Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Dec. 12, 2019 | |
Details | ||
Registrant CIK | 0001388410 | |
Fiscal Year End | --12-31 | |
Registrant Name | PARALLAX HEALTH SCIENCES, INC. | |
SEC Form | 10-Q/A | |
Period End date | Jun. 30, 2019 | |
Tax Identification Number (TIN) | 46-4733512 | |
Number of common stock shares outstanding | 238,579,740 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Interactive Data Current | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | true | |
Ex Transition Period | false | |
Amendment Description | In response to SEC Comments on 10-K for 2018 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-52534 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1327 Ocean Avenue, Suite B | |
Entity Address, City or Town | Santa Monica | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90401 | |
Phone Fax Number Description | Registrant's telephone number | |
City Area Code | 310 | |
Local Phone Number | 899-4442 | |
Amendment Flag | true | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 15,598 | $ 262 |
Prepaid expenses | 8,900 | 0 |
Operating lease right of use asset | 102,313 | 0 |
Total current assets | 126,811 | 262 |
Property and equipment, net | 2,540 | 0 |
Intangible assets, net | 518,725 | 579,035 |
Deposits | 7,800 | 0 |
Goodwill | 785,060 | 785,060 |
TOTAL ASSETS | 1,440,936 | 1,364,357 |
Current liabilities | ||
Accounts payable and accrued expenses | 2,796,712 | 2,655,138 |
Operating lease liability | 102,313 | 0 |
Derivative liability, short-term | 57,313 | 23,925 |
Debentures, convertible | 27,275 | 724,903 |
Debentures, convertible, related party | 411,006 | 411,006 |
Notes payable | 220,000 | 0 |
Notes payable, convertible, net of unamortized discount | 716,462 | 296,000 |
Notes payable, convertible, related party | 20,000 | 0 |
Related party payables | 1,396,628 | 1,004,720 |
Total current liabilities | 5,747,709 | 5,115,692 |
Long-term liabilities | ||
License fees payable | 422,000 | 430,000 |
Royalties payable | 295,598 | 310,000 |
Derivative liability, long-term | 0 | 34,000 |
Debentures, convertible, net of unamortized discount | 0 | 184,870 |
Notes payable, convertible | 720,154 | 720,154 |
Notes payable, convertible, related party | 491,100 | 491,100 |
Notes payable, bank | 23,950 | 28,995 |
Total long-term liabilities | 1,952,802 | 2,199,119 |
Total liabilities | 7,700,511 | 7,314,811 |
Stockholders' deficit | ||
Preferred stock | 978 | 1,014 |
Common stock | 204,808 | 158,113 |
Additional paid in capital - preferred | 1,599,036 | 1,699,000 |
Additional paid in capital - common | 15,624,496 | 11,382,341 |
Subscriptions receivable | (500,000) | 0 |
Accumulated deficit | (23,188,893) | (19,190,922) |
Total stockholders' deficit | (6,259,575) | (5,950,454) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,440,936 | $ 1,364,357 |
CONSOLIDATED BALANCE SHEETS - P
CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued and Outstanding | 977,352 | 1,013,691 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares Issued and Outstanding | 204,807,879 | 158,113,141 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 900 | $ 4,869 | $ 51,890 | $ 9,759 |
Cost of sales | 3,861 | 4,739 | 8,972 | 10,277 |
Gross profit (loss) | (2,961) | 130 | 42,918 | (518) |
General and administrative expenses | 1,732,834 | 1,263,851 | 3,265,097 | 3,135,677 |
Operating loss | (1,735,795) | (1,263,721) | (3,222,179) | (3,136,195) |
Other expenses | ||||
Gain (loss) on fair value adjustments | 35,886 | (62,600) | 103,888 | (62,600) |
Loss on extinguishment of debt | (598,922) | 0 | (568,003) | 0 |
Loss on settlements | 0 | 0 | (33,272) | 0 |
Discount amortization | 37,000 | (1,335,000) | 29,000 | (2,620,000) |
Interest expense | (193,153) | (758,059) | (307,405) | (1,081,208) |
Total other expenses | (719,189) | (2,155,659) | (775,792) | (3,763,808) |
Net loss - continuing operations | (2,454,984) | (3,419,380) | (3,997,971) | (6,900,003) |
Net loss - discontinued operations | 0 | (671,660) | 0 | (918,171) |
Net loss | $ (2,454,984) | $ (4,091,040) | $ (3,997,971) | $ (7,818,174) |
Net loss per common share - diluted | ||||
Continuing operations | $ (0.009) | $ (0.016) | $ (0.016) | $ (0.033) |
Discontinued operations | 0 | (0.003) | 0 | (0.004) |
Net loss per common share - basic | ||||
Continuing operations | (0.013) | (0.023) | (0.023) | (0.048) |
Discontinued operations | $ 0 | $ (0.005) | $ 0 | $ (0.006) |
Weighted average common shares outstanding - basic | 187,592,006 | 146,211,165 | 175,845,013 | 144,700,905 |
Weighted average common shares outstanding - diluted | 187,592,006 | 146,211,165 | 175,845,013 | 144,700,905 |
STATEMENT OF STOCKHOLDERS' DEFI
STATEMENT OF STOCKHOLDERS' DEFICIT - USD ($) | Preferred Stock, Shares | Preferred Stock | Common Stock, Shares | Common Stock, Value | Preferred Stock, Paid In Capital | Common Stock, Paid In Capital | Deferred Compensation, Value | Subscriptions Receivable | Accumulated Deficit | Total |
Equity Balance at Dec. 31, 2017 | $ 864 | $ 136,754 | $ 665,803 | $ 9,637,859 | $ (3,188,092) | $ (592) | $ (33,691,386) | $ (26,438,789) | ||
Equity Balance, Shares at Dec. 31, 2017 | 863,691 | 136,754,530 | ||||||||
Issuance of common stock to officers | 6,000 | 984,000 | (5,000) | 985,000 | ||||||
Issuance of common stock to officers, Shares | 6,000,000 | |||||||||
Issuance of common stock for cash | 1,000 | 39,000 | 40,000 | |||||||
Issuance of common stock for cash, Shares | 1,000,000 | |||||||||
Issuance of common stock for debt service | 440 | 43,560 | (44,000) | 0 | ||||||
Issuance of common stock for debt service | 440,000 | |||||||||
Grant of stock options to consultants | 539,200 | (539,200) | 0 | |||||||
Grant of stock options to officers/directors | 134,500 | (134,500) | 0 | |||||||
Grant of stock awards for services | 250 | 67,250 | (67,500) | 0 | ||||||
Grant of stock awards for services | 250,000 | |||||||||
Grant of stock warrants | 40,263 | (38,870) | 1,393 | |||||||
Beneficial conversion feature of debt | 3,607 | 3,607 | ||||||||
Amortization of stock options | 193,484 | 193,484 | ||||||||
Amortization of stock awards | 150,148 | 150,148 | ||||||||
Amortization of stock warrant | 21,508 | 21,508 | ||||||||
Subscriptions received | 5,250 | 5,250 | ||||||||
Net income (loss) | (3,727,134) | (3,727,134) | ||||||||
Equity Balance, Shares at Mar. 31, 2018 | 863,691 | 144,444,530 | ||||||||
Equity Balance at Mar. 31, 2018 | 864 | 144,444 | 665,803 | 11,489,239 | (3,647,022) | (342) | (37,418,520) | (28,765,533) | ||
Issuance of common stock for cash | 1,000 | 199,000 | 200,000 | |||||||
Issuance of common stock for cash, Shares | 1,000,000 | |||||||||
Issuance of common stock for debt service | 890 | 88,110 | (89,000) | 0 | ||||||
Issuance of common stock for debt service | 890,000 | |||||||||
Grant of stock warrants | 62,730 | (62,730) | 0 | |||||||
Beneficial conversion feature of debt | 343,850 | 343,850 | ||||||||
Amortization of stock options | 38,000 | 38,000 | ||||||||
Amortization of stock awards | 193,622 | 193,622 | ||||||||
Amortization of stock warrant | 13,937 | 13,937 | ||||||||
Conversion of debt for common stock | 481 | 47,633 | 48,114 | |||||||
Conversion of debt for common stock | 481,130 | |||||||||
Exercise of stock options-employees | 846 | 268,479 | 269,325 | |||||||
Exercise of stock options-employees | 846,051 | |||||||||
Forfeiture of stock options | (184,373) | 184,373 | 0 | |||||||
Net income (loss) | (4,091,040) | (4,091,040) | ||||||||
Equity Balance, Shares at Jun. 30, 2018 | 863,691 | 147,661,711 | ||||||||
Equity Balance at Jun. 30, 2018 | 864 | 147,661 | 665,803 | 12,314,669 | (3,368,820) | (342) | (41,509,550) | (31,749,724) | ||
Issuance of preferred stock for related party debt | 90,000 | |||||||||
Issuance of preferred stock for related party debt | 90 | 449,910 | 450,000 | |||||||
Issuance of preferred stock for cash | 60,000 | |||||||||
Issuance of preferred stock for cash | 60 | 299,940 | 300,000 | |||||||
Issuance of common stock for debt service | 740 | 73,260 | (74,000) | 0 | ||||||
Issuance of common stock for debt service | 740,000 | |||||||||
Grant of stock options to officers/directors | 160,000 | (160,000) | 0 | |||||||
Amortization of stock options | 251,907 | 251,907 | ||||||||
Amortization of stock awards | 630,155 | 630,155 | ||||||||
Amortization of stock warrant | 14,108 | 14,108 | ||||||||
Subscriptions received | 250 | 250 | ||||||||
Conversion of debt for common stock | 2,605 | 245,395 | 248,000 | |||||||
Conversion of debt for common stock | 2,605,000 | |||||||||
Exercise of stock options-officers | 1,071 | 186,429 | 187,500 | |||||||
Exercise of stock options-officers | 1,071,430 | |||||||||
Change in derivative liability to equity | 750,200 | 750,200 | ||||||||
Deemed dividend on Series C preferred stock | 283,347 | (283,347) | 0 | |||||||
Net income (loss) | 25,074,058 | 25,074,058 | ||||||||
Equity Balance, Shares at Sep. 30, 2018 | 1,013,691 | 152,078,141 | ||||||||
Equity Balance at Sep. 30, 2018 | 1,014 | 152,077 | 1,699,000 | 13,729,953 | (2,706,650) | (92) | (16,718,849) | (3,843,546) | ||
Issuance of common stock for debt service | 740 | 73,260 | (74,000) | 0 | ||||||
Issuance of common stock for debt service | 740,000 | |||||||||
Grant of stock awards for services | 1,500 | 210,110 | (85,500) | 126,110 | ||||||
Grant of stock awards for services | 1,500,000 | |||||||||
Grant of stock warrants | 11,610 | (11,610) | ||||||||
Beneficial conversion feature of debt | (375,100) | (375,100) | ||||||||
Amortization of stock options | 89,478 | 89,478 | ||||||||
Amortization of stock awards | 121,268 | 121,268 | ||||||||
Amortization of stock warrant | 23,817 | 23,817 | ||||||||
Subscriptions received | 92 | 92 | ||||||||
Conversion of debt for common stock | 3,796 | 375,705 | 379,501 | |||||||
Conversion of debt for common stock | 3,795,000 | |||||||||
Net income (loss) | (2,472,073) | (2,472,073) | ||||||||
Equity Balance, Shares at Dec. 31, 2018 | 1,013,691 | 158,113,141 | ||||||||
Equity Balance at Dec. 31, 2018 | 1,014 | 158,113 | 1,699,000 | 14,025,538 | (2,643,197) | 0 | (19,190,922) | (5,950,454) | ||
Issuance of common stock for cash | 5,000 | 495,000 | 500,000 | |||||||
Issuance of common stock for cash, Shares | 5,000,000 | |||||||||
Issuance of common stock for debt service | 740 | 73,260 | (74,000) | 0 | ||||||
Issuance of common stock for debt service | 740,000 | |||||||||
Grant of stock options to officers/directors | 96,100 | (96,100) | 0 | |||||||
Grant of stock awards for services | 2,717 | 322,283 | 325,000 | |||||||
Grant of stock awards for services | 2,716,667 | |||||||||
Grant of stock warrants | 72,750 | 72,750 | ||||||||
Amortization of stock options | 29,442 | 29,442 | ||||||||
Amortization of stock awards | 124,357 | 124,357 | ||||||||
Amortization of stock warrant | 3,225 | 3.225 | ||||||||
Conversion of debt for common stock | 3,689 | 483,642 | 487,331 | |||||||
Conversion of debt for common stock | 3,689,328 | |||||||||
Cancellation of preferred stock to treasury | (36) | (99,964) | (100,000) | |||||||
Cancellation of preferred stock to treasury | (36,339) | |||||||||
Net income (loss) | (1,542,987) | (1,542,987) | ||||||||
Equity Balance, Shares at Mar. 31, 2019 | 977,352 | 170,259,136 | ||||||||
Equity Balance at Mar. 31, 2019 | 978 | 170,259 | 1,599,036 | 15,568,573 | (2,656,273) | 0 | (20,733,909) | (6,051,335) | ||
Equity Balance at Dec. 31, 2018 | 1,014 | 158,113 | 1,699,000 | 14,025,538 | (2,643,197) | 0 | (19,190,922) | (5,950,454) | ||
Equity Balance, Shares at Dec. 31, 2018 | 1,013,691 | 158,113,141 | ||||||||
Equity Balance, Shares at Jun. 30, 2019 | 977,352 | 204,807,879 | ||||||||
Equity Balance at Jun. 30, 2019 | 978 | 204,808 | 1,599,036 | 19,080,266 | (3,455,770) | (500,000) | (23,188,893) | (6,259,575) | ||
Equity Balance at Mar. 31, 2019 | 978 | 170,259 | 1,599,036 | 15,568,573 | (2,656,273) | 0 | (20,733,909) | (6,051,335) | ||
Equity Balance, Shares at Mar. 31, 2019 | 977,352 | 170,259,136 | ||||||||
Issuance of common stock for cash | 14,350 | 1,220,650 | (500,000) | 735,000 | ||||||
Issuance of common stock for cash, Shares | 14,350,000 | |||||||||
Grant of stock options to officers/directors | 195,600 | (195,600) | 0 | |||||||
Grant of stock awards for services | 3,600 | 324,110 | (33,050) | 294,660 | ||||||
Grant of stock awards for services | 3,600,000 | |||||||||
Grant of stock warrants | 7,760 | 7,760 | ||||||||
Amortization of stock options | 134,480 | 134,480 | ||||||||
Amortization of stock awards | 47,198 | 47,198 | ||||||||
Amortization of stock warrant | 3,225 | 3,225 | ||||||||
Conversion of debt for common stock | 9,241 | 597,408 | 606,649 | |||||||
Conversion of debt for common stock | 9,240,597 | |||||||||
Cancellation of preferred stock to treasury | (21) | (58,211) | (58,232) | |||||||
Cancellation of preferred stock to treasury | (21,161) | |||||||||
Dividends paid in kind on preferred stock to treasury | 21 | 58,211 | 58,232 | |||||||
Dividends paid in kind on preferred stock to treasury | 21,161 | |||||||||
Sale of preferred treasury stock | 57 | 68,943 | 69,000 | |||||||
Sale of preferred treasury stock | 57,500 | |||||||||
Conversion of preferred stock to common stock | (57) | 1,150 | (68,943) | 67,850 | 0 | |||||
Conversion of preferred stock to common stock | (57,500) | 1,150,000 | ||||||||
Issuance of common stock for services | 1,550 | 134,450 | 136,000 | |||||||
Issuance of common stock for services | 1,550,000 | |||||||||
Cancellation of common stock for debt service | (510) | (50,490) | 51,000 | 0 | ||||||
Cancellation of common stock for debt service | (510,000) | |||||||||
Issuance of common stock for warrants | 2,168 | 207,605 | 209,773 | |||||||
Issuance of common stock for warrants | 2,168,146 | |||||||||
Grant of stock awards for services-officer | 3,000 | 198,300 | (198,300) | 3,000 | ||||||
Grant of stock awards for services-officer | 3,000,000 | |||||||||
Grant of stock options for services | 608,450 | (608,450) | 0 | |||||||
Net income (loss) | (2,454,984) | (2,454,984) | ||||||||
Equity Balance, Shares at Jun. 30, 2019 | 977,352 | 204,807,879 | ||||||||
Equity Balance at Jun. 30, 2019 | $ 978 | $ 204,808 | $ 1,599,036 | $ 19,080,266 | $ (3,455,770) | $ (500,000) | $ (23,188,893) | $ (6,259,575) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (3,997,971) | $ (6,900,003) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | (60,398) | (60,644) |
Stock compensation/stock option amortization | (1,421,237) | (2,069,274) |
Discount amortization | 29,000 | (2,620,000) |
Allowance for bad debt | 0 | (236) |
Loss on extinguishment of debt | 568,003 | 0 |
(Gain) loss on fair value adjustments | (103,888) | 62,600 |
Loss on settlement | (33,272) | 0 |
Debt accretion | 72,867 | 362,283 |
Changes in operating assets and liabilities: | ||
Decrease in trade and other receivables | 0 | (2,859) |
(Increase) in prepaid expenses | 8,900 | 5,780 |
(Increase) in deposits | 7,800 | 0 |
Increase in accounts payable and accrued expenses | (30,123) | (757,050) |
Increase in royalties payable | (6,598) | 0 |
Increase in related party payables | (411,908) | (376,892) |
Net Cash Used by Operating Activities | (1,543,153) | (593,945) |
Cash flows from investing activities: | ||
Purchase of professional equipment | (2,628) | 0 |
Net cash used by investing activities | (2,628) | 0 |
Cash flows from financing activities: | ||
Proceeds from notes payable | 220,000 | 0 |
Repayment of notes payable | (5,045) | (5,451) |
Proceeds from convertible notes payable | (556,780) | (782,000) |
Repayment of convertible notes payable | (65,000) | (50,000) |
Repayment of debentures | (685,750) | 0 |
Proceeds from issuance of preferred treasury shares | 69,000 | 0 |
Proceeds from issuance of common shares | (1,471,132) | (41,000) |
Net cash provided by financing activities | 1,561,117 | 767,549 |
Net cash provided by continuing operations | 15,336 | 173,604 |
Cash flows from discontinued operations: | ||
Net cash used by operating activities | 0 | (134,510) |
Net cash used by discontinued operations | 0 | (134,510) |
Net increase (decrease) in cash | 15,336 | 39,094 |
Cash - beginning of period | 262 | 183 |
Cash - end of period | 15,598 | 39,277 |
NON-CASH ACTIVITIES | ||
Dividends paid in kind on preferred stock returned to treasury | 58,232 | 0 |
Preferred stock returned to treasury for debt settlement | 100,000 | 0 |
Conversion of accounts payable to convertible note payable | 20,000 | 37,500 |
Conversion of accounts payable to related party convertible note payable | 20,000 | 0 |
Conversion of convertible notes payable to common stock | 512,142 | 48,114 |
Conversion of related party convertible note payable to non-related party convertible note payable | 0 | 576,154 |
Conversion of related party payables to non-related party payables | 0 | 42,356 |
Subscriptions receivable | (500,000) | (342) |
Interest paid | ||
Continuing operations | 44,375 | 798 |
Discontinued operations | 0 | 106 |
Income taxes paid | 0 | 0 |
Discounts on long-term liabilities | (29,000) | 2,620,000 |
Beneficial conversion feature of convertible promissory notes | 0 | 347,457 |
Fair value of stock warrants | 185,810 | 697,500 |
Embedded conversion option of convertible promissory notes | $ 9,370 | $ 850 |
OVERVIEW AND NATURE OF BUSINESS
OVERVIEW AND NATURE OF BUSINESS | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
OVERVIEW AND NATURE OF BUSINESS | NOTE 1. OVERVIEW AND NATURE OF BUSINESS These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2018. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements have been omitted. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The unaudited interim consolidated financial statements reflect all adjustments consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. The unaudited interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern. NOTE: The following notes and any further reference made to “the Company”, "we", "us", "our" and "Parallax" shall mean Parallax Health Sciences, Inc., and its wholly-owned subsidiaries, Parallax Diagnostics, Inc., Parallax Health Management, Inc., and Parallax Behavioral Health, Inc. unless otherwise indicated. Business Overview The Company’s principal focus is on personalized patient care through remote healthcare services, behavioral health systems, and Point-of-Care (“POC”) diagnostic testing. Parallax’s current family of companies that serve as the foundation for its cross-over business model of operations include: Parallax Diagnostics, Inc. Parallax Health Management, Inc. ® Parallax Behavioral Health, Inc. Parallax Care Optimized Outcomes REBOOT Behavioral modification Connected Health Fotodigm ® Remote patient monitoring, telehealth, and POC diagnostic testing Smart Data Intrinsic Code Actionable insights to behavior modification Operating Segments The Company’s operations include the following operating segments for financial statement presentation: Remote Patient Monitoring (RPM), Behavioral Health Services (BHS), and Diagnostics/Corporate. Remote Patient Monitoring The Company provides a distinctive technology platform that provides for the complete remote patient care delivery system: the patent-pending Fotodigm ® ® The RPM segment generates revenues through fees charged for the license and utilization of its proprietary system that provides software integrations of the Fotodigm ® Behavioral Health Services The BHS segment commenced with the acquisition of the REBOOT Diagnostics/Corporate The Diagnostics/Corporate Segment supports the costs and operating expenses related to the continued development and exploitation of the Company’s proprietary Target System POS diagnostic platform and processes. In addition, the Diagnostics/Corporate Segment provides management and administrative services to support the Company and consists of certain aspects of the Company’s executive management, corporate relations, legal, compliance, human resources, corporate information technology and finance departments. Going Concern The Company has incurred losses since inception resulting in an accumulated deficit of $23,188,893, and a working capital deficit of $5,620,898, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms. There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company will require additional financing in order to proceed with its plan of operations, including approximately $1,000,000 over the next 12 months to pay for its ongoing expenses. These cash requirements include working capital, general and administrative expenses, the development of the Company’s product line, and the pursuit of acquisitions. These cash requirements are in excess of the Company’s current cash and working capital resources. Accordingly, the Company will require additional financing in order to continue operations and to repay its liabilities. There is no assurance that the financing will be completed as planned or at all. If the Company is unable to secure adequate capital to continue the Company’s planned operations, the Company’s shareholders may lose some or all of their investment and the Company’s business may fail. |
RESTATEMENT
RESTATEMENT | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
RESTATEMENT | NOTE 2. RESTATEMENT On October 18, 2019, the Company concluded that the previously issued audited consolidated financial statements as of and for the years ended December 31, 2018 and 2017, should no longer be relied upon. The Company reached its conclusion after consultation with its Audit Committee and a joint discussion with the Company’s independent registered public accounting firm. The Company has restated its audited consolidated financial statements as of and for the years ended December 31, 2018 and 2017, and interim periods, to reflect adjustments made in connection with the accounting treatment of certain convertible debt (the “Subject Debt”), warrants (the “Subject Warrants”), and convertible preferred stock (the “Subject Preferred Stock”). The adjustments resulted in material overstatements and understatements, the nature and impact of which are further described below. Valuation of Convertible Debt and Warrant Liabilities: The Company reviewed the accounting treatment of the Subject Debt, Subject Warrants, and Subject Preferred Stock, and concluded that it was not in accordance with U.S. generally accepted accounting principles. Specifically, the Subject Debt, Subject Warrants and Subject Preferred Stock were not evaluated to determine the impact (if any) of 1) embedded conversion option; 2) beneficial conversion feature; 3) bifurcation; 4) derivative liability; and 5) fair value adjustments and other expenses thereto. A third-party valuation was performed on the Subject Debt, Subject Warrants and Subject Preferred Stock, and the accounting treatment was determined. The effects of the accounting treatment, all non-cash in nature, resulted in a restatement of convertible debentures and convertible notes payable, additional paid in capital, and accumulated deficit, and the establishment of a derivative liability, resulting in changes to total liabilities and total stockholders’ deficit on the consolidated balance sheets; and a restatement of general and administrative expenses, gain on extinguishment of debt, discount amortization, and interest expense, and the establishment of a loss on fair value adjustments, resulting in changes to net income (loss), net loss per share-basic, and net loss per share-diluted on the consolidated statements of operations; and the restatement of stock compensation/stock option expense, discount amortization, gain on extinguishment of debt, loss on fair value adjustments, debt accretion, and the increase in accounts payable and accrued expenses from operating activities on the consolidated statements of cash flows. The following tables summarize the impacts on the Company’s consolidated financial statements as of and for the six months ended June 30, 2018, and the consolidated statements of operations for the three months ended March 31, 2019 and 2018, respectively: June 30, 2018 As Previously Reported As Restated Increase (Decrease) CONSOLIDATED BALANCE SHEETS Derivative liability, short-term $ –– $ 656,500 $ 656,500 Debentures, convertible –– –– –– Debentures, convertible, related party –– –– –– Notes payable, convertible, net of discount 688,705 108,237 (580,468 ) Total current liabilities 5,459,948 5,535,980 76,032 Derivative liability, long-term –– –– –– Debentures, convertible, net of unamortized discount –– –– –– Total liabilities 33,152,999 33,229,031 76,032 Additional paid in capital - preferred 665,803 665,803 –– Additional paid in capital - common 8,561,553 8,945,849 384,296 Accumulated deficit (41,049,230 ) (41,509,558 ) (460,328 ) Total stockholders' deficit (31,673,691 ) (31,749,723 ) 76,032 CONSOLIDATED STATEMENTS OF OPERATIONS General and administrative expenses 3,100.232 3,135,677 35,445 Operating loss (3,100,750 ) (3,136,195 ) 35,445 Gain on extinguishment of debt Loss on fair value adjustments (62,600 ) 62,600 Discount amortization Interest expense, net of income (718,925 ) (1,081,208 ) 362,283 Total other income (expenses) (3,338,925 ) (3,763,808 ) 424,883 Net income (loss) - continuing operations (6,439,675 ) (6,900,003 ) 460,328 Net income (loss) (7,357,846 ) (7,818,174 ) 460,328 Net income (loss) per common share - continuing operations - basic (0.045 ) (0.048 ) 0.003 Net income (loss) per common share - continuing operations - diluted (0.031 ) (0.033 ) 0.002 CONSOLIDATED STATEMENTS OF CASH FLOWS Net income (loss) (6,439,675 ) (6,900,003 ) 460,328 Stock compensation/stock option expense 2,033,829 2,069,274 35,445 Discount amortization 2,620,000 2,620,000 –– Gain on extinguishment of debt –– –– –– Loss on fair value adjustments –– 62,600 62,600 Debt accretion –– 362,283 362,283 Increase in accounts payable and accrued expenses 757,050 757,050 –– Non-Cash Activities: Discounts on long-term liabilities 2,620,000 2,620,000 –– Beneficial conversion feature of convertible promissory notes –– 347,457 347,457 Fair value of stock warrants –– 697,500 697,500 Embedded conversion option of convertible promissory notes –– 850 850 Supplemental Information: Interest paid-continuing operations 42,653 42,653 –– March 31, 2019 March 31, 2018 …. As Previously Reported As Restated Increase (Decrease) As Previously Reported As Restated Increase (Decrease) …. CONSOLIDATED STATEMENTS OF OPERATIONS General and administrative expenses $ 1,456,288 $ 1,532,263 $ 75,975 $ 1,871,826 $ 1,871,826 $ –– Operating loss (1,410,409 ) (1,486,384 ) 75,975 (1,872,474 ) (1,872,474 ) –– Gain on extinguishment of debt –– 30,919 30,919 –– –– –– Loss on fair value adjustments –– 68,002 68,002 –– –– –– Discount amortization (130,420 ) (8,000 ) (122,420 ) (1,285,000 ) (1,285,000 ) –– Interest expense, net of income (100,014 ) (114,252 ) 14,238 (323,149 ) (323,149 ) –– Total other income (expenses) (263,706 ) (56,603 ) (108,182 ) (1,608,149 ) (1,608,149 ) –– Net income (loss) - continuing operations (1,674,115 ) (1,542,987 ) (32,207 ) (3,480,623 ) (3,480,623 ) –– Net income (loss) (1,674,115 ) (1,542,987 ) (32,207 ) (3,727,134 ) (3,727,134 ) –– Net income (loss) per common share - continuing operations - basic (0.010 ) (0.009 ) (0.001 ) (0.024 ) (0.024 ) –– Net income (loss) per common share - continuing operations - diluted (0.007 ) (0.007 ) –– (0.017 ) (0.017 ) –– |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. 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. The Company’s fiscal year-end is December 31. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. When the Company loses control of a subsidiary, a gain or loss is recognized and is calculated as the difference between: the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and the carrying amount of the net assets (liabilities) of the subsidiary and any noncontrolling interest. Upon deconsolidation of a subsidiary, any loans to the former subsidiary made by the Company are measured at fair value at the deconsolidation date. Any difference between the carrying amount of the loan to the subsidiary and its fair value is included as part of the gain or loss calculation upon deconsolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Fair Value Hierarchy The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following: Level 1: Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2: Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. Level 3: Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of nine months or less at the time of issuance to be cash equivalents. As of June 30, 2019, and December 31, 2018, the Company had no cash equivalents. Fair Value of Financial Instruments As of June 30, 2019, and December 31, 2018, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation. See Note 6 for additional information about long-term debt. • Derivatives of financial instruments: Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period, with changes in fair value recognized in profit or loss. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities. • Embedded derivatives: Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value with changes in fair value recognized in profit or loss. An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the hybrid instrument to which the embedded derivative relates is more than 12 months and it is not expected to be realized or settled within 12 months. Other embedded derivatives are presented as current assets or current liabilities. . The following table represents the Company’s derivative financial instruments: June 30, 2019 December 31, 2018 Convertible debentures $ –– $ 23,925 Convertible promissory notes 2,140 –– Warrants 55,173 34,000 Total derivative liability $ 57,313 $ 57,925 The following table represents the changes in the Company’s derivative financial instruments: June 30, 2019 December 31, 2018 Fair value of derivative liability, beginning $ 57,925 $ –– Increase in derivative liability-convertible promissory notes 9,370 60,350 Increase in derivative liability-warrants 105,000 623,900 Fair value adjustment-debentures (8,296 ) (2,500 ) Fair value adjustment-convertible promissory notes (9,370 ) –– Fair value adjustment-warrants (86,222 ) 126,375 Reclassification of warrant carrying value due to reset of exercise price –– (750,200 ) Reclassification to gain (loss) upon extinguished debt (11,094 ) –– Fair value of derivative liability, ending $ 57,313 $ 57,925 Accounts Receivable Accounts receivable are stated net of an allowance for doubtful accounts. The accounts receivable balance primarily includes amounts due from customers. Charges to bad debt are based on both historical write-offs and specifically identified receivables. Property and Equipment Property and equipment is comprised of office and computer equipment and software, furniture and fixtures, and leasehold improvements, recorded at cost and depreciated using the double declining balance method over the estimated useful lives of 5 to 7 years. Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. See Note 3 for additional information about property and equipment. Intangible Assets Product processes, patents and customer lists are amortized on a straight-line basis over their estimated useful lives between 4 and 20 years. Application development stage costs for significant internally developed software projects are capitalized and amortized on a straight-line basis over the useful life, between 2 and 5 years. Costs to extend and maintain patents and trademarks are charged directly to expense as incurred. See Note 5 for additional information about intangible assets. Goodwill and Other Indefinitely-Lived Assets Goodwill and other indefinitely-lived assets are not amortized, but are subject to impairment reviews annually, or more frequently if necessary. Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company believes that future projected cash flows are sufficient for the recoverability of its long-lived assets, and no impairment exists. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and products under development will continue. Either of these could result in future impairment losses. Convertible Debt The Company recognizes the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert debt into common stock at a price per share that is less than the trading price to the public on the date of the debt. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debt, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the interest method. Net Loss Per Share The computation of basic earnings per share ("EPS") is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common stock equivalents. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible debt, convertible preferred shares and the exercise of the Company’s stock options and warrants. Comprehensive Loss As of June 30, 2019, and December 31, 2018, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. Revenue Recognition The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Revenue is measured based on a consideration specified in a contract with a customer, and excludes any amounts collected on behalf of third parties. Income Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. The Company may have net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that the Company will not realize a future tax benefit, a valuation allowance is established. As of June 30, 2019, the Company has not yet filed its 2012 through 2018 annual corporate income tax returns. Due to the Company’s recurring losses, it is anticipated that no corporate income taxes are due for these periods. Stock-Based Compensation The Company records stock-based compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. Recently Adopted Accounting Standards The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company. The Company has recently adopted the following new accounting standards: Adopted In July 2017, the FASB issued ASU No. 2017-11 (“ASU 2017-11”), Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). ASU 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. ASU 2017-11 also addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification ® In June 2018, the FASB issued ASU No. 2018-07 (“ASU 2018-07”), Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11 (“ASU 2018-11”), Leases (Topic 842), Targeted Improvements. ASU 2018-11 addresses certain issues in implementing ASU 2016-02, Leases, which was issued to increase transparency ad comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing transaction. ASU 2018-11 clarifies 1) comparative reporting requirements for initial adoption; and 2) for lessors only, separating lease and non-lease components in a contract and allocating the consideration in the contract to the separate components. The amendments in this Update related to separating components of a contract affect the amendments in Update 2016-02, which is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted. Not yet adopted In August 2018, the FASB issued ASU No. 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. ASU 2018-13 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15 (“ASU 2018-15”), Intangibles-Goodwill and Other Internal-Use Software (Subtopic 350-40). ASU 2018-15 was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures. Recently Issued Accounting Standards Updates: There were other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
PROPERTY AND EQUIPMENT | NOTE 4. PROPERTY AND EQUIPMENT Property and equipment, net, consists of the following: June 30, 2019 December 31, 2018 Computer equipment $ 6,615 $ 3,987 Medical devices 45,194 45,194 Property and equipment, gross 51,809 49,181 Accumulated depreciation (49,269 ) (49,181 ) Property and equipment, net $ 2,540 $ –– Depreciation expense was $88 and $0 for the three months ended June 30, 2019 and 2018, respectively, and was $88 and $0 for the six months then ended, respectively. |
OPERATING LEASES
OPERATING LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
OPERATING LEASES | NOTE 5. OPERATING LEASES The Company entered into a sub-lease agreement with PearTrack Security Systems, Inc. (“PearTrack”), whose principal is a related party, on December 1, 2017, for its headquarters in Santa Monica, California, with a monthly sub-lease payment of $5,600, on a month-to-month basis, consistent with the underlying lease between PearTrack and property owner. Due to the short-term nature of the sub-lease, the Company has elected to not recognize the operating lease asset and liability, and will expense the rent as incurred. The Company entered into a sub-lease agreement with AI Assist, Inc. (“AI Assist”) on May 1, 2019, for certain office space located in New York, New York, with a monthly sub-lease payment of $8,900 for a term of fourteen (14) months, maturing June 30, 2020. The right-of-use present value of the sub-lease has been calculated as $118,585, utilizing an implied interest rate of 8%. The operating lease asset and liability will be amortized over the term of the lease. During the three months and the six months ended June 30, 2019, respectively, the Company recognized $16,292 and $16,292 in amortization. The present value of future lease payments at June 30, 2019, was $102,313. As of June 30, 2019, the future minimum lease payments are as follows: 2019 2020 Total Operating lease minimum payments $ 53,400 $ 53,400 $ 106,800 Less: amount treated as interest 3,263 1,224 4,487 Present value of minimum lease payments $ 50,137 $ 52,176 $ 102,313 The total lease costs are summarized as follows: June 30, 2019 December 31, 2018 Operating lease costs $ 17,800 $ –– Short-term lease costs 34,160 73,351 Total lease costs $ 51,960 $ 73,351 Lease costs were $34,600 and $17,360 for the three months ended June 30, 2019 and 2018, respectively, and were $51,960 and $36,757 for the six months then ended, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
INTANGIBLE ASSETS | NOTE 6. INTANGIBLE ASSETS The following are the components of finite-lived intangible assets: June 30, 2019 December 31, 2018 Products and processes $ 12,500 $ 12,500 Trademarks and patents / technology 150,700 150,700 Customer lists / relationships 30,000 30,000 Non-compete agreement 30,000 30,000 Marketing related 64,000 64,000 Software 510,300 510,300 Intangible assets, gross 797,500 797,500 Accumulated amortization (278,775 ) (218,465 ) Intangible assets, net $ 518,725 $ 579,035 Amortization expense for the three months ended June 30, 2019 and 2018, was $30,155 and $30,322, respectively, and for the six months ended June 30, 2019 and 2018, was $60,310 and $60,644, respectively. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of: June 30, 2019 December 31, 2018 Accounts payable-vendors $ 1,010,819 $ 830,590 Credit cards payable 42,552 42,552 Payroll taxes payable 80,134 78,608 Accrued interest 639,004 450,187 Accrued payroll and payroll taxes 513,055 402,053 Other liabilities 426,148 601,148 2,711,712 2,405,138 Reserve-legal fees 85,000 250,000 Total accounts payable and accrued expenses $ 2,796,712 $ 2,655,138 Payroll taxes payable includes $17,475 and $17,475 in penalties, and $5,729 and $4,202 in interest, related to unpaid payroll taxes as of June 30, 2019, and December 31, 2018, respectively. Other liabilities consists of certain payroll tax liabilities in the amount of $426,148 and $601,148 owed as of June 30, 2019, and December 31, 2018, respectively, by the bankrupt entity, RoxSan Pharmacy, Inc., that were not discharged under California bankruptcy laws. The Company has retained a tax resolution specialist to aid the Company in resolving the liability with the taxing agencies on behalf of RoxSan. During the year ended December 31, 2018, accounts payable and accrued expenses was reduced by $341,606, resulting from the extinguishment of debt consisting of accounts payable-vendors in the amount of $284,714 and accrued interest in the amount of $56,892. In 2018, the Company established a reserve for future legal fees to be incurred in connection with pending legal actions. As of June 30, 2019, and December 31, 2018, respectively, the reserve balance was $85,000 and $250,000. |
NOTES AND LOANS PAYABLE
NOTES AND LOANS PAYABLE | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
NOTES AND LOANS PAYABLE | NOTE 8. NOTES AND LOANS PAYABLE Notes and loans payable consists of the following: June 30, 2019 December 31, 2018 Short-term Debentures, convertible $ 27,275 $ 724,903 Notes payable 220,000 –– Notes payable, convertible , net of unamortized discount 716,462 296,000 Total short-term 963,737 1,020,903 Long-term Debentures, convertible, net of unamortized discount –– 184,870 Note payable, convertible 720,154 720,154 Note payable-bank 23,950 28,995 Total long-term 744,104 934,019 Total notes and loans payable $ 1,707,841 $ 1,954,922 Non-related party convertible debt consist of the following: Holder Principal APR Accrued Interest Conversion Price Term/Due Convertible debentures: Short-term $ 27,275 10% $ –– $0.12 07/ 30/ Convertible promissory notes: Short-term Lender Group A 120,000 12-20% 244,987 $0.10 05/ 30/ Lender Group B 505,462 12% 18,524 $0.10 to $.12 09/ 30/ 30/ Investor Group A 91,000 10% 16,426 $0.10 09/ 30/ 716,462 279,937 Long-term The Kasper Group, Ltd. 144,000 7% 75,586 $0.10 10/ 30/ Joseph M. Redmond 576,154 5% 133,835 $0.10 07/ 30/ $ 720,154 $ 209,421 Total convertible debt $ 1,463,889 $ 489,348 During the six months ended June 30, 2019, the Company issued 12% convertible promissory notes in the aggregate principal sum of $585,000 (“Lender Group B”) for working capital, of which $556,780 in proceeds was disbursed to the Company after an original issue discount of $28,220. The notes bear interest at a rate of 12% per annum, mature six to twelve months from payment of disbursed proceeds, and contain a repayment provision to convert the debt into shares of the Company's common stock at conversion rates equal to the lower of 1) between $0.10 to $0.12 per share; or 2) between 65% to 70% of the 2nd lowest trading prices during the twenty (20) trading days preceding the conversion date. In addition, the Company issued warrants to purchase 2,600,000 shares of the Company’s common stock at an exercise price of $0.15 per share for a period of five (5) years. The note was discounted for embedded conversion option of $9,370 and warrant fair value of $105,000, reclassified as derivative liabilities. As of June 30, 2019, and December 31, 2018, respectively, short-term non-related party debt in the amount of $963,737 and $1,020,903 consists of $27,275 and $724,903 in convertible debentures; $220,000 and $0 in notes payable; and $716,462 and $296,000 in convertible notes payable. During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, notes and debentures in the principal aggregate of $585,000 and $825,000 were issued; principal in the amount of $562,869 and $50,000, along with interest in the amount of $41,519 and $608, was repaid in cash; principal in the amount of $395,000 and $620,000, along with interest in the amount of $2,000 and $55,613, was converted to common stock; losses on extinguishment of debt of $403,234 and $105,320 were incurred; and debt accretion in the amount of $63,051 and $1,087,974, and interest in the amount of $137,715 and $270,142 was expensed. As of June 30, 2019, and December 31, 2018, respectively, a total of $279,937 and $185,741 in accrued interest remains, and is included as an accrued expense on the accompanying consolidated balance sheet. As of June 30, 2019, and December 31, 2018, respectively, long-term non-related party debt in the amount of $744,104 and $934,019 consists of $0 and $207,500 in convertible debentures, less unamortized discount of $0 and $22,630; $720,154 and $720,154 in convertible notes payable, of which $576,154 and $576,154 is related to pending litigation with a former executive (see Note 18), and subject to compromise; and $23,950 and $28,995 in notes payable to banks. During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, debentures in the principal aggregate of $0 and $225,000 were issued; principal in the amount of $217,045 and $9,245, along with interest in the amount of $856 and $632 was repaid in cash; principal in the amount of $95,142 and $0 was converted to common stock; losses on extinguishment of debt of $206,230 and $0 were incurred; and debt accretion in the amount of $9,816 and $2,370, and interest in the amount of $20,303 and $739,383 was expensed. As of June 30, 2019, and December 31, 2018, respectively, a total of $209,833 and $190,386 in accrued interest remains, and is included as an accrued expense on the accompanying consolidated balance sheet. The future maturities of notes payable are summarized as follows: Year 2020 2021 Total Principal $ 720,154 $ 23,950 $ $744,104 During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, interest expense on non-related party notes and loans payable in the amount of $158,018 and $1,009,525 was expensed. As of June 30, 2019, and December 31, 2018, respectively, a total of $489,770 and $376,127 in interest has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
RELATED PARTY TRANSACTIONS | NOTE 9. RELATED PARTY TRANSACTIONS Related party transactions consist of the following: June 30, 2019 December 31, 2018 Related party payables: Accrued compensation $ 1,101,143 $ 869,859 Cash advances 295,485 134,861 Total related party payables 1,396,628 1,004,720 Debentures, convertible 411,006 411,006 Notes payable, convertible, related party 511,100 491,100 Total related party transactions $ 2,318,734 $ 1,906,826 Related party convertible debt consist of the following: Note Holder Principal APR Accrued Interest Conversion Price Term/Due Convertible promissory notes: Huntington Chase, Beneficial Owner $ 491,100 7% $ 91,107 $0.10 12 /31 John Ogden, Director 20,000 10% 986 $0.10 12 /31 $ 511,100 $ 92,093 Convertible debentures: AvantGarde, LLC, Beneficial Owner 342,734 12% 47,649 $0.10 [1] 12 /31 Hamburg Investment Co., Beneficial Owner 68,272 12% 9,492 $0.10 [1] 12 /31 411,006 57,141 Total convertible debt-related parties $ 1,196,906 $ 149,234 [1] In July 2019, the debentures and accrued interest were converted into senior secured promissory notes (see Note 18). As of June 30, 2019, and December 31, 2018, respectively, related parties are due a total of $2,318,734 and $1,906,826, consisting of $1,101,143 and $869,859 in accrued compensation owed to officers; $295,485 and $134,861 in accrued benefits and cash advances from officers and beneficial owners to the Company for operating expenses; $411,006 and $411,006 in convertible debentures; and $511,100 and $491,100 in convertible promissory notes. During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, $627,784 and $1,371,446 in related party compensation was accrued, $396,500 and $510,500 was paid, and $0 and $450,000 was converted to preferred stock. In June 2019, $575,132 of related party debt was purchased by non-related-parties (the “Proceeds”). The Proceeds were collected on behalf of the related parties by the Company. Of the $396,500 paid to related parties during the current period, $159,500 was Proceeds. The remaining Proceeds of $415,632 were subsequently loaned to the Company by the related parties for operating expenses. During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, $296,060 and $121,949 in benefits were accrued and cash advances were made to the Company by related parties for overhead requirements, of which $135,436 and $115,384 was paid/repaid to related parties. During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, no principal payments of related party notes and debentures were made; premiums on related party debentures in the amount of $257,674 and $0 were charged; interest in the amount of $75,174 and $66,840 was expensed, of which $0 and $798 was paid to the note holders in cash; and $0 and $71,839 was converted to principal. As of June 30, 2019, and December 31, 2018, respectively, a total of $149,234 and $74,060 in accrued interest remains and is included as part of accrued expenses on the accompanying consolidated balance sheets. In April 2019, the Company entered into an employment agreement with Mr. David Appell to serve as the Company’s Chief Operating Officer. The agreement commenced May 15, 2019, is for an initial term of two (2) years, and provides a base compensation of $250,000 year one, and $275,000 in year two, as well as various performance bonuses, and customary employee benefits. In addition, the agreement includes a grant to purchase 3,000,000 restricted common shares, valued at $201,300, for cash in the amount of $3,000, of which 25% vest immediately, and the remainder vest when certain earnings goals are met; as well as options granted to purchase 3,000,000 shares of the Company's Common Stock at an exercise price of $0.25 per share. The options, valued at $195,600 using the Black-Scholes method, are for a period of five (5) years, and vest annually over the term of the agreement, with an initial vesting of 25%. The assumptions used in valuing the options were: expected term 4.75 years, expected volatility 2.21, risk free interest rate 2.15%, and dividend yield 0%. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
COMMITMENTS AND CONTINGENCIES | NOTE 10. COMMITMENTS AND CONTINGENCIES On August 13, 2015, the Company issued a secured promissory note in the amount of $20,500,000 (the “Promissory Note”) in connection with the acquisition of RoxSan Pharmacy, Inc. (“RoxSan”). The Promissory Note bore interest at a rate of 6% per annum, and matured August 13, 2018 ("Maturity"). In September 2018, as part of the deconsolidation of RoxSan resulting from its Chapter 7 petition filed on May 14, 2018, management reevaluated the characteristics of the Promissory Note. Included in the evaluation were the following considerations: 1) the related asset is no longer a part of the parent financial statements due to a loss of financial control; 2) the Company is currently in litigation as a result of material breaches by the note holder; 3) the Company has claims against the note holder for losses and damages directly related to the Promissory Note and its underlying assets; 4) there is a high likelihood that no obligation exists. After careful consideration, management has determined that the current characteristics of the liability are contingent in nature, and the debt of $20,500,000 and related $2,278,281 in accrued interest was extinguished in 2018, resulting in a gain of $22,778,281. On August 31, 2016, as part of the Company’s acquisition of 100% of the issued and outstanding shares of Qolpom ® ® On April 26, 2017, as part of the Company’s acquisition of certain intellectual property (“Intellectual Property”) from ProEventa, Inc (“ProEventa”), the agreement provides for, among other things, ProEventa to receive a revenue sharing cash earn-out of up to $3,000,000 to be derived from certain net revenue generated by the Company; as well as Royalties of 3% of certain revenues generated from the Intellectual Property, ending at such time as the Company has paid ProEventa $25,000,000, as defined in the agreement. As of June 30, 2019, and December 31, 2018, respectively, the present value of future Revenue Share was $1,189,000 and $1,040,000; the present value of future Royalties was $791,000 and $690,000, and $6,598 and $0 in Royalties payable on earned revenues was accrued. |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
CONVERTIBLE PREFERRED STOCK | NOTE 11. CONVERTIBLE PREFERRED STOCK The total number of authorized shares of preferred stock that may be issued by the Company is 10,000,000 with a par value of $0.001 per share. On March 31, 2019, in connection with the settlement agreement with Mr. Dave Engert, 36,339 shares of the Company’s Series A preferred stock held by Mr. Engert, with a book value of $100,000, were returned to treasury. As a result, preferred paid in capital was reduced by $99,964. On April 1, 2019, dividends owed on the Series A preferred stock were paid in kind with the issuance and immediate return to treasury of 21,121 shares of Series A preferred stock, resulting in a total of 57,500 shares of Series A preferred stock held in treasury (the “Treasury Shares”). On May 15, 2019, the 57,500 Treasury Shares were reissued for cash in the amount of $69,000. Subsequently, the 57,500 shares of Series A preferred stock were converted into 1,150,000 shares of common stock at a ratio of 20 shares of common stock for each share of preferred stock held. As of June 30, 2019, and December 31, 2018, respectively, the Company had 977,352 and 1,013,691 shares of preferred stock issued and outstanding. |
COMMON STOCK
COMMON STOCK | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
COMMON STOCK | NOTE 12. COMMON STOCK On January 28, 2019, pursuant to a majority shareholder consent, the Company increased its authorized common stock from 250,000,000 shares to 500,000,000 shares, with a par value of $0.001 per share. During the six months ended June 30, 2019, 1,150,000 shares of the Company’s restricted common stock were issued in connection with the conversion of -57,500 shares of Series A preferred stock, valued at -$69,000. As a result, $67,850 was recorded to paid in capital. During the six months ended June 30, 2019, 12,929,925 shares of the Company’s restricted common stock were issued in connection with the conversion of non-related party debt in the amount of $748,274. As a result, $735,345 was recorded to paid in capital. During the six months ended June 30, 2019, 6,316,667 shares of the Company’s restricted common stock were issued in connection with stock awards to non-related parties, valued at $652,710, including 500,000 shares valued at $33,550 for cash in the amount of $500, of which 25% vests immediately, and the remainder vest when certain trading prices are met. As a result, $33,050 was deferred, to be amortized over the vesting terms, and $646,392 was recorded to paid in capital. During the six months ended June 30, 2019, 3,000,000 shares of the Company’s restricted common stock were issued in connection with a stock award to David Appell, the company’s Chief Operating Officer, valued at $201,300 for cash in the amount of $3,000, of which 25% vests immediately, and the remainder vest when certain earnings goals are met. As a result, $198,300 was deferred, to be amortized over the vesting terms, and $198,300 was recorded to paid in capital. During the six months ended June 30, 2019, 7,500,000 shares of the Company’s restricted common stock were issued in connection with a Simple Agreement Future Equity (“SAFE”) offering for cash in the amount of $735,000 and services valued at $15,000. As a result, $742,500 was recorded to paid in capital. During the six months ended June 30, 2019, 2,168,146 shares of the Company’s restricted common stock were issued, valued at $240,040, in connection with the retirement of 4,550,000 warrants. As a result, $237,972 was recorded to paid in capital. During the six months ended June 30, 2019, 1,400,000 shares of the Company’s restricted common stock were issued in connection with services valued at $121,000. As a result, $119,600 was recorded to paid in capital. During the six months ended June 30, 2019, 230,000 shares of the Company’s common stock were issued in connection with debt and debt service in the amount of $23,000. As a result, $22,770 was recorded to paid in capital. During the six months ended June 30, 2019, in connection with an equity funding, 6,000,000 shares of the Company’s restricted common stock was issued for cash in the amount of $500,000, with a subscription for an additional 6,000,000 shares to be issued for an additional $500,000 upon the effectiveness of the Company’s recently filed registration statement. As a result, $500,000 was recorded to subscription receivable, and $494,000 was recorded to paid in capital. During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, a total of 46,694,738 and 21,358,611 shares of the Company’s common stock were issued. As of June 30, 2019 and December 31, 2018, respectively, the Company had 204,807,879 and 158,113,141 common shares issued and outstanding. Restricted Stock Awards During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, 3,730,000 and 3,660,000 restricted stock awards were granted, valued at $254,350 and $434,000; and 1,654,270 and 6,827,368 restricted stock awards vested, for which $171,555 and $1,095,193 in deferred stock compensation was expensed. As of June 30, 2019 and December 31, 2018, respectively, there remains 7,963,925 and 5,888,195 shares to be vested, and $1,231,604 and $1,148,809 in deferred stock compensation to be expensed over the next eighteen (18) months. Restricted Stock Awards Activity Number of Deferred Shares Compensation Outstanding at December 31, 2017 9,055,563 $ 1,810,002 Granted 3,660,000 434,000 Vested (6,827,368 ) (1,095,193 ) Outstanding at December 31, 2018 5,888,195 1,148,809 Granted 3,730,000 254,350 Vested (1,654,270 ) (171,555 ) Outstanding at June 30, 2019 7,963,925 $ 1,231,604 |
WARRANTS AND OPTIONS
WARRANTS AND OPTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
WARRANTS AND OPTIONS | NOTE 13. WARRANTS AND OPTIONS As of June 30, 2019, and December 31, 2018, respectively, the Company had 32,782,500 and 21,232,500 warrants, and 28,060,000 and 18,060,000 options, issued and outstanding. During the six months and the year ended June 30, 2019 and December 31, 2018, respectively, 16,700,000 and 14,077,500 warrants were granted, 4,850,000 and 0 were retired, and 300,000 and 100,000 expired. The warrants carry an exercise price of between $0.001 to $0.60 per share, and expire between 2020 to 2024, and were valued at $80,510 and $851,610, using the Black-Scholes method. The assumptions used in valuing the warrants were: expected term between 2 to 5 years; expected volatility 40% to 45%; risk free interest rate between 1.16% to 2.91%; and a dividend yield of 0%. A total of $0 and $113,210 in deferred stock warrant compensation was recorded, and $86,960 and $73,370 was expensed during the six months and the year ended June 30, 2019, and December 31, 2018, respectively. There remains $92,470 and $98,920 in deferred compensation as of June 30, 2019, and December 31, 2018, respectively, to be expensed over the next twelve (12) months. Warrants Outstanding Number of Remaining Exercise Price Weighted Common Contractual Life Times Number Average Exercise Price Shares (in years) Of Shares Exercise Price $0.001 300,000 4.00 $ 300 $0.17 $0.01 75,000 1.50 750 $0.18 $0.10 62,500 3.75 6,250 $0.29 $0.10 250,000 2.00 25,000 $0.19 $0.10 4,877,500 1.75 487,750 $0.21 $0.10 250,000 1.25 25,000 $0.32 $0.15 600,000 4.75 90,000 $0.19 $0.15 1,000,000 1.50 150,000 $0.28 $0.17 62,500 3.75 10,625 $0.29 $0.18 62,500 3.75 11,250 $0.29 $0.20 2,600,000 4.75 520,000 $0.19 $0.21 62,500 3.75 13,125 $0.29 $0.21 100,000 1.25 21,000 $0.34 $0.25 3,750,000 4.75 937,500 $0.19 $0.25 3,250,000 2.25 812,500 $0.18 $0.25 9,750,000 1.75 2,437,500 $0.19 $0.25 475,000 1.50 118,750 $0.27 $0.25 3,255,000 1.25 813,750 $0.32 $0.25 1,500,000 1.00 375,000 $0.39 $0.35 250,000 1.25 87,500 $0.32 $0.60 250,000 1.25 150,000 $0.34 32,782,500 $ 7,093,550 $0.21 Weighted Warrant Activity Number of Average Shares Exercise Price Outstanding at December 31, 2018 21,232,500 $0.18 Issued 16,700,000 $0.20 Exercised –– –– Retired / Cancelled (4,850,000 ) $0.22 Expired / Forfeited (300,000 ) $0.18 Outstanding at June 30, 2019 32,782,500 $0.21 During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, 10,000,000 and 6,000,000 stock options were granted, which vest periodically over a two ( 2) year period, are exercisable for a period of between 3 to 5 years at an exercise price of between $0.05 to $0.60 per share, and were valued at $900,150 and $833,700 using the Black-Scholes method. The assumptions used in valuing the options were: expected term between 3.00 to 4.75 years; expected volatility between 1.78 to 2.29; risk free interest rate of between 1.69% to 2.78%; and a dividend yield of 0%. Options Outstanding Remaining Exercise Price Weighted Number of Contractual Life times Number Average Exercise Price Shares (in years) of Shares Exercise Price $0.05 90,000 3.00 $ 4,500 $0.14 $0.05 1,140,000 2.75 57,000 $0.09 $0.05 100,000 2.25 5,000 $0.08 $0.05 60,000 1.50 3,000 $0.06 $0.05 170,000 1.25 8,500 $0.12 $0.09 5,500,000 3.00 467,500 $0.20 $0.10 500,000 1.25 50,000 $0.14 $0.10 250,000 0.25 25,000 $0.06 $0.15 1,000,000 1.25 150,000 $0.14 $0.25 3,500,000 4.75 875,000 $0.23 $0.25 1,000,000 4.50 250,000 $0.20 $0.25 5,000,000 3.75 1,250,000 $0.16 $0.25 7,000,000 3.00 1,750,000 $0.16 $0.25 1,000,000 1.25 250,000 $0.15 $0.25 1,000,000 0.75 250,000 $0.10 $0.25 250,000 0.25 62,500 $0.06 $0.35 250,000 0.25 87,500 $0.07 $0.60 250,000 0.25 150,000 $0.08 28,060,000 $ 5,695,500 $0.20 Weighted Options Activity Number of Average Shares Exercise Price Outstanding at December 31, 2018 18,060,000 $0.23 Issued 10,000,000 $0.22 Exercised –– –– Expired / Forfeited –– –– Outstanding at June 30, 2019 28,060,000 $0.20 During the six months and the year ended June 30, 2019, and December 31, 2018, respectively, 10,000,000 and 6,000,000 options were issued, 0 and 1,973,189 options were exercised, 0 and 1,000,000 options expired, and 0 and 5,641,811 options were forfeited. A total of $900,150 and $649,327 in deferred stock option compensation was recorded, net of forfeitures, and $163,922 and $572,870 was expensed during the six months and the year ended June 30, 2019, and December 31, 2018, respectively. There remains $2,131,696 and $1,395,466 in deferred compensation as of June 30, 2019, and December 31, 2018, respectively, to be expensed over the next 18 months. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
INCOME TAXES | NOTE 14. INCOME TAXES A reconciliation of the expected statutory federal and state taxes and the total income tax expense (benefit) at June 30, 2019, and December 31, 2018, was as follows: June 30, 2019 December 31, 2018 Income (loss) before taxes $ (3,997,971 ) $ 15,608,209 Statutory rate (Fed & State(s)) 30% 30% Computed expected tax payable (recovery) (1,050,700 ) 4,781,700 Effect of release of net operating loss carryforwards (927,100 ) (2,417,700 ) Tax effect of non-deductible expenses: Gain on extinguishment of debt-principal –– (6,124,000 ) Stock compensation/amortization of stock options 398,100 1,048,500 Discount amortization 130,900 837,000 Other 1,600 1,500 Total tax effect of non-deductible expenses 530,600 (4,237,000 ) Change in valuation allowance 1,447,200 (1,873,000 ) Income tax expense $ –– $ –– Reported income taxes: Federal $ –– $ –– State –– –– Total $ –– $ –– The significant components of deferred income tax assets and liabilities at June 30, 2019, and December 31, 2018, are as follows: June 30, 2019 December 31, 2018 Net operating loss carried forward $ 1,361,400 $ –– Bad debt allowance –– –– Officers’ accrued compensation 308,100 243,400 Accrued related party interest 41,800 20,700 Valuation allowance (1,711,300 ) (264,100 ) Net deferred income tax asset $ –– $ –– During the year ended December 31, 2018, the company realized extinguishment of debt principal in the amount of $20,880,688. Per Internal Revenue Code (“IRC”) Section 108(a) (1) (A) the extinguishment of debt principal is excluded from taxable income for the Company. However, any available tax attributes must be released up and to the amount of the extinguishment. Therefore, net operating loss carryforwards were released for the amount of income excluded from taxable income. The remaining net operating losses available to use toward future taxable income are as follows: Tax Year Net Operating Loss Expires 2016 $ 442,900 2036 2017 2,115,400 2037 2018 548,900 No Expiration 2019 to date 1,758,100 No Expiration Total $ 4,865,300 As at June 30, 2019, the Company had approximately $4,865,300 of federal net operating losses, of which $2,307,000 have no expiration date. The Company is open to examinations for the tax year 2011 through the current tax year. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
DISCONTINUED OPERATIONS | NOTE 15. DISCONTINUED OPERATIONS In December 2017, the Company discontinued all operations related to the Retail Pharmacy Segment (RPS) involving the Company’s wholly-owned subsidiary, RoxSan Pharmacy, Inc. (“RoxSan”). On May 14, 2018, pursuant to a unanimous resolution of the Boards of Directors of RoxSan and Parallax Health Sciences, Inc., RoxSan filed a Chapter 7 petition in the United States Bankruptcy Court for the Central District of California. Mr. Timothy Yoo was appointed trustee on May 15, 2018. In connection with the filing, RoxSan sought to discharge approximately $5 million of liabilities owed to various parties, and intercompany loans in excess of $1 million owed to the Company. The Chapter 7 bankruptcy proceeding by was fully discharged and the case was closed on March 13, 2019. Due to, among other things, the reduction in RoxSan’s cash flows during 2016 and 2017, RoxSan became delinquent in its payroll tax depository obligations, resulting in a liability owed to federal and state taxing agencies in the aggregate of $1,148,811, which includes $601,148 in taxes withheld from employees (“Trust Fund Taxes”), employer taxes of $183,172, and penalties and interest of $364,491 through December 31, 2018. The liability was included as part of the Chapter 7 bankruptcy petition, and certain portions of the liability may be discharged. However, in accordance with California bankruptcy laws, federal and state Trust Fund Taxes are not dischargeable. During the six months ended June 30, 2019, the company has made payments on behalf of RoxSan to the taxing agencies in the amount of $175,000. As of June 30, 2019, $426,148 in Trust Fund Taxes remains outstanding. The Company has retained a tax resolution specialist and is in communications with the taxing agencies in order to resolve RoxSan’s liability (Note 6). As a result of the loss of financial control of RoxSan, the Company derecognized the subsidiary effective May 14, 2018. The derecognition resulted in a gain of $4,478,268. The Company also extinguished $22,778,281 in debt and accrued interest related to the acquisition of RoxSan. The results of the discontinued operations of RoxSan Pharmacy, Inc. for the three and six months ending June 30, 2018, are summarized as follows: June 30, 2018 Three months ended Six months ended Revenue $ –– $ –– Cost of sales –– –– Gross profit –– –– Sales, marketing and pharmacy expenses 69,553 194,890 General and administrative expenses 566,417 666,000 Operating loss (635,970 ) (860,890 ) Loss on disposal of assets (10,000 ) (10,000 ) Interest expense (25,690 ) (47,281 ) Net loss from discontinued operations $ (671,660 ) $ (918,171 ) |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
SEGMENT REPORTING | NOTE 16. SEGMENT REPORTING The Company has the following business segments: Remote Care Services (RCS), Behavioral Health Services (BHS), and Diagnostics/Corporate (DCS). See Note 1 and 2 for a description of each segment and related significant accounting policies. The following table is a reconciliation of the Company’s business segments to the consolidated financial statements: Remote Care Segment Behavioral Health Segment Diagnostics/ Corporate Segment Discontinued Operations Consolidated Totals June 30, 2019 Revenue $ 990 $ 50,900 $ –– $ –– $ 51,890 Gross profit (loss) (330 ) 43,248 –– –– 42,918 Operating loss (143,159 ) (66,889 ) (3,012,130 ) –– (3,222,179 ) Depreciation and amortization 4,598 54,880 920 –– 60,398 Interest expense 1,527 –– 305,878 –– 307,405 Gain (loss) on fair value adjustments –– –– 103,888 –– 103,888 Loss on extinguishment of debt –– –– (568,003 ) –– (568,003 ) Loss on settlement –– –– (33,272 ) –– (33,272 ) Discount amortization (29,000 ) –– –– –– (29,000 ) Total assets 909,337 384,687 146,912 –– 1,440,936 Goodwill 785,060 –– –– –– 785,060 Additions to property and equipment –– –– 2,628 –– 2,628 June 30, 2018 Revenue 8,859 900 –– –– 9,759 Gross profit (loss) (1,418 ) 900 –– –– (518 ) Operating loss (143,421 ) (94,274 ) (2,898,500 ) –– (3,136,195 ) Depreciation and amortization 4,932 54,880 832 –– 60,644 Interest expense 1,449 –– 1,079,759 –– 1,081,208 Loss on extinguishment of debt –– –– (62,600 ) –– (62,600 ) Discount amortization 70,000 –– 2,550,000 –– 2,620,000 Discontinued operations –– –– –– (918,171 ) (918,171 ) Total assets 929,625 494,447 55,236 –– 1,479,308 Goodwill 785,060 –– –– –– 785,060 Additions to property and equipment –– –– –– –– –– |
LEGAL MATTERS
LEGAL MATTERS | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
LEGAL MATTERS | NOTE 17. LEGAL MATTERS The Company knows of no material developments to its legal matters other than those disclosed below: Dispute with Former Owner of RoxSan Action No. SC125702: In the Matter, action No. SC125702, in the Superior Court of the State of California, County of Los Angeles, West District, the former owner of RoxSan Pharmacy, Inc., Shahla Melamed (“Melamed”), alleges that the Company is in default under the terms of the Purchase Agreement and Secured Note, and the Company’s termination of Melamed’s employment agreement. The Company firmly believes that it had adequate grounds to justify the termination of the employment, that it acted within its rights, and shall prevail in these proceedings. A trial date, previously set for December 2018, is currently set for January 2020. Action No. SC 124898: The Company initiated legal action against Melamed and filed a complaint, action number SC 124898, in the Superior Court of the State of California, County of Los Angeles, West District, Parallax Health Sciences, et al. v. Shahla Melamed, et al. The Complaint in that action alleges that Melamed has breached several obligations under the Purchase Agreement, and the Company is seeking to reduce the Secured Note due to undisclosed material changes in the business. A trial date, previously set for December 2018, is currently set for January 2020. Disputes with Former Executives Action No. CV2017-052804 On March 9, 2017, Dave Engert former Executive Chairman and director of the Company filed a lawsuit in Arizona and then on or about May 5, 2017, Mr. Engert, changed the venue and filed suit against the Company and RoxSan Pharmacy, Inc. in the United States District Court, Central District of California for an amount exceeding $75,000. On October 23, 2017, the Company filed an answer and counterclaims against Mr. Engert for an amount exceeding $100,000. The counterclaims include possible fraud and negligence committed by Mr. Engert and Mr. J. Michael Redmond, former successor Chairman of Mr. Engert, director, President and Chief Executive Officer of the Company and former President, Chief Executive Officer, Chairman and director of RoxSan Pharmacy, Inc. On October 8, 2018, a settlement was reached between Mr. Engert and the Company (the “Settlement”). The Settlement includes, among other things, a cash payment to Mr. Engert in the amount of $139,000, and the cancellation of all of Mr. Engert’s equity holdings in the Company, including preferred shares (see Note 11). The Settlement resulted in a net loss to the Company of $33,272. On April 10, 2019, a stipulation for dismissal was filed, and the matter has been fully resolved. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Notes | |
SUBSEQUENT EVENTS | NOTE 18. SUBSEQUENT EVENTS The Company has evaluated the events and transactions for recognition or disclosure subsequent to June 30, 2019, through the date of the issuance of the financial statements, and has determined that there have been no events that would require disclosure, except for the following: On July 5, 2019, in connection with cash proceeds received in June 2019, the Company issued three (3) Senior Secured Notes (the “Notes”) in the aggregate principal of $220,000, pursuant to certain Note and Purchase Agreements (the “Purchase Agreements”) of the same date. The Notes bears interest at 8% per annum, and mature 180 days from the issuance date (“Maturity Date”). As additional consideration for entering into the Purchase Agreements, 400,000 shares of the Company’s restricted common stock is being issued to each of the note holders, for an aggregate of 1,200,000 shares, valued at $190,200. On July 17, 2019, 293,146 shares of the Company’s restricted common stock, valued at $10,289, which were previously issued in connection with the cashless exercise of certain warrants, were returned to treasury and cancelled, and the warrant was fully retired. On July 25, 2019, the related party convertible debentures in the principal sum of $428,132, plus premiums of $261,604 and accrued interest of $68.926, were converted to Senior Secured Promissory Notes (the “Senior Notes”) in the aggregate principal of $759,446. The Senior Notes bear interest at a rate of 8% per annum, with payments of $126,152 plus interest accrued thereon due December 31, 2019; $300,000 due December 31, 2020; and the remaining principal and accrued interest due December 31, 2021. In addition, as part of the commitment to extend the debt, the noteholders were issued an aggregate of 1,380,811 shares of the Company’s restricted Common Stock, valued at $131,315, as well as warrants to purchase an aggregate of 2,528,413 shares of the Company’s Common Stock for a period of five (5) years at an exercise price of $0.10461. In August 2019, the Company amended the private placement equity offering (the “Offering”) previously established in March 2019. The revised Offering is for the purchase of the 31,875,000 shares, or a maximum of $3,000,000, in Common Stock, plus equal Warrants at an exercise price of $0.25 per share for a term of three (3) years (the Common Stock and the Warrants together, the “Units”). The Offering provides for, among other thing, the purchase of the Units at a price of $0.10 per share, with a minimum total Offering of $2,000,000, and a minimum investment of 200,000 shares, or $20,000. Prior to the Offering, the Company sold $1,125,000 in Units through a Simple Agreement Future Equity (“SAFE”) offering, which included an aggregate of $375,000 in SAFE shares to be issued to three of the Company’s executive officers for the reduction of accrued officer compensation. The SAFE Units were sold at a 20% discount of the offering Unit price of $0.10, and are not a part of, nor reduce, the $2,000,000 minimum. The initial closing will occur on a date set by the Company in its discretion. The Company may sell Units in one or more closings. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Policies | |
Basis of Presentation | Basis of Presentation This summary of significant accounting policies is presented to assist in understanding the CompanyÂ’s financial statements. 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. The CompanyÂ’s fiscal year-end is December 31. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Changes in the CompanyÂ’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. When the Company loses control of a subsidiary, a gain or loss is recognized and is calculated as the difference between: the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and the carrying amount of the net assets (liabilities) of the subsidiary and any noncontrolling interest. Upon deconsolidation of a subsidiary, any loans to the former subsidiary made by the Company are measured at fair value at the deconsolidation date. Any difference between the carrying amount of the loan to the subsidiary and its fair value is included as part of the gain or loss calculation upon deconsolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Fair Value Hierarchy | Fair Value Hierarchy The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following: Level 1: Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2: Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. Level 3: Inputs to the valuation methodology are unobservable inputs based upon managementÂ’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of nine months or less at the time of issuance to be cash equivalents. As of June 30, 2019, and December 31, 2018, the Company had no cash equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments As of June 30, 2019, and December 31, 2018, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation. See Note 6 for additional information about long-term debt. • Derivatives of financial instruments: Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period, with changes in fair value recognized in profit or loss. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities. • Embedded derivatives: Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value with changes in fair value recognized in profit or loss. An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the hybrid instrument to which the embedded derivative relates is more than 12 months and it is not expected to be realized or settled within 12 months. Other embedded derivatives are presented as current assets or current liabilities. . The following table represents the Company’s derivative financial instruments: June 30, 2019 December 31, 2018 Convertible debentures $ –– $ 23,925 Convertible promissory notes 2,140 –– Warrants 55,173 34,000 Total derivative liability $ 57,313 $ 57,925 The following table represents the changes in the Company’s derivative financial instruments: June 30, 2019 December 31, 2018 Fair value of derivative liability, beginning $ 57,925 $ –– Increase in derivative liability-convertible promissory notes 9,370 60,350 Increase in derivative liability-warrants 105,000 623,900 Fair value adjustment-debentures (8,296 ) (2,500 ) Fair value adjustment-convertible promissory notes (9,370 ) –– Fair value adjustment-warrants (86,222 ) 126,375 Reclassification of warrant carrying value due to reset of exercise price –– (750,200 ) Reclassification to gain (loss) upon extinguished debt (11,094 ) –– Fair value of derivative liability, ending $ 57,313 $ 57,925 |
Accounts Receivable | Accounts Receivable Accounts receivable are stated net of an allowance for doubtful accounts. The accounts receivable balance primarily includes amounts due from customers. Charges to bad debt are based on both historical write-offs and specifically identified receivables. |
Property and Equipment | Property and Equipment Property and equipment is comprised of office and computer equipment and software, furniture and fixtures, and leasehold improvements, recorded at cost and depreciated using the double declining balance method over the estimated useful lives of 5 to 7 years. Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. See Note 3 for additional information about property and equipment. |
Intangible Assets | Intangible Assets Product processes, patents and customer lists are amortized on a straight-line basis over their estimated useful lives between 4 and 20 years. Application development stage costs for significant internally developed software projects are capitalized and amortized on a straight-line basis over the useful life, between 2 and 5 years. Costs to extend and maintain patents and trademarks are charged directly to expense as incurred. See Note 5 for additional information about intangible assets. |
Goodwill and Other Indefinitely-Lived Assets | Goodwill and Other Indefinitely-Lived Assets Goodwill and other indefinitely-lived assets are not amortized, but are subject to impairment reviews annually, or more frequently if necessary. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company believes that future projected cash flows are sufficient for the recoverability of its long-lived assets, and no impairment exists. There can be no assurance, however, that market conditions will not change or demand for the CompanyÂ’s products and products under development will continue. Either of these could result in future impairment losses. |
Convertible Debt | Convertible Debt The Company recognizes the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert debt into common stock at a price per share that is less than the trading price to the public on the date of the debt. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debt, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the interest method. |
Net Loss Per Common Share | Net Loss Per Share The computation of basic earnings per share ("EPS") is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common stock equivalents. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible debt, convertible preferred shares and the exercise of the CompanyÂ’s stock options and warrants. |
Comprehensive Loss | Comprehensive Loss As of June 30, 2019, and December 31, 2018, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Revenue is measured based on a consideration specified in a contract with a customer, and excludes any amounts collected on behalf of third parties. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. The Company may have net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that the Company will not realize a future tax benefit, a valuation allowance is established. As of June 30, 2019, the Company has not yet filed its 2012 through 2018 annual corporate income tax returns. Due to the CompanyÂ’s recurring losses, it is anticipated that no corporate income taxes are due for these periods. |
Stock-based Compensation | Stock-Based Compensation The Company records stock-based compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company. The Company has recently adopted the following new accounting standards: Adopted In July 2017, the FASB issued ASU No. 2017-11 (“ASU 2017-11”), Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). ASU 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. ASU 2017-11 also addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification ® In June 2018, the FASB issued ASU No. 2018-07 (“ASU 2018-07”), Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11 (“ASU 2018-11”), Leases (Topic 842), Targeted Improvements. ASU 2018-11 addresses certain issues in implementing ASU 2016-02, Leases, which was issued to increase transparency ad comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing transaction. ASU 2018-11 clarifies 1) comparative reporting requirements for initial adoption; and 2) for lessors only, separating lease and non-lease components in a contract and allocating the consideration in the contract to the separate components. The amendments in this Update related to separating components of a contract affect the amendments in Update 2016-02, which is effective for the Company for annual periods beginning after December 15, 2018, and interim periods. Early adoption is permitted. Not yet adopted In August 2018, the FASB issued ASU No. 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. ASU 2018-13 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15 (“ASU 2018-15”), Intangibles-Goodwill and Other Internal-Use Software (Subtopic 350-40). ASU 2018-15 was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods. Early adoption is permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures. Recently Issued Accounting Standards Updates: There were other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows. |
RESTATEMENT (Tables)
RESTATEMENT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Restatement | June 30, 2018 As Previously Reported As Restated Increase (Decrease) CONSOLIDATED BALANCE SHEETS Derivative liability, short-term $ –– $ 656,500 $ 656,500 Debentures, convertible –– –– –– Debentures, convertible, related party –– –– –– Notes payable, convertible, net of discount 688,705 108,237 (580,468 ) Total current liabilities 5,459,948 5,535,980 76,032 Derivative liability, long-term –– –– –– Debentures, convertible, net of unamortized discount –– –– –– Total liabilities 33,152,999 33,229,031 76,032 Additional paid in capital - preferred 665,803 665,803 –– Additional paid in capital - common 8,561,553 8,945,849 384,296 Accumulated deficit (41,049,230 ) (41,509,558 ) (460,328 ) Total stockholders' deficit (31,673,691 ) (31,749,723 ) 76,032 CONSOLIDATED STATEMENTS OF OPERATIONS General and administrative expenses 3,100.232 3,135,677 35,445 Operating loss (3,100,750 ) (3,136,195 ) 35,445 Gain on extinguishment of debt Loss on fair value adjustments (62,600 ) 62,600 Discount amortization Interest expense, net of income (718,925 ) (1,081,208 ) 362,283 Total other income (expenses) (3,338,925 ) (3,763,808 ) 424,883 Net income (loss) - continuing operations (6,439,675 ) (6,900,003 ) 460,328 Net income (loss) (7,357,846 ) (7,818,174 ) 460,328 Net income (loss) per common share - continuing operations - basic (0.045 ) (0.048 ) 0.003 Net income (loss) per common share - continuing operations - diluted (0.031 ) (0.033 ) 0.002 CONSOLIDATED STATEMENTS OF CASH FLOWS Net income (loss) (6,439,675 ) (6,900,003 ) 460,328 Stock compensation/stock option expense 2,033,829 2,069,274 35,445 Discount amortization 2,620,000 2,620,000 –– Gain on extinguishment of debt –– –– –– Loss on fair value adjustments –– 62,600 62,600 Debt accretion –– 362,283 362,283 Increase in accounts payable and accrued expenses 757,050 757,050 –– Non-Cash Activities: Discounts on long-term liabilities 2,620,000 2,620,000 –– Beneficial conversion feature of convertible promissory notes –– 347,457 347,457 Fair value of stock warrants –– 697,500 697,500 Embedded conversion option of convertible promissory notes –– 850 850 Supplemental Information: Interest paid-continuing operations 42,653 42,653 –– March 31, 2019 March 31, 2018 …. As Previously Reported As Restated Increase (Decrease) As Previously Reported As Restated Increase (Decrease) …. CONSOLIDATED STATEMENTS OF OPERATIONS General and administrative expenses $ 1,456,288 $ 1,532,263 $ 75,975 $ 1,871,826 $ 1,871,826 $ –– Operating loss (1,410,409 ) (1,486,384 ) 75,975 (1,872,474 ) (1,872,474 ) –– Gain on extinguishment of debt –– 30,919 30,919 –– –– –– Loss on fair value adjustments –– 68,002 68,002 –– –– –– Discount amortization (130,420 ) (8,000 ) (122,420 ) (1,285,000 ) (1,285,000 ) –– Interest expense, net of income (100,014 ) (114,252 ) 14,238 (323,149 ) (323,149 ) –– Total other income (expenses) (263,706 ) (56,603 ) (108,182 ) (1,608,149 ) (1,608,149 ) –– Net income (loss) - continuing operations (1,674,115 ) (1,542,987 ) (32,207 ) (3,480,623 ) (3,480,623 ) –– Net income (loss) (1,674,115 ) (1,542,987 ) (32,207 ) (3,727,134 ) (3,727,134 ) –– Net income (loss) per common share - continuing operations - basic (0.010 ) (0.009 ) (0.001 ) (0.024 ) (0.024 ) –– Net income (loss) per common share - continuing operations - diluted (0.007 ) (0.007 ) –– (0.017 ) (0.017 ) –– |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Derivatives | June 30, 2019 December 31, 2018 Convertible debentures $ –– $ 23,925 Convertible promissory notes 2,140 –– Warrants 55,173 34,000 Total derivative liability $ 57,313 $ 57,925 |
Schedule of Changes in Derivative Liabilities at Fair Value | June 30, 2019 December 31, 2018 Fair value of derivative liability, beginning $ 57,925 $ –– Increase in derivative liability-convertible promissory notes 9,370 60,350 Increase in derivative liability-warrants 105,000 623,900 Fair value adjustment-debentures (8,296 ) (2,500 ) Fair value adjustment-convertible promissory notes (9,370 ) –– Fair value adjustment-warrants (86,222 ) 126,375 Reclassification of warrant carrying value due to reset of exercise price –– (750,200 ) Reclassification to gain (loss) upon extinguished debt (11,094 ) –– Fair value of derivative liability, ending $ 57,313 $ 57,925 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Property and Equipment | June 30, 2019 December 31, 2018 Computer equipment $ 6,615 $ 3,987 Medical devices 45,194 45,194 Property and equipment, gross 51,809 49,181 Accumulated depreciation (49,269 ) (49,181 ) Property and equipment, net $ 2,540 $ –– |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Operating Lease, Future Miinimum Payments | 2019 2020 Total Operating lease minimum payments $ 53,400 $ 53,400 $ 106,800 Less: amount treated as interest 3,263 1,224 4,487 Present value of minimum lease payments $ 50,137 $ 52,176 $ 102,313 |
Operating Lease, Lease Costs | June 30, 2019 December 31, 2018 Operating lease costs $ 17,800 $ –– Short-term lease costs 34,160 73,351 Total lease costs $ 51,960 $ 73,351 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Schedule of Intangible Assets | June 30, 2019 December 31, 2018 Products and processes $ 12,500 $ 12,500 Trademarks and patents / technology 150,700 150,700 Customer lists / relationships 30,000 30,000 Non-compete agreement 30,000 30,000 Marketing related 64,000 64,000 Software 510,300 510,300 Intangible assets, gross 797,500 797,500 Accumulated amortization (278,775 ) (218,465 ) Intangible assets, net $ 518,725 $ 579,035 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Schedule of Accounts Payable and Accrued Expenses | June 30, 2019 December 31, 2018 Accounts payable-vendors $ 1,010,819 $ 830,590 Credit cards payable 42,552 42,552 Payroll taxes payable 80,134 78,608 Accrued interest 639,004 450,187 Accrued payroll and payroll taxes 513,055 402,053 Other liabilities 426,148 601,148 2,711,712 2,405,138 Reserve-legal fees 85,000 250,000 Total accounts payable and accrued expenses $ 2,796,712 $ 2,655,138 |
NOTES AND LOANS PAYABLE (Tables
NOTES AND LOANS PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Schedule of Notes and Loans Payable | June 30, 2019 December 31, 2018 Short-term Debentures, convertible $ 27,275 $ 724,903 Notes payable 220,000 –– Notes payable, convertible , net of unamortized discount 716,462 296,000 Total short-term 963,737 1,020,903 Long-term Debentures, convertible, net of unamortized discount –– 184,870 Note payable, convertible 720,154 720,154 Note payable-bank 23,950 28,995 Total long-term 744,104 934,019 Total notes and loans payable $ 1,707,841 $ 1,954,922 |
Non-Related Party Convertible Notes Payable | Holder Principal APR Accrued Interest Conversion Price Term/Due Convertible debentures: Short-term $ 27,275 10% $ –– $0.12 07/ 30/ Convertible promissory notes: Short-term Lender Group A 120,000 12-20% 244,987 $0.10 05/ 30/ Lender Group B 505,462 12% 18,524 $0.10 to $.12 09/ 30/ 30/ Investor Group A 91,000 10% 16,426 $0.10 09/ 30/ 716,462 279,937 Long-term The Kasper Group, Ltd. 144,000 7% 75,586 $0.10 10/ 30/ Joseph M. Redmond 576,154 5% 133,835 $0.10 07/ 30/ $ 720,154 $ 209,421 Total convertible debt $ 1,463,889 $ 489,348 |
Lender Group B, Conversion Terms | |
Schedule of Maturities of Long-term Debt | Year 2020 2021 Total Principal $ 720,154 $ 23,950 $ $744,104 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Summary | June 30, 2019 December 31, 2018 Related party payables: Accrued compensation $ 1,101,143 $ 869,859 Cash advances 295,485 134,861 Total related party payables 1,396,628 1,004,720 Debentures, convertible 411,006 411,006 Notes payable, convertible, related party 511,100 491,100 Total related party transactions $ 2,318,734 $ 1,906,826 |
Schedule of Related Party Convertible Debt | Note Holder Principal APR Accrued Interest Conversion Price Term/Due Convertible promissory notes: Huntington Chase, Beneficial Owner $ 491,100 7% $ 91,107 $0.10 12 /31 John Ogden, Director 20,000 10% 986 $0.10 12 /31 $ 511,100 $ 92,093 Convertible debentures: AvantGarde, LLC, Beneficial Owner 342,734 12% 47,649 $0.10 [1] 12 /31 Hamburg Investment Co., Beneficial Owner 68,272 12% 9,492 $0.10 [1] 12 /31 411,006 57,141 Total convertible debt-related parties $ 1,196,906 $ 149,234 [1] In July 2019, the debentures and accrued interest were converted into senior secured promissory notes (see Note 18). |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Schedule of Restricted Stock Units Activity | Restricted Stock Awards Activity Number of Deferred Shares Compensation Outstanding at December 31, 2017 9,055,563 $ 1,810,002 Granted 3,660,000 434,000 Vested (6,827,368 ) (1,095,193 ) Outstanding at December 31, 2018 5,888,195 1,148,809 Granted 3,730,000 254,350 Vested (1,654,270 ) (171,555 ) Outstanding at June 30, 2019 7,963,925 $ 1,231,604 |
WARRANTS AND OPTIONS (Tables)
WARRANTS AND OPTIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Warrants Outstanding | Warrants Outstanding Number of Remaining Exercise Price Weighted Common Contractual Life Times Number Average Exercise Price Shares (in years) Of Shares Exercise Price $0.001 300,000 4.00 $ 300 $0.17 $0.01 75,000 1.50 750 $0.18 $0.10 62,500 3.75 6,250 $0.29 $0.10 250,000 2.00 25,000 $0.19 $0.10 4,877,500 1.75 487,750 $0.21 $0.10 250,000 1.25 25,000 $0.32 $0.15 600,000 4.75 90,000 $0.19 $0.15 1,000,000 1.50 150,000 $0.28 $0.17 62,500 3.75 10,625 $0.29 $0.18 62,500 3.75 11,250 $0.29 $0.20 2,600,000 4.75 520,000 $0.19 $0.21 62,500 3.75 13,125 $0.29 $0.21 100,000 1.25 21,000 $0.34 $0.25 3,750,000 4.75 937,500 $0.19 $0.25 3,250,000 2.25 812,500 $0.18 $0.25 9,750,000 1.75 2,437,500 $0.19 $0.25 475,000 1.50 118,750 $0.27 $0.25 3,255,000 1.25 813,750 $0.32 $0.25 1,500,000 1.00 375,000 $0.39 $0.35 250,000 1.25 87,500 $0.32 $0.60 250,000 1.25 150,000 $0.34 32,782,500 $ 7,093,550 $0.21 |
Warrant Activity | Weighted Warrant Activity Number of Average Shares Exercise Price Outstanding at December 31, 2018 21,232,500 $0.18 Issued 16,700,000 $0.20 Exercised –– –– Retired / Cancelled (4,850,000 ) $0.22 Expired / Forfeited (300,000 ) $0.18 Outstanding at June 30, 2019 32,782,500 $0.21 |
Options Outstanding | Options Outstanding Remaining Exercise Price Weighted Number of Contractual Life times Number Average Exercise Price Shares (in years) of Shares Exercise Price $0.05 90,000 3.00 $ 4,500 $0.14 $0.05 1,140,000 2.75 57,000 $0.09 $0.05 100,000 2.25 5,000 $0.08 $0.05 60,000 1.50 3,000 $0.06 $0.05 170,000 1.25 8,500 $0.12 $0.09 5,500,000 3.00 467,500 $0.20 $0.10 500,000 1.25 50,000 $0.14 $0.10 250,000 0.25 25,000 $0.06 $0.15 1,000,000 1.25 150,000 $0.14 $0.25 3,500,000 4.75 875,000 $0.23 $0.25 1,000,000 4.50 250,000 $0.20 $0.25 5,000,000 3.75 1,250,000 $0.16 $0.25 7,000,000 3.00 1,750,000 $0.16 $0.25 1,000,000 1.25 250,000 $0.15 $0.25 1,000,000 0.75 250,000 $0.10 $0.25 250,000 0.25 62,500 $0.06 $0.35 250,000 0.25 87,500 $0.07 $0.60 250,000 0.25 150,000 $0.08 28,060,000 $ 5,695,500 $0.20 |
Options Activity | Weighted Options Activity Number of Average Shares Exercise Price Outstanding at December 31, 2018 18,060,000 $0.23 Issued 10,000,000 $0.22 Exercised –– –– Expired / Forfeited –– –– Outstanding at June 30, 2019 28,060,000 $0.20 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | June 30, 2019 December 31, 2018 Income (loss) before taxes $ (3,997,971 ) $ 15,608,209 Statutory rate (Fed & State(s)) 30% 30% Computed expected tax payable (recovery) (1,050,700 ) 4,781,700 Effect of release of net operating loss carryforwards (927,100 ) (2,417,700 ) Tax effect of non-deductible expenses: Gain on extinguishment of debt-principal –– (6,124,000 ) Stock compensation/amortization of stock options 398,100 1,048,500 Discount amortization 130,900 837,000 Other 1,600 1,500 Total tax effect of non-deductible expenses 530,600 (4,237,000 ) Change in valuation allowance 1,447,200 (1,873,000 ) Income tax expense $ –– $ –– Reported income taxes: Federal $ –– $ –– State –– –– Total $ –– $ –– |
Components of Deferred Tax Assets and Liabilities | June 30, 2019 December 31, 2018 Net operating loss carried forward $ 1,361,400 $ –– Bad debt allowance –– –– Officers’ accrued compensation 308,100 243,400 Accrued related party interest 41,800 20,700 Valuation allowance (1,711,300 ) (264,100 ) Net deferred income tax asset $ –– $ –– |
Summary of Operating Loss Carryforwards | Tax Year Net Operating Loss Expires 2016 $ 442,900 2036 2017 2,115,400 2037 2018 548,900 No Expiration 2019 to date 1,758,100 No Expiration Total $ 4,865,300 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Schedule of Discontinued Operations, Income Statement | June 30, 2018 Three months ended Six months ended Revenue $ –– $ –– Cost of sales –– –– Gross profit –– –– Sales, marketing and pharmacy expenses 69,553 194,890 General and administrative expenses 566,417 666,000 Operating loss (635,970 ) (860,890 ) Loss on disposal of assets (10,000 ) (10,000 ) Interest expense (25,690 ) (47,281 ) Net loss from discontinued operations $ (671,660 ) $ (918,171 ) |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tables/Schedules | |
Schedule of Segment Reporting Information, by Segment | Remote Care Segment Behavioral Health Segment Diagnostics/ Corporate Segment Discontinued Operations Consolidated Totals June 30, 2019 Revenue $ 990 $ 50,900 $ –– $ –– $ 51,890 Gross profit (loss) (330 ) 43,248 –– –– 42,918 Operating loss (143,159 ) (66,889 ) (3,012,130 ) –– (3,222,179 ) Depreciation and amortization 4,598 54,880 920 –– 60,398 Interest expense 1,527 –– 305,878 –– 307,405 Gain (loss) on fair value adjustments –– –– 103,888 –– 103,888 Loss on extinguishment of debt –– –– (568,003 ) –– (568,003 ) Loss on settlement –– –– (33,272 ) –– (33,272 ) Discount amortization (29,000 ) –– –– –– (29,000 ) Total assets 909,337 384,687 146,912 –– 1,440,936 Goodwill 785,060 –– –– –– 785,060 Additions to property and equipment –– –– 2,628 –– 2,628 June 30, 2018 Revenue 8,859 900 –– –– 9,759 Gross profit (loss) (1,418 ) 900 –– –– (518 ) Operating loss (143,421 ) (94,274 ) (2,898,500 ) –– (3,136,195 ) Depreciation and amortization 4,932 54,880 832 –– 60,644 Interest expense 1,449 –– 1,079,759 –– 1,081,208 Loss on extinguishment of debt –– –– (62,600 ) –– (62,600 ) Discount amortization 70,000 –– 2,550,000 –– 2,620,000 Discontinued operations –– –– –– (918,171 ) (918,171 ) Total assets 929,625 494,447 55,236 –– 1,479,308 Goodwill 785,060 –– –– –– 785,060 Additions to property and equipment –– –– –– –– –– |
OVERVIEW AND NATURE OF BUSINE_2
OVERVIEW AND NATURE OF BUSINESS: Going Concern (Details) | Jun. 30, 2019USD ($) |
Details | |
Cumulative Earnings (Deficit) | $ 23,188,893 |
Working Capital Deficit | $ 5,620,898 |
RESTATEMENT_ Restatement (Detai
RESTATEMENT: Restatement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Derivative liability, short-term | $ 57,313 | $ 57,313 | $ 23,925 | ||||
Debentures, convertible | 27,275 | 27,275 | 724,903 | ||||
Debentures, convertible, related party | 411,006 | 411,006 | 411,006 | ||||
Derivative liability, long-term | 0 | 0 | 34,000 | ||||
Debentures, convertible, net of unamortized discount | 0 | 0 | 184,870 | ||||
Additional paid in capital - preferred | 1,599,036 | 1,599,036 | 1,699,000 | ||||
Additional paid in capital - common | 15,624,496 | 15,624,496 | 11,382,341 | ||||
Accumulated deficit | (23,188,893) | (23,188,893) | $ (19,190,922) | ||||
Loss on fair value adjustments | 35,886 | $ (62,600) | 103,888 | $ (62,600) | |||
Discount amortization | $ 37,000 | $ (1,335,000) | $ 29,000 | $ (2,620,000) | |||
Continuing operations | $ (0.013) | $ (0.023) | $ (0.023) | $ (0.048) | |||
Continuing operations | $ (0.009) | $ (0.016) | $ (0.016) | $ (0.033) | |||
Stock compensation/stock option expense | $ 1,421,237 | $ 2,069,274 | |||||
Discount amortization | (29,000) | 2,620,000 | |||||
Increase in accounts payable and accrued expenses | 30,123 | 757,050 | |||||
Discounts on long-term liabilities | (29,000) | 2,620,000 | |||||
Beneficial conversion feature of convertible promissory notes | 0 | 347,457 | |||||
Fair value of stock warrants | 185,810 | 697,500 | |||||
Embedded conversion option of convertible promissory notes | 9,370 | 850 | |||||
Interest paid-continuing operations | 44,375 | 798 | |||||
As Previously Reported | |||||||
Derivative liability, short-term | $ 0 | 0 | |||||
Debentures, convertible | 0 | 0 | |||||
Debentures, convertible, related party | 0 | 0 | |||||
Notes payable, convertible, net of discount | 688,705 | 688,705 | |||||
Total current liabilities | 5,459,948 | 5,459,948 | |||||
Derivative liability, long-term | 0 | 0 | |||||
Debentures, convertible, net of unamortized discount | 0 | 0 | |||||
Total liabilities | 33,152,999 | 33,152,999 | |||||
Additional paid in capital - preferred | 665,803 | 665,803 | |||||
Additional paid in capital - common | 8,561,553 | 8,561,553 | |||||
Accumulated deficit | (41,049,230) | (41,049,230) | |||||
Total stockholders' deficit | (31,673,691) | (31,673,691) | |||||
General and administrative expenses | $ 1,871,826 | 3,100.232 | |||||
Operating loss | (1,872,474) | (3,100,750) | |||||
Gain on extinguishment of debt | 0 | ||||||
Loss on fair value adjustments | 0 | ||||||
Discount amortization | (1,285,000) | ||||||
Interest expense, net of income | (323,149) | (718,925) | |||||
Total other income (expenses) | (1,608,149) | (3,338,925) | |||||
Net income (loss) - continuing operations | (3,480,623) | (6,439,675) | |||||
Net income (loss) | $ (3,727,134) | $ (7,357,846) | |||||
Continuing operations | $ (0.024) | $ (0.045) | |||||
Continuing operations | $ (0.017) | $ (0.031) | |||||
Net income (loss) | $ (6,439,675) | ||||||
Stock compensation/stock option expense | 2,033,829 | ||||||
Discount amortization | 2,620,000 | ||||||
Gain on extinguishment of debt | 0 | ||||||
Loss on fair value adjustments | 0 | ||||||
Debt accretion | 0 | ||||||
Increase in accounts payable and accrued expenses | 757,050 | ||||||
Discounts on long-term liabilities | 2,620,000 | ||||||
Beneficial conversion feature of convertible promissory notes | 0 | ||||||
Fair value of stock warrants | 0 | ||||||
Embedded conversion option of convertible promissory notes | 0 | ||||||
Interest paid-continuing operations | 42,653 | ||||||
As Restated | |||||||
Derivative liability, short-term | 656,500 | 656,500 | |||||
Debentures, convertible | 0 | 0 | |||||
Debentures, convertible, related party | 0 | 0 | |||||
Notes payable, convertible, net of discount | 108,237 | 108,237 | |||||
Total current liabilities | 5,535,980 | 5,535,980 | |||||
Derivative liability, long-term | 0 | 0 | |||||
Debentures, convertible, net of unamortized discount | 0 | 0 | |||||
Total liabilities | 33,229,031 | 33,229,031 | |||||
Additional paid in capital - preferred | 665,803 | 665,803 | |||||
Additional paid in capital - common | 8,945,849 | 8,945,849 | |||||
Accumulated deficit | (41,509,558) | (41,509,558) | |||||
Total stockholders' deficit | (31,749,723) | (31,749,723) | |||||
General and administrative expenses | $ 1,532,263 | $ 1,871,826 | 3,135,677 | ||||
Operating loss | (1,486,384) | (1,872,474) | (3,136,195) | ||||
Gain on extinguishment of debt | 30,919 | 0 | |||||
Loss on fair value adjustments | 68,002 | 0 | (62,600) | ||||
Discount amortization | (8,000) | (1,285,000) | |||||
Interest expense, net of income | (114,252) | (323,149) | (1,081,208) | ||||
Total other income (expenses) | (56,603) | (1,608,149) | (3,763,808) | ||||
Net income (loss) - continuing operations | (1,542,987) | (3,480,623) | (6,900,003) | ||||
Net income (loss) | $ (1,542,987) | $ (3,727,134) | $ (7,818,174) | ||||
Continuing operations | $ (0.009) | $ (0.024) | $ (0.048) | ||||
Continuing operations | $ (0.007) | $ (0.017) | $ (0.033) | ||||
Net income (loss) | $ (6,900,003) | ||||||
Stock compensation/stock option expense | 2,069,274 | ||||||
Discount amortization | 2,620,000 | ||||||
Gain on extinguishment of debt | 0 | ||||||
Loss on fair value adjustments | 62,600 | ||||||
Debt accretion | 362,283 | ||||||
Increase in accounts payable and accrued expenses | 757,050 | ||||||
Discounts on long-term liabilities | 2,620,000 | ||||||
Beneficial conversion feature of convertible promissory notes | 347,457 | ||||||
Fair value of stock warrants | 697,500 | ||||||
Embedded conversion option of convertible promissory notes | 850 | ||||||
Interest paid-continuing operations | 42,653 | ||||||
Increase (Decrease) | |||||||
Derivative liability, short-term | 656,500 | 656,500 | |||||
Debentures, convertible | 0 | 0 | |||||
Debentures, convertible, related party | 0 | 0 | |||||
Notes payable, convertible, net of discount | (580,468) | (580,468) | |||||
Total current liabilities | 76,032 | 76,032 | |||||
Derivative liability, long-term | 0 | 0 | |||||
Debentures, convertible, net of unamortized discount | 0 | 0 | |||||
Total liabilities | 76,032 | 76,032 | |||||
Additional paid in capital - preferred | 0 | 0 | |||||
Additional paid in capital - common | 384,296 | 384,296 | |||||
Accumulated deficit | (460,328) | (460,328) | |||||
Total stockholders' deficit | $ 76,032 | 76,032 | |||||
General and administrative expenses | $ 75,975 | $ 0 | 35,445 | ||||
Operating loss | 75,975 | 0 | 35,445 | ||||
Gain on extinguishment of debt | 30,919 | 0 | |||||
Loss on fair value adjustments | 68,002 | 0 | 62,600 | ||||
Discount amortization | (122,420) | 0 | |||||
Interest expense, net of income | 14,238 | 0 | 362,283 | ||||
Total other income (expenses) | (108,182) | 0 | 424,883 | ||||
Net income (loss) - continuing operations | (32,207) | 0 | 460,328 | ||||
Net income (loss) | $ (32,207) | $ 0 | $ 460,328 | ||||
Continuing operations | $ (0.001) | $ 0 | $ 0.003 | ||||
Continuing operations | $ 0 | $ 0 | $ 0.002 | ||||
Net income (loss) | $ 460,328 | ||||||
Stock compensation/stock option expense | 35,445 | ||||||
Discount amortization | 0 | ||||||
Gain on extinguishment of debt | 0 | ||||||
Loss on fair value adjustments | $ 62,600 | ||||||
Debt accretion | 362,283 | ||||||
Increase in accounts payable and accrued expenses | 0 | ||||||
Discounts on long-term liabilities | 0 | ||||||
Beneficial conversion feature of convertible promissory notes | 347,457 | ||||||
Fair value of stock warrants | 697,500 | ||||||
Embedded conversion option of convertible promissory notes | 850 | ||||||
Interest paid-continuing operations | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fair Value of Financial Instruments: Derivatives (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Derivative Liability-Convertible Debentures | $ 0 | $ 23,925 |
Derivative Liability-Convertible Promissory Notes | 2,140 | 0 |
Derivative Liability-Warrants | 55,173 | 34,000 |
Total derivative liability | $ 57,313 | $ 57,925 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fair Value of Financial Instruments: Schedule of Changes in Derivative Liabilities at Fair Value (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Details | ||
Fair value of derivative liability, beginning | $ 57,925 | $ 0 |
Increase in derivative liability-debentures | 9,370 | 60,350 |
Increase in derivative liability-warrants | 105,000 | 623,900 |
Fair value adjustment-debentures | (8,296) | (2,500) |
Fair value adjustment-convertible promissory notes | (9,370) | 0 |
Fair value adjustment-warrants | (86,222) | 126,375 |
Reclassification of warrant carrying value due to reset of exercise price | 0 | (750,200) |
Reclassification to gain (loss) upon extinguished debt | (11,094) | 0 |
Fair value of derivative liability, beginning | $ 57,313 | $ 57,925 |
PROPERTY AND EQUIPMENT_ Propert
PROPERTY AND EQUIPMENT: Property and Equipment (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Computer equipment | $ 6,615 | $ 3,987 |
Medical devices | 45,194 | 45,194 |
Property and equipment, gross | 51,809 | 49,181 |
Accumulated depreciation | (49,269) | (49,181) |
Property and equipment, net | $ 2,540 | $ 0 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Details | ||||
Depreciation | $ 88 | $ 0 | $ 88 | $ 0 |
OPERATING LEASES (Details)
OPERATING LEASES (Details) | 6 Months Ended | |
Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Related Party Transaction, Description of Transaction | The Company entered into a sub-lease agreement with PearTrack Security Systems, Inc. | |
Short-Term Lease, Date of Lease | Dec. 1, 2017 | |
Short-term Lease Commitment, Amount | $ 5,600 | |
Operating lease right of use asset | $ 102,313 | $ 0 |
New York, NY | ||
Operating Lease, Date of Lease | May 1, 2019 | |
Operating Lease, Payments, Monthly | $ 8,900 | |
Operating Lease, Term of Lease (Mos) | 14 | |
Operating Lease, Lease Maturity | Jun. 30, 2020 | |
Operating lease right of use asset | $ 118,585 | |
Operating Lease, Discount Rate | 8.00% |
OPERATING LEASES_ Lease Amortiz
OPERATING LEASES: Lease Amortization (Details) - New York, NY | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Operating Lease, Expense | $ 16,292 | $ 16,292 |
Operating Lease Liability | $ 102,313 | $ 102,313 |
OPERATING LEASES_ Operating Lea
OPERATING LEASES: Operating Lease, Future Miinimum Payments (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
2019 | |
Operating Lease, Minimum Payments | $ 53,400 |
Operating Lease, Amounts Treated as Interest | 3,263 |
Operating Lease, Present Value of Lease Payments | 50,137 |
2020 | |
Operating Lease, Minimum Payments | 53,400 |
Operating Lease, Amounts Treated as Interest | 1,224 |
Operating Lease, Present Value of Lease Payments | 52,176 |
Operating Lease, Minimum Payments | 106,800 |
Operating Lease, Amounts Treated as Interest | 4,487 |
Operating Lease, Present Value of Lease Payments | $ 102,313 |
OPERATING LEASES_ Operating L_2
OPERATING LEASES: Operating Lease, Lease Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Details | |||||
Operating lease costs | $ 17,800 | $ 0 | |||
Short-term lease costs | 34,160 | 73,351 | |||
Total lease costs | $ 34,600 | $ 17,360 | $ 51,960 | $ 36,757 | $ 73,351 |
OPERATING LEASES_ Lease Costs (
OPERATING LEASES: Lease Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Details | |||||
Total lease costs | $ 34,600 | $ 17,360 | $ 51,960 | $ 36,757 | $ 73,351 |
INTANGIBLE ASSETS_ Schedule of
INTANGIBLE ASSETS: Schedule of Intangible Assets (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Products and processes | $ 12,500 | $ 12,500 |
Trademarks, patents and technology | 150,700 | 150,700 |
Customer lists/relationships | 30,000 | 30,000 |
Non-compete agreement | 30,000 | 30,000 |
Marketing related intangibles | 64,000 | 64,000 |
Software | 510,300 | 510,300 |
Intangible Assets, Gross | 797,500 | 797,500 |
Accumulated amortization | (278,775) | (218,465) |
Intangible Assets, Net | $ 518,725 | $ 579,035 |
INTANGIBLE ASSETS_ Amortization
INTANGIBLE ASSETS: Amortization Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Details | ||||
Amortization Expense | $ 30,155 | $ 30,322 | $ 60,310 | $ 60,644 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES: Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Accounts Payable, Vendors | $ 1,010,819 | $ 830,590 |
Credit cards payable | 42,552 | 42,552 |
Payroll taxes payable | 80,134 | 78,608 |
Accrued Interest | 639,004 | 450,187 |
Accrued payroll and payroll taxes | 513,055 | 402,053 |
Other liabilities | 426,148 | 601,148 |
Reserve-Legal Fees | 85,000 | 250,000 |
Total accounts payable and accrued expenses | $ 2,796,712 | $ 2,655,138 |
ACCOUNTS PAYABLE AND ACCRUED _4
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2019 | |
Payroll Taxes Payable, Penalties | $ 17,475 | $ 17,475 |
Payroll Taxes Payable, Interest | 4,202 | 5,729 |
Payroll Taxes-RoxSan Pharmacy | 601,148 | 426,148 |
Extinguishment of Debt | 341,606 | |
Reserve-Legal Fees | 250,000 | $ 85,000 |
Accounts Payable | ||
Extinguishment of Debt | 284,714 | |
Accrued Interest | ||
Extinguishment of Debt | $ 56,892 |
NOTES AND LOANS PAYABLE_ Schedu
NOTES AND LOANS PAYABLE: Schedule of Notes and Loans Payable (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Debentures, Convertible | $ 27,275 | $ 724,903 |
Notes payable | 220,000 | 0 |
Notes payable, convertible, net of unamortized discount | 716,462 | 296,000 |
Total short-term | 963,737 | 1,020,903 |
Debentures, Convertible, Net of Unamortized Discount | 0 | 184,870 |
Notes Payable, Convertible | 720,154 | 720,154 |
Note Payable-Bank | 23,950 | 28,995 |
Total long-term | 744,104 | 934,019 |
Notes Payable, Total | $ 1,707,841 | $ 1,954,922 |
NOTES AND LOANS PAYABLE_ Non-Re
NOTES AND LOANS PAYABLE: Non-Related Party Convertible Notes Payable (Details) | 6 Months Ended |
Jun. 30, 2019USD ($)$ / shares | |
Short-term Debentures | |
Principal | $ 27,275 |
APR | 10.00% |
Accrued Interest | $ 0 |
Conversion Price | $ / shares | $ 0.12 |
Term/Due | 07/30/2019 |
Lender Group A | |
Principal | $ 120,000 |
Accrued Interest | $ 244,987 |
Conversion Price | $ / shares | $ 0.10 |
Term/Due | 05/30/2018 |
Lender Group B | |
Principal | $ 505,462 |
APR | 12.00% |
Accrued Interest | $ 18,524 |
Lender Group B | Minimum | |
Conversion Price | $ / shares | $ 0.10 |
Lender Group B | Maximum | |
Conversion Price | $ / shares | $ 0.12 |
Investor Group A | |
Principal | $ 91,000 |
APR | 10.00% |
Accrued Interest | $ 16,426 |
Conversion Price | $ / shares | $ 0.10 |
Term/Due | 09/30/2018 |
The Kasper Group, Ltd | |
Principal | $ 144,000 |
APR | 7.00% |
Accrued Interest | $ 75,586 |
Conversion Price | $ / shares | $ 0.10 |
Term/Due | 10/30/2019 |
Joseph M. Redmond | |
Principal | $ 576,154 |
APR | 5.00% |
Accrued Interest | $ 133,835 |
Conversion Price | $ / shares | $ 0.10 |
Term/Due | 07/30/2017 |
Principal | $ 1,463,889 |
Accrued Interest | $ 489,348 |
NOTES AND LOANS PAYABLE_ Summar
NOTES AND LOANS PAYABLE: Summary (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Short-Term Debt, Total | $ 963,737 | $ 1,020,903 |
Short-Term Debt, Debentures, Convertible | 27,275 | 724,903 |
Short-Term Debt, Notes Payable | 220,000 | 0 |
Short-Term Debt, Notes Payable, Convertible | 716,462 | 296,000 |
Long-Term Debt, Total | 744,104 | 934,019 |
Long-Term Debt, Debentures, Convertible | 0 | 207,500 |
Long-Term Debt, Debentures, Convertible, Discount | 0 | 22,630 |
Long-Term Debt, Notes Payable, Convertible | 720,154 | 720,154 |
Long-Term Debt, Notes Payable, Convertible, Subject to Compromise | 576,154 | 576,154 |
Long-Term Debt, Notes Payable, Banks | $ 23,950 | $ 28,995 |
NOTES AND LOANS PAYABLE_ Short-
NOTES AND LOANS PAYABLE: Short-Term Debt-Activity (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Details | ||
Short-Term Debt, Issuances | $ 585,000 | $ 825,000 |
Short-Term Debt, Repayments, Principal | 562,869 | 50,000 |
Short-Term Debt, Repayments, Interest | 41,519 | 608 |
Short-Term Debt, Conversions, Principal | 395,000 | 620,000 |
Short-Term Debt, Conversions, Interest | 2,000 | 55,613 |
Short-Term Debt, Premiums | 403,234 | 105,320 |
Short-Term Debt, Discount Amortization | 63,051 | 1,087,974 |
Short-Term Debt, Interest Accrued | $ 137,715 | $ 270,142 |
NOTES AND LOANS PAYABLE_ Accrue
NOTES AND LOANS PAYABLE: Accrued Interest (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Details | |||
Short-Term Debt, Accrued Interest, Total | $ 279,937 | $ 185,741 | |
Long-Term Debt, Accrued Interest, Total | 209,833 | 190,386 | |
Accrued Interest, Current Period | 158,018 | $ 1,009,525 | |
Accrued Interest | $ 489,770 | $ 376,127 |
NOTES AND LOANS PAYABLE_ Activi
NOTES AND LOANS PAYABLE: Activity (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Long-Term Debt, Debentures, Convertible, Repaid | $ 217,045 | $ 9,245 |
Long-Term Debt, Debentures, Convertible, Repaid, Interest | 856 | 632 |
Long-Term Debt, Debentures, Convertible, Converted | 95,142 | 0 |
Long-Term Debt, Debentures, Convertible, Premiums Charged | 206,230 | 0 |
Long-Term Debt, Debentures, Convertible, Discount Amortization | 9,816 | 2,370 |
Long-Term Debt, Debentures, Convertible, Interest Accrued | $ 20,303 | $ 739,383 |
NOTES AND LOANS PAYABLE_ Sche_2
NOTES AND LOANS PAYABLE: Schedule of Maturities of Long-term Debt (Details) | Jun. 30, 2019USD ($) |
2020 | |
Long-Term Debt, Principal | $ 720,154 |
2021 | |
Long-Term Debt, Principal | 23,950 |
Long-Term Debt, Principal | $ 744,104 |
RELATED PARTY TRANSACTIONS_ Sum
RELATED PARTY TRANSACTIONS: Summary (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Related party payables | ||
Related Party, Accrued Compensation | $ 1,101,143 | $ 869,859 |
Related Party, Cash Advances | 295,485 | 134,861 |
Related Party, Total Payables | 1,396,628 | 1,004,720 |
Debentures, convertible | 411,006 | 411,006 |
Notes payable, convertible, related party | 511,100 | 491,100 |
Total Related Party Trasactions | $ 2,318,734 | $ 1,906,826 |
RELATED PARTY TRANSACTIONS_ Sch
RELATED PARTY TRANSACTIONS: Schedule of Related Party Convertible Debt (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Beneficial Owner | |
Note Payable, Convertible, Related Party, Principal | $ 491,100 |
Note Payable, Convertible, Related Party, Interest Rate | 7.00% |
Note Payable, Convertible, Related Party, Accrued Interest | $ 91,107 |
Note Payable, Convertible, Related Party, Conversion Price | $ 0.10 |
Note Payable, Convertible, Related Party, Maturity Date | 12/31/2023 |
DIrector | |
Note Payable, Convertible, Related Party, Principal | $ 20,000 |
Note Payable, Convertible, Related Party, Interest Rate | 10.00% |
Note Payable, Convertible, Related Party, Accrued Interest | $ 986 |
Note Payable, Convertible, Related Party, Conversion Price | $ 0.10 |
Note Payable, Convertible, Related Party, Maturity Date | 12/31/2019 |
Beneficial Owner | |
Note Payable, Convertible, Related Party, Principal | $ 342,734 |
Note Payable, Convertible, Related Party, Interest Rate | 12.00% |
Note Payable, Convertible, Related Party, Accrued Interest | $ 47,649 |
Note Payable, Convertible, Related Party, Conversion Price | $ 0.10 |
Note Payable, Convertible, Related Party, Maturity Date | 12/31/2021 |
Beneficial Owner | |
Note Payable, Convertible, Related Party, Principal | $ 68,272 |
Note Payable, Convertible, Related Party, Interest Rate | 12.00% |
Note Payable, Convertible, Related Party, Accrued Interest | $ 9,492 |
Note Payable, Convertible, Related Party, Conversion Price | $ 0.10 |
Note Payable, Convertible, Related Party, Maturity Date | 12/31/2019 |
Note Payable, Convertible, Related Party, Principal | $ 1,196,906 |
Note Payable, Convertible, Related Party, Accrued Interest | $ 149,234 |
RELATED PARTY TRANSACTIONS_ S_2
RELATED PARTY TRANSACTIONS: Summary Totals (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Related Party Transactions, Total | $ 2,318,734 | $ 1,906,826 |
Related Party Transactions, Accrued Compensation | 1,101,143 | 869,859 |
Related Party Transactions, Advances to Company | 295,485 | 134,861 |
Related Party Transactions, Convertible Debentures | 411,006 | 411,006 |
Related Party Transactions, Convertible Notes Payable | $ 511,100 | $ 491,100 |
RELATED PARTY TRANSACTIONS_ Act
RELATED PARTY TRANSACTIONS: Activity (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Details | ||
Related Party Transactions, Accrued Compensation, Current | $ 627,784 | $ 1,371,446 |
Related Party Transactions, Accrued Compensation, Paid | 396,500 | 510,500 |
Related Party Transactions, Accrued Compensation, Converted to Equity | 0 | 450,000 |
Related Party Transactions, Debt Purchase | 575,132 | |
Related Party Transactions, Accrued Compensation, Paid, Debt Purchase | 159,500 | |
Related Party Transactions, Debt Purchase, Loan to Company | 415,632 | |
Related Party Transactions, Accrued Benefits & Advances, Increase | 296,060 | 121,949 |
Related Party Transactions, Accrued Benefits & Advances, Paid/Repaid | 135,436 | 115,384 |
Related Party Transactions, Debentures, Premiums Charged | 257,674 | 0 |
Related Party Transactions, Interest Accrued | 75,174 | 66,840 |
Related Party Transactions, Interest Paid | 0 | 798 |
Related Party Transactions, Interest Converted to Principal | 0 | 71,839 |
Related Party Transactions, Accrued Interest, Total | $ 149,234 | $ 74,060 |
RELATED PARTY TRANSACTIONS_ Agr
RELATED PARTY TRANSACTIONS: Agreements (Details) - Chief Operating Officer | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Employment Agreement, Effective Date | May 15, 2019 |
Employment Agreement, Term | 2 |
Employment Agreement, Compensation, Year 1 | $ 250,000 |
Employment Agreement, Compensation, Year 2 | $ 275,000 |
Employment Agreement, Stock Award, Shares | shares | 3,000,000 |
Employment Agreement, Stock Award, Value | $ 201,300 |
Employment Agreement, Stock Award, Cash Paid | $ 3,000 |
Employment Agreement, Stock Award, Initial Vesting (Pct) | 25.00% |
Employment Agreement, Stock Options, Shares | shares | 3,000,000 |
Employment Agreement, Stock Options, Exercise Price | $ / shares | $ 0.25 |
Employment Agreement, Stock Options, Value | $ 195,600 |
Employment Agreement, Stock Options, Method Used | Black-Scholes |
Employment Agreement, Stock Options, Term (Yrs) | 5 |
Employment Agreement, Stock Options, Initial Vesting (Pct) | 25.00% |
Employment Agreement, Stock Options, Expected Term | 4 years 9 months |
Employment Agreement, Stock Options, Expected Volatility | 2.21% |
Employment Agreement, Stock Options, Risk Free Interest Rate | 2.15% |
Employment Agreement, Stock Options, Dividiend Yield | 0.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Qolpom Shareholders | ||
Contingency, Revenue Share, Maximum Payment | $ 2,000,000 | |
Contingency, Royalty, Percent | 3.00% | |
Contingency, Revenue Share, Present Value | $ 422,000 | $ 430,000 |
Contingency, Royalty, Present Value | 295,598 | 310,000 |
ProEventa | ||
Contingency, Revenue Share, Maximum Payment | $ 3,000,000 | |
Contingency, Royalty, Percent | 3.00% | |
Contingency, Revenue Share, Present Value | $ 1,189,000 | 1,040,000 |
Contingency, Royalty, Present Value | 791,000 | 690,000 |
Contingency, Royalty, Maximum Payment | 25,000,000 | |
Payable, Royalties | 6,598 | $ 0 |
Pending Litigation | ||
Gain Contingency, Promissory Note, Principal | 20,500,000 | |
Gain Contingency, Promissory Note, Accrued Interest | 2,278,281 | |
Gain Contingency, Promissory Note, Total | $ 22,778,281 | |
Secured Debt, In Litigation | ||
Note Payable, Date | Aug. 13, 2015 | |
Note Payable, Principal | $ 20,500,000 | |
Note Payable, Interest Rate | 6.00% | |
Note Payable, Maturity Date | Aug. 13, 2018 |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Outstanding | 977,352 | 1,013,691 |
CONVERTIBLE PREFERRED STOCK_ Ac
CONVERTIBLE PREFERRED STOCK: Activity (Details) - Series A Preferred Stock - USD ($) | May 15, 2019 | Apr. 01, 2019 | Mar. 31, 2019 |
Preferred Stock, Cancelled, Treasury Shares | 36,339 | ||
Preferred Stock, Cancelled, Treasury Shares | $ 100,000 | ||
Preferred Stock, Cancelled, Paid in Capital | $ 99,964 | ||
Preferred Stock-Dividends Paid in Kind | 21,121 | ||
Preferred Stock.Treasury Shares | 57,500 | ||
Preferred Stock, Treasury Shares, Reissued | 57,500 | ||
Preferred Stock, Treasury Shares, Reissued, Proceeds | $ 69,000 | ||
Preferred Stock, Converted | 57,500 | ||
Preferred Stock, Shares Issued Upon Conversion | 1,150,000 | ||
Preferred Stock, Conversion Rate, To Common | 20 |
COMMON STOCK (Details)
COMMON STOCK (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Class A | ||
Common Stock, Shares Authorized | 500,000,000 | 250,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Issued | 46,694,738 | 21,358,611 |
Common Stock, Shares Oustanding | 204,807,879 | 158,113,141 |
COMMON STOCK_ Activity (Details
COMMON STOCK: Activity (Details) | 6 Months Ended |
Jun. 30, 2019shares | |
Common Stock, Shares, Issued | |
Shares Issued, Conversion of Series A Preferred | 1,150,000 |
Shares Issued, Conversion of Debt | 12,929,925 |
Shares Issued, Stock Awards | 6,316,667 |
Shares Issued, Stock Awards, Related Party | 3,000,000 |
Shares Issued, SAFE offering | 7,500,000 |
Shares Issued, Retirement of Warrants | 2,168,146 |
Shares Issued, For Services | 1,400,000 |
Shares Issued, Debt Service | 230,000 |
Shares Issued, Equity Funding | 6,000,000 |
Preferred Stock, Shares | |
Shares Issued, Conversion of Series A Preferred | (57,500) |
Preferred Stock, Value | |
Shares Issued, Conversion of Series A Preferred | (69,000) |
Common Stock, APIC | |
Shares Issued, Conversion of Series A Preferred | 67,850 |
Shares Issued, Conversion of Debt | 735,345 |
Shares Issued, Stock Awards | 33,050 |
Shares Issued, Stock Awards, Related Party | 198,300 |
Shares Issued, SAFE offering | 742,500 |
Shares Issued, Retirement of Warrants | 237,972 |
Shares Issued, For Services | 119,600 |
Shares Issued, Debt Service | 22,770 |
Shares Issued, Equity Funding | 494,000 |
Common Stock, Conversion of Debt, Amount | |
Shares Issued, Conversion of Debt | 748,274 |
Common Stock, Shares, Value | |
Shares Issued, Stock Awards | 652,710 |
Shares Issued, Stock Awards, Related Party | 201,300 |
Shares Issued, Retirement of Warrants | 240,040 |
Shares Issued, For Services | 121,000 |
Shares Issued, Debt Service | 23,000 |
Common Stock, Shares, Purchased at Par | |
Shares Issued, Stock Awards | 500,000 |
Common Stock, Value, Purchased at Par | |
Shares Issued, Stock Awards | 33,550 |
Common Stock, Proceeds, Cash | |
Shares Issued, Stock Awards | 500 |
Shares Issued, Stock Awards, Related Party | 3,000 |
Shares Issued, SAFE offering | 735,000 |
Shares Issued, Equity Funding | 500,000 |
Common Stock, Shares, Vested (Pct) | |
Shares Issued, Stock Awards | 0.2500 |
Shares Issued, Stock Awards, Related Party | 0.2500 |
Deferred Compensation | |
Shares Issued, Stock Awards, Related Party | 198,300 |
Common Stock, Proceeds, Stock Compensation | |
Shares Issued, SAFE offering | 15,000 |
Warrants, Retired | |
Shares Issued, Retirement of Warrants | 4,550,000 |
Common Stock, Shares, Future Issuance | |
Shares Issued, Equity Funding | 6,000,000 |
Subscriptions Receivable | |
Shares Issued, Equity Funding | 500,000 |
COMMON STOCK_ Restricted Stock
COMMON STOCK: Restricted Stock Awards (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Details | ||
Restricted Stock Award, Grants, Shares | 3,730,000 | 3,660,000 |
Restricted Stock Award, Grants, Value | $ 254,350 | $ 434,000 |
Restricted Stock Award, Vested, Shares | 1,654,270 | 6,827,368 |
Restricted Stock Award, Vested, Value | $ 171,555 | $ 1,095,193 |
Restricted Stock Award, Unvested, Shares | 7,963,925 | 5,888,195 |
Restricted Stock Award, Unvested, Value | $ 1,231,604 | $ 1,148,809 |
COMMON STOCK_ Schedule of Restr
COMMON STOCK: Schedule of Restricted Stock Units Activity (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted Stock Award | |||
Restricted Stock Awards, Outstanding | 7,963,925 | 5,888,195 | 9,055,563 |
Restricted Stock Awards, Granted | 3,730,000 | 3,660,000 | |
Restricted Stock Awards, Vested | (1,654,270) | (6,827,368) | |
Deferred Compensation | |||
Restricted Stock Award, Deferred Compensation, Balance | $ 1,231,604 | $ 1,148,809 | $ 1,810,002 |
Restricted Stock Award, Deferred Compensation, Granted | 254,350 | 434,000 | |
Restricted Stock Award, Deferred Compensation, Vested | $ (171,555) | $ (1,095,193) |
WARRANTS AND OPTIONS_ Issued (D
WARRANTS AND OPTIONS: Issued (Details) - shares | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Warrants, Number of Shares | 32,782,500 | 21,232,500 |
Stock Options, Number of Shares | 28,060,000 | 18,060,000 |
WARRANTS AND OPTIONS_ Summary-C
WARRANTS AND OPTIONS: Summary-Current Period (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Warrants, Granted | 16,700,000 | 14,077,500 | |
Warrants, Retired | 4,850,000 | 0 | |
Warrants, Expired | 300,000 | 100,000 | |
Warrants, Value | $ 80,510 | $ 851,610 | |
Warrants, Yield | 0.00% | ||
Deferred Compensation, Total. Warrants | $ 0 | $ 113,210 | |
Deferred Compensation, Current Period Expense, Warrants | 86,960 | 73,370 | |
Deferred Compensation,Future Expense, Warrants | $ 92,470 | $ 98,920 | |
Deferred Compensation,Future Expense, Term (Months), Warrants | 12 | ||
Minimum | |||
Warrants, Exercise Price | $ / shares | $ 0.001 | ||
Warrants, Expiration (Year) | 2020 | ||
Warrants, Expected Term (Years) | 2 | ||
Warrants, Expected Volatility | 40.00% | ||
Warrants, Risk Free Interest Rate | 1.16% | ||
Maximum | |||
Warrants, Exercise Price | $ / shares | $ 0.60 | ||
Warrants, Expiration (Year) | 2024 | ||
Warrants, Expected Term (Years) | 5 | ||
Warrants, Expected Volatility | 45.00% | ||
Warrants, Risk Free Interest Rate | 2.91% |
WARRANTS AND OPTIONS_ Schedule
WARRANTS AND OPTIONS: Schedule of Warrants Outstanding (Details) | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
$0.001 | |
Warrants, Number of Shares | shares | 300,000 |
Warrants, Remaining Life (Years) | 4 years |
Warrants, Exercise Price X Number Of Shares | $ | $ 300 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.17 |
$0.10 | |
Warrants, Number of Shares | shares | 75,000 |
Warrants, Remaining Life (Years) | 1 year 6 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 750 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.18 |
$0.10 | |
Warrants, Number of Shares | shares | 62,500 |
Warrants, Remaining Life (Years) | 3 years 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 6,250 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.29 |
$0.10 | |
Warrants, Number of Shares | shares | 250,000 |
Warrants, Remaining Life (Years) | 2 years |
Warrants, Exercise Price X Number Of Shares | $ | $ 25,000 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.19 |
$0.10 | |
Warrants, Number of Shares | shares | 4,877,500 |
Warrants, Remaining Life (Years) | 1 year 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 487,750 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.21 |
$0.10 | |
Warrants, Number of Shares | shares | 250,000 |
Warrants, Remaining Life (Years) | 1 year 3 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 25,000 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.32 |
$0.15 | |
Warrants, Number of Shares | shares | 600,000 |
Warrants, Remaining Life (Years) | 4 years 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 90,000 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.19 |
$0.15 | |
Warrants, Number of Shares | shares | 1,000,000 |
Warrants, Remaining Life (Years) | 1 year 6 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 150,000 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.28 |
$0.17 | |
Warrants, Number of Shares | shares | 62,500 |
Warrants, Remaining Life (Years) | 3 years 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 10,625 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.29 |
$0.18 | |
Warrants, Number of Shares | shares | 62,500 |
Warrants, Remaining Life (Years) | 3 years 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 11,250 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.29 |
$0.20 | |
Warrants, Number of Shares | shares | 2,600,000 |
Warrants, Remaining Life (Years) | 4 years 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 520,000 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.19 |
$0.21 | |
Warrants, Number of Shares | shares | 62,500 |
Warrants, Remaining Life (Years) | 3 years 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 13,125 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.29 |
$0.21 | |
Warrants, Number of Shares | shares | 100,000 |
Warrants, Remaining Life (Years) | 1 year 3 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 21,000 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.34 |
$0.25 | |
Warrants, Number of Shares | shares | 3,750,000 |
Warrants, Remaining Life (Years) | 4 years 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 937,500 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.19 |
$0.25 | |
Warrants, Number of Shares | shares | 3,250,000 |
Warrants, Remaining Life (Years) | 2 years 3 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 812,500 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.18 |
$0.25 | |
Warrants, Number of Shares | shares | 9,750,000 |
Warrants, Remaining Life (Years) | 1 year 9 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 2,437,500 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.19 |
$0.25 | |
Warrants, Number of Shares | shares | 475,000 |
Warrants, Remaining Life (Years) | 1 year 6 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 118,750 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.27 |
$0.25 | |
Warrants, Number of Shares | shares | 3,255,000 |
Warrants, Remaining Life (Years) | 1 year 3 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 813,750 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.32 |
$0.25 | |
Warrants, Number of Shares | shares | 1,500,000 |
Warrants, Remaining Life (Years) | 1 year |
Warrants, Exercise Price X Number Of Shares | $ | $ 375,000 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.39 |
$0.35 | |
Warrants, Number of Shares | shares | 250,000 |
Warrants, Remaining Life (Years) | 1 year 3 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 87,500 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.32 |
$0.60 | |
Warrants, Number of Shares | shares | 250,000 |
Warrants, Remaining Life (Years) | 1 year 3 months |
Warrants, Exercise Price X Number Of Shares | $ | $ 150,000 |
Warrants, Weighted Average Exercise Price | $ / shares | $ 0.34 |
WARRANTS AND OPTIONS_ Warrant A
WARRANTS AND OPTIONS: Warrant Activity (Details) | 6 Months Ended |
Jun. 30, 2019shares | |
Weighted Average Exercise Price | |
Warrants, Outstanding, Beginnning | 0.18 |
Warrants, Issued in Period | 0.20 |
Warrants, Exercised in Period | 0 |
Warrants, Retaired in Period | 0.22 |
Warrants, Expired/Forfeited in Period | 0.18 |
Warrants, Outstanding, Ending | 0.21 |
Warrant, Common Stock | |
Warrants, Outstanding, Beginnning | 21,232,500 |
Warrants, Issued in Period | 16,700,000 |
Warrants, Exercised in Period | 0 |
Warrants, Retaired in Period | (4,850,000) |
Warrants, Expired/Forfeited in Period | (300,000) |
Warrants, Outstanding, Ending | 32,782,500 |
WARRANTS AND OPTIONS_ Options G
WARRANTS AND OPTIONS: Options Granted-Current Period (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | |
Stock Options, Granted | shares | 10,000,000 | 6,000,000 |
Stock Options, Vest Period (Years) | 2 | |
Stock Options, Value | $ | $ 900,150 | $ 833,700 |
Stock Options, Yield | 0.00% | |
Minimum | ||
Stock Options, Life (Years) | 3 | |
Stock Options, Exercise Price | $ 0.05 | |
Stock Options, Expected Term (Years) | 3 | |
Stock Options, Expected Volatility | 1.78 | |
Stock Options, Risk Free Interest Rate | 1.69% | |
Maximum | ||
Stock Options, Life (Years) | 5 | |
Stock Options, Exercise Price | $ 0.60 | |
Stock Options, Expected Term (Years) | 4.75 | |
Stock Options, Expected Volatility | 2.29 | |
Stock Options, Risk Free Interest Rate | 2.78% |
WARRANTS AND OPTIONS_ Options O
WARRANTS AND OPTIONS: Options Outstanding (Details) | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
$0.05 | |
Stock Options, Number of Shares | shares | 90,000 |
Stock Options, Remaining Life (Years) | 3 years |
Stock Options, Exercise Price x Number of Shares | $ | $ 4,500 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.14 |
$0.05 | |
Stock Options, Number of Shares | shares | 1,140,000 |
Stock Options, Remaining Life (Years) | 2 years 9 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 57,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.09 |
$0.05 | |
Stock Options, Number of Shares | shares | 100,000 |
Stock Options, Remaining Life (Years) | 2 years 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 5,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.08 |
$0.05 | |
Stock Options, Number of Shares | shares | 60,000 |
Stock Options, Remaining Life (Years) | 1 year 6 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 3,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.06 |
$0.05 | |
Stock Options, Number of Shares | shares | 170,000 |
Stock Options, Remaining Life (Years) | 1 year 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 8,500 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.12 |
$0.09 | |
Stock Options, Number of Shares | shares | 5,500,000 |
Stock Options, Remaining Life (Years) | 3 years |
Stock Options, Exercise Price x Number of Shares | $ | $ 467,500 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.20 |
$0.10 | |
Stock Options, Number of Shares | shares | 500,000 |
Stock Options, Remaining Life (Years) | 1 year 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 50,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.14 |
$0.10 | |
Stock Options, Number of Shares | shares | 250,000 |
Stock Options, Remaining Life (Years) | 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 25,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.06 |
$0.15 | |
Stock Options, Number of Shares | shares | 1,000,000 |
Stock Options, Remaining Life (Years) | 1 year 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 150,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.14 |
$0.25 | |
Stock Options, Number of Shares | shares | 3,500,000 |
Stock Options, Remaining Life (Years) | 4 years 9 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 875,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.23 |
$0.25 | |
Stock Options, Number of Shares | shares | 1,000,000 |
Stock Options, Remaining Life (Years) | 4 years 6 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 250,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.20 |
$0.25 | |
Stock Options, Number of Shares | shares | 5,000,000 |
Stock Options, Remaining Life (Years) | 3 years 9 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 1,250,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.16 |
$0.25 | |
Stock Options, Number of Shares | shares | 7,000,000 |
Stock Options, Remaining Life (Years) | 3 years |
Stock Options, Exercise Price x Number of Shares | $ | $ 1,750,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.16 |
$0.25 | |
Stock Options, Number of Shares | shares | 1,000,000 |
Stock Options, Remaining Life (Years) | 1 year 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 250,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.15 |
$0.25 | |
Stock Options, Number of Shares | shares | 1,000,000 |
Stock Options, Remaining Life (Years) | 9 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 250,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.10 |
$0.25 | |
Stock Options, Number of Shares | shares | 250,000 |
Stock Options, Remaining Life (Years) | 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 62,500 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.06 |
$0.35 | |
Stock Options, Number of Shares | shares | 250,000 |
Stock Options, Remaining Life (Years) | 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 87,500 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.07 |
$0.60 | |
Stock Options, Number of Shares | shares | 250,000 |
Stock Options, Remaining Life (Years) | 3 months |
Stock Options, Exercise Price x Number of Shares | $ | $ 150,000 |
Stock Options, Weighted Average Exercise Price | $ / shares | $ 0.08 |
WARRANTS AND OPTIONS_ Options A
WARRANTS AND OPTIONS: Options Activity (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Stock Options, Grants In Period | 10,000,000 | 6,000,000 |
Weighted Average Exercise Price | ||
Stock Options, Beginning | 0.23 | |
Stock Options, Grants In Period | 0.22 | |
Stock Options, Exercises | 0 | |
Stock Options, Expirations/Forfeitures in Period | 0 | |
Stock Options, Ending | 0.20 | 0.23 |
Stock Options | ||
Stock Options, Beginning | 18,060,000 | |
Stock Options, Grants In Period | 10,000,000 | |
Stock Options, Exercises | 0 | |
Stock Options, Expirations/Forfeitures in Period | 0 | |
Stock Options, Ending | 28,060,000 | 18,060,000 |
WARRANTS AND OPTIONS_ Summary_2
WARRANTS AND OPTIONS: Summary-Current Peiriod (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | |
Details | ||
Stock Options, Grants | 10,000,000 | 6,000,000 |
Stock Options, Exercises | 0 | 1,973,189 |
Stock Options, Expirations | 0 | 1,000,000 |
Stock Options, Forfeitures | 0 | 5,641,811 |
Deferred Compensation, Total | $ | $ 900,150 | $ 649,327 |
Deferred Compensation, Current Period Expense | $ | 163,922 | 572,870 |
Deferred Compensation, Future Expense | $ | $ 2,131,696 | $ 1,395,466 |
Deferred Compensation, Future Expense, Term (Months) | 18 |
INCOME TAXES_ Schedule of Effec
INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | $ (3,997,971) | $ 15,608,209 |
Statutory Rate (Fed & State(s)) | 30.00% | 30.00% |
Computed Expected Tax Payable (Recovery) | $ (1,050,700) | $ 4,781,700 |
Effect of release of net operating loss carryforwards | (927,100) | (2,417,700) |
Gain on extinguishment of debt-principal | 0 | (6,124,000) |
Non-Deductible, Stock Option Amortization | 398,100 | 1,048,500 |
Non-Deductible, Discount amortization | 130,900 | 837,000 |
Non-Deductible, Other | 1,600 | 1,500 |
Non-Deductible, Total | 530,600 | (4,237,000) |
Change in Valuation Allowance | 1,447,200 | (1,873,000) |
Current Income Tax Expense (Benefit) | 0 | 0 |
Reported Income Taxes, Federal | 0 | 0 |
Reported Income Taxes, State | 0 | 0 |
Reported Income Taxes, Total | $ 0 | $ 0 |
INCOME TAXES_ Components of Def
INCOME TAXES: Components of Deferred Tax Assets and Liabilities (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Details | ||
Deferred Tax Asset, Net Operating Losses | $ 1,361,400 | $ 0 |
Deferred Tax Asset, Bad Debt Allowance | 0 | 0 |
Deferred Tax Asset, Officers Accrued Compensation | 308,100 | 243,400 |
Deferred Tax Asset, Related Party Interest | 41,800 | 20,700 |
Deferred Tax Asset, Valuation Allowance | (1,711,300) | (264,100) |
Deferred Tax Assets, Net of Valuation Allowance | $ 0 | $ 0 |
INCOME TAXES_ Extinguishment of
INCOME TAXES: Extinguishment of Debt (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Details | |
Extinguishment of Debt, Pricipal | $ 20,880,688 |
INCOME TAXES_ Summary of Operat
INCOME TAXES: Summary of Operating Loss Carryforwards (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
2016 | |
Net Operating Loss | $ 442,900 |
Expires | 2036 |
2017 | |
Net Operating Loss | $ 2,115,400 |
Expires | 2037 |
2018 | |
Net Operating Loss | $ 548,900 |
Expires | No Expiration |
2019 | |
Net Operating Loss | $ 1,758,100 |
Expires | No Expiration |
Net Operating Loss | $ 4,865,300 |
INCOME TAXES_ Tax Years Open to
INCOME TAXES: Tax Years Open to Examination (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Details | |
Years Open to Examination, Beginning Year | 2011 |
DISCONTINUED OPERATIONS_ Payrol
DISCONTINUED OPERATIONS: Payroll Tax Liability (Details) - RoxSan Pharamcy Inc - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Payroll Tax Liability, Total | $ 1,148,811 | |
Payroll Tax Liability, Trust Fund Taxes | $ 426,148 | 601,148 |
Payroll Tax Liability, Employer Taxes | 183,172 | |
Payroll Tax Liability, Penalties and Interest | 364,491 | |
Payroll Tax Liability, Payments Made | $ 175,000 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - RoxSan Pharamcy Inc | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Deconsolidation, RoxSan Pharmacy, Gain | $ 4,478,268 |
Extinguishment of Debt, Gain | $ 22,778,281 |
DISCONTINUED OPERATIONS_ Schedu
DISCONTINUED OPERATIONS: Schedule of Discontinued Operations, Income Statement (Details) - RoxSan Pharamcy Inc - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Revenue | $ 0 | $ 0 |
Cost of Goods Sold | 0 | 0 |
Gross Profit | 0 | 0 |
Sales, marketing and pharmacy expenses | 69,553 | 194,890 |
General & Administrative Expenses | 566,417 | 666,000 |
Operating Loss | (635,970) | (860,890) |
Loss on disposal of assets | (10,000) | (10,000) |
Interest Expense | (25,690) | (47,281) |
Net Loss | $ (671,660) | $ (918,171) |
SEGMENT REPORTING_ Schedule of
SEGMENT REPORTING: Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | $ 51,890 | $ 9,759 | ||
Gross Profit | 42,918 | (518) | ||
Operating Income (loss) | (3,222,179) | (3,136,195) | ||
Deprecation and amortization | 60,398 | 60,644 | ||
Interest Expense | 307,405 | 1,081,208 | ||
Liabilities, Fair Value Adjustment | $ 35,886 | $ (62,600) | 103,888 | (62,600) |
Loss on extinguishment of debt | (598,922) | 0 | (568,003) | 0 |
Loss on settlement | (33,272) | |||
Discount Amortization | (29,000) | 2,620,000 | ||
Total Assets | 1,440,936 | 1,479,308 | ||
Goodwill | 785,060 | 785,060 | 785,060 | 785,060 |
Additions to Property and Equipment | 2,628 | 0 | ||
Discontinued operations | (918,171) | |||
Remote Care Segment | ||||
Revenue | 990 | 8,859 | ||
Gross Profit | (330) | (1,418) | ||
Operating Income (loss) | (143,159) | (143,421) | ||
Deprecation and amortization | 4,598 | 4,932 | ||
Interest Expense | 1,527 | 1,449 | ||
Liabilities, Fair Value Adjustment | 0 | 0 | ||
Loss on extinguishment of debt | 0 | |||
Loss on settlement | 0 | |||
Discount Amortization | (29,000) | 70,000 | ||
Total Assets | 909,337 | 929,625 | ||
Goodwill | 785,060 | 785,060 | 785,060 | 785,060 |
Additions to Property and Equipment | 0 | 0 | ||
Discontinued operations | 0 | |||
Behavioral Healthcare Segment | ||||
Revenue | 50,900 | 900 | ||
Gross Profit | 43,248 | 900 | ||
Operating Income (loss) | (66,889) | (94,274) | ||
Deprecation and amortization | 54,880 | 54,880 | ||
Interest Expense | 0 | 0 | ||
Liabilities, Fair Value Adjustment | 0 | 0 | ||
Loss on extinguishment of debt | 0 | |||
Loss on settlement | 0 | |||
Discount Amortization | 0 | 0 | ||
Total Assets | 384,687 | 494,447 | ||
Goodwill | 0 | 0 | 0 | 0 |
Additions to Property and Equipment | 0 | 0 | ||
Discontinued operations | 0 | |||
Diagnostics/Corporate Segment | ||||
Revenue | 0 | 0 | ||
Gross Profit | 0 | 0 | ||
Operating Income (loss) | (3,012,130) | (2,898,500) | ||
Deprecation and amortization | 920 | 832 | ||
Interest Expense | 305,878 | 1,079,759 | ||
Liabilities, Fair Value Adjustment | 103,888 | (62,600) | ||
Loss on extinguishment of debt | (568,003) | |||
Loss on settlement | (33,272) | |||
Discount Amortization | 0 | 2,550,000 | ||
Total Assets | 146,912 | 55,236 | ||
Goodwill | 0 | 0 | 0 | 0 |
Additions to Property and Equipment | 2,628 | 0 | ||
Discontinued operations | 0 | |||
Pharmacy Segment | ||||
Revenue | 0 | 0 | ||
Gross Profit | 0 | 0 | ||
Operating Income (loss) | 0 | 0 | ||
Deprecation and amortization | 0 | 0 | ||
Interest Expense | 0 | 0 | ||
Liabilities, Fair Value Adjustment | 0 | 0 | ||
Loss on extinguishment of debt | 0 | |||
Loss on settlement | 0 | |||
Discount Amortization | 0 | 0 | ||
Total Assets | 0 | 0 | ||
Goodwill | $ 0 | $ 0 | 0 | 0 |
Additions to Property and Equipment | $ 0 | 0 | ||
Discontinued operations | $ (918,171) |
LEGAL MATTERS (Details)
LEGAL MATTERS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Details | ||||
Loss on settlements | $ 0 | $ 0 | $ 33,272 | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Senior Secured Notes | |
Senior Secured Notes, Date | Jul. 5, 2019 |
Senior Secured Notes, Principal | $ 220,000 |
Senior Secured Notes, Interest Rate | 8.00% |
Senior Secured Notes, Days to Maturity | 180 |
Senior Secured Notes, Shares Issued | shares | 1,200,000 |
Senior Secured Notes, Shares Issued, Value | $ 190,200 |
Stock Cancellation | |
Stock Cancellation, Date | Jul. 17, 2019 |
Stock Cancellation, Shares | shares | 293,146 |
Stock Cancellation, Shares, Value | $ 10,289 |
Debentures Converted to Notes | |
Senior Secured Notes, Date | Jul. 25, 2019 |
Senior Secured Notes, Principal | $ 759,446 |
Senior Secured Notes, Interest Rate | 8.00% |
Senior Secured Notes, Shares Issued | shares | 1,380,811 |
Senior Secured Notes, Shares Issued, Value | $ 131,315 |
Debentures, Principal | 428,132 |
Debentures, Premiums | 261,604 |
Debentures, Interest | 68.926 |
Senior Secured Notes, Payment 1, Amount | $ 126,152 |
Senior Secured Notes, Payment 1, Date | Dec. 31, 2019 |
Senior Secured Notes, Payment 2, Amount | $ 300,000 |
Senior Secured Notes, Payment 2, Date | Dec. 31, 2020 |
Senior Secured Notes, Payment 3, Date | Dec. 31, 2021 |
Senior Secured Notes, Warrants Issued | shares | 2,528,413 |
Senior Secured Notes, Warrants Issued, Term (Yrs) | 5 |
Senior Secured Notes, Warrants Issued, Exercise Price | $ / shares | $ 0.10461 |
Private Placement Offering | |
Private Placement, Maximum Shares | shares | 31,875,000 |
Private Placement, Maximum Offering ($) | $ 3,000,000 |
Private Placement, Warrants, Exercise Price | $ / shares | $ 0.25 |
Private Placement, Warrants, Life (Years) | 3 |
Private Placement, Price Per Share | $ / shares | $ 0.10 |
Private Placement, Minimum Offering ($) | $ 2,000,000 |
Private Placement, Minimum Investment, Shaes | shares | 200,000 |
Private Placement, Minimum Investment ($) | $ 20,000 |
Private Placement, SAFE, Proceeds | 1,125,000 |
Private Placement, SAFE, Proceeds, Executive Officers | $ 375,000 |
Private Placement, SAFE, Discount | 20.00% |