Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 13, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | VerifyMe, Inc. | |
Entity Central Index Key | 0001104038 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Reporting Status Current | Yes | |
Entity File Number | 000-31927 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | NV | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,575,554 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 9,595,133 | $ 252,766 |
Accounts Receivable | 46,074 | 81,113 |
Deposits on Equipment | 51,494 | |
Prepaid expenses and other current assets | 46,801 | 31,801 |
Inventory | 34,630 | 30,158 |
TOTAL CURRENT ASSETS | 9,722,638 | 447,332 |
PROPERTY AND EQUIPMENT | ||
Equipment for lease, net of accumulated amortization of $22,870 and $0 as of June 30, 2020 and December 31, 2019, respectively | 227,714 | 177,021 |
INTANGIBLE ASSETS | ||
Patents and Trademarks, net of accumulated amortization of $306,223 and $292,588 as of June 30, 2020 and December 31, 2019, respectively | 233,698 | 218,570 |
Capitalized Software Costs, net of accumulated amortization of $10,023 and $0 as of June 30, 2020 and December 31, 2019, respectively | 90,208 | 100,231 |
TOTAL ASSETS | 10,274,258 | 943,154 |
CURRENT LIABILITIES | ||
Convertible Debt, net of unamortized debt discount | 297,997 | |
Derivative Liability | 171,499 | |
Accounts payable and other accrued expenses | 371,609 | 422,297 |
Accrued Payroll | 13,133 | 119,041 |
TOTAL CURRENT LIABILITIES | 384,742 | 1,010,834 |
LONG-TERM LIABILITIES | ||
Term Note | 72,400 | |
TOTAL LIABILITIES | 457,142 | 1,010,834 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common stock of $.001 par value; 675,000,000 authorized; 5,350,391 and 2,239,120 issued, 5,343,380 and 2,232,112 shares outstanding as of June 30,2020 and December 31, 2019, respectively | 5,343 | 2,232 |
Additional paid in capital | 75,441,731 | 61,814,826 |
Treasury stock as cost (7,011 shares at June 30, 2020 and December 31, 2019) | (113,389) | (113,389) |
Accumulated deficit | (65,516,569) | (61,771,349) |
STOCKHOLDERS' EQUITY (DEFICIT) | 9,817,116 | (67,680) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 10,274,258 | 943,154 |
Series A Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Convertible Preferred Stock | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Convertible Preferred Stock |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Accumulated amortization, equipment for Lease | $ 22,870 | $ 0 |
Accumulated amortization, patent and trademarks | 306,223 | 292,588 |
Accumulated amortization, capitalized software costs | $ 10,023 | $ 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 675,000,000 | 675,000,000 |
Common stock, issued | 5,350,391 | 2,239,120 |
Common stock, outstanding | 5,343,380 | 2,232,112 |
Treasury stock, shares | 7,011 | 7,011 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 37,564,767 | 37,564,767 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 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 | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
NET REVENUE | |||||
Sales | $ 75,256 | $ 40,479 | $ 167,102 | $ 86,933 | |
COST OF SALES | 13,172 | 7,085 | 29,974 | 21,852 | |
GROSS PROFIT | 62,084 | 33,394 | 137,128 | 65,081 | |
OPERATING EXPENSES | |||||
General and administrative | [1] | 461,211 | 418,195 | 1,031,793 | 650,877 |
Legal and accounting | 53,174 | 68,335 | 89,725 | 130,699 | |
Payroll expenses | [1] | 209,530 | 101,786 | 303,525 | 206,575 |
Research and development | 402 | 2,608 | 402 | 6,251 | |
Sales and marketing | [1] | 79,439 | 109,158 | 122,349 | 252,301 |
Total Operating expenses | 803,756 | 700,082 | 1,547,794 | 1,246,703 | |
LOSS BEFORE OTHER INCOME (EXPENSE) | (741,672) | (666,688) | (1,410,666) | (1,181,622) | |
OTHER (EXPENSE) INCOME | |||||
Interest (expenses) income, net | (1,911,385) | 1,032 | (2,054,050) | 2,660 | |
Loss on Extinguishment of debt | (280,504) | ||||
TOTAL OTHER (EXPENSE) INCOME | (1,911,385) | 1,032 | (2,334,554) | 2,660 | |
NET LOSS | $ (2,653,057) | $ (665,656) | $ (3,745,220) | $ (1,178,962) | |
LOSS PER SHARE | |||||
BASIC (in dollars per share) | $ (1.04) | $ (0.34) | $ (1.56) | $ (0.61) | |
DILUTED (in dollars per share) | $ (1.04) | $ (0.34) | $ (1.56) | $ (0.61) | |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | |||||
BASIC (in shares) | 2,549,844 | 1,950,416 | 2,394,948 | 1,928,687 | |
DILUTED (in shares) | 2,549,844 | 1,950,416 | 2,394,948 | 1,928,687 | |
[1] | Includes share based compensation of $365,295 and $687,924 for the three and six months ended June 30, 2020, respectively, and $259,923 and $349,008 for the three and six months ended June 30, 2019, respectively. |
Statements of Operations (Una_2
Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Stock-based compensation | $ 365,295 | $ 259,923 | $ 687,924 | $ 349,008 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (3,745,220) | $ (1,178,962) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 49,681 | 15,000 |
Fair value of options in exchange for services | 485,470 | 249,788 |
Fair value of restricted stock awards issued in exchange for services | 98,938 | 84,220 |
Fair value of warrants in exchange for services | 53,835 | |
Loss on Extinguishment of Debt | 280,504 | |
Amortization of debt discount | 1,992,000 | |
Common stock issued for interest expense | 60,802 | |
Amortization and depreciation | 46,528 | 11,635 |
Changes in operating assets and liabilities: | ||
Accounts Receivable | 35,039 | 8,349 |
Deposits on Equipment | (163,090) | |
Inventory | (4,472) | (1,284) |
Prepaid expenses and other current assets | (15,000) | (4,200) |
Accounts payable and accrued expenses | (37,555) | (34,694) |
Net cash used in operating activities | (699,450) | (1,013,238) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Patents | (28,763) | (28,574) |
Purchase of Equipment for lease | (22,069) | |
Capitalized Software Costs | (46,196) | |
Net cash used in investing activities | (50,832) | (74,770) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from public offering of securities, net of costs | 9,023,046 | |
Proceeds from issuance of notes payable | 72,400 | |
Repayment of bridge financing and early redemption fee | (750,000) | |
Proceeds from convertible debt, net of costs | 1,747,203 | |
Net cash provided by financing activities | 10,092,649 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 9,342,367 | (1,088,008) |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 252,766 | 1,673,201 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 9,595,133 | 585,193 |
Cash paid during the period for: | ||
Interest | 1,250 | |
Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Common Stock issued in relation to conversion of 2020 Debentures and warrant cancellation | 1,992,000 | |
Relative fair value of common stock issued in connection with 2020 Debentures | 34,412 | |
Relative fair value of warrants issued in connection with 2020 Debentures | 1,063,239 | |
Beneficial conversion feature in connection with 2020 Debentures | 649,552 | |
Common stock cancelled | 19 | |
Cashless Exercise of Warrants | 2 | |
Common stock issued to settle accrued payroll | 119,041 | |
Series A Convertible Preferred Stock [Member] | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Convertible Preferred Stock converted to common stock | $ 122 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Dec. 31, 2018 | $ 305 | $ 2,044 | $ 60,944,955 | $ (113,389) | $ (59,263,550) | $ 1,570,365 | |
Balance at beginning (in shares) at Dec. 31, 2018 | 304,778 | 0.85 | 2,044,063 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of Series A Convertible Preferred Stock | $ (305) | $ 122 | 183 | ||||
Conversion of Series A Convertible Preferred Stock (in shares) | (304,778) | 121,911 | |||||
Common stock issued for services | $ 1 | 14,999 | 15,000 | ||||
Common stock issued for services (in shares) | 1,426 | ||||||
Cashless Exercise of Warrants | $ 1 | (1) | |||||
Cashless Exercise of Warrants (in shares) | 1,435 | ||||||
Fair value of stock option | 249,788 | 249,788 | |||||
Restricted Stock awards and Restricted Stock Units | $ 18 | 84,202 | 84,220 | ||||
Restricted Stock awards and Restricted Stock Units (in shares) | 17,600 | ||||||
Net loss | (1,178,962) | (1,178,962) | |||||
Balance at ending at Jun. 30, 2019 | $ 2,186 | 61,294,126 | (113,389) | (60,442,512) | 740,411 | ||
Balance at ending (in shares) at Jun. 30, 2019 | 0.85 | 2,186,435 | |||||
Balance at beginning at Mar. 31, 2019 | $ 265 | $ 2,073 | 61,034,051 | (113,389) | (59,776,856) | 1,146,144 | |
Balance at beginning (in shares) at Mar. 31, 2019 | 264,778 | 0.85 | 2,072,863 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of Series A Convertible Preferred Stock | $ (265) | $ 106 | 159 | ||||
Conversion of Series A Convertible Preferred Stock (in shares) | (264,778) | 105,911 | |||||
Common stock issued for services | $ 1 | 14,999 | 15,000 | ||||
Common stock issued for services (in shares) | 1,426 | ||||||
Cashless Exercise of Warrants | $ 1 | (1) | |||||
Cashless Exercise of Warrants (in shares) | 1,435 | ||||||
Fair value of stock option | 126,077 | 126,077 | |||||
Restricted Stock awards and Restricted Stock Units | $ 5 | 118,841 | 118,846 | ||||
Restricted Stock awards and Restricted Stock Units (in shares) | 4,800 | ||||||
Net loss | (665,656) | (665,656) | |||||
Balance at ending at Jun. 30, 2019 | $ 2,186 | 61,294,126 | (113,389) | (60,442,512) | 740,411 | ||
Balance at ending (in shares) at Jun. 30, 2019 | 0.85 | 2,186,435 | |||||
Balance at beginning at Dec. 31, 2019 | $ 2,232 | 61,814,826 | (113,389) | (61,771,349) | (67,680) | ||
Balance at beginning (in shares) at Dec. 31, 2019 | 0.85 | 2,232,112 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of Series A Convertible Preferred Stock (in shares) | 0 | ||||||
Common stock issued for services | $ 3 | 17,178 | 17,181 | ||||
Common stock issued for services (in shares) | 3,335 | ||||||
Common stock issued in connection with 2020 Debentures | $ 19 | 66,893 | 66,912 | ||||
Common stock issued in connection with 2020 Debentures (in shares) | 19,208 | ||||||
Common Stock in relation to conversion of 2020 Debentures, interest expense and cancellation of warrants | $ 816 | 2,051,986 | 2,052,802 | ||||
Common Stock in relation to conversion of 2020 Debentures, interest expense and cancellation of warrants (in shares) | 816,713 | ||||||
Common Stock issued in relation to public offering of securities | $ 2,254 | 9,020,792 | 9,023,046 | ||||
Common Stock issued in relation to public offering of securities (in shares) | 2,253,913 | ||||||
Cancellation of common stock | $ (19) | 19 | |||||
Cancellation of common stock (in shares) | (19,401) | ||||||
Fair value of stock option | 485,470 | 485,470 | |||||
Restricted stock awards | $ 38 | 217,941 | 217,979 | ||||
Restricted stock awards (in shares) | 37,500 | ||||||
Fair value of warrants issued for services | 53,835 | 53,835 | |||||
Beneficial conversion feature in connection with 2020 Debentures | 649,552 | 649,552 | |||||
Fair value of warrants issued in connection with 2020 Debentures | 1,063,239 | 1,063,239 | |||||
Net loss | (3,745,220) | (3,745,220) | |||||
Balance at ending at Jun. 30, 2020 | $ 5,343 | 75,441,731 | (113,389) | (65,516,569) | 9,817,116 | ||
Balance at ending (in shares) at Jun. 30, 2020 | 0.85 | 5,343,380 | |||||
Balance at beginning at Mar. 31, 2020 | $ 2,252 | 63,884,638 | (113,389) | (62,863,512) | 909,989 | ||
Balance at beginning (in shares) at Mar. 31, 2020 | 0.85 | 2,252,653 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued for services | $ 2 | 9,445 | 9,447 | ||||
Common stock issued for services (in shares) | 2,002 | ||||||
Common Stock in relation to conversion of 2020 Debentures, interest expense and cancellation of warrants | $ 816 | 2,051,986 | 2,052,802 | ||||
Common Stock in relation to conversion of 2020 Debentures, interest expense and cancellation of warrants (in shares) | 816,716 | ||||||
Common Stock issued in relation to public offering of securities | $ 2,254 | 9,020,792 | 9,023,046 | ||||
Common Stock issued in relation to public offering of securities (in shares) | 2,253,913 | ||||||
Cancellation of common stock | $ (19) | 19 | |||||
Cancellation of common stock (in shares) | (19,401) | ||||||
Fair value of stock option | 267,865 | 267,865 | |||||
Restricted stock awards | $ 38 | 153,151 | 153,189 | ||||
Restricted stock awards (in shares) | 37,500 | ||||||
Fair value of warrants issued for services | 53,835 | 53,835 | |||||
Net loss | (2,653,057) | (2,653,057) | |||||
Balance at ending at Jun. 30, 2020 | $ 5,343 | $ 75,441,731 | $ (113,389) | $ (65,516,569) | $ 9,817,116 | ||
Balance at ending (in shares) at Jun. 30, 2020 | 0.85 | 5,343,380 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business VerifyMe, Inc. (“VerifyMe,” or the “Company,” “we,” “us,” or “our”) 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, and warrants are traded on The Nasdaq Capital Market (“Nasdaq”) under the trading symbols “VRME” and “VRMEW,” respectively. The Company is a technology solutions provider specializing in brand protection functions such as counterfeit prevention, authentication, serialization, track and trace features for labels, packaging and products. The Company began to commercialize its covert luminescent pigment, RainbowSecure®, in 2018 and also developed the patented VeriPAS™ software system in 2018, which covertly and overtly serializes products to track a product’s “life cycle” for brand owners. We believe VeriPAS™ is the only invisible covert serialization and authentication solution deployed through variable digital printing on HP Indigo (a division of HP Inc.) printing systems with a smartphone tracking and authentication system. VeriPAS™ is capable of fluorescing, decoding, and verifying invisible RainbowSecure® codes in the field – designed to allow investigators to quickly and efficiently authenticate product throughout the distribution chain, including warehouses, ports of entry, retail locations, and product purchased over the internet for inspection and investigative actions. This technology is coupled with a secure cloud-based track and trace software engine which allows brands and investigators to see where products originate and where they are deployed with geo location mapping and intelligent programable alerts. Brand owners access the VeriPAS™ software over the internet. Brand owners can then set rules of engagement, establish marketing programs for customer engagement and control, and monitor and protect their products “life cycle.” The Company has not yet derived any revenue from the VeriPAS™ software system and has derived limited revenue from the sale of our RainbowSecure® technology. 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 intellectual property. Reverse Stock Split On June 17, 2020, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation, as amended, with the Nevada Secretary of State to effect a 50-to-1 reverse stock split of the Company’s issued and outstanding common stock and treasury stock, effective on June 18, 2020 (the “Reverse Stock Split”). The Reverse Stock Split does not affect the total number of shares of common stock that the Company is authorized to issue. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented, unless otherwise specified. Basis of Presentation 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 U.S. 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, 2019 as filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2020. 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 and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any future interim periods. Revenue Recognition The Company accounts for revenues according to Accounting Standards Codification (“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 obligations are satisfied. During the three and six months ended June 30, 2020, the Company’s revenues were primarily generated from printing labels with the Company’s technology. Sequencing As of September 19, 2019, the Company adopted a sequencing policy whereby all equity-linked instruments issued prior to the closing of the $600,000 secured convertible debentures on September 19, 2019 may be classified as equity and all future equity-linked instruments may be classified as a derivative liability with the exception of instruments related to stock-based compensation issued to employees or directors. As of March 6, 2020 the Company redeemed the secured convertible debentures issued as of September 19, 2019 and as a result abandoned the sequencing policy previously adopted, so that all equity-linked instruments going forward may be classified as equity. Convertible Debt The Company recognizes the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert debt into common stock at a price per share that is less than the trading price to the public on the date of the debt. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debt, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the interest method. Basic and Diluted Net Income per Share of Common Stock The Company follows Financial Accounting Standards Board (“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 each of the three and six months ended June 30, 2020 and 2019, 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 and six months ended June 30, 2020, there were approximately 4,369,000 anti-dilutive shares consisting of 446,000 shares issuable upon exercise of options, 3,779,000 shares issuable upon exercise of warrants, and 144,000 shares issuable upon conversion of preferred stock. For the three and six months ended June 30, 2019, there were approximately 978,000 anti-dilutive shares consisting of 392,000 shares issuable upon exercise of options, 441,000 shares issuable upon exercise of warrants and 144,000 shares issuable upon conversion of preferred stock. Liquidity On August 27, 2014, FASB issued Accounting Standards Update (ASU) 2014-05, Disclosure of Uncertainties about an Entitys ability to Continue as a Going Concern (ASU 2014-05), which requires management to assess a companys ability to continue as a going concern within one year from financial statement issuance and to provide related footnote disclosures in certain circumstances. The accompanying financial statements and notes have been prepared assuming the Company will continue as a going concern. During the year ended December 31, 2019 the Company suffered from recurring losses from operations and negative cash flows from operations, resulting in a need for, among other things, capital resources. As of December 31, 2019, the Company had cash of $252,766 and disclosed that its ability to continue as a going concern was predicated on the Company’s ability to raise capital and to sustain adequate working capital to finance its operations. During the first half of 2020, the Company participated in an underwritten public offering and raised approximately $10.0 million in gross proceeds, and $9,023,046 in net proceeds after deducting discounts and commissions and other offering expenses. The Company met and exceeded those predications thus mitigating any substantial doubt about the Company’s ability to continue as a going concern as defined by ASU 2014-05 and its ability to satisfy the estimated liquidity needs for the twelve months from the issuance of the financial statements. 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 2018-07”), 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. Effective January 1, 2019, the Company adopted ASU No. 2016-02 – “Leases (Topic 842)” and the series of related Accounting Standards Updates that followed (collectively referred to as “Topic 842”) using the modified retrospective approach. The adoption of Topic 842 did not have a material impact on the Company’s financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 2 – PROPERTY AND EQUIPMENT Equipment for Lease During the six months ended June 30, 2020 and 2019, the Company capitalized $73,563 (including a $51,494 deposit made in fiscal 2019) and $0, respectively, in connection with the certification and production of the VerifyMe Beeper and the VeriPAS™ Smartphone Authenticator technology. The Company depreciates equipment for lease over its useful life of five years. Depreciation expense for equipment for lease was $11,435 and $22,870 for the three and six months ended June 30, 2020, respectively, and $0 for each of the three and six months ended June 30, 2019, |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 3 – INTANGIBLE ASSETS Patents and Trademarks The current patent and trademark portfolios consist of ten granted U.S. patents and one granted European patent validated in four countries, five pending U.S. and foreign patent applications, six registered U.S. trademarks, four registered foreign registrations, including one each in Colombia, Europe, Japan, and Mexico, and four pending U.S. and foreign trademark applications. In January 2020, the Company received a Notice of Allowance for the U.S. Patent Application for the dual code authentication process relating to the Company’s invisible QR code and smartphone reading system “Device and Method for Authentication.” The Company’s registered patents expire between the years 2021 and 2037. 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 six months ended June 30, 2020 and 2019, the Company capitalized $28,763 and $28,574, respectively, of patent and trademarks costs. Amortization expense for patents and trademarks was $7,003 and $5,928 for the three months ended June 30, 2020 and 2019, respectively, and $13,635 and $11,635 for the six months ended June 30, 2020 and 2019, respectively. Capitalized Software Costs incurred in connection with the development of software related to our proprietary digital products are accounted for in accordance with FASB 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 costs begins once the product is available to the market. Capitalized software costs are amortized over the estimated life of the related product, generally five years, using the straight-line method. The Company will evaluate its software assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. During the six months ended June 30, 2020 and 2019, the Company capitalized $0 and $46,196, respectively, related to software costs. Amortization expense for capitalized software was $5,012 and $0 for the three months ended June 30, 2020 and 2019, respectively, and $10,023 and $0 for the six months ended June 30, 2020 and 2019, respectively, |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 6 Months Ended |
Jun. 30, 2020 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
CONVERTIBLE PREFERRED STOCK | NOTE 4 – CONVERTIBLE PREFERRED STOCK The Company is authorized to issue Series A Convertible Preferred Stock, par value of $0.001 per share (the “Series A”) and Series B Convertible Preferred Stock, par value of $0.001 per share (the “Series B”). As of June 30, 2020, there were no shares of Series A outstanding and 0.85 of a share of Series B outstanding convertible into 144,444 shares of common stock. During the six months ended June 30, 2020 and June 30, 2019, 0 and 304,778 shares of Series A, respectively, were converted into 0 and 121,911 shares of the Company’s common stock, respectively. Each share of Series A and Series B has limited voting rights, is entitled to participate with the common stock on liquidation and holders of Series A and Series B are subject to beneficial ownership limitations. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | NOTE 5 – CONVERTIBLE DEBT On September 19, 2019, the Company completed the closing of $600,000 of secured convertible debentures (the “2019 Debentures”) for gross proceeds of $540,000 after original issue discounts. As of September 18, 2019 (the “Effective Date”), the Company entered into two substantially identical securities purchase agreements (the “Securities Purchase Agreements”) with two purchasers (the “Purchasers”), which provided for the issuance of up to an aggregate of $1.2 million in principal amount of the 2019 Debentures (the “Bridge Financing”) of which the first tranche of $600,000 was issued. The Securities Purchase Agreements provided for the issuance of the 2019 Debentures due one year from the dates of issuance in two $600,000 tranches: the first tranche as described above, and the second tranche, at the discretion of the Purchasers and us, to occur any time after November 17, 2019. If, at any time after November 17, 2019, the Purchasers elected not to consummate the closing of the second tranche, then the Company was entitled to raise up to $600,000 from additional investors (including the Company’s affiliates) who would have a security interest on a pari passu In connection with the 2019 Debentures, each of the Purchasers received commitment fees of $5,000 and 500,000 restricted shares (the “Commitment Shares”) of our common stock. The placement agent for the 2019 Debentures received a cash fee of 8% of the gross proceeds received at the closing and was entitled to receive warrants convertible into shares of common stock until May 2020 when the placement agent waived its right to receive the warrants. The 2019 Debentures contained provisions that entitled each Purchaser, at any time, to convert all or any portion of the outstanding principal amount of its 2019 Debenture(s) plus any accrued interest into restricted shares of common stock. If we consummated a public offering within 180 calendar days of the Effective Date, then the conversion price would be the lesser of (a) $7.50 or (b) 70% multiplied of the price per share of the common stock we issued in the public offering (the “QPI Discounted Price”), subject to further adjustment as provided in the 2019 Debentures as well as subject in each case to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events. Further, if the Company consummated a public offering of common stock which resulted in us receiving gross proceeds of at least $5 million within 180 calendar days of the Effective Date then we would have been obligated to repay the outstanding amounts owed under the 2019 Debentures, to the extent they were not converted and including the applicable redemption premium then in effect, within three days of consummation of such an offering. If any portion of the 2019 Debentures was outstanding on the 181st calendar day after the Effective Date, then the conversion price would equal the lesser of (a) $7.50, (b) the QPI Discounted Price, or (c) 70% of the lowest volume-weighted average price (as reported by Bloomberg LP) of the common stock on any trading day during the 20 trading days immediately preceding the date of conversion of the 2019 Debentures (provided, further, that if either we are not DWAC operational at the time of conversion, the common stock is traded on the OTC Pink at the time of conversion, or the conversion price was less than $0.50 per share, then 70% would automatically adjust to 60%). The 2019 Debentures were subject to a “conversion blocker” such that the each of the Purchasers could not convert the 2019 Debentures to the extent that the conversion would result in the Purchaser and its affiliates holding more than 4.99% of the outstanding common stock (which the Purchaser could increase to 9.99% upon at least 61 days prior written notice to us). So long as no event of default had occurred and was continuing under the 2019 Debentures, the Company could at our option call for redemption all or part of the 2019 Debentures prior to the maturity date, upon not more than two calendar days written notice, for an amount equal to: (i) if the redemption date was 90 calendar days or less from the date of issuance of the 2019 Debentures, 110% of the sum of the principal amount; (ii) if the redemption date was greater than or equal to 91 calendar days from the date of issuance of the 2019 Debentures and less than or equal to 150 calendar days from the date of issuance of the 2019 Debentures, 120% of the sum of the principal amount; (iii) if the redemption date was greater than or equal to 151 calendar days from the date of issuance of the 2019 Debentures and less than or equal to 180 calendar days from the date of issuance of the 2019 Debentures, 125% of the sum of the principal amount; and (iv) if either (1) the 2019 Debentures were in default but the holder consents to the redemption notwithstanding such default or (2) the redemption date was greater than or equal to 181 calendar days from the date of issuance of the 2019 Debentures, 130% of the sum of the principal amount. The 2019 Debentures included an adjustment provision that, subject to certain exceptions, would reduce, at the Purchaser’s option, the conversion price if we issued common stock or common stock equivalents (including in variable rate transactions) at a price lower than the then-current conversion price of the 2019 Debentures. Any reverse stock split of our outstanding shares would also have resulted in an adjustment of the conversion price of the 2019 Debentures. The conversion option, the QPI put and the put that were exercisable upon certain financing events are embedded derivatives that are collectively bifurcated at fair value, with subsequent changes in fair value recognized in the Statement of Operations. The fair value estimate is a Level 3 measurement as defined by ASC Topic 820, Fair Value Measurements and Disclosures, as it is based on significant inputs not observable in the market. The Company estimated the fair value of the monthly payment provision using a Monte Carlo Simulation, with 10,000 trials, with the following key inputs: June 30, 2020 December 31, 2019 Stock price - $3.50 - $5.00 Terms (years) - 0.72 – 1.00 Volatility - 153.9% - 195.7% Risk-free rate - 1.60% - 1.87% Probability of QPI - 50% As of December 31, 2019, the Company’s warrants issuable to the Company’s placement agent in relation to the 2019 Debentures were treated as derivative liabilities and changes in the fair value were recognized in earnings. The Company estimated the fair value of these potentially issuable warrants using the Black-Scholes method and the following assumptions: June 30, December 31, Closing trade price of Common Stock $ - $ 3.50 Intrinsic value of conversion option per share $ - $ 3.50 June 30, December 31, Annual Dividend Yield - 0.0% Expected Life (Years) - 5 Risk-Free Interest Rate - 1.68%-1.69% Expected Volatility - 445.01%-453.08% Expected volatility was based primarily on historical volatility. Historical volatility was computed using daily pricing observations for recent periods. The Company believes this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected term of these warrants. The Company had no reason to believe future volatility over the expected remaining life of these warrants was likely to differ materially from historical volatility. The expected life was based on the expected remaining term of the warrants. The risk-free rate was based on the U.S. Treasury rate that corresponded to the expected term of the warrants. The Company recorded a total of $401,957 debt discount upon the closing of the 2019 Debentures, including $171,425 fair value of the embedded derivative liability, $70,100 fair value of the common stock issued, $78,693 of direct transaction costs incurred, $21,739 related to warrants issuable to the placement agent, and $60,000 original issue discount. The debt discount is amortized to interest expense over the term of the loan. Amortization of the debt discount associated with the 2019 Debentures was $99,954 for the year ended December 31, 2019 and was included in interest expense in the Statements of Operations. The 2019 Debentures were fully redeemed on February 26, 2020 for a face value of $600,000 and an early redemption fee of $150,000 resulting in a $280,504 loss on extinguishment of debt included in the Statement of Operations. The following table summarizes the 2019 Debentures outstanding as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Convertible Debentures, due September 18, 2020: Principal value $ - $ 600,000 Unamortized debt discount - (302,003 ) Carrying value of convertible notes - 297,997 Total short-term carrying value of Convertible Debentures $ - $ 297,997 Embedded Derivative Liability: Fair value of derivative liability, December 31, 2019 $ 171,499 Gain on extinguishment of debt (171,499 ) Fair value of derivative liability, June 30, 2020 $ - On March 6, 2020, the Company completed the offering of $1,992,000 of senior secured convertible debentures (the “2020 Debentures”) and raised $1,992,000 in gross proceeds from the sale of the 2020 Debentures and 2020 Warrants (defined below). Of this amount, $330,000 was received from four directors and an entity in which one officer of the Company is a majority owner and co-manager. The Company received $1,747,203 after deducting direct transaction costs. The Company used $750,000 of the net proceeds to redeem the existing 2019 Debentures prior to maturity, with a face value of $600,000 and an early redemption fee of $150,000. The 2020 Debentures were due eighteen months following issuance as follows; $932,000 on August 26, 2021, $910,000 on August 28, 2021 and $150,000 on September 6, 2021. The Company’s capital structure after the closing had no outstanding variably-priced convertible instruments on its Balance Sheets. The 2020 Debentures were secured by a blanket lien on all assets of the Company until such time the 2020 Debentures were paid in full or converted in full. The 2020 Debentures were automatically convertible into shares of the Company’s common stock upon the earliest to occur of (i) the commencement of trading of the common stock on the Nasdaq, New York Stock Exchange or NYSE American (an “Uplist”) at the Uplist Conversion Price (defined below); or (ii) at any time the minimum bid price of the common stock exceeded $25.00 per share for twenty (20) consecutive trading days and the average trading volume during the 10 trading days prior to the conversion was at least 2,000 shares and the shares were registered under an effective registration statement or the shares were salable under Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended. The “Uplist Conversion Price” was the lesser of $4.00 or a 30% discount to the public offering price a share of common stock was offered to the public in a securities offering resulting in the listing of the common stock on the Nasdaq, New York Stock Exchange or NYSE American. The 2020 Debentures were convertible, at any time, at the option of the holder, into shares of common stock, at a fixed conversion price equal to $4.00 per share. The embedded conversion feature was not determined to be a derivative that required bifurcation pursuant to FASB ASC 815, “Derivatives and Hedging” (“ASC 815”), but was determined to be a beneficial conversion feature that required recognition within equity on the commitment date. The beneficial conversion feature was recognized at its intrinsic value on the commitment date, limited to the proceeds allocated to the convertible debt. As such, the Company recorded $649,552 within additional paid-in-capital on the Balance Sheets for the beneficial conversion feature identified. The debt discount arising from recognition of the beneficial conversion feature was amortized as interest expense over the term of the convertible debt. In connection with the issuance of the 2020 Debentures, the Company also issued warrants (“2020 Warrants”) to purchase 498,000 shares of common stock. Each 2020 Warrant had a three-year (3) term and was immediately exercisable at an exercise price of $7.50 per share. If at any time after six months following the issuance date and prior to the expiration date the Company failed to maintain an effective registration statement (the “Registration Statement”) with the SEC covering the resale of the shares of common stock underlying the 2020 Warrants, the 2020 Warrants could have been exercised by means of a “cashless exercise,” until such time as there was an effective Registration Statement. Each 2020 Warrant contained customary adjustment provisions in the event of a stock split, reverse stock split or recapitalization. 2020 Warrants for 82,500 shares were issued to four directors and an entity in which one officer of the Company is a majority owner. The 2020 Warrants were determined to meet equity classification pursuant to FASB ASC 480, “Distinguish by Liabilities from Equity” and ASC 815. As such, the relative fair value of the 2020 Warrants was recorded as additional paid-in-capital on the Balance Sheets, which was determined to be $1,063,239, on the issuance date. The debt discount arising from recognition of the 2020 Warrants was amortized as interest expense over the term of the convertible debt. On June 22, 2020, the Company cancelled the 2020 Warrants for twenty-three of the twenty-five warrant holders and issued to the holders of the cancelled 2020 Warrants an aggregate of 179,200 shares of Common Stock. Of this amount, 33,000 shares of Common stock were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. 2020 Warrants to purchase an aggregate of 81,700 shares of Common Stock at an exercise price of $4.59 per share remain outstanding. Also on such date, the 2020 Debentures were automatically converted into an aggregate of 637,513 shares of common stock and warrants to purchase 573,479 shares of common stock. Of this amount, 105,567 shares of common stock and warrants to purchase 105,567 of shares of common stock were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. See Note 8 – Stock options, Restricted Stock and Warrants. In connection with the 2020 Debentures, the Company entered into an agreement with a non-exclusive financial advisor and placement agent for a term of twelve months commencing in January 2020. Upon execution of the agreement, the Company issued 5,000 fully vested restricted shares of the Company’s common stock and recorded $32,500 included in general and administrative expense in the accompanying Statements of Operations. On March 6, 2020, in connection with this agreement a cash compensation of $152,960 was made by the Company and an additional 12,285 shares of the Company’s common stock were issued. These amounts were included in the debt discount for the 2020 Debentures noted above. In February 2020, the Company entered into an agreement with a non-exclusive financial advisor and placement agent terminating the later of April 30, 2020 or upon closing a successful private placement. The agreement automatically extended for periods of thirty days until terminated in writing. The Company agreed to pay 10% of the gross proceeds raised by the financial advisor and placement agent and agreed to issue an amount of restricted shares equal to 4% of the total securities sold in the private placement divided by the last reported closing price of the stock on the closing date of the private placement. On March 6, 2020, in connection with this agreement cash compensation of $25,000 was paid by the Company and 1,923 shares of the Company’s common stock were issued. These amounts were included in the debt discount for the 2020 Debentures noted above. The Company recorded a total of $1,992,000 debt discount upon the closing of the 2020 Debentures, including the $649,552 intrinsic value of the beneficial conversion option, $34,412 relative fair value of the common stock issued to the placement agents, $244,797 of direct transaction costs incurred and $1,063,239 related to the 2020 Warrants. The debt discount was amortized to interest expense over the term of the loan. On June 22, 2020, upon the Company’s consummation of the public offering (See Note 7 – Stockholders’ Equity) and the Company’s commencement of trading on Nasdaq, the 2020 Debentures were automatically converted at $3.22, the QPI Discounted Price. As a result, the unamortized debt discount was fully amortized and included in interest expense in the accompanying Statements of Operations. Amortization of the debt discount associated with the 2020 Debentures was $1,868,183 and $1,992,000 for the three and six months ended June 30, 2020, respectively, and was included in interest expense in the accompanying Statements of Operations. Interest expense for the three and six months ended June 30, 2020 was $43,202 and $60,802, respectively. On January 30, 2020 the Company issued an unsecured promissory note payable to a stockholder of the Company with a face value of $75,000 and an interest rate of 10% per annum payable in full on March 30, 2020, subject to the Company’s right to extend payment until May 29, 2020. On February 28, 2020, the holder of the $75,000 promissory note which was to become due in March 2020 purchased $80,000 of the 2020 Debentures and 2020 Warrants, which was paid by exchanging the promissory note and paying an additional $5,000. This is included in the $1,992,000 gross proceeds raised. Interest expense in relation to the unsecured promissory note of $0 and $1,250 was recorded for the three and six months ended June 30, 2020, respectively. |
TERM NOTE
TERM NOTE | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
TERM NOTE | NOTE 6 – TERM NOTE On May 17, 2020, the Company entered into a paycheck protection program term note for $72,400 (the “SBA Loan”) with PNC Bank, N.A. under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) pursuant to the Paycheck Protection Program (the “PPP”), which is administered by the U.S. Small Business Administration. The SBA Loan is scheduled to mature on May 17, 2022, bears interest at a rate of 1.00% per annum and is subject to the terms and conditions applicable to loans administered by the U.S. Small Business Administration under the CARES Act. Pursuant to the CARES Act and the PPP, all or a portion of the principal amount of the SBA Loan is subject to forgiveness so long as, over the eight-week period following the receipt by the Company of the proceeds of the SBA Loan, the Company uses those proceeds for payroll costs, payment on rent obligations, utility costs, and costs of certain employee benefits as per Section 1106 of the CARES Act. As of June 30, 2020, the amount outstanding on the SBA Loan was $72,400 classified as Long-Term Liabilities and included in the accompanying Statement of Balance Sheets. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 7 – STOCKHOLDERS’ EQUITY The Company expensed $21,683 and $98,938 in costs related to restricted stock awards for the three and six months ended June 30, 2020, respectively. For the three and six months ended June 30, 2019, the Company expensed $118,846 and $84,220, respectively, relative to restricted common stock. On June 17, 2020, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC, as representative of the underwriters (the “Representative”), for an underwritten public offering (the “Offering”) of an Of the 2,173,913 Units purchased in the Offering, 17,800 Units were purchased by two directors of the Company. Pursuant to the Underwriting Agreement, the Company agreed to issue to the Representative, as a portion of the underwriting compensation payable to the Representative, warrants to purchase up to a total of 173,913 shares of Common Stock (the “Representative’s Warrants”). The Representative’s warrants are exercisable at $5.06 per share, are initially exercisable 180 days after the effective date of the Offering and have a term of three years from their initial exercise date. See Note 8 – Stock Options, Restricted Stock and Warrants. In connection to the closing of the Offering and the related automatic conversion of the 2020 Debentures the Company issued 637,513 shares of common stock related to the principal amount outstanding of $1,992,000 and interest expense of $60,802 and issued 179,200 shares of common stock related to the cancellation of the 2020 Warrants (see Note 5 – Convertible Debt). In connection to the 2020 Debentures (see Note 5 – Convertible Debt) the Company issued 19,208 restricted shares of common stock to the placement agents in connection with the private placement. In May 2020, the Company rescinded and cancelled an aggregate of 19,401 shares of common stock that the Company had approved for issuance but were not yet issued and outstanding shares. On April 16, 2020, the Company granted Mr. White a restricted stock award of 37,500 restricted shares of the Companys common stock in lieu of $150,000 in deferred salary. Of this amount, $119,041 was accrued in prior years, and the remaining amount was expensed in payroll expenses included in the accompanying Statement of Operations. The restricted stock award vests in full one-year from the date of grant, subject to Mr. Whites continued services as an officer and employee of the Company on the vesting date. During the six months ended June 30, 2019, the Company granted a total of 24,000 restricted stock awards to five directors of the Company for their services. The restricted stock awards vested in equal quarterly installments over a one-year period. On February 27, 2019, three directors resigned from the Company’s Board of Directors, effective March 1, 2019. This resulted in a cancellation of 6,400 shares related to the portion of the unvested restricted stock awards these directors had received. On March 15, 2019, we engaged an advisor to provide consulting services under an Investor Relations and Advisory Agreement (the "Agreement"). Pursuant to the Agreement, we agreed to pay in advance of services a monthly fee of $5,000 in shares of restricted common stock to the consulting firm for consulting services. The number of shares to be issued will be calculated based on the closing price of our common shares on the first day of each month or the preceding day, if the first were to fall on a weekend or holiday. However, if the stock were to trade below $4.60 per share, the calculation would be based on $4.60. The shares shall not have registration rights, and the shares may be sold subject to Rule 144. During the six months ended June 30, 2020, the Company issued 3,335 shares of restricted common stock for a total expense of $17,181 related to these services. During the six months ended June 30, 2019, the Company issued 1,426 shares of restricted common stock for a total expense of $15,000 related to these services. |
STOCK OPTIONS, RESTRICTED STOCK
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS | NOTE 8 – STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS On December 17, 2003, the Company adopted the 2003 Stock Option Plan (the “2003 Plan”). Under the 2003 Plan, the Company is authorized to grant options to purchase up to 360,000 shares of common stock to the Company’s employees, officers, directors, consultants, and other agents and advisors. 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 up to an aggregate of 400,000 shares of common stock. The 2013 Plan is intended to permit certain 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-qualified stock options. On November 14, 2017, the Executive Committee of the Company’s Board of Directors adopted the 2017 Equity Incentive Plan (the “2017 Plan”) which covers the potential issuance of 260,000 shares of common stock. The 2017 Plan provides that directors, officers, employees, and consultants of the Company will be eligible to receive equity incentives under the 2017 Plan at the discretion of the Board or the Board’s Compensation Committee. The Compensation Committee may adopt rules and regulations to carry out the terms of the 2017 Plan. The 2017 Plan terminates on November 14, 2027 unless sooner terminated. The 2017 Plan is administered by the 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-qualified stock options, including prices, duration, transferability and limitations on exercise. The Company issued non-qualified 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 judgements. The following table presents the weighted-average assumptions used to estimate the fair value of the stock options granted during the six months ended June 30, 2020: Risk Free Interest Rate 1.78 % Expected Volatility 453.91 % Expected Life (in years) 5.0 Dividend Yield 0 % Weighted average estimated fair value of options during the period $ 5.00 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, 2019 358,271 $5.91 Granted 105,000 3.66 Forfeited/Cancelled/Expired (17,500 ) 29.07 Balance as of June 30, 2020 445,771 $4.47 Exercisable as of June 30, 2020 408,771 $4.40 4.5 $167 (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 six months ended June 30, 2020 Unvested Options Weighted - Average Number of Unvested Grant Date Options Exercise Price Balance as of December 31, 2019 20,000 $ 9.75 Granted 105,000 3.66 Vested (88,000 ) 4.40 Balance as of June 30, 2020 37,000 $ 5.19 Effective January 2020, the Company awarded its Chief Financial Officer incentive stock options exercisable for 4,000 shares of common stock with an exercise price of $3.505 vesting quarterly over a one-year period and expiring on January 7, 2025 with a fair value of $13,716. Effective January 2020, the Company awarded four directors non-qualified stock options exercisable for 40,000 shares in the aggregate, for services rendered to the Company in 2019 with an exercise price of $3.505 vesting immediately and expiring on January 7, 2025 with a fair value of $137,160. Effective January 2020, the Company awarded five of its directors non-qualified stock options exercisable for 50,000 shares in the aggregate, for services to be rendered to the Company in 2020 with an exercise price of $3.505 vesting quarterly over a one-year period and expiring on January 7, 2025 with a fair value of $171,451. On April 16, 2020, the Company approved a three-year extension of the expiration date for certain options previously granted to Patrick White, the Company’s President and Chief Executive Officer and to Norman Gardner, the Company’s Chairman. As a result, 140,000 options previously granted to Mr. White now expire on August 15, 2025 and 90,000 options previously granted to Mr. Gardner now expire on June 29, 2025. All other terms with respect to the option grants remain the same. The Company applied FASB ASC 718, “Compensation—Stock Compensation,” modification accounting and calculated a change in fair value of $153,913. On April 16, 2020, the Company awarded a director non-qualified stock options for 3,000 shares of common stock for services rendered to the Company with an exercise price of $4.025 vesting immediately and expiring on April 16, 2025, with a fair value of $11,811. On May 27, 2020, the Company awarded two directors non-qualified stock options for 8,000 shares of common stock for services rendered to the Company with an exercise price of $5.295 vesting immediately and expiring on May 27, 2025, with a fair value of $41,435. During the three months ended June 30, 2020 and 2019, the Company expensed $267,865 and $126,077, respectively, with respect to options. During the six months ended June 30, 2020 and 2019, the Company expensed $485,470 and $249,788, respectively, with respect to options. As of June 30, 2020, there was $131,362 unrecognized compensation cost related to outstanding stock options expected to vest over the weighted average of 0.5 years. The following table summarizes the activities for the Company’s warrants for the six months ended June 30, 2020 Warrants Outstanding Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in 000's) (1) Balance as of December 31, 2019 445,252 $ 15.39 Granted 3,787,991 5.03 Cancelled/Forfeited (454,000 ) 7.50 Balance as of June 30, 2020 3,779,243 $ 5.89 4.4 Exercisable as of June 30, 2020 3,605,330 $ 5.93 4.6 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $3.81 for our common stock on June 30, 2020. The Company issued three-year 2020 Warrants to purchase 498,000 shares of common stock to the purchasers of the 2020 Debentures (see Note 5 – Convertible Debt). The 2020 Warrants have an exercise price of $7.50 per share, and may be exercised cashlessly if the Company fails to maintain an effective registration statement at any time beginning six months after issuance. Of this amount, 2020 Warrants to purchase 82,500 shares were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. On June 22, 2020, 2020 Warrants to purchase 448,000 shares of common stock were cancelled (including 2020 Warrants for 82,500 shares that had been issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager) and warrants to purchase 573,479 shares of common stock were issued upon closing of the Offering and conversion of the 2020 Debentures, with an exercise price of $4.60 and an expiration term of five years. Of this amount, warrants to purchase 105,567 of shares of common stock were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. As a result of the Offering, the per share exercise price for the outstanding but unexercised 2020 Warrants to purchase shares of common stock related to the two warrant holders who did not cancel their 2020 Warrants, has been adjusted from $7.50 to $4.59 and the number of shares of common stock underlying the outstanding but unexercised 2020 Warrants increased from an aggregate of 50,000 to 81,700 shares of common stock. On May 27, 2020, the Company awarded four non-employees warrants for 11,000 shares of common stock for services rendered to the Company with an exercise price of $5.295 vesting immediately and expiring on May 27, 2023, with a fair value of $53,835. On June 18, 2020, in connection with the Offering, the Representative provided a partial exercise notice of the over-allotment option to purchase 50,000 additional shares of common stock and additional warrants to purchase 325,987 shares of common stock. On June 22, 2020, in connection with the Offering, the Company issued warrants to purchase 2,499,900 shares of common stock, with a five-year term and an exercise price of $4.60, including the additional warrants pursuant to the over-allotment option exercise noted above. In connection with the Offering, on June 22, 2020 the Company issued warrants to the Representative to purchase up to a total of 173,913 shares of common stock. The warrants are exercisable during the three-year period commencing 180 days from June 22, 2020. The warrants are exercisable at a per share price equal to $5.06 per share with a fair value of $522,515 netted in Additional Paid-In Capital included in the accompanying Statement of Balance Sheets. |
CONCENTRATIONS
CONCENTRATIONS | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 9 – CONCENTRATIONS Revenue For the three months ended June 30, 2020, one customer represented 99% of revenues. For the six months ended June 30, 2020, two customers represented an aggregate of 97% of revenues. Accounts Receivable As of June 30, 2020, one customer represented 99% of accounts receivable. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS In July 2020, the Company issued 1,087 shares of restricted common stock in relation to investor relation services. In August 2020, the Company issued options to purchase of 28,000 shares of common stock, that expire eighteen months from the date of grant and have an exercise price of $4.60, for services performed by two sales consultants. In August 2020, the Company issued 1,087 shares of restricted common stock in relation to investor relation services. On August 5, 2020, the Company issued restricted stock awards for an aggregate of 230,000 shares of restricted common stock to the Company’s directors in consideration of their years of service to the Company that vest in full one-year from the date of grant, subject to the director’s continued service as member of the Board of Directors on the vesting date. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of the Business | Nature of the Business VerifyMe, Inc. (“VerifyMe,” or the “Company,” “we,” “us,” or “our”) 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, and warrants are traded on The Nasdaq Capital Market (“Nasdaq”) under the trading symbols “VRME” and “VRMEW,” respectively. The Company is a technology solutions provider specializing in brand protection functions such as counterfeit prevention, authentication, serialization, track and trace features for labels, packaging and products. The Company began to commercialize its covert luminescent pigment, RainbowSecure®, in 2018 and also developed the patented VeriPAS™ software system in 2018, which covertly and overtly serializes products to track a product’s “life cycle” for brand owners. We believe VeriPAS™ is the only invisible covert serialization and authentication solution deployed through variable digital printing on HP Indigo (a division of HP Inc.) printing systems with a smartphone tracking and authentication system. VeriPAS™ is capable of fluorescing, decoding, and verifying invisible RainbowSecure® codes in the field – designed to allow investigators to quickly and efficiently authenticate product throughout the distribution chain, including warehouses, ports of entry, retail locations, and product purchased over the internet for inspection and investigative actions. This technology is coupled with a secure cloud-based track and trace software engine which allows brands and investigators to see where products originate and where they are deployed with geo location mapping and intelligent programable alerts. Brand owners access the VeriPAS™ software over the internet. Brand owners can then set rules of engagement, establish marketing programs for customer engagement and control, and monitor and protect their products “life cycle.” The Company has not yet derived any revenue from the VeriPAS™ software system and has derived limited revenue from the sale of our RainbowSecure® technology. 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 intellectual property. |
Reverse Stock Split | Reverse Stock Split On June 17, 2020, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Articles of Incorporation, as amended, with the Nevada Secretary of State to effect a 50-to-1 reverse stock split of the Company’s issued and outstanding common stock and treasury stock, effective on June 18, 2020 (the “Reverse Stock Split”). The Reverse Stock Split does not affect the total number of shares of common stock that the Company is authorized to issue. The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Stock Split for all periods presented, unless otherwise specified. |
Basis of Presentation | Basis of Presentation 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 U.S. 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, 2019 as filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2020. 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 and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any future interim periods. |
Revenue Recognition | Revenue Recognition The Company accounts for revenues according to Accounting Standards Codification (“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 obligations are satisfied. During the three and six months ended June 30, 2020, the Company’s revenues were primarily generated from printing labels with the Company’s technology. |
Sequencing | Sequencing As of September 19, 2019, the Company adopted a sequencing policy whereby all equity-linked instruments issued prior to the closing of the $600,000 secured convertible debentures on September 19, 2019 may be classified as equity and all future equity-linked instruments may be classified as a derivative liability with the exception of instruments related to stock-based compensation issued to employees or directors. As of March 6, 2020 the Company redeemed the secured convertible debentures issued as of September 19, 2019 and as a result abandoned the sequencing policy previously adopted, so that all equity-linked instruments going forward may be classified as equity. |
Convertible Debt | Convertible Debt The Company recognizes the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert debt into common stock at a price per share that is less than the trading price to the public on the date of the debt. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debt, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the interest method. |
Basic and Diluted Net Income per Share of Common Stock | Basic and Diluted Net Income per Share of Common Stock The Company follows Financial Accounting Standards Board (“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 each of the three and six months ended June 30, 2020 and 2019, 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 and six months ended June 30, 2020, there were approximately 4,369,000 anti-dilutive shares consisting of 446,000 shares issuable upon exercise of options, 3,779,000 shares issuable upon exercise of warrants, and 144,000 shares issuable upon conversion of preferred stock. For the three and six months ended June 30, 2019, there were approximately 978,000 anti-dilutive shares consisting of 392,000 shares issuable upon exercise of options, 441,000 shares issuable upon exercise of warrants and 144,000 shares issuable upon conversion of preferred stock. |
Liquidity | Liquidity On August 27, 2014, FASB issued Accounting Standards Update (ASU) 2014-05, Disclosure of Uncertainties about an Entitys ability to Continue as a Going Concern (ASU 2014-05), which requires management to assess a companys ability to continue as a going concern within one year from financial statement issuance and to provide related footnote disclosures in certain circumstances. The accompanying financial statements and notes have been prepared assuming the Company will continue as a going concern. During the year ended December 31, 2019 the Company suffered from recurring losses from operations and negative cash flows from operations, resulting in a need for, among other things, capital resources. As of December 31, 2019, the Company had cash of $252,766 and disclosed that its ability to continue as a going concern was predicated on the Company’s ability to raise capital and to sustain adequate working capital to finance its operations. During the first half of 2020, the Company participated in an underwritten public offering and raised approximately $10.0 million in gross proceeds, and $9,023,046 in net proceeds after deducting discounts and commissions and other offering expenses. The Company met and exceeded those predications thus mitigating any substantial doubt about the Company’s ability to continue as a going concern as defined by ASU 2014-05 and its ability to satisfy the estimated liquidity needs for the twelve months from the issuance of the financial statements. |
Recently Adopted Accounting Pronouncements | 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 2018-07”), 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. Effective January 1, 2019, the Company adopted ASU No. 2016-02 – “Leases (Topic 842)” and the series of related Accounting Standards Updates that followed (collectively referred to as “Topic 842”) using the modified retrospective approach. The adoption of Topic 842 did not have a material impact on the Company’s financial statements. |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of estimated the fair value | The Company estimated the fair value of the monthly payment provision using a Monte Carlo Simulation, with 10,000 trials, with the following key inputs: June 30, 2020 December 31, 2019 Stock price - $3.50 - $5.00 Terms (years) - 0.72 – 1.00 Volatility - 153.9% - 195.7% Risk-free rate - 1.60% - 1.87% Probability of QPI - 50% |
Schedule of estimated the fair value of these warrants using Black-Scholes | The Company estimated the fair value of these potentially issuable warrants using the Black-Scholes method and the following assumptions: June 30, December 31, Closing trade price of Common Stock $ - $ 3.50 Intrinsic value of conversion option per share $ - $ 3.50 June 30, December 31, Annual Dividend Yield - 0.0% Expected Life (Years) - 5 Risk-Free Interest Rate - 1.68%-1.69% Expected Volatility - 445.01%-453.08% |
Schedule of convertible debt | The following table summarizes the 2019 Debentures outstanding as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Convertible Debentures, due September 18, 2020: Principal value $ - $ 600,000 Unamortized debt discount - (302,003 ) Carrying value of convertible notes - 297,997 Total short-term carrying value of Convertible Debentures $ - $ 297,997 Embedded Derivative Liability: Fair value of derivative liability, December 31, 2019 $ 171,499 Gain on extinguishment of debt (171,499 ) Fair value of derivative liability, June 30, 2020 $ - |
STOCK OPTIONS, RESTRICTED STO_2
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of weighted-average assumptions | The following table presents the weighted-average assumptions used to estimate the fair value of the stock options granted during the six months ended June 30, 2020: Risk Free Interest Rate 1.78 % Expected Volatility 453.91 % Expected Life (in years) 5.0 Dividend Yield 0 % Weighted average estimated fair value of options during the period $ 5.00 |
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, 2019 358,271 $5.91 Granted 105,000 3.66 Forfeited/Cancelled/Expired (17,500 ) 29.07 Balance as of June 30, 2020 445,771 $4.47 Exercisable as of June 30, 2020 408,771 $4.40 4.5 $167 (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 six months ended June 30, 2020 Unvested Options Weighted - Average Number of Unvested Grant Date Options Exercise Price Balance as of December 31, 2019 20,000 $ 9.75 Granted 105,000 3.66 Vested (88,000 ) 4.40 Balance as of June 30, 2020 37,000 $ 5.19 |
Schedule of warrant activity | The following table summarizes the activities for the Company’s warrants for the six months ended June 30, 2020 Warrants Outstanding Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in 000's) (1) Balance as of December 31, 2019 445,252 $ 15.39 Granted 3,787,991 5.03 Cancelled/Forfeited (454,000 ) 7.50 Balance as of June 30, 2020 3,779,243 $ 5.89 4.4 Exercisable as of June 30, 2020 3,605,330 $ 5.93 4.6 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $3.81 for our common stock on June 30, 2020. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Jun. 17, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Sep. 19, 2019 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Reverse stock spli | 50-to-1 | ||||||
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share | 4,369,000 | 978,000 | 4,369,000 | 978,000 | |||
Secured convertible debentures | $ 600,000 | ||||||
Liquiidty cash | $ 252,766 | ||||||
Gross proceeds | $ 10,000,000 | ||||||
Proceeds from public offering of securities, net of costs | $ 9,023,046 | ||||||
Employee Stock Option [Member] | |||||||
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share | 446,000 | 392,000 | 446,000 | 392,000 | |||
Warrant [Member] | |||||||
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share | 3,779,000 | 441,000 | 3,779,000 | 441,000 | |||
Preferred Share Agreements [Member] | |||||||
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share | 144,000 | 144,000 | 144,000 | 144,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Capitalized amount | $ 73,563 | $ 0 | $ 73,563 | $ 0 |
Deposit | 51,494 | $ 51,494 | ||
Useful life | 5 years | |||
Depreciation expense | $ 11,435 | $ 0 | $ 22,870 | $ 0 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)Number | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Number | Jun. 30, 2019USD ($) | |
Amortization expense | $ | $ 5,012 | $ 0 | $ 10,023 | $ 0 |
Capitalized software costs | $ | $ 0 | 46,196 | ||
Patents [Member] | ||||
Number of patents granted | 10 | 10 | ||
Number of pending patents | 5 | 5 | ||
Number of trademarks | 6 | 6 | ||
Number of pending trademarks | 4 | 4 | ||
Amortization method | Straight-line basis | |||
Description of expire | The Company’s registered patents expire between the years 2021 and 2037. | |||
Patents [Member] | Minimum [Member] | ||||
Estimated lives of intangible assets | 17 years | |||
Patents [Member] | Maximum [Member] | ||||
Estimated lives of intangible assets | 19 years | |||
Patents [Member] | Foreign [Member] | ||||
Number of trademarks | 4 | 4 | ||
Patents [Member] | Europe [Member] | ||||
Number of patents granted | 1 | 1 | ||
Trademarks [Member] | ||||
Amortization method | Straight-line basis | |||
Capitalized Software [Member] | ||||
Estimated lives of intangible assets | 5 years | |||
Patents And Trademark [Member] | ||||
Capitalized patent costs and trademarks | $ | $ 28,763 | 28,574 | ||
Amortization expense | $ | $ 7,003 | $ 5,928 | $ 13,635 | $ 11,635 |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details Narrative) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Preferred stock, voting rights | Each share of Series A and Series B has limited voting rights, is entitled to participate with the common stock on liquidation and holders of Series A and Series B are subject to beneficial ownership limitations. | |||
Series A Convertible Preferred Stock [Member] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Convertible preferred stock, outstanding (in shares) | 0 | 0 | ||
Conversion of stock, shares converted (in shares) | 264,778 | 0 | 304,778 | |
Conversion of shares of preferred stock to common stock (in shares) | 0 | 304,778 | ||
Series B Convertible Preferred Stock [Member] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Convertible preferred stock, outstanding (in shares) | 0.85 | 0.85 | ||
Conversion of shares of preferred stock to common stock (in shares) | 144,444 |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) - Fair Value, Inputs, Level 3 [Member] - Number | 12 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2020 | |
Stock Price [Member] | ||
Embedded Derivative Liability, Measurement Input | ||
Stock Price [Member] | Minimum [Member] | ||
Embedded Derivative Liability, Measurement Input | 4 | |
Stock Price [Member] | Maximum [Member] | ||
Embedded Derivative Liability, Measurement Input | 5 | |
Terms [Member] | Minimum [Member] | ||
Embedded Derivative, Term | 8 months 19 days | |
Terms [Member] | Maximum [Member] | ||
Embedded Derivative, Term | 1 year | |
Volatility [Member] | ||
Embedded Derivative Liability, Measurement Input | ||
Volatility [Member] | Minimum [Member] | ||
Embedded Derivative Liability, Measurement Input | 154 | |
Volatility [Member] | Maximum [Member] | ||
Embedded Derivative Liability, Measurement Input | 196 | |
Risk-Free Rate [Member] | ||
Embedded Derivative Liability, Measurement Input | ||
Risk-Free Rate [Member] | Minimum [Member] | ||
Embedded Derivative Liability, Measurement Input | 2 | |
Risk-Free Rate [Member] | Maximum [Member] | ||
Embedded Derivative Liability, Measurement Input | 2 | |
Probability of QPI [Member] | ||
Embedded Derivative Liability, Measurement Input | 50 |
CONVERTIBLE DEBT (Details 1)
CONVERTIBLE DEBT (Details 1) - Common Stock Purchase [Member] - Warrant [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Closing trade price of Common Stock (in dollars per share) | $ 3.50 | |
Intrinsic value of conversion option per share (in dollars per share) | $ 3.50 |
CONVERTIBLE DEBT (Details 2)
CONVERTIBLE DEBT (Details 2) - Common Stock Purchase [Member] - Warrant [Member] - Number | Jun. 30, 2020 | Dec. 31, 2019 |
Dividend Yield [Member] | ||
Debt instrument measurement input | 0 | |
Expected Life (Years) [Member] | ||
Debt instrument maturity terms | 5 years | |
Risk-Free Rate [Member] | ||
Debt instrument measurement input | ||
Risk-Free Rate [Member] | Minimum [Member] | ||
Debt instrument measurement input | 2 | |
Risk-Free Rate [Member] | Maximum [Member] | ||
Debt instrument measurement input | 2 | |
Expected Volatility [Member] | ||
Debt instrument measurement input | ||
Expected Volatility [Member] | Minimum [Member] | ||
Debt instrument measurement input | 445 | |
Expected Volatility [Member] | Maximum [Member] | ||
Debt instrument measurement input | 453 |
CONVERTIBLE DEBT (Details 3)
CONVERTIBLE DEBT (Details 3) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 19, 2019 |
Total short-term carrying value of Convertible Debentures | $ 401,957 | $ 600,000 | |
Convertible Debt, Due on September 18, 2020 [Member] | |||
Principal value | $ 600,000 | ||
Unamortized debt discount | (302,003) | ||
Carrying value of convertible notes | 297,997 | ||
Total short-term carrying value of Convertible Debentures | $ 297,997 |
CONVERTIBLE DEBT (Details 4)
CONVERTIBLE DEBT (Details 4) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Gain on extinguishment of debt | $ (280,504) | |||
Embedded Derivative Financial Instruments [Member] | ||||
Fair value of derivative liability, beginning balance | 171,499 | |||
Gain on extinguishment of debt | (171,499) | |||
Fair value of derivative liability, ending balance |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | Sep. 19, 2019 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Convertible debt | $ 600,000 | $ 401,957 | $ 401,957 | |
Debentures for gross proceeds | 540,000 | |||
Warrants issuable to the placement agent | 21,739 | $ 21,739 | ||
Description of debt conversion | If any portion of the 2019 Debentures was outstanding on the 181st calendar day after the Effective Date, then the conversion price would equal the lesser of (a) $7.50, (b) the QPI Discounted Price, or (c) 70% of the lowest volume-weighted average price (as reported by Bloomberg LP) of the common stock on any trading day during the 20 trading days immediately preceding the date of conversion of the 2019 Debentures (provided, further, that if either we are not DWAC operational at the time of conversion, the common stock is traded on the OTC Pink at the time of conversion, or the conversion price was less than $0.50 per share, then 70% would automatically adjust to 60%). | |||
Description of debt redemption | So long as no event of default had occurred and was continuing under the 2019 Debentures, the Company could at our option call for redemption all or part of the 2019 Debentures prior to the maturity date, upon not more than two calendar days written notice, for an amount equal to: (i) if the redemption date was 90 calendar days or less from the date of issuance of the 2019 Debentures, 110% of the sum of the principal amount; (ii) if the redemption date was greater than or equal to 91 calendar days from the date of issuance of the 2019 Debentures and less than or equal to 150 calendar days from the date of issuance of the 2019 Debentures, 120% of the sum of the principal amount; (iii) if the redemption date was greater than or equal to 151 calendar days from the date of issuance of the 2019 Debentures and less than or equal to 180 calendar days from the date of issuance of the 2019 Debentures, 125% of the sum of the principal amount; and (iv) if either (1) the 2019 Debentures were in default but the holder consents to the redemption notwithstanding such default or (2) the redemption date was greater than or equal to 181 calendar days from the date of issuance of the 2019 Debentures, 130% of the sum of the principal amount. | |||
Amortization of debt discount | 1,868,183 | $ 1,992,000 | ||
Fair value of embedded derivative liability | 171,425 | 171,425 | ||
Common stock issued in relation to Bridge Financing | 66,912 | |||
Transaction costs | 78,693 | 78,693 | ||
Original issue discount | $ 60,000 | |||
Public Offering [Member] | ||||
Description of debt | The 2019 Debentures contained provisions that entitled each Purchaser, at any time, to convert all or any portion of the outstanding principal amount of its 2019 Debenture(s) plus any accrued interest into restricted shares of common stock. If we consummated a public offering within 180 calendar days of the Effective Date, then the conversion price would be the lesser of (a) $7.50 or (b) 70% multiplied of the price per share of the common stock we issued in the public offering (the “QPI Discounted Price”), subject to further adjustment as provided in the 2019 Debentures as well as subject in each case to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events. Further, if the Company consummated a public offering of common stock which resulted in us receiving gross proceeds of at least $5 million within 180 calendar days of the Effective Date then we would have been obligated to repay the outstanding amounts owed under the 2019 Debentures, to the extent they were not converted and including the applicable redemption premium then in effect, within three days of consummation of such an offering. | |||
Securities Purchase Agreement [Member] | Two Purchasers [Member] | ||||
Principal amount | $ 1,200,000 | |||
Description of debt tranche issuer | The Purchasers elected not to consummate the closing of the second tranche, then the Company was entitled to raise up to $600,000 from additional investors (including the Company’s affiliates) who would have a security interest on a pari passu basis with the Purchasers in the first tranche, so long as such investors agreed not to convert the securities received until the Purchasers in the first tranche had completely converted the 2019 Debentures or been fully repaid. | |||
Securities Purchase Agreement [Member] | Two Purchasers [Member] | First Tranche [Member] | ||||
Issuance of the debt tranche | $ 600,000 | |||
Maturity date | Sep. 18, 2020 | |||
Securities Purchase Agreement [Member] | Two Purchasers [Member] | Second Tranche [Member] | ||||
Issuance of the debt tranche | $ 600,000 | |||
Securities Purchase Agreement [Member] | Bridge Financing [Member] | ||||
Commitment fee | $ 5,000 | $ 5,000 | ||
Description of fee | The placement agent for the 2019 Debentures received a cash fee of 8% of the gross proceeds received at the closing and was entitled to receive warrants convertible into shares of common stock until May 2020 when the placement agent waived its right to receive the warrants. | |||
Securities Purchase Agreement [Member] | Bridge Financing [Member] | Restricted Common Stock [Member] | ||||
Shares issued during period | 500,000 |
CONVERTIBLE DEBT (Details Nar_2
CONVERTIBLE DEBT (Details Narrative 1) | Jun. 22, 2020 | Mar. 06, 2020USD ($) | Mar. 06, 2020USD ($)shares | Feb. 28, 2020USD ($) | Feb. 27, 2020$ / sharesshares | Feb. 26, 2020USD ($) | Jan. 31, 2020 | Sep. 19, 2019USD ($) | Feb. 29, 2020 | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)shares | Sep. 06, 2021USD ($) | Aug. 28, 2021USD ($) | Aug. 26, 2021USD ($) | Jan. 30, 2020USD ($) | Dec. 31, 2019USD ($)$ / shares | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Debt instrument convertible excess of principal | $ 5,000 | ||||||||||||||||||
Net proceeds from debt | $ 540,000 | ||||||||||||||||||
Additional paid in capital | $ 75,441,731 | $ 75,441,731 | $ 61,814,826 | ||||||||||||||||
Amortization of debt discount | 1,868,183 | 1,992,000 | |||||||||||||||||
Interest expense | 43,202 | 60,802 | |||||||||||||||||
General and administrative expense | [1] | 461,211 | $ 418,195 | 1,031,793 | 650,877 | ||||||||||||||
Loss (Gain) on extinguishment of debt | (280,504) | ||||||||||||||||||
Promissory Note Due On March 2020 [Member] | |||||||||||||||||||
Purchased of convertible debt | 75,000 | ||||||||||||||||||
Unsecured Debt [Member] | |||||||||||||||||||
Cumulative interest rate | 10.00% | ||||||||||||||||||
Debt principal amount | $ 75,000 | ||||||||||||||||||
Interest expense | $ 0 | $ 1,250 | |||||||||||||||||
Private Placement [Member] | |||||||||||||||||||
Description of termination | The agreement will automatically extend for periods of thirty days until terminated in writing. | ||||||||||||||||||
Dividend percentage | 0.04 | ||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Number of shares issued for services (in shares) | shares | 2,002 | 1,426 | 3,335 | 1,426 | |||||||||||||||
Agreement [Member] | |||||||||||||||||||
Cash compensation | $ 152,960 | ||||||||||||||||||
Agreement [Member] | Private Placement [Member] | |||||||||||||||||||
Cash compensation | $ 25,000 | ||||||||||||||||||
Agreement [Member] | Common Stock [Member] | |||||||||||||||||||
Number of shares issued for services (in shares) | shares | 12,285 | ||||||||||||||||||
Agreement [Member] | Common Stock [Member] | Private Placement [Member] | |||||||||||||||||||
Number of shares issued for services (in shares) | shares | 1,923 | ||||||||||||||||||
Warrant [Member] | Common Stock [Member] | |||||||||||||||||||
Description of conversion stock | Company cancelled the 2020 Warrants for twenty-three of the twenty-five warrant holders and issued to the holders of the cancelled warrants an aggregate of 179,200 shares of Common Stock. Of this amount, 33,000 shares of Common stock were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. 2020 Warrants to purchase an aggregate of 81,700 shares of Common Stock at an exercise price of $4.59 per share remain outstanding. Also on such date, the 2020 Debentures were automatically converted into an aggregate of 637,513 shares of common stock and warrants to purchase 573,479 shares of common stock. Of this amount, 105,567 shares of common stock and warrants to purchase 105,567 of shares of common stock were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. | ||||||||||||||||||
Director [Member] | Warrant [Member] | |||||||||||||||||||
Description of warrant | Warrants for 82,500 shares were issued to four directors and an entity in which one officer of the Company is a majority owner. The 2020 Warrants were determined to meet equity classification pursuant to ASC 480 and ASC 815. As such, the relative fair value of the 2020 Warrants was recorded as additional paid-in-capital on the Balance Sheets, which was determined to be $1,063,239, on the issuance date. | ||||||||||||||||||
Convertible Debt [Member] | |||||||||||||||||||
Debt principal amount | $ 600,000 | ||||||||||||||||||
Description of conversion stock | (i) the commencement of trading of the common stock on the NASDAQ, New York Stock Exchange or NYSE American (an “Uplist”) at the Uplist Conversion Price (defined below); or (ii) at any time the minimum bid price of the common stock exceeded $25.00 per share for twenty (20) consecutive trading days and the average trading volume during the 10 trading days prior to the conversion was at least 2,000 shares and the shares were registered under an effective registration statement or the shares were salable under Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended. | ||||||||||||||||||
Purchased of convertible debt | $ 649,552 | ||||||||||||||||||
Debt instrument convertible excess of principal | 34,412 | ||||||||||||||||||
Principal value | $ 600,000 | $ 600,000 | |||||||||||||||||
Net proceeds from debt | 750,000 | ||||||||||||||||||
Direct transaction costs | 1,747,203 | 244,797 | |||||||||||||||||
Additional paid in capital | $ 649,552 | 649,552 | |||||||||||||||||
Amortization of debt discount | 1,992,000 | ||||||||||||||||||
Loss (Gain) on extinguishment of debt | 280,504 | ||||||||||||||||||
Redemption fee | $ 150,000 | $ 150,000 | |||||||||||||||||
Debt term | 18 months | ||||||||||||||||||
Convertible Debt [Member] | Warrant [Member] | |||||||||||||||||||
Convertible debt | $ 1,063,239 | $ 1,063,239 | |||||||||||||||||
Convertible Debt [Member] | Four Directors And One Officer [Member] | |||||||||||||||||||
Number of shares issued for services (in shares) | shares | 498,000 | ||||||||||||||||||
Convertible debt | $ 330,000 | 330,000 | |||||||||||||||||
Warrant term | 3 years | ||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 7.50 | ||||||||||||||||||
Convertible Debt [Member] | |||||||||||||||||||
Purchased of convertible debt | $ 80,000 | ||||||||||||||||||
Convertible debt | $ 1,992,000 | $ 1,992,000 | |||||||||||||||||
Convertible Debt [Member] | Subsequent Event [Member] | |||||||||||||||||||
Debt principal amount | $ 150,000 | $ 910,000 | $ 932,000 | ||||||||||||||||
[1] | Includes share based compensation of $365,295 and $687,924 for the three and six months ended June 30, 2020, respectively, and $259,923 and $349,008 for the three and six months ended June 30, 2019, respectively. |
TERM NOTE (Details Narrative)
TERM NOTE (Details Narrative) - Paycheck Protection Program Term Note [Member] - PNC Bank, N.A. [Member] | May 17, 2020USD ($) |
Principal value | $ 72,400 |
Maturity date | May 17, 2022 |
Interest rate | 1.00% |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Jun. 22, 2020 | Jun. 17, 2020 | Jun. 17, 2020 | Apr. 16, 2020 | Mar. 15, 2019 | Feb. 27, 2019 | May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Jun. 18, 2020 |
Common stock issued | 5,350,391 | 5,350,391 | 2,239,120 | ||||||||||
Proceeds from issuance public offering | $ 9,023,046 | ||||||||||||
Fair value of shares issued | $ 9,447 | $ 15,000 | $ 17,181 | 15,000 | |||||||||
Underwriting Agreement [Member] | 2020 Debentures [Member] | |||||||||||||
Common stock issued | 637,513 | 637,513 | |||||||||||
Principal amount | $ 1,992,000 | $ 1,992,000 | |||||||||||
Interest expense | $ 60,802 | ||||||||||||
Underwriting Agreement [Member] | Representative's Warrants [Member] | |||||||||||||
Number of warrant issued | 173,913 | 173,913 | |||||||||||
Exercise price (in dollars per share) | $ 5.06 | $ 5.06 | |||||||||||
Warrant term | 3 years | 3 years | |||||||||||
Underwriting Agreement [Member] | 2020 Warrants [Member] | 2020 Debentures [Member] | |||||||||||||
Common stock issued | 179,200 | 179,200 | |||||||||||
Chief Executive Officer (Patrick White) [Member] | |||||||||||||
Number of shares issued for services | 140,000 | ||||||||||||
Warrant term | 3 years | ||||||||||||
Public Offering [Member] | Maxim Group LLC [Member] | Underwriting Agreement [Member] | |||||||||||||
Number of shares issued in transaction | 2,173,913 | ||||||||||||
Description of transaction | one share (each a “Share” and collectively, the “Shares”) of the Company’s common stock and a warrant to purchase one share of Common Stock (each a “Warrant” and collectively, the “Warrants”) at an exercise price equal to $4.60 per share of Common Stock. | ||||||||||||
Public offering price (in diollars per share) | $ 4.60 | $ 4.60 | |||||||||||
Discount percentage | 8.00% | ||||||||||||
Transaction date | Jun. 22, 2020 | ||||||||||||
Proceeds from issuance public offering | $ 10,000,000 | ||||||||||||
Number of shares issued for services | 30,000 | ||||||||||||
Fair value of shares issued | $ 124,800 | ||||||||||||
Public Offering [Member] | Two Directors [Member] | Underwriting Agreement [Member] | |||||||||||||
Number of shares issued in transaction | 17,800 | ||||||||||||
Over-Allotment Option [Member] | |||||||||||||
Number of warrant issued | 325,987 | ||||||||||||
Over-Allotment Option [Member] | Warrant [Member] | |||||||||||||
Number of warrant issued | 2,499,900 | ||||||||||||
Exercise price (in dollars per share) | $ 4.60 | ||||||||||||
Warrant term | 5 years | ||||||||||||
Over-Allotment Option [Member] | Maxim Group LLC [Member] | Underwriting Agreement [Member] | |||||||||||||
Number of shares issued in transaction | 50,000 | 326,087 | |||||||||||
Proceeds from issuance public offering | $ 232,759 | ||||||||||||
Proceeds from Issuance net over-allotment option | $ 9,023,046 | ||||||||||||
Over-Allotment Option [Member] | Maxim Group LLC [Member] | Underwriting Agreement [Member] | Warrant [Member] | |||||||||||||
Number of shares issued in transaction | 325,987 | 326,087 | |||||||||||
Restricted Common Stock [Member] | |||||||||||||
Number of share cancelled | 19,401 | ||||||||||||
Restricted Common Stock [Member] | Chief Executive Officer (Patrick White) [Member] | |||||||||||||
Restricted stock awards granted | 37,500 | ||||||||||||
Deferred salary | $ 150,000 | $ 119,041 | |||||||||||
Restricted stock awards granted term | 1 year | ||||||||||||
Restricted Common Stock [Member] | Five Director [Member] | |||||||||||||
Restricted stock awards granted | 24,000 | ||||||||||||
Restricted stock awards granted term | 1 year | ||||||||||||
Restricted Common Stock [Member] | Three Director [Member] | |||||||||||||
Number of share cancelled | 6,400 | ||||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||
Restricted stock/Restricted stock units, Expense | $ 21,683 | $ 118,846 | $ 98,938 | 84,220 | |||||||||
Restricted Stock Units (RSUs) [Member] | Private Placement [Member] | |||||||||||||
Common stock issued | 19,208 | 19,208 | |||||||||||
Restricted Stock Units (RSUs) [Member] | Investor Relations and Advisory Agreement [Member] | |||||||||||||
Restricted stock/Restricted stock units, Expense | $ 3,335 | $ 15,000 | |||||||||||
Restricted stock units issued | 17,181 | 1,426 | |||||||||||
Monthly fee | $ 5,000 | ||||||||||||
Description of closing price of common shares | The number of shares to be issued will be calculated based on the closing price of our common shares on the first day of each month or the preceding day, if the first were to fall on a weekend or holiday. However, if the stock were to trade below $4.60 per share, the calculation would be based on $4.60. |
STOCK OPTIONS, RESTRICTED STO_3
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details) | 6 Months Ended |
Jun. 30, 2020$ / shares | |
Share-based Payment Arrangement [Abstract] | |
Risk Free Interest Rate | 1.78% |
Expected Volatility | 45391.00% |
Expected Life (in years) | 5 years |
Dividend Yield | 0.00% |
Weighted average estimated fair value of options during the period | $ 5 |
STOCK OPTIONS, RESTRICTED STO_4
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 1) - Employee Stock Option [Member] | 6 Months Ended | |
Jun. 30, 2020USD ($)$ / sharesshares | ||
Number of Shares | ||
Balance, as of beginning | shares | 358,271 | |
Granted | shares | 105,000 | |
Forfeited/Cancelled/Expired | shares | (17,500) | |
Balance, as of ending | shares | 445,771 | |
Exercisable | shares | 408,771 | |
Weighted Average Exercise Price | ||
Balance, as of beginning | $ / shares | $ 5.91 | |
Granted | $ / shares | 3.66 | |
Forfeited/Cancelled/Expired | $ / shares | 29.07 | |
Balance, as of ending | $ / shares | 4.47 | |
Exercisable | $ / shares | $ 4.40 | |
Weighted Average Remaining Contractual Term | ||
Exercisable | 4 years 6 months | |
Aggregate Intrinsic Value | ||
Exercisable | $ | $ 167 | [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] | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Number of Unvested Options | |
Balance, as of Beginning | shares | 20,000 |
Granted | shares | 105,000 |
Vested | shares | (88,000) |
Balance, as of Ending | shares | 37,000 |
Weighted-Average Grant Date Exercise Price | |
Balance, as of Beginning | $ / shares | $ 9.75 |
Granted | $ / shares | 3.66 |
Vested | $ / shares | 4.40 |
Balance, as of Ending | $ / shares | $ 5.19 |
STOCK OPTIONS, RESTRICTED STO_6
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 3) | 6 Months Ended | |
Jun. 30, 2020USD ($)$ / sharesshares | ||
Number of Shares | ||
Balance as of beginning | shares | 445,252 | |
Granted | shares | 3,787,991 | |
Cancelled/Forfeited | shares | (454,000) | |
Balance as of ending | shares | 3,779,243 | |
Exercisable | shares | 3,605,330 | |
Weighted Average Exercise Price | ||
Balance as of beginning | $ / shares | $ 15.39 | |
Granted | $ / shares | 5.03 | |
Cancelled/Forfeited | $ / shares | 7.50 | |
Balance as of ending | $ / shares | 5.89 | |
Exercisable | $ / shares | $ 5.93 | |
Weighted - Average Remaining Contractual Term | ||
Balance as of ending | 4 years 4 months 24 days | |
Exercisable | 4 years 7 months 6 days | |
Aggregate Intrinsic Value: | ||
Exercisable | $ | [1] | |
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $3.81 for our common stock on June 30, 2020. |
STOCK OPTIONS, RESTRICTED STO_7
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details Narrative) - USD ($) | Jun. 22, 2020 | Jun. 18, 2020 | May 27, 2020 | Apr. 16, 2020 | Feb. 27, 2020 | Jan. 31, 2020 | Nov. 14, 2017 | Jan. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2013 | Dec. 17, 2003 |
Option, expense | $ 267,865 | $ 126,077 | $ 485,470 | $ 249,788 | ||||||||||
Unrecognized compensation cost | $ 131,362 | |||||||||||||
Weighted average vest term | 6 months | |||||||||||||
Value of shares issued | $ 9,447 | $ 15,000 | $ 17,181 | $ 15,000 | ||||||||||
Over-Allotment Option [Member] | ||||||||||||||
Shares issued during period (in shares) | 50,000 | |||||||||||||
Number of warrant issued | 325,987 | |||||||||||||
Warrant [Member] | Over-Allotment Option [Member] | ||||||||||||||
Exercise price (in dollars per share) | $ 4.60 | |||||||||||||
Warrant term | 5 years | |||||||||||||
Number of warrant issued | 2,499,900 | |||||||||||||
Warrant [Member] | Common Stock [Member] | ||||||||||||||
Description of conversion stock | Company cancelled the 2020 Warrants for twenty-three of the twenty-five warrant holders and issued to the holders of the cancelled warrants an aggregate of 179,200 shares of Common Stock. Of this amount, 33,000 shares of Common stock were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. 2020 Warrants to purchase an aggregate of 81,700 shares of Common Stock at an exercise price of $4.59 per share remain outstanding. Also on such date, the 2020 Debentures were automatically converted into an aggregate of 637,513 shares of common stock and warrants to purchase 573,479 shares of common stock. Of this amount, 105,567 shares of common stock and warrants to purchase 105,567 of shares of common stock were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. | |||||||||||||
Warrant [Member] | Common Stock [Member] | ||||||||||||||
Description of conversion stock | the per share exercise price for the outstanding but unexercised 2020 Warrants to purchase shares of common stock related to the two warrant holders who did not cancel their 2020 Warrants, has been adjusted from $7.50 to $4.59 and the number of shares of common stock underlying the outstanding but unexercised 2020 Warrants increased from an aggregate of 50,000 to 81,700 shares of common stock. | |||||||||||||
Convertible Debt [Member] | ||||||||||||||
Description of conversion stock | (i) the commencement of trading of the common stock on the NASDAQ, New York Stock Exchange or NYSE American (an “Uplist”) at the Uplist Conversion Price (defined below); or (ii) at any time the minimum bid price of the common stock exceeded $25.00 per share for twenty (20) consecutive trading days and the average trading volume during the 10 trading days prior to the conversion was at least 2,000 shares and the shares were registered under an effective registration statement or the shares were salable under Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended. | |||||||||||||
Convertible Debt [Member] | Warrant [Member] | Over-Allotment Option [Member] | ||||||||||||||
Shares issued during period (in shares) | 173,913 | |||||||||||||
Shares issued during period | $ 522,515 | |||||||||||||
Exercise price (in dollars per share) | $ 5.06 | |||||||||||||
Warrant term | 3 years | |||||||||||||
Warrant [Member] | ||||||||||||||
Exercise price (in dollars per share) | $ 3.81 | $ 3.81 | ||||||||||||
Warrant [Member] | Convertible Debt [Member] | ||||||||||||||
Warrant amount | $ 82,500 | $ 82,500 | ||||||||||||
Chief Operating Officer [Member] | ||||||||||||||
Granted | 1,000,000 | |||||||||||||
Four Director [Member] | ||||||||||||||
Shares issued during period (in shares) | 40,000 | |||||||||||||
Shares issued during period | $ 137,160 | |||||||||||||
Expiration date | Jan. 7, 2025 | |||||||||||||
Exercise price (in dollars per share) | $ 3.505 | $ 3.505 | ||||||||||||
Five Director [Member] | ||||||||||||||
Term of unvested options | 1 year | |||||||||||||
Shares issued during period (in shares) | 50,000 | |||||||||||||
Shares issued during period | $ 171,451 | |||||||||||||
Expiration date | Jan. 7, 2025 | |||||||||||||
Exercise price (in dollars per share) | 3.505 | $ 3.505 | ||||||||||||
Chief Executive Officer (Patrick White) [Member] | ||||||||||||||
Shares issued during period | $ 153,913 | |||||||||||||
Expiration date | Aug. 15, 2025 | |||||||||||||
Warrant term | 3 years | |||||||||||||
Number of shares issued for services (in shares) | 140,000 | |||||||||||||
Mr. Gardner [Member] | ||||||||||||||
Expiration date | Jun. 29, 2025 | |||||||||||||
Number of shares issued for services (in shares) | 90,000 | |||||||||||||
Value of shares issued | $ 53,913 | |||||||||||||
Director [Member] | ||||||||||||||
Shares issued during period | $ 11,811 | |||||||||||||
Expiration date | Apr. 16, 2025 | |||||||||||||
Exercise price (in dollars per share) | $ 4.025 | |||||||||||||
Number of shares issued for services (in shares) | 3,000 | |||||||||||||
Director [Member] | Warrant [Member] | Common Stock [Member] | ||||||||||||||
Description of conversion stock | Warrants to purchase 448,000 shares of common stock were cancelled (including 2020 Warrants for 82,500 shares that had been issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager) and warrants to purchase 573,479 shares of common stock were issued upon closing of the Offering and conversion of the 2020 Debentures, with an exercise price of $4.60 and an expiration term of five years. Of this amount, warrants to purchase 105,567 of shares of common stock were issued to four directors and an entity in which one officer of the Company is a majority owner and co-manager. | |||||||||||||
Two Director [Member] | ||||||||||||||
Shares issued during period | $ 41,435 | |||||||||||||
Expiration date | May 27, 2025 | |||||||||||||
Exercise price (in dollars per share) | $ 5.295 | |||||||||||||
Number of shares issued for services (in shares) | 8,000 | |||||||||||||
Four Non - Employees Member [Member] | ||||||||||||||
Shares issued during period | $ 53,835 | |||||||||||||
Expiration date | May 27, 2023 | |||||||||||||
Exercise price (in dollars per share) | $ 5.295 | |||||||||||||
Number of shares issued for services (in shares) | 11,000 | |||||||||||||
Chief Operating Officer [Member] | ||||||||||||||
Term of unvested options | 1 year | |||||||||||||
Shares issued during period (in shares) | 4,000 | |||||||||||||
Shares issued during period | $ 13,716 | |||||||||||||
Expiration date | Jan. 7, 2025 | |||||||||||||
Exercise price (in dollars per share) | $ 3.505 | $ 3.505 | ||||||||||||
Four Directors And One Officer [Member] | Convertible Debt [Member] | ||||||||||||||
Exercise price (in dollars per share) | $ 7.50 | |||||||||||||
Warrant term | 3 years | |||||||||||||
Number of shares issued for services (in shares) | 498,000 | |||||||||||||
Employee Stock Option [Member] | ||||||||||||||
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). | |||||||||||||
Granted | 105,000 | |||||||||||||
Stock Option 2003 Plan [Member] | ||||||||||||||
Number of shares authorized to be granted under plan | 360,000 | |||||||||||||
Stock Option 2003 Plan [Member] | Stock Options, Restricted Stock and Units, and Other Stock-based Awards [Member] | ||||||||||||||
Number of shares authorized to be granted under plan | 400,000 | |||||||||||||
Equity Incentive Plan 2017 [Member] | Board of Director [Member] | ||||||||||||||
Shares issued during period (in shares) | 260,000 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
One Customer [Member] | Revenues [Member] | ||
Concentration risk, percentage | 99.00% | |
One Customer [Member] | Accounts Receivable [Member] | ||
Concentration risk, percentage | 99.00% | |
Two Customer [Member] | Revenues [Member] | ||
Concentration risk, percentage | 97.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - $ / shares | Aug. 05, 2020 | Apr. 16, 2020 | Aug. 31, 2020 | Jul. 31, 2020 |
Director [Member] | ||||
Number of shares issued for services | 3,000 | |||
Exercise price (in dollars per share) | $ 4.025 | |||
Subsequent Event [Member] | Two Sales Consultants [Member] | ||||
Number of shares issued for services | 28,000 | |||
Stock awards granted term | 18 months | |||
Exercise price (in dollars per share) | $ 4.60 | |||
Subsequent Event [Member] | Restricted Common Stock [Member] | Investor [Member] | ||||
Number of shares issued for services | 1,087 | 1,087 | ||
Subsequent Event [Member] | Restricted Common Stock [Member] | Director [Member] | ||||
Number of shares issued for services | 230,000 |