Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017 | |
Document And Entity Information | |
Entity Registrant Name | United Cannabis Corp |
Entity Central Index Key | 1,436,161 |
Document Type | S1 |
Document Period End Date | Sep. 30, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | |||
Cash and cash equivalents | $ 647,697 | $ 112,621 | $ 118,420 |
Accounts receivable | 25,700 | 24,484 | 53,435 |
Due from related parties | 37,283 | 26,775 | 8,284 |
Inventory | 36,098 | ||
Prepaid expenses | 56,341 | ||
Deferred financing costs, net | 32,400 | ||
Total current assets | 746,778 | 163,880 | 268,880 |
Outdoor cultivation facility and laboratory equipment, net of accumulated depreciation of $26,299 and $0.0 at September 30, 2017 and December 31, 2016, respectively | 321,283 | ||
Patents, net | 141,417 | ||
Intangible assets | 73,043 | 32,273 | 32,273 |
Investments in non-marketable equity securities | 205,275 | ||
Equity method investments | 88,000 | 88,000 | |
Goodwill | 4,912,201 | ||
Total assets | 6,194,722 | 284,153 | 594,428 |
Current liabilities: | |||
Accounts payable | 86,477 | 25,048 | 104,238 |
Accrued expenses | 38,244 | 55,264 | 928,533 |
Derivative liabilities | 383,581 | ||
Current portion of deferred revenue | 180,000 | 180,000 | 380,000 |
Advances from and accrued wages of officers and directors | 587,943 | ||
Notes payable | 775,000 | ||
Notes payable to and advances from officers and directors | 171,203 | ||
Convertible notes payable, net of $34,543 and $272,793 debt discount, respectively | 125,547 | 108,207 | |
Total current liabilities | 892,664 | 557,062 | 2,679,559 |
Scientific Research Grant | 75,000 | ||
Long term liabilities: | |||
Deferred revenue, net of current portion | 68,750 | 203,750 | 383,750 |
Total liabilities | 1,036,414 | 760,812 | 3,063,309 |
Stockholders' deficit: | |||
Preferred stock, no par value; 10,000,000 shares authorized; none issued and outstanding | 2,200 | ||
Common stock, no par value; 100,000,000 shares authorized; 60,210,502, 50,650,994 and 44,988,500 shares issued and outstanding, respectively | 18,002,191 | 8,885,674 | 3,039,448 |
Accumulated deficit | (12,849,876) | (9,362,333) | (5,508,329) |
Total equity (deficit) attributable to stockholders of the Company | 5,154,515 | (476,659) | (2,468,881) |
Non-controlling interests (deficits) in less than fifty percent owned subsidiaries | 3,793 | ||
Total stockholders' deficit | 5,158,308 | (476,659) | (2,468,881) |
Total liabilities and stockholders' deficit | $ 6,194,722 | $ 284,153 | $ 594,428 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accumulated depreciation | $ 26,299 | $ 0 | |
Preferred stock, no par value | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Common stock, no par value | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 50,650,994 | 44,988,500 | |
Common stock, shares outstanding | 60,210,502 | 50,650,994 | 44,988,500 |
Series A Preferred Stock [Member] | |||
Preferred stock, shares issued | 2,000 | 0 | |
Preferred stock, shares outstanding | 2,000 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | ||||||
Revenues, non-affiliates | $ 57,627 | $ 264,964 | $ 277,685 | $ 707,660 | $ 695,095 | $ 558,248 |
Revenues, affiliate | 45,033 | 178,785 | 20,000 | 4,425 | ||
Total revenues | 102,660 | 264,964 | 456,470 | 707,660 | 715,095 | 562,673 |
Cost of revenues: | ||||||
Cost of revenues, non-affiliate | 335,571 | 75,672 | ||||
Cost of revenues, affiliate | 7,500 | 74,564 | ||||
Total cost of revenues | 26,226 | 68,813 | 238,227 | 252,550 | 343,071 | 150,236 |
Gross profit | 76,434 | 196,151 | 218,243 | 455,110 | 372,024 | 412,437 |
Operating expenses: | ||||||
Marketing, advertising and new business development | 39,728 | 7,516 | 132,493 | 56,208 | 68,007 | 86,797 |
Research and development | 40,611 | 4,371 | 90,006 | 17,732 | 23,124 | 329 |
Legal, accounting, consulting and public reporting | 181,052 | 111,847 | 637,252 | 246,584 | 643,913 | 645,503 |
General and administrative | 461,990 | (6,923) | 2,644,041 | 225,748 | 404,002 | 1,101,604 |
Total operating expenses | 723,381 | 116,811 | 3,503,792 | 546,272 | 1,139,046 | 1,834,233 |
Income (loss) from operations | (646,947) | 79,340 | (3,285,549) | (91,162) | (767,022) | (1,421,796) |
Other income and costs and expenses | ||||||
Other income and expenses | 184,875 | |||||
Gain (loss) on derivative liabilities | (331,618) | (332,456) | (1,894,258) | (23,593) | ||
Interest expense | (6,759) | (40,044) | (54,432) | (153,438) | (418,437) | (107,496) |
Amortization of debt discount | (266,711) | (267,258) | (82,500) | |||
Equity in net loss of unconsolidated affiliate | (90,900) | |||||
Loss on extinguishment of debt and repurchase of warrants | (267,567) | (130,423) | (691,904) | (768,602) | ||
Loss on investment in non-marketable equity securities | (388,475) | |||||
Gain on conversion of a portion of convertible notes | (4,253) | 11,237 | ||||
Loss on settlement of dispute | (122,139) | |||||
Total other income (expense), net | (6,759) | (375,915) | (444,138) | (871,791) | (3,086,982) | (1,461,566) |
Loss before provision for taxes on income | (653,706) | (296,575) | (3,729,687) | (962,953) | (3,854,004) | (2,883,362) |
Provision for taxes on income | ||||||
Net Income (Loss) | (653,706) | (296,575) | (3,729,687) | (962,953) | (3,854,004) | (2,883,362) |
Loss attributable to non-controlling interests | 80,914 | 242,146 | ||||
Net (Loss) attributable to common shareholders | $ (572,792) | $ (296,575) | $ (3,487,541) | $ (962,953) | $ (3,854,004) | $ (2,883,362) |
Basic and diluted net loss per share: | $ (0.01) | $ (0.01) | $ (0.07) | $ (0.02) | $ (0.08) | $ (0.06) |
Basic and diluted weighted-average common shares outstanding: | 56,503,689 | 44,925,837 | 54,170,003 | 45,519,746 | 46,722,407 | 44,793,510 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) | Common Stock [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2014 | $ 1,626,968 | $ (2,624,967) | $ (997,999) |
Beginning balance, shares at Dec. 31, 2014 | 44,060,001 | ||
Shares issued for repurchase of warrant | $ 987,390 | 987,390 | |
Shares issued for repurchase of warrant, shares | 621,000 | ||
Cancellation of warrant | $ (218,788) | (218,788) | |
Cancellation of warrant, shares | |||
Shares issued for services | $ 226,215 | 226,215 | |
Shares issued for services, shares | 307,500 | ||
Options issued to officers and directors for accrued wages | 12,279 | ||
Warrants issued for services | 47,880 | ||
Stock options issued for compensation | $ 417,663 | 417,663 | |
Stock options issued for compensation, shares | |||
Net loss | (2,883,362) | (2,883,362) | |
Ending balance at Dec. 31, 2015 | $ 3,039,448 | (5,508,329) | (2,468,881) |
Ending balance, shares at Dec. 31, 2015 | 44,988,501 | ||
Options issued to officers and directors for accrued wages | $ 612,512 | ||
Options issued to officers and directors for accrued wages, shares | |||
Warrants issued for services | $ 319,419 | 319,419 | |
Stock options issued for compensation | $ 271,097 | 271,097 | |
Stock options issued for compensation, shares | 565,576 | ||
Shares issued for payables and accrued expenses | $ 223,484 | 223,484 | |
Shares issued for payables and accrued expenses, shares | 509,549 | ||
Conversion of note to Tangiers Investment Group | $ 473,966 | 473,966 | |
Conversion of note to Tangiers Investment Group, shares | 2,843,698 | ||
Conversion of notes to Slainte Ventures | $ 3,845,748 | 3,845,748 | |
Conversion of notes to Slainte Ventures, shares | 1,638,731 | ||
Share buy-back with exercise of put option | $ 100,000 | 100,000 | |
Share buy-back with exercise of put option, shares | 104,939 | ||
Net loss | (3,854,004) | (3,854,004) | |
Ending balance at Dec. 31, 2016 | $ 8,885,674 | $ (9,362,333) | (476,659) |
Ending balance, shares at Dec. 31, 2016 | 50,650,994 | ||
Warrants issued for services | 16,379 | ||
Net loss | (3,487,541) | ||
Ending balance at Sep. 30, 2017 | $ 5,154,515 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | ||||
Net loss | $ (3,729,687) | $ (962,953) | $ (3,854,004) | $ (2,883,362) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Increase in collection reserve | 25,660 | (4,619) | 24,185 | |
Amortization of debt discount to interest expense | 34,453 | 266,711 | 267,258 | 82,500 |
Amortization of deferred financing costs | 32,400 | 32,400 | 8,700 | |
Non-cash interest expense | 199,206 | 4,694 | ||
Loan origination discount | 15,500 | |||
Depreciation and amortization | 26,299 | |||
Share-based compensation, net | 2,117,302 | 118,160 | 622,450 | 1,030,681 |
Deferred revenue in the form of non-marketable equity securities recognized as revenue | (180,000) | (180,000) | ||
Loss on revaluation of derivative liabilities | 365,576 | 1,894,258 | 23,593 | |
Loss on extinguishment of debt and repurchase of warrants | 691,904 | 768,602 | ||
Loss on non-marketable equity securities | 15,125 | 388,475 | ||
Loss on extinguishment of debt | 248,892 | |||
Loss on settlement of dispute | 122,139 | |||
Loss on warrants to cure debt default | 92,004 | |||
Loss on modification of note payable | 133,077 | |||
Gain on payoff of convertible notes | (156,531) | |||
Gain on conversion of convertible note | (11,237) | |||
Discount on and fees on convertible note payable | 15,500 | |||
Equity in net loss of unconsolidated affiliate | 90,900 | |||
Abandonment of FoxBarry consulting project and resultant recognition of deferred revenue | (200,000) | |||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (1,216) | (279) | 33,570 | (68,263) |
Due from related party | (10,508) | (18,491) | (8,284) | |
Inventory | (36,098) | |||
Prepaid expenses | 56,341 | 56,341 | (3,394) | |
Accounts payable and accrued expenses | 23,271 | 72,634 | 40,729 | 195,825 |
Deferred revenue | (135,000) | (335,000) | ||
Accrued wages payable to officers and directors | 302,889 | 29,330 | 42,695 | |
Advances from officers and directors | 71,008 | |||
Net cash used in operating activities | (1,037,264) | (258,607) | (274,670) | (525,148) |
Investing activities: | ||||
Cash acquired upon acquisition of subsidiary | 347,307 | |||
Improvements to cultivation facility and purchase of equipment | (261,560) | |||
Purchase of intangible assets | (125,858) | (17,685) | ||
Return of deposit | (32,500) | |||
Cash portion of settlement of dispute | (20,000) | |||
Purchase of equity method investments | ||||
Net cash provided by (used in) investing activities | (92,611) | (17,685) | ||
Financing activities: | ||||
Proceeds from notes payable to officers and directors | 50,000 | |||
Proceeds from issuance of common stock - equity financing line | 1,380,204 | |||
Net proceeds from issuance of convertible debt and warrants | 316,478 | 316,478 | 339,900 | |
Advances from officers and directors | 254,943 | 52,500 | ||
Repayment of convertible debt and notes payable | (35,000) | (213,978) | (242,607) | |
Proceeds from issuance of common shares and deposit on warrant exercise | 64,804 | 145,000 | ||
Net cash provided by (used in) financing activities | 1,664,951 | 155,000 | 268,871 | 339,900 |
Net increase (decrease) in cash | 535,076 | (103,607) | (5,799) | (202,933) |
Cash, beginning of period | 112,621 | 118,420 | 118,420 | 321,353 |
Cash, end of period | 647,697 | 14,813 | 112,621 | 118,420 |
Supplemental schedule of cash flow information: | ||||
Cash paid for interest | 8,165 | |||
Cash paid for income taxes | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||
Issuance of stock options in exchange for accrued wages payable to officers and directors | 612,512 | 612,512 | ||
Reduction of convertible notes payable due to the conversion by Tangiers Investment Group | 220,000 | 220,000 | ||
Issuance of common stock upon conversion of Tangiers Investment Group convertible note | 473,965 | 473,965 | ||
Common shares issued in the acquisition of Prana Therapeutics, Inc. | 4,870,500 | |||
Exercise of stock option for 1,000,000 of common stock in exchange for notes payable to an officer and director | 200,000 | |||
Reduction of three convertible notes payable due to the conversion by Slainte Ventures | 206,978 | |||
Issuance of common stock upon conversion of Slainte Ventures note payable | 218,038 | |||
Reduction of note payable due to the conversion by Slainte Ventures | 600,000 | |||
Issuance of common stock upon conversion of Slainte Ventures note payable | 3,845,748 | |||
Reduction of notes payable in exchange for 1,100,000 shares of common stock of WeedMD | 175,000 | 175,000 | ||
Intangible asset costs included in accounts payable | 12,279 | |||
Issuance of common stock for services | 47,880 | |||
Issuance of common stock for prepaid professional fees | 187,335 | |||
Issuance of common stock for repurchase of warrant | 987,390 | |||
Warrants cancelled | (3,000,000) | (218,788) | ||
Issuance of options for compensation, accrued expenses and accounts payable | 417,664 | |||
Issuance of convertible note payable for debt issuance costs | 41,000 | |||
Debt conversion feature issued for debt discount | $ (355,293) | |||
Decrease in non-marketable securities due to the exchange of 1,100,000 shares of common stock of WeedMD | (190,150) | |||
Acquisition from and leaseback to of equipment to related party | 99,200 | |||
Accounts payable exchanged for note payable to third party | $ 30,000 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 9 Months Ended |
Sep. 30, 2017shares | |
WeedMD RX Inc. (''WMD'') [Member] | |
Notes payable in exchange for shares of common stock | 1,100,000 |
Officers and Directors [Member] | |
Notes payable in exchange for shares of common stock | 1,000,000 |
BUSINESS ORGANIZATION AND NATUR
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 –BUSINESS ORGANIZATION AND NATURE OF OPERATIONS Background and Current Operations United Cannabis Corporation ("we", "our", "us", "UCANN", or “the Company”) a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold to the prior President of the Company. In early 2014 we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property to the cannabis industry. On March 26, 2014, we entered into a License Agreement with Earnest Blackmon, Tony Verzura and Chad Ruby pursuant to which Messrs. Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock. In connection with this transaction: · Messrs. Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced (non-psychoactive) cannabinoid therapy program called "A.C.T. Now", security, regulatory compliance, and other methods and processes which relate to the cannabis industry. · The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement. · Messrs. Blackmon, Verzura and Ruby were appointed to our board of directors effective April 7, 2014. · Mr. Blackmon was elected as our President, Mr. Ruby was elected as Chief Operating Officer and Mr. Verzura was elected as Vice President. · A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014. UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin, Inc. merged into UCANN, a wholly-owned subsidiary of MySkin, Inc., for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation. On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we entered into a new business and no longer had any use for these assets. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on March 31, 2014. On July 14, 2017, we completed the acquisition of Prana Therapeutics, Inc. (“Prana”) in a one-for-one exchange of 5,730,000 shares of common stock of the Company for 5,730,000 of common stock of Prana. The purchase price had a fair market value of $5,070,500, based upon the closing price of $0.85 per share on the OTC QB exchange on July 14, 2017, including the cost to purchase 400,000 shares of Prana common stock for $200,000. Prana is a polymolecular botanical drug development company focused on developing targeted therapeutics for prevention of the negative side effects of chemotherapy, management of rheumatoid arthritis and treatment of brain cancer. Management elected to purchase Prana, because of the successful indication of the effectiveness of their Epidiferphane™ chemical formulation in the treatment of (i) the negative side effects of chemotherapy, (ii) inflammation and pain associated with arthritis and back-centric pain, (iii) sleep disorder, and (iv) the potential shrinkage of brain tumors. Government Regulation As of September 30, 2017, 28 states and the District of Columbia allow their citizens to use medical marijuana, and voters in the states of California, Colorado, Washington, Nevada, Oregon, Alaska and the District of Columbia approved ballot measures to legalize cannabis for adult recreational use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The former Obama administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical and recreational marijuana. However, there is no guarantee that the current administration will not change its stated policy regarding the low-priority enforcement of federal laws, or that any future administration would not change this policy and decide to enforce the federal laws vigorously. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to us. | NOTE 1 –BUSINESS ORGANIZATION AND NATURE OF OPERATIONS On March 19, 2014, we effected a four-for-one stock split of our outstanding shares of common stock. All references to shares of our common stock in our consolidated financial statements refer to the number of shares of common stock after giving effect to the stock split (unless otherwise indicated). Background and Current Operations United Cannabis Corporation ("we", "our", "us", or "UCANN") a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. (“MySkin”) on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold. In early 2014, we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property licenses to the cannabis industry. On March 26, 2014, we entered into a License Agreement with Earnest Blackmon, Tony Verzura and Chad Ruby pursuant to which Messrs. Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock. In connection with this transaction: · Messrs. Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced cannabinoid therapy program called "A.C.T. Now", security, regulatory compliance, and other methods and processes which relate to the cannabis industry. · The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement. · Messrs. Blackmon, Verzura and Ruby were appointed to our board of directors effective April 7, 2014. · Mr. Blackmon was elected as our President, Mr. Ruby was elected as Chief Operating Officer and Mr. Verzura was elected as Vice President. · A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014. UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin merged into UCANN, a wholly-owned subsidiary of MySkin, for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation. On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we have entered into a new business and we no longer have any use for these assets. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on March 31, 2014. Government Regulation As of December 31, 2016, 28 states and the District of Columbia allow their citizens to use medical marijuana, and four states and the District of Columbia have legalized marijuana for recreational use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical and recreational marijuana. However, there is no guarantee that the current administration will not change its stated policy regarding the low-priority enforcement of federal laws, or that any future administration would not change this policy and decide to enforce the federal laws vigorously. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to us. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Principles of Consolidation Use of Estimates We make our estimates of the ultimate outcome for these items based on historical trends and other information available when our condensed consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimates, which are typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at September 30, 2017, approximates their fair values based on our incremental borrowing rates. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the nine months ended September 30, 2017 and the year ended December 31, 2016. Cash and Cash Equivalents Accounts Receivable Prepaid Expenses Property and Equipment Patents – Intangible Assets – Long-Lived Assets Impairment Assessment FASB Accounting Standards Codification Equity Method Investments Goodwill Purchase Price Allocation Business Combinations Fair Value Measurements and Disclosures Deferred Revenue Revenue Recognition Revenue Recognition Revenue for services with a payment in the form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid with warrants is measured using the Black-Scholes-Merton pricing model. Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred, and collectability is reasonably assured. Revenue Recognition – Affiliate Prana Prana Prana Prana Prana Prana Revenue Recognition. Cost of Revenues Research and Development Expenses General and Administrative Expenses Stock-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken, or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured, as described above, is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets, along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. Commitments and Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive: Nine Months Ended Three Months Ended 2017 2016 2017 2016 Warrants to purchase common stock 641,000 666,667 641,000 666,667 Cashless warrants not converted to common stock 783,112 1,228,455 783,112 1,228,455 Stock options 6,580,000 3,680,000 6,580,000 3,680,000 8,004,112 5,575,122 8,004,112 5,575,122 Other Comprehensive Income (Loss) Segment Reporting – Concentration of Credit Risk The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Nine Months Ended Three Months Ended September 30, September 30, 2017 2016 2017 2016 Customer A 82 % 88 % 98 % 80 % Customer B 17 % 12 % 2 % 20 % Customer C 1 % 0 % 0 % 0 % Percentage of Accounts Receivable: Nine Months Ended 2017 2016 Customer A 0 % 68 % Customer B 0 % 30 % Customer C 0 % 21 % Recently Issued Accounting Pronouncements In May 2014 the FASB issued guidance on revenue from contracts with customers, which implements a five-step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective at the beginning of fiscal year 2018, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our condensed consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting. In February 2016, the FASB issued guidance on leases which requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new guidance also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new guidance will be effective for us at the beginning of fiscal year 2019. Early adoption is permitted. We are in the process of evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at December 31, 2016, approximates their fair values based on our incremental borrowing rates. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the years ended December 31, 2016 and 2015. Cash and Cash Equivalents Accounts Receivable Our allowance for doubtful accounts was $30,000 and $4,340 as of December 31, 2016 and 2015, respectively. We recorded bad debt expense, included in general and administrative expenses, of $82,831 and $24,185 during the years ended December 31, 2016 and 2015, respectively. Prepaid Expenses - Property and Equipment Intangible Assets – Investments in Non-Marketable Equity Securities Long-Lived Assets We have not recorded any impairment charges related to long-lived assets as of December 31, 2016 or December 31, 2015. Equity Method Investments Deferred Revenue Revenue Recognition - Revenue Recognition Revenue for services with a payment in the form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid for with warrants is measured using the Black-Scholes-Merton pricing model. Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in cost of revenues. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in our consolidated statement of operations on a net basis. Cost of Revenues Research and Development Expenses - Sales and Marketing Expenses – General and Administrative Expenses - Share-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. Commitments and Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Years Ended December 31, 2016 2015 Warrants to purchase common stock 666,667 3,000,000 Cashless warrants not converted to common stock 783,112 — Stock options 3,680,000 600,000 Total potentially dilutive securities 5,129,779 3,600,000 Other Comprehensive Income (Loss) Segment Reporting – Concentration of Credit Risk The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Years Ended December 31, 2016 2015 Customer A 95 % 36 % Customer B 3 % 32 % Customer C 2 % 18 % Percentage of Accounts Receivable: Years Ended December 31, 2016 2015 Customer D 75 % 56 % Customer E 25 % 41 % Customer F % 1 % Recently Issued Accounting Pronouncements In May 2014, the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for us at the beginning of fiscal year 2018, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting. In August 2014, the FASB issued guidance on disclosure of uncertainties about an entity's ability to continue as a going concern. This guidance requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity's ability to continue as a going concern. The guidance is effective for us at the beginning of fiscal year 2017, with early adoption permitted. We do not expect that the adoption of this standard will have a material effect on our consolidated financial statements. In November 2015, the FASB issued guidance requiring entities to present deferred tax assets and liabilities as noncurrent in a classified balance sheet instead of separating into current and noncurrent amounts. This guidance is effective for us at the beginning of fiscal year 2017, on a prospective or retrospective basis, and thus, we will implement such guidance beginning in 2017. In February 2016, the FASB issued guidance on leases which requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new guidance also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new guidance will be effective for us at the beginning of fiscal year 2019. Early adoption is permitted. We are in the process of evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. |
GOING CONCERN
GOING CONCERN | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
GOING CONCERN [Abstract] | ||
GOING CONCERN | NOTE 3 – GOING CONCERN Our condensed consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the nine months ended September 30, 2017, we incurred losses of $3,729,687 and used cash of $1,037,264 in our operating activities. At September 30, 2017, we had a working capital deficit of $145,886 and an accumulated deficit of $12,849,876. We have an equity line of credit funding agreement for providing equity capital for up to $10,000,000 of funding through the purchase of shares of our common stock. During the term of the agreement, the Company may deliver a put notice to the financier, which will specify the number of shares which we will sell to the financier. As of September 30, 2017, we have received $1,380,204, under the terms of the equity line of credit agreement. However, our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, to able to draw funds from our equity line of credit agreement. There is no assurance that these events will be satisfactorily completed. | NOTE 3 – GOING CONCERN Our consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the year ended December 31, 2016, we incurred losses of $3,854,004 and used cash of $274,670 in our operating activities. As at December 31, 2016, we had a working capital deficit of $393,182 and an accumulated deficit of $9,362,333. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed. |
PURCHASE OF PRANA THERAPUETICS,
PURCHASE OF PRANA THERAPUETICS, INC. | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
PUCHASE OF PRANA THERAPUETICS, INC. | NOTE 5 – PURCHASE OF PRANA THERAPUETICS, INC. On June 8, 2017, we entered into an agreement to purchase 400,000 shares of Prana Therapeutics, Inc. (“Prana”), in a private offering of their common shares, for a total consideration of $200,000 (“Subscription Agreement’). In accordance with the terms of the Subscription Agreement, we paid Prana $50,000, upon execution of the Subscription Agreement, and committed to remit $50,000 to Prana on September 30, 2017, December 31, 2017 and March 31, 2018, respectively. Subsequently, on July 14, 2017, we completed the acquisition of Prana in a one-for-one exchange of 5,730,000 shares of our common stock for 5,730,000 shares of common stock of Prana. The purchase price had a fair market value of $5,070,500, based upon the closing price of $0.85 per share of our common stock on the OTC QB exchange on July 14, 2017, including the cost to purchase 400,000 shares of Prana for $200,000. The purchase price for Prana was allocated to the net tangible and intangible assets based upon their fair values as of the acquisition date. The excess of the purchase price over the fair values of the net tangible assets and intangible assets was recorded as goodwill and is generally driven by management’s expectations and ability to realize synergies and achieve strategic growth. As of July 14, 2017, the allocation of the purchase price for the 95% fair value of Prana was comprised of: Patents $ 52,596 Net assets 450,888 Goodwill 4,567,016 Total $ 5,070,500 |
PATENTS
PATENTS | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PATENTS | NOTE 6 -PATENTS On August 15, 2017, the United States Patent and Trademark Office issued to the Company US Patent #9730911 (the “Patent”) granting exclusive rights to its proprietary formulations based on compounds extracted from cannabis plant materials; more specifically the composition of matter pertaining to the use of phytocannabinoids, cannabinoids, and specific terpene profiles in liquid form. This composition of matter Patent provides protection for our proprietary formulations. The Patent protects the use of suspending both phytocannabinoids and cannabinoids with specific combinations of cannabis derived terpenes in liquid forms with an array of delivery methods including capsule, sublingual, topical, oral, suppository, and vaporization. Cannabinoids referenced in the application include ratios of tetrahydrocannabinolic acid (THCa), cannabidiolic acid (CBDa), tetrahydrocannabinol (THC), cannabinol (CBN), cannabidiol (CBD), cannabichromenic acid (CBCa), and cannabichromene (CBC). At August 15, 2017, we classified the costs associated with research, legal fees, application costs incurred in the process of being granted the Patent on our consolidated balance sheet in the amount of $142,317, and we began amortizing such cost of the Patent on a straight-line basis over a 15 year period. Amortization expense of the Patent is $900 and $0.00 for the nine months ended September 30, 2017 and 2016, respective, and accumulated amortization is $900 and $0.00 at September 30, 2017 and 2016, respectively. |
INVESTMENTS IN NON-MARKETABLE E
INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES | 12 Months Ended |
Dec. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES | NOTE 4 – INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES On June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WeedMD RX Inc. (“WMD”), a private Canadian company in the cannabis industry, in exchange for future consulting services and use of our intellectual property. The shares represented a 4.29% equity investment in WMD at the time of the investment and we did not have significant influence over the investee. We recorded our investment in these non-marketable equity securities at estimated cost, based on our estimate of the fair value of the securities on the date of the transaction. The 3,000,000 WMD warrants expired unexercised in December 2014. The WMD common shares were recorded at $0.50 per share, or $593,750 in total, taking into consideration WMD’s most recent sale of their common shares prior to the date of the transaction (CAD $0.50). In December 2015, we determined that WMD’s lack of operating activities during 2015 resulted in a significant adverse effect on our carrying value of these securities (an impairment indicator) and accordingly, we recorded an other-than-temporary impairment charge of $388,475 and included this amount in loss on investments in non-marketable securities in our consolidated statements of operations. The remaining balance, $205,275, or $0.17 per share, was determined based on the consideration we received in our subsequent sale of 1,100,000 WMD shares in March 2016, and this amount is classified as investment in non-marketable equity securities on our consolidated balance sheets. On March 24, 2016, an unrelated third party agreed to assume all of our obligations, including accrued and unpaid interest, pursuant to the terms of a $175,000 note payable we owed to WeedMD, in consideration for the transfer by us of 1,100,000 shares of the common stock of WMD to the unrelated third party. WMD consented to the assumption of the loan by the unrelated third party, and released us from any further liability with respect to the loan. After the exchange of the 1,100,000 shares of common stock of WMD to the unrelated third party, we own 87,500 shares of common stock of WMD, and reduced our investment in none-marketable equity securities to $15, 125. Because of the difficulty in validating a fair market value for our investment in WMD, we elected to write-off such carrying value as a charge to other income and expenses in our consolidated statements of operations in the amount of $15,125, in the year ended December 31, 2016. |
PREPAID EXPENSES
PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | NOTE 5 – PREPAID EPENSES Our prepaid expenses consist of: December 31, 2016 2015 Prepaid investor relations services $ — $ 1,667 Prepaid licensing fees — 35,000 Other prepaid services and fees — 19,674 $ — $ 56,341 |
INTANGIBLES
INTANGIBLES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
INTANGIBLES | NOTE 7 – INTANGIBLES Our intangible assets are comprised of the costs incurred in pursuing provisional patent applications and applications for design mark and trademarks, which have presently not been approved or issued. The costs associated with our intangible assets are amortized on a straight-line basis over estimated useful lives of 15 years for patents and 10 years for design marks and trademarks, once the applications are approved. Costs associated with applications that are not approved will be expensed in the period that the application is rejected or abandoned. | NOTE 6 – INTANGIBLES Our intangible assets are comprised of provisional patent applications and applications for a design mark and trademarks. Our intangible assets will be amortized on a straight-line basis over estimated useful lives of 20 years for patents and 10 years for design marks and trademarks once the applications are approved. Costs associated with applications that are not approved will be expensed in the period that the application is rejected or abandoned. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
EQUITY METHOD INVESTMENTS | NOTE 8 – EQUITY METHOD INVESTMENTS On August 15, 2014, we acquired a 50% interest in Cannabinoid Research & Development Company Limited (“CRD”), a Jamaican company, in exchange 40,000 shares of our common stock valued at $88,000 based on the previous day’s closing price of our stock. We also committed to provide expertise on design-build, genetics, cultivation, production, processing, productizing, labeling, packaging, marketing, branding and distribution of products, as well as use of our intellectual property in the operations of CRD. We accounted for this $88,000 as an equity method investment on our condensed consolidated balance sheets at December 31, 2016. At March 31, 2017, it was concluded that we had established a variable interest entity relationship with CRD, because we are the primary beneficiary, in accordance with GAAP. As a result, we elected to consolidate the assets and liabilities of CRD in our consolidated balance sheet at March 31, 2017. | NOTE 7 – EQUITY METHOD INVESTMENTS On August 15, 2014, we acquired a 50% interest in Cannabinoid Research & Development Company Limited (“CRD”), a Jamaican company, in exchange for 40,000 shares of our common stock valued at $88,000 based on the previous day’s closing price of our stock. We also committed to provide expertise on design-build, genetics, cultivation, production, processing, productizing, labeling, packaging, marketing, branding and distribution of products, as well as use of our intellectual property in the operations of CRD. During the year ended December 31, 2016, CRD had minimal operating activities. However, in November 2016, the Jamaican government accepted applications from CRD for a Tier 1 Cultivar license and a Research and Development license. Predicated upon the potential approval of the license applications from the Jamaican government, CRD entered to an agreement with the Caribbean Institute of Medical Research in January 2017, for collaboration in the use of medical cannabis therapies through biomedical research and development for the nutraceutical industry. We accounted for this $88,000 as an equity method investment on our consolidated balance sheets. On January 19, 2017, the Company and CRD signed a letter of intent (the “LOI”) with the Caribbean Institute of Medical Research (“CARIMER”) to collaborate on advancing clinical research on medical cannabis. CARIMER is the Jamaican-based division of MPR Development Group, a full service global Clinical Research and Development Organization (“CRO”). CARIMER also serves as the research arm of several medical facilities and hospitals in the Caribbean and collaborates with health institutions to support health care research projects around the world. According to the terms of the LOI, during the next two months the parties will work to finalize the clinical trial and financial terms. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accrued Liabilities, Current [Abstract] | ||
ACCRUED EXPENSES | NOTE 9 – ACCRUED EXPENSES Our accrued expenses consist of: September 30, 2017 December 31, 2016 Accrued consulting fees $ — $ 45,000 Accrued interest expense — 5,875 Accrued payroll taxes 38,244 — $ 38,244 $ 50,875 On May 6, 2014, we entered into a consultancy agreement with two third party consultants that had a nine month term, which could be renewed and/or extended by mutual agreement. The agreement provided for a $50,000 payment at signing, which has been paid, and for three more $50,000 payments (a total of $200,000) and the issuance of 100,000 shares of our common stock upon the achievement of certain goals, as set forth in appendix II of the agreement. During the year ended December 31, 2014 we recognized $160,000 of expense applicable to this agreement. At December 31, 2015, the project was approximately 80% complete and $110,000 was included in accrued expenses on our consolidated balance sheet at that date. On December 7, 2016, upon mutual agreement, the consultancy agreement was deemed to be abandoned, because the project was not completed. In turn, one of the consultants, Dr. Brent Reynolds, has been performing other services for us during the year ended December 31, 2016, and has agreed to join our Board of Advisors. Dr Reynolds is currently a professor in the Department of Neurosurgery at the University of Florida, College of Medicine, where his lab focuses on the application of natural products for treating diseases and dysfunction of the nervous system. In recognition of his services to us during the year ended December 31, 2016, and as an inducement to join our Board of Advisors, he was issued 100,000 shares of our common stock for such services, and the fair market value of these shares in the amount of $163,783 was credited to stockholders’ equity (deficit) on the consolidated balance sheet at December 31, 2016, and the residual amount of $53,783 was recognized as a loss on the extinguishment of a debt in our consolidated statement of operations. | NOTE 8 – ACCRUED EXPENSES Our accrued expenses consist of: December 31, 2016 2015 Accrued consulting fees $ 45,000 $ 110,000 Accrued wages and related expenses — 629,780 Accrued interest expense 10,264 101,185 Accrued other expenses — 87,568 Total accrued expenses $ 55,264 $ 928,533 On May 6, 2014, we entered into a consultancy agreement with two third party consultants that had a nine month term, which could be renewed and/or extended by mutual agreement. The agreement provided for a $50,000 payment at signing, which has been paid, and for three more $50,000 payments (a total of $200,000) and the issuance of 100,000 shares of our common stock upon the achievement of certain goals, as set forth in appendix II of the agreement. During the year ended December 31, 2014 we recognized $160,000 of expense applicable to this agreement. At December 31, 2015, the project was approximately 80% complete and $110,000 is included in accrued expenses on our consolidated balance sheet at that date. On December 7, 2016, upon mutual agreement, the consultancy agreement was deemed to be abandoned, because the project was not completed. In turn, one of the consultants, Dr. Brent Reynolds, has been performing other services for the Company during the year ended December 31, 2016, and has agreed to join our Board of Advisors. Dr Reynolds is currently a professor in the Department of Neurosurgery at the University of Florida, College of Medicine, where his lab focuses on the application of natural products for treating diseases and dysfunction of the nervous system. In recognition of his services to the Company during the year ended December 31, 2016, and as an inducement to join our Board of Advisors, he was issued 100,000 shares of our common stock for such services, and the fair market value of these shares in the amount of $163,783 was charged to common stock on the consolidated balance sheet at December 31, 2016, and the residual amount of $53,783 was recognized as a loss on the extinguishment of a debt in our consolidated statement of operations. |
FAIR VALUE MEASUREMENTS AND DER
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES | NOTE 10 – FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES We did not have any liabilities carried at fair value measured on a recurring basis as of September 30, 2017 or at December 31, 2016. | NOTE 9– FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES The following table provides the liabilities carried at fair value measured on a recurring basis as of December 31, 2015: Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 383,581 $ 383,581 We did not have any liabilities carried at fair value measured on a recurring basis as of December 31, 2016. Derivative Liabilities We valued our derivative liabilities related to warrants and embedded conversion features applicable to our borrowings under our convertible notes payable (see Notes 10 and 11 below) and accrued interest payable thereon in accordance with fair value measurement guidelines. For the years ended December 31, 2016 and 2015, the following table reconciles the beginning and ending balances for our financial instruments that are carried at fair value measured on a recurring basis: Derivative liabilities as of December 31, 2014 $ — Additions to derivative liabilities for convertible debt conversion features and interest 359,988 Loss on revaluation of derivative liabilities during the year 23,593 Derivative liabilities as of December 31, 2015 383,581 Additions to derivative liabilities for convertible debt conversion features 557,000 Additions for modifications of note payable to Sláinte Ventures 686,612 Reductions due to conversions or repayments of convertible debt (3,317,986 ) Loss on revaluation of derivative liabilities during the year 1,690,793 Derivative liabilities as of December 31, 2016 $ — The estimated fair value of the derivative liabilities related to our convertible notes payable was measured as the aggregate estimated fair value of each component of the compound embedded derivative liabilities (see Note 11 and 12 below), based on Level 2 and Level 3 inputs, using a binomial lattice pricing model. Changes in the fair value of the compound embedded derivative liability at each reporting date are included in gain/ (loss) on derivative liabilities in our consolidated statement of operations. |
RESEARCH GRANT PAYABLE
RESEARCH GRANT PAYABLE | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
RESEARCH GRANT PAYABLE | NOTE 11 – RESEARCH GRANT PAYABLE In August of 2013, we were received a grant from Accelerate Brain Cancer Cure, Inc. (“ABC”) in the amount of $75,000 to be used by us for the development and testing of brain cancer therapies (the “Grant”). Under the terms of the Grant, within 15 years after the effective date of the Grant, if one or more products resulting from the Grant is brought to market, then the Company will owe ABC the repayment of the Grant in the following amounts, based upon the following cumulative net profit benchmarks: Net Profit Grant $ 5,000,000 $ 75,000 15,000,000 75,000 30,000,000 75,000 50,000,000 75,000 $ 300,000 |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Deferred Revenue Disclosure [Abstract] | ||
DEFERRED REVENUE | NOTE 12 – DEFERRED REVENUE Our deferred revenue consists of: September 30, December 31, Deferred revenue - WeedMD $ 248,750 $ 383,750 Less - current portion (180,000 ) (180,000 ) Deferred revenue, net of current portion $ 68,750 $ 203,750 As described in Note 4 above, on June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WMD in exchange for future consulting services and use of our intellectual property. We recorded the $893,750 fair value of these securities as deferred revenue, and we recognized $150,000 of this amount as revenue during the period July 1, 2014 through December 31, 2014, based upon our initial three year estimate of the service period involved. Based on consultations with WMD, we expect to deliver the remaining consulting services and use of our intellectual property to WMD on a relatively consistent monthly basis during the four year period January 1, 2016 through December 31, 2018. Accordingly, we are now recognizing $15,000 of deferred revenue per month, and thus, during the three and nine month periods ending September 30, 2017 and 2016, we recognized a total of $45,000 and $90,000, respectively, of revenue applicable to this arrangement. At September 30, 2017, we expect to recognize $180,000 of the remaining $248,750 WMD deferred revenue during the next twelve months and accordingly, we have classified the $180,000 as a current liability on our condensed consolidated balance sheets. On December 28, 2014, we entered into a royalty and consulting services agreement with FoxBarry Farms, LLC (“FoxBarry”) whereby we received a $200,000 prepaid royalty payment from FoxBarry. At the time, we planned to recognize deferred royalty revenue based on actual applicable sales as defined in the agreement. During the years ended December 31, 2015 and 2014, we did not recognize any deferred revenue related to this agreement. In August 2015, we discontinued providing consulting services to FoxBarry, as our initial project with FoxBarry was abandoned due to operational issues. However, FoxBarry appears to no longer be in existence, and since all of our conditions pursuant to the agreement have been satisfied, we elected to recognize the $200,000 of deferred income during the year ended December 31, 2016, as other income . | NOTE 10 – DEFERRED REVENUE Our deferred revenue consists of: December 31, 2016 2015 Deferred revenue – WeedMD $ 383,750 $ 563,750 Deferred revenue - FoxBarry — 200,000 383,750 763,750 Less – current portion (180,000 ) (380,000 ) Deferred revenue, net of current portion $ 203,750 $ 383,750 As described in Note 4 above, on June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WMD in exchange for future consulting services and use of our intellectual property. We recorded the $893,750 fair value of these securities as deferred revenue and we recognized $150,000 of this amount as revenue during the period July 1, 2014 through December 31, 2014, based upon our initial three year estimate of the service period involved. Based on recent discussions with WMD, we now expect to deliver the remaining consulting services and use of our intellectual property to WMD on a relatively consistent monthly basis during the four year period January 1, 2015 through December 31, 2018. Accordingly, we are now recognizing $15,000 of deferred revenue per month. We recognized $180,000 of revenue applicable to this arrangement, in each of the years ended December 31, 2016 and 2015. At December 31, 2016, we expect to recognize $180,000 of the remaining $383,750 WMD deferred revenue during the next twelve months and accordingly, we have classified the $180,000 as a current liability on our consolidated balance sheets. On December 28, 2014, we entered into a royalty and consulting services agreement with FoxBarry Farms, LLC (“FoxBarry”) whereby we received a $200,000 prepaid royalty payment from FoxBarry. At the time, we planned to recognize deferred royalty revenue based on actual applicable sales as defined in the agreement. During the years ended December 31, 2015 and 2014, we did not recognize any deferred revenue related to this agreement. In August 2015, we discontinued providing consulting services to FoxBarry, as our initial project with FoxBarry was abandoned due to operational issues. However, FoxBarry appears to no longer be in existence, and since all of our conditions pursuant to the agreement have been satisfied, we elected to recognize the $200,000 of deferred income during the year ended December 31, 2016, as other income. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Notes Payable [Abstract] | ||
NOTES PAYABLE | NOTE 13 – NOTES PAYABLE We do not owe any notes payable at September 30, 2017 or December 31, 2016. | NOTE 11 – NOTES PAYABLE Our notes payable consist of: December 31, 2016 2015 Note payable - WeedMD $ — $ 175,000 Note payable – Slainte — 600,000 Total notes payable $ — $ 775,000 On July 7, 2014, we issued a $175,000, unsecured, demand promissory note bearing interest at 5% to WeedMD for cash used in our business development activities. On March 24, 2016, an unrelated third party agreed to assume all of our obligations, including accrued and unpaid interest, pursuant to the terms of a $175,000 note payable we owed to WeedMD, in consideration for the transfer by us of 1,100,000 shares of the common stock of WMD to the unrelated third party. WMD consented to the assumption of the loan by the unrelated third party, and released us from any further liability with respect to the loan. On December 18, 2014, we issued a $600,000 unsecured promissory note (the “Slainte Note”) bearing interest at 12% to Slainte Ventures, LLC (“Slainte”). The principal and accrued interest were due on the earlier of December 17, 2015, or upon the closing of certain capital raising transactions as described in the note. The default rate of interest under the note is 18%. Debt issuance costs of $13,500 were immediately recognized as interest expense as, at the time, we expected to close on a capital raising transaction in early 2015. On October 6, 2015, we borrowed funds from a third party and did not apply the borrowed funds to the Slainte Note resulting in a default under the terms of the note, and thus, we received a default waiver from Slainte. On March 18, 2016, we entered into an agreement with Slainte whereby Slainte waived default, amended the terms and extended the maturity date of the Slainte Note until December 17, 2016, and agreed to accept a warrant in lieu of interest due on the loan. The warrant allows Slainte to purchase 416,667 shares of our common stock; plus that number of shares of our common stock equal in number to (i) the product of the then-applicable interest rate under the Slainte Note and the amount of principal outstanding on the Note, calculated on a daily basis and paid for actual days elapsed, during the period beginning on December 18, 2015, and ending on the date on which the Note is paid in full, divided by (ii) $0.18; plus that number of shares of our common stock equal in number to (i) the product of 0.02 and the sum of the amount of principal and interest outstanding on the Note on the first day of each calendar month, beginning with February 1, 2016, divided by (ii) $0.18. The warrant is exercisable at a price of $0.18 per share, subject to adjustment in the event of stock splits, the sale of our shares of common stock at a price below $0.18 per share or the sale of equity securities with a conversion price of less than $0.18 per share. On November 14, 2016, the Slainte Note was again amended to extend the maturity date to December 30, 2017 and to allow the note to be converted into shares of the Company's common stock. The number of shares to be issued upon conversion of the note will be determined by dividing the dollar amount of the principal to be converted by 70% of the average closing price of the Company's common stock for the ten business days immediately preceding the date of the conversion. The warrant can be exercised at any time during the five year period following the full repayment of the loan; the exercise price can be paid in cash or through a cashless exercise feature; and the warrant grants certain registration rights to Slainte applicable to all shares of our common stock owned or controlled by Slainte, including shares issued upon exercise of the warrant. In addition, Slainte granted us a put option, exercisable upon repayment of the loan prior to December 17, 2016, that requires Slainte to purchase from us, for $100,000, that number of shares of our common stock equal in number to (i) $100,000 divided by (ii) the product of 80% and the average price of our common stock for the 30 trading days immediately prior to the date the put option is exercised. Due to the fair value of the warrants issued and conversion feature added in connection with the amended note agreements, the modifications were considered substantial (i.e. greater than 10% of the carrying value of the debt). As a result, an extinguishment of debt was deemed to have occurred, resulting in the recognition of extinguishment losses totaling $674,666. Following the amendment in November 2016, Slainte converted the entire principal amount of the note into 594,540 shares of the Company's common stock. Slainte also exercised the warrants through the cashless exercise feature resulting in the issuance of 1,330,007 shares of the Company's common stock. He also purchased 104,939 shares of the Company's common stock for $100,000 in connection with the Company's exercise of the put option. Prior to their exercise in November 2016, these warrants and conversion feature were accounted for as a liability under ASC 815. The Company assessed the fair value of the warrants and conversion feature upon issuance and conversion and at each reporting period based on the Black-Scholes pricing model. See below for the range of variables used in assessing the fair value during the year ended December 31, 2016. Warrants December 31, Conversion Feature December 31, Expected life (years) 4.29 - 5.0 1.09 - 1.13 Risk-free interest rate 1.01% - 1.90% 0.78% - 0.79% Expected volatility 214% - 227% 200% - 203% In connection with these warrants, the Company recognized a loss on the change in fair value of warrant liability of $1,616,215 during the year ended December 31, 2016. In connection with the conversion feature, the Company recognized a loss on the change in fair value of derivative liability of $13,947. Expected volatility is based primarily on historical volatility. Historical volatility was computed using weekly pricing observations for recent periods that correspond to the expected life of the warrants or conversion feature. The Company believes this method produces an estimate that is representative of our expectations of future volatility over the expected term of these warrants or conversion feature. The expected life is based on the remaining term of the warrants or conversion feature. The risk-free interest rate is based on U.S. Treasury securities rates. On March 24, 2016, an unrelated third party agreed to assume all of our obligations, including accrued and unpaid interest, pursuant to the terms of a $175,000 note payable we owed to WeedMD, in consideration for the transfer by us of 1,100,000 shares of the common stock of WMD to the unrelated third party. WMD consented to the assumption of the loan by the unrelated third party, and released us from any further liability with respect to the loan. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2016 | |
CONVERTIBLE NOTE PAYABLE [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 12 – CONVERTIBLE NOTES PAYABLE From time to time during the year ended December 31, 2016 and 2015, we issued convertible promissory notes to unaffiliated third parties. The net proceeds from these transactions are used for general working capital purposes. The debt discounts and deferred financing costs on the convertible promissory notes are amortized on a straight-line basis, which approximates the effective interest rate method, over the term of the note, and this amortization is included in interest expense in our consolidated statements of operations. The following table summarizes our convertible promissory notes outstanding as of December 31, 2016 and 2015: Maturity Interest Base December 31, Issue Date Holder Security Date Rate Conversion Rate 2016 2015 12/28/2016 Tangiers Investment Group Unsecured 7/8/2017 10 % $1.00 through maturity; 55% of lowest closing price thereafter $ 35,000 $ — 8/10/2016 JSJ Investments Unsecured 5/10/2017 12 % $0.20 during first 180 days; 45% of lowest closing price thereafter 125,000 — 10/6/2015 Vis Vires Group Unsecured 6/30/2016 8 % 58% of three lowest closing bids — 59,000 10/12/2015 JSJ Investments Unsecured 7/8/2016 12 % 55% of five lowest trades — 102,000 12/9/2015 Tangiers Investment Group Secured 12/8/2016 10 % 55% of three lowest closing bids — 220,000 160,000 381,000 Less unamortized discount (34,453 ) (272,793 ) $ 125,547 $ 108,207 The convertible notes, including accrued interest payable, may be converted into shares of our common stock at the Conversion Price, in whole, or in part, at various times, after the date of issuance, at the option of the holder (the “Conversion Feature”), as defined by the terms of the convertible note. The Conversion Price is equal to the Base Conversion Rate specified in the table above multiplied by the Variable Conversion Rate (“VCR”) which is equal to the average of the number of lowest trading prices or closing bid prices of our common stock (specified in the table above) during the ten trading day period prior to the date of conversion divided by the closing price of our common stock on the day of conversion. If these conversion rates results in a beneficial conversion feature (“BCF”), the BCF is recorded as an unamortized convertible debt discount, which is required to be valued and amortized to interest expense over the term of the Note. We amortize our convertible debt discount on a straight-line basis, which approximates the effective interest rate method, and this amortization is included in amortization of debt discount in our consolidated statements of operations. If a convertible note is repaid, any remaining unamortized deferred financing costs and unamortized debt discount are expensed on the date of repayment. If a convertible notes is convertible into an unlimited number of unregistered, restricted common shares, it is classified as having an unlimited shares feature (“Unlimited Shares Feature”). The difference between the closing price of our common stock and the VCR is referred to as the Variable Conversion Rate Differential (“VCRD”). If, both the Unlimited Shares Feature and the VCRD meet the definition of an embedded derivative, then together they create a compound embedded derivative liability or, hereafter, simply a “derivative liability.” In accordance with U.S. GAAP, our derivative liabilities are recorded at fair value on the date of issuance and subsequently remeasured to fair value each reporting period with any change in fair value being recognized as gain (loss) on derivative liabilities in our consolidated statement of operations. See Note 9. Similarly, accrued interest payable applicable to the convertible notes is convertible into shares of our common stock, without limit, at the same Conversion Price. The fair value of the derivative liabilities applicable to accrued interest payable is measured and recognized at each reporting date as derivative liabilities with a corresponding charge to interest expense. As noted above, all derivative liabilities are re-measured in subsequent reporting periods with any change in fair value being included in gain (loss) on derivative liabilities. During the years ended December 31, 2016 and 2015, we recorded deferred financing fees of $0 and $41,100, respectively, in connection with the issuance of our convertible notes and we recognized $32,400 and $8,700 of amortization of deferred financing costs during the year ended December 31, 2016 and 2015, respectively. This amount is included in interest expense in our consolidated statements of operations. The aggregate fair value of the derivative liabilities applicable to our convertible notes on the dates of issuance was $557,000 and $355,293 for convertible notes issued during the years ended December 31, 2016 and 2015, respectively, and was recorded as derivative liabilities on our consolidated balance sheets. The related BCF debt discount was recorded as a reduction to our convertible notes payable on our consolidated balance sheets. During the years ended December 31, 2016 and 2015, we recognized $267,258 and $82,500, respectively, of amortization related to the convertible notes and recorded this amount as amortization of debt discount in our consolidated statements of operations. We recognized $35,719 and $5,121 of interest expense applicable to our convertible notes during the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015, $5,876 and $5,121, respectively, of this interest is accrued within accrued expenses on our consolidated balance sheets. 2015 Convertible Notes At various times during the year ended December 31, 2015, the Company issued convertible promissory notes (the "2015 Notes") in the aggregate principal balance of $381,000. The 2015 Notes, including accrued interest payable, may be converted into shares of our common stock at the Conversion Price, as defined below, in whole, or in part, at any time beginning 180 days after the date of issuance, at the option of the holder. The 2015 Notes also contain prepayment options whereby we may, during the first 180 days that each note is outstanding, prepay the note by paying prepayment premiums ranging from 10% to 40% of the principal then outstanding depending on the date of prepayment. In general, per the terms of our 2015 Notes, the note holders may not make any conversions that would result in the note holder holding more than 9.99% of our issued and outstanding common stock at any one time. Should we default on a conversion or repayment of a convertible note, the note, accrued interest and default penalties and fees are immediately due and payable. The minimum default penalty amount ranges from 25% to 50% (or more, under certain circumstances) times the then outstanding principal and unpaid interest. During the year ended December 31, 2016, two of these notes in the aggregate principal balance of $161,000 were repaid. The $220,000 note dated December 9, 2015 from Tangiers Investment Group, LLC was converted in full into a total of 2,843,698 shares of the Company's common stock at various dates during the year ended December 31, 2016. Slainte Convertible Notes On March 30, 2016, we borrowed $81,978, from Slainte Ventures and used the proceeds to repay principal and accrued interest applicable to our $59,000 convertible promissory note dated October 6, 2015, to Vis Vires Group, Inc. On April 6, 2016, we borrowed an additional $75,000 from Slainte Ventures and used the proceeds, along with $52,500 of advances to the Company by officers and directors of the Company, to repay principal and accrued interest applicable to our $102,000 convertible promissory note, dated October 12, 2015, to JSJ Investments, Inc. On July 5, 2016, we borrowed $50,000 from Slainte Ventures and used the proceeds for working capital purposes. These loans, together with interest at 12% per year, are payable on December 30, 2016. We can prepay the loans at any time. If the loans are repaid on or before September 30, 2016, the principal amount which is being repaid will increase by 10%. If the loans are repaid after September 30, 2016, the principal amount which is being repaid will increase by 15%. The amount of the principal increase may be paid with shares of our common stock. The number of shares to be issued for such purpose will be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the prepayment date. The original principal of the loan was not convertible prior to maturity. If the loans were not paid when due, then at any time between the maturity date and January 10, 2017, Slainte may convert the outstanding principal and interest on the loan into shares of our common stock. The number of shares to be issued on conversion was to be determined by dividing the average closing price of our common stock (which in no case can be greater than $0.45) for the ten trading days preceding the conversion date by the outstanding principal and interest on the loan on the conversion date. The notes were not paid prior to the maturity date of December 30, 2016. As a result, the notes became convertible effective December 31, 2016. Derivative liabilities in the aggregate amount of $557,000 were recorded upon these notes becoming convertible. The notes along with their accrued interest were converted into 497,296 shares of the Company's common stock on December 31, 2016, and the value of the derivative liabilities were extinguished to common stock. JSJ Convertible Note On August 10, 2016, we borrowed $125,000 from JSJ Investments and used the proceeds for working capital purposes. The loan, together with interest at 12% per year, is payable on May 10, 2017. We can prepay the loan at any time. If the loan is repaid on or before October 16, the principal amount which is being repaid will increase by 25%. If the loan is repaid on or before October 16, 2016 through February 12, 2016, the principal amount which is being repaid will increase by 30%. Thereafter, the note may be repaid only upon written consent from JSJ, and the principal amount that is being repaid will increase by 30%. At any time after the date of the note, JSJ is entitled to convert all of the outstanding and unpaid principal in to shares of our common stock. Until February 12, 2017, the conversion price is $0.20 per share, and thereafter, the conversion price will be at a 45% discount to the lowest closing price of our common stock for the ten trading days preceding the conversion date. JSJ may not make any conversions that would result in the note holder holding more than 4.99% of our issued and outstanding common stock at any one time. If the notes are held through February 12, 2017, derivative accounting will apply upon the change to a variable conversion price. This convertible note was paid in full on February 9, 2017, as more fully described in Note 19 – Subsequent Events. Tangiers Convertible Note In connection with an equity line agreement discussed in Note 20, the Company issued a promissory note to Tangiers for the principal sum of $35,000 as a commitment fee for the equity line. The note bears interest at 10% per year, is unsecured, and is due and payable on July 8, 2017. At the option of Tangiers, all or any part of the unpaid principal amount of the note may be converted into shares of the Company's common stock. The number of shares to be issued on any conversion will be determined by dividing the principal amount of the note to be converted by $1.00. If the note is not repaid or converted prior to maturity, the conversion price will change to 55% of the lowest closing bid price during the 20 days preceding the conversion date. If the note is held past maturity, derivative accounting will apply upon the change to a variable conversion price. |
NOTES PAYABLE TO AND ADVANCES F
NOTES PAYABLE TO AND ADVANCES FROM OFFICERS AND DIRECTORS | 12 Months Ended |
Dec. 31, 2016 | |
NOTES PAYABLE, RELATED PARTIES [Abstract] | |
NOTES PAYABLE, RELATED PARTIES | NOTE 13 – NOTES PAYABLE TO AND ADVANCES FROM OFFICERS AND DIRECTORS Notes payable to and advance from officers and directors consisted of the following, at December 31, 2016 and 2015: December 31, 2016 2015 Note payable to Earnie Blackmon, an officer and director $ 28,750 $ — Note payable to Tony Verzura, an officer and director 28,750 — Advances from officers and directors 71,008 — Accrued wages payable to officers and directors 42,695 612,512 $ 171,203 $ 612,512 On April 6, 2016, we borrowed $25,000 from Ernest Blackmon and $25,000 from Tony Verzura and used the proceeds to repay principal and interest applicable on our $102,000 convertible promissory note dated October 12, 2015, to JSJ Investments Inc. During the year ended December 31, 2016, Messrs. Blackmon, Verzura and Ruby, who are officers and directors of the Company, paid obligations and expenses on behalf of the Company, from their own individual, personal funds. Such payments have been recorded in the consolidated balance sheets as a component of Notes payable to and advances from officers and directors. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | ||
STOCKHOLDERS' DEFICIT | NOTE 14 – STOCKHOLDERS’ EQUITY (DEFICIT) Stock Options On January 9, 2016, we awarded 200,000 stock options to each of Messrs. Blackmon, Verzura and Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.70 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.70 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.70 Exercise price $ 0.70 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % At December 31, 2016, the fair value of these 600,000 options totaling $417,664 was included in accrued expenses on our condensed consolidated balance sheets and on January 9, 2016, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of these options on that date. On January 12, 2016, we awarded 1,050,000 stock options to each of Messrs. Blackmon, Verzura and 980,000 stock potions to Mr. Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.20 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ .20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % On May 31, 2017, we awarded 100,000 stock options to each of Messrs. Blackmon, Verzura, 100,000 stock options to a non-officer consultant, and 2,600,000 stock options to Mr. Ruby under our 2017 Stock Incentive Plan. The options were fully vested at the time of grant, and give the option holder the right to purchase shares of our common stock at $0.56 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.56 per option, based upon the day’s closing price of our common stock on the date of grant. At December 31, 2016, the fair value of 3,080,000 options totaling $612,512, was included in accrued expenses on our condensed consolidated balance sheets, and on January 15, 2017, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of these options on that date. The following table summarizes our stock options outstanding, as of September 30, 2017: Nine Months Ended September 30, 2017 Number of Shares Weighted Average Remaining Life (years) Weighted Average Exercise Price Stock options outstanding, beginning of period 3,680,000 8.9 $ $0.28 Issued 2,900,000 9.6 $0.56 Exercised — Expired — Stock options outstanding, end of period 6,580,000 8.8 $ $0.40 Stock options exercisable, September 30, 2017 6,580,000 8.8 $ $0.40 We issued to certain of our employees 57,500 stock options, at an option price of $0.92 per share that will become vested and exercisable on July 26, 2018. Common Stock Issued In Exchange For Warrant Outstanding On February 10, 2016, we issued 621,000 shares of our common stock valued at $987,390 based on the previous day’s closing price, to Typenex Co-Investment, LLC ("Typenex") in exchange for the return of Warrant #1 to Purchase Shares of Common Stock (the “Warrant”) that we issued to Typenex on August 13, 2014, as part of a financing arrangement. We calculated the fair value of the Warrant to be $218,788, or approximately $1.29 per underlying share, utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 1.59 Exercise price $ 3.00 Risk free interest rate 1.05 % Expected term (years) 2.6 Expected volatility 183 % Expected dividends 0 % The Warrant gave Typenex the right to purchase 170,044 shares of our common stock on the issuance date and provided for adjustments to the number of shares underlying the Warrant upon occurrence of certain events including subsequent sales of our common stock. Our repurchase of the Warrant resulted in Typenex forgoing its potential right to receive shares in excess of the original 170,044 shares underlying the Warrant on the original issuance date. On February 10, 2016, we recorded the $768,602 fair value of the common shares issued in excess of the $218,788 fair value of the Warrant reacquired as a loss on settlement of disputed terms of warrant in our condensed consolidated statements of operations and as an increase in common stock on our condensed consolidated balance sheets. On February 10, 2016, we cancelled the Warrant and recorded the $218,788 fair value as an increase to common stock. Warrants: The following table summarizes our share warrants outstanding as of September 30, 2017 and December 31, 2016: September 30, 2017 December 31, 2016 Number Weighted Number Weighted Warrants outstanding, beginning of period 1,449,779 $ 0.18 3,000,000 $ 12.00 Warrants issued to consultant 83,333 0.18 666,667 0.18 Warrants issued to consultant 16,000 1.25 — — Cashless issued upon conversion of Slainte note — 1,746,674 — Warrants exercised (125,000 ) 0.18 (963,562 ) — Expired — — (3,000,000 ) — Warrants outstanding, end of period 1,424,112 $ 0.19 1,449,779 $ 0.18 Warrants exercisable, end of period 1,424,112 $ 0.19 1,449,779 $ 0.18 Preferred Stock On July 18, 2017, the Board of Directors adopted a resolution creating a series of Preferred Shares, no par value per share, designated as the Series A Preferred Shares. We subsequently issued 2,000 shares of our Series A preferred stock for $2,200 to of our officers and directors. | NOTE 14 – STOCKHOLDERS’ DEFICIT 2014 Stock Split On March 21, 2014, we effected a four-for-one stock split of our common stock in the form of a stock dividend of three shares of common stock for each share of common stock outstanding to stockholders of record on March 19, 2014. 2014 Equity Offering On March 26, 2014, we sold 600,000 Units for a total amount of $900,000 to 45 accredited investors. Each Unit consisted of one share of our common stock, two A Warrants and three B Warrants. Each A Warrant entitles the holder to purchase one share of our common stock at a price of $7.50 per share during the two year period commencing April 1, 2014. The A Warrants are callable once our common stock has traded at a price of at least $15.00 for 20 consecutive trading days. Each B Warrant entitles the holder to purchase one share of our common stock at a price of $15.00 per share during the three year period commencing April 1, 2014. The B Warrants are callable once our common stock has traded at a price of at least $22.00 for 20 consecutive trading days. 2014 Change in Authorized Share Capital Effective May 2, 2014, we increased the authorized number of our preferred shares from five million to ten million and the authorized number of our common shares from 50 million to 100 million. At the same time we also changed the par value of both our preferred and common stock from $0.001 per share to no par value per share. Common Stock Issued For Warrant Outstanding On February 10, 2015, we issued 621,000 shares of our common stock, valued at $987,390 based on the previous day’s closing price, to Typenex in exchange for the return of Typenex Warrant #1 that we issued to Typenex on August 13, 2014, as part of a financing arrangement with Typenex. On February 10, 2015, we calculated the fair value of Typenex Warrant #1 to be $218,788, or approximately $1.29 per underlying share, utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 1.59 Exercise price $ 3.00 Risk free interest rate 1.05 % Expected term (years) 2.6 Expected volatility 183 % Expected dividends 0 % Typenex Warrant #1 gave Typenex the right to purchase 170,044 shares of our common stock on the issuance date and provided for adjustments to the number of shares underlying the warrant upon occurrence of certain events including subsequent sales of our common stock. Our repurchase of Typenex Warrant #1 resulted in Typenex forgoing its potential right to receive shares in excess of the original 170,044 shares underlying the warrant on the issuance date. On February 10, 2015, we recorded the $987,390 fair value of the common shares issued as an increase to common stock and the $218,788 fair value of Typenex Warrant #1 reacquired and cancelled as a decrease to common stock and the difference, $768,602, as a loss on extinguishment of debt and repurchase of warrants in our consolidated statements of operations. Warrants: The following table summarizes our share warrants outstanding as of December 31, 2016 and 2015: Year Ended December 31, 2016 2015 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Warrants outstanding, beginning of period 3,000,000 $ 12.00 3,170,044 $ 11.52 Warrants issued to consultant 666,667 0.18 — — Cashless issued upon conversion of Slainte note 1,746,674 — Warrants exercised (963,562 ) — — — Repurchased and cancelled — (170,044 ) 3.00 Expired (3,000,000 ) — — — Warrants outstanding, end of period 1,449,779 $ 0.180 3,000,000 $ 12.00 Warrants exercisable, end of period 1,449,779 $ 0.180 3,000,000 $ 12.00 The weighted-average remaining contractual life for warrants outstanding and exercisable at December 31, 2016, is 4.5 years, and the aggregate intrinsic value of warrants outstanding and exercisable at December 31, 2016 is $0. The warrants issued during the year ended December 31, 2016 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $0.16 - $2.18 Exercise price $0.18 Risk free interest rate 1.01% - 1.37% Expected term (years) 5 Expected volatility 322% - 504% Expected dividends 0% 2014 Equity Incentive Plan On November 20, 2014, our board of directors approved our 2014 Stock Incentive Plan (the “Plan”) and the Plan became effective on November 19, 2015. The Plan provides officers, directors, selected employees and outside consultants an opportunity to acquire or increase a direct ownership interest in our operations and future success. Our board of directors currently administers the Plan and makes all decisions concerning which officers, directors, employees and other persons are granted awards, how many to grant to each recipient, when awards are granted, the terms and conditions applicable to awards, how the Plan should be interpreted, whether to amend or terminate the Plan and whether to delegate administration of the Plan to a committee. A maximum of 4,000,000 common shares are subject to the Plan. The Plan provides for the grant of stock options, stock awards, restricted stock units and stock appreciation rights. Stock options may be non-qualified stock options or incentive stock options except that stock options granted to outside directors, consultants or advisers providing services to us shall in all cases be non-qualified stock options. The Plan will terminate on November 20, 2024, unless the administrator terminates the Plan earlier. As of December 31, 2015, 3,400,000 common shares were available for issue under the Plan. Stock Options On January 9, 2015, we awarded 200,000 stock options to each of Messrs. Blackmon, Verzura and Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.70 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.70 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.70 Exercise price $ 0.70 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % At December 31, 2014, the fair value of these 600,000 options totaling $417,664 was included in accrued expenses on our consolidated balance sheets. On January 9, 2015, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of the 600,000 options on that date. On January 12, 2016, we awarded 1,050,000 stock options to each of Messrs. Blackmon, Verzura and 980,000 stock options to Mr. Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.20 per share during the ten year term of the option. We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % At December 31, 2015 the fair value of these 3,080,000 options totaling $612,512, which was included in accrued expenses on our consolidated balance sheets, and on January 15, 2016, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of these options on that date. The following table summarizes our stock options outstanding as of both December 31, 2016 and 2015, respectively: Number of Weighted Weighted Stock options outstanding at December 31, 2014 — — Issued 600,000 9.8 $0.70 Exercised — — — Expired — — — Stock options outstanding at December 31, 2015 600,000 9.8 $0.70 Stock options exercisable at December 31, 2015 600,000 $0.70 Stock options outstanding at December 31, 2015 600,000 9.8 Issued 3,080,000 10.0 $0.20 Exercised — — — Expired — — — Stock options outstanding at December 31, 2016 3,680,000 8.9 $0.28 Stock options exercisable at December 31, 2016 3,680,000 8.9 $0.28 The weighted-average remaining contractual life for stock options outstanding and exercisable at December 31, 2016, is 8.9 years, and the aggregate intrinsic value of options outstanding and exercisable at December 31, 2016 is $0. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
SHARE-BASED COMPENSATION | NOTE 15 – SHARE-BASED COMPENSATION Share-based Compensation We recognize share-based compensation expense in cost of revenues and general and administrative expense based on the fair value of common shares issued for services. Share-based compensation expense for the three and nine months ended September 30, 2017 and 2016 is, as follows: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Options granted to officers and directors for compensation $ — $ 33,780 $ 1,812,456 $ 118,160 Warrants and options issued for consulting services — — 16,379 — Common stock issued for services 68,984 — 170,958 — Common stock accrued as payment for services, shares not yet issued 22,949 — 117,509 — $ 91,933 $ 33,780 $ 2,117,302 $ 118,160 | NOTE 15 – SHARE-BASED COMPENSATION Share-based Compensation We recognize share-based compensation expense in cost of revenues, sales and marketing expenses, R&D expenses and general and administrative expenses based on the fair value of common shares issued for services. In addition, we accrue share-based compensation expense for estimated share-based awards earned during the years ended December 31, 2016 and 2015, under our 2014 Equity Incentive Plan. Share-based compensation expense for the years ended December 31, 2016 and 2015 is, as follows: December 31, 2016 2015 Warrants issued for consulting services $ 319,419 $ 47,880 Warrants issued for accrual of share-based awards to officers and directors — 612,512 Common stock issued for accounts payable and accrued expenses 223,484 — Common stock issued for services 271,097 67,500 Amortization of common stock issued for prepaid services — 302,789 $ 814,000 $ 1,030,681 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 16 – INCOME TAXES The Internal Revenue Code (“IRC”) allows net operating losses (“NOL's”) to be carried forward and applied against future profits for a period of twenty years. The change of ownership following our merger with MySkin may limit our ability to utilize these NOLs under the terms of IRC Section 381. We did not provide any current or deferred federal income tax provision or benefit for any of the periods presented in our consolidated financial statements because we have experienced losses since our inception. When it is more likely than not, that a tax asset cannot be realized through future income, we must record an allowance against any potential future tax benefit. We provided a full valuation allowance against our net deferred tax assets, consisting of net operating loss carry forwards, because we determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward periods. We have not taken a tax position that, if challenged, would have a material effect on our consolidated financial statements for the years ended December 31, 2016 and 2015, as defined under ASC 740. We did not recognize any adjustment to our liability for uncertain tax positions and therefore did not record any adjustment to the beginning balance of our accumulated deficit on our consolidated balance sheets. Our provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows: Years Ended December 31, 2016 2015 Statutory U.S. federal tax rate 39 % 39 % Effect of increase in valuation allowance (39 %) (39 %) — % — % Changes in our cumulative net deferred tax assets consist of the following: December 31, 2016 2015 Net loss carry forward $ 3,648,316 $ 2,148,248 Valuation allowance (3,648,316 ) (2,148,248 ) $ — $ — A reconciliation of our income taxes computed at the statutory rate is as follows: Years Ended December 31, 2016 2015 Tax benefit at statutory rate $ 1,500,068 $ 1,124,511 Valuation allowance (1,500,068 ) (1,124,511 ) $ — $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | NOTE 4 – RECEIVABLE FROM AND EQUIPMENT NOTE PAYABLE TO RELATED PARTY On April 20, 2015, we advanced Cannabinoid Research & Development, Limited (“CRD”) $5,000 and included this amount in due from related parties. At March 31, 2017, we concluded that we had established a variable interest entity relationship with CRD, because we are the primary beneficiary, in accordance with GAAP. As a result, we elected to consolidate the assets and liabilities of CRD in our consolidated balance sheet at March 31, 2017. Thus, at September 30, 2017, the $5,000 advance to CRD is eliminated upon the consolidation of the assets and liabilities of CRD for financial statement reporting purposes. In the normal course of business, we make non-interest bearing advances to Advesa, Inc. (“Advesa’), which is 100% owned by one of our officers and directors. Such advances are used by Advesa to purchase equipment and to cover the cost of their operations. Amounts due from related parties consist of: September 30, December 31, 2017 2016 Advesa, Inc. $ 35,083 $ 21,775 Employees 2,200 — Cannabinoid Research & Development, Limited — 5,000 $ 37,283 $ 26,775 We purchased certain laboratory equipment from Advesa at an amount equal to their cost of the equipment, and subsequently leased the laboratory equipment back to Advesa for a 36 month period. The equipment note is payable over 36 months at an interest rate of $7.5%. The equipment note was paid in full on August 1, 2017. | NOTE 17 – RELATED PARTY TRANSACTIONS Affiliate Customer During 2010, Messrs. Blackmon and Verzura, who are officers and directors of our Company, made loans to, or equity investments in, one of our customers. Effective June 30, 2015, Messrs. Blackmon and Verzura completely divested themselves of those interests. As Messrs. Blackmon and Verzura may have had significant influence on management or operating polices of the customer until June 30, 2015, we classified professional fees in the amount of $4,425 to this customer as revenues - affiliate, in our consolidated statements of operations and accounts receivable from this customer, as due from related parties on our consolidated balance sheets. Lone Mountain During the year ended December 31, 2014, we made certain payments on behalf of Lone Mountain during the organizational phase of this venture and we classified these payments as due from related parties on our consolidated balance sheets. As further described in Note 6 above, during the first half of 2015, we expensed our $40,900 advance to Lone Mountain and included this amount in equity in net loss of unconsolidated affiliate in our consolidated statements of operations. CRD On April 20, 2015, we advanced CRD $5,000 and included this amount in due from related parties. Blue River Inc. In February 2015, Messrs. Blackmon and Verzura, who are officers and directors of our Company, formed Blue River Inc. (“Blue River”), a Colorado corporation in the cannabis industry that plans to manufacture and wholesale medicinal and recreational cannabis including our Prana medicinals products. On January 1, 2016, our wholly owned subsidiary, UCANN California Corporation (“UCANN CA”), entered into a five year consulting and intellectual property licensing arrangement with Blue River whereby UCANN CA will provide consulting services to Blue River at hourly rates and a non-exclusive license to our intellectual property for $5,000 per month. The arrangement can be terminated by either party by written agreement. During the year ended December 31, 2015, we advanced Blue River $3,284 and included this amount in due from related parties. For the year ended December 31, 2016 and 2015, we recognized consulting fee revenue in the amounts of $71,680 and $4,425, respectively, which amounts are included as Revenue, affiliate in our consolidated statements of operations. At December 31, 2016 and 2015, we owed Blue River $4,293 and $0, respectively, in trade payables and included this amount in accounts payable. Advesa Corporation Advesa Corporation (“Advesa”), a California corporation, was formed in September 2016, and is 100% owned by Messer Verzura. The Company entered into a memo of understanding in November 2016, under which we provide consulting services to Advesa, and Advesa assists our largest customer, who is located in California, produce our Prana biomedical line of products under a licensing agreement with that California customer. During the year ended December 31, 2016 we advance Advesa approximately $20,499 and included this amount in Due from related parties in our consolidated balance sheet. Amounts due from related parties consist of: December 31, 2016 2015 Blue River $ — $ 3,284 Advesa 21,755 — CRD 5,000 5,000 Total due from related parties $ 26,755 $ 8,284 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES Contractual Obligations and Commercial Commitments On February 20, 2017, we entered into a consulting agreement with a third party that has a twelve month term, and which can be extended by mutual agreement. The agreement provides for the issuance of a five (5) year warrant to the consultant, upon the execution of the agreement, to purchase 250,000 shares of our common stock at a price of $0.18 per share, plus the payment of $7,500 on the first day of each month, beginning March 1, 2016, coupled with the monthly issuance of five (5) year warrants to purchase our common stock in a number of shares determined by dividing $7,500 by $0.18 per share. These warrants are exercisable at a price of $0.18 per share. During the nine months ended September 30, 2017, we recognized $84,380 of expense applicable to this consulting agreement. On May 6, 2014, we entered into a consulting agreement with two third party consultants that has a nine month term, which can be renewed and/or extended by mutual agreement. Currently, the renewal of the agreement is under negotiation. The agreement provides for a $50,000 payment to the consultants at signing, which has been paid, and for three more $50,000 payments (a total of $200,000) and the issuance of 100,000 shares of our common stock upon the achievement of certain goals as set forth in appendix II of the agreement. During the three and nine months ended September 30, 2017 and 2016, we recognized no expenses applicable to this agreement At September 30, 2017 and December 31, 2016 the project was approximately 80% complete and $110,000 is included in accrued expenses on our consolidated balance sheets. The value of the 100,000 shares will be recognized upon achievement of the goals. The project has been suspended and it is unknown when it will resume. Financing Agreement – Equity Line of Credit On December 28, 2016, the Company entered into an equity line of credit agreement with Tangiers Global, LLC (“Tangiers”). Under the equity line agreement, Tangiers has agreed to provide the Company with up to $10,000,000 of funding through the purchase of shares of the Company’s common stock. During the term of the agreement, the Company may deliver a put notice to Tangiers, which will specify the number of shares which the Company will sell to Tangiers. The minimum amount the Company can draw down at any one time is $5,000, and the maximum amount the Company can draw down at any one time is $350,000 as determined by the formula contained in the equity line agreement. A closing will occur on the date which is no earlier than five trading days following, and no later than seven trading days following, the applicable put notice. On each closing date, the Company will sell, and Tangiers will purchase, the shares of the Company’s common stock specified in the put notice. The amount to be paid by Tangiers on a particular closing date will be determined by multiplying the purchase price by the number of shares specified in the put notice. The purchase price is 85% of the average of the two lowest trading prices of the Company’s common stock during the pricing period applicable to the put notice. The pricing period, with respect to a particular put notice, is five consecutive trading days including, and immediately following, the delivery of a put notice to Tangiers. The Company may submit a put notice once every ten trading days provided the closing of the previous transaction has taken place. The Company is under no obligation to submit any put notices. The Company has delivered seven (7) put notices to Tangiers as of September 30, 2017, and has received $1,380,204, under the terms of the equity line of credit agreement from the sale of 1,897,215 shares of our common stock to Tangiers. Subsequent to September 30, 2017, the Company delivered an additional put notice to Tangiers, and received $162,506, under the terms of the equity line of credit agreement from the sale of 267,703 shares of our common stock to Tangiers. Legal Proceedings We were not subject to any legal proceedings during the nine months ended September 30, 2017, and, to the best of our knowledge, no legal proceedings are pending or threatened. | NOTE 18 – COMMITMENTS AND CONTINGENCIES Contractual Obligations and Commercial Commitments Consulting Agreement for GAAP Reporting Services On February 20, 2016, we entered into a consulting agreement with a third party that has a twelve month term, and which can be extended by mutual agreement. The agreement provides for the issuance of a five (5) year warrant to the consultant, upon the execution of the agreement, to purchase 250,000 shares of our common stock at a price of $0.18 per share, plus the payment of $7,500 on the first day of each month, beginning March 1, 2016, coupled with the monthly issuance of five (5) year warrants to purchase our common stock in an amount of shares determined by dividing $7,500 by $0.18 per share. These warrants are exercisable at a price of $0.18 per share. During the year ended 31, 2016, we recognized in our consolidated statements of operations expenses in the total amount of $394,215 related to this contract, as follows: Year Ended Cash paid to consultant $ 15,000 Shares of common stock issued to consultant 62,781 Fair value of warrants issued to consultant 319,419 $ 397,200 Financing Commitment On December 28, 2016, we entered into an equity line of credit agreement with Tangiers Global, LLC (“Tangiers”). Under the equity line agreement, Tangiers has agreed to provide the Company with up to $10,000,000 of funding through the purchase of shares of the Company’s common stock. During the term of the agreement, the Company may deliver a put notice to Tangiers, which will specify the number of shares which the Company will sell to Tangiers. The minimum amount the Company can draw down at any one time is $5,000, and the maximum amount the Company can draw down at any one time is $350,000 as determined by the formula contained in the equity line agreement. A closing will occur on the date which is no earlier than five trading days following, and no later than seven trading days following, the applicable put notice. On each closing date, the Company will sell, and Tangiers will purchase, the shares of the Company’s common stock specified in the put notice. The amount to be paid by Tangiers on a particular closing date will be determine by multiplying the purchase price by the number of shares specified in the put notice. The purchase price is 85% of the average of the two lowest trading prices of the Company’s common stock during the pricing period applicable to the put notice. The pricing period, with respect to a particular put notice, is five consecutive trading days including, and immediately following, the delivery of a put notice to Tangiers. The Company may submit a put notice once every ten trading days provided the closing of the previous transaction has taken place. The Company is under no obligation to submit any put notices. The equity line agreement has a term of 36 months, which will begin on the effective date of the registration statement, which the Company has agreed to file with the Securities and Exchange Commission so that the shares of common stock to be sold to Tangiers may be sold in the public market. The Company issued a promissory note to Tangiers for the principal sum of $35,000 as a commitment fee for the equity line. The note bears interest at 10% per year, is unsecured, and is due and payable on July 8, 2017. The note is recorded on our consolidated balance sheet at December 31, 2016 in the amount of $35,000, net of a discount of $34,453. At the option of Tangiers, all or any part of the unpaid principal amount of the note may be converted into shares of the Company’s common stock. The number of shares to be issued on any conversion will be determined by dividing the principal amount of the note to be converted by $1.00. Legal Proceedings We are involved in disputes and legal actions arising in the normal course of our business. There have been no material developments in legal proceedings in which we are involved during the year ended December 31, 2016. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS Research Agreement Under the terms of a research agreement entered into in October 2017 with the University of Florida Trustees (“UFT”), our subsidiary, Prana Therapeutics, Inc. committed to pay UFT $100,000, upon the execution of the research agreement, and $50,000 in each of the months of February 2018 and June 2018, for a total commitment of $200,000. Subsequent Analysis of Operations In accordance with ASC 855-10, we have analyzed our operations subsequent to September 30, 2017, to the date these condensed consolidated financial statements were issued, and have determined that, other than as disclosed above, we do not have any material subsequent events to disclose in these condensed financial statements. | NOTE 19 – SUBSEQUENT EVENTS JSJ Convertible Note On August 10, 2016, we borrowed $125,000 from JSJ Investments and used the proceeds for working capital purposes. The note, together with interest at 12% per year, was due and payable on May 10, 2017. We could prepay the loan at any time, and if we were to repay the note on or before October 16, 2016 through February 12, 2016, the principal amount which was being repaid would increase by 30%. On February 13, 2017, the note was repaid in the form of the issuance of 379,100 shares of our common stock to JSJ Investments. In accordance with ASC 855-10 we have analyzed its operations subsequent to December 31, 2016, to the date these consolidated financial statements were issued, and has determined that, other that as disclosed above, we do not have any material subsequent events to disclose in these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Principles of Consolidation | Principles of Consolidation | Principles of Consolidation |
Basis of Presentation | Basis of Presentation | |
Use of Estimates | Use of Estimates We make our estimates of the ultimate outcome for these items based on historical trends and other information available when our condensed consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimates, which are typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. | Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at September 30, 2017, approximates their fair values based on our incremental borrowing rates. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the nine months ended September 30, 2017 and the year ended December 31, 2016. | Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at December 31, 2016, approximates their fair values based on our incremental borrowing rates. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the years ended December 31, 2016 and 2015. |
Cash and Cash Equivalents | Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable | Accounts Receivable Our allowance for doubtful accounts was $30,000 and $4,340 as of December 31, 2016 and 2015, respectively. We recorded bad debt expense, included in general and administrative expenses, of $82,831 and $24,185 during the years ended December 31, 2016 and 2015, respectively. |
Prepaid Expenses | Prepaid Expenses | Prepaid Expenses - |
Property and Equipment | Property and Equipment | Property and Equipment |
Patents | Patents – | |
Intangible Assets | Intangible Assets – | Intangible Assets – |
Investments in Non-Marketable Equity Securities | Investments in Non-Marketable Equity Securities | |
Long-Lived Assets | Long-Lived Assets Impairment Assessment FASB Accounting Standards Codification | Long-Lived Assets We have not recorded any impairment charges related to long-lived assets as of December 31, 2016 or December 31, 2015. |
Equity Method Investments | Equity Method Investments | Equity Method Investments |
Goodwill | Goodwill | |
Purchase Price Allocation | Purchase Price Allocation Business Combinations Fair Value Measurements and Disclosures | |
Deferred Revenue | Deferred Revenue | Deferred Revenue |
Revenue Recognition | Revenue Recognition Revenue Recognition Revenue for services with a payment in the form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid with warrants is measured using the Black-Scholes-Merton pricing model. Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred, and collectability is reasonably assured. Revenue Recognition – Affiliate Prana Prana Prana Prana Prana Prana Revenue Recognition. | Revenue Recognition - Revenue Recognition Revenue for services with a payment in the form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid for with warrants is measured using the Black-Scholes-Merton pricing model. Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in cost of revenues. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in our consolidated statement of operations on a net basis. |
Cost of Revenues | Cost of Revenues | Cost of Revenues |
Research and Development Expenses | Research and Development Expenses | Research and Development Expenses - |
Sales and Marketing Expenses | Sales and Marketing Expenses – | |
General and Administrative Expenses | General and Administrative Expenses | General and Administrative Expenses - |
Share-Based Compensation | Stock-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation | Share-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation |
Income Taxes | Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken, or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured, as described above, is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets, along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. | Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. |
Commitments and Contingencies | Commitments and Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. | Commitments and Contingencies If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
Net Loss Per Share | Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive: Nine Months Ended Three Months Ended 2017 2016 2017 2016 Warrants to purchase common stock 641,000 666,667 641,000 666,667 Cashless warrants not converted to common stock 783,112 1,228,455 783,112 1,228,455 Stock options 6,580,000 3,680,000 6,580,000 3,680,000 8,004,112 5,575,122 8,004,112 5,575,122 | Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Years Ended December 31, 2016 2015 Warrants to purchase common stock 666,667 3,000,000 Cashless warrants not converted to common stock 783,112 — Stock options 3,680,000 600,000 Total potentially dilutive securities 5,129,779 3,600,000 |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) |
Segment Reporting | Segment Reporting – | Segment Reporting – |
Concentration of Credit Risk | Concentration of Credit Risk The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Nine Months Ended Three Months Ended September 30, September 30, 2017 2016 2017 2016 Customer A 82 % 88 % 98 % 80 % Customer B 17 % 12 % 2 % 20 % Customer C 1 % 0 % 0 % 0 % Percentage of Accounts Receivable: Nine Months Ended 2017 2016 Customer A 0 % 68 % Customer B 0 % 30 % Customer C 0 % 21 % | Concentration of Credit Risk The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Years Ended December 31, 2016 2015 Customer A 95 % 36 % Customer B 3 % 32 % Customer C 2 % 18 % Percentage of Accounts Receivable: Years Ended December 31, 2016 2015 Customer D 75 % 56 % Customer E 25 % 41 % Customer F % 1 % |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014 the FASB issued guidance on revenue from contracts with customers, which implements a five-step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective at the beginning of fiscal year 2018, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our condensed consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting. In February 2016, the FASB issued guidance on leases which requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new guidance also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new guidance will be effective for us at the beginning of fiscal year 2019. Early adoption is permitted. We are in the process of evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. | Recently Issued Accounting Pronouncements In May 2014, the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for us at the beginning of fiscal year 2018, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting. In August 2014, the FASB issued guidance on disclosure of uncertainties about an entity's ability to continue as a going concern. This guidance requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity's ability to continue as a going concern. The guidance is effective for us at the beginning of fiscal year 2017, with early adoption permitted. We do not expect that the adoption of this standard will have a material effect on our consolidated financial statements. In November 2015, the FASB issued guidance requiring entities to present deferred tax assets and liabilities as noncurrent in a classified balance sheet instead of separating into current and noncurrent amounts. This guidance is effective for us at the beginning of fiscal year 2017, on a prospective or retrospective basis, and thus, we will implement such guidance beginning in 2017. In February 2016, the FASB issued guidance on leases which requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new guidance also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new guidance will be effective for us at the beginning of fiscal year 2019. Early adoption is permitted. We are in the process of evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Schedule of potentially dilutive securities that have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive | Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive: Nine Months Ended Three Months Ended 2017 2016 2017 2016 Warrants to purchase common stock 641,000 666,667 641,000 666,667 Cashless warrants not converted to common stock 783,112 1,228,455 783,112 1,228,455 Stock options 6,580,000 3,680,000 6,580,000 3,680,000 8,004,112 5,575,122 8,004,112 5,575,122 | Years Ended December 31, 2016 2015 Warrants to purchase common stock 666,667 3,000,000 Cashless warrants not converted to common stock 783,112 — Stock options 3,680,000 600,000 Total potentially dilutive securities 5,129,779 3,600,000 |
Schedule of significant concentrations in revenues and accounts receivable | The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Nine Months Ended Three Months Ended September 30, September 30, 2017 2016 2017 2016 Customer A 82 % 88 % 98 % 80 % Customer B 17 % 12 % 2 % 20 % Customer C 1 % 0 % 0 % 0 % Percentage of Accounts Receivable: Nine Months Ended 2017 2016 Customer A 0 % 68 % Customer B 0 % 30 % Customer C 0 % 21 % | Percentage of Revenue: Years Ended December 31, 2016 2015 Customer A 95 % 36 % Customer B 3 % 32 % Customer C 2 % 18 % Percentage of Accounts Receivable: Years Ended December 31, 2016 2015 Customer D 75 % 56 % Customer E 25 % 41 % Customer F % 1 % |
RECEIVABLE FROM AND EQUIPMENT N
RECEIVABLE FROM AND EQUIPMENT NOTE PAYABLE TO RELATED PARTY (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Schedule of Amounts Due From Related Parties | Amounts due from related parties consist of: September 30, December 31, 2017 2016 Advesa, Inc. $ 35,083 $ 21,775 Employees 2,200 — Cannabinoid Research & Development, Limited — 5,000 $ 37,283 $ 26,775 | December 31, 2016 2015 Blue River $ — $ 3,284 Advesa 21,755 — CRD 5,000 5,000 Total due from related parties $ 26,755 $ 8,284 |
PURCHASE OF PRANA THERAPUETIC33
PURCHASE OF PRANA THERAPUETICS, INC. (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of allocation of purchase price | As of July 14, 2017, the allocation of the purchase price for the 95% fair value of Prana was comprised of: Patents $ 52,596 Net assets 450,888 Goodwill 4,567,016 Total $ 5,070,500 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Prepaid Expense, Current [Abstract] | |
Schedule of prepaid expenses | December 31, 2016 2015 Prepaid investor relations services $ — $ 1,667 Prepaid licensing fees — 35,000 Other prepaid services and fees — 19,674 $ — $ 56,341 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accrued Liabilities, Current [Abstract] | ||
Schedule of accrued expenses | Our accrued expenses consist of: September 30, 2017 December 31, 2016 Accrued consulting fees $ — $ 45,000 Accrued interest expense — 5,875 Accrued payroll taxes 38,244 — $ 38,244 $ 50,875 | December 31, 2016 2015 Accrued consulting fees $ 45,000 $ 110,000 Accrued wages and related expenses — 629,780 Accrued interest expense 10,264 101,185 Accrued other expenses — 87,568 Total accrued expenses $ 55,264 $ 928,533 |
FAIR VALUE MEASUREMENTS AND D36
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of liabilities carried at fair value measured on a recurring basis | Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 383,581 $ 383,581 |
Schedule of reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | Derivative liabilities as of December 31, 2014 $ — Additions to derivative liabilities for convertible debt conversion features and interest 359,988 Loss on revaluation of derivative liabilities during the year 23,593 Derivative liabilities as of December 31, 2015 383,581 Additions to derivative liabilities for convertible debt conversion features 557,000 Additions for modifications of note payable to Sláinte Ventures 686,612 Reductions due to conversions or repayments of convertible debt (3,317,986 ) Loss on revaluation of derivative liabilities during the year 1,690,793 Derivative liabilities as of December 31, 2016 $ — |
RESEARCH GRANT PAYABLE (Tables)
RESEARCH GRANT PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of research grant payable | In August of 2013, we were received a grant from Accelerate Brain Cancer Cure, Inc. (“ABC”) in the amount of $75,000 to be used by us for the development and testing of brain cancer therapies (the “Grant”). Under the terms of the Grant, within 15 years after the effective date of the Grant, if one or more products resulting from the Grant is brought to market, then the Company will owe ABC the repayment of the Grant in the following amounts, based upon the following cumulative net profit benchmarks: Net Profit Grant $ 5,000,000 $ 75,000 15,000,000 75,000 30,000,000 75,000 50,000,000 75,000 $ 300,000 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Deferred Revenue Disclosure [Abstract] | ||
Schedule of deferred revenue | Our deferred revenue consists of: September 30, December 31, Deferred revenue - WeedMD $ 248,750 $ 383,750 Less - current portion (180,000 ) (180,000 ) Deferred revenue, net of current portion $ 68,750 $ 203,750 | December 31, 2016 2015 Deferred revenue – WeedMD $ 383,750 $ 563,750 Deferred revenue - FoxBarry — 200,000 383,750 763,750 Less – current portion (180,000 ) (380,000 ) Deferred revenue, net of current portion $ 203,750 $ 383,750 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Payable [Abstract] | |
Schedule of notes payable | December 31, 2016 2015 Note payable - WeedMD $ — $ 175,000 Note payable – Slainte — 600,000 Total notes payable $ — $ 775,000 |
Significant notes payable assumptions | Warrants December 31, Conversion Feature December 31, Expected life (years) 4.29 - 5.0 1.09 - 1.13 Risk-free interest rate 1.01% - 1.90% 0.78% - 0.79% Expected volatility 214% - 227% 200% - 203% |
CONVERTIBLE NOTE PAYABLE (Table
CONVERTIBLE NOTE PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CONVERTIBLE NOTE PAYABLE [Abstract] | |
Schedule of convertible promissory notes | Maturity Interest Base December 31, Issue Date Holder Security Date Rate Conversion Rate 2016 2015 12/28/2016 Tangiers Investment Group Unsecured 7/8/2017 10 % $1.00 through maturity; 55% of lowest closing price thereafter $ 35,000 $ — 8/10/2016 JSJ Investments Unsecured 5/10/2017 12 % $0.20 during first 180 days; 45% of lowest closing price thereafter 125,000 — 10/6/2015 Vis Vires Group Unsecured 6/30/2016 8 % 58% of three lowest closing bids — 59,000 10/12/2015 JSJ Investments Unsecured 7/8/2016 12 % 55% of five lowest trades — 102,000 12/9/2015 Tangiers Investment Group Secured 12/8/2016 10 % 55% of three lowest closing bids — 220,000 160,000 381,000 Less unamortized discount (34,453 ) (272,793 ) $ 125,547 $ 108,207 |
NOTES PAYABLE TO AND ADVANCES41
NOTES PAYABLE TO AND ADVANCES FROM OFFICERS AND DIRECTORS (Tables) (USD $) | 12 Months Ended |
Dec. 31, 2016 | |
Notes Payable To And Advances From Officers And Directors Tables Usd | |
Notes payable to and advance from officers and directors | December 31, 2016 2015 Note payable to Earnie Blackmon, an officer and director $ 28,750 $ — Note payable to Tony Verzura, an officer and director 28,750 — Advances from officers and directors 71,008 — Accrued wages payable to officers and directors 42,695 612,512 $ 171,203 $ 612,512 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Summary of share warrants outstanding | The following table summarizes our stock options outstanding, as of September 30, 2017: Nine Months Ended September 30, 2017 Number of Shares Weighted Average Remaining Life (years) Weighted Average Exercise Price Stock options outstanding, beginning of period 3,680,000 8.9 $ $0.28 Issued 2,900,000 9.6 $0.56 Exercised — Expired — Stock options outstanding, end of period 6,580,000 8.8 $ $0.40 Stock options exercisable, September 30, 2017 6,580,000 8.8 $ $0.40 | Year Ended December 31, 2016 2015 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Warrants outstanding, beginning of period 3,000,000 $ 12.00 3,170,044 $ 11.52 Warrants issued to consultant 666,667 0.18 — — Cashless issued upon conversion of Slainte note 1,746,674 — Warrants exercised (963,562 ) — — — Repurchased and cancelled — (170,044 ) 3.00 Expired (3,000,000 ) — — — Warrants outstanding, end of period 1,449,779 $ 0.180 3,000,000 $ 12.00 Warrants exercisable, end of period 1,449,779 $ 0.180 3,000,000 $ 12.00 |
Summary of stock options outstanding | The following table summarizes our share warrants outstanding as of September 30, 2017 and December 31, 2016: September 30, 2017 December 31, 2016 Number Weighted Number Weighted Warrants outstanding, beginning of period 1,449,779 $ 0.18 3,000,000 $ 12.00 Warrants issued to consultant 83,333 0.18 666,667 0.18 Warrants issued to consultant 16,000 1.25 — — Cashless issued upon conversion of Slainte note — 1,746,674 — Warrants exercised (125,000 ) 0.18 (963,562 ) — Expired — — (3,000,000 ) — Warrants outstanding, end of period 1,424,112 $ 0.19 1,449,779 $ 0.18 Warrants exercisable, end of period 1,424,112 $ 0.19 1,449,779 $ 0.18 | Number of Weighted Weighted Stock options outstanding at December 31, 2014 — — Issued 600,000 9.8 $0.70 Exercised — — — Expired — — — Stock options outstanding at December 31, 2015 600,000 9.8 $0.70 Stock options exercisable at December 31, 2015 600,000 $0.70 Stock options outstanding at December 31, 2015 600,000 9.8 Issued 3,080,000 10.0 $0.20 Exercised — — — Expired — — — Stock options outstanding at December 31, 2016 3,680,000 8.9 $0.28 Stock options exercisable at December 31, 2016 3,680,000 8.9 $0.28 |
Stock Options [Member] | ||
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | We calculated the fair value of each option to be approximately $0.70 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.70 Exercise price $ 0.70 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ .20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % | Stock price $ 0.70 Exercise price $ 0.70 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % |
Stock Options [Member] | Stock Incentive Plan 2014 [Member] | ||
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % | |
Common Stock Issued for Warrant Outstanding [Member] | ||
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | We calculated the fair value of the Warrant to be $218,788, or approximately $1.29 per underlying share, utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 1.59 Exercise price $ 3.00 Risk free interest rate 1.05 % Expected term (years) 2.6 Expected volatility 183 % Expected dividends 0 % | Stock price $ 1.59 Exercise price $ 3.00 Risk free interest rate 1.05 % Expected term (years) 2.6 Expected volatility 183 % Expected dividends 0 % |
Warrant [Member] | ||
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | Stock price $0.16 - $2.18 Exercise price $0.18 Risk free interest rate 1.01% - 1.37% Expected term (years) 5 Expected volatility 322% - 504% Expected dividends 0% |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Schedule of share-based compensation expense | We recognize share-based compensation expense in cost of revenues and general and administrative expense based on the fair value of common shares issued for services. Share-based compensation expense for the three and nine months ended September 30, 2017 and 2016 is, as follows: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Options granted to officers and directors for compensation $ — $ 33,780 $ 1,812,456 $ 118,160 Warrants and options issued for consulting services — — 16,379 — Common stock issued for services 68,984 — 170,958 — Common stock accrued as payment for services, shares not yet issued 22,949 — 117,509 — $ 91,933 $ 33,780 $ 2,117,302 $ 118,160 | December 31, 2016 2015 Warrants issued for consulting services $ 319,419 $ 47,880 Warrants issued for accrual of share-based awards to officers and directors — 612,512 Common stock issued for accounts payable and accrued expenses 223,484 — Common stock issued for services 271,097 67,500 Amortization of common stock issued for prepaid services — 302,789 $ 814,000 $ 1,030,681 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of sources and tax effects of the differences for the periods | Years Ended December 31, 2016 2015 Statutory U.S. federal tax rate 39 % 39 % Effect of increase in valuation allowance (39 %) (39 %) — % — % |
Schedule of changes in cumulative net deferred tax assets | December 31, 2016 2015 Net loss carry forward $ 3,648,316 $ 2,148,248 Valuation allowance (3,648,316 ) (2,148,248 ) $ — $ — |
Schedule of reconciliation of income taxes computed at the statutory rate | Years Ended December 31, 2016 2015 Tax benefit at statutory rate $ 1,500,068 $ 1,124,511 Valuation allowance (1,500,068 ) (1,124,511 ) $ — $ — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Schedule of amounts due from related parties | Amounts due from related parties consist of: September 30, December 31, 2017 2016 Advesa, Inc. $ 35,083 $ 21,775 Employees 2,200 — Cannabinoid Research & Development, Limited — 5,000 $ 37,283 $ 26,775 | December 31, 2016 2015 Blue River $ — $ 3,284 Advesa 21,755 — CRD 5,000 5,000 Total due from related parties $ 26,755 $ 8,284 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Tables | |
Summary of Consolidated statements of operations expense | Year Ended Cash paid to consultant $ 15,000 Shares of common stock issued to consultant 62,781 Fair value of warrants issued to consultant 319,419 $ 397,200 |
BUSINESS ORGANIZATION AND NAT47
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details) - USD ($) | Jul. 14, 2017 | Mar. 31, 2014 | Sep. 30, 2017 | May 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 10, 2015 | Dec. 31, 2014 | Mar. 26, 2014 |
Amount of payable owed to former officer and director, exchanged for assets sold | $ 15,000 | ||||||||
Number of common shares issued in exchange for certain intellectual property | 38,690,000 | ||||||||
Total number of common shares previously outstanding, cancelled during period | 41,690,000 | ||||||||
Common stock, shares outstanding | 60,210,502 | 50,650,994 | 44,988,500 | 43,620,000 | |||||
Investments in non-marketable equity securities | $ 205,275 | $ 593,750 | |||||||
Closing price per share | $ 0.56 | $ 1.59 | |||||||
Prana [Member] | |||||||||
Common shares received in exchange for future consulting services and use of our intellectual property | 5,730,000 | ||||||||
Fair market value of common stock | $ 5,070,500 | ||||||||
Closing price per share | $ 0.85 | ||||||||
Prana [Member] | Subscription Agreement [Member] | |||||||||
Shares of investment owned | 400,000 | ||||||||
Investments in non-marketable equity securities | $ 200,000 | $ 50,000 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017USD ($)Item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Cash equivalents | |||
Number of operating segment | Item | 1 | ||
Allowance for doubtful accounts | $ 0 | $ 30,000 | 4,340 |
Bad debt expense | 82,831 | $ 24,185 | |
Excess of purchase price over fair values of net tangible assets and intangible assets recorded as goodwill | 4,733,410 | ||
Goodwill | $ 4,912,201 | ||
PTI [Member] | |||
Equity Method Investments, Percentage | 95.00% | ||
Purchase Price Allocation | $ 5,070,500 | ||
Goodwill | 4,567,016 | ||
Prana [Member] | |||
Goodwill | $ 4,805,328 | ||
CRD [Member] | |||
Equity Method Investments, Percentage | 50.00% | ||
Goodwill | $ 106,873 | ||
Chief Executive Officer [Member] | |||
Cash equivalents | $ 4,158 | $ 4,158 | |
Minimum [Member] | |||
Estimated useful lives of property and equipment | 3 years | 3 years | |
Estimated useful lives of intangible assets | 10 years | 10 years | |
Equity Method Investments, Percentage | 20.00% | ||
Maximum [Member] | |||
Estimated useful lives of property and equipment | 5 years | 5 years | |
Estimated useful lives of intangible assets | 15 years | 20 years | |
Equity Method Investments, Percentage | 50.00% | ||
Patents [Member] | |||
Estimated useful lives of intangible assets | 15 years | 20 years |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of anti-dilutive securities) (Details) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computation of diluted net loss per share | 8,004,112 | 5,575,122 | 8,004,112 | 5,575,122 | 5,129,779 | 3,600,000 |
Warrant [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computation of diluted net loss per share | 641,000 | 666,667 | 641,000 | 666,667 | 666,667 | 3,000,000 |
Cashless warrants not converted to common stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computation of diluted net loss per share | 783,112 | 1,228,455 | 783,112 | 1,228,455 | 783,112 | |
Stock Options [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computation of diluted net loss per share | 6,580,000 | 3,680,000 | 6,580,000 | 3,680,000 | 3,680,000 | 600,000 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of concentration of credit risk) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue [Member] | Customer A [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 98.00% | 80.00% | 82.00% | 88.00% | 95.00% | 36.00% |
Revenue [Member] | Customer B [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 2.00% | 20.00% | 17.00% | 12.00% | 3.00% | 32.00% |
Revenue [Member] | Customer C [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 0.00% | 0.00% | 1.00% | 0.00% | 2.00% | 18.00% |
Accounts Receivable [Member] | Customer A [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 0.00% | 68.00% | ||||
Accounts Receivable [Member] | Customer B [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 0.00% | 30.00% | ||||
Accounts Receivable [Member] | Customer C [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 0.00% | 21.00% | ||||
Accounts Receivable [Member] | Customer D [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 75.00% | 56.00% | ||||
Accounts Receivable [Member] | Customer E [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 25.00% | 41.00% | ||||
Accounts Receivable [Member] | Customer F [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 0.00% | 1.00% |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
GOING CONCERN [Abstract] | ||||||
Net loss (income) | $ 572,792 | $ 296,575 | $ 3,487,541 | $ 962,953 | $ 3,854,004 | $ 2,883,362 |
Net cash used in operating activities | (1,037,264) | $ (258,607) | (274,670) | (525,148) | ||
Working capital deficit | 393,182 | |||||
Accumulated deficit | 12,849,876 | 12,849,876 | $ 9,362,333 | $ 5,508,329 | ||
Line of credit agreement | $ 1,380,204 | 1,380,204 | ||||
Payment to purchase common stock | $ 10,000,000 |
PURCHASE OF PRANA THERAPUETIC52
PURCHASE OF PRANA THERAPUETICS, INC. (Narrative) (Details) - USD ($) | Jul. 14, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | May 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 10, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||||
Investments in non-marketable equity securities | $ 205,275 | $ 593,750 | |||||||
Closing price per share | $ 0.56 | $ 1.59 | |||||||
Prana [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Common shares received in exchange for future consulting services and use of our intellectual property | 5,730,000 | ||||||||
Fair market value of common stock | $ 5,070,500 | ||||||||
Closing price per share | $ 0.85 | ||||||||
Shares issued in acquisition | 400,000 | ||||||||
Shares issued in acquisition, value | $ 200,000 | ||||||||
Prana [Member] | Subscription Agreement [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Shares of investment owned | 400,000 | ||||||||
Investments in non-marketable equity securities | $ 200,000 | $ 50,000 | |||||||
Prana [Member] | Subscription Agreement [Member] | Subsequent Event [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Investments in non-marketable equity securities | $ 50,000 | $ 50,000 |
PURCHASE OF PRANA THERAPUETIC53
PURCHASE OF PRANA THERAPUETICS, INC. (Schedule of Purchase Price Allocation) (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||
Goodwill | $ 4,912,201 | |
PTI [Member] | ||
Business Acquisition [Line Items] | ||
Patents | 52,596 | |
Net assets | 450,888 | |
Goodwill | 4,567,016 | |
Purchase Price Allocation | $ 5,070,500 |
PATENTS (Details)
PATENTS (Details) - Patents [Member] - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jul. 15, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful live | 15 years | 20 years | ||
Amortization expense | $ 900 | $ 0 | ||
Accumulated amortization | $ 900 | $ 0 | ||
Research, legal fees | $ 142,317 |
INVESTMENTS IN NON-MARKETABLE55
INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES (Narrative) (Details) - USD ($) | Dec. 09, 2014 | Jun. 09, 2014 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 24, 2016 | Dec. 31, 2014 |
Schedule of Cost-method Investments [Line Items] | |||||||
Common shares, price per share | $ 0.17 | ||||||
Investments in non-marketable equity securities | $ 205,275 | $ 593,750 | |||||
Loss on investment in non-marketable equity securities | 388,475 | ||||||
Notes payable | 775,000 | ||||||
Loss on non-marketable equity securities | $ 15,125 | $ 388,475 | |||||
WeedMD RX Inc. (''WMD'') [Member] | |||||||
Schedule of Cost-method Investments [Line Items] | |||||||
Common shares received in exchange for future consulting services and use of our intellectual property | 1,187,500 | ||||||
Warrants received in exchange for future consulting services and use of our intellectual property | 3,000,000 | ||||||
Equity Method Investments, Percentage | 4.29% | ||||||
Common shares, price per share | $ 0.50 | ||||||
Investments in non-marketable equity securities | $ 15,125 | ||||||
Warrants expired | 3,000,000 | ||||||
Sale of common stock | 1,100,000 | 1,100,000 | |||||
Notes payable | $ 175,000 | ||||||
Shares of investment owned | 87,500 | ||||||
Loss on non-marketable equity securities | $ 15,125 | ||||||
CAD [Member] | |||||||
Schedule of Cost-method Investments [Line Items] | |||||||
Warrants, price per warrant | $ 0.50 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid investor relations services | $ 1,667 | |
Prepaid licensing fees | 35,000 | |
Other prepaid services and fees | 19,674 | |
Total prepaid expenses | $ 56,341 |
INTANGIBLES (Details)
INTANGIBLES (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | 20 years |
Design Marks and Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | 10 years |
EQUITY METHOD INVESTMENTS (Narr
EQUITY METHOD INVESTMENTS (Narrative) (Details) - USD ($) | Aug. 15, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 |
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments | $ 88,000 | $ 88,000 | ||
Equity in net loss of unconsolidated affiliate | $ (90,900) | |||
CRD [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Interest acquired (as a percentage) | 50.00% | |||
Equity method investments | $ 88,000 | |||
Shares of common stock issuable for acquisition of interest | 40,000 |
ACCRUED EXPENSES (Narrative) (D
ACCRUED EXPENSES (Narrative) (Details) - USD ($) | May 06, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Costs recognized | $ 181,052 | $ 111,847 | $ 637,252 | $ 246,584 | $ 643,913 | $ 645,503 | ||
Accrued expenses | 38,244 | 38,244 | 55,264 | 928,533 | ||||
Loss on extinguishment of debt | $ 267,567 | $ 130,423 | $ 691,904 | 768,602 | ||||
Research and Development Arrangement [Member] | ||||||||
Consultancy agreement, term | 9 months | |||||||
Consultancy agreement, initial payment | $ 50,000 | |||||||
Consultancy agreement, additional payments | 50,000 | |||||||
Consultancy agreement, total payments | $ 200,000 | |||||||
Shares issued for consultancy agreement | 100,000 | 100,000 | ||||||
Costs recognized | $ 160,000 | |||||||
Accrued expenses | $ 110,000 | |||||||
Percentage of completion | 80.00% | |||||||
Fair value of shares | $ 163,783 | |||||||
Loss on extinguishment of debt | $ 53,783 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Liabilities, Current [Abstract] | |||
Accrued consulting fees | $ 45,000 | $ 110,000 | |
Accrued wages and related expenses | 629,780 | ||
Accrued interest expense | 10,264 | 101,185 | |
Accrued other expenses | 38,244 | 87,568 | |
Total accrued expenses | $ 38,244 | $ 55,264 | $ 928,533 |
FAIR VALUE MEASUREMENTS AND D61
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Schedule of fair value measured on a recurring basis) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | $ 383,581 | |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | ||
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | $ 383,581 |
FAIR VALUE MEASUREMENTS AND D62
FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES (Schedule of reconciliation of beginning and ending balances) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | ||
Derivative liability at the beginning of the period | $ 383,581 | |
Additions to derivative liabilities for convertible debt conversion features and interest | 557,000 | $ 359,988 |
Additions for modifications of note payable to Slainte Ventures | 686,612 | |
Reductions due to conversions or repayments of convertible debt | (3,317,986) | |
Loss on revaluation of derivative liabilities during the year | 1,690,793 | 23,593 |
Derivative liability at the end of the period | 383,581 | |
Derivative Financial Instruments, Liabilities [Member] | ||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | ||
Derivative liability at the beginning of the period | 383,581 | |
Derivative liability at the end of the period | 383,581 | |
Derivative Financial Instruments, Liabilities [Member] | Notes payable [Member] | ||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | ||
Reductions due to conversions or repayments of convertible debt | (3,317,986) | |
Amortization of Debt Conversion Features and interest [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | ||
Additions to derivative liabilities for convertible debt conversion features and interest | 557,000 | 359,988 |
Notes payable [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | ||
Additions for modifications of note payable to Slainte Ventures | 686,612 | |
Gain (Loss) on Derivative Instruments [Member] | Derivative Financial Instruments, Liabilities [Member] | ||
Reconciliation of beginning and ending balances for financial instruments carried at fair value measured on a recurring basis | ||
Loss on revaluation of derivative liabilities during the year | $ (1,690,793) | $ 23,593 |
RESEARCH GRANT PAYABLE (Schedul
RESEARCH GRANT PAYABLE (Schedule of Research Grant Payable) (Details) | Sep. 30, 2017USD ($) |
Other Commitments [Line Items] | |
Grant Repayment Amount | $ 300,000 |
Grant [Member] | |
Other Commitments [Line Items] | |
Net Profit Benchmarks | 5,000,000 |
Grant Repayment Amount | 75,000 |
Grant One [Member] | |
Other Commitments [Line Items] | |
Net Profit Benchmarks | 15,000,000 |
Grant Repayment Amount | 75,000 |
Grant Two [Member] | |
Other Commitments [Line Items] | |
Net Profit Benchmarks | 30,000,000 |
Grant Repayment Amount | 75,000 |
Grant Three [Member] | |
Other Commitments [Line Items] | |
Net Profit Benchmarks | 50,000,000 |
Grant Repayment Amount | $ 75,000 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) | Jun. 09, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 30, 2014 |
Deferred Revenue Arrangement [Line Items] | |||||||||
Deferred revenue | $ 383,750 | $ 763,750 | |||||||
Less - current portion | $ (180,000) | $ (180,000) | (180,000) | (380,000) | |||||
Deferred revenue, net of current portion | 68,750 | 68,750 | 203,750 | 383,750 | |||||
WeedMD RX Inc. (''WMD'') [Member] | |||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||
Common shares received in exchange for future consulting services and use of our intellectual property | 1,187,500 | ||||||||
Warrants received in exchange for future consulting services and use of our intellectual property | 3,000,000 | ||||||||
Fair value of securities recorded as deferred revenue | $ 893,750 | ||||||||
Deferred revenue recognized per month | 15,000 | $ 15,000 | 15,000 | $ 15,000 | 15,000 | ||||
Total deferred revenue recognized | 45,000 | $ 90,000 | $ 150,000 | 45,000 | $ 90,000 | 180,000 | 180,000 | ||
Deferred revenue | $ 248,750 | $ 248,750 | 383,750 | 563,750 | |||||
Deffered income recognized other income | 200,000 | ||||||||
Fox Barry Farms Llc [Member] | |||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||
Deferred revenue | $ 200,000 | $ 200,000 |
DEFERRED REVENUE (Schedule of d
DEFERRED REVENUE (Schedule of deferred revenue) (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 30, 2014 |
Deferred Revenue Arrangement [Line Items] | ||||
Deferred revenue | $ 383,750 | $ 763,750 | ||
Less - current portion | $ (180,000) | (180,000) | (380,000) | |
Deferred revenue, net of current portion | 68,750 | 203,750 | 383,750 | |
WeedMD RX Inc. (''WMD'') [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred revenue | $ 248,750 | 383,750 | 563,750 | |
Fox Barry Farms Llc [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Deferred revenue | $ 200,000 | $ 200,000 |
NOTES PAYABLE (Narrative) (Deta
NOTES PAYABLE (Narrative) (Details) | Nov. 14, 2016 | Dec. 18, 2014USD ($) | Dec. 17, 2016USD ($)d | Nov. 30, 2016USD ($)shares | Mar. 24, 2016USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($) | Jul. 05, 2016 | Mar. 18, 2016shares | Dec. 18, 2015 | Jul. 07, 2014USD ($) |
Short-term Debt [Line Items] | |||||||||||||||
Debt issuance costs | $ 15,500 | ||||||||||||||
Accrued interest payable | $ 10,264 | $ 101,185 | |||||||||||||
Maturity date | Jul. 8, 2017 | ||||||||||||||
Loss on extinguishment of debt | (267,567) | (130,423) | $ (691,904) | (768,602) | |||||||||||
Loss on derivative liabilities | $ 365,576 | 1,894,258 | $ 23,593 | ||||||||||||
Warrant [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Loss on derivative liabilities | 1,616,215 | ||||||||||||||
Conversion Feature [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Loss on derivative liabilities | $ 13,947 | ||||||||||||||
SlainteVentures, LLC [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument, interest rate | 12.00% | 18.00% | |||||||||||||
Default rate of interest under the note | 70.00% | 80.00% | |||||||||||||
Number of shares of common stock issued | shares | 104,939 | ||||||||||||||
Number of shares called by warrants | shares | 416,667 | ||||||||||||||
Warrant exercise price | $ / shares | $ 0.18 | ||||||||||||||
Maturity date | Dec. 30, 2017 | ||||||||||||||
Value of shares of common stock issued | $ 100,000 | $ 100,000 | |||||||||||||
Number of trading days | d | 30 | ||||||||||||||
Loss on extinguishment of debt | $ 674,666 | ||||||||||||||
Assumption of liabilities for stock, shares | shares | 594,540 | ||||||||||||||
Exercise warrants issuance of Common stock | shares | 1,330,007 | ||||||||||||||
Notes Payable Other Payables [Member] | WeedMD RX Inc. (''WMD'') [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument, face amount | $ 175,000 | $ 175,000 | |||||||||||||
Debt instrument, interest rate | 5.00% | ||||||||||||||
Assumption of liabilities for stock, shares | shares | 1,100,000 | ||||||||||||||
Notes Payable Other Payables [Member] | Unrelated Third Party [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument, face amount | $ 600,000 | ||||||||||||||
Debt instrument, interest rate | 12.00% | ||||||||||||||
Debt issuance costs | $ 13,500 |
NOTES PAYABLE (Schedule of Note
NOTES PAYABLE (Schedule of Notes Payable) (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Short-term Debt [Line Items] | |||
Notes payable | $ 775,000 | ||
WeedMD RX Inc. (''WMD'') [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 175,000 | ||
WeedMD RX Inc. (''WMD'') [Member] | Notes Payable Other Payables [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 175,000 | ||
SlainteVentures, LLC [Member] | Notes Payable Other Payables [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | $ 600,000 |
NOTES PAYABLE (Schedule of key
NOTES PAYABLE (Schedule of key inputs in valuation) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Minimum [Member] | Warrant [Member] | |
Expected life (years) | 4 years 3 months 15 days |
Risk-free interest rate | 1.01% |
Expected volatility | 214.00% |
Minimum [Member] | Conversion Feature [Member] | |
Expected life (years) | 1 year 1 month 2 days |
Risk-free interest rate | 0.78% |
Expected volatility | 20000.00% |
Maximum [Member] | Warrant [Member] | |
Expected life (years) | 5 years |
Risk-free interest rate | 1.90% |
Expected volatility | 227.00% |
Maximum [Member] | Conversion Feature [Member] | |
Expected life (years) | 1 year 1 month 17 days |
Risk-free interest rate | 0.79% |
Expected volatility | 203.00% |
CONVERTIBLE NOTES PAYABLE (Narr
CONVERTIBLE NOTES PAYABLE (Narrative) (Details) - USD ($) | Aug. 10, 2016 | Jul. 05, 2016 | Apr. 06, 2016 | Mar. 31, 2016 | Mar. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 18, 2015 | Feb. 10, 2015 |
Debt Instrument [Line Items] | |||||||||||||
Convertible note payable | $ 160,000 | $ 381,000 | |||||||||||
Convertible notes payable-current portion, net | 125,547 | 108,207 | |||||||||||
Original issue discount | 34,453 | 272,793 | |||||||||||
Exercise price (in dollars per share) | $ 1.29 | ||||||||||||
Net cash proceeds received from initial borrowing | $ 316,478 | 316,478 | 339,900 | ||||||||||
Loss on origination of derivative liability | (365,576) | (1,894,258) | (23,593) | ||||||||||
Components of convertible debt, net | |||||||||||||
Debt discount - conversion feature | 11,237 | ||||||||||||
Debt discount amortization and interest expense | 266,711 | 267,258 | 82,500 | ||||||||||
Deferred financing costs, net | 32,400 | ||||||||||||
Amortization of deferred financing costs | $ 32,400 | 32,400 | 8,700 | ||||||||||
Proceeds from debt, net | 50,000 | ||||||||||||
Advances from officers and directors | 71,008 | ||||||||||||
Convertible Note [Member] | Typenex Co Investment Llc [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument initial borrowing | 381,000 | ||||||||||||
Components of convertible debt, net | |||||||||||||
Accrued interest payable | $ 5,876 | $ 5,121 | |||||||||||
Convertible Note [Member] | Tangiers Investment Group, LLC [Member] | |||||||||||||
Components of convertible debt, net | |||||||||||||
Number of Common shares converted | 2,843,698 | ||||||||||||
2016 Convertible Notes [Member] | |||||||||||||
Components of convertible debt, net | |||||||||||||
Debt discount amortization and interest expense | $ 267,258 | ||||||||||||
Interest expense | 35,719 | ||||||||||||
Deferred financing costs, net | 0 | ||||||||||||
Amortization of deferred financing costs | 32,400 | ||||||||||||
Aggregate fair value of the derivative liabilities | $ 557,000 | ||||||||||||
Accured interest converted in common stock | 497,296 | ||||||||||||
2015 Convertible Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of trading days immediately preceding the applicable conversion | 180 days | ||||||||||||
Components of convertible debt, net | |||||||||||||
Debt discount amortization and interest expense | $ 82,500 | ||||||||||||
Interest expense | $ 5,121 | ||||||||||||
Holding rate of issued and outstanding common stock | 9.99% | ||||||||||||
Deferred financing costs, net | $ 41,100 | ||||||||||||
Amortization of deferred financing costs | 8,700 | ||||||||||||
Aggregate fair value of the derivative liabilities | $ 355,293 | ||||||||||||
2015 Convertible Notes [Member] | Minimum [Member] | |||||||||||||
Components of convertible debt, net | |||||||||||||
Prepayment premiums | 10.00% | ||||||||||||
Minimum default penalty amount, rate | 25.00% | ||||||||||||
2015 Convertible Notes [Member] | Maximum [Member] | |||||||||||||
Components of convertible debt, net | |||||||||||||
Prepayment premiums | 40.00% | ||||||||||||
Minimum default penalty amount, rate | 50.00% | ||||||||||||
SlainteVentures, LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, interest rate | 12.00% | 18.00% | |||||||||||
Components of convertible debt, net | |||||||||||||
Accrued interest payable | $ 102,000 | ||||||||||||
Proceeds from debt, net | $ 50,000 | 75,000 | $ 81,978 | ||||||||||
Advances from officers and directors | $ 52,500 | ||||||||||||
Tangiers Convertible Note [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, interest rate | 10.00% | ||||||||||||
Expiration date | Jul. 8, 2017 | ||||||||||||
Components of convertible debt, net | |||||||||||||
Proceeds from debt, net | $ 35,000 | ||||||||||||
JSJ Investments [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, interest rate | 12.00% | ||||||||||||
Components of convertible debt, net | |||||||||||||
Proceeds from debt, net | $ 125,000 | ||||||||||||
Average closing price of common stock | $ 0.20 | ||||||||||||
Conversions rate on issue and outstandng common stock | 4.99% | ||||||||||||
Vis Vires Group, Inc. [Member] | SlainteVentures, LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Expiration date | Jan. 10, 2017 | ||||||||||||
Components of convertible debt, net | |||||||||||||
Minimum default penalty amount, rate | 15.00% | ||||||||||||
Repayment of principal and accrued interest | $ 59,000 | ||||||||||||
Average closing price of common stock | $ 0.45 |
CONVERTIBLE NOTES PAYABLE (Sche
CONVERTIBLE NOTES PAYABLE (Schedule of summarizes our convertible promissory notes issued) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Maturity Date | Jul. 8, 2017 | |
Total principal outstanding | $ 160,000 | $ 381,000 |
Less unamortized discount | (34,453) | (272,793) |
Total of outstanding amount | $ 125,547 | 108,207 |
Tangiers Investment Group, LLC [Member] | 2016 Convertible Notes [Member] | ||
Issue Date | Dec. 28, 2016 | |
Holder | Tangiers Investment Group | |
Security | Unsecured | |
Maturity Date | Jul. 8, 2017 | |
Interest Rate | 10.00% | |
Base Conversion Rate | 1.00 through maturity; 55% of lowest closing price thereafter | |
Total principal outstanding | $ 35,000 | |
Tangiers Investment Group, LLC [Member] | 2015 Convertible Notes [Member] | ||
Issue Date | Dec. 9, 2015 | |
Holder | Tangiers Investment Group | |
Security | Secured | |
Maturity Date | Dec. 8, 2016 | |
Interest Rate | 10.00% | |
Base Conversion Rate | 55% of three lowest closing bids | |
Total principal outstanding | 220,000 | |
JSJ Investments Inc. [Member] | 2016 Convertible Notes [Member] | ||
Issue Date | Aug. 10, 2016 | |
Holder | JSJ Investments | |
Security | Unsecured | |
Maturity Date | May 10, 2017 | |
Interest Rate | 12.00% | |
Base Conversion Rate | $0.20 during first 180 days; 45% of lowest closing price thereafter | |
Total principal outstanding | $ 125,000 | |
JSJ Investments Inc. [Member] | 2015 Convertible Notes [Member] | ||
Issue Date | Oct. 12, 2015 | |
Holder | JSJ Investments | |
Security | Unsecured | |
Maturity Date | Jul. 8, 2016 | |
Interest Rate | 12.00% | |
Base Conversion Rate | 55% of five lowest trades | |
Total principal outstanding | 102,000 | |
Vis Viers Group, Inc. [Member] | 2015 Convertible Notes [Member] | ||
Issue Date | Oct. 6, 2015 | |
Holder | Vis Vires Group | |
Security | Unsecured | |
Maturity Date | Jun. 30, 2016 | |
Interest Rate | 8.00% | |
Base Conversion Rate | 58% of three lowest closing bids | |
Total principal outstanding | $ 59,000 |
NOTES PAYABLE TO AND ADVANCES71
NOTES PAYABLE TO AND ADVANCES FROM OFFICERS AND DIRECTORS (Narrative) (Details) - USD ($) | Dec. 31, 2016 | Dec. 30, 2016 | Apr. 06, 2016 | Dec. 31, 2015 | Oct. 12, 2015 |
Related Party Transaction [Line Items] | |||||
Principal balance increase | $ 57,500 | ||||
Notes Payable Other Payables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Convertible note payable, related party | $ 171,203 | $ 612,512 | |||
Earnie Blackmon [Member] | Notes Payable Other Payables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Convertible note payable, related party | 28,750 | ||||
Tony Verzura [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument, face amount | $ 25,000 | ||||
Tony Verzura [Member] | Notes Payable Other Payables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Convertible note payable, related party | 28,750 | ||||
Advances from officers and directors [Member] | Notes Payable Other Payables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Convertible note payable, related party | 71,008 | ||||
Accrued wages payable to officers and directors [Member] | Notes Payable Other Payables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Convertible note payable, related party | $ 42,695 | $ 612,512 | |||
Ernest Blackmon [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument, face amount | $ 25,000 | ||||
JSJ Investments Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Convertible note payable, related party | $ 102,000 | ||||
Debt instrument, interest rate | 12.00% |
STOCKHOLDERS' EQUITY (DEFICIT72
STOCKHOLDERS' EQUITY (DEFICIT) (Narrative) (Details) - USD ($) | 1 Months Ended | |||||
Mar. 31, 2014 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | May 03, 2014 | May 02, 2014 | |
Stockholders' Equity Note [Abstract] | ||||||
Number of units sold through equity offering | 600,000 | |||||
Proceeds from sale of units | $ 900,000 | |||||
Per share price A Warrant holders can purchase each share of the Company's common stock during the two year period commencing April 1, 2014 | $ 7.50 | |||||
Per share price B Warrant holders can purchase each share of the Company's common stock during the three year period commencing April 1, 2014 | $ 15 | |||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 5,000,000 | 10,000,000 | |
Preferred stock, par value per share | $ 0.001 | |||||
Preferred stock, no par value | ||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 50,000,000 | 100,000,000 | |
Common stock, par value per share | $ 0.001 | |||||
Common stock, no par value |
STOCKHOLDERS' EQUITY (DEFICIT73
STOCKHOLDERS' EQUITY (DEFICIT) (Stock Option Activity) (Narrative) (Details) - USD ($) | Jul. 18, 2017 | Feb. 10, 2016 | Mar. 31, 2014 | Sep. 30, 2017 | Dec. 31, 2016 | May 31, 2017 | Jan. 12, 2016 | Jan. 09, 2016 | Dec. 31, 2015 | Feb. 10, 2015 | Jan. 12, 2015 | Jan. 09, 2015 | Dec. 31, 2014 | May 03, 2014 | May 02, 2014 |
Number of units sold through equity offering | 600,000 | ||||||||||||||
Proceeds from sale of units | $ 900,000 | ||||||||||||||
Per share price A Warrant holders can purchase each share of the Company's common stock during the two year period commencing April 1, 2014 | $ 7.50 | ||||||||||||||
Per share price B Warrant holders can purchase each share of the Company's common stock during the three year period commencing April 1, 2014 | $ 15 | ||||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 5,000,000 | 10,000,000 | ||||||||||
Preferred stock, par value per share | $ 0.001 | ||||||||||||||
Preferred stock, no par value | |||||||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 50,000,000 | 100,000,000 | ||||||||||
Common stock, par value per share | $ 0.001 | ||||||||||||||
Common stock, no par value | |||||||||||||||
Awarded stock options | $ 3,080,000 | ||||||||||||||
Share price of common stock | $ 0.56 | $ 1.59 | |||||||||||||
Fair value of warrants | $ 612,512 | ||||||||||||||
Maturity date | Jul. 8, 2017 | ||||||||||||||
Series A Preferred Stock [Member] | Officer and Director [Member] | |||||||||||||||
Share issued | 2,000 | ||||||||||||||
Proceeds from shares issued | $ 2,200 | ||||||||||||||
Stock Options [Member] | |||||||||||||||
Awarded stock options | $ 57,500 | ||||||||||||||
Share price of common stock | $ 0.92 | ||||||||||||||
Maturity date | Jul. 26, 2018 | ||||||||||||||
Mr. Ruby [Member] | |||||||||||||||
Awarded stock options | $ 2,600,000 | ||||||||||||||
Blackmon [Member] | |||||||||||||||
Awarded stock options | 100,000 | ||||||||||||||
Tony Verzura [Member] | |||||||||||||||
Awarded stock options | 100,000 | ||||||||||||||
Non Officer Consultant [Member] | |||||||||||||||
Awarded stock options | $ 100,000 | ||||||||||||||
2014 Stock Incentive Plan [Member] | |||||||||||||||
Awarded stock options | $ 200,000 | ||||||||||||||
2014 Stock Incentive Plan [Member] | Mr. Ruby [Member] | |||||||||||||||
Common stock, par value per share | $ 0.20 | ||||||||||||||
Awarded stock options | $ 980,000 | ||||||||||||||
Stock Options [Member] | |||||||||||||||
Aggregate intrinsic value of options outstanding and exercisable | $ 0 | $ 0 | |||||||||||||
Awarded stock options | $ 1,050,000 | $ 200,000 | |||||||||||||
Stock options | 6,580,000 | 3,680,000 | 600,000 | 600,000 | |||||||||||
Fair value of options | 417,664 | ||||||||||||||
Weighted-average remaining contractual life for stock options outstanding and exercisable | 8 years 9 months 18 days | 8 years 10 months 24 days | |||||||||||||
Share price of common stock | $ 0.20 | $ 0.70 | $ 0.70 | $ 0.70 | |||||||||||
Stock Options [Member] | |||||||||||||||
Stock options | 600,000 | ||||||||||||||
Fair value of options | 417,664 | ||||||||||||||
Common Stock Issued for Warrant Outstanding [Member] | |||||||||||||||
Awarded stock options | $ 987,390 | ||||||||||||||
Stock options | 621,000 | ||||||||||||||
Share price of common stock | $ 1.59 | ||||||||||||||
Fair value of warrants | $ 218,788 | ||||||||||||||
Warrant issued to purchase common stock | 170,044 | ||||||||||||||
Fair value of common shares issued in excess | $ 768,602 |
STOCKHOLDERS' EQUITY (DEFICIT74
STOCKHOLDERS' EQUITY (DEFICIT) (Schedule of Assumptions on Date of Valuation Utilizing for Fair Value of Warrants) (Details) - $ / shares | Jan. 12, 2016 | Jan. 09, 2016 | Feb. 10, 2015 | Dec. 31, 2016 | May 31, 2017 | Dec. 31, 2015 | Jan. 09, 2015 |
Warrants price (on dollars per shares) | $ 1.29 | ||||||
Stock price (in dollars per share) | 1.59 | $ 0.56 | |||||
Exercise price (in dollars per share) | $ 3 | ||||||
Risk free interest rate (as a percent) | 1.05% | ||||||
Expected term (years) | 2 years 7 months 6 days | ||||||
Expected volatility (as a percent) | 183.00% | ||||||
Expected dividends (as a percent) | 0.00% | ||||||
Warrant [Member] | |||||||
Warrants price (on dollars per shares) | $ 0.70 | ||||||
Stock price (in dollars per share) | 1.03 | ||||||
Exercise price (in dollars per share) | $ 0.18 | 3 | |||||
Expected dividends (as a percent) | 0.00% | ||||||
Warrant [Member] | Minimum [Member] | |||||||
Stock price (in dollars per share) | $ 0.16 | ||||||
Risk free interest rate (as a percent) | 1.01% | ||||||
Expected term (years) | 5 years | ||||||
Expected volatility (as a percent) | 322.00% | ||||||
Warrant [Member] | Maximum [Member] | |||||||
Stock price (in dollars per share) | $ 2.18 | ||||||
Risk free interest rate (as a percent) | 1.37% | ||||||
Expected volatility (as a percent) | 504.00% | ||||||
Stock Options [Member] | |||||||
Warrants price (on dollars per shares) | 0.70 | ||||||
Stock price (in dollars per share) | $ 0.20 | $ 0.70 | 0.70 | $ 0.70 | |||
Exercise price (in dollars per share) | $ 0.20 | $ 0.70 | $ 0.70 | ||||
Risk free interest rate (as a percent) | 1.98% | 1.98% | |||||
Expected term (years) | 10 years | 10 years | |||||
Expected volatility (as a percent) | 173.00% | 173.00% | |||||
Expected dividends (as a percent) | 0.00% | 0.00% |
STOCKHOLDERS' EQUITY (DEFICIT75
STOCKHOLDERS' EQUITY (DEFICIT) (Common Stock Issued For Services, Warrants and 2004 Equity Incentive Plan) (Details) - USD ($) | Feb. 10, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 20, 2014 |
Value of shares of common stock issued for services | $ 226,215 | |||||||
Equity method investments | $ 88,000 | 88,000 | ||||||
Fair value of Warrant | 612,512 | |||||||
Loss on extinguishment of debt and repurchase of warrants | (122,139) | |||||||
Issuance of Stock and Warrants for Services or Claims | $ 16,379 | $ 319,419 | $ 47,880 | |||||
Stock Incentive Plan 2014 [Member] | ||||||||
Maximum number of shares to be issued | 4,000,000 | |||||||
Common share availabe for issue | 3,400,000 | |||||||
Typenex Co Investment Llc [Member] | Warrant [Member] | ||||||||
Number of shares of common stock issued for services | 621,000 | |||||||
Value of shares of common stock issued for services | $ 987,390 | |||||||
Number of warrants issued to purchase shares of common stock | 170,044 | |||||||
Fair value of Warrant | $ 218,788 | |||||||
Loss on extinguishment of debt and repurchase of warrants | $ 768,602 |
STOCKHOLDERS' EQUITY (DEFICIT76
STOCKHOLDERS' EQUITY (DEFICIT) (Common Stock Issued For Services, Warrants) (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Warrants outstanding, beginning of period | 1,449,779 | 3,000,000 | 3,170,044 |
Warrants issued to consultant | 83,333 | 666,667 | |
Warrants issued to consultant | 16,000 | ||
Cashless issued upon conversion of Slainte note | 1,746,674 | ||
Warrants exercised | (125,000) | (963,562) | |
Repurchased and cancelled (shares) | (170,044) | ||
Expired (in shares) | (3,000,000) | ||
Warrants outstanding, end of period | 1,424,112 | 1,449,779 | 3,000,000 |
Warrants exercisable at the end of the period (in shares) | 1,424,112 | 1,449,779 | 3,000,000 |
Weighted Average Remaining Life (years) | |||
Warrants exercisable at the end of the period | 4 years 6 months | ||
Weighted Average Exercise Price | |||
Warrants outstanding, beginning of period (in dollars per share) | $ 0.18 | $ 12 | $ 11.52 |
Issued (in dollars per share) | 0.18 | $ 0.18 | |
Warrants issued to consultant | $ 1.25 | ||
Cashless issued upon conversion of Slainte note | |||
Repurchased and cancelled (in dollars per share) | $ 3 | ||
Expired (in dollars per share) | |||
Warrants outstanding, end of period (in dollars per share) | 0.19 | 0.18 | 12 |
Warrants exercisable at the end of the period (in dollars per share) | $ 0.19 | $ 0.180 | $ 12 |
STOCKHOLDERS' EQUITY (DEFICIT77
STOCKHOLDERS' EQUITY (DEFICIT) (Schedule of stock option activity) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||||||
Issued | 33,780 | 1,812,456 | 118,160 | ||||
Stock Options [Member] | |||||||
Number of Shares | |||||||
Stock options outstanding, beginning of period | 3,680,000 | 600,000 | 600,000 | ||||
Issued | 2,900,000 | 3,080,000 | 600,000 | ||||
Exercised | |||||||
Expired | |||||||
Stock options outstanding, end of period | 6,580,000 | 6,580,000 | 3,680,000 | 600,000 | |||
Stock options exercisable, end of period | 6,580,000 | 6,580,000 | 3,680,000 | 600,000 | |||
Weighted Average Exercise Price | |||||||
Stock options outstanding, beginning of period | $ 0.28 | $ 0.70 | $ 0.70 | ||||
Issued | 0.56 | 0.20 | 0.70 | ||||
Exercised | |||||||
Expired | |||||||
Stock options outstanding, end of period | $ 0.40 | 0.40 | 0.28 | 0.70 | |||
Stock options exercisable, end of period | $ 0.40 | $ 0.40 | $ 0.28 | $ 0.70 | |||
Weighted Average Remaining Life (Years) | |||||||
Stock options outstanding, beginning of period | 8 years 9 months 18 days | 8 years 10 months 24 days | 9 years 9 months 18 days | 9 years 9 months 18 days | |||
Stock options Issued, end of period | 9 years 7 months 6 days | 10 years | |||||
Stock options exercisable, end of period | 8 years 9 months 18 days | 8 years 10 months 24 days |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||
Options granted to officers and directors for compensation | 33,780 | 1,812,456 | 118,160 | |||
Warrants issued for consulting services | $ 16,379 | $ 319,419 | $ 47,880 | |||
Warrants issued for accrual of share-based awards to officers and directors | 612,512 | |||||
Common stock issued for accounts payable and accrued expenses | 223,484 | |||||
Warrants issued for accrual of share-based awards to officers and directors | 271,097 | 67,500 | ||||
Amortization of common stock issued for prepaid services | 302,789 | |||||
Common stock issued for services | 68,984 | 170,958 | ||||
Common stock accrued as payment for services, shares not yet issued | 22,949 | 117,509 | ||||
Share-based compensation | $ 91,933 | $ 33,780 | $ 2,117,302 | $ 118,160 | $ 814,000 | $ 1,030,681 |
SHARE-BASED COMPENSATION (Narra
SHARE-BASED COMPENSATION (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Share-based Compensation Narrative Details | |
Share-based compensation reported as a reduction of accounts payable and accrued expenses | $ 191,550 |
Share-based compensation reported as a loss on extinguishment of debt | $ 31,934 |
INCOME TAXES (Schedule of Sourc
INCOME TAXES (Schedule of Sources and Tax Effects of Differences for Periods) (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Sources and tax effects of the differences | ||
Statutory U.S. federal tax rate | 39.00% | 39.00% |
Effect of increase in valuation allowance | (39.00%) | (39.00%) |
Effective income tax rate (as a percent) |
INCOME TAXES (Schedule of Chang
INCOME TAXES (Schedule of Changes in Cumulative Net Deferred Tax Assets) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Net deferred tax assets | ||
Net loss carry forward | $ 3,648,316 | $ 2,148,248 |
Valuation allowance | (3,648,316) | (2,148,248) |
Net deferred tax assets |
INCOME TAXES (Schedule of Recon
INCOME TAXES (Schedule of Reconciliation of Income Taxes Computed at Statutory Rate) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of income taxes computed at statutory rate | ||||||
Tax benefit at statutory rate | $ 1,500,068 | $ 1,124,511 | ||||
Valuation allowance | (1,500,068) | (1,124,511) | ||||
Income tax expense (benefit) |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 30, 2015 | Dec. 31, 2014 | |
Total due from related parties | $ 37,283 | $ 37,283 | $ 26,775 | $ 8,284 | |||||
Professional fees | 181,052 | $ 111,847 | 637,252 | $ 246,584 | 643,913 | 645,503 | |||
Lone Mountain [Member] | |||||||||
Total due from related parties | $ 40,900 | ||||||||
CRD [Member] | |||||||||
Total due from related parties | 37,283 | 37,283 | 5,000 | 5,000 | $ 5,000 | ||||
Affiliated customer [Member] | |||||||||
Professional fees | $ 4,425 | ||||||||
Blue River [Member] | |||||||||
Total due from related parties | 3,284 | ||||||||
Consulting term | 5 years | ||||||||
Non-exclusive license to our intellectual property | $ 5,000 | ||||||||
Consulting fee revenue | 71,680 | 4,425 | |||||||
Accounts payable | 4,293 | 0 | |||||||
Advesa [Member] | |||||||||
Total due from related parties | $ 35,083 | $ 35,083 | 21,755 | ||||||
Advances to related party during period | $ 20,499 | ||||||||
Interest rate | 7.50% | 7.50% | |||||||
Lease term of laboratory equipment | 36 months |
RELATED PARTY TRANSACTIONS (Sch
RELATED PARTY TRANSACTIONS (Schedule of Amounts Due from Related Parties) (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 30, 2015 |
Related Party Transaction [Line Items] | ||||
Total due from related parties | $ 37,283 | $ 26,775 | $ 8,284 | |
Blue River [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total due from related parties | 3,284 | |||
Advesa [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total due from related parties | 35,083 | 21,755 | ||
CRD [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total due from related parties | 37,283 | $ 5,000 | $ 5,000 | $ 5,000 |
Employees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total due from related parties | $ 2,200 |
COMMITMENTS AND CONTINGENCIES85
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | Dec. 28, 2016 | May 06, 2014 | Feb. 20, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | May 03, 2014 |
Long-term Purchase Commitment [Line Items] | ||||||||||
Common stock, price per share | $ 0.001 | |||||||||
Research and development | $ 40,611 | $ 4,371 | $ 90,006 | $ 17,732 | $ 23,124 | $ 329 | ||||
Payment to purchase common stock | 10,000,000 | |||||||||
Line of Credit agreement | 1,380,204 | 1,380,204 | ||||||||
Minimum amount draw down at one time | 5,000 | |||||||||
Maximum amount draw down at one time | $ 350,000 | |||||||||
Percentage of trading price | 85.00% | |||||||||
Commitment fee | $ 35,000 | |||||||||
Bear Note interest per year | 10.00% | |||||||||
Maturity Date | Jul. 8, 2017 | |||||||||
Note payable | $ 35,000 | |||||||||
Net discount | 34,453 | $ 272,793 | ||||||||
Contractual Obligations and Commercial Commitments [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Warrant issued to purchase common stock | 100,000 | |||||||||
Accrued expenses | $ 110,000 | $ 110,000 | 110,000 | |||||||
Consulting agreement expense | $ 84,380 | |||||||||
Consultants signing amount | $ 50,000 | |||||||||
Consultants amount, net | $ 200,000 | |||||||||
Percentage of completion | 80.00% | 8.00% | 8.00% | |||||||
Tangiers Global, LLC [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Payment to purchase common stock | $ 10,000,000 | |||||||||
Tangiers Global, LLC [Member] | Minimum [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Line of Credit agreement | 5,000 | |||||||||
Tangiers Global, LLC [Member] | Maximum [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Line of Credit agreement | 350,000 | |||||||||
Tangiers Global, LLC [Member] | 7 put notices [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Line of Credit agreement | $ 1,380,204 | $ 1,380,204 | ||||||||
Number of shares sold | 1,897,215 | |||||||||
Tangiers Global, LLC [Member] | Put notices [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Line of Credit agreement | $ 162,506 | $ 162,506 | ||||||||
Number of shares sold | 267,703 | |||||||||
Tangiers Global, LLC [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Line of Credit agreement | $ 10,000,000 | |||||||||
Consulting Agreement [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Agreement, term | 12 months | |||||||||
Warrant term | 5 years | |||||||||
Initial payment | $ 7,500 | |||||||||
Shares issued for agreement | 250,000 | |||||||||
Common stock, price per share | $ 0.18 | |||||||||
Consultancy Agreement [Member] | ||||||||||
Long-term Purchase Commitment [Line Items] | ||||||||||
Expenses recognized | $ 394,215 |
COMMITMENTS AND CONTINGENCIES86
COMMITMENTS AND CONTINGENCIES (Summary of Consolidated statements of operations expense) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Professional fees | $ 181,052 | $ 111,847 | $ 637,252 | $ 246,584 | $ 643,913 | $ 645,503 |
Fair value of warrants issued to consultant | 612,512 | |||||
Consultant [Member] | ||||||
Professional fees | 15,000 | |||||
Shares of common stock issued to consultant | 62,781 | |||||
Fair value of warrants issued to consultant | 319,419 | |||||
Total contract expenses | $ 397,200 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Aug. 10, 2016 | Feb. 13, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2017 |
Subsequent Event [Line Items] | |||||||
Proceeds from issuance of convertible debt | $ 316,478 | $ 316,478 | $ 339,900 | ||||
Maturity date | Jul. 8, 2017 | ||||||
Prana [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Total commitment upon execution of research agreement | $ 100,000 | ||||||
Commitment owed in February 2018 | 50,000 | ||||||
Commitment owed in June 2018 | 50,000 | ||||||
Total commitment amount owed | $ 200,000 | ||||||
JSJ Investments Inc. [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from issuance of convertible debt | $ 125,000 | ||||||
Interest rate (as a percent) | 12.00% | ||||||
Maturity date | May 10, 2017 | ||||||
Minimum term to be hold for conversion | Aug. 16, 2016 | ||||||
Percentage of repaid amount increase | 30.00% | ||||||
Repaid of note issuance of common stock | 379,100 |