Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | ||
Sep. 30, 2018 | Nov. 05, 2018 | Nov. 02, 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 | Sep. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q3 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Common Stock, Shares Outstanding | 58,324,093 | 58,324,093 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 101,969 | $ 119,446 |
Prepaid expenses | 34,174 | 21,644 |
TOTAL CURRENT ASSETS | 136,143 | 141,090 |
PROPERTY AND EQUIPMENT | ||
Machinery and equipment | 37,225 | 31,455 |
Less accumulated depreciation | (26,046) | (23,733) |
NET PROPERTY AND EQUIPMENT | 11,179 | 7,722 |
OTHER ASSETS | ||
Patents, net of amortization of $8,312 and $6,045, respectively | 67,175 | 69,442 |
Deposit | 770 | 770 |
TOTAL OTHER ASSETS | 67,945 | 70,212 |
TOTAL ASSETS | 215,267 | 219,024 |
CURRENT LIABILITIES | ||
Accounts payable | 35,756 | 31,845 |
Accrued expenses | 563,146 | 414,702 |
Derivative liability | 25,056,739 | 5,239,073 |
Convertible promissory notes net of debt discount of $192,275 and $5,340, respectively | 203,725 | 396,660 |
TOTAL CURRENT LIABILITIES | 25,859,366 | 6,082,280 |
LONG TERM LIABILITIES | ||
Convertible promissory notes net of debt discount of $262 and $351, respectively | 2,205,958 | 1,791,279 |
TOTAL LONG TERM LIABILITIES | 2,205,958 | 1,791,279 |
TOTAL LIABILITIES | 28,065,324 | 7,873,559 |
SHAREHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value; 10,000,000 authorized preferred shares | ||
Common stock, $0.0001 par value; 500,000,000 authorized common shares 56,930,392 and 41,485,051 shares issued and outstanding, respectively | 5,693 | 4,149 |
Additional paid in capital | 11,476,662 | 11,127,693 |
Accumulated deficit | (39,332,412) | (18,786,377) |
TOTAL SHAREHOLDERS' DECIFIT | (27,850,057) | (7,654,535) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 215,267 | $ 219,024 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Patents, net of amortization | $ 8,312 | $ 6,045 |
Convertible promissory notes net of debt discount, current | 192,275 | 5,340 |
Convertible promissory notes net of debt discount, non current | $ 262 | $ 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 | 56,930,392 | 41,485,051 |
Common stock, shares outstanding | 56,930,392 | 41,485,051 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
REVENUE | ||||
OPERATING EXPENSES | ||||
General and administrative expenses | 107,200 | 439,082 | 310,808 | 1,442,254 |
Research and development | 90,886 | 85,506 | 184,327 | 117,065 |
Depreciation and amortization | 1,237 | 28,032 | 4,580 | 29,693 |
TOTAL OPERATING EXPENSES | 199,323 | 552,620 | 499,715 | 1,589,012 |
LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES) | (199,323) | (552,620) | (499,715) | (1,589,012) |
OTHER INCOME/(EXPENSES) | ||||
Interest income | 7 | 9 | 20 | 31 |
Loss on settlement of debt | (93,685) | (234,733) | (338,652) | |
Gain (Loss) on change in derivative liability | 9,894,072 | (391,415) | (19,570,822) | (926,505) |
Interest expense | (111,185) | (66,604) | (240,785) | (290,297) |
TOTAL OTHER INCOME (EXPENSES) | 9,782,894 | (551,695) | (20,046,320) | (1,555,423) |
NET INCOME (LOSS) | $ 9,583,571 | $ (1,104,315) | $ (20,546,035) | $ (3,144,435) |
BASIC AND DILUTED EARNING (LOSS) PER SHARE | $ 0.17 | $ (0.03) | $ (0.4) | $ (0.09) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED | 56,931,392 | 37,398,502 | 51,577,523 | 34,315,968 |
Condensed Statement of Sharehol
Condensed Statement of Shareholders' Deficit - 9 months ended Sep. 30, 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 | $ 1,544 | 348,969 | 350,513 | ||
Issuance of common shares for converted promissory notes and accrued interest, shares | 15,445,341 | ||||
Net Loss | (20,546,035) | (20,546,035) | |||
Ending balance at Sep. 30, 2018 | $ 5,693 | $ 11,476,662 | $ (39,332,412) | $ (27,850,057) | |
Ending balance, shares at Sep. 30, 2018 | 56,930,392 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (20,546,035) | $ (3,144,435) |
Adjustment to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization expense | 4,580 | 29,693 |
Stock based compensation | 1,141,684 | |
Loss on net change in derivative liability | 19,570,822 | 926,505 |
Loss on conversion of debt | 234,733 | 338,652 |
Amortization of debt discount recognized as interest expense | 59,996 | 141,450 |
(Increase) Decrease in Changes in Assets | ||
Prepaid expenses | (12,530) | (10,860) |
Increase (Decrease) in Changes in Liabilities | ||
Accounts payable | 3,911 | (3,799) |
Accrued expenses | 178,816 | 147,369 |
NET CASH USED IN OPERATING ACTIVITIES | (505,707) | (433,741) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | (5,770) | |
Patent expenditures | (699) | |
NET CASH USED IN INVESTING ACTIVITIES | (5,770) | (699) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible promissory notes | 494,000 | 357,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 494,000 | 357,000 |
NET DECREASE IN CASH | (17,477) | (77,440) |
CASH, BEGINNING OF PERIOD | 119,446 | 208,629 |
CASH, END OF PERIOD | 101,969 | 131,189 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | 1,974 | 1,382 |
Taxes paid | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH TRANSACTIONS | ||
Common stock issued for convertible notes and accrued interest | $ 350,513 | $ 419,373 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 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 unaudited 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 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 | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s unaudited financial statements. The unaudited 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 unaudited 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 September 30, 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 nine months ended September 30, 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 $2,602,220, because their impact was anti-dilutive. For the nine months ended September 30, 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 245,000, and the shares issuable from convertible debt of $1,852,700, 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 September 30, 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 September 30, 2018: Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 25,056,739 $ - $ - $ 25,056,739 Total Liabilities measured at fair value $ 25,056,739 $ - $ - $ 25,056,739 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 246,844 Loss on change in derivative liability 19,570,822 Balance as of September 30, 2018 $ 25,056,739 Reclassification of expenses During the three and nine month period ended September 30, 2017, certain reclassifications have been made to conform to the current period presentation. There is no material impact on any of the Company’s previously issued financial statements. 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. In June 2018, FASB issued accounting standards update ASU 2018-07, (Topic 505) – “Shared-Based Payment Arrangements with Nonemployees”, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees will be aligned with the requirements for share-based payments granted to employees. Under the ASU 2018-07, the measurement of equity-classified nonemployee share-based payments will be fixed on the grant date, as defined in ASC 718, and will use the term nonemployee vesting period, rather than requisite service period. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including 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 within fiscal years beginning after December 15, 2020. Early adoption is permitted if financial statements have not yet been issued. The Company is currently evaluating the impact of the adoption of ASU 2018-07 on the Company’s financial statements. In August 2018, the FASB issued to accounting standards update ASU 2018-13, (Topic 820) - “Fair Value Measurement”, which changes the unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance. The Company is currently evaluation the impact of the adoption of ASU 2018-13, 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 | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
CAPITAL STOCK | 3. CAPITAL STOCK During the nine months ended September 30, 2018, the Company issued 15,445,341 shares of common stock upon conversion of convertible promissory notes in the amount of $85,410, plus accrued interest of $30,370, with an aggregate fair value loss of $234,733 at prices ranging from $0.016 - $0.058. |
Stock Options
Stock Options | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 2018 and 2017, respectively. 9/30/2018 9/30/2017 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 15,435,000 $ 0.23 The weighted average remaining contractual life of options outstanding as of September 30, 2018 and 2017 was as follows: 9/30/2018 9/30/2017 Exercisable Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) Exercisable Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) $ 0.40 25,000 25,000 0.42 $ 0.09 2,450,000 2,450,000 3.48 $ 0.09 2,450,000 2,450,000 4.48 $ 0.26 13,500,000 13,500,000 3.93 $ 0.26 13,500,000 12,960,000 4.93 15,950,000 15,950,000 15,975,000 15,435,000 The stock-based compensation expense recognized in the statement of operations during the nine months ended September 30, 2018 and 2017, related to the granting of these options was $0 and $1,141,684, respectively. As of September 30, 2018, and 2017, respectively, there was no intrinsic value with regards to the outstanding options. |
Convertible Promissory Notes
Convertible Promissory Notes | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE PROMISSORY NOTES | 5. CONVERTIBLE PROMISSORY NOTES As of September 30, 2018, the outstanding convertible promissory notes net of debt discount are summarized as follows: Convertible Promissory Notes, net of debt discount $ 2,409,683 Less current portion 203,725 Total long-term liabilities $ 2,205,958 Maturities of long-term debt for the next five years are as follows: September 30, Amount 2020 631,220 2021 493,000 2022 694,738 2023 289,000 2024 98,000 $ 2,205,958 At September 30, 2018, the $2,602,220 in convertible promissory notes had a remaining debt discount of $192,537, leaving a net balance of $2,409,683. On May 2, 2014, the Company entered into a convertible promissory note with an investor, providing for the sale by the Company of 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 September 30, 2018, the remaining principal balance was $221,220. During the nine months ended September 30, 2018, the Company issued 15,445,341 shares of common stock for principal in the amount of $85,410, plus accrued interest of $30,370, leaving a principal balance of $221,220. 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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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 entered into a convertible promissory note with an investor, providing for the sale by the Company of 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 September 30, 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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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 entered into a convertible promissory note with an investor, providing for the sale by the Company of 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 September 30, 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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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. 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 entered into a convertible promissory note with an investor, providing for the sale by the Company of 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 September 30, 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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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 nine months ended September 30, 2018. On March 20, 2017, the Company entered into a convertible promissory note with an investor, providing for the sale by the Company of 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 September 30, 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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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 $5,447 during the nine months ended September 30, 2018. On February 26, 2018, the Company entered into a convertible promissory note with an investor, providing for the sale by the Company of a 10% unsecured convertible note (the “February 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 $15,000. On various dates during the period ended September 30, 2018, Company received additional tranches in the aggregate sum of $265,000. The principal balance as of September 30, 2018 was $280,000. 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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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 $38,514 during the nine months ended September 30, 2018. On July 23, 2018, the Company entered into a convertible promissory note with an investor, providing for the sale by the Company of a 10% unsecured convertible note (the “July Note”) in the aggregate principal amount of up to $63,000. The July Note matures on July 23, 2019. The July Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) trading prices during the fifteen (15) trading day prior to the conversion date. The conversion feature of the July Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Note. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $11,910 during the nine months ended September 30, 2018. On September 4, 2018, the Company entered into a convertible promissory note with an investor, providing for the sale by the Company of a 10% unsecured convertible note (the “September Note”) in the aggregate principal amount of up to $53,000. The September Note matures on September 4, 2019. The September Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) trading prices during the fifteen (15) trading day prior to the conversion date. The conversion feature of the July Note was considered a derivative in accordance with current accounting guidelines because of the reset conversion features of the Note. The Company recorded amortization of debt discount, which was recognized as interest expense in the amount of $3,775 during the nine months ended September 30, 2018. We evaluated the financing transactions in accordance with ASC Topic 815, Derivatives and Hedging, and determined that the conversion feature of the convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has 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 note 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 note in its 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 | 9 Months Ended |
Sep. 30, 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 convertible promissory note was not afforded the exemption for conventional convertible instruments due to its variable conversion rate. The note has 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 note 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 note in its 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 convertible 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 nine months ended September 30, 2018, as a result of the convertible notes (“Notes”) issued that were accounted for as derivative liabilities, we determined that the fair value of the conversion feature of the convertible notes at issuance was $246,843, 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 nine months ended September 30, 2018, the Company converted $85,410 in principal of convertible notes, plus accrued interest of $30,370. As a result of the conversion of these notes the Company recorded a fair value loss on the settlement of debt in the amount of $234,733 in the statement of operations for the nine months ended September 30, 2018. At September 30, 2018, the fair value of the derivative liability was $25,056,739. 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: 9/30/2018 Risk free interest rate 2.19% - 2.94% Stock volatility factor 131.0% - 249.0% Weighted average expected option life 1 years - 5 years Expected dividend yield None |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 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 October 12, 2018, the Company issued 1,393,701 shares of common stock upon conversion of principal in the amount of $5,300, plus accrued interest of $2,156. On October 12, 2018, the Company entered into a convertible promissory note with an investor, providing for the sale by the Company of a 10% unsecured convertible note (the “October 2018 Note”) in the principal amount of $53,000. The October 2018 Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of 61% of the average lowest two (2) trading prices for common stock during the fifteen (15) trading day period prior to the conversion date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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 unaudited 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 September 30, 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 nine months ended September 30, 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 $2,602,220, because their impact was anti-dilutive. For the nine months ended September 30, 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 245,000, and the shares issuable from convertible debt of $1,852,700, 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 September 30, 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 September 30, 2018: Total (Level 1) (Level 2) (Level 3) Derivative Liability $ 25,056,739 $ - $ - $ 25,056,739 Total Liabilities measured at fair value $ 25,056,739 $ - $ - $ 25,056,739 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 246,844 Loss on change in derivative liability 19,570,822 Balance as of September 30, 2018 $ 25,056,739 |
Reclassification of expenses | Reclassification of expenses During the three and nine month period ended September 30, 2017, certain reclassifications have been made to conform to the current period presentation. There is no material impact on any of the Company’s previously issued financial statements. |
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. In June 2018, FASB issued accounting standards update ASU 2018-07, (Topic 505) – “Shared-Based Payment Arrangements with Nonemployees”, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees will be aligned with the requirements for share-based payments granted to employees. Under the ASU 2018-07, the measurement of equity-classified nonemployee share-based payments will be fixed on the grant date, as defined in ASC 718, and will use the term nonemployee vesting period, rather than requisite service period. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including 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 within fiscal years beginning after December 15, 2020. Early adoption is permitted if financial statements have not yet been issued. The Company is currently evaluating the impact of the adoption of ASU 2018-07 on the Company’s financial statements. In August 2018, the FASB issued to accounting standards update ASU 2018-13, (Topic 820) - “Fair Value Measurement”, which changes the unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance. The Company is currently evaluation the impact of the adoption of ASU 2018-13, 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 Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 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 $ 25,056,739 $ - $ - $ 25,056,739 Total Liabilities measured at fair value $ 25,056,739 $ - $ - $ 25,056,739 |
Schedule of reconciliation of derivative liability | Balance as of December 31, 2017 $ 5,239,073 Fair value of derivative liabilities issued 246,844 Loss on change in derivative liability 19,570,822 Balance as of September 30, 2018 $ 25,056,739 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock options | 9/30/2018 9/30/2017 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 15,435,000 $ 0.23 |
Schedule of weighted average remaining contractual life of options outstanding | 9/30/2018 9/30/2017 Exercisable Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) Exercisable Stock Options Outstanding Stock Options Exercisable Weighted Average Remaining Contractual Life (years) $ 0.40 25,000 25,000 0.42 $ 0.09 2,450,000 2,450,000 3.48 $ 0.09 2,450,000 2,450,000 4.48 $ 0.26 13,500,000 13,500,000 3.93 $ 0.26 13,500,000 12,960,000 4.93 15,950,000 15,950,000 15,975,000 15,435,000 |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of outstanding convertible promissory notes | Convertible Promissory Notes, net of debt discount $ 2,409,683 Less current portion 203,725 Total long-term liabilities $ 2,205,958 |
Schedule of maturities of long-term debt | September 30, Amount 2020 631,220 2021 493,000 2022 694,738 2023 289,000 2024 98,000 $ 2,205,958 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative liabilities valuation assumptions | 9/30/2018 Risk free interest rate 2.19% - 2.94% Stock volatility factor 131.0% - 249.0% Weighted average expected option life 1 years - 5 years Expected dividend yield None |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | Sep. 30, 2018USD ($) |
Derivative Liability | |
Derivative Liability | $ 25,056,739 |
Total Liabilities measured at fair value | 25,056,739 |
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 | |
Fair Value, Inputs, Level 3 [Member] | |
Derivative Liability | |
Derivative Liability | 25,056,739 |
Total Liabilities measured at fair value | $ 25,056,739 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Schedule of reconciliation of derivative liability | |
Balance as of December 31, 2017 | $ 5,239,073 |
Balance as of September 30, 2018 | 25,056,739 |
Fair Value, Inputs, Level 3 [Member] | |
Schedule of reconciliation of derivative liability | |
Balance as of December 31, 2017 | 5,239,073 |
Fair value of derivative liabilities issued | 246,844 |
Loss on change in derivative liability | 19,570,822 |
Balance as of September 30, 2018 | $ 25,056,739 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Convertible Debt Securities [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Shares issuable from convertible debt | $ 2,602,220 | $ 1,852,700 |
Warrant [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Outstanding warrants | 245,000 | |
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] | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Capital Stock (Textual) | |
Common stock issued | shares | 15,445,341 |
Aggregate fair value loss | $ 234,733 |
Amount of debt conversion | 85,410 |
Accrued interest | $ 30,370 |
Maximum [Member] | |
Capital Stock (Textual) | |
Common stock conversion price per share | $ / shares | $ 0.058 |
Minimum [Member] | |
Capital Stock (Textual) | |
Common stock conversion price per share | $ / shares | $ 0.016 |
Stock Options (Details)
Stock Options (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 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 | 15,435,000 |
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 | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 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 | 15,435,000 |
Exercisable Price [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) | 5 months 1 day | |
Exercisable Price 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 | 2,450,000 |
Weighted Average Remaining Contractual Life (years) | 3 years 5 months 23 days | 4 years 5 months 23 days |
Exercisable Price 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 | 12,960,000 |
Weighted Average Remaining Contractual Life (years) | 3 years 11 months 4 days | 4 years 11 months 4 days |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Stock Options (Textual) | ||
Stock-based compensation expense | $ 1,141,684 | |
Stock Options [Member] | ||
Stock Options (Textual) | ||
Stock-based compensation expense | 0 | 1,141,684 |
Intrinsic value of options outstanding |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) | Sep. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes, net of debt discount | $ 2,409,683 |
Less current portion | 203,725 |
Total long-term liabilities | $ 2,205,958 |
Convertible Promissory Notes _2
Convertible Promissory Notes (Details 1) | Sep. 30, 2018USD ($) |
Year Ending June 30, | |
2,020 | $ 631,220 |
2,021 | 493,000 |
2,022 | 694,738 |
2,023 | 289,000 |
2,024 | 98,000 |
Total long-term debt | $ 2,205,958 |
Convertible Promissory Notes _3
Convertible Promissory Notes (Details Textual) - USD ($) | Sep. 04, 2018 | Mar. 20, 2017 | Apr. 05, 2016 | Oct. 01, 2015 | May 02, 2014 | Jul. 23, 2018 | Feb. 26, 2017 | Jan. 30, 2015 | Sep. 30, 2018 | Sep. 30, 2017 |
Convertible Promissory Notes (Textual) | ||||||||||
Tranche amount received | $ 494,000 | $ 357,000 | ||||||||
Amortization of debt discount recognized as interest expense | 59,996 | $ 141,450 | ||||||||
Convertible promissory notes | 2,602,220 | |||||||||
Debt discount | 192,537 | |||||||||
Net balance | 2,409,683 | |||||||||
May 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 | |||||||||
Aggregate principal amount | $ 500,000 | 221,220 | ||||||||
Principal amount converted | $ 221,220 | |||||||||
Shares issued upon conversion of debt | 15,445,341 | |||||||||
Value issued upon conversion of debt | $ 85,410 | |||||||||
Accrued interest | $ 30,370 | |||||||||
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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p>" id="sjs-J20"><p style="margin: 0pt">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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p> | |||||||||
January 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 | $ 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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p>" id="sjs-J29"><p style="margin: 0pt">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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p> | |||||||||
October Note [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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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. The fair value of the October Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months.</p>" id="sjs-J38"><p style="margin: 0pt">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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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. The fair value of the October Note has been determined by using the Binomial lattice formula with an expected life of twelve (12) months.</p> | |||||||||
April Note [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.</p>" id="sjs-J46"><p style="margin: 0">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.</p> | |||||||||
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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p>" id="sjs-J47"><p style="margin: 0pt">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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p> | |||||||||
Amortization of debt discount recognized as interest expense | $ 351 | |||||||||
March Note [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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p>" id="sjs-J57"><p style="margin: 0pt">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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p> | |||||||||
Amortization of debt discount recognized as interest expense | $ 5,447 | |||||||||
February Note [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 | 265,000 | |||||||||
Principal amount converted | $ 280,000 | |||||||||
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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p>" id="sjs-J67"><p style="margin: 0pt">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 Borrower fails to deliver shares in accordance with the timeframe of three (3) business days, 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 Borrower. 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.</p> | |||||||||
Amortization of debt discount recognized as interest expense | $ 38,514 | |||||||||
July Note [Member] | ||||||||||
Convertible Promissory Notes (Textual) | ||||||||||
Convertible promissory note interest, percentage | 10.00% | |||||||||
Principal amount converted | $ 63,000 | |||||||||
Debt conversion, description | The July Note matures on July 23, 2019. The July Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) trading prices during the fifteen (15) trading day prior to the conversion date. | |||||||||
Amortization of debt discount recognized as interest expense | 11,910 | |||||||||
September Note [Member] | ||||||||||
Convertible Promissory Notes (Textual) | ||||||||||
Convertible promissory note interest, percentage | 10.00% | |||||||||
Principal amount converted | $ 53,000 | |||||||||
Debt conversion, description | The September Note matures on September 4, 2019. The September Note may be converted into shares of the Company’s common stock at a conversion price of sixty-one (61%) percent of the lowest average two (2) trading prices during the fifteen (15) trading day prior to the conversion date. | |||||||||
Amortization of debt discount recognized as interest expense | $ 3,775 |
Derivative Liabilities (Details
Derivative Liabilities (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Expected dividend yield | |
Minimum [Member] | |
Risk free interest rate | 2.19% |
Stock volatility factor | 131.00% |
Weighted average expected option life | 1 year |
Maximum [Member] | |
Risk free interest rate | 2.94% |
Stock volatility factor | 249.00% |
Weighted average expected option life | 5 years |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivative Liabilities (Textual) | |||||
Fair value loss on the settlement of debt | $ (93,685) | $ (234,733) | $ (338,652) | ||
Fair value of the derivative liability | $ 25,056,739 | 25,056,739 | $ 5,239,073 | ||
Convertible notes [Member] | |||||
Derivative Liabilities (Textual) | |||||
Fair value of the conversion feature | 246,843 | ||||
Amount of debt conversion | 85,410 | ||||
Fair value loss on the settlement of debt | 234,733 | ||||
Accrued interest | $ 30,370 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event [Member] | Oct. 12, 2018USD ($)shares |
Subsequent Event (Textual) | |
Principal amount | $ 53,000 |
Unsecured convertible note, percentage | 10.00% |
Conversion of common stock, description | The October Note is convertible into shares of common stock of the Company at a price equal to a variable conversion price of 61% of the average lowest two (2) trading prices for common stock during the fifteen (15) trading day period prior to the conversion date. |
Common stock upon conversion issued, shares | shares | 1,393,701 |
Common stock upon conversion issued | $ 5,300 |
Accrued interest | $ 2,156 |