Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Mar. 29, 2018 | |
Entity Registrant Name | Vystar Corp | |
Entity Central Index Key | 1,308,027 | |
Document Type | 10-K | |
Trading Symbol | VYST | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 4,717,746 | |
Entity Stock, Shares Outstanding | 134,307,218 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,017 | |
Series A Preferred Stock [Member] | ||
Entity Stock, Shares Outstanding | 13,828 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash | $ 13,502 | $ 36,282 |
Accounts receivable | 3,963 | 17,370 |
Prepaid expenses | 166,091 | 41,300 |
TOTAL CURRENT ASSETS | 183,556 | 94,952 |
OTHER ASSETS | ||
Intangible assets, net | 123,882 | 139,562 |
TOTAL ASSETS | 307,438 | 234,514 |
CURRENT LIABILITIES | ||
Related party line of credit | 1,499,875 | 1,499,875 |
Accounts payable | 468,906 | 488,784 |
Accrued compensation | 19,355 | 2,917 |
Shareholder notes payable | 674,990 | 595,837 |
Accrued expenses | 294,995 | 231,080 |
TOTAL CURRENT LIABILITIES | 2,958,121 | 2,818,493 |
Long-term Shareholder notes payable | 206,683 | 239,231 |
TOTAL LIABILITIES | 3,164,804 | 3,057,724 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized; 13,828 issued and outstanding at December 31, 2017 and 2016 respectively | 1 | 1 |
Common stock, $0.0001 par value, 250,000,000 shares authorized; 132,809,218 and 114,951,594 shares issued and outstanding at December 31, 2017 and 2016, respectively | 13,280 | 11,495 |
Additional paid-in capital | 25,128,476 | 23,979,943 |
Accumulated deficit | (27,999,123) | (26,814,649) |
TOTAL STOCKHOLDERS' DEFICIT | (2,857,366) | (2,823,210) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 307,438 | $ 234,514 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Preferred stock, issued | 13,828 | 13,828 |
Preferred stock, outstanding | 13,828 | 13,828 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 132,809,218 | 114,951,594 |
Common stock, outstanding | 132,809,218 | 114,951,594 |
STATEMENTS OF LOSS
STATEMENTS OF LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
REVENUE | $ 16,754 | $ 40,193 |
COST OF REVENUE | 21,498 | 20,473 |
Gross Margin | (4,744) | 19,720 |
OPERATING EXPENSES | ||
General and administrative, including non-cash share-based compensation of $585,556 and $242,159 in 2017 and 2016, respectively | 1,125,638 | 1,096,354 |
Total Operating Expenses | 1,125,638 | 1,096,354 |
LOSS FROM OPERATIONS | (1,130,382) | (1,076,634) |
OTHER INCOME (EXPENSE) | ||
Interest income | 1 | |
Other (expense) income | 78,513 | (14,456) |
Interest expense | (174,661) | (168,188) |
Total Other Income (Expense) | (96,148) | (182,643) |
LOSS FROM CONTINUING OPERATIONS | (1,226,530) | (1,259,277) |
DISCONTINUED OPERATIONS | 42,056 | 37,979 |
NET LOSS | $ (1,184,474) | $ (1,221,298) |
BASIC AND DILUTED LOSS PER SHARE: | ||
Net loss per share (in dollars per share) | $ 0.01 | $ 0.01 |
Basic and Diluted Weighted Average Number of Common Shares Outstanding (in shares) | 125,868,534 | 106,985,632 |
STATEMENTS OF LOSS (Parenthetic
STATEMENTS OF LOSS (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Non-cash share-based compensation | $ 585,556 | $ 242,159 |
STATEMENTS OF STOCKHOLDERS' DEF
STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2015 | $ 1 | $ 9,644 | $ 22,962,678 | $ (25,593,351) | $ (2,621,028) |
Balance, Shares at Dec. 31, 2015 | 13,828 | 96,443,907 | |||
Common stock issued in private placement | $ 1,418 | 707,582 | 709,000 | ||
Common stock issued in private placement, shares (in shares) | 14,180,000 | ||||
Common stock issued upon exercise of common stock warrants | $ 308 | 53,192 | 53,500 | ||
Common stock issued upon exercise of common stock warrants, shares (in shares) | 3,080,220 | ||||
Share-based compensation to employees - warrants | 100,291 | 100,291 | |||
Common stock and warrants issued for services | $ 125 | 141,744 | 141,869 | ||
Common stock and warrants issued for services, shares (in shares) | 1,247,466 | ||||
Warrant/Option Repricing | 14,456 | 14,456 | |||
Net Loss | (1,221,298) | (1,221,298) | |||
Balance at Dec. 31, 2016 | $ 1 | $ 11,495 | 23,979,943 | (26,814,649) | (2,823,210) |
Balance, Shares at Dec. 31, 2016 | 13,828 | 114,951,593 | |||
Common stock issued in private placement | $ 769 | 383,731 | 384,500 | ||
Common stock issued in private placement, shares (in shares) | 7,690,000 | ||||
Common stock issued upon cashless exercise of warrants | $ 181 | (181) | |||
Common stock issued upon cashless exercise of warrants, shares | 1,813,993 | ||||
Share-based compensation to employees - warrants | 146,193 | 146,193 | |||
Share-based compensation to employees - common stock | $ 75 | 37,425 | 37,500 | ||
Share-based compensation to employees - common stock, shares (in shares) | 750,000 | ||||
Common stock and warrants issued for services | $ 649 | 526,006 | 526,655 | ||
Common stock and warrants issued for services, shares (in shares) | 6,494,226 | ||||
Common stock issued upon conversion of convertible notes | $ 111 | 55,359 | 55,470 | ||
Common stock issued upon conversion of convertible notes, shares (in shares) | 1,109,406 | ||||
Net Loss | (1,184,474) | (1,184,474) | |||
Balance at Dec. 31, 2017 | $ 1 | $ 13,280 | $ 25,128,476 | $ (27,999,123) | $ (2,857,366) |
Balance, Shares at Dec. 31, 2017 | 13,828 | 132,809,218 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ 1,184,474 | $ 1,221,298 |
Adjustments to reconcile net loss to cash used in operating activities | ||
Share-based compensation | 710,348 | 242,159 |
Allowance for uncollectible accounts receivable | (60,266) | |
Depreciation | 278 | |
Amortization of intangible assets | 15,680 | 15,861 |
(Increase) decrease in assets | ||
Accounts receivable | 13,407 | 40,409 |
Prepaid expenses | (124,791) | 192,516 |
Increase (decrease) in liabilities | ||
Accounts payable | (19,878) | (91,020) |
Accrued compensation and expenses | 90,745 | (26,080) |
Net cash used in operating activities | (498,963) | (907,441) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Disposal (investment in) of equipment, net | 2,701 | |
Net cash provided by (used) in investing activities | 2,701 | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
(Payments) Advances D&O Financing | 7 | |
Issuance of common stock, net of costs | 384,500 | 723,456 |
Proceeds from exercise of common stock warrants | 53,500 | |
Proceeds/(Payment) from Shareholder Notes | 91,683 | 135,000 |
Net cash provided by financing activities | 476,183 | 911,963 |
NET INCREASE (DECREASE) IN CASH | (22,780) | 7,223 |
CASH - BEGINNING OF YEAR | 36,282 | 29,059 |
CASH - END OF YEAR | 13,502 | 36,282 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: NON-CASH TRANSACTIONS | ||
Common stock issued for services rendered | 710,348 | 242,160 |
Cashless exercise of common stock warrants | 181 | |
Cashless conversion of shareholder note | 55,471 | |
CASH PAID DURING THE PERIOD FOR | ||
Interest | $ 100,354 | $ 97,989 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES History and Nature of Business Vystar Corporation (“Vystar”, the “Company”, “we”, “us”, or “our”) is the creator and exclusive owner of the innovative technology to produce Vytex® Natural Rubber Latex (“NRL”). In addition, on June 28, 2013, Vystar Corporation (the “Company”) completed the acquisition of Kiron Clinical Sleep Lab, LLC (“Kiron”) a vertically integrated sleep diagnostic practice located in Durham, NC. We effectively closed Kiron in April 2016 due to changes in the healthcare insurance marketplace. Because of the closure of Kiron, Vystar Corporation has returned its focus to expanding the licensing and utilization of its proprietary source natural rubber latex technology. Vytex NRL uses a global multi-patented technology and proprietary formulation to reduce non-rubber particles including the antigenic proteins associated with latex allergies, resulting in a cleaner form of latex. In fact, the antigenic protein levels are reduced to virtually undetectable levels. On January 22, 2015, Vystar announced the signing of an exclusive domestic distribution agreement with Worcester, MA based Nature’s Home Solutions (NHS) who sources eco-friendly materials and technologies for use in furnishings and other markets. On March 4, 2015, the Company announced that Hartford, CT based Gold Bond formed a strategic alliance with NHS to produce and market the world’s first Vytex NRL based mattress. In June 2015, the first mattresses made with Vytex (hybrid and pure Vytex) were placed on the sales floor at Rotman’s Furniture and Carpet Store in Worcester, MA using the “Evaya” brand and Gold Bond had shipped four versions of their “Brilliance” inner coil and pure foam mattresses (Emerald, Ruby, Sapphire Plush and Sapphire Firm) to over 30 stores from Maine to Florida. Basis of Presentation The financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification. The Company has evaluated subsequent events through the date of the filing of its Form 10-K with the Securities and Exchange Commission. Other than those events disclosed in Note 15, the Company is not aware of any other significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Company’s financial statements. Reclassification Certain items in the prior year’s financial statements have been reclassified in order to conform with the current year presentation. Specifically note such reclassifications for discontinued operations. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future, actual results could differ from these estimates. Examples include valuation allowances for deferred tax assets, provisions for bad debts, and fair values of share-based compensation and other equity issuances. Concentration of Credit Risk Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash and accounts receivable. Cash held in operating accounts may exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limits. While we monitor cash balances in our operating accounts on a regular basis and adjust the balances as appropriate, these balances could be impacted if the underlying financial institutions fail. To date, we have experienced no loss or lack of access to our cash; however, we can provide no assurances that access to our cash will not be impacted by adverse conditions in the financial markets. Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts based upon its assessment of the current status of individual accounts. Balances that are still outstanding after management has performed reasonable collection efforts are written off through a charge to the allowance and a credit to accounts receivable. As of December 31, 2017 and 2016, we have determined there were no amounts deemed uncollectible. We grant credit to our customers without requiring collateral. The amount of accounting loss for which we are at risk in these unsecured accounts receivable is limited to their carrying value. Property and Equipment Property and equipment is stated at cost. Depreciation is provided by the use of the straight-line and accelerated methods for financial and tax reporting purposes, respectively, over the estimated useful lives of the assets, generally 5 years. As of December 31, 2017 and 2016, all of our property and equipment was fully depreciated resulting in no net balance being reflected. Intangible Assets Patents represent legal and other fees associated with the registration of patents. The Company has four issued patents with the United States Patent and Trade Office (USPTO) as well as four issued international PCT (Patent Cooperation Treaty) patents. Patents are carried at cost and are being amortized on a straight-line basis over their estimated useful lives, typically 20 years. The Company has trademark protection for “Vystar”, “Vytex”, and “Created by Nature. Recreated by Science.” Trademarks are carried at cost and since their estimated life is indeterminable, no amortization is recognized. Instead, they are evaluated annually for impairment. Impairment of Long-lived Assets Long-lived assets, including property and equipment and intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized in the amount that the carrying amount of the asset exceeds its fair value. Fair value is determined based on discounted future net cash flows associated with the use of the asset. Fair Value of Financial Instruments The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued expenses, lines of credit, shareholder notes payable, and long-term debt. The carrying values of all the Company’s financial instruments approximate fair value because of their short maturities. In addition to the short maturities, the carrying amounts of our line of credit and shareholder notes payable approximate fair value because the interest rates at December 31, 2017 and 2016 approximate market interest rates for the respective borrowings. In specific circumstances, certain assets and liabilities are reported or disclosed at fair value. Fair value is the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the Company’s principal market for such transactions. If there is not an established principal market, fair value is derived from the most advantageous market. Valuation inputs are classified in the following hierarchy: ● Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 inputs are directly or indirectly observable valuation inputs for the asset or liability, excluding Level 1 inputs. ● Level 3 inputs are unobservable inputs for the asset or liability. Highest priority is given to Level 1 inputs and the lowest priority to Level 3 inputs. Acceptable valuation techniques include the market approach, income approach, and cost approach. In some cases, more than one valuation technique is used. Income Taxes Vystar recognizes income taxes on an accrual basis based on a tax position taken or expected to be taken in its tax returns. A tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets or liabilities. Tax positions are recognized only when it is more likely than not (i.e., likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities. Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more likely than not be realized. A valuation allowance for the full amount of the net deferred tax asset was recorded for the years ended December 31, 2017 and 2016. Should they occur, interest and penalties related to tax positions are recorded as interest expense. No such interest or penalties have been incurred as of December 31, 2017 and 2016. The Company is no longer subject to federal examination for years prior to 2013. On December 22, 2017 the Tax Cuts and Jobs Act was signed into law, impacting corporations by reducing the maximum tax rate from 35% to 21% as well as various other provisions relating to the deductibility of certain items. The Act is not expected to have an immediate impact on the Company due to the large net operating loss carryforward as well as the full valuation allowance. Loss Per Share The Company presents basic and diluted loss per share. Because the Company reported a net loss in 2017 and 2016, common stock equivalents, including stock options and warrants, were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same. Excluded from the computation of diluted loss per share were options to purchase 7,748,271 and 9,418,271 shares of common stock for 2017 and 2016, respectively, as their effect would be anti-dilutive. Warrants to purchase 14,699,582 and 16,122,332 shares of common stock for 2017 and 2016, respectively, were also excluded from the computation of diluted loss per share as their effect would be anti-dilutive. In addition, preferred stock convertible to 4,037,977 and 3,761,417 shares of common stock for 2017 and 2016, respectively, were excluded from the computation of diluted loss per share as their effect would be anti-dilutive. Revenue Revenue is derived from sales of or license fees of Vytex NRL raw material to manufacturers and distributors of rubber and rubber end products. Under both the direct and licensing agreement sales revenue is recognized at the time product is shipped and title passes to the customer. Revenue is recognized when the following four criteria are met: (1) persuasive evidence of an arrangement exists; (2) shipment or delivery has occurred; (3) the price is fixed or determinable and (4) collectability is reasonably assured. Cost of Revenue Cost of revenue consists primarily of product and freight costs. Research and Development Research and development costs are expensed when incurred. Research and development costs include all costs incurred related to the research, development and testing of the Company’s process to produce Vytex NRL. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, a new standard on revenue recognition. The new standard will supersede existing revenue recognition guidance and apply to all entities that enter into contracts to provide goods or services to customers. The guidance also addresses the measurement and recognition of gains and losses on the sale of certain non-financial assets, such as real estate, property and equipment. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which defers the effective date of the guidance in ASU 2014-09 by one year. This update is now effective for annual and interim period beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal year 2018. Early application is permitted for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. This update permits the use of either the retrospective or cumulative effect transition method. The Company has assessed the impact that this guidance will have on its financial statements and determined it will not have a material effect. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires lessees to recognize the assets and liabilities on their balance sheet for the rights and obligations created by most leases and continue to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The Company is currently assessing the impact that this guidance will have on its financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain receipts and cash payments are presented and classified in the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is currently assessing the impact that this guidance will have on its financial statements. |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 12 Months Ended |
Dec. 31, 2017 | |
Liquidity And Going Concern | |
LIQUIDITY AND GOING CONCERN | NOTE 2 – LIQUIDITY AND GOING CONCERN The Company’s financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. However, we have incurred significant losses and experienced negative cash flow since inception. At December 31, 2017, the Company had cash of $13,502 and a deficit in working capital of $2,774,565. For the year ended December 31, 2017, the Company had a net loss of $1,184,474 and an accumulated deficit of $27,999,123. For the year ended December 31, 2016, the Company had a net loss of $1,221,298 and the accumulated deficit amounted to $26,814,649. We use working capital to finance our ongoing operations and since those operations do not currently cover all of our operating costs and managing working capital is essential to our Company’s future success. Net cash used in operating activities was $498,963 for the year ended December 31, 2017 as compared to $907,441 for the year ended December 31, 2016. During the year ended December 31, 2017, cash used in operations was primarily due to the net loss for the year of $1,153,730 net of non-cash related add-back of share-based compensation expense of $710,348. The Company had no net cash provided by investing activities during the year ended December 31, 2017. Net cash provided by investing activities for the year ended December 31, 2016 was $2,701 was a result of selling some equipment. Net cash provided by financing activities was $476,183 during the year ended December 31, 2017, as compared to cash provided of $911,963 during the year ended December 31, 2016. During 2017 cash was provided from the issuance of common stock in the amount of $384,500 and $91,683 in proceeds from Shareholder Notes. In 2016, the cash provided by financing activities was provided from the issuance of common stock in the amount of $723,456, $53,500 from the exercise of common stock warrants and $135,000 in proceeds from Shareholder Notes. A successful transition to attaining profitable operations is dependent upon obtaining sufficient financing to fund the Company’s planned expenses and achieving a level of revenue adequate to support the Company’s cost structure. Management plans to finance future operations through the use of cash on hand, increased revenue from Vytex division license fees, stock warrant exercises from existing shareholders, and raising capital through private placement memoranda (see Note 13, Subsequent Events). As a result of this history of losses and financial condition, there is substantial doubt about the Company’s ability to continue as a going concern. There can be no assurances that the Company will be able to achieve projected levels of revenue in 2018 and beyond. If the Company is not able to achieve projected revenue and obtain alternate additional financing of equity or debt, the Company would need to significantly curtail or reorient operations during 2018, which could have a material adverse effect on the ability to achieve the business objectives and as a result may require the Company to file for bankruptcy or cease operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions. The Company’s future expenditures will depend on numerous factors, including: the rate at which the Company can introduce and license Vytex NRL to manufacturers; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and market acceptance of the Company’s products and services and competing technological developments. As the Company expands our activities and operations, cash requirements are expected to increase at a rate consistent with revenue growth after the Company has achieved sustained revenue generation. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 3 – INTANGIBLE ASSETS Intangible assets were as follows at December 31: 2017 2016 Patents $ 238,551 $ 238,551 Trademarks & trade name 9,072 9,072 Subtotal 247,623 247,623 Accumulated amortization (123,741 ) (108,061 ) Intangible assets, net $ 123,882 $ 139,562 Amortization expense for the years ended December 31, 2017 and 2016 was $15,680 and $15,861, respectively. Estimated future amortization expense for finite-lived intangible assets is as follows: 2017 2018 2019 2020 2021 Thereafter Patents & trade name $ 15,680 $ 15,680 $ 15,680 $ 15,680 $ 15,680 $ 45,482 |
NOTES PAYABLE AND LOAN FACILITY
NOTES PAYABLE AND LOAN FACILITY | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND LOAN FACILITY | NOTE 4 – NOTES PAYABLE AND LOAN FACILITY Related Party Line of Credit (CMA Note Payable) On April 29, 2011, the Company executed with CMA Investments, LLC, a Georgia limited liability company of which three of the directors of the Company (“CMA directors”) are the members (“CMA”), an unsecured line of credit bearing interest at LIBOR plus 5.25% per annum on amounts drawn and fees. The weighted average interest rate in effect on the borrowings for the years ended December 31, 2017 and 2016 was 6.37% and 5.75%, respectively. During the tenure of the CMA Note Payable, the Company has increased the amount of the Note and in exchange provided benefits to the CMA directors as follows: Date Amount (increase) Benefit to CMA Impact to Company Inception $800,000 Warrants to purchase 2,600,000 shares $0.45, vesting 20% immediately and 10% per $100,000 drawn Warrant costs amortized over the term of the CMA Note Sept 4, 2011 $200,000 Modified warrant price on 2,600,000 shares from $0.45 to $0.27, and issued additional 1,600,000 shares $0.27 Warrant costs amortized over the remaining term of the CMA Note Nov 2, 2012 $500,000 Warrants to purchase 2,100,000 shares $0.35 Warrant costs amortized over the remaining term of the CMA Note Apr 29, 2013 $0 (maturity date extended 1 year) Modified warrant price on 6,300,000 shares from $0.10, and agreed to forfeit 630,000 of the warrants Warrant costs amortized over the remaining term of the CMA Note Apr 29, 2014 $0 (maturity date extended 1 year) None None Apr 29, 2015 $0 (maturity date extended 1 year) None None The note is currently due on demand. Shareholder Notes Payable Shareholder notes payable outstanding as of December 31, 2017 and 2016 totaled $881,673 and $835,068, respectively. On March 11, 2011, the Company issued to existing shareholders of the Company an aggregate of $175,000 of convertible promissory notes together with warrants to purchase an aggregate of 160,000 shares of the Company’s common stock at $0.68 per share for two years from the date of issuance. Such notes are (i) unsecured, (ii) bear interest at an annual rate of ten percent (10%) per annum, and (iii) are convertible into shares of common stock. The outstanding notes are currently due on demand and Vystar is currently working with the subscription holders of the matured notes to extend the maturity date beyond 2018. One subscription holder demanded payment for their matured note. The subscription holder and Vystar agreed to three installment payments of $52,785, the first of which was made in the fourth quarter of 2016; one installment was converted to Vystar common stock shares; and another holder of Vystar Shareholder Notes has agreed to purchase the third installment. In May of 2013, the Company issued to existing shareholders of the Company an aggregate of $420,837 of convertible promissory notes together with warrants to purchase an aggregate of 50,000 shares of the Company’s common stock at $0.49 per share for two years from the date of issuance. Such notes are (i) unsecured, (ii) bear interest at an annual rate of ten percent (10%) per annum, and (iii) are convertible into shares of common stock. The outstanding notes are currently due on demand and Vystar is currently working with the subscription holders of the matured notes to extend the maturity date beyond 2018. A summary of terms for the convertible promissory notes discussed above and additional convertible promissory notes issued to shareholders that are unsecured, bear interest at an annual rate, and have conversion privileges as follows: Date Amount Interest Rate Conversion Rate Maturity March 11, 2011 $75,000 10% $0.10 of principal and interest for each share Demand March 11, 2011 $54,922 10% $0.05 of principal and interest for each share Demand May 6, 2013 $390,830 10% $0.05 of principal and interest for each share Demand May 31, 2013 $30,007 10% $0.10 of principal and interest for each share Demand Sept 6, 2013 $40,769 10% $0.075 of principal and interest for each share Sept 6, 2018 Dec 30, 2013 $25,962 10% $0.05 of principal and interest for each share Dec 30, 2018 Dec 31, 2015 $37,500 10% $0.08 of principal and interest for each share Dec 30, 2018 Dec 31, 2016 $135,000 5% $0.05 of principal and interest for each share Dec 30, 2021 Oct 10, 2017 $20,000 5% $0.05 of principal and interest for each share Demand Oct 10, 2017 $25,000 5% $0.05 of principal and interest for each share Dec 30, 2019 Nov 17, 2017 $6,683 5% $0.05 of principal and interest for each share Dec 30, 2019 Dec 13, 2017 $30,000 5% Convertible by the Company upon closing of NHS merger at prior 20-day average closing price, discounted 50% Dec 13, 2019 Dec 18, 2017 $10,000 5% Convertible by the Company upon closing of NHS merger at prior 20-day average closing price, discounted 50% Dec 13, 2019 The maturities (by year) of the principal amount of Shareholder Notes Payable as of December 31, 2017 are as follows: Amount Matured $ 570,759 2018 104,231 2019 71,683 2020 — 2021 135,000 2022 & thereafter — Total $ 881,673 The current base weighted-average conversion price for the above referenced Shareholder and Promissory Notes with an outstanding balance as of December 31, 2017 of $1,176,668 including accrued interest of $294,995, is $0.053 per share or 22,208,271 shares of the Company’s common stock. The face value of the Shareholder Notes at December 31, 2017 is $881,673. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 5 – COMMITMENTS Employment Agreements There are currently no employment agreements in place; however employment compensation and potential agreements are under discussion for 2018. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 6 – DISCONTINUED OPERATIONS Kiron Clinical Sleep Lab’s post acquisition performance fell far below Vystar’s expectations. As part of the Company’s strategy to focus on realizing the potential of the Vytex foam business in the pillow and mattress markets as well as part of the Company’s cost reduction plan, the Company made the decision to discontinue the operations of the Kiron division acquired in June 2013 and the division was closed May of 2016 There was no revenue from the Kiron division for the year ended December 31, 2017.The Kiron division revenue was $82,353 for the year ended December 31, 2016. Net gains from discontinued operations were $42,056 and $37,979 for the fiscal years ended December 31, 2017 and 2016, respectively. Net gains were recorded directly related to the write-off of payables determined to be no longer due. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 7 – STOCKHOLDERS’ EQUITY Preferred Stock At December 31, 2017 and 2016, the 13,828 shares of outstanding preferred stock had accumulated undeclared dividends of approximately $63,600 and $49,800 and could be converted into 4,037,977 and 3,761,417 shares of common stock, respectively, at the option of the holder. Common Stock and Warrants As part of a September 2014 Private Placement Memorandum, updated in February 2015 and September 2015, the Company issued 12,480,000 shares of common stock to six (6) accredited investors during the fiscal year ended December 31, 2016. Total gross proceeds of the issuances were $624,000. No commissions were paid. The shares of common stock were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. As part of a November 2016 Private Placement Memorandum, the Company issued 1,700,000 shares of common stock to four (4) accredited investors during the fiscal year ended December 31, 2016. Total gross proceeds of the issuances were $85,000. No commissions were paid. The shares of common stock were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. During the year ended December 31, 2016, the Company had 1,783,335 common stock warrants exercised at $0.03 per share for $53,500 and issued 1,296,885 common shares for cashless warrants that were exercised. On June 30, 2016, the Company issued 997,466 common shares as compensation under the Company’s Business Development Agreement with Blue Oar Consulting, Inc. executed in March 2013 as amended in August 2013 and amended February 2014 and 250,000 common shares as compensation under the Company’s Business Development Agreement with Byron Novosad executed in February 26, 2014. During the year ended December 31, 2017, the Company had 1,950,000 cashless common stock warrants exercised at $0.05 per share and issued 1,332,109 common shares. During the year ended December 31, 2017, the Company had 1,750,000 cashless common stock options exercised at $0.05 per share and issued 1,481,884 common shares. As part of the November 2016 Private Placement Memorandum, the Company issued 7,690,000 shares of common stock to sixteen (16) accredited investors during the period from January 1, 2017 to September 30, 2017. Total gross proceeds of the issuances were $384,500. No commissions were paid. The shares of common stock were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. On March 15, 2017, the Company issued 1,150,000 common shares as compensation under Business Development Agreements. On April 25, 2017, the Company issued 1,109,406 common shares as a result of a partial conversion of a Shareholder Note and accrued interest. On May 22, 2017, the Company signed a sales and marketing agreement issuing restricted common shares quarterly as goals are achieved and issued 363,985 shares on September 28, 2017 and 368,218 on October 10, 2017. On July 1, 2017, the Company issued 3,125,000 shares under the Company’s Public Relations Services Agreement through December 2018. On September 29, 2017, the Company issued 500,000 shares of common stock as part of the existing PPM to its CEO in lieu of salary earned in August and September 2017. On September 27, 2017, the Company issued an additional 200,000 common shares as compensation under a Business Development Agreement. On July 30, 2017, the Company issued 200,000 common shares as compensation under a Business Development Agreement. On July 25, 2017, the Company issued 1,087,023 shares as part of a prior contract for business development. On November 1, 2017, the Company issued 250,000 shares of common stock as part of the existing PPM to its CEO in lieu of salary earned in October 2017. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 8 – SHARE-BASED COMPENSATION Generally accepted accounting principles require share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values at the date of grant, net of estimated forfeitures. The Company used the Black-Scholes option pricing model to estimate the grant-date fair value of awards granted during 2017 and 2016. The following assumptions were used: ● Expected Dividend Yield – because the Company does not currently pay dividends, the expected dividend yield is zero; ● Expected Volatility in Stock Price – Expected volatility calculations were based on the Company’s trading activity which ranged between and 149.6% and 152.9% during 2017; ● Risk-free Interest Rate – reflects the average rate on a United States Treasury bond with maturity equal to the expected term of the option or warrant, ranging from 1.81% and 2.45% during 2017; and ● Expected Life of Awards – because the Company has minimal experience with the exercise of options or warrants for use in determining the expected life for each award, the simplified method was used to calculate an expected life based on the end of the contractual term of the stock award. In total, the Company recorded $60,795 and $55,143 for the years ended December 31, 2017 and 2016, respectively, of share-based compensation expense related to employee and Board members’ stock options. The unrecognized compensation expense as of December 31, 2017 was $151,730 for non-vested share-based awards to be recognized over a period of approximately five years. Stock Options During 2004, the Board of Directors of the Company adopted a stock option plan (the “Plan”) and authorized up to 4,000,000 shares to be issued under the Plan. In April 2009, the Company’s Board of Directors authorized an increase in the number of shares to be issued under the Plan to 10,000,000 shares and to include the independent Board Members in the Plan in lieu of continuing the previous practice of granting warrants each quarter to independent Board Members for services. At December 31, 2017, there were 2,251,729 shares of common stock reserved for issuance under the Plan. In 2014, the Board adopted an additional stock option plan which provides for an additional 5,000,000 shares which are all available as of December 31, 2017. The Plan is intended to permit stock options granted to employees to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the Plan that are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options. Stock options are granted at an exercise price equal to the fair market value of the Company’s common stock on the date of grant, typically vest over periods up to 4 years and are typically exercisable up to 10 years. The weighted-average assumptions used in the option pricing model for stock option grants were as follows: 2017 2016 Expected Dividend Yield 0.00 % 0.00 % Expected Volatility in Stock Price 149.81 % 145.82 % Risk-Free Interest Rate 2.35 % 1.87 % Expected Life of Stock Awards – Years 10.0 10.0 Weighted Average Fair Value at Grant Date $ 0.05 $ 0.05 The following tables summarize all stock option activity of the Company for the years ended December 31, 2017 and 2016: Number of Shares Weighted Average Exercise Price Outstanding, December 31, 2015 9,381,573 $ 0.19 Granted 500,000 $ 0.05 Exercised (400,000 ) $ 0.05 Forfeited (63,302 ) $ 0.07 Outstanding, December 31, 2016 9,418,271 $ 0.16 Exercisable, December 31, 2016 6,783,271 $ 0.21 Granted 1,500,000 $ 0.05 Exercised (1,750,000 ) $ 0.05 Forfeited (1,420,000 ) $ 0.17 Outstanding, December 31, 2017 7,748,271 $ 0.16 Exercisable, December 31, 2017 5,158,271 $ 0.25 Additional details, including the average remaining contractual life of the options, as well as the range of exercise prices are shown in the table below: Number of Weighted Average Range of Outstanding, December 31, 2015 9,381,573 6.29 $ 0.05 - $0.68 Granted 500,000 9.10 $0.05 Exercised (400,000 ) $0.05 Expired/Forfeited (63,302 ) $0.07 Outstanding, December 31, 2016 9,418,271 4.43 $ 0.05 - $0.68 Exercisable, December 31, 2016 6,783,271 5.99 $ 0.10 - $0.68 Granted 1,500,000 9.96 $0.05 Exercised (1,750,000 ) $0.05 Expired/Forfeited (1,420,000 ) $ 0.03 - $0.68 Outstanding, December 31, 2017 7,748,271 5.80 $ 0.03 - $0.68 Exercisable, December 31, 2017 5,158,271 9.42 $ 0.03 - $0.68 The Company added a director on May 18, 2016. The director was granted 500,000 options with a ten-year term and an exercise price of $0.05 respectively, the closing price of the Company’s common stock on the OTCBB on the grant date. The options vest 25,000 shares quarterly beginning on June 30, 2016 for a period of five years ending March 31, 2021. The Company added three directors on December 17, 2017. Each director was granted 500,000 options with a ten-year term and an exercise price of $0.05 respectively, the closing price of the Company’s common stock on the OTCBB on the grant date. The options vest 25,000 shares quarterly beginning on December 31, 2017 for a period of five years ending December 31, 2022. As of December 31, 2017, the aggregate intrinsic value of the Company’s outstanding options was $4,000. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock. Warrants Warrants are issued to third parties as payment for services, debt financing compensation and conversion and in conjunction with the issuance of common stock. The fair value of each common stock warrant issued for services is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average assumptions used in the option pricing model for stock warrant grants were as follows: 2017 2016 Expected Dividend Yield 0.00 % 0.00 % Expected Volatility in Stock Price 152.54 % 121.20 % Risk-Free Interest Rate 2.01 % 2.18 % Expected Life of Stock Awards – Years 7.0 10.0 The following table represents the Company’s warrant activity for the years ended December 31, 2017 and 2016: Number Weighted Weighted Weighted Outstanding, December 31, 2015 18,178,158 $ 0.13 5.54 Granted 1,713,244 $ 0.07 $ 0.07 9.07 Exercised (3,163,336 ) $ 0.05 0.3 Forfeited (605,734 ) Outstanding, December 31, 2016 16,122,332 $ 0.13 5.54 Granted 1,240,250 $ 0.13 $ 0.14 6.14 Exercised (1,950,000 ) $ 0.08 0.18 Forfeited (713,000 ) $ 0.18 Outstanding, December 31, 2017 14,699,582 $ 0.10 5.41 Exercisable, December 31, 2017 14,699,582 $ 0.10 5.41 The stock compensation expense for 2017 and 2016 related to warrants was $159,553 and $115,054, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS Officers and Directors During April 2009, the Company’s Board of Directors authorized the inclusion of the Board members in the Company’s stock option plan in lieu of continuing the previous practice of granting warrants each quarter to independent Board members. Each Board member was granted options to purchase 400,000 shares of the Company’s common stock, valued at approximately $84,346 each with an exercise price of $0.68 per share. Vesting occurred at the end of each complete calendar quarter served as an independent Board member of the Company at a rate of 20,000 shares each per quarter. The options are exercisable in whole or in part before September 30, 2019. Beginning in July 2014, each Board member was granted options to purchase 500,000 shares of the Company’s common stock. The value of each grant ranged from approximately $14,714 to $53,513 depending on the date of the grant and the exercise price of the option. Exercise prices ranged between $0.03 and $0.11 per share and were equal to the closing price of Company’s common stock on the date of the grant. Vesting occurs at the end of each complete calendar quarter served as an independent Board member of the Company at a rate of 25,000 shares each per quarter. The options are exercisable in whole or in part before December 15, 2027. One board member’s unvested options were forfeited when he resigned from the Board in 2017. |
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
DEFINED CONTRIBUTION PLAN | NOTE 10 – DEFINED CONTRIBUTION PLAN The Company’s tax-qualified retirement plan {401(k)} was terminated in 2016. |
MAJOR CUSTOMERS AND VENDORS
MAJOR CUSTOMERS AND VENDORS | 12 Months Ended |
Dec. 31, 2017 | |
Major Customers And Vendors | |
MAJOR CUSTOMERS AND VENDORS | NOTE 11 – MAJOR CUSTOMERS AND VENDORS Major customers and vendors are defined as a customer or vendor from which the Company derives at least 10% of its revenue and cost of revenue, respectively. During 207, Vytex revenue came from three major customers Natures Home Solutions, RCMA, and Centrotrade, which collectively comprised 100% total Vytex revenue. No amounts were owed to major vendors at December 31, 2017 and December 31, 2016. |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
RISKS AND UNCERTAINTIES | NOTE 12 – RISKS AND UNCERTAINTIES The Company is exposed to commodity price risk, mainly associated with variations in the market price for NRL as well as wintering of the Hevea trees, which differs for each country. The timing and magnitude of industry cycles are difficult to predict and are impacted by general economic conditions including the buying climate in China. The Company responds to changes in NRL prices by adjusting sales prices on a weekly basis and by turning rather than holding inventory in anticipation of higher prices. The Company actively manages its exposure to commodity price risk and monitors the actual and expected spread between forward selling prices and purchase costs and processing and shipping expense. The Company also currently spreads the processing of Vytex NRL among three continents. Sales contracts are based on forward market prices, and generally orders are placed 30 to 90 days ahead of shipment date due to these fluctuations. However, financial results may be negatively impacted where selling prices fall more quickly than purchase price adjustments can be made or when levels of inventory have an anticipated net realizable value that is below cost. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS From January 1, 2018 and through the date of these financial statements, the Company has issued certain convertible promissory notes in varying amounts. The face amount of the notes represents the amount due at maturity along with the accrued interest, at which time that amount will be converted into shares of the Company stock based on the lowest 2 day closing price for the trailing 20 days prior to conversion and carrying a 35% discount. These notes are included in the table below: Issue Date Face Amount Interest Rate Maturity Net Cash Proceeds Jan 29, 2018 $ 80,000 12 % Jan 29,2019* $ 72,300 Feb 14, 2018 $ 80,000 12 % Nov 14, 2018* $ 72,500 Feb 13, 2018 $ 76,500 5 % Nov 13, 2018* $ 72,500 Feb 14, 2018 $ 85,000 12 % Feb 14, 2019* $ 82,000 *Note that these notes can be converted after 6 months from the issue date From January 1, 2018 to February 9, 2018, the Company issued Convertible Promissory Notes (the “Notes”) contract work, investment and in lieu of salary and expense reimbursement in the amount of $195,635. The Notes are (i) unsecured, (ii) bear interest at an annual rate of five percent (5%) per annum from date of issuance, and (iii) are convertible by the Company upon the closing of the previously announced intention to purchase all of the assets of NHS. The Notes mature one year from issuance but may be extended one (1) additional year by the Company. If converted, the Notes plus accrued interest are convertible into shares of the Company’s common stock at the prior twenty (20) day average closing price with a 50% discount. On February 5, 2018, the Company issued 1,500,000 shares under the terms of a Consulting Agreement dated January 26, 2018. On January 7, 2018, the Company signed a Letter of Intent to acquire the assets of NHS, the exclusive U.S. distributor of Vytex® virtually allergen-, VOC- and odor-free natural rubber latex (NRL) foam. The transaction is expected to close in the second quarter of 2018. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification. The Company has evaluated subsequent events through the date of the filing of its Form 10-K with the Securities and Exchange Commission. Other than those events disclosed in Note 15, the Company is not aware of any other significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Company’s financial statements. |
Reclassification | Reclassification Certain items in the prior year’s financial statements have been reclassified in order to conform with the current year presentation. Specifically note such reclassifications for discontinued operations. |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future, actual results could differ from these estimates. Examples include valuation allowances for deferred tax assets, provisions for bad debts, and fair values of share-based compensation and other equity issuances. |
Concentration of Credit Risk | Concentration of Credit Risk Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash and accounts receivable. Cash held in operating accounts may exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limits. While we monitor cash balances in our operating accounts on a regular basis and adjust the balances as appropriate, these balances could be impacted if the underlying financial institutions fail. To date, we have experienced no loss or lack of access to our cash; however, we can provide no assurances that access to our cash will not be impacted by adverse conditions in the financial markets. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts based upon its assessment of the current status of individual accounts. Balances that are still outstanding after management has performed reasonable collection efforts are written off through a charge to the allowance and a credit to accounts receivable. As of December 31, 2017 and 2016, we have determined there were no amounts deemed uncollectible. We grant credit to our customers without requiring collateral. The amount of accounting loss for which we are at risk in these unsecured accounts receivable is limited to their carrying value. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost. Depreciation is provided by the use of the straight-line and accelerated methods for financial and tax reporting purposes, respectively, over the estimated useful lives of the assets, generally 5 years. As of December 31, 2017 and 2016, all of our property and equipment was fully depreciated resulting in no net balance being reflected. |
Intangible Assets | Intangible Assets Patents represent legal and other fees associated with the registration of patents. The Company has four issued patents with the United States Patent and Trade Office (USPTO) as well as four issued international PCT (Patent Cooperation Treaty) patents. Patents are carried at cost and are being amortized on a straight-line basis over their estimated useful lives, typically 20 years. The Company has trademark protection for “Vystar”, “Vytex”, and “Created by Nature. Recreated by Science.” Trademarks are carried at cost and since their estimated life is indeterminable, no amortization is recognized. Instead, they are evaluated annually for impairment. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets, including property and equipment and intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized in the amount that the carrying amount of the asset exceeds its fair value. Fair value is determined based on discounted future net cash flows associated with the use of the asset. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued expenses, lines of credit, shareholder notes payable, and long-term debt. The carrying values of all the Company’s financial instruments approximate fair value because of their short maturities. In addition to the short maturities, the carrying amounts of our line of credit and shareholder notes payable approximate fair value because the interest rates at December 31, 2017 and 2016 approximate market interest rates for the respective borrowings. In specific circumstances, certain assets and liabilities are reported or disclosed at fair value. Fair value is the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the Company’s principal market for such transactions. If there is not an established principal market, fair value is derived from the most advantageous market. Valuation inputs are classified in the following hierarchy: ● Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 inputs are directly or indirectly observable valuation inputs for the asset or liability, excluding Level 1 inputs. ● Level 3 inputs are unobservable inputs for the asset or liability. Highest priority is given to Level 1 inputs and the lowest priority to Level 3 inputs. Acceptable valuation techniques include the market approach, income approach, and cost approach. In some cases, more than one valuation technique is used. |
Income Taxes | Income Taxes Vystar recognizes income taxes on an accrual basis based on a tax position taken or expected to be taken in its tax returns. A tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets or liabilities. Tax positions are recognized only when it is more likely than not (i.e., likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities. Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more likely than not be realized. A valuation allowance for the full amount of the net deferred tax asset was recorded for the years ended December 31, 2017 and 2016. Should they occur, interest and penalties related to tax positions are recorded as interest expense. No such interest or penalties have been incurred as of December 31, 2017 and 2016. The Company is no longer subject to federal examination for years prior to 2013. On December 22, 2017 the Tax Cuts and Jobs Act was signed into law, impacting corporations by reducing the maximum tax rate from 35% to 21% as well as various other provisions relating to the deductibility of certain items. The Act is not expected to have an immediate impact on the Company due to the large net operating loss carryforward as well as the full valuation allowance. |
Loss Per Share | Loss Per Share The Company presents basic and diluted loss per share. Because the Company reported a net loss in 2017 and 2016, common stock equivalents, including stock options and warrants, were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same. Excluded from the computation of diluted loss per share were options to purchase 7,748,271 and 9,418,271 shares of common stock for 2017 and 2016, respectively, as their effect would be anti-dilutive. Warrants to purchase 14,699,582 and 16,122,332 shares of common stock for 2017 and 2016, respectively, were also excluded from the computation of diluted loss per share as their effect would be anti-dilutive. In addition, preferred stock convertible to 4,037,977 and 3,761,417 shares of common stock for 2017 and 2016, respectively, were excluded from the computation of diluted loss per share as their effect would be anti-dilutive. |
Revenue | Revenue Revenue is derived from sales of or license fees of Vytex NRL raw material to manufacturers and distributors of rubber and rubber end products. Under both the direct and licensing agreement sales revenue is recognized at the time product is shipped and title passes to the customer. Revenue is recognized when the following four criteria are met: (1) persuasive evidence of an arrangement exists; (2) shipment or delivery has occurred; (3) the price is fixed or determinable and (4) collectability is reasonably assured. |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of product and freight costs. |
Research and Development | Research and Development Research and development costs are expensed when incurred. Research and development costs include all costs incurred related to the research, development and testing of the Company’s process to produce Vytex NRL. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, a new standard on revenue recognition. The new standard will supersede existing revenue recognition guidance and apply to all entities that enter into contracts to provide goods or services to customers. The guidance also addresses the measurement and recognition of gains and losses on the sale of certain non-financial assets, such as real estate, property and equipment. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which defers the effective date of the guidance in ASU 2014-09 by one year. This update is now effective for annual and interim period beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal year 2018. Early application is permitted for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. This update permits the use of either the retrospective or cumulative effect transition method. The Company has assessed the impact that this guidance will have on its financial statements and determined it will not have a material effect. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires lessees to recognize the assets and liabilities on their balance sheet for the rights and obligations created by most leases and continue to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The Company is currently assessing the impact that this guidance will have on its financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain receipts and cash payments are presented and classified in the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is currently assessing the impact that this guidance will have on its financial statements. |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets were as follows at December 31: 2017 2016 Patents $ 238,551 $ 238,551 Trademarks & trade name 9,072 9,072 Subtotal 247,623 247,623 Accumulated amortization (123,741 ) (108,061 ) Intangible assets, net $ 123,882 $ 139,562 |
Schedule of future amortization expense | Estimated future amortization expense for finite-lived intangible assets is as follows: 2017 2018 2019 2020 2021 Thereafter Patents & trade name $ 15,680 $ 15,680 $ 15,680 $ 15,680 $ 15,680 $ 45,482 |
NOTES PAYABLE AND LOAN FACILI23
NOTES PAYABLE AND LOAN FACILITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of CMA Note Payable | During the tenure of the CMA Note Payable, the Company has increased the amount of the Note and in exchange provided benefits to the CMA directors as follows: Date Amount (increase) Benefit to CMA Impact to Company Inception $800,000 Warrants to purchase 2,600,000 shares $0.45, vesting 20% immediately and 10% per $100,000 drawn Warrant costs amortized over the term of the CMA Note Sept 4, 2011 $200,000 Modified warrant price on 2,600,000 shares from $0.45 to $0.27, and issued additional 1,600,000 shares $0.27 Warrant costs amortized over the remaining term of the CMA Note Nov 2, 2012 $500,000 Warrants to purchase 2,100,000 shares $0.35 Warrant costs amortized over the remaining term of the CMA Note Apr 29, 2013 $0 (maturity date extended 1 year) Modified warrant price on 6,300,000 shares from $0.10, and agreed to forfeit 630,000 of the warrants Warrant costs amortized over the remaining term of the CMA Note Apr 29, 2014 $0 (maturity date extended 1 year) None None Apr 29, 2015 $0 (maturity date extended 1 year) None None |
Schedule of additional convertible promissory notes issued to shareholders | A summary of terms for the convertible promissory notes discussed above and additional convertible promissory notes issued to shareholders that are unsecured, bear interest at an annual rate, and have conversion privileges as follows: Date Amount Interest Rate Conversion Rate Maturity March 11, 2011 $75,000 10% $0.10 of principal and interest for each share Demand March 11, 2011 $54,922 10% $0.05 of principal and interest for each share Demand May 6, 2013 $390,830 10% $0.05 of principal and interest for each share Demand May 31, 2013 $30,007 10% $0.10 of principal and interest for each share Demand Sept 6, 2013 $40,769 10% $0.075 of principal and interest for each share Sept 6, 2018 Dec 30, 2013 $25,962 10% $0.05 of principal and interest for each share Dec 30, 2018 Dec 31, 2015 $37,500 10% $0.08 of principal and interest for each share Dec 30, 2018 Dec 31, 2016 $135,000 5% $0.05 of principal and interest for each share Dec 30, 2021 Oct 10, 2017 $20,000 5% $0.05 of principal and interest for each share Demand Oct 10, 2017 $25,000 5% $0.05 of principal and interest for each share Dec 30, 2019 Nov 17, 2017 $6,683 5% $0.05 of principal and interest for each share Dec 30, 2019 Dec 13, 2017 $30,000 5% Convertible by the Company upon closing of NHS merger at prior 20-day average closing price, discounted 50% Dec 13, 2019 Dec 18, 2017 $10,000 5% Convertible by the Company upon closing of NHS merger at prior 20-day average closing price, discounted 50% Dec 13, 2019 |
Schedule of Shareholder Notes Payable | The maturities (by year) of the principal amount of Shareholder Notes Payable as of December 31, 2017 are as follows: Amount Matured $ 570,759 2018 104,231 2019 71,683 2020 — 2021 135,000 2022 & thereafter — Total $ 881,673 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of weighted-average assumptions used in the option pricing model for stock option grants | The weighted-average assumptions used in the option pricing model for stock option grants were as follows: 2017 2016 Expected Dividend Yield 0.00 % 0.00 % Expected Volatility in Stock Price 149.81 % 145.82 % Risk-Free Interest Rate 2.35 % 1.87 % Expected Life of Stock Awards – Years 10.0 10.0 Weighted Average Fair Value at Grant Date $ 0.05 $ 0.05 |
Schedule of stock option activity | The following tables summarize all stock option activity of the Company for the years ended December 31, 2017 and 2016: Number of Shares Weighted Average Exercise Price Outstanding, December 31, 2015 9,381,573 $ 0.19 Granted 500,000 $ 0.05 Exercised (400,000 ) $ 0.05 Forfeited (63,302 ) $ 0.07 Outstanding, December 31, 2016 9,418,271 $ 0.16 Exercisable, December 31, 2016 6,783,271 $ 0.21 Granted 1,500,000 $ 0.05 Exercised (1,750,000 ) $ 0.05 Forfeited (1,420,000 ) $ 0.17 Outstanding, December 31, 2017 7,748,271 $ 0.16 Exercisable, December 31, 2017 5,158,271 $ 0.25 |
Schedule of average remaining contractual life of the options as well as the range of exercise prices of stock options | Additional details, including the average remaining contractual life of the options, as well as the range of exercise prices are shown in the table below: Number of Shares Weighted Average Remaining Contractual Life Range of Exercise Prices Outstanding, December 31, 2015 9,381,573 6.29 $0.05 - $0.68 Granted 500,000 9.10 $0.05 Exercised (400,000 ) $0.05 Expired/Forfeited (63,302 ) $0.07 Outstanding, December 31, 2016 9,418,271 4.43 $0.05 - $0.68 Exercisable, December 31, 2016 6,783,271 5.99 $0.10 - $0.68 Granted 1,500,000 9.96 $0.05 Exercised (1,750,000 ) $0.05 Expired/Forfeited (1,420,000 ) $0.03 - $0.68 Outstanding, December 31, 2017 7,748,271 5.80 $0.03 - $0.68 Exercisable, December 31, 2017 5,158,271 9.42 $0.03 - $0.68 |
Schedule of weighted-average assumptions used in the option pricing model for stock warrant grants | The weighted-average assumptions used in the option pricing model for stock warrant grants were as follows: 2017 2016 Expected Dividend Yield 0.00 % 0.00 % Expected Volatility in Stock Price 152.54 % 121.20 % Risk-Free Interest Rate 2.01 % 2.18 % Expected Life of Stock Awards – Years 7.0 10.0 |
Schedule of warrant activity | The following table represents the Company’s warrant activity for the years ended December 31, 2017 and 2016: Number Weighted Weighted Weighted Outstanding, December 31, 2015 18,178,158 $ 0.13 5.54 Granted 1,713,244 $ 0.07 $ 0.07 9.07 Exercised (3,163,336 ) $ 0.05 0.3 Forfeited (605,734 ) Outstanding, December 31, 2016 16,122,332 $ 0.13 5.54 Granted 1,240,250 $ 0.13 $ 0.14 6.14 Exercised (1,950,000 ) $ 0.08 0.18 Forfeited (713,000 ) $ 0.18 Outstanding, December 31, 2017 14,699,582 $ 0.10 5.41 Exercisable, December 31, 2017 14,699,582 $ 0.10 5.41 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Schedule of notes represents the amount due at maturity | The face amount of the notes represents the amount due at maturity along with the accrued interest, at which time that amount will be converted into shares of the Company stock based on the lowest 2 day closing price for the trailing 20 days prior to conversion and carrying a 35% discount. These notes are included in the table below: Issue Date Face Amount Interest Rate Maturity Net Cash Proceeds Jan 29, 2018 $ 80,000 12 % Jan 29,2019* $ 72,300 Feb 14, 2018 $ 80,000 12 % Nov 14, 2018* $ 72,500 Feb 13, 2018 $ 76,500 5 % Nov 13, 2018* $ 72,500 Feb 14, 2018 $ 85,000 12 % Feb 14, 2019* $ 82,000 |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Property, plant and equipment, estimated useful lives | 5 years | ||
Finite-lived intangible asset, useful life | 20 years | ||
Minimum [Member] | |||
Income tax rate | 21.00% | ||
Maximum [Member] | |||
Income tax rate | 35.00% | ||
Preferred Stock [Member] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 4,037,977 | 3,761,417 | |
Stock Options [Member] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 7,748,271 | 9,418,271 | |
Warrant [Member] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 14,699,582 | 16,122,332 |
LIQUIDITY AND GOING CONCERN (De
LIQUIDITY AND GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Liquidity And Going Concern Details Narrative | |||
Cash | $ 13,502 | $ 36,282 | $ 29,059 |
Working capital deficit | 2,774,565 | ||
Accumulated deficit | (27,999,123) | (26,814,649) | |
NET LOSS | (1,184,474) | (1,221,298) | |
Net cash used in operating activities | (498,963) | (907,441) | |
Share based compensation | 710,348 | 242,159 | |
Net cash provided by investing activities | 2,701 | ||
Net cash provided by financing activities | 476,183 | 911,963 | |
Issuance of common stock, net of costs | 384,500 | 723,456 | |
Proceeds from exercise of common stock warrants | 53,500 | ||
Proceeds/(Payment) from Shareholder Notes | $ 91,683 | $ 135,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents | $ 238,551 | $ 238,551 |
Trademarks & trade name | 9,072 | 9,072 |
Subtotal | 247,623 | 247,623 |
Accumulated amortization | (123,741) | (108,061) |
Intangible assets, net | $ 123,882 | $ 139,562 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) | Dec. 31, 2017USD ($) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
2,017 | $ 15,680 |
2,018 | 15,680 |
2,019 | 15,680 |
2,020 | 15,680 |
2,021 | 15,680 |
Thereafter | $ 45,482 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 15,680 | $ 15,861 |
NOTES PAYABLE AND LOAN FACILI31
NOTES PAYABLE AND LOAN FACILITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Grant of warrants (in shares) | 1,240,250 | 1,713,244 |
Warrant exercise price (in dollars per share) | $ 0.03 | $ 0.03 |
Number of warrants forfeited (in shares) | 713,000 | 605,734 |
CMA Note [Member] | April 29, 2011 [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 800,000 | |
Discription of impact to Company | Warrant costs amortized over the term of the CMA Note | |
CMA Note [Member] | Sept 4, 2011 [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 200,000 | |
Grant of warrants (in shares) | 1,600,000 | |
Warrant exercise price (in dollars per share) | $ 0.27 | |
Discription of impact to Company | Warrant costs amortized over the remaining term of the CMA Note | |
CMA Note [Member] | Nov 2, 2012 [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000 | |
Discription of impact to Company | Warrant costs amortized over the remaining term of the CMA Note | |
CMA Note [Member] | Apr 29, 2013 [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 0 | |
Discription of impact to Company | Warrant costs amortized over the remaining term of the CMA Note | |
CMA Note [Member] | Apr 29, 2014 [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 0 | |
CMA Note [Member] | Apr 29, 2015 [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 0 | |
CMA Note [Member] | Warrant [Member] | April 29, 2011 [Member] | ||
Grant of warrants (in shares) | 2,600,000 | |
Warrant exercise price (in dollars per share) | $ 0.45 | |
Percentage of Common Stock Shares Vested Immediately on Directors by Conversion of Warrants (in percent) | 20.00% | |
Percentage of Common Stock Shares Vesting on Directors Upon Each Draw by Conversion of Warrants (in percent) | 10.00% | |
Minimum Amount of Line of Credit Drawn For Vesting of Portion of Common Stock Granted to Directors As Compensation | $ 100,000 | |
CMA Note [Member] | Warrant [Member] | Sept 4, 2011 [Member] | ||
Grant of warrants (in shares) | 2,600,000 | |
Warrant exercise price (in dollars per share) | $ 0.45 | |
CMA Note [Member] | Warrant [Member] | Nov 2, 2012 [Member] | ||
Grant of warrants (in shares) | 2,100,000 | |
Warrant exercise price (in dollars per share) | $ 0.35 | |
CMA Note [Member] | Warrant [Member] | Apr 29, 2013 [Member] | ||
Grant of warrants (in shares) | 6,300,000 | |
Warrant exercise price (in dollars per share) | $ 0.10 | |
Number of warrants forfeited (in shares) | 630,000 |
NOTES PAYABLE AND LOAN FACILI32
NOTES PAYABLE AND LOAN FACILITY (Details 1) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Convertible Notes Payable 1 [Member] | |
Date | Mar. 11, 2011 |
Amount | $ 75,000 |
Interest Rate | 10.00% |
Conversion Rate | $0.10 of principal and interest for each share |
Maturity | Demand |
Convertible Notes Payable 2 [Member] | |
Date | Mar. 11, 2011 |
Amount | $ 54,922 |
Interest Rate | 10.00% |
Conversion Rate | $0.05 of principal and interest for each share |
Maturity | Demand |
Convertible Notes Payable 3 [Member] | |
Date | May 6, 2013 |
Amount | $ 390,830 |
Interest Rate | 10.00% |
Conversion Rate | $0.05 of principal and interest for each share |
Maturity | Demand |
Convertible Notes Payable 4 [Member] | |
Date | May 31, 2013 |
Amount | $ 30,007 |
Interest Rate | 10.00% |
Conversion Rate | $0.10 of principal and interest for each share |
Maturity | Demand |
Convertible Notes Payable 5 [Member] | |
Date | Sep. 6, 2013 |
Amount | $ 40,769 |
Interest Rate | 10.00% |
Conversion Rate | $0.075 of principal and interest for each share |
Maturity | Sept 6, 2018 |
Convertible Notes Payable 6 [Member] | |
Date | Dec. 30, 2013 |
Amount | $ 25,962 |
Interest Rate | 10.00% |
Conversion Rate | $0.05 of principal and interest for each share |
Maturity | Dec 30, 2018 |
Convertible Notes Payable 7 [Member] | |
Date | Dec. 31, 2015 |
Amount | $ 37,500 |
Interest Rate | 10.00% |
Conversion Rate | $0.08 of principal and interest for each share |
Maturity | Dec 30, 2018 |
Convertible Notes Payable 8 [Member] | |
Date | Dec. 31, 2016 |
Amount | $ 135,000 |
Interest Rate | 5.00% |
Conversion Rate | $0.05 of principal and interest for each share |
Maturity | Dec 30, 2021 |
Convertible Notes Payable 9 [Member] | |
Date | Oct. 10, 2017 |
Amount | $ 20,000 |
Interest Rate | 5.00% |
Conversion Rate | $0.05 of principal and interest for each share |
Maturity | Demand |
Convertible Notes Payable 10 [Member] | |
Date | Oct. 10, 2017 |
Amount | $ 25,000 |
Interest Rate | 5.00% |
Conversion Rate | $0.05 of principal and interest for each share |
Maturity | Dec 30, 2019 |
Convertible Notes Payable 11 [Member] | |
Date | Nov. 17, 2017 |
Amount | $ 6,683 |
Interest Rate | 5.00% |
Conversion Rate | $0.05 of principal and interest for each share |
Maturity | Dec 30, 2019 |
Convertible Notes Payable 12 [Member] | |
Date | Dec. 13, 2017 |
Amount | $ 30,000 |
Interest Rate | 5.00% |
Conversion Rate | Convertible by the Company upon closing of NHS merger at prior 20-day average closing price, discounted 50% |
Maturity | Dec 13, 2019 |
Convertible Notes Payable 13 [Member] | |
Date | Dec. 18, 2017 |
Amount | $ 10,000 |
Interest Rate | 5.00% |
Conversion Rate | Convertible by the Company upon closing of NHS merger at prior 20-day average closing price, discounted 50% |
Maturity | Dec 13, 2019 |
NOTES PAYABLE AND LOAN FACILI33
NOTES PAYABLE AND LOAN FACILITY (Details 2) | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
Matured | $ 570,759 |
2,018 | 104,231 |
2,019 | 71,683 |
2,021 | 135,000 |
Total | $ 881,673 |
NOTES PAYABLE AND LOAN FACILI34
NOTES PAYABLE AND LOAN FACILITY (Details Narrative) - USD ($) | Apr. 29, 2011 | Mar. 11, 2011 | May 31, 2013 | Dec. 31, 2017 | Dec. 31, 2016 |
Shareholder notes payable | $ 881,673 | $ 835,068 | |||
Grant of warrants | 1,240,250 | 1,713,244 | |||
Warrant exercise price (in dollars per share) | $ 0.03 | $ 0.03 | |||
Weighted average interest rate on borrowings | 6.37% | 5.75% | |||
Shareholders Convertible Promissory Notes [Member] | |||||
Shareholder notes payable | $ 1,176,668 | ||||
Grant of warrants | 160,000 | 50,000 | |||
Warrant exercise price (in dollars per share) | $ 0.68 | $ 0.49 | |||
Debt instrument face amount | $ 175,000 | $ 420,837 | $ 881,673 | $ 835,068 | |
Debt instrument interest rate | 10.00% | 10.00% | |||
Conversion price of debt (per share) | $ 0.053 | ||||
Conversion of debt equivalent shares | 22,208,271 | ||||
Accrued Interest | $ 294,995 | ||||
CMA Note [Member] | Warrant [Member] | |||||
Basis Spread on Variable Rate, During Period | 5.25% |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - Kiron Division [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from discontinued operations | $ 82,353 | |
Gains (losses) from discontinued operations | $ 42,056 | $ 37,979 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) | Nov. 01, 2017shares | Oct. 10, 2017shares | Sep. 29, 2017shares | Sep. 28, 2017shares | Sep. 27, 2017shares | Jul. 30, 2017shares | Jul. 25, 2017shares | Jul. 01, 2017shares | Apr. 25, 2017shares | Mar. 15, 2017shares | Jun. 30, 2016shares | Sep. 30, 2017USD ($)Number of accredited investorsshares | Dec. 31, 2017USD ($)Number of accredited investors$ / sharesshares | Dec. 31, 2016USD ($)Number of accredited investors$ / sharesshares |
Accumulated dividends preferred stock | $ | $ 63,600 | $ 49,800 | ||||||||||||
Number of shares issuable upon conversion | 4,037,977 | 3,761,417 | ||||||||||||
Common stock issued upon exercise of common stock warrants | $ | $ 53,500 | |||||||||||||
Common stock issued in private placement | $ | $ 384,500 | $ 709,000 | ||||||||||||
Number of shares issued for the partial conversion of a Shareholder Note and accrued interest | 1,109,406 | |||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.03 | $ 0.03 | ||||||||||||
Number of warrants exercised | 1,950,000 | 3,163,336 | ||||||||||||
Conversion of Shareholder Note and Accrued Interest [Member] | ||||||||||||||
Common stock issued upon conversion of convertible notes, shares (in shares) | 1,109,406 | |||||||||||||
Business Development Agreements [Member] | ||||||||||||||
Common stock and warrants issued for services, shares | 200,000 | 200,000 | 1,087,023 | 1,150,000 | ||||||||||
Sales and Marketing Agreement [Member] | ||||||||||||||
Common stock and warrants issued for services, shares | 368,218 | 363,985 | ||||||||||||
Public Relations Services Agreement [Member] | ||||||||||||||
Common stock and warrants issued for services, shares | 3,125,000 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Common stock and warrants issued for services, shares | 6,494,226 | 1,247,466 | ||||||||||||
Common stock issued upon exercise of common stock warrants | $ | $ 308 | |||||||||||||
Common stock issued upon exercise of common stock warrants, shares | 3,080,220 | |||||||||||||
Common stock issued upon cashless exercise of warrants, shares | 1,813,993 | |||||||||||||
Common stock issued in private placement | $ | $ 769 | $ 1,418 | ||||||||||||
Common stock issued in private placement, shares (in shares) | 7,690,000 | 14,180,000 | ||||||||||||
Common stock warrants exercised | 4,100,000 | |||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.05 | |||||||||||||
Common stock issued upon conversion of convertible notes, shares (in shares) | 1,109,406 | |||||||||||||
September 2014 Private Placement [Member] | ||||||||||||||
Number of accredited investors of private placcement | Number of accredited investors | 6 | |||||||||||||
Common stock issued in private placement | $ | $ 7,690,000 | $ 624,000 | ||||||||||||
Common stock issued in private placement, shares (in shares) | 384,500 | 12,480,000 | ||||||||||||
November 2016 Private Placement [Member] | ||||||||||||||
Number of accredited investors of private placcement | Number of accredited investors | 16 | 4 | ||||||||||||
Common stock issued in private placement | $ | $ 384,500 | $ 85,000 | ||||||||||||
Common stock issued in private placement, shares (in shares) | 7,690,000 | 1,700,000 | ||||||||||||
November 2016 Private Placement [Member] | CEO [Member] | ||||||||||||||
Common stock and warrants issued for services, shares | 250,000 | 500,000 | ||||||||||||
Business Development Agreement - Byron Novosad [Member] | ||||||||||||||
Common stock and warrants issued for services, shares | 250,000 | |||||||||||||
Blue Oar Consulting, LLC (Consulting Agreement ) [Member] | ||||||||||||||
Common stock and warrants issued for services, shares | 997,466 | |||||||||||||
Business Development Agreement One [Member] | ||||||||||||||
Common stock and warrants issued for services, shares | 200,000 | 1,150,000 | ||||||||||||
Warrant [Member] | ||||||||||||||
Common stock issued upon exercise of common stock warrants | $ | $ 53,500 | |||||||||||||
Common stock issued upon exercise of common stock warrants, shares | 1,783,335 | |||||||||||||
Common stock issued upon cashless exercise of warrants, shares | 1,332,109 | 1,296,885 | ||||||||||||
Number of warrants exercised | 1,950,000 | |||||||||||||
Warrants exercised price | $ / shares | $ .05 | |||||||||||||
Stock Options [Member] | ||||||||||||||
Number of stock options exercised cashless | 1,750,000 | |||||||||||||
Stock options exercised price | $ / shares | $ 0.05 | |||||||||||||
Common stock issued upon cashless exercise of stock options, shares | 1,481,884 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected Dividend Rate | 0.00% | 0.00% |
Expected Volatility in Stock price | 149.81% | 145.82% |
Risk Free Interest Rate | 2.35% | 1.87% |
Expected Life of Stock Awards - Years | 10 years | 10 years |
Weighted Average Fair Value at Grant Date | $ 0.05 | $ 0.05 |
SHARE-BASED COMPENSATION (Det38
SHARE-BASED COMPENSATION (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted Average Exercise Price: | ||
Options exercised | $ 0.05 | $ 0.05 |
Stock Options [Member] | ||
Number of options: | ||
Number of Options outstanding, beginning | 9,418,271 | 9,381,573 |
Number of Options granted | 1,500,000 | 500,000 |
Number of Options exercised | (1,750,000) | (400,000) |
Number of Options expired | (1,420,000) | (63,302) |
Number of Options outstanding, ending | 7,748,271 | 9,418,271 |
Number of Options exercisable | 5,158,271 | 6,783,271 |
Weighted Average Exercise Price: | ||
Options outstanding, beginning | $ 0.16 | $ 0.19 |
Options granted | 0.05 | 0.05 |
Options exercised | 0.05 | 0.05 |
Options expired | 0.17 | 0.07 |
Options outstanding, ending | 0.16 | 0.16 |
Options exercisable | $ 0.25 | $ 0.21 |
SHARE-BASED COMPENSATION (Det39
SHARE-BASED COMPENSATION (Details 2) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted Average Exercise Price: | |||
Options exercised | $ 0.05 | $ 0.05 | |
Options forfeited | $ 0.07 | ||
Weighted Average Remaining Contractual Term: | |||
Weighted Average Remaining Contractual Term of Options outstanding, granted | 9 years 11 months 16 days | 9 years 1 month 6 days | |
Weighted Average Remaining Contractual Term of Options outstanding | 5 years 9 months 18 days | 4 years 5 months 5 days | 6 years 3 months 14 days |
Weighted Average Remaining Contractual Term of Options exercisable | 9 years 5 months 12 days | 5 years 11 months 26 days | |
Minimum [Member] | |||
Weighted Average Exercise Price: | |||
Options outstanding, beginning | $ 0.05 | $ 0.05 | |
Options exercised | |||
Options forfeited | |||
Options outstanding, ending | 0.05 | 0.05 | $ 0.05 |
Options exercisable | 0.03 | 0.10 | |
Maximum [Member] | |||
Weighted Average Exercise Price: | |||
Options outstanding, beginning | 0.68 | 0.68 | |
Options exercised | |||
Options forfeited | |||
Options outstanding, ending | 0.68 | 0.68 | $ 0.68 |
Options exercisable | $ 0.68 | $ 0.68 |
SHARE-BASED COMPENSATION (Det40
SHARE-BASED COMPENSATION (Details 3) - Warrant [Member] | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected Dividend Rate | 0.00% | 0.00% |
Expected Volatility in Stock price | 152.54% | 121.20% |
Risk Free Interest Rate | 2.01% | 2.18% |
Expected Term | 7 years | 10 years |
SHARE-BASED COMPENSATION (Det41
SHARE-BASED COMPENSATION (Details 4) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Warrant: | |||
Number of Warrant outstanding, beginning | 16,122,332 | 18,178,158 | |
Number of Warrant granted | 1,240,250 | 1,713,244 | |
Number of Warrant exercised | (1,950,000) | (3,163,336) | |
Number of Warrant forfeited | (713,000) | (605,734) | |
Number of Warrant outstanding, ending | 14,699,582 | 16,122,332 | 18,178,158 |
Number of Warrant exercisable | 14,699,582 | ||
Warrant Weighted Average Exercise Price: | |||
Warrant outstanding, beginning | $ 0.13 | $ 0.13 | |
Warrant granted | 0.14 | 0.07 | |
Warrant exercised | 0.08 | 0.05 | |
Warrant forfeited | 0.18 | ||
Warrant outstanding, ending | 0.10 | $ 0.13 | $ 0.13 |
Warrant exercisable | $ 0.10 | ||
Weighted Average Remaining Contractual Life | |||
Warrant granted | 6 years 1 month 20 days | 9 years 25 days | |
Warrant outstanding | 5 years 4 months 28 days | 5 years 6 months 14 days | 5 years 6 months 14 days |
Warrant exercisable | 5 years 4 months 28 days | 3 months 7 days | |
Weighted average grant date fair value | $ 0.13 | $ 0.07 |
SHARE-BASED COMPENSATION (Det42
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | Dec. 17, 2017 | May 18, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2009 | Jan. 01, 2004 |
Share-based compensation | $ 710,348 | $ 242,159 | ||||||
Unrecognized compensation cost for non-vested awards | 151,730 | 157,838 | ||||||
Share-based compensation - stock options | $ 60,795 | $ 55,143 | ||||||
Warrant exercise price (in dollars per share) | $ 0.03 | $ 0.03 | ||||||
Non-vested warrants granted in 2016 | 14,699,582 | 16,122,332 | 18,178,158 | |||||
Intrinsic value of options outstanding | $ 4,000 | |||||||
Warrant [Member] | ||||||||
Share-based compensation | $ 159,553 | $ 115,054 | ||||||
Term of the award | 7 years | 10 years | ||||||
Expected Dividend Rate | 0.00% | 0.00% | ||||||
Expected Volatility in Stock price | 152.54% | 121.20% | ||||||
Risk Free Interest Rate | 2.01% | 2.18% | ||||||
Stock Options [Member] | ||||||||
Term of the award | 10 years | 10 years | ||||||
Options granted | $ 0.05 | $ 0.05 | ||||||
Number of Options granted | 1,500,000 | 500,000 | ||||||
Expected Dividend Rate | 0.00% | 0.00% | ||||||
Expected Volatility in Stock price | 149.81% | 145.82% | ||||||
Risk Free Interest Rate | 2.35% | 1.87% | ||||||
Stock Options [Member] | Director [Member] | ||||||||
Vesting period of stock options | 5 years | |||||||
Exercisable period of stock options | 10 years | |||||||
Options granted | $ 0.05 | |||||||
Vesting amounts | 25,000 | |||||||
Number of Options granted | 500,000 | |||||||
Stock Options [Member] | Director One [Member] | ||||||||
Vesting period of stock options | 5 years | |||||||
Exercisable period of stock options | 10 years | |||||||
Options granted | $ 0.05 | |||||||
Vesting amounts | 25,000 | |||||||
Number of Options granted | 500,000 | |||||||
Stock Options [Member] | Director Two [Member] | ||||||||
Vesting period of stock options | 5 years | |||||||
Exercisable period of stock options | 10 years | |||||||
Options granted | $ 0.05 | |||||||
Vesting amounts | 25,000 | |||||||
Number of Options granted | 500,000 | |||||||
Stock Options [Member] | Director Three [Member] | ||||||||
Vesting period of stock options | 5 years | |||||||
Exercisable period of stock options | 10 years | |||||||
Options granted | $ 0.05 | |||||||
Vesting amounts | 25,000 | |||||||
Number of Options granted | 500,000 | |||||||
Stock Option Plan [Member] | ||||||||
Number of shares authorized under stock option plan | 5,000,000 | 10,000,000 | 4,000,000 | |||||
Number of shares reserved for issuance | 2,251,729 | |||||||
Vesting period of stock options | 4 years | |||||||
Exercisable period of stock options | 10 years | |||||||
Expected Dividend Rate | 0.00% | 0.00% | ||||||
Expected Volatility in Stock price | 149.60% | 152.90% | ||||||
Risk Free Interest Rate | 1.81% | 2.45% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - Board of Directors [Member] - USD ($) | 1 Months Ended | |
Jul. 31, 2014 | Apr. 30, 2009 | |
Options, Grants in Period, Net of Forfeitures | 500,000 | 400,000 |
Share Based Payment Award Options Fair Value | $ 84,346 | |
Vesting amounts | 25,000 | 20,000 |
Maximum [Member] | ||
Share Based Payment Award Options Fair Value | $ 53,513 | |
Options, Grants in Period, Weighted Average Exercise Price | $ 0.11 | $ 0.68 |
Minimum [Member] | ||
Share Based Payment Award Options Fair Value | $ 14,714 | |
Options, Grants in Period, Weighted Average Exercise Price | $ 0.03 |
MAJOR CUSTOMERS AND VENDORS (D
MAJOR CUSTOMERS AND VENDORS (Details Narrative) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Product Revenue [Member] | Three Customers [Member] | ||
Concetration, percentage | 100.00% | 100.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | Jan. 01, 2018USD ($) | |
Convertible Notes Payable 14 [Member] | ||
Issue Date | Jan. 29, 2018 | |
Face Amount | $ 80,000 | |
Interest Rate | 12.00% | |
Maturity | Jan 292019 | [1] |
Net Cash Proceeds | $ 72,300 | |
Convertible Notes Payable 15 [Member] | ||
Issue Date | Feb. 14, 2018 | |
Face Amount | $ 80,000 | |
Interest Rate | 12.00% | |
Maturity | Nov 14, 2018 | [1] |
Net Cash Proceeds | $ 72,500 | |
Convertible Notes Payable 16 [Member] | ||
Issue Date | Feb. 13, 2018 | |
Face Amount | $ 76,500 | |
Interest Rate | 5.00% | |
Maturity | Nov 13, 2018 | [1] |
Net Cash Proceeds | $ 72,500 | |
Convertible Notes Payable 17 [Member] | ||
Issue Date | Feb. 14, 2018 | |
Face Amount | $ 85,000 | |
Interest Rate | 12.00% | |
Maturity | Feb 14, 2019 | [1] |
Net Cash Proceeds | $ 82,000 | |
[1] | Note that these notes can be converted after 6 months from the issue date. |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Feb. 05, 2018 | Mar. 28, 2018 | Feb. 09, 2018 |
Consulting Agreement [Member] | |||
Number of shares issued | 1,500,000 | ||
Convertible Promissory Notes [Member] | |||
Debt conversion discount rate | 35.00% | ||
Issuance of unsecured debt | $ 195,635 | ||
Interest rate of convertible promissory notes | 5.00% |