVENESS
DEBT FORGIVENESS | 3 Months Ended |
Mar. 31, 2018 | |
Debt Forgiveness | |
DEBT FORGIVENESS | NOTE 9 – DEBT FORGIVENESS During the first quarter of 2018 the Company negotiated with certain vendors regarding balances outstanding for prior year services resulting in a Gain on accounts payable forgiveness included in the Income Statement for $397,725. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS On January 30, 2018, the Company authorized a 30-day offer, beginning on February 20, 2018, to the holders of the Company’s outstanding warrants exercisable at $0.15 to exercise their warrants at $0.10. This authorization was since extended until the latter of 30 days after the receipt of all Investment Letters in connection with the Settlement Shares, or June 30, 2018. See Note 6. Since March 31, 2018 through May 8, 2018 the Company has received gross proceeds of $292,496, in relation to the reduced warrant exercise program and issued 2,924,963 shares of common stock. In April 2018, the former Chief Executive Officer of the Company exercised his warrants at an exercise price of $0.01 for gross proceeds of $1,000 resulting in an issuance of 100,000 shares. On April 25, 2018, the Company granted 300,000 shares of vested restricted stock to a new director. On April 25, 2018, the Company accelerated the vesting of all restricted stock held by its directors to treat them the same as Paul Klapper. |
SUMMARY OF SIGNIFICANT ACCOUN16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business The Company was incorporated in the State of Nevada on November 10, 1999. The Company is based in Rochester, New York and its common stock, par value $0.001 per share (the “Common Stock”), is traded on the over-the-counter market and quoted on the OTCQB. The Company is a technology pioneer in the anti-counterfeiting industry. This broad market encompasses counterfeiting of physical and material goods and products, as well as counterfeiting of identity in digital transactions. The Company is able to deliver security solutions for identification and authentication of people, products and packaging in a variety of applications in the security field for physical transactions and owns digital patents which are in the same field. The products can be used to manage and issue secure credentials, including national IDs, passports, driver licenses and access control credentials, as well as comprehensive authentication security software to secure physical and logical access to facilities, computer networks, internet sites and mobile applications. The accompanying unaudited condensed interim financial statements (the “Interim Statements”) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by generally accepted accounting principles for complete financial statements are not included herein. The Interim Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission (the “SEC”) on April 16, 2018. The accompanying interim financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The interim results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any future interim periods. The Company’s activities are subject to significant risks and uncertainties, including the need to secure additional funding to further develop the Company’s patents. |
Basis of Presentation | Basis of Presentation The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States of America. |
Basic and Diluted Net Income per Share of Common Stock | Basic and Diluted Net Income per Share of Common Stock The Company follows FASB ASC 260, “Earnings Per Share,” when reporting Earnings Per Share resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss for each of the years presented, common stock equivalents, including preferred stock, stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and diluted loss per share were the same. For the three months ended March 31, 2018 and 2017, there were shares potentially issuable, that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the years presented. For the three months ended March 31, 2018 there were approximately 63,471,000 anti-dilutive shares consisting of 32,143,000 relating to warrants, 18,014,000 relating to options and 13,314,000 relating to preferred share agreements. For the three months ended March 31, 2017 there were approximately 37,613,000 anti-dilutive shares consisting of 16,466,000 relating to warrants, 3,958,000 relating to options and 17,189,000 relating to preferred share agreements. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | Notes payable consist of the following as of March 31, 2018 and December 31, 2017: March 31, 2018 December 31, 2017 Series A notes payable; interest at 8% per annum; principal and $ 50,000 $ 50,000 Net 50,000 50,000 Less: current portion (50,000 ) (50,000 ) Balance $ - $ |
STOCK OPTIONS, RESTRICTED STO18
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Weighted-average Assumptions Used to Estimate the Fair Values of Stock Options Granted | The following table presents the weighted-average assumptions used to estimate the fair value of the stock options granted during the three months ended March 31, 2018: Risk Free Interest Rate 2.39 % Expected Volatility 201.48 % Expected Life (in years) 5.0 Dividend Yield 0 % Weighted average estimated fair value of options during the period $ 0.18 |
Schedule of Stock Option Activity | Options Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price (in years) (1) Balance as of December 31, 2017 22,013,529 $ 0.11 Granted 1,000,000 0.21 Exercised (5,000,000 ) 0.07 Balance March 31, 2018 18,013,529 $ 0.13 Exercisable at March 31, 2018 15,513,529 $ 0.14 4.6 $ 2,795,335 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at each respective period. As of March 31, 2018, the aggregate intrinsic value of options exercised under the Company’s stock option plans was $2,795,335. |
Summary of the Activities of Unvested Stock Options | The following table summarizes the activities for the Company’s unvested stock options for the three months Unvested Options Weighted - Average Grant Number of Unvested Date Exercise Price Options Balance December 31, 2017 2,666,666 $ 0.06 Granted 1,000,000 0.21 Vested (1,166,666 ) 0.11 Balance March 31, 2018 2,500,000 $ 0.10 |
Schedule of Warrant Activity | The following table summarizes the activities for the Company’s warrants for the three months Warrants Outstanding Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in 000's) Balance, December 31, 2017 32,292,580 $ 0.30 Granted 18,262,994 0.15 Exercised (14,712,459 ) 0.10 Cancelled/Forfeited (4,950,000 ) 0.40 Balance, March 31, 2018 30,893,116 $ 0.22 4.4 Exercisable at March 31, 2018 30,893,116 $ 0.22 4.4 $ 5,515 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.28 for our common stock on March 31, 2018. |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - $ / shares | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share | 63,471,000 | 37,613,000 | |
Warrant [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share | 32,143,000 | 16,466,000 | |
Stock Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share | 18,014,000 | 3,958,000 | |
Preferred share agreements [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share | 13,314,000 | 17,189,000 |
PATENTS AND TRADEMARKS (Details
PATENTS AND TRADEMARKS (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)Patents | Mar. 31, 2017USD ($) | |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of patents granted | Patents | 11 | |
Amortization method | Straight-line basis | |
Patents [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives of intangible assets | 17 years | |
Patents [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives of intangible assets | 19 years | |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization method | Straight-line basis | |
Patents And Trademark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Capitalized patent costs and trademarks | $ 825 | $ 0 |
Amortization expense | $ 5,034 | $ (2,212) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income Tax Expense (Benefit) | $ 0 | $ 0 |
Unrecognized tax benefits | 0 | |
Change in unrecognized tax benefits | 0 | |
Accrual for uncertain tax positions | $ 0 |
NOTES PAYABLE (Narrative) (Deta
NOTES PAYABLE (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 28, 2009 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 11, 2011 | |
Debt Instrument [Line Items] | |||||
Proceeds from issuance of notes payable | $ 145,000 | ||||
Debt conversion, converted amount | $ 120,000 | ||||
Interest expense | $ 791 | 66,544 | |||
Note payable balance | 50,000 | $ 50,000 | |||
Loss on settlement of related party notes payable | $ (279,000) | ||||
Warrant [Member] | |||||
Debt Instrument [Line Items] | |||||
Shares issued on conversion of debt (in shares) | 1,749,683 | ||||
Exercise price (in dollars per share) | $ 0.10 | ||||
Common Stock payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Accrued interest | $ 2,478 | ||||
Common Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Shares issued on conversion of debt (in shares) | 1,749,683 | ||||
Notes Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Number of common stock called by warrants (in shares) | 6,151,762 | ||||
Notes Payable [Member] | Warrant [Member] | |||||
Debt Instrument [Line Items] | |||||
Expected warrant term | 5 years | ||||
Proceeds from issuance of notes payable | $ 50,000 | ||||
Series A Notes Payable Due At Maturity In October 2011 (Past Due) [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate, notes payable | 8.00% | 8.00% | 8.00% |
NOTES PAYABLE (Schedule of Note
NOTES PAYABLE (Schedule of Notes Payable) (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Notes payable | $ 50,000 | $ 50,000 |
Less: Current portion | (50,000) | (50,000) |
Balance | ||
Series A Notes Payable Due At Maturity In October 2011 (Past Due) [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 50,000 | $ 50,000 |
NOTES PAYABLE (Schedule of No24
NOTES PAYABLE (Schedule of Notes Payable) (Details) | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 11, 2011 |
Series A Notes Payable Due At Maturity In October 2011 (Past Due) [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 8.00% | 8.00% | 8.00% |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Series A Convertible Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Conversion of Stock, Shares Converted | 400,000 | |
Conversion of shares of preferred stock to common stock, shares | (20,000) | |
Preferred stock, shares authorized | 37,564,767 | 37,564,767 |
Preferred stock, shares outstanding | 304,778 | 324,778 |
Series B Convertible Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Conversion of Stock, Shares Converted | 599,362 | |
Conversion of shares of preferred stock to common stock, shares | (0.07) | |
Preferred stock, shares authorized | 85 | 85 |
Preferred stock, shares outstanding | 0.85 | 0.92 |
STOCKHOLDERS' EQUITY (Narrative
STOCKHOLDERS' EQUITY (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Mar. 28, 2018 | |
Proceeds from issuance of notes payable | $ 145,000 | |||||
Debt conversion, converted amount | $ 120,000 | |||||
Common stock issued | 53,873,872 | 92,945,925 | 53,873,872 | |||
Proceeds From Issuance Of Convertible Preferred Stock | $ 1,476,489 | |||||
Share-based payment for settlement agreement with shareholders | 279,000 | |||||
Related Party [Member] | ||||||
Share-based payment for settlement agreement with shareholders | 139,500 | |||||
Third Party [Member] | ||||||
Share-based payment for settlement agreement with shareholders | $ 139,500 | |||||
Common stock and warrant [Member] | Common Stock [Member] | ||||||
Common stock sold | 16,513,311 | 715,000 | ||||
Exercise price | $ 0.15 | $ 0.15 | ||||
Warrant term | 5 years | |||||
Private Placement [Member] | ||||||
Proceeds From Issuance of Private Placement | $ 1,154,777 | $ 2,100,000 | ||||
Board of Director [Member] | ||||||
Proceeds From Issuance Of Convertible Preferred Stock | $ 1,017,598 | |||||
Issuance of shares cashless exercise of options related to services | 5,000,000 | 4,027,778 | ||||
Board of Director [Member] | Settlement Agreement [Member] | ||||||
Number of common stock called by warrants (in shares) | 3,700,000 | |||||
Common stock issued | 500,000 | |||||
Exercise price | $ 0.40 | |||||
Amount of Settlement paid | $ 500,000 | |||||
Board of Director [Member] | Common Stock [Member] | ||||||
Shares issued to convert accounts payable | 1,749,683 | |||||
Common stock sold | 14,607,583 | |||||
Proceeds From Issuance Of Convertible Preferred Stock | $ 10,890,983 | |||||
Board of Director [Member] | Common stock and warrant [Member] | Common Stock [Member] | ||||||
Common stock sold | 7,590,111 | |||||
Board of Director [Member] | Private Placement [Member] | ||||||
Proceeds From Issuance of Private Placement | $ 2,100,000 | $ 530,777 | ||||
Chairman of Board [Member] | ||||||
Disposed shares related to services | 972,222 | |||||
Restricted Stock [Member] | Director [Member] | ||||||
Restricted stock awards granted | 300,000 | |||||
Restricted stock awards granted term | 1 year | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Option vesting | 150,000 | |||||
Restricted Stock Units (RSUs) [Member] | Consulting service agreement [Member] | ||||||
Restricted stock units, Expense | $ 8,376 | 0 | ||||
Restricted Stock Units (RSUs) [Member] | Board of Director [Member] | ||||||
Common stock issued | 5,037 | |||||
Restricted stock units, Expense | $ 42,914 | $ 0 | ||||
Restricted Stock Units (RSUs) [Member] | Consultant [Member] | ||||||
Restricted stock units issued | 120,000 | |||||
Restricted stock units fair value | $ 32,644 | |||||
Warrant [Member] | ||||||
Exercise price | $ 0.10 | |||||
Restricted stock units issued | 1,460,758 | |||||
Warrants exercisable Price | $ 0.15 | |||||
Warrant [Member] | Common stock and warrant [Member] | ||||||
Common stock sold | 16,513,311 | 715,000 | ||||
Exercise price | $ 0.15 | $ 0.15 | ||||
Warrant term | 5 years | |||||
Warrant [Member] | Board of Director [Member] | ||||||
Shares issued to convert accounts payable | 1,749,683 | |||||
Common stock sold | 14,607,583 | |||||
Proceeds From Issuance Of Convertible Preferred Stock | $ 1,089,098 | |||||
Exercise price | $ 0.15 | |||||
Warrant [Member] | Board of Director [Member] | Common stock and warrant [Member] | ||||||
Common stock sold | 7,590,111 | |||||
Warrant [Member] | Officer [Member] | ||||||
Proceeds From Issuance Of Convertible Preferred Stock | $ 15,731 | |||||
Warrants exercisable Price | $ 0.15 | |||||
Stock issued | 104,876 |
STOCK OPTIONS, RESTRICTED STO27
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Feb. 28, 2019 | Jan. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Option, expense | $ 205,969 | $ 51,597 | ||||
Intrinsic value of stock options exercised | $ 2,795,335 | |||||
Vested | 500,000 | |||||
Granted | 1,000,000 | |||||
Shares issued during period value | $ 1,154,777 | |||||
Shares issued during period | 16,513,311 | |||||
Member of Board [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued during period value | $ 15,731 | |||||
Shares issued during period | 104,876 | |||||
Klapper [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued in conversion of debt | 1,749,683 | |||||
Board of Director [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Issuance of shares cashless exercise of options related to services | 5,000,000 | 4,027,778 | ||||
Chairman of Board [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Disposed shares related to services | 972,222 | |||||
Subsequent Event [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vested | 500,000 | |||||
Warrant [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued during period | 16,513,311 | |||||
Shares issued in conversion of debt | 1,749,683 | |||||
Exercise price | $ 0.10 | |||||
Warrants exercised | 1,250,000 | |||||
Warrant [Member] | Member of Board [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise price | $ 0.15 | |||||
Warrants exercised | 104,876 | |||||
Warrant [Member] | Klapper [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued in conversion of debt | 1,749,683 | |||||
Exercise price | $ 0.15 | |||||
Forfeited warrants | 3,700,000 | |||||
Warrant [Member] | Board of Director [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise price | $ 0.15 | |||||
Warrant discount program [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued during period value | $ 1,460,758 | |||||
Shares issued during period | 14,607,583 | |||||
Warrants exercised | 14,607,583 | |||||
Stock Options, Restricted Stock and Units, and Other Stock-based Awards [Member] | Stock Option 2013 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized to be granted under plan | 20,000,000 | 20,000,000 | ||||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise price, description | In connection with Incentive Stock Options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company). The aggregate fair market value (determined at the time of the grant) of stock for which an employee may exercise Incentive Stock Options under all plans of the company shall not exceed $1,000,000 per calendar year. If any employee shall have the right to exercise any options in excess of $100,000 during any calendar year, the options in excess of $100,000 shall be deemed to be Non-Statutory Stock Options, including prices, duration, transferability and limitations on exercise. | |||||
Granted | 1,000,000 | |||||
Warrants exercised | 5,000,000 |
STOCK OPTIONS, RESTRICTED STO28
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Schedule of Fair Value Assumptions Used to Value Stock Options) (Details) | 3 Months Ended |
Mar. 31, 2018$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Risk Free Interest Rate | 2.39% |
Expected Volatility | 201.48% |
Expected Life (in years) | 5 years |
Dividend Yield | 0.00% |
Weighted average estimated fair value of options during the period | $ 0.18 |
STOCK OPTIONS, RESTRICTED STO29
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Schedule of Stock Option Activity) (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)$ / sharesshares | ||
Number of Shares: | ||
Granted | 1,000,000 | |
Employee Stock Option [Member] | ||
Number of Shares: | ||
Balance, beginning | 22,013,529 | |
Granted | 1,000,000 | |
Exercised | (5,000,000) | |
Balance, ending | 18,013,529 | |
Exercisable | 15,513,529 | |
Weighted Average Exercise Price: | ||
Balance, beginning | $ / shares | $ 0.11 | |
Granted | $ / shares | 0.21 | |
Exercised | $ / shares | 0.07 | |
Balance, ending | $ / shares | 0.13 | |
Exercisable | $ / shares | $ 0.14 | |
Weighted Average Remaining Contractual Term: | ||
Balance as of March 31, 2018 | 4 years 7 months 6 days | |
Aggregate Intrinsic Value: | ||
Exercisable as of March 31, 2018 | $ | $ 2,795,335 | [1] |
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company's common stock for options that were in-the-money at each respective period. As of March 31, 2018, the aggregate intrinsic value of options exercised under the Company's stock option plans was $2,795,335. |
STOCK OPTIONS, RESTRICTED STO30
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Schedule of Unvested Stock Option Activity) (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Granted | 1,000,000 |
Vested | (500,000) |
Nonvested Stock Options [Member] | |
Number of Shares | |
Balance, Beginning | 2,666,666 |
Granted | 1,000,000 |
Vested | (1,166,666) |
Balance, Ending | 2,500,000 |
Weighted-Average Grant Date Fair Value | |
Balance, Beginning | $ / shares | $ 0.06 |
Granted | $ / shares | 0.21 |
Vested | $ / shares | 0.11 |
Balance, Ending | $ / shares | $ 0.10 |
STOCK OPTIONS, RESTRICTED STO31
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Schedule of Warrant Activity) (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)$ / sharesshares | ||
Number of Shares: | ||
Balance, beginning | shares | 32,292,580 | |
Granted | shares | 18,262,994 | |
Exercised | shares | (14,712,459) | |
Cancelled/Forfeited | shares | (4,950,000) | |
Balance, ending | shares | 30,893,116 | |
Exercisable at March 31, 2018 | shares | 30,893,116 | |
Weighted Average Exercise Price: | ||
Balance, beginning | $ 0.30 | |
Granted | 0.15 | |
Exercised | 0.10 | |
Forfeited/canceled | 0.40 | |
Outstanding, ending | 0.22 | |
Exercisable at March 31, 2018 | $ 0.22 | |
Weighted- Average Remaining Contractual Term: | ||
Balance as of March 31, 2018 | 4 years 4 months 24 days | |
Exercisable as of March 31, 2018 | 4 years 4 months 24 days | |
Aggregate Intrinsic Value: | ||
Exercisable as of March 31, 2018 | $ | $ 5,515 | [1] |
Closing stock price | $ 0.28 | |
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.28 for our common stock on March 31, 2018. |
RELATED PARTIES (Details)
RELATED PARTIES (Details) | Mar. 31, 2018USD ($) |
Related Party Transactions [Abstract] | |
Due from related party | $ 566 |
Due to related party | $ 30,000 |
DEBT FORGIVENESS (Details)
DEBT FORGIVENESS (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Debt Forgiveness | |
Gain on accounts payable forgiveness | $ 397,725 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
May 08, 2018 | Apr. 30, 2018 | Apr. 25, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Subsequent Event [Line Items] | ||||||
Proceeds From Issuance Of Convertible Preferred Stock | $ 1,476,489 | |||||
Warrant [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Warrants exercisable Price | $ 0.15 | |||||
Exercise price | $ 0.10 | |||||
Vesting restricted common stock | 1,460,758 | |||||
Subsequent Event [Member] | Restricted Stock [Member] | New Director [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Vesting restricted common stock | 300,000 | |||||
Common stock and warrant [Member] | Warrant [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock sold | 16,513,311 | 715,000 | ||||
Exercise price | $ 0.15 | |||||
Common stock and warrant [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock sold | 2,924,963 | |||||
Proceeds from warrant | $ 292,496 | |||||
Common stock and warrant [Member] | Subsequent Event [Member] | Former Chief Executive Officer [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock sold | 100,000 | |||||
Exercise price | $ 0.01 | |||||
Proceeds from warrant | $ 1,000 |