Health Discovery (HDVY) 10-Q 21 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 21, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	HEALTH DISCOVERY CORP
Entity Central Index Key	1,141,788
Trading Symbol	hdvy
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		271,718,989
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

Balance Sheets (unaudited)

Balance Sheets (unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current Assets
Cash	$ 183,451	$ 417,208
Investment in Available For Sale Securities (Note G)	148,074	141,978
Total Current Assets	331,525	559,186
Equipment, Less Accumulated Depreciation of $60,885 and $60,690 as of September 30, 2016 and December 31, 2015, respectively		195
Other Assets
Patents, Less Accumulated Amortization of $3,241,769 and $3,044,729 as of September 30, 2016 and December 31, 2015, respectively	744,026	941,066
Total Assets	1,075,551	1,500,447
Current Liabilities
Accounts Payable - Trade	140,166	37,633
Dividends Payable	206,637	206,637
Deferred Revenue	43,388	43,388
Common Stock Warrants Liability (Note D)		339,268
Total Current Liabilities	390,191	626,926
Long Term Liabilities
Deferred Revenue	72,312	104,853
Total Liabilities	462,503	731,779
Stockholders' Equity
Series C Preferred Stock, Convertible, 45,000,000 Shares Authorized; 30,000,000 Issued and Outstanding September 30, 2016 and December 31, 2015	900,000	560,732
Common Stock, No Par Value, 450,000,000 Shares Authorized; 271,718,989 Shares Issued and Outstanding September 30, 2016; 268,718,989 Shares Issued and Outstanding December 31, 2015	28,873,471	27,410,930
Accumulated Deficit	(29,160,423)	(27,202,994)
Total Stockholders' Equity	613,048	768,668
Total Liabilities and Stockholders' Equity	$ 1,075,551	$ 1,500,447

Balance Sheets (unaudited) (Par

Balance Sheets (unaudited) (Parentheticals) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accumulated depreciation on equipment (in dollars)	$ 60,885	$ 60,690
Accumulated amortization on patents (in dollars)	$ 3,241,769	$ 3,044,729
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	450,000,000	300,000,000
Common stock, shares issued	271,718,989	268,718,989
Common stock, shares outstanding	271,718,989	268,718,989
Series C Preferred Stock Convertible
Preferred stock, shares authorized	45,000,000	30,000,000
Preferred stock, shares issued	30,000,000	30,000,000
Preferred stock, shares outstanding	30,000,000	30,000,000

Statements of Operations (unaud

Statements of Operations (unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Licensing and Development	$ 10,847	$ 12,050	$ 32,665	$ 33,754
Operating Expenses:
Depreciation and Amortization	65,680	65,875	197,234	197,770
Professional and Consulting Fees	51,848	30,965	173,274	129,377
Legal Fees	6,225	9,000	21,225	37,357
Research and Development Fees	9,000	9,000	27,000	31,813
Compensation	56,179	48,328	233,035	142,665
Other General and Administrative Expenses	42,514	33,438	147,811	116,112
Total Operating Expenses	231,446	196,606	799,579	655,094
Loss From Operations	(220,599)	(184,556)	(766,914)	(621,340)
Other Income (Expense)
Unrealized Gain (Loss) on Available for Sale Securities (Note G)	3,240	(17,917)	6,096	(160,706)
Realized Gain on Available for Sale Securities (Note G)		27,192		232,937
Other Expense - Change in Warrants Liability (Note D)			(1,196,612)
Forgiveness on Payables (Note H)		121,503		121,503
Settlement Expense				(17,693)
Other Income (Expense), net	3,240	130,778	(1,190,516)	176,041
Net Loss	(217,359)	(53,778)	(1,957,430)	(445,299)
Net Loss Attributable to Common Stockholders	$ (217,359)	$ (53,778)	$ (1,957,430)	$ (445,299)
Weighted Average Outstanding Shares - basic and diluted (in shares)	271,718,989	266,052,322	271,052,322	265,163,433
Net Loss Per Share - basic and diluted (in dollars per share)	$ (0.0008)	$ (0.0002)	$ (0.0072)	$ (0.0017)

Statements of Cash Flows (unaud

Statements of Cash Flows (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows From Operating Activities:
Net Loss	$ (1,957,430)	$ (445,299)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Stock-based Compensation for Employees	102,233	11,512
Stock-based Compensation for Directors and Consultants	73,698	39,700
Realized Gain on Available for Sale Securities Measured in Accordance with the Fair Value Option (Note G)		(232,937)
Unrealized (Gain) Loss on Available for Sale Securities Measured in Accordance with the Fair Value Option (Note G)	(6,096)	160,706
Increase in Warrants Liability (Note D)	1,196,612
Depreciation and Amortization	197,234	197,770
Decrease in Accounts Receivable		1,969
Decrease in Deferred Revenue	(32,541)	(32,541)
Increase (Decrease) in Accounts Payable - Trade	102,533	(98,639)
Forgiveness on Accounts Payable - Trade		(121,503)
Increase in Available for Sale Securities		(1,294)
Net Cash Used in Operating Activities	(323,757)	(520,556)
Cash Flows From Investing Activities:
Proceeds from Sale of Available for Sale Securities (Note G)		331,465
Net Cash Provided by Investing Activities		331,465
Cash Flows From Financing Activities:
Proceeds from Common Stock Issuance	90,000	120,000
Proceeds from Series C Preferred Stock Issuance		568,000
Net Cash Provided by Financing Activities	90,000	688,000
Net (Decrease) Increase in Cash	(233,757)	498,909
Cash, at Beginning of Period	417,208	7,642
Cash, at End of Period	$ 183,451	$ 506,551

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
BASIS OF PRESENTATION	Note A - BASIS OF PRESENTATION Health Discovery Corporation (the “Company”) is a biotechnology-oriented company that has acquired patents and has patent pending applications for certain machine learning tools, primarily pattern recognition techniques using advanced mathematical algorithms to analyze large amounts of data thereby uncovering patterns that might otherwise be undetectable. Such machine learning tools are currently in use for diagnostics and drug discovery, but are also marketed for other applications. The Company licenses the use of its patent protected technology and may provide services to develop specific learning tools under development agreements or to sell to third parties. The accounting principles followed by the Company and the methods of applying these principles conform with accounting principles generally accepted in the United States of America (GAAP). In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ significantly from those estimates. The interim financial statements included in this report are unaudited but reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. The results of operations for the nine month period ended September 30, 2016 are not necessarily indicative of the results of a full year’s operations and should be read in conjunction with the financial statements and footnotes included in the Company’s annual report on Form 10-K for the year ended December 31, 2015.

REVENUE RECOGNITION

REVENUE RECOGNITION	9 Months Ended
	Sep. 30, 2016
Deferred Revenue Disclosure [Abstract]
REVENUE RECOGNITION	Note B – REVENUE RECOGNITION Revenue is generated through the sale or license of patented technology and processes and from services provided through development agreements. These arrangements are generally governed by contracts that dictate responsibilities and payment terms. The Company recognizes revenues as they are earned over the duration of a license agreement or upon the sale of any owned patent once all contractual obligations have been fulfilled. If a license agreement has an undetermined or unlimited life, the revenue is recognized over the remaining expected life of the patents. Revenue is recognized under development agreements in the period the services are performed. The Company treats the incremental direct cost of revenue arrangements, which consists principally of employee bonuses, as deferred charges and these incremental direct costs are amortized to expense using the straight-line method over the same term as the related deferred revenue recognition. Deferred revenue represents the unearned portion of payments received in advance for licensing and development agreements. The Company had total unearned revenue of $115,700 as of September 30, 2016. Unearned revenue of $43,388 is recorded as current and $72,312 is classified as long-term.

NET LOSS PER SHARE

NET LOSS PER SHARE	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
NET LOSS PER SHARE	Note C - NET (LOSS) INCOME PER SHARE Basic Earnings Per Share (“EPS”) includes no dilution and is computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of securities that could share in the earnings or losses of the entity. Due to the net loss in all periods presented, potentially dilutive shares are not included in the calculation of diluted EPS, as those shares would create an anti-dilutive result.

STOCK-BASED COMPENSATION AND OT

STOCK-BASED COMPENSATION AND OTHER EQUITY BASED PAYMENTS	9 Months Ended
	Sep. 30, 2016
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]
STOCK-BASED COMPENSATION AND OTHER EQUITY BASED PAYMENTS	Note D - STOCK-BASED COMPENSATION AND OTHER EQUITY BASED PAYMENTS Stock-based compensation expense included in our net loss for the three months and nine months ended September 30, 2016 was $35,163 and $175,931, respectively, for stock options granted to employees, directors, and consultants. Stock-based compensation expense included in our net loss for the three months and nine months ended September 30, 2015 was $17,071 and $51,212, respectively. As of September 30, 2016, there was $192,993 of unrecognized cost related to stock option grants. The cost is to be recognized over the remaining vesting periods that average approximately 2.25 years. In connection with their election to the Board of Directors, on May 17, 2016, the Company granted to Mr. Henry Kaplan, Mr. Kevin Kowbel, Mr. George McGovern, and Mr. William Quirk each an option to purchase 1,500,000 shares of the Company’s common stock. The options for Messrs. Kaplan, Kowbel, McGovern and Quirk vest 250,000 shares every six months, have an exercise price of $0.035, and expire on May 17, 2026. The fair value of each option granted is $0.0265 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.89%, an expected life of 5 years, and volatility of 102%. The aggregate computed fair value of these options is $158,756, and this amount will be charged as an expense over the three-year vesting period. Additionally, in recognition of his leadership as Chairman of the Board of Directors and CEO, on May 17, 2016, the Company granted to Mr. Kevin Kowbel an option to purchase 3,000,000 shares of the Company’s common stock. The options for Mr. Kowbel vest immediately, have an exercise price of $0.035, and expire on May 17, 2026. The fair value of each option granted is $0.0265 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.89%, an expected life of 5 years, and volatility of 102%. The aggregate computed fair value of these options is $79,519, and this amount was charged as an expense during the second quarter of 2016. On February 8, 2016, the Company granted options to purchase 5,000,000 shares of the Company’s common stock to a group of employees and consultants in recognition of their efforts to lower the Company’s monthly expenditures and compensation and their continuing contributions to the Company. The options vest over a two-year period, have an exercise price of $.03, and expire on February 8, 2026. Within the group of 5,000,000 options, the Company’s Vice President, Mark A. Moore, Ph.D., received an option to purchase 500,000 shares of the Company’s common stock and the Company’s Senior Vice President, Hong Zhang, Ph.D., received an option to purchase 1,250,000 shares of the Company’s common stock. The fair value of each option granted is $0.0219 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.99%, an expected life of 5 years, and volatility of 96%. The aggregate computed fair value of these options is $109,271, and this amount will be charged as an expense over the two-year vesting period. Because at the time of issuance, these options exceeded the amount of common shares available if the holders exercised the previously issued outstanding options and warrants, the Company needed to increase the authorized shares of common stock in order to satisfy these options. The shareholders of the Company approved this increase in authorized shares on May 17, 2016. In the fourth quarter of 2013, the Board of Directors authorized the issuance of Series C Preferred Shares in private placement transactions. As of December 31, 2015, the Company had issued a total of 30,000,000 preferred shares. The Series C Preferred Shares were fully subscribed in the third quarter 2015. The Series C Preferred Shares are accompanied by $0.03 warrants and $0.03 contingency warrants. The contingency warrants were issued during the three months ended March 31, 2016 as a result of the Company not attaining profitability by the end of the first quarter 2016. Because at the time of issuance, these warrants exceeded the amount of common shares available if the holders exercised the previously issued outstanding options and warrants, the Company needed to increase the authorized shares of common stock in order to satisfy these options. The shareholders of the Company approved this increase in authorized shares on May 17, 2016. The fair value of each warrant granted was $0.0219 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.67%, an expected life of 5 years, and volatility of 96%. During the third quarter of 2015, the Board of Directors authorized the issuance of Common Stock in a private placement of 7,000,000 Common Shares with certain warrant features. As of March 31, 2016, 7,000,000 shares of this offering were sold. During the three and six month periods ended March 31, 2016, the Company sold 3,000,000 of these shares and received $90,000 in proceeds. The Common Shares are accompanied by $0.03 warrants and $0.06 contingency warrants. The contingency warrants were issued during the three months ended March 31, 2016 as a result of the Company not attaining profitability by the end of the first quarter 2016. Because at the time of issuance, these warrants exceeded the amount of common shares available if the holders exercised the previously issued outstanding options and warrants, the Company needed to increase the authorized shares of common stock in order to satisfy these options. The shareholders of the Company approved this increase in authorized shares on May 17, 2016. The fair value of each warrant granted was $0.0219 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.67%, an expected life of 5 years, and volatility of 96%. Furthermore, as a result of the Company issuing options and warrants which exceeded the amount of common shares available if the holders exercised the previously issued outstanding options and warrants, the Company recorded an increase in the common stock warrants liability during the first quarter of 2016 of $940,812 and $255,800 during the second quarter of 2016. As previously disclosed above, the Company had issued options and warrants which exceeded the amount of common shares available if the holders exercised all of the previously issued outstanding options and warrants. This created a common stock warrant liability for the Company. During the first quarter, based upon the trading price of the Company’s common stock, this liability increased by $940,812 and during the second quarter of 2016 increased by $1,196,612. At the Annual Shareholder Meeting of the Company held on May 17, 2016, the shareholders approved an increase to the authorized shares of common and preferred stock. As a result, the Company has enough common stock available if the holders exercised all of the previously issued outstanding options and warrants. This resulted in there no longer being a common stock warrant liability for the Company. With the reduction in the common stock warrant liability, the Company increased the common stock value within the balance sheet. As of September 30, 2016, there were 100,750,000 option and warrant shares outstanding with a weighted average exercise price of $0.033. The following schedule summarizes combined stock option and warrant information as of September 30, 2016: Exercise Prices Number Weighted- Number Weighted $0.027 3,000,000 6.75 3,000,000 6.75 $0.030 72,000,000 9.25 68,250,000 9.25 $0.035 9,000,000 9.75 3,000,000 9.75 $0.036 7,750,000 7.00 6,833,335 7.00 $0.040 1,000,000 1.25 1,000,000 1.25 $0.050 1,000,000 1.25 1,000,000 1.25 $0.060 7,000,000 9.50 7,000,000 9.50 Total 100,750,000 90,083,335 The weighted average remaining life of all outstanding warrants and options at September 30, 2016 are 9.35 years. The aggregate intrinsic value of all options and warrants outstanding and exercisable as of September 30, 2016 was $392,400, based on the market closing price of $0.0351 on September 30, 2016, less exercise prices.

PATENTS

PATENTS	9 Months Ended
	Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
PATENTS	Note E - PATENTS The Company has acquired and developed a group of patents related to biotechnology and certain machine learning tools used for diagnostic and drug discovery. Legal costs associated with patent acquisitions and the application processes for new patents are also capitalized as patent assets. The Company has recorded as other assets $744,026 in patents and patent related costs, net of $ 3,241,769 in accumulated amortization, at September 30, 2016. Amortization charged to operations for the three months and nine months ended September 30, 2016 and 2015 was $65,680 and $197,039 in both years. Estimated amortization expense for the next three years, including 2016, is $262,720 per year. Estimated amortization expense for the fourth year is $152,906 and no amortization expense for the fifth year.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Sep. 30, 2016
Stockholders Equity Note [Abstract]
STOCKHOLDERS' EQUITY	Note F – STOCKHOLDERS’ EQUITY Series C Preferred Stock In the fourth quarter of 2013, the Board of Directors authorized the issuance of Series C Preferred Shares in private placement transactions. As of December 31, 2015, the Company had issued a total of 30,000,000 preferred shares. The Series C Preferred Shares were fully subscribed in the third quarter of 2015. The Series C Preferred Shares are accompanied by $0.03 warrants and $0.03 contingency warrants. The contingency warrants were issued during the three month period ended March 31, 2016 as a result of the Company not attaining profitability by the end of the first quarter 2016. The holders must exercise fifty percent of the warrants if the market price for the Company’s common stock is $0.20 for a period of thirty consecutive calendar days or the warrants will expire. The holders must also exercise fifty percent of the warrants if the market price for the Company’s common stock is $0.30 for a period of thirty consecutive calendar days or the warrants will expire. The fair value of each warrant granted is $0.0219 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.67%, an expected life of 5 years, and volatility of 96%. The aggregate fair value of these warrants is $656,380. The Series C Preferred Stock has not been registered under either federal or state securities laws and must be held until a registration statement covering such securities is declared effective by the Securities and Exchange Commission or an applicable exemption applies. Each share of Series C Preferred Stock may be converted into one share of Common Stock of the Company at the option of the holder, without the payment of additional consideration by the holder, so long as the Company has a sufficient number of authorized shares to allow for the exercise of all of its outstanding warrants and options. The Shares of Series C Preferred Stock must be converted into Common Stock of the Company either by the demand by the shareholder or at the fifth anniversary of the date of issuance. If the Company were to be dissolved, the Series C Preferred Stock receives preferential treatment over Common Stock. During the third quarter of 2015, the Board of Directors authorized the issuance of Common Stock in a private placement of 7,000,000 Common Shares with certain warrant features. As of September 30, 2016, 7,000,000 shares of this offering have been sold. The Common Shares are accompanied by $0.03 warrants and $0.06 contingency warrants. The contingency warrants were issued during the three month period ended March 31, 2016 as a result of the Company not attaining profitability by the end of the first quarter 2016. The holders must exercise fifty percent of the warrants if the market price for the Company’s common stock is $0.20 for a period of thirty consecutive calendar days or the warrants will expire. The holders must also exercise fifty percent of the warrants if the market price for the Company’s common stock is $0.30 for a period of thirty consecutive calendar days or the warrants will expire. The fair value of each warrant granted is $0.0219 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.67%, an expected life of 5 years, and volatility of 96%.

INVESTMENT IN AVAILABLE FOR SAL

INVESTMENT IN AVAILABLE FOR SALE SECURITIES	9 Months Ended
	Sep. 30, 2016
Available-For-Sale Securities [Abstract]
INVESTMENT IN AVAILABLE FOR SALE SECURITIES	Note G – INVESTMENT IN AVAILABLE FOR SALE SECURITIES The Company has elected the fair value option in accordance with ASC 825, Financial Instruments, The Company’s investment in NeoGenomics’ common stock is recorded on the accompanying balance sheets under the caption Investment in Available for Sale Securities. The carrying value of this investment on the date of acquisition approximated $1,945,000. The change in fair value from December 31, 2015 to September 30, 2016 is an unrealized gain of $6,096 for the remaining 18,000 shares held and is classified as other expense under the caption Unrealized Gain (Loss) on Available for Sale Securities in the accompanying statements of operations. There are three levels of investments in the fair value hierarchy that assesses a company's assets based on the degree of certainty around the asset's underlying value. A Level 1 asset can be valued with certainty because they are liquid and have clear market prices. At the other end of the spectrum, Level 3 assets are illiquid and estimating their value requires inputs that are unobservable and reflect significant management assumptions. The Company classifies its investment as an available for sale security presented as a trading security on the balance sheets and the fair value is considered a Level 1 investment in the fair value hierarchy. The September 30, 2016 fair value of the investment of $148,074 is for the remaining shares held and is calculated using the closing stock price of the NeoGenomics common stock at the end of the reporting period. As of September 30, 2016 and December 31, 2015, the Company held 18,000 shares of NeoGenomics stock.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Note H – COMMITMENTS AND CONTINGENCIES On July 17, 2013, the Company received a Civil Investigative Demand (the "Demand") from the Federal Trade Commission of the United States of America (the "FTC") relating to the Company's MelApp software application. In the Demand, the FTC requested information relating to potentially unfair or deceptive acts or practices related to (i) false advertising and (ii) consumer privacy and data security, in violation of Trade Commission Act, 15 U.S.C. Sections 45 and 42. On February 23, 2015, the FTC notified the Company of its approval, by a vote of 4-1, to accept an Agreement Containing Consent Order (“Agreement”). This Agreement was for settlement purposes only. The Company neither admitted nor denied any of the allegations, except as specifically stated in the Agreement. The Company believed the effort to contest this matter with the FTC would require funds greater than the Company had at its disposal. The Agreement does, among other things, bar the Company from claiming that any device detects or diagnoses melanoma or its risk factors, or increases users’ chances of early detection, unless the representation is not misleading and supported by competent and reliable scientific evidence in the form of human clinical testing of the device. The Agreement also prohibits the Company from making any other misleading or unsubstantiated claims about a device’s health benefits or efficacy, unless the representation is not misleading and supported by competent and reliable scientific evidence in the form of human clinical testing of the device. Finally, the Company was required to pay $17,693 to the FTC, which was accrued during the three month period ended March 31, 2015. This amount is included as Settlement Expense in the accompanying statements of operations for the nine-month period ended September 30, 2015. The Company’s balance sheet for the year ended December 31, 2014 reflected an accrued liability of approximately $239,910 for professional services. In an effort to conserve cash, the Company worked with several of the vendors regarding a portion of this amount by negotiating with the service providers regarding potential reduction of the amount billed. During the quarter ended September 30, 2015, the Company and the service providers negotiated the amounts owed and as a result, the Company recorded a decrease in accounts payables of $121,503. During the period ended September 30, 2016 there was no forgiveness on payables. The Company is subject to various claims primarily arising in the normal course of business. Although the outcome of these matters cannot be determined, the Company does not believe it is probable that any such claims will result in material costs and expenses.

FINANCIAL CONDITION AND GOING C

FINANCIAL CONDITION AND GOING CONCERN	9 Months Ended
	Sep. 30, 2016
Financial Condition And Going Concern [Abstract]
FINANCIAL CONDITION AND GOING CONCERN	Note I – FINANCIAL CONDITION AND GOING CONCERN The Company has prepared its financial statements on a “going concern” basis, which presumes that it will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company’s ability to continue as a going concern is dependent upon our licensing arrangements with third parties, achieving profitable operations, obtaining additional financing and successfully bringing the Company’s technologies to the market. The outcome of these matters cannot be predicted at this time. The Company’s financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classifications of the assets and liabilities that might be necessary should the Company be unable to continue in business. If the going concern assumption was not appropriate for the Company’s financial statements then adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used. Such adjustments may be material. At September 30, 2016, the Company had $183,451 of cash on hand along with its investment in NeoGenomics stock classified as available for sale securities worth $148,074. Also, at September 30, 2016, the Company had $390,191 in current liabilities. As a result, the Company estimates cash will be depleted by the end of first quarter 2017 if the Company does not generate sufficient cash to support operations. The Company’s plan to have sufficient cash to support operations is comprised of generating revenue through finding new opportunities to license its technology, providing services related to those patents, selling its NeoGenomics stock, and obtaining additional equity or debt financing. During the third quarter of 2015, the Board of Directors authorized the issuance of Common Stock in a private placement of 7,000,000 Common Shares with certain warrant features. As of September 30, 2016, 7,000,000 shares of this offering had been sold. During the first quarter of 2016, the Company sold 3,000,000 of these shares and received $90,000 in proceeds. The Company is currently in discussions with NeoGenomics to modify the current agreement between the two companies. One of the goals for these discussions is to obtain quarterly payments from NeoGenomics that would help cover monthly expenses. Additionally, the Company is attempting to encourage the Series C Preferred Stockholders to exercise some or all of their warrants in order to help fund the operations of the Company. While the Company believes these efforts will create a profitable future, there is no guarantee the Company will be successful in these efforts.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	9 Months Ended
	Sep. 30, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	Note J – RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards (“ASU”) 2016-02, Leases. This standard update was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities, including for operating leases, on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that adopting ASU 2016-02 will have on its financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. This standard update provides guidance for balance sheet classification of deferred taxes. This standard requires that deferred tax assets and liabilities be classified as non-current on the balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount on the balance sheet. ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Earlier application is permitted as of the beginning of an interim or annual period. The Company is currently evaluating the impact that adopting ASU 2015-17 will have on its financial statements.

ACCOUNTING POLICIES

ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
ACCOUNTING POLICIES	Note K –ACCOUNTING POLICIES Patents Initial costs paid to purchase patents are capitalized and amortized using the straight line method over the remaining life of the patent. The Company capitalizes the external costs and filing fees associated with obtaining patents on its new discoveries and amortizes these costs using the straight-line method over the shorter of the legal life of the patent or its economic life, generally 17 years, beginning on the date the patent is issued. Annual patent maintenance costs and annual license and renewal registration fees are expensed as period costs. If the applied for patents are abandoned or are not issued, the Company will expense the costs capitalized to date in the period of abandonment or earlier if abandonment appears probable. The carrying value of patents is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. As of September 30, 2016, the Company does not believe there has been any impairment of its patents. Stock-based Compensation Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. Valuation and Amortization Method Expected Term Expected Volatility – Risk-Free Interest Rate

ACCOUNTING POLICIES (Policies)

ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Patents	Patents Initial costs paid to purchase patents are capitalized and amortized using the straight line method over the remaining life of the patent. The Company capitalizes the external costs and filing fees associated with obtaining patents on its new discoveries and amortizes these costs using the straight-line method over the shorter of the legal life of the patent or its economic life, generally 17 years, beginning on the date the patent is issued. Annual patent maintenance costs and annual license and renewal registration fees are expensed as period costs. If the applied for patents are abandoned or are not issued, the Company will expense the costs capitalized to date in the period of abandonment or earlier if abandonment appears probable. The carrying value of patents is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. As of September 30, 2016, the Company does not believe there has been any impairment of its patents.
Stock-based Compensation	Stock-based Compensation Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. Valuation and Amortization Method Expected Term Expected Volatility – Risk-Free Interest Rate
RECENT ACCOUNTING PRONOUNCEMENTS	RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards (“ASU”) 2016-02, Leases. This standard update was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities, including for operating leases, on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that adopting ASU 2016-02 will have on its financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. This standard update provides guidance for balance sheet classification of deferred taxes. This standard requires that deferred tax assets and liabilities be classified as non-current on the balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount on the balance sheet. ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Earlier application is permitted as of the beginning of an interim or annual period. The Company is currently evaluating the impact that adopting ASU 2015-17 will have on its financial statements.

STOCK-BASED COMPENSATION AND 18

STOCK-BASED COMPENSATION AND OTHER EQUITY BASED PAYMENTS (Tables)	9 Months Ended
	Sep. 30, 2016
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]
Schedule of stock option and warrants outstanding by exercise price range	Exercise Prices Number Weighted- Number Weighted $0.027 3,000,000 6.75 3,000,000 6.75 $0.030 72,000,000 9.25 68,250,000 9.25 $0.035 9,000,000 9.75 3,000,000 9.75 $0.036 7,750,000 7.00 6,833,335 7.00 $0.040 1,000,000 1.25 1,000,000 1.25 $0.050 1,000,000 1.25 1,000,000 1.25 $0.060 7,000,000 9.50 7,000,000 9.50 Total 100,750,000 90,083,335

REVENUE RECOGNITION (Detail Tex

REVENUE RECOGNITION (Detail Textuals) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Deferred Revenue Disclosure [Abstract]
Total unearned revenue	$ 115,700
Unearned revenue, current	43,388	$ 43,388
Unearned revenue, long term	$ 72,312	$ 104,853

STOCK-BASED COMPENSATION AND 20

STOCK-BASED COMPENSATION AND OTHER EQUITY BASED PAYMENTS (Details)	9 Months Ended
	Sep. 30, 2016$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding	100,750,000
Number Exercisable	90,083,335
Stock option and warrant | Exercise Price $0.027
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices | $ / shares	$ 0.027
Number Outstanding	3,000,000
Weighted-Average Remaining Contractual Life (years)	6 years 9 months
Number Exercisable	3,000,000
Weighted Average Remaining Contractual Life (years) of Exercisable Warrants	6 years 9 months
Stock option and warrant | Exercise Price $0.030
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices | $ / shares	$ 0.030
Number Outstanding	72,000,000
Weighted-Average Remaining Contractual Life (years)	9 years 3 months
Number Exercisable	68,250,000
Weighted Average Remaining Contractual Life (years) of Exercisable Warrants	9 years 3 months
Stock option and warrant | Exercise Price $0.035
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices | $ / shares	$ 0.035
Number Outstanding	9,000,000
Weighted-Average Remaining Contractual Life (years)	9 years 9 months
Number Exercisable	3,000,000
Weighted Average Remaining Contractual Life (years) of Exercisable Warrants	9 years 9 months
Stock option and warrant | Exercise Price $0.036
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices | $ / shares	$ 0.036
Number Outstanding	7,750,000
Weighted-Average Remaining Contractual Life (years)	7 years
Number Exercisable	6,833,335
Weighted Average Remaining Contractual Life (years) of Exercisable Warrants	7 years
Stock option and warrant | Exercise Price $0.040
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices | $ / shares	$ 0.040
Number Outstanding	1,000,000
Weighted-Average Remaining Contractual Life (years)	1 year 3 months
Number Exercisable	1,000,000
Weighted Average Remaining Contractual Life (years) of Exercisable Warrants	1 year 3 months
Stock option and warrant | Exercise Price $0.050
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices | $ / shares	$ 0.050
Number Outstanding	1,000,000
Weighted-Average Remaining Contractual Life (years)	1 year 3 months
Number Exercisable	1,000,000
Weighted Average Remaining Contractual Life (years) of Exercisable Warrants	1 year 3 months
Stock option and warrant | Exercise Price $0.060
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices | $ / shares	$ 0.060
Number Outstanding	7,000,000
Weighted-Average Remaining Contractual Life (years)	9 years 6 months
Number Exercisable	7,000,000
Weighted Average Remaining Contractual Life (years) of Exercisable Warrants	9 years 6 months

STOCK-BASED COMPENSATION AND 21

STOCK-BASED COMPENSATION AND OTHER EQUITY BASED PAYMENTS (Detail Textuals) - USD ($)	Feb. 08, 2016	May 17, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Mr. Kevin Kowbel
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option to purchase		1,500,000
Number of shares vested		250,000
Mr. Henry Kaplan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option to purchase		1,500,000
Number of shares vested		250,000
Mr. George McGovern
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option to purchase		1,500,000
Number of shares vested		250,000
Mr. William Quirk
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option to purchase		1,500,000
Number of shares vested		250,000
Board of Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining vesting periods		3 years
Exercise price of option		$ 0.035
Option expiration date		May 17, 2026
Fair value of each option granted		$ 0.0265
Method used		Black-Scholes pricing model
Dividend yield		0.00%
Risk-free interest rate		1.89%
Expected life		5 years
Volatility rate		102.00%
Aggregate computed value of warrants		$ 158,756
Board of Directors | Private placement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of each option granted					$ 0.0219
Method used					Black-Scholes pricing model
Dividend yield					0.00%
Risk-free interest rate					1.67%
Expected life					5 years
Volatility rate					96.00%
Chairman of the Board of Directors and CEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option to purchase		3,000,000
Exercise price of option		$ 0.035
Option expiration date		May 17, 2026
Fair value of each option granted		$ 0.0265
Method used		Black-Scholes pricing model
Dividend yield		0.00%
Risk-free interest rate		1.89%
Expected life		5 years
Volatility rate		102.00%
Aggregate computed value of warrants		$ 79,519
Stock options and warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized cost related to stock option grants			$ 192,993		$ 192,993
Remaining vesting periods					2 years 3 months
Option expiration date	Feb. 8, 2026
Fair value of each option granted	$ 0.0219				$ 0.0219
Method used	Black-Scholes pricing model				Black-Scholes pricing model
Dividend yield	0.00%				0.00%
Risk-free interest rate	1.99%				1.67%
Expected life	5 years				5 years
Volatility rate	96.00%				96.00%
Aggregate computed value of warrants	$ 109,271		656,380		$ 656,380
Stock options and warrants | Employees, directors, and consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based expense			$ 35,163	$ 17,071	$ 175,931	$ 51,212
Stock options and warrants | Employees and consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining vesting periods	2 years
Number of option to purchase	5,000,000
Exercise price of option	$ 0.03
Stock options and warrants | Mark A. Moore, Ph.D.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option to purchase	500,000
Stock options and warrants | Hong Zhang, Ph.D.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option to purchase	1,250,000

STOCK-BASED COMPENSATION AND 22

STOCK-BASED COMPENSATION AND OTHER EQUITY BASED PAYMENTS (Detail Textuals 1) - USD ($)	Feb. 08, 2016	May 17, 2016	Mar. 31, 2016	Jun. 30, 2016	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock warrant liability			$ 940,812	$ 255,800
Increase in Warrants Liability (Note D)					$ 1,196,612
Private placement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued under private placement					7,000,000
Weighted average exercise price					$ 0.20
Board of Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of each option granted		$ 0.0265
Exercise price of option		$ 0.035
Option expiration date		May 17, 2026
Dividend yield		0.00%
Expected life		5 years
Method used		Black-Scholes pricing model
Risk-free interest rate		1.89%
Volatility rate		102.00%
Warrants and Rights Outstanding		$ 158,756
Remaining vesting periods		3 years
Board of Directors | Private placement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of each option granted					$ 0.0219
Dividend yield					0.00%
Expected life					5 years
Method used					Black-Scholes pricing model
Risk-free interest rate					1.67%
Volatility rate					96.00%
Shares warrant feature per share (in dollars per share)			$ 0.03
Shares contingency warrant feature per share (in dollars per share)			$ 0.06
Number of share authorized for issuance							7,000,000
Stock issued under private placement					7,000,000
Number of shares sold					3,000,000
Proceeds from shares sold					$ 90,000
Series C Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock, shares issued					30,000,000	30,000,000
Shares warrant feature per share (in dollars per share)						$ 0.03
Shares contingency warrant feature per share (in dollars per share)						$ 0.03
Weighted average exercise price					$ 0.20
Stock options and warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of each option granted	$ 0.0219				$ 0.0219
Option expiration date	Feb. 8, 2026
Dividend yield	0.00%				0.00%
Expected life	5 years				5 years
Method used	Black-Scholes pricing model				Black-Scholes pricing model
Risk-free interest rate	1.99%				1.67%
Volatility rate	96.00%				96.00%
Warrants and Rights Outstanding	$ 109,271				$ 656,380
Remaining vesting periods					2 years 3 months
Option and warrant outstanding					100,750,000
Weighted average exercise price					$ 0.033
Weighted-Average Remaining Contractual Life (years)					9 years 4 months 6 days
Aggregate intrinsic value of outstanding and exercisable options and warrants outstanding and exercisable					$ 392,400
Closing price of outstanding and exercisable options and warrants less exercise prices					$ 0.0351
Increase in Warrants Liability (Note D)			$ 940,812	$ 1,196,612

PATENTS (Detail Textuals)

PATENTS (Detail Textuals) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Patents and patent related costs, net	$ 744,026		$ 744,026		$ 941,066
Accumulated amortization of patents	3,241,769		3,241,769		$ 3,044,729
Amortization charged on patents	65,680	$ 65,680	197,039	$ 197,039
Estimated amortization expense of patents at 2017	262,720		262,720
Estimated amortization expense of patents at 2018	262,720		262,720
Estimated amortization expense of patents at 2019	262,720		262,720
Estimated amortization expense of patents at 2020	$ 152,906		$ 152,906

STOCKHOLDERS' EQUITY (Detail Te

STOCKHOLDERS' EQUITY (Detail Textuals)	Feb. 08, 2016USD ($)$ / shares	Sep. 30, 2016USD ($)$ / shares$ / Warrantshares	Dec. 31, 2015shares
Stock options and warrants
Class Of Stock [Line Items]
Price per share for exercise of warrants, condition one (in dollars per share)		$ 0.033
Fair value of each option granted	$ 0.0219	$ 0.0219
Method used	Black-Scholes pricing model	Black-Scholes pricing model
Dividend yield	0.00%	0.00%
Risk-free interest rate	1.99%	1.67%
Expected life	5 years	5 years
Volatility rate	96.00%	96.00%
Aggregate computed value of warrants | $	$ 109,271	$ 656,380
Private placement
Class Of Stock [Line Items]
Preferred shares warrant feature per share (in dollars per share)		$ 0.03
Preferred shares contingency warrant feature per share (in dollars per share)		$ 0.06
Series C preferred stock, contingency warrant exercise description		The contingency warrants were issued during the three month period ended March 31, 2016 as a result of the Company not attaining profitability by the end of the first quarter 2016. The holders must exercise fifty percent of the warrants if the market price for the Company's common stock is $0.20 for a period of thirty consecutive calendar days.
Percentage of warrants exercise if market price for company's common stock is $0.20		50.00%
Price per share for exercise of warrants, condition one (in dollars per share)		$ 0.20
Number of days for common stock price at $0.20		30 days
Percentage of warrants exercise if market price for company's common stock is $0.30		50.00%
Price per share for exercise of warrants, condition two | $ / Warrant		0.30
Number of days for common stock price at $0.30		30 days
Stock Issued Under Private Placement | shares		7,000,000
Valuation method for warrants		Black Scholes Method
Series C Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares issued | shares		30,000,000	30,000,000
Preferred shares warrant feature per share (in dollars per share)		$ 0.03
Preferred shares contingency warrant feature per share (in dollars per share)		$ 0.03
Series C preferred stock, contingency warrant exercise description		The contingency warrants were issued during the three month period ended March 31, 2016 as a result of the Company not attaining profitability by the end of the first quarter 2016. The holders must exercise fifty percent of the warrants if the market price for the Company's common stock is $0.20 for a period of thirty consecutive calendar days.
Price per share for exercise of warrants, condition one (in dollars per share)		$ 0.20
Number of days for common stock price at $0.20		30 days
Percentage of warrants exercise if market price for company's common stock is $0.30		50.00%
Price per share for exercise of warrants, condition two | $ / Warrant		0.30
Number of days for common stock price at $0.30		30 days
Fair value of exercise price of warrants		$ 0.0219
Valuation method for warrants		Black Scholes Method
Series C Preferred Stock converted into Common Stock | shares		1

INVESTMENT IN AVAILABLE FOR S25

INVESTMENT IN AVAILABLE FOR SALE SECURITIES (Detail Textuals) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Number of shares of Neo Genomics stock held	18,000	18,000
NeoGenomics Laboratories Inc | Other income (expense)
Schedule of Available-for-sale Securities [Line Items]
Unrealized net gain (loss) on available for sale securities	$ 6,096
NeoGenomics Laboratories Inc | Carrying value
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities	1,945,000
NeoGenomics Laboratories Inc | Fair value
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities	$ 148,074

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Detail Textuals) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Accrued professional liability			$ 239,910
Increase (Decrease) in accounts payable	$ 121,503
Settlement expense		$ 17,693

FINANCIAL CONDITION AND GOING27

FINANCIAL CONDITION AND GOING CONCERN (Detail Textuals) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Financial Condition And Going Concern [Abstract]
Cash	$ 183,451	$ 417,208	$ 506,551	$ 7,642
Schedule of Available-for-sale Securities [Line Items]
Current liabilities	$ 390,191	$ 626,926
Private placement
Schedule of Available-for-sale Securities [Line Items]
Stock issued under private placement	7,000,000
Private placement | Board of Directors
Schedule of Available-for-sale Securities [Line Items]
Number of share authorized for issuance			7,000,000
Stock issued under private placement	7,000,000
Number of shares sold	3,000,000
Proceeds from shares sold	$ 90,000
NeoGenomics Laboratories Inc | Fair value
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities	$ 148,074

ACCOUNTING POLICIES (Detail Tex

ACCOUNTING POLICIES (Detail Textuals) - Patents	9 Months Ended
	Sep. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Amortization method	Straight-line method
Useful life	17 years