Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BioSolar Inc | |
Entity Central Index Key | 1,371,128 | |
Trading Symbol | BSRC | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 51,937,541 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 102,872 | $ 119,446 |
Prepaid expenses | 54,429 | 21,644 |
TOTAL CURRENT ASSETS | 157,301 | 141,090 |
PROPERTY AND EQUIPMENT | ||
Machinery and equipment | 31,455 | 31,455 |
Less accumulated depreciation | (24,511) | (23,733) |
NET PROPERTY AND EQUIPMENT | 6,944 | 7,722 |
OTHER ASSETS | ||
Patents, net of amortization of $6,800 and $6,045, respectively | 68,686 | 69,442 |
Deposit | 770 | 770 |
TOTAL OTHER ASSETS | 69,456 | 70,212 |
TOTAL ASSETS | 233,701 | 219,024 |
CURRENT LIABILITIES | ||
Accounts payable | 35,923 | 31,845 |
Accrued expenses | 449,879 | 414,702 |
Derivative liability | 5,453,635 | 5,239,073 |
Convertible promissory notes net of debt discount of $16,501 and $5,340, respectively | 296,699 | 396,660 |
TOTAL CURRENT LIABILITIES | 6,236,136 | 6,082,280 |
LONG TERM LIABILITIES | ||
Convertible promissory notes net of debt discount of $2,926 and $351, respectively | 1,982,074 | 1,791,279 |
TOTAL LONG TERM LIABILITIES | 1,982,074 | 1,791,279 |
TOTAL LIABILITIES | 8,218,210 | 7,873,559 |
SHAREHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value; 10,000,000 authorized common shares | ||
Common stock, $0.0001 par value; 500,000,000 authorized common shares 50,189,322 and 41,485,051 shares issued and outstanding, respectively | 5,019 | 4,149 |
Additional paid in capital | 11,369,167 | 11,127,693 |
Accumulated deficit | (19,358,695) | (18,786,377) |
TOTAL SHAREHOLDERS' DECIFIT | (7,984,509) | (7,654,535) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 233,701 | $ 219,024 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Patents, net of amortization | $ 6,800 | $ 6,045 |
Convertible promissory notes net of debt discount, current | 16,501 | 5,340 |
Convertible promissory notes net of debt discount, non current | $ 2,926 | $ 351 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 50,189,322 | 41,485,051 |
Common stock, shares outstanding | 50,189,322 | 41,485,051 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
REVENUE | ||
OPERATING EXPENSES | ||
General and administrative expenses | 95,931 | 511,698 |
Research and development | 53,400 | 4,551 |
Depreciation and amortization | 1,534 | 830 |
TOTAL OPERATING EXPENSES | 150,865 | 517,079 |
LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES) | (150,865) | (517,079) |
TOTAL OTHER INCOME/(EXPENSES) | ||
Interest income | 7 | 12 |
Gain (Loss) on conversion of debt and change in derivative liability | (360,283) | 284,807 |
Interest expense | (61,177) | (138,623) |
TOTAL OTHER (EXPENSES) INCOME | (421,453) | 146,196 |
NET LOSS | $ (572,318) | $ (370,883) |
BASIC AND DILUTED LOSS PER SHARE | $ (0.01) | $ (0.01) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED | 44,897,155 | 31,042,540 |
Condensed Statement of Sharehol
Condensed Statement of Shareholders’ Deficit - 3 months ended Mar. 31, 2018 - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2017 | $ 4,149 | $ 11,127,693 | $ (18,786,377) | $ (7,654,535) | |
Beginning balance, shares at Dec. 31, 2017 | 41,485,051 | ||||
Issuance of common shares for converted promissory notes and accrued interest | $ 870 | 241,474 | 242,344 | ||
Issuance of common shares for converted promissory notes and accrued interest, shares | 8,704,271 | ||||
Net Loss | (572,318) | (572,318) | |||
Ending balance at Mar. 31, 2018 | $ 5,019 | $ 11,369,167 | $ (19,358,695) | $ (7,984,509) | |
Ending balance, shares at Mar. 31, 2018 | 50,189,322 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (572,318) | $ (370,883) |
Adjustment to reconcile net loss income to net cash used in operating activities | ||
Depreciation and amortization expense | 1,534 | 830 |
Stock based compensation | 392,942 | |
(Gain) Loss on net change in derivative liability and conversion of debt | 360,283 | (284,807) |
Amortization of debt discount recognized as interest expense | 55,618 | 91,980 |
(Increase) Decrease in Changes in Assets | ||
Prepaid expenses | (32,785) | (25,241) |
Increase (Decrease) in Changes in Liabilities | ||
Accounts payable | 4,078 | 8,120 |
Accrued expenses | 4,016 | 46,320 |
NET CASH USED IN OPERATING ACTIVITIES | (179,574) | (140,739) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Patent expenditures | (482) | |
NET CASH USED IN INVESTING ACTIVITIES | (482) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible promissory notes | 163,000 | 95,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 163,000 | 95,000 |
NET DECREASE IN CASH | (16,574) | (46,221) |
CASH, BEGINNING OF PERIOD | 119,446 | 208,629 |
CASH, END OF PERIOD | 102,872 | 162,408 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | 1,974 | 197 |
Taxes paid | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH TRANSACTIONS | ||
Common stock issued for convertible notes and accrued interest | $ 242,344 | $ 19,968 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information refer to the financial statements and footnotes thereto included in the Company’s Form 10-K for the year ended December 31, 2017. Going Concern The accompanying condensed financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company has not generated significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. The Company has historically obtained funds through private placements offerings of equity and debt. Management believes that it will be able to continue to raise funds by sale of its securities to its existing shareholders and prospective new investors to provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core of business. There is no assurance that the Company will be able to continue raising the required capital for its operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company are presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. Revenue Recognition The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. To date, the Company has not had significant revenues and is in the development stage. Cash and Cash Equivalent The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities and the fair value of stock options. Actual results could differ from those estimates. Intangible Assets The Company has patent applications to protect the inventions and processes behind its proprietary bio-based back-sheet, a protective covering for the back of photovoltaic solar modules traditionally made from petroleum-based film. Intangible assets that have finite useful lives continue to be amortized over their useful lives Stock-Based Compensation The Company measures the cost of employee services received in exchange for an equity award based on the grant-date fair value of the award. All grants under our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which an employee, consultant, or director are required to provide service in exchange for the award (the vesting period). Compensation expense for options granted to employees and non-employees is determined in accordance with the standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense for awards granted is re-measured each period. Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company used Black Scholes to value its stock option awards which incorporated the Company’s stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life. The stock options terminate seven (7) years from the date of grant or upon termination of employment. As of March 31, 2018, 15,950,000 stock options are outstanding. Net Earnings (Loss) per Share Calculations Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock based awards (Note 4), plus the assumed conversion of convertible debt (Note 5). For the three months ended March 31, 2018, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. The Company has excluded 15,950,000 stock options, and the shares issuable from convertible debt of $2,298,200, because their impact was anti-dilutive. For the three months ended March 31, 2017, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. The Company has excluded 15,975,000 stock options and warrants of 150,000, and the shares issuable from convertible debt of $1,879,200, because their impact was anti-dilutive. Fair Value of Financial Instruments Fair Value of Financial Instruments, requires disclosure of the fair value information, whether recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2018, the amounts reported for cash, inventory, prepaid expenses, accounts payable, and accrued expenses, approximate the fair value because of their short maturities. Fair value is defined as the 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. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at March 31, 2018: Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 5,453,635 $ - $ - $ 5,453,635 Total Liabilities measured at fair value $ 5,453,635 $ - $ - $ 5,453,635 The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value: Balance as of December 31, 2017 $ 5,239,073 Fair value of derivative liabilities issued 17,753 Loss on conversion of debt and change in derivative liability 196,809 Balance as of March 31, 2018 $ 5,453,635 Recently Issued Accounting Pronouncements In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU 2017-12 on the Company’s financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
CAPITAL STOCK | 3. CAPITAL STOCK During the three months ended March 31, 2018, the Company issued 8,704,271 shares of common stock upon conversion of convertible promissory notes in the amount of $58,430, plus accrued interest of $20,441, with an aggregate fair value loss of $163,474 at prices ranging from $0.025 - $0.031. |
Stock Options
Stock Options | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTIONS | 4. STOCK OPTIONS Stock Options The Company did not grant any stock options during the three months ended March 31, 2018 and 2017, respectively. 3/31/2018 3/31/2017 Number of Options Weighted average exercise price Number of Options Weighted average exercise price Outstanding as of the beginning of the periods 15,975,000 $ 0.23 15,975,000 $ 0.23 Granted - - - - Exercised - - - - Expired (25,000 ) $ 0.40 - - Outstanding as of the end of the periods 15,950,000 $ 0.23 15,975,000 $ 0.23 Exercisable as of the end of the periods 15,950,000 $ 0.23 12,097,000 $ 0.23 The weighted average remaining contractual life of options outstanding as of March 31, 2018 and 2017 was as follows: 3/31/2018 3/31/2017 Exercisable Price Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) Exercisable Price Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) $ 0.40 25,000 25,000 0.92 $ 0.09 2,450,000 2,450,000 3.98 $ 0.09 2,450,000 2,352,000 4.98 $ 0.26 13,500,000 13,500,000 4.43 $ 0.26 13,500,000 9,720,000 5.43 15,950,000 15,950,000 15,975,000 12,097,000 The stock-based compensation expense recognized in the statement of operations during the three months ended March 31, 2018 and 2017, related to the granting of these options was $0 and $392,942, respectively. As of March 31, 2018, and 2017, respectively, there was no intrinsic value with regards to the outstanding options. |
Convertible Promissory Notes
Convertible Promissory Notes | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE PROMISSORY NOTES | 5. CONVERTIBLE PROMISSORY NOTES As of March 31, 2018, the outstanding convertible promissory notes net of debt discount are summarized as follows: Convertible Promissory Notes, net of debt discount $ 2,278,773 Less current portion 296,699 Total long-term liabilities $ 1,982,074 Maturities of long-term debt for the next five years are as follows: Year Ending March 31, Amount 2020 $ 730,000 2021 755,000 2022 399,074 2023 98,000 $ 1,982,074 At March 31, 2018, the $2,298,200 in convertible promissory notes had a remaining debt discount of $19,427, leaving a net balance of $2,278,773. On May 2, 2014, the Company issued a 10% unsecured convertible note (the “May Note”) in the aggregate principal amount of up to $500,000, to be advanced in amounts at the lender’s discretion. Upon execution of the convertible promissory note, the Company received a tranche in the amount of $50,000. On various dates, the Company received additional tranches in the aggregate sum of $450,000, for a total aggregate sum of $500,000. As of December 31, 2017, the remaining principal balance was $306,630. During the three months ended March 31, 2018, the Company issued 8,704,272 shares of common stock for principal in the amount of $58,430, plus accrued interest of $20,441, leaving a principal balance of $248,200. Each tranche matures eighteen (18) months from the effective date of each tranche, which was extended on January 12, 2016 to sixty (60) months, with maturity dates ranging from June 12, 2019 to December 21, 2019. The May Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.25 per share of common stock, b) fifty percent (50%) of the average three (3) lowest trading prices of three (3) separate trading days recorded after the effective date, or c) the lowest effective price granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the May Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the May Note has been determined by using the Binomial lattice formula with an expected life of sixty (60) months from the effective date of each tranche. On January 30, 2015, the Company issued a 10% unsecured convertible note (the “January Note”) in the aggregate principal amount of up to $500,000, to be advanced in amounts at the lender’s discretion. Upon execution of the convertible promissory note, the Company received a tranche in the amount of $50,000. On various dates, the Company received additional tranches in the aggregate sum of $450,000. The principal balance at March 31, 2018 was $500,000. Each tranche matured eighteen (18) months from the effective date of each tranche, which was extended on January 12, 2016 to sixty (60) months from the effective date of each tranche, with maturity dates ranging from January 29, 2020 to August 25, 2020. The January Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.15 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the January Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the January Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the January Note has been determined by using the Binomial lattice formula with an expected life of sixty (60) months from the effective date of each tranche. On October 1, 2015, the Company issued a 10% unsecured convertible note (the “October Note”) in the aggregate principal amount of up to $500,000, to be advanced in amounts at the lender’s discretion. Upon execution of the convertible promissory note, the Company received a tranche in the amount of $90,000. On various dates, the Company received additional tranches in the aggregate sum of $395,000. The principal balance at March 31, 2018 was $485,000. Each tranche matures twelve (12) months from the effective date of each tranche, which was extended on October 13, 2016 to sixty (60) months from the effective date of each tranche, with maturity dates ranging from October 1, 2020 to March 9, 2021.The October Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.25 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the October Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the October Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the October Note has been determined by using the Binomial lattice formula with an expected life of sixty (60) months from the effective date of each tranche. The fair value of the October Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months. On April 5, 2016, the Company issued a 10% unsecured convertible note (the “April Note”) in the aggregate principal amount of up to $500,000, to be advanced in amounts at the lender’s discretion. Upon execution of the convertible promissory notes, the Company received a tranche in the amount of $48,000. On various dates, the Company received additional tranches in the aggregate sum of $452,000. The principal balance at March 31, 2018 was $500,000. Each tranche matures twelve (12) months from its’ effective date of each tranche, which was extended on April 5, 2017 to sixty (60) months from the effective date of each tranche, with maturity dates ranging from April 8, 2021 to February 20, 2022. The April Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.13 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the April Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the April Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the April Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $351 during the three months ended March 31, 2018. On March 20, 2017, the Company issued a 10% unsecured convertible note (the “March Note”) in the aggregate principal amount of up to $500,000, to be advanced in amounts at the lender’s discretion. Upon execution of the convertible promissory note, the Company received a tranche in the amount of $25,000. On various dates during the Company received additional tranches in the aggregate sum of $475,000. The principal balance as of March 31, 2018 was $500,000. Each tranche matures twelve (12) months from the effective date of each tranche, with an extension of sixty (60) months from each tranche. The March Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.13 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the March Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the March Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the March Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $2,847 during the three months ended March 31, 2018. On February 26, 2018, the Company issued a 10% unsecured convertible note (the “February Note,” and together with the May Note, January Note, October Note, April Note and March Note, the “Notes”) in the aggregate principal amount of up to $500,000, to be advanced in amounts at the lender’s discretion. Upon execution of the convertible promissory note, the Company received a tranche in the amount of $15,000. On various dates during the period ended March 31, 2018, the Company received an additional tranche in the sum of $50,000. The principal balance as of March 31, 2018 was $65,000. Each tranche matures twelve (12) months from the effective date of each tranche, with an extension of sixty (60) months from each tranche. The February Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.03 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the February Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the February Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the February Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $818 during the three months ended March 31, 2018. We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the Notes was not afforded the exemption for conventional convertible instruments due to their variable conversion rate. The Notes have no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the Notes under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the Notes in their entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations. |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | 6. DERIVATIVE LIABILITIES We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the Notes was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The Notes have no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. The Company elected to recognize the Notes under paragraph 815-15-25-4, whereby, there would be a separation into a host contract and derivative instrument. The Company elected to initially and subsequently measure the Notes in their entirety at fair value, with changes in fair value recognized in earnings. The Company recorded a derivative liability representing the imputed interest associated with the embedded derivative. The derivative liability is adjusted periodically per the stock price fluctuations. The Notes issued and described in Note 5 do not have fixed settlement provisions because their conversion prices are not fixed. The conversion feature has been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. During the three months ended March 31, 2018, as a result of the Notes issued that were accounted for as derivative liabilities, we determined that the fair value of the conversion feature of the Notes at issuance was $17,753, based upon a Binomial-Model calculation. We recorded the full value of the derivative as a liability at issuance with an offset to valuation discount, which will be amortized over the life of the Notes. During the three months ended March 31, 2018, the Company converted $58,430 in principal of the Notes, plus accrued interest of $20,441. As a result of the conversion of these Notes and the change in fair value of the remaining notes, the Company recorded a loss on net change in derivative and conversion of debt in the amount of $360,283 in the statement of operations for the three months ended March 31, 2018. At March 31, 2018, the fair value of the derivative liability was $5,453,635. For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used the Binomial lattice valuation model. The significant assumptions used in the Binomial lattice valuation model for the derivative are as follows: 3/31/2018 Risk free interest rate 2.09% - 2.56% Stock volatility factor 83.0% - 134.0% Weighted average expected option life 1 years - 5 years Expected dividend yield None |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 7. SUBSEQUENT EVENT Management has evaluated subsequent events according to the requirements of ASC TOPIC 855 and has determined that there are the following subsequent events: On April 20, 2018, the Company received an additional tranche in the amount of $55,000 on the February Note. On April 23, 2018, the Company issued 1,748,219 shares of common stock upon conversion of the May Note for principal in the amount of $7,500, plus accrued interest of $2,698. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. To date, the Company has not had significant revenues and is in the development stage. |
Cash and Cash Equivalent | Cash and Cash Equivalent The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements, include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, derivative liabilities and the fair value of stock options. Actual results could differ from those estimates. |
Intangible Assets | Intangible Assets The Company has patent applications to protect the inventions and processes behind its proprietary bio-based back-sheet, a protective covering for the back of photovoltaic solar modules traditionally made from petroleum-based film. Intangible assets that have finite useful lives continue to be amortized over their useful lives |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of employee services received in exchange for an equity award based on the grant-date fair value of the award. All grants under our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which an employee, consultant, or director are required to provide service in exchange for the award (the vesting period). Compensation expense for options granted to employees and non-employees is determined in accordance with the standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense for awards granted is re-measured each period. Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company used Black Scholes to value its stock option awards which incorporated the Company’s stock price, volatility, U.S. risk-free rate, dividend rate, and estimated life. The stock options terminate seven (7) years from the date of grant or upon termination of employment. As of March 31, 2018, 15,950,000 stock options are outstanding. |
Net Earnings (Loss) per Share Calculations | Net Earnings (Loss) per Share Calculations Net earnings (Loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per share. Basic earnings (loss) per share are computed by dividing by the weighted average number of common shares outstanding during the year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of stock options and stock based awards (Note 4), plus the assumed conversion of convertible debt (Note 5). For the three months ended March 31, 2018, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. The Company has excluded 15,950,000 stock options, and the shares issuable from convertible debt of $2,298,200, because their impact was anti-dilutive. For the three months ended March 31, 2017, the Company’s diluted loss per share is the same as the basic loss per share, and the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss. The Company has excluded 15,975,000 stock options and warrants of 150,000, and the shares issuable from convertible debt of $1,879,200, because their impact was anti-dilutive. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair Value of Financial Instruments, requires disclosure of the fair value information, whether recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2018, the amounts reported for cash, inventory, prepaid expenses, accounts payable, and accrued expenses, approximate the fair value because of their short maturities. Fair value is defined as the 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. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at March 31, 2018: Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 5,453,635 $ - $ - $ 5,453,635 Total Liabilities measured at fair value $ 5,453,635 $ - $ - $ 5,453,635 The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value: Balance as of December 31, 2017 $ 5,239,073 Fair value of derivative liabilities issued 17,753 Loss on conversion of debt and change in derivative liability 196,809 Balance as of March 31, 2018 $ 5,453,635 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2017, FASB issued accounting standards update ASU-2017-12, “D” (Topic 815) – “Targeted Improvements to Accounting for Hedging Activities”, to require an entity to present the earnings effect of the hedging instrument in the same statement line item in which the earnings effect of the hedged item is reported. The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods with the fiscal years beginning after December 15, 2020. Early adoption is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact of the adoption of ASU 2017-12 on the Company’s financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 5,453,635 $ - $ - $ 5,453,635 Total Liabilities measured at fair value $ 5,453,635 $ - $ - $ 5,453,635 |
Schedule of reconciliation of derivative liability | Balance as of December 31, 2017 $ 5,239,073 Fair value of derivative liabilities issued 17,753 Loss on conversion of debt and change in derivative liability 196,809 Balance as of March 31, 2018 $ 5,453,635 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock options | 3/31/2018 3/31/2017 Number of Options Weighted average exercise price Number of Options Weighted average exercise price Outstanding as of the beginning of the periods 15,975,000 $ 0.23 15,975,000 $ 0.23 Granted - - - - Exercised - - - - Expired (25,000 ) $ 0.40 - - Outstanding as of the end of the periods 15,950,000 $ 0.23 15,975,000 $ 0.23 Exercisable as of the end of the periods 15,950,000 $ 0.23 12,097,000 $ 0.23 |
Schedule of weighted average remaining contractual life of options outstanding | 3/31/2018 3/31/2017 Exercisable Price Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) Exercisable Price Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) $ 0.40 25,000 25,000 0.92 $ 0.09 2,450,000 2,450,000 3.98 $ 0.09 2,450,000 2,352,000 4.98 $ 0.26 13,500,000 13,500,000 4.43 $ 0.26 13,500,000 9,720,000 5.43 15,950,000 15,950,000 15,975,000 12,097,000 |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of outstanding convertible promissory notes | Convertible Promissory Notes, net of debt discount $ 2,278,773 Less current portion 296,699 Total long-term liabilities $ 1,982,074 |
Schedule of maturities of long-term debt | Year Ending March 31, Amount 2020 $ 730,000 2021 755,000 2022 399,074 2023 98,000 $ 1,982,074 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative liabilities valuation assumptions | 3/31/2018 Risk free interest rate 2.09% - 2.56% Stock volatility factor 83.0% - 134.0% Weighted average expected option life 1 years - 5 years Expected dividend yield None |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Details) | Mar. 31, 2018USD ($) |
Derivative Liability | |
Derivative Liability | $ 5,453,635 |
Total Liabilities measured at fair value | 5,453,635 |
Fair Value, Inputs, Level 3 [Member] | |
Derivative Liability | |
Derivative Liability | 5,453,635 |
Total Liabilities measured at fair value | 5,453,635 |
Fair Value, Inputs, Level 1 [Member] | |
Derivative Liability | |
Derivative Liability | |
Total Liabilities measured at fair value | |
Fair Value, Inputs, Level 2 [Member] | |
Derivative Liability | |
Derivative Liability | |
Total Liabilities measured at fair value |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Details 1) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Schedule of reconciliation of derivative liability | |
Balance, Beginning | $ 5,239,073 |
Balance, Ending | 5,453,635 |
Fair Value, Inputs, Level 3 | |
Schedule of reconciliation of derivative liability | |
Balance, Beginning | 5,239,073 |
Fair value of derivative liabilities issued | 17,753 |
Loss on conversion of debt and change in derivative liability | 196,809 |
Balance, Ending | $ 5,453,635 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Convertible Debt Securities [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Shares issuable from convertible debt | $ 2,298,200 | $ 1,879,200 |
Warrant [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Outstanding warrants | 150,000 | 150,000 |
Employee Stock Option [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Expiration period | 7 years | |
Antidilutive securities excluded from computation of earnings per share, amount | 15,950,000 | 15,975,000 |
Outstanding stock options | 15,950,000 |
Capital Stock (Details)
Capital Stock (Details) - Convertible Debt [Member] | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Capital Stock (Textual) | |
Common stock issued | shares | 8,704,271 |
Aggregate fair value loss | $ 163,474 |
Amount of debt conversion | 58,430 |
Accrued interest | $ 20,441 |
Maximum [Member] | |
Capital Stock (Textual) | |
Common stock conversion price per share | $ / shares | $ 0.031 |
Minimum [Member] | |
Capital Stock (Textual) | |
Common stock conversion price per share | $ / shares | $ 0.025 |
Stock Options (Details)
Stock Options (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Number of Options | ||
Outstanding as of the beginning of the periods | 15,975,000 | 15,975,000 |
Granted | ||
Exercised | ||
Expired | (25,000) | |
Outstanding as of the end of the periods | 15,950,000 | 15,975,000 |
Exercisable as of the end of the periods | 15,950,000 | 12,097,000 |
Weighted average exercise price | ||
Outstanding as of the beginning of the periods | $ 0.23 | $ 0.23 |
Granted | ||
Exercised | ||
Expired | 0.40 | |
Outstanding as of the end of the periods | 0.23 | 0.23 |
Exercisable as of the end of the periods | $ 0.23 | $ 0.23 |
Stock Options (Details 1)
Stock Options (Details 1) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of weighted average remaining contractual life of options outstanding | ||
Stock Options Outstanding | 15,950,000 | 15,975,000 |
Stock Options Exercisable | 15,950,000 | 12,097,000 |
Exercisable Prices [Member] | ||
Schedule of weighted average remaining contractual life of options outstanding | ||
Exercisable Price | $ 0.40 | |
Stock Options Outstanding | 25,000 | |
Stock Options Exercisable | 25,000 | |
Weighted Average Remaining Contractual Life (years) | 11 months 1 day | |
Exercisable Prices One [Member] | ||
Schedule of weighted average remaining contractual life of options outstanding | ||
Exercisable Price | $ 0.09 | $ 0.09 |
Stock Options Outstanding | 2,450,000 | 2,450,000 |
Stock Options Exercisable | 2,450,000 | 2,352,000 |
Weighted Average Remaining Contractual Life (years) | 3 years 11 months 23 days | 4 years 11 months 23 days |
Exercisable Prices Two [Member] | ||
Schedule of weighted average remaining contractual life of options outstanding | ||
Exercisable Price | $ 0.26 | $ 0.26 |
Stock Options Outstanding | 13,500,000 | 13,500,000 |
Stock Options Exercisable | 13,500,000 | 9,720,000 |
Weighted Average Remaining Contractual Life (years) | 4 years 5 months 5 days | 5 years 5 months 5 days |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock Options (Textual) | ||
Stock-based compensation expense | $ 392,942 | |
Stock Options [Member] | ||
Stock Options (Textual) | ||
Stock-based compensation expense | 0 | $ 392,942 |
Intrinsic value of options outstanding |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) | Mar. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes, net of debt discount | $ 2,278,773 |
Less current portion | 296,699 |
Total long-term liabilities | $ 1,982,074 |
Convertible Promissory Notes 27
Convertible Promissory Notes (Details 1) | Mar. 31, 2018USD ($) |
Year Ending March 31, | |
2,020 | $ 730,000 |
2,021 | 755,000 |
2,022 | 399,074 |
2,023 | 98,000 |
Total long-term debt | $ 1,982,074 |
Convertible Promissory Notes 28
Convertible Promissory Notes (Details Textual) - USD ($) | Mar. 20, 2017 | Apr. 05, 2016 | Oct. 01, 2015 | May 02, 2014 | Feb. 26, 2017 | Jan. 30, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Convertible Promissory Notes (Textual) | |||||||||
Tranche amount received | $ 163,000 | $ 95,000 | |||||||
Amortization of debt discount recognized as interest expense | 55,618 | $ 91,980 | |||||||
Convertible promissory notes | 2,298,200 | ||||||||
Debt discount | 19,427 | ||||||||
Net balance | 2,278,773 | ||||||||
Unsecured Convertible Promissory Note [Member] | |||||||||
Convertible Promissory Notes (Textual) | |||||||||
Unsecured convertible note principal amount | $ 500,000 | ||||||||
Convertible promissory note interest, percentage | 10.00% | ||||||||
Tranche amount received | $ 50,000 | ||||||||
Additional tranche amount received | $ 450,000 | ||||||||
Principal amount converted | $ 248,200 | $ 306,630 | |||||||
Shares issued upon conversion of debt | 8,704,272 | ||||||||
Value issued upon conversion of debt | $ 58,430 | ||||||||
Accrued interest | $ 20,441 | ||||||||
Debt instrument, description | Each tranche matures eighteen (18) months from the effective date of each tranche, which was extended on January 12, 2016 to sixty (60) months, with maturity dates ranging from June 12, 2019 to December 21, 2019. | ||||||||
Debt conversion, description | The May Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.25 per share of common stock, b) fifty percent (50%) of the average three (3) lowest trading prices of three (3) separate trading days recorded after the effective date, or c) the lowest effective price granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the May Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the May Note has been determined by using the Binomial lattice formula with an expected life of sixty (60) months from the effective date of each tranche. | ||||||||
Unsecured Convertible Promissory Note Three [Member] | |||||||||
Convertible Promissory Notes (Textual) | |||||||||
Unsecured convertible note principal amount | $ 500,000 | ||||||||
Convertible promissory note interest, percentage | 10.00% | ||||||||
Tranche amount received | $ 48,000 | ||||||||
Additional tranche amount received | $ 452,000 | ||||||||
Principal amount converted | $ 500,000 | ||||||||
Debt instrument, description | Each tranche matures twelve (12) months from its’ effective date of each tranche, which was extended on April 5, 2017 to sixty (60) months from the effective date of each tranche, with maturity dates ranging from April 8, 2021 to February 20, 2022. | ||||||||
Debt conversion, description | The April Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.13 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the April Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the April Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the April Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months. | ||||||||
Amortization of debt discount recognized as interest expense | $ 351 | ||||||||
Unsecured Convertible Promissory Note Two [Member] | |||||||||
Convertible Promissory Notes (Textual) | |||||||||
Unsecured convertible note principal amount | $ 500,000 | ||||||||
Convertible promissory note interest, percentage | 10.00% | ||||||||
Tranche amount received | $ 90,000 | ||||||||
Additional tranche amount received | $ 395,000 | ||||||||
Principal amount converted | $ 485,000 | ||||||||
Debt instrument, description | Each tranche matures twelve (12) months from the effective date of each tranche, which was extended on October 13, 2016 to sixty (60) months from the effective date of each tranche, with maturity dates ranging from October 1, 2020 to March 9, 2021. | ||||||||
Debt conversion, description | The October Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.25 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the October Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the October Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the October Note has been determined by using the Binomial lattice formula with an expected life of sixty (60) months from the effective date of each tranche. | ||||||||
Unsecured Convertible Promissory Note Four [Member] | |||||||||
Convertible Promissory Notes (Textual) | |||||||||
Unsecured convertible note principal amount | $ 500,000 | ||||||||
Convertible promissory note interest, percentage | 10.00% | ||||||||
Tranche amount received | $ 25,000 | ||||||||
Additional tranche amount received | $ 475,000 | ||||||||
Principal amount converted | $ 500,000 | ||||||||
Debt instrument, description | Each tranche matures twelve (12) months from the effective date of each tranche, with an extension of sixty (60) months from each tranche. | ||||||||
Debt conversion, description | The March Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.13 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the March Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the March Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the March Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months. | ||||||||
Amortization of debt discount recognized as interest expense | $ 2,847 | ||||||||
Unsecured Convertible Promissory Note One [Member] | |||||||||
Convertible Promissory Notes (Textual) | |||||||||
Unsecured convertible note principal amount | $ 500,000 | ||||||||
Convertible promissory note interest, percentage | 10.00% | ||||||||
Tranche amount received | $ 50,000 | ||||||||
Additional tranche amount received | $ 450,000 | ||||||||
Principal amount converted | $ 500,000 | ||||||||
Debt instrument, description | Each tranche matured eighteen (18) months from the effective date of each tranche, which was extended on January 12, 2016 to sixty (60) months from the effective date of each tranche, with maturity dates ranging from January 29, 2020 to August 25, 2020. | ||||||||
Debt conversion, description | The January Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.15 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the January Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the January Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the January Note has been determined by using the Binomial lattice formula with an expected life of sixty (60) months from the effective date of each tranche. | ||||||||
Unsecured Convertible Promissory Note Five [Member] | |||||||||
Convertible Promissory Notes (Textual) | |||||||||
Unsecured convertible note principal amount | $ 500,000 | ||||||||
Convertible promissory note interest, percentage | 10.00% | ||||||||
Tranche amount received | $ 15,000 | ||||||||
Additional tranche amount received | $ 50,000 | ||||||||
Principal amount converted | $ 65,000 | ||||||||
Debt instrument, description | Each tranche matures twelve (12) months from the effective date of each tranche, with an extension of sixty (60) months from each tranche. | ||||||||
Debt conversion, description | The February Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of a) the lesser of $0.03 per share of common stock, b) fifty percent (50%) of the lowest trade price recorded since the original effective date of the February Note, or c) the lowest effective price per share granted to any person or entity after the effective date to acquire common stock. If the Company fails to deliver shares in accordance with the timeframe of three (3) business days of the receipt of a notice of conversion, the lender, at any time prior to selling all of those shares, may rescind any portion, in whole or in part of that particular conversion attributable to the unsold shares and have the rescinded conversion amount returned to the principal sum with the rescinded conversion shares returned to the Company. In no event shall the lender be entitled to convert any portion of the February Note such that would result in beneficial ownership by the lender and its affiliates of more than 4.99% of the outstanding shares of common stock of the Company. In addition, for each conversion, in the event that shares are not delivered by the fourth business day (inclusive of the day of conversion), a penalty of $1,500 per day shall be assessed for each day after the third business day (inclusive of the day of the conversion) until the shares are delivered. The fair value of the February Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months. | ||||||||
Amortization of debt discount recognized as interest expense | $ 818 |
Derivative Liabilities (Details
Derivative Liabilities (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Expected dividend yield | |
Minimum [Member] | |
Risk free interest rate | 2.09% |
Stock volatility factor | 83.00% |
Weighted average expected option life | 1 year |
Maximum [Member] | |
Risk free interest rate | 2.56% |
Stock volatility factor | 134.00% |
Weighted average expected option life | 5 years |
Derivative Liabilities (Detai30
Derivative Liabilities (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Derivative Liabilities (Textual) | ||
Fair value of the derivative liability | $ 5,453,635 | $ 5,239,073 |
Convertible debt [Member] | ||
Derivative Liabilities (Textual) | ||
Fair value of the conversion feature | 17,753 | |
Amount of debt conversion | 58,430 | |
Conversion of debt, amount | 360,283 | |
Accrued interest | $ 20,441 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Apr. 23, 2018 | Apr. 20, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Subsequent Event (Textual) | ||||
Tranches amount receivable | $ 163,000 | $ 95,000 | ||
Subsequent Event [Member] | ||||
Subsequent Event (Textual) | ||||
Tranches amount receivable | $ 55,000 | |||
Common stock issued | 1,748,219 | |||
Principal amount | $ 7,500 | |||
Accrued interest | $ 2,698 |