VerifyMe (VRME) 10-Q 15 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 10, 2019
Document And Entity Information
Entity Registrant Name	VerifyMe, Inc.
Entity Central Index Key	0001104038
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity's Reporting Status Current	Yes
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Small Business	true
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		104,143,611
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 1,055,585	$ 1,673,201
Accounts Receivable	28,262	30,373
Deposits on Equipment	163,090
Prepaid expenses and other current assets	29,981	25,781
Inventory	30,374	41,982
TOTAL CURRENT ASSETS	1,307,292	1,771,337
INTANGIBLE ASSETS
Patents and Trademarks, net of accumulated amortization $264,001 and $258,294 as of March 31, 2019 and December 31, 2018	227,777	209,049
Capitalized Software Costs	70,231	70,231
TOTAL ASSETS	1,605,300	2,050,617
CURRENT LIABILITIES
Accounts payable and other accrued expenses	377,786	411,211
Accrued Payroll	81,370	69,041
TOTAL CURRENT LIABILITIES	459,156	480,252
STOCKHOLDERS' EQUITY
Common stock of $.001 par value; 675,000,000 authorized; 103,993,706 and 102,553,706 issued, 103,643,166 and 102,203,166 shares outstanding as of March 31, 2019 and December 31, 2018	103,643	102,203
Additional paid in capital	60,932,481	60,844,796
Treasury stock as cost (350,540 shares at March 31, 2019 and December 31, 2018)	(113,389)	(113,389)
Accumulated deficit	(59,776,856)	(59,263,550)
STOCKHOLDERS' EQUITY	1,146,144	1,570,365
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,605,300	2,050,617
Series A Convertible Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Convertible Preferred Stock	265	305
STOCKHOLDERS' EQUITY	265	305
Series B Convertible Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Convertible Preferred Stock
STOCKHOLDERS' EQUITY

Balance Sheets (Unaudited) (Par

Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Accumulated amortization, patent and trademarks	$ 264,001	$ 258,294
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	675,000,000	675,000,000
Common stock, issued	103,993,706	102,553,706
Common stock, outstanding	103,643,166	102,203,166
Treasury stock, shares	350,540	350,540
Series A Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	37,564,767	37,564,767
Preferred stock, issued	264,778	304,778
Preferred stock, outstanding	264,778	304,778
Series B Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	85	85
Preferred stock, issued	0.85	0.85
Preferred stock, outstanding	0.85	0.85

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($)		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
NET REVENUE
Sales		$ 46,454
COST OF SALES		14,767
GROSS PROFIT		31,687
OPERATING EXPENSES
General and administrative	[1]	232,682	495,574
Legal and accounting		62,364	133,704
Payroll expenses	[1]	104,789	92,051
Research and development		3,643	12,196
Sales and marketing	[1]	143,143	8,042
Total Operating expenses		546,621	741,567
LOSS BEFORE OTHER INCOME (EXPENSE)		(514,934)	(741,567)
OTHER (EXPENSE) INCOME
Interest income (expenses), net		1,628	(791)
Settlement agreement with shareholders			(779,000)
Gain on accounts payable forgiveness			397,725
TOTAL OTHER INCOME (EXPENSE)		1,628	(382,066)
NET LOSS		$ (513,306)	$ (1,123,633)
LOSS PER SHARE
BASIC (in dollars per share)		$ (0.01)	$ (0.01)
DILUTED (in dollars per share)		$ (0.01)	$ (0.01)
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING
BASIC (in shares)		94,092,049	76,278,102
DILUTED (in shares)		94,092,049	76,278,102
[1]	Includes share based compensation of $89,085 and $289,903 for the three months ended March 31, 2019 and 2018, respectively.

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (513,306)	$ (1,123,633)
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	123,711	205,969
Fair value of restricted stock and restricted stock units issued in exchange for services	(34,626)	51,290
Gain on accounts payable forgiveness		(397,725)
Share-based payment for settlement agreement with shareholders		279,000
Amortization and depreciation	5,707	5,034
Changes in operating assets and liabilities:
Accounts Receivable	2,111
Deposit on Equipment	(163,090)
Inventory	11,608	(9,768)
Prepaid expenses and other current assets	(4,200)	(12,566)
Accounts payable and accrued expenses	(21,096)	(12,286)
Net cash used in operating activities	(593,181)	(982,041)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Patents	(24,435)	(825)
Net cash used in investing activities	(24,435)	(825)
CASH FLOWS FROM FINANCING ACTIVITIES
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
NET INCREASE IN CASH AND CASH EQUIVALENTS	(617,616)	1,648,400
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	1,673,201	693,001
CASH AND CASH EQUIVALENTS - END OF PERIOD	1,055,585	2,341,401
Cash paid during the period for:
Interest
Income taxes
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Cashless Exercise of Warrants		4,028
Common Stock and Warrants Issued for Common Stock Payable		122,478
Series A Convertible Preferred Stock [Member]
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Convertible Preferred Stock converted to common stock	800	400
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

Statement of Stockholders' Equi

Statement of Stockholders' Equity (Deficit) (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Series A Convertible Preferred Stock [Member]	Series B Convertible Preferred Stock [Member]	Series C Convertible Preferred Stock [Member]	Series D Convertible Preferred Stock [Member]	Total
Balance at beginning at Dec. 31, 2017	$ 53,522	$ 56,198,126	$ (113,389)	$ (56,331,088)	$ 325				$ (192,504)
Balance at beginning (in shares) at Dec. 31, 2017	53,523,332				324,778	0.92
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of Series A Convertible Preferred Stock	$ 400	$ (380)			$ (20)
Conversion of Series A Convertible Preferred Stock (in shares)	400,000				(20,000)
Conversion of Series B Convertible Preferred Stock	$ 599	$ (599)
Conversion of Series B Convertible Preferred Stock (in shares)	599,362				20,000	(0.07)
Sale of common stock	$ 16,513	$ 1,138,264							1,154,777
Sale of common stock (in shares)	16,513,311
Settlement Agreement	$ 1,000	278,000							279,000
Settlement Agreement (in shares)	1,000,000
Conversion of notes payable	$ 1,750	120,728							122,478
Conversion of notes payable (in shares)	1,749,683
Exercise of Warrants	$ 14,712	1,461,777							1,476,489
Exercise of Warrants (in shares)	14,712,459
Cashless Exercise of Stock Options	$ 4,028	(4,028)
Cashless Exercise of Stock Options (in shares)	4,027,778
Fair value of stock option		205,969							205,969
Restricted Stock awards and Restricted Stock Units	$ 300	50,990							51,290
Restricted Stock awards and Restricted Stock Units (in shares)	300,000
Common stock and warrants issued for services	$ 120	32,524							32,644
Common stock and warrants issued for services (in shares)	120,000
Net loss				$ (1,123,633)					(1,123,633)
Balance at ending at Mar. 31, 2018	$ 92,944	59,481,371	(113,389)	(57,454,721)	$ 305				2,006,510
Balance at ending (in shares) at Mar. 31, 2018	92,945,925				304,778	0.85
Balance at beginning at Dec. 31, 2018	$ 102,203	$ 60,844,796	$ (113,389)	$ (59,263,550)	$ 305				$ 1,570,365
Balance at beginning (in shares) at Dec. 31, 2018	102,203,166				304,778	0.85
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of Series A Convertible Preferred Stock	$ 800	$ (760)			$ (40)
Conversion of Series A Convertible Preferred Stock (in shares)	800,000				(40,000)
Conversion of Series B Convertible Preferred Stock (in shares)					40,000
Fair value of stock option		$ 123,711							$ 123,711
Restricted Stock awards and Restricted Stock Units	$ 640	$ (35,266)							$ (34,626)
Restricted Stock awards and Restricted Stock Units (in shares)	640,000
Net loss				$ (513,306)					$ (513,306)
Balance at ending at Mar. 31, 2019	$ 103,643	$ 60,932,481	$ (113,389)	$ (59,776,856)	$ 265				$ 1,146,144
Balance at ending (in shares) at Mar. 31, 2019	103,643,166				264,778	0.85

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the 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, 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 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 (“GAAP”) 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, 2018 as filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2019. The accompanying Interim 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, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods. The Company’s activities are subject to significant risks and uncertainties, including the need to secure additional funding for working capital and to further develop the Company’s patents. Basis of Presentation The accompanying financial statements are presented in accordance with GAAP. Revenue Recognition The Company accounts for revenues according to ASC Topic 606, “ Revenue from Contracts with Customers” The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: · identify the contract with a customer; · identify the performance obligations in the contract; · determine the transaction price; · allocate the transaction price to performance obligations in the contract; and · recognize revenue as the performance obligation is satisfied. During the three months ended March 31, 2019, the Company’s revenues were made up of revenue generated from printing labels with the Company’s technology. 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 periods 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, 2019 and 2018, 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, 2019 there were approximately 54,373,000 anti-dilutive shares consisting of 19,614,000 shares issuable upon exercise of options, 22,241,000 shares issuable upon exercise of warrants and 12,518,000 shares issuable upon conversion of preferred stock. 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. Going Concern The Company has suffered recurring losses from operations and negative cash flows from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Management's plans to continue as a going concern include raising additional capital through increased sales of product and by sale of common shares. The Company’s business plans are dependent on the ability to raise capital through private placements of our common stock and/or preferred stock, through the possible exercise of outstanding options and warrants, through debt financing and/or through future public offering of our securities. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The Company’s existing cash resources are sufficient to sustain the Company’s operations during the next six months, however the Company needs to raise additional funds in the future in order to remain operational until October 2019. Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial statements.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	NOTE 2 – INTANGIBLE ASSETS Patents and Trademarks The current patent and trademark portfolios consist of 10 granted US patents and 1 granted European patent validated in 4 countries, 3 pending US and foreign patent applications, 4 registered US trademark, and 9 pending US and foreign trademark applications. Costs associated with the registration and legal defense of the 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, 2019 and 2018, the Company capitalized $24,435 and $825 of patent costs and trademarks. Amortization expense for patents and trademarks was $5,707 and $5,034 for the three months ended March 31, 2019 and 2018, respectively. Capitalized Software Costs incurred in connection with the development of software related to our proprietary digital products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 “Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market. Amortization of capitalized software development costs begins once the product is available to the market. Capitalized software development costs are amortized over the estimated life of the related product, generally three years, using the straight-line method. The Company will evaluate its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company had Capitalized Software of $70,231 and $70,231 as of March 31, 2019 and December 31, 2018, respectively. The Company has not incurred a depreciation charge as the software was not available for use as of March 31, 2019.

CONVERTIBLE PREFERRED STOCK

CONVERTIBLE PREFERRED STOCK	3 Months Ended
	Mar. 31, 2019
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
CONVERTIBLE PREFERRED STOCK	NOTE 3 – 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, 2019, there were 264,778 outstanding shares of Series A 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, 2019, 40,000 shares of Series A were converted into 800,000 shares of the Company’s common 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, 2019
Equity [Abstract]
STOCKHOLDERS' EQUITY	NOTE 4 – STOCKHOLDERS’ EQUITY For the three months ended March 31, 2019 and 2018 the Company expensed $0 and $8,376 relative to restricted stock units. During the three months ended March 31, 2019, the Company granted a total of 960,000 restricted stock awards to four directors of the Company, for their services vesting quarterly over a one-year period. On February 27, 2019 three persons resigned as members of the Company’s Board of Directors, effective March 1, 2019. This resulted in a cancellation of 320,000 shares related to the portion of the unvested restricted stock awards the retired directors had received. The Company expensed $48,182 and $42,914 in related to restricted stock awards for the three months ended March 31, 2019 and 2018, respectively. Additionally, the Company corrected the vesting schedule relating to restricted stock awards awarded to the Company’s attorney, resulting in a credit of $82,808 for the three months ended March 31, 2019.

STOCK OPTIONS, RESTRICTED STOCK

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS	3 Months Ended
	Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS	NOTE 5 – 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 Compensation Committee. The 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). 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 first 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. During the three months ended March 31, 2019 and 2018, the Company expensed $123,711 and $205,969 with respect to 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, 2019: Risk Free Interest Rate 2.14 % Expected Volatility 424.69 % Expected Life (in years) 5.0 Dividend Yield 0 % Weighted average estimated fair value of options during the period $ 0.27 Options Outstanding Weighted - Average Aggregate Remaining Intrinsic Weighted- Contractual Value Number of Average Term (in 000’s) Shares Exercise Price (in years) (1) Balance as of December 31, 2018 18,613,529 $ 0.14 Granted 1,000,000 0.20 Balance March 31, 2019 19,613,529 $ 0.14 Exercisable at March 31, 2019 17,121,863 $ 0.13 3.6 $ 3,203 (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. The following table summarizes the activities for the Company’s unvested stock options for the three months ended March 31 Unvested Options Weighted - Average Grant Number of Unvested Date Exercise Price Options Balance December 31, 2018 2,016,666 $ 0.18 Granted 1,000,000 0.20 Vested (525,000 ) 0.21 Balance March 31, 2019 2,491,666 $ 0.18 During the three months ended March 31, 2019, the Company amended the Consulting Agreement held with its Chief Operating Officer and granted him 1,000,000 stock options with an exercise price of $0.195 vesting annually in equal increments over a two-year period. 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) (1) Balance, December 31, 2018 22,240,833 $ 0.31 Granted - - Balance, March 31, 2019 22,240,833 $ 0.31 3.5 Exercisable at March 31, 2019 22,240,833 $ 0.31 3.5 $ 3,387 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.29 for our common stock on March 31, 2019.

CONCENTRATIONS

CONCENTRATIONS	3 Months Ended
	Mar. 31, 2019
Risks and Uncertainties [Abstract]
CONCENTRATIONS	NOTE 6 – CONCENTRATIONS Revenue For the three months ended March 31, 2019, one customer represented 100% of revenues. Accounts Receivable As of March 31, 2019, two customers represented 100% of accounts receivable.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 7 – SUBSEQUENT EVENTS In April 2019, 20,000 shares of Series A were converted into 400,000 shares of the Company’s common stock. In April 2019, a former member of the Board exercised 100,445 warrants with an exercise price of $0.15 and a total of 100,445 shares of common stock were issued for gross proceeds of $15,067. In May 2019, the Company appointed Chris Gardner to its Board. On May 10, 2019, the Company granted Mr. Gardner the option of receiving

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Nature of the Business	Nature of the 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, 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 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 (“GAAP”) 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, 2018 as filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2019. The accompanying Interim 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, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods. The Company’s activities are subject to significant risks and uncertainties, including the need to secure additional funding for working capital and to further develop the Company’s patents.
Basis of Presentation	Basis of Presentation The accompanying financial statements are presented in accordance with GAAP.
Revenue Recognition	Revenue Recognition The Company accounts for revenues according to ASC Topic 606, “ Revenue from Contracts with Customers” The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: · identify the contract with a customer; · identify the performance obligations in the contract; · determine the transaction price; · allocate the transaction price to performance obligations in the contract; and · recognize revenue as the performance obligation is satisfied. During the three months ended March 31, 2019, the Company’s revenues were made up of revenue generated from printing labels with the Company’s technology.
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 periods 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, 2019 and 2018, 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, 2019 there were approximately 54,373,000 anti-dilutive shares consisting of 19,614,000 shares issuable upon exercise of options, 22,241,000 shares issuable upon exercise of warrants and 12,518,000 shares issuable upon conversion of preferred stock. 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.
Going Concern	Going Concern The Company has suffered recurring losses from operations and negative cash flows from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Management's plans to continue as a going concern include raising additional capital through increased sales of product and by sale of common shares. The Company’s business plans are dependent on the ability to raise capital through private placements of our common stock and/or preferred stock, through the possible exercise of outstanding options and warrants, through debt financing and/or through future public offering of our securities. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The Company’s existing cash resources are sufficient to sustain the Company’s operations during the next six months, however the Company needs to raise additional funds in the future in order to remain operational until October 2019.
Recently Issued Accounting Pronouncements Not Yet Adopted	Recently Adopted Accounting Pronouncements Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial statements.

STOCK OPTIONS, RESTRICTED STO_2

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Tables)	3 Months Ended
	Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Schedule of weighted-average assumptions 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, 2019: Risk Free Interest Rate 2.14 % Expected Volatility 424.69 % Expected Life (in years) 5.0 Dividend Yield 0 % Weighted average estimated fair value of options during the period $ 0.27
Schedule of stock option activity	Options Outstanding Weighted - Average Aggregate Remaining Intrinsic Weighted- Contractual Value Number of Average Term (in 000’s) Shares Exercise Price (in years) (1) Balance as of December 31, 2018 18,613,529 $ 0.14 Granted 1,000,000 0.20 Balance March 31, 2019 19,613,529 $ 0.14 Exercisable at March 31, 2019 17,121,863 $ 0.13 3.6 $ 3,203 (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.
Schedule of summary for the activities of unvested stock options	The following table summarizes the activities for the Company’s unvested stock options for the three months ended March 31 Unvested Options Weighted - Average Grant Number of Unvested Date Exercise Price Options Balance December 31, 2018 2,016,666 $ 0.18 Granted 1,000,000 0.20 Vested (525,000 ) 0.21 Balance March 31, 2019 2,491,666 $ 0.18
Schedule of warrant activity	The following table summarizes the activities for the Company’s warrants for the three months ended March 31, 2019: Warrants Outstanding Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in 000's) Balance, December 31, 2018 22,240,833 $ 0.31 Granted - - Balance, March 31, 2019 22,240,833 $ 0.31 3.5 Exercisable at March 31, 2019 22,240,833 $ 0.31 3.5 $ 3,387 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.29 for our common stock on March 31, 2019.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
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	54,373,000	63,471,000
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	12,518,000	13,314,000
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	22,241,000	32,143,000
Employee Stock Option [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	19,614,000	18,014,000

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative)	3 Months Ended		12 Months Ended
	Mar. 31, 2019USD ($)Number	Mar. 31, 2018USD ($)	Dec. 31, 2018USD ($)
Finite-Lived Intangible Assets [Line Items]
Capitalized Software Costs | $			$ 70,231
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Number of patents granted	10
Number of pending patents	3
Number of trademarks	4
Number of pending trademarks	9
Amortization method	Straight-line basis
Patents [Member] | Europe [Member]
Finite-Lived Intangible Assets [Line Items]
Number of patents granted	1
Patents [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated lives of intangible assets	19 years
Patents [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated lives of intangible assets	17 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 | $	$ 24,435	$ 825
Amortization expense | $	$ 5,707	$ 5,034

CONVERTIBLE PREFERRED STOCK (De

CONVERTIBLE PREFERRED STOCK (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Preferred stock, voting rights	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 [Member]
Convertible preferred stock, outstanding (in shares)	264,778		304,778
Conversion of stock, shares converted (in shares)	40,000	20,000
Conversion of shares of preferred stock to common stock (in shares)	800,000	400,000
Series B Convertible Preferred Stock [Member]
Convertible preferred stock, outstanding (in shares)	0.85		0.85
Conversion of stock, shares converted (in shares)		(0.07)
Conversion of shares of preferred stock to common stock (in shares)		599,362

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	Feb. 27, 2019	Mar. 31, 2019	Mar. 31, 2018
Restricted stock awards granted
Restricted Stock Units (RSUs) [Member]
Corrected vesting schedule relating to restricted stock awards awarded		$ 82,808
Consulting Service Agreement [Member] | Restricted Stock Units (RSUs) [Member]
Restricted stock units, Expense		$ 0	$ 8,376
Consulting Service Agreement [Member] | Restricted Stock [Member]
Option foreited to purchase common stock		48,182	42,914
Four Director [Member] | Restricted Stock [Member]
Restricted stock awards granted		960,000
Restricted stock awards granted term		1 year
Three Director [Member] | Restricted Stock [Member]
Number of share cancelled	320,000

STOCK OPTIONS, RESTRICTED STO_3

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details)	3 Months Ended
	Mar. 31, 2019$ / shares
Share-based Payment Arrangement [Abstract]
Risk Free Interest Rate	2.14%
Expected Volatility	424.69%
Expected Life (in years)	5 years
Dividend Yield	0.00%
Weighted average estimated fair value of options during the period	$ 0.27

STOCK OPTIONS, RESTRICTED STO_4

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 1) - Employee Stock Option [Member]	3 Months Ended
	Mar. 31, 2019USD ($)$ / sharesshares
Number of Shares
Balance, beginning | shares	18,613,529
Granted | shares	1,000,000
Balance, ending | shares	19,613,529
Exercisable | shares	17,121,863
Weighted Average Exercise Price
Balance, beginning | $ / shares	$ 0.14
Granted | $ / shares	0.20
Balance, ending | $ / shares	0.14
Exercisable | $ / shares	$ 0.13
Weighted Average Remaining Contractual Term
Exercisable	3 years 7 months 6 days
Aggregate Intrinsic Value
Exercisable | $	$ 3,203	[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.

STOCK OPTIONS, RESTRICTED STO_5

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 2) - Nonvested Stock Options [Member]	3 Months Ended
	Mar. 31, 2019$ / sharesshares
Number of Unvested Options
Balance, Beginning | shares	2,016,666
Granted | shares	1,000,000
Vested | shares	(525,000)
Balance, Ending | shares	2,491,666
Weighted-Average Grant Date Exercise Price
Balance, Beginning | $ / shares	$ 0.18
Granted | $ / shares	0.20
Vested | $ / shares	0.21
Balance, Ending | $ / shares	$ 0.18

STOCK OPTIONS, RESTRICTED STO_6

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 3)	3 Months Ended
	Mar. 31, 2019USD ($)$ / sharesshares
Number of Shares
Balance, beginning | shares	22,240,833
Granted | shares
Balance, ending | shares	22,240,833
Exercisable | shares	22,240,833
Weighted Average Exercise Price
Balance, beginning	$ 0.31
Granted
Balance, ending	0.31
Exercisable	$ 0.31
Weighted - Average Remaining Contractual Term
Balance, ending	3 years 6 months
Exercisable	3 years 6 months
Aggregate Intrinsic Value:
Exercisable | $	$ 3,387	[1]
Closing stock price	$ 0.29
[1]	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.29 for our common stock on March 31, 2019.

STOCK OPTIONS, RESTRICTED STO_7

STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details Narrative) - USD ($)	Nov. 14, 2017	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option, expense		$ 123,711	$ 205,969
Shares issued during period value			$ 1,154,777
Chief Operating Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted		1,000,000
Exercise price of unvested options (in dollars per share)		$ 0.195
Term of unvested options		2 years
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants exercised		0.29
Equity Incentive Plan 2017 [Member] | Board of Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued during period	13,000,000
Employee Stock Option [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).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 first 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
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

CONCENTRATIONS (Details Narrati

CONCENTRATIONS (Details Narrative)	3 Months Ended
	Mar. 31, 2019
Customer Concentration Risk One [Member] | Revenues [Member]
Concentration risk, percentage	100.00%
Customer Concentration Risk Two [Member] | Accounts Receivable [Member]
Concentration risk, percentage	100.00%

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	May 10, 2019	Apr. 30, 2019	Mar. 31, 2019	Mar. 31, 2018
Subsequent Event [Line Items]
Option, expense			$ 123,711	$ 205,969
Shares issued during period value				$ 1,154,777
Warrant [Member]
Subsequent Event [Line Items]
Warrants exercised			0.29
Series A Convertible Preferred Stock [Member]
Subsequent Event [Line Items]
Conversion of stock, shares converted (in shares)			40,000	20,000
Conversion of shares of preferred stock to common stock (in shares)			800,000	400,000
Shares issued during period
Shares issued during period value
Warrants exercised
Subsequent Event [Member] | Former Member of Board [Member] | Warrant [Member]
Subsequent Event [Line Items]
Shares issued during period		100,445
Shares issued during period value		$ 15,067
Warrants exercised		100,445
Warrant exercise price (in dollars per share)		$ 0.15
Subsequent Event [Member] | Restricted Stock [Member] | Mr. Gardner [Member]
Subsequent Event [Line Items]
Number of option granted	240,000
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member]
Subsequent Event [Line Items]
Number of units granted	240,000
Vesting period	1 year
Subsequent Event [Member] | Series A Convertible Preferred Stock [Member]
Subsequent Event [Line Items]
Conversion of stock, shares converted (in shares)		20,000
Conversion of shares of preferred stock to common stock (in shares)		400,000