Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 15, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | REGO PAYMENT ARCHITECTURES, INC. | |
Entity Central Index Key | 1,437,283 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 119,096,866 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 3,508 | $ 7,232 |
Prepaid expenses | 34,400 | 57,300 |
Deposits | 1,218 | 1,218 |
TOTAL CURRENT ASSETS | 39,126 | 65,750 |
PROPERTY AND EQUIPMENT | ||
Computer equipment | 5,129 | 5,129 |
Less: accumulated depreciation | (5,129) | (4,773) |
Total property and equipment | 356 | |
OTHER ASSETS | ||
Patents and trademarks, net of accumulated amortization of $141,329 and $134,023 | 403,784 | 411,090 |
Total other assets | 403,784 | 411,090 |
TOTAL ASSETS | 442,910 | 477,196 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 3,333,207 | 3,170,114 |
Accounts payable and accrued expenses - related parties | 149,292 | 48,103 |
Loans payable | 41,815 | 27,000 |
10% Secured convertible notes payable - stockholders | 3,360,264 | 3,460,264 |
Notes payable - stockholder | 100,000 | 100,000 |
3.5% Secured convertible notes payable - stockholders, net of discount of $3,157 and $6,421 | 5,816,043 | 5,462,779 |
Convertible notes payable | 183,250 | |
Preferred stock dividend liability | 4,218,826 | 3,950,545 |
TOTAL CURRENT LIABILITIES | 17,202,697 | 16,218,805 |
CONTINGENCIES | ||
STOCKHOLDERS' DEFICIT | ||
Common stock, $ .0001 par value; 230,000,000 shares authorized; 118,596,866 shares issued and outstanding at March 31, 2018 and December 31, 2017 | 11,860 | 11,860 |
Additional paid in capital | 56,715,983 | 56,390,489 |
Deferred compensation | (21,875) | (31,250) |
Accumulated deficit | (73,459,436) | (72,112,722) |
Noncontrolling interests | (6,333) | |
STOCKHOLDERS' DEFICIT | (16,759,787) | (15,741,609) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 442,910 | 477,196 |
Series A [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock | 11 | 11 |
Series B [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock | 3 | 3 |
Series C [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Patents and trademarks, accumulated amortization | $ 141,329 | $ 134,023 |
Preferred stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Common stock, par value per share | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 230,000,000 | 230,000,000 |
Common stock, shares issued | 118,596,866 | 118,596,866 |
Common stock, shares outstanding | 118,596,866 | 118,596,866 |
Series A [Member] | ||
Preferred stock, shares authorized | 195,500 | 195,500 |
Preferred stock, shares issued | 107,850 | 107,850 |
Preferred stock, shares outstanding | 107,850 | 107,850 |
Series B [Member] | ||
Preferred stock, shares authorized | 222,222 | 222,222 |
Preferred stock, shares issued | 28,378 | 28,378 |
Preferred stock, shares outstanding | 28,378 | 28,378 |
Series C [Member] | ||
Preferred stock, shares authorized | 150,000 | 150,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
3.5% Secured Convertible Promissory Notes [Member] | ||
Notes payable, discount | $ 3,157 | $ 6,421 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
SALES | ||
OPERATING EXPENSES | ||
Sales and marketing | 8,200 | 206,918 |
Product development | 174,501 | 446,711 |
General and administrative | 571,939 | 507,793 |
Total operating expenses | 754,640 | 1,161,422 |
NET OPERATING LOSS | (754,640) | (1,161,422) |
OTHER EXPENSE | ||
Interest expense | (330,227) | (189,568) |
NET LOSS | (1,084,867) | (1,350,990) |
Less: Accrued preferred dividends | (268,280) | (268,280) |
Add: Net loss attributable to noncontrolling interests | 6,433 | |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (1,346,714) | $ (1,619,270) |
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $ (0.01) | $ (0.01) |
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 118,346,866 | 117,767,626 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Deficit - 3 months ended Mar. 31, 2018 - USD ($) | Preferred Stock [Member]Series A [Member] | Preferred Stock [Member]Series B [Member] | Preferred Stock [Member]Series C [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Deferred Compensation [Member] | Accumulated Deficit [Member] | Noncontrolling Interest | Total |
Balance at Dec. 31, 2017 | $ 11 | $ 3 | $ 11,860 | $ 56,390,489 | $ (31,250) | $ (72,112,722) | $ (15,741,609) | ||
Balance, shares at Dec. 31, 2017 | 107,850 | 28,378 | 118,596,866 | ||||||
Issuance of warrants for notes payable extensions | 191,737 | 191,737 | |||||||
Stock based compensation expense | 133,757 | 133,757 | |||||||
Amortization of deferred compensation | 9,375 | 9,375 | |||||||
Accrued preferred dividends | (268,280) | (268,280) | |||||||
Net loss | (1,078,434) | (6,333) | (1,084,867) | ||||||
Balance at Mar. 31, 2018 | $ 11 | $ 3 | $ 11,860 | $ 56,715,983 | $ (21,875) | $ (73,459,436) | $ (6,333) | $ (16,759,787) | |
Balance, shares at Mar. 31, 2018 | 107,850 | 28,378 | 118,596,866 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,084,867) | $ (1,350,990) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Fair value of warrants issued for extension of notes payable | 191,737 | |
Stock based compensation expense | 133,757 | 88,442 |
Amortization of deferred compensation | 9,375 | 6,875 |
Accretion of discount on notes payable | 3,264 | 62,349 |
Depreciation and amortization | 7,663 | 10,669 |
Decrease in assets | ||
Prepaid expenses | 22,900 | |
Increase in liabilities | ||
Accounts payable and accrued expenses | 163,193 | 416,643 |
Accounts payable and accrued expenses - related parties | 101,189 | 3,542 |
Net cash used in operating activities | (451,789) | (762,470) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from loans payable | 42,265 | 25,000 |
Repayment of loans payable | (27,450) | |
Proceeds from convertible notes payable - stockholders | 250,000 | 500,000 |
Proceeds from notes payable - stockholders | 200,000 | |
Proceeds from convertible notes payable | 183,250 | |
Repayment of notes payable - stockholders | (10,800) | |
Net cash provided by financing activities | 448,065 | 714,200 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (3,724) | (48,270) |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 7,232 | 52,719 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 3,508 | 4,449 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid during year for: Interest | ||
Cash paid during year for: Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||
Accrued preferred dividend | 268,280 | 268,280 |
Fair value of warrants issued as discount for note payable | 33,210 | |
Exchange of 10% secured convertible notes payable for 3.5% secured convertible notes payable | $ 100,000 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business Rego Payment Architectures, Inc. (“REGO”) was incorporated in the state of Delaware on February 11, 2008. Effective February 28, 2017, the Company changed its name from Virtual Piggy, Inc. to Rego Payment Architectures, Inc. Zoom Payment Solutions USA, Inc. was incorporated in the state of Nevada on December 6, 2017, as a wholly owned subsidiary of Zoom Payment Solutions, LLC. Zoom Payment Solutions USA, Inc. had no operations during the three months ended March 31, 2018. Zoom Payment Solutions, LLC was formed in the state of Delaware on December 15, 2017, and Rego Payment Architectures, Inc. owns 78% of Zoom Payment Solutions, LLC. Zoom Payment Solutions, Inc. (“ZPS”) was incorporated in the state of Delaware on February 16, 2018, as a subsidiary of Rego Payment Architectures, Inc. Rego Payment Architectures, Inc. owns 78% of Zoom Payment Solutions, Inc. Zoom Payment Solutions, LLC, will be merged with ZPS. and ZPS. will be the surviving entity. ZPS is the holding company for various subsidiaries that will utilize REGO’s payment platform to address emerging markets. Zoom Mining Solutions, Inc. was incorporated in the State of Delaware on February 19, 2018, as a wholly owned subsidiary of ZPS. There were minimal operations during the three months ended March 31, 2018. Rego Payment Architectures, Inc. and its subsidiaries (collectively, the “Company”) is a technology company that will deliver an online and mobile payment platform solution for the family. The system allows parents and their children to manage, allocate funds and track their expenditures, savings and charitable giving on both a mobile device and online through the Company’s web portal. The Company’s system is designed to allow a minor to transact both online and in traditional brick and mortar retail outlets using the telephone handset as a payment device. The new payment platform automatically monitors regulatory compliance in real-time for all transactions, including protection of vendors from unintended regulatory infractions. In addition utilizing the same architecture we allow individual parents to create a contract with each child that sets the rules and parameters of how the child may use the mobile payment system with as much or as little parental oversight as the parent determines is necessary. The Company is including specialized technology that increases and improves the security of the system and protects the user’s identity while in use. Management believes that building on its Children’s Online Privacy Protection Act (“COPPA”) advantage that the future of the Company will be based on the foundational architecture of the system that will allow its use across multiple financial markets where secure controlled payments are needed. For the under seventeen years of age market, the Company will use its OINK.com brand. The Company intends to license in each alternative field of use the ability for its partners, distributors and/or value added resellers to private label each of the alternative markets. These partners will deploy, customize and support each implementation under their own label but with acknowledgement of the Company’s proprietary intellectual assets as the base technology. Management believes this approach will enable the Company to reduce expenses while broadening its reach. Revenues generated from this system are anticipated to come from multiple sources depending on the level of service and facilities requested by the parent. There will be levels of subscription revenue paid monthly, service fees, transaction fees and in some cases revenue sharing with banking and distribution partners. The Company has licensed its technology to ZPS, which is developing new markets for the use of the platform and its blockchain technology including the auto, consumer packaged goods and cryptocurrency industries. The Company’s principal office is located in Cerritos, California. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the SEC. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional financing to operationalize the Company’s current technology before another company develops similar technology to compete with the Company. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718), Scope of Modification Accounting Recently Issued Accounting Pronouncements Not Yet Adopted As of March 31, 2018, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements. |
MANAGEMENT PLANS
MANAGEMENT PLANS | 3 Months Ended |
Mar. 31, 2018 | |
MANAGEMENT PLANS [Abstract] | |
MANAGEMENT PLANS | NOTE 2 – MANAGEMENT PLANS The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant losses and experienced negative cash flow from operations since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Since inception, the Company has focused on developing and implementing its business plan. The Company believes that its existing cash resources will not be sufficient to sustain operations during the next twelve months. The Company’s current monetization model is to license its platform to merchants to enable them to provide COPPA compliant services for themselves and their customers. As of May 15, 2018, the Company has a cash position of approximately $35,000. Based upon the current cash position and the Company’s planned expense run rate, management believes the Company does not have funds currently to finance its operations through December 31, 2018. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTIES | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - RELATED PARTIES | NOTE 3 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES - RELATED PARTIES As of March 31, 2018 and December 31, 2017, the Company owed the Chief Executive Officer a total of $71,200 and $27,998, including $67,498 and $25,690 in unpaid salary and expenses of $3,702 and $2,308. As of March 31, 2018 and December 31, 2017, the Company owed the Chief Financial Officer $25,256 and $9,331 including $25,256 and $9,299 in unpaid salary and expenses of $0 and $32 . Additionally as of March 31, 2018 and December 31, 2017, the Company owed the Secretary $15,036 and $5,774 in unpaid salary. The Company owed a company owned by a more than 5% beneficial owner $37,800 and $5,000 as of March 31, 2018 and December 31, 2017. |
LOANS PAYABLE
LOANS PAYABLE | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | NOTE 4 – LOANS PAYABLE During the three months ended March 31, 2018, the Company received loans in the amount of $42,265 with no formal repayment terms and no interest. The Company repaid $27,450 of these loans during the three months ended March 31, 2018. The balance of the loans payable as of March 31, 2018 and December 31, 2017 was $41,815 and $27,000. |
10% SECURED CONVERTIBLE NOTES P
10% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS | 3 Months Ended |
Mar. 31, 2018 | |
Convertible Debt [Abstract] | |
10% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS | NOTE 5 – 10% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS On March 6, 2015, the Company, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”), issued $2,000,000 aggregate principal amount of its 10% Secured Convertible Promissory Notes due March 5, 2016 (the “Notes”) to certain stockholders. On May 11, 2015, the Company issued an additional $940,000 of Notes to stockholders. The maturity dates of the Notes have been extended to September 6, 2018 with the consent of the Note holders. The Notes are convertible by the holders, at any time, into shares of the Company’s Series B Preferred Stock at a conversion price of $90.00 per share, subject to adjustment for stock splits, stock dividends and similar transactions with respect to the Series B Preferred Stock only. Each share of Series B Preferred Stock is currently convertible into 100 shares of the Company’s common stock at a current conversion price of $0.90 per share, subject to anti-dilution adjustment as described in the Certificate of Designation of the Series B Preferred Stock. In addition, pursuant to the terms of a Security Agreement entered into on May 11, 2015 by and among the Company, the Note holders and a collateral agent acting on behalf of the Note holders (the “Security Agreement”), the Notes are secured by a lien against substantially all of the Company’s business assets. Pursuant to the Purchase Agreement, the Company also granted piggyback registration rights to the holders of the Series B Preferred Stock upon a conversion of the Notes. During the first quarter of 2018, $100,000 of the Notes were exchanged for $100,000 of the 3.5% Secured convertible notes payable – stockholders (see Note 7). On March 6, 2018, the Company issued 2 year warrants to purchase 692,020 shares of the Company’s common stock to the 10% Secured convertible note holders at an exercise price of $0.90, as consideration for the note holders extending the maturity date of the notes payable to September 6, 2018. The warrants were valued at $128,803, fair value, using the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants. The warrant value of $128,803 was expensed immediately during the three months ended March 31, 2018 as interest expense. The assumptions related to the use of the Black-Scholes option pricing model for warrants and options, during the three months ended March 31, 2018 are as follows: no dividend, yield, expected volatility of 203.5% to 205.6%, risk free interest rate of 1.96% to 2.28% and expected term of 2.0 years. The Notes are recorded as a current liability as of March 31, 2018 and December 31, 2017 in the amount of $3,360,264 and $3,460,264. Interest accrued on the Notes was $1,041,199 and $952,693 as of March 31, 2018 and December 31, 2017. Interest expense related to these Notes payable was $88,507 and $103,370 for the three months ended March 31, 2018 and 2017. |
NOTES PAYABLE - STOCKHOLDERS
NOTES PAYABLE - STOCKHOLDERS | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE - STOCKHOLDERS | NOTE 6 – NOTES PAYABLE - STOCKHOLDER On December 14, 2017, the Company issued a promissory note in the amount of $100,000 non-interest bearing and maturing on December 21, 2017, along with warrants to purchase 160,000 shares of the Company’s common stock, with an exercise price of $0.90, expiring in two years. The note also includes a provision that the promissory note holder will receive additional warrants to purchase 25,000 shares of the Company’s common stock for each week that the payment of the principal is past due. During the three months ended March 31, 2018, the promissory note holder received additional warrants to purchase 325,000 shares of the Company’s common stock with an exercise price of $0.90, expiring in two years. The warrants were valued at $62,934 fair value, using the Black-Scholes option pricing model to calculate the grant-date fair value of the warrants, with the following assumptions: no dividend yield, expected volatility of 201.7% to 236.2%, risk free interest rate of 1.9% and expected option term of 2 years. The warrant value of $62,934 was expensed as interest expense during the three months ended March 31, 2018. The notes payable are recorded as a current liability as of March 31, 2018 and December 31, 2017 in the amount of $100,000. Interest accrued on the notes as of March 31, 2018 and December 31, 2017 was $5,065. Interest expense, including accretion of discounts, related to these notes payable was $62,934 and $67,886 for the three months ended March 31, 2018 and 2017. |
3.5% SECURED CONVERTIBLE NOTES
3.5% SECURED CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2018 | |
Convertible Debt [Abstract] | |
3.5% SECURED CONVERTIBLE PROMISSORY NOTES PAYABLE | NOTE 7 – 3.5% SECURED CONVERTIBLE NOTES PAYABLE On August 26, 2016, the Company, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”), issued $600,000 aggregate principal amount of its 3.5% Secured Convertible Promissory Notes due June 30, 2018 (the “New Secured Notes”) to certain accredited investors (“investors”). The Company issued additional New Secured Notes during 2016 and 2017. The New Secured Notes are convertible by the holders, at any time, into shares of the Company’s newly authorized Series C Cumulative Convertible Preferred Stock (“Series C Preferred Stock”) at a conversion price of $90.00 per share, subject to adjustment for stock splits, stock dividends and similar transactions with respect to the Series C Preferred Stock only. Each share of Series C Preferred Stock is currently convertible into 100 shares of the Company’s common stock at a current conversion price of $0.90 per share, subject to full ratchet anti-dilution adjustment for one year and weighted average anti-dilution adjustment thereafter, as described in the Certificate of Designation of the Series C Preferred Stock. Upon a liquidation event, the Company shall first pay to the holders of the Series C Preferred Stock, on a pari passu basis with the holders of the Company’s outstanding Series A Preferred Stock and Series B Preferred Stock, an amount per share equal to 700% of the conversion price (i.e., $630.00 per share of Series C Preferred Stock), plus all accrued and unpaid dividends on each share of Series C Preferred Stock (the “Series C Preference Amount”). The Series C Preference Amount shall be paid prior and in preference to payment of any amounts to the Common Stock. After the payment of all preferential amounts required to be paid to the holders of shares of Series C Preferred Stock, Series A Preferred Stock, Series B Preferred Stock and any additional senior preferred stock, the Series C Preferred Stock participates in further distributions subject to an aggregate cap of seven and one-half times (7.5x) the original issue price thereof, plus all accrued and unpaid dividends. In March 2018, the Company issued $350,000 aggregate principal amount of its New Secured Notes to certain accredited investors. The aggregate consideration consisted of $250,000 in cash and the exchange of $100,000 outstanding principal amount of 10% Secured Convertible Notes (See Note 5). The New Secured Notes are recorded as a short-term liability in the amount of $5,716,043 and $5,462,779, net of discount of $3,157 and $6,421 as of March 31, 2018 and December 31, 2017. Interest accrued on the New Secured Notes was $195,018 and $148,299 as of March 31, 2018 and December 31, 2017. Interest expense, including accretion of discounts, related to these notes payable was $49,983 and $18,312 for the three months ended March 31, 2018 and 2017. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2018 | |
Convertible Debt [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 8 – CONVERTIBLE NOTES PAYABLE During the first quarter of 2018, Zoom Payment Solutions, Inc. and Zoom Payment Solutions, LLC received $183,250 for convertible notes payable. The notes are non-interest bearing. Of the $183,250 in convertible notes, $122,750 was from stockholders of Rego Payment Architectures, Inc. The notes are convertible within 90 days of issuance into: (i) Common stock of Oil Optimization Inc., a company traded on the Toronto Stock Exchange, at the conversion price of $0.125 per share of common stock in the Canadian Company; or (ii) Common stock of Zoom Payment Solutions, Inc. at the conversion price of $500 per share of common stock; |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 – INCOME TAXES Income tax expense was $0 for the three months ended March 31, 2018 and 2017. As of January 1, 2018, the Company had no unrecognized tax benefits, and accordingly, the Company did not recognize interest or penalties during 2017 related to unrecognized tax benefits. There has been no change in unrecognized tax benefits during the three months ended March 31, 2018, and there was no accrual for uncertain tax positions as of March 31, 2018. Tax years from 2014 through 2017 remain subject to examination by major tax jurisdictions. There is no income tax benefit for the losses for the three months ended March 31, 2018 and 2017, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits. |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2018 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
CONVERTIBLE PREFERRED STOCK | NOTE 10 – CONVERTIBLE PREFERRED STOCK Series A Preferred Stock The Series A Preferred Stock has a preference in liquidation equal to two times the Original Issue Price to be paid out of assets available for distribution prior to holders of common stock and thereafter participates with the holders of common stock in any remaining proceeds subject to an aggregate cap of 2.5 times the Original Issue Price. The Series A Preferred Stockholders may cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A Preferred Stock can be converted. The Series A Preferred Stock also contains customary approval rights with respect to certain matters. The Series A Preferred Stock accrues dividends at the rate of 8% per annum. The conversion feature of the additional Series A Preferred Stock is an embedded derivative, which is classified as a liability in accordance with FASB ASC 815 and was valued in accordance with FASB ASC 470 as a beneficial conversion feature at an original fair market value of $3,489,000 at April 30, 2014 and $0 at March 31, 2018 and December 31, 2017. Series B Preferred Stock The Series B Preferred Stock is pari passu with the Series A Preferred Stock and has a preference in liquidation equal to two times the Original Issue Price to be paid out of assets available for distribution prior to holders of common stock and thereafter participates with the holders of common stock in any remaining proceeds subject to an aggregate cap of 2.5 times the Original Issue Price. The Series B Preferred Stockholders may cast the number of votes equal to the number of whole shares of common stock into which the shares of Series B Preferred Stock can be converted. The Series B Preferred Stock also contains customary approval rights with respect to certain matters. The Series B Preferred Stock accrues dividends at the rate of 8% per annum. The Warrants associated with the Series B Preferred Stock were also classified as equity, in accordance with FASB ASC 480-10-25. Therefore it is not necessary to bifurcate these Warrants from the Series B Preferred Stock. The conversion price of the Series B Preferred Stock is currently $0.90 per share. The Series B Preferred Stock is subject to mandatory conversion if certain registration or related requirements are satisfied and the average closing price of the Company’s common stock exceeds 2.5 times the conversion price over a period of twenty consecutive trading days. Series C Preferred Stock In August 2016, the Company authorized 150,000 shares of the Company’s Series C Cumulative Convertible Preferred Stock (“Series C”). As of March 31, 2018, none of the Series C shares are issued or outstanding. After the date of issuance of Series C, dividends at the rate of $7.20 per share will begin accruing and will be cumulative. The Series C Preferred Stock is pari passu with the Series A Preferred Stock and Series B Preferred Stock and has a preference in liquidation equal to seven times the Original Issue Price to be paid out of assets available for distribution prior to holders of common stock and thereafter participates with the holders of common stock in any remaining proceeds subject to an aggregate cap of 7.5 times the Original Issue Price. The Series C Preferred Stockholders may cast the number of votes equal to the number of whole shares of common stock into which the shares of Series C Preferred Stock can be converted. The Series C Preferred Stock also contains customary approval rights with respect to certain matters. As of March 31, 2018, the value of the cumulative 8% dividends for all preferred stock was $4,218,826. Such dividends will be paid when and if declared payable by the Company’s board of directors or upon the occurrence of certain liquidation events. In accordance with FASB ASC 260-10-45-11, the Company has recorded these accrued dividends as a current liability. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 11 – STOCKHOLDERS’ EQUITY Issuance of Restricted Shares A restricted stock award (“RSA”) is an award of common shares that is subject to certain restrictions during a specified period. Restricted stock awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of nonvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon and are considered to be currently issued and outstanding. The Company’s restricted stock awards generally vest over a period of one year. The Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, straight-line over the period during which the restrictions lapse. For these purposes, the fair market value of the restricted stock is determined based on the closing price of the Company’s common stock on the grant date. During the three months ended March 31, 2018 and 2017, the Company expensed $9,375 and $6,875 relative to restricted stock awards. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 12 – STOCK OPTIONS AND WARRANTS During 2008, the Board of Directors (“Board”) of the Company adopted the 2008 Equity Incentive Plan (“2008 Plan”) that was approved by the stockholders. Under the 2008 Plan, the Company was authorized to grant options to purchase up to 25,000,000 shares of common stock to any officer, other employee or director of, or any consultant or other independent contractor who provides services to the Company. The 2008 Plan was intended to permit stock options granted to employees under the 2008 Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the 2008 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”). As of March 31, 2018, options to purchase 7,273,333 shares of common stock have been issued and are unexercised, and 7,876,667 shares are available for grants under the 2008 Plan. The 2008 Plan expiration date was extended for one year to March 3, 2019 by the Board of Directors. During 2013, the Board adopted the 2013 Equity Incentive Plan (“2013 Plan”), which was approved by stockholders at the 2013 annual meeting of stockholders. Under the 2013 Plan, the Company is authorized to grant awards of stock options, restricted stock, restricted stock units and other stock-based awards of up to an aggregate of 5,000,000 shares of common stock to any officer, employee, director or consultant. The 2013 Plan is intended to permit stock options granted to employees under the 2013 Plan to qualify as Incentive Stock Options. All options granted under the 2013 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be Non-Statutory Stock Options. As of March 31, 2018, under the 2013 Plan grants of restricted stock and options to purchase 1,921,666 shares of common stock have been issued and are unvested or unexercised, and 1,928,334 shares of common stock remain available for grants under the 2013 Plan. The 2008 Plan and 2013 Plan are administered by the Board or its compensation committee, which determines the persons to whom awards will be granted, the number of awards to be granted, and the specific terms of each grant, including the vesting thereof, subject to the terms of the applicable Plan. In connection with Incentive Stock Options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company). Prior to January 1, 2014, volatility in all instances presented is the Company’s estimate of volatility that is based on the volatility of other public companies that are in closely related industries to the Company. Beginning January 1, 2014, volatility in all instances presented is the Company’s estimate of volatility that is based on the historical volatility of the Company’s stock. The following table summarizes the activities for the Company’s stock options for the three months ended March 31, 2018: Options Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price in years) (in 000's) (1) Balance December 31, 2017 9,150,000 $ 0.83 3.6 $ 66 Expired (155,000 ) $ 1.19 - - Balance March 31, 2018 8,995,000 0.82 3.4 57 Exercisable at March 31, 2018 3,244,996 $ 0.75 1.8 $ 56 Exercisable at March 31, 2018 and expected to vest thereafter 8,995,000 $ 0.82 3.4 $ 57 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $0.23 for the Company’s common stock on March 31, 2018. For the three months ended March 31, 2018 and 2017, the Company expensed $133,756 and $88,442 with respect to options. In accordance with FASB ASC 505-50, Equity – Equity-Based Payments to Non-Employees As of March 31, 2018, there was $549,734 of unrecognized compensation cost related to outstanding stock options. This amount is expected to be recognized over a weighted-average period of 1.2 years. To the extent the actual forfeiture rate is different from what we have estimated, stock-based compensation related to these awards will be different from the Company’s expectations. The difference between the stock options exercisable at March 31, 2018 and the stock options exercisable and expected to vest relates to management’s estimate of options expected to vest in the future. The following table summarizes the activities for the Company’s unvested stock options for the three months ended March 31, 2018: Unvested Options Weighted - Average Grant Number of Date Fair Shares Value Balance December 31, 2017 5,811,670 $ 0.13 Vested (61,666 ) 0.37 Balance March 31, 2018 5,750,004 0.13 The following table summarizes the activities for the Company’s warrants for the three months ended March 31, 2018: Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price (in years) (in 000's) (1) Balance December 31, 2017 1,191,700 $ 0.90 1.9 $ - Granted 1,017,020 0.90 1.9 - Expired (96,700 ) 0.90 - - Balance March 31, 2018 2,112,020 $ 0.90 1.8 $ - Exercisable at March 31, 2018 2,112,020 $ 0.90 1.9 $ - Exercisable at March 31, 2018 and expected to vest thereafter 2,112,020 $ 0.90 1.9 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.23 for the Company’s common stock on March 31, 2018. All warrants were vested on the date of grant. |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
OPERATING LEASES | N OTE 13 – OPERATING LEASES For the three months ended March 31, 2018 and 2017, total rent expense under leases amounted to $4,967 and $34,950. At March 31, 2018, the Company was obligated for $1,218 per month through September 30, 2018 under a non-cancelable operating lease arrangement for property. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 – RELATED PARTY TRANSACTIONS The Company has a consulting agreement with a company owned by a more than 5% beneficial owner, at a cost of $15,000 per month. For the three months ended March 31, 2018 and 2017, the Company expensed $45,000 and $55,811 to the consulting company. The Company has a consulting agreement with the son of the principal of a company owned by a more than 5% beneficial owner, at a cost of $5,000 per month. For the three months ended March 31, 2018 and 2017, the Company paid $15,000 to this consultant. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS The Company has issued 2 year warrants to purchase 150,000 shares of the Company’s common stock, with an exercise price of $0.90, to a stockholder in conjunction with notes payable issued in December 2017 (See Note 7). From April 1, 2018 through the date of this report, the Company has received loans from stockholders in the amount of $37,650 and repaid $34,025. On April 12, 2018, the Company issued options to purchase 750,000 shares of the Company’s common stock to two Board members, the Chief Financial Officer and the company owned by a more than 5% stockholder, for a total of 3 million options. The options have an exercise price of $0.2595, vest immediately and have a term of 5 years, with a fair value of $728,345, which will be expensed immediately. In April 2018, Crowd Cart, Inc. issued 500,000 share of its stock to the Company, for a 5% ownership interest in Crowd Cart, Inc. and the Company issued 500,000 shares of its stock to Crowd Cart, Inc. pursuant to a Stock Issuance and Stock Option Agreement. Crowd Cart, Inc. has the option to receive an additional 500,000 shares of the Company’s common stock upon either: 1. The formation of Zoom Mining Solutions, Inc. and the closing on a minimum 200 bitcoin mining machines being acquired into Zoom Mining Solutions, Inc. or 2. The contribution of $500,000 in equity capital into Zoom Payment Solutions by investors introduced by Crowd Cart. The option expires June 16, 2018. The Company received $200,000, in May 2018, as a down payment to develop software for the automotive industry. This will be a business to business and a business to consumer application intended to remove friction in the industry and provide an improved and trusted consumer experience. |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of the Business | Nature of the Business Rego Payment Architectures, Inc. (“REGO”) was incorporated in the state of Delaware on February 11, 2008. Effective February 28, 2017, the Company changed its name from Virtual Piggy, Inc to Rego Payment Architectures, Inc. Zoom Payment Solutions USA, Inc. was incorporated in the state of Nevada on December 6, 2017, as a wholly owned subsidiary of Zoom Payment Solutions, LLC. Zoom Payment Solutions USA, Inc. had no operations during the three months ended March 31, 2018. Zoom Payment Solutions, LLC was formed in the state of Delaware on December 15, 2017, and Rego Payment Architectures, Inc. owns 78% of Zoom Payment Solutions, LLC. Zoom Payment Solutions, Inc. (“ZPS”) was incorporated in the state of Delaware on February 16, 2018, as a subsidiary of Rego Payment Architectures, Inc. Rego Payment Architectures, Inc. owns 78% of Zoom Payment Solutions, Inc. Zoom Payment Solutions, LLC, will be merged with ZPS. and ZPS. will be the surviving entity. ZPS is the holding company for various subsidiaries that will utilize REGO’s payment platform to address emerging markets. Zoom Mining Solutions, Inc. was incorporated in the State of Delaware on February 19, 2018, as a wholly owned subsidiary of ZPS. There were minimal operations during the three months ended March 31, 2018. Rego Payment Architectures, Inc. and its subsidiaries (collectively, the “Company”) is a technology company that will deliver an online and mobile payment platform solution for the family. The system allows parents and their children to manage, allocate funds and track their expenditures, savings and charitable giving on both a mobile device and online through the Company’s web portal. The Company’s system is designed to allow a minor to transact both online and in traditional brick and mortar retail outlets using the telephone handset as a payment device. The new payment platform automatically monitors regulatory compliance in real-time for all transactions, including protection of vendors from unintended regulatory infractions. In addition utilizing the same architecture we allow individual parents to create a contract with each child that sets the rules and parameters of how the child may use the mobile payment system with as much or as little parental oversight as the parent determines is necessary. The Company is including specialized technology that increases and improves the security of the system and protects the user’s identity while in use. Management believes that building on its Children’s Online Privacy Protection Act (“COPPA”) advantage that the future of the Company will be based on the foundational architecture of the system that will allow its use across multiple financial markets where secure controlled payments are needed. For the under seventeen years of age market, the Company will use its OINK.com brand. The Company intends to license in each alternative field of use the ability for its partners, distributors and/or value added resellers to private label each of the alternative markets. These partners will deploy, customize and support each implementation under their own label but with acknowledgement of the Company’s proprietary intellectual assets as the base technology. Management believes this approach will enable the Company to reduce expenses while broadening its reach. Revenues generated from this system are anticipated to come from multiple sources depending on the level of service and facilities requested by the parent. There will be levels of subscription revenue paid monthly, service fees, transaction fees and in some cases revenue sharing with banking and distribution partners. The Company has licensed its technology to ZPS, which is developing new markets for the use of the platform and its blockchain technology including the auto, consumer packaged goods and cryptocurrency industries. The Company’s principal office is located in Cerritos, California. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the SEC. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional financing to operationalize the Company’s current technology before another company develops similar technology to compete with the Company. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718), Scope of Modification Accounting |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted As of March 31, 2018, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements. |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes the activities for the Company’s stock options for the three months ended March 31, 2018: Options Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price in years) (in 000's) (1) Balance December 31, 2017 9,150,000 $ 0.83 3.6 $ 66 Expired (155,000 ) $ 1.19 - - Balance March 31, 2018 8,995,000 0.82 3.4 57 Exercisable at March 31, 2018 3,244,996 $ 0.75 1.8 $ 56 Exercisable at March 31, 2018 and expected to vest thereafter 8,995,000 $ 0.82 3.4 $ 57 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $0.23 for the Company’s common stock on March 31, 2018. |
Schedule of Unvested Options Activity | The following table summarizes the activities for the Company’s unvested stock options for the three months ended March 31, 2018: Unvested Options Weighted - Average Grant Number of Date Fair Shares Value Balance December 31, 2017 5,811,670 $ 0.13 Vested (61,666 ) 0.37 Balance March 31, 2018 5,750,004 0.13 |
Schedule of Warrant Activity | The following table summarizes the activities for the Company’s warrants for the three months ended March 31, 2018: Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price (in years) (in 000's) (1) Balance December 31, 2017 1,191,700 $ 0.90 1.9 $ - Granted 1,017,020 0.90 1.9 - Expired (96,700 ) 0.90 - - Balance March 31, 2018 2,112,020 $ 0.90 1.8 $ - Exercisable at March 31, 2018 2,112,020 $ 0.90 1.9 $ - Exercisable at March 31, 2018 and expected to vest thereafter 2,112,020 $ 0.90 1.9 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.23 for the Company’s common stock on March 31, 2018. |
MANAGEMENT PLANS (Details)
MANAGEMENT PLANS (Details) - USD ($) | May 15, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Subsequent Event [Line Items] | |||||
Cash positions | $ 3,508 | $ 7,232 | $ 4,449 | $ 52,719 | |
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash positions | $ 35,000 |
ACCOUNTS PAYABLE AND ACCRUED 25
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTIES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Related Party Transaction [Line Items] | |||
Due to related party | $ 149,292 | $ 48,103 | |
Chief Executive Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | 71,200 | 27,998 | |
Chief Executive Officer [Member] | Unpaid payroll [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | 67,498 | 25,690 | |
Chief Executive Officer [Member] | Expenses [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | 3,702 | 2,308 | |
Chief Financial Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | 25,256 | 9,331 | |
Chief Financial Officer [Member] | Unpaid payroll [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | 25,256 | 9,299 | |
Chief Financial Officer [Member] | Expenses [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | 0 | 32 | |
Secretary [Member] | Unpaid payroll [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | 15,036 | 5,774 | |
Beneficial Owner [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related party | $ 37,800 | $ 5,000 | |
Ownership percentage | 5.00% | 5.00% | 5.00% |
LOANS PAYABLE (Details)
LOANS PAYABLE (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Aggregate loan amount received | $ 42,265 | $ 25,000 | |
Repayment of loans payable | 27,450 | ||
Loans payable | $ 41,815 | $ 27,000 |
10% SECURED CONVERTIBLE NOTES27
10% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS (Details) - USD ($) | Mar. 06, 2018 | May 11, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||
Maturity date | Sep. 6, 2018 | ||||
Interest expense, notes payable | $ 62,934 | $ 67,886 | |||
Additional notes issued to stockholders | $ 940,000 | 250,000 | 500,000 | ||
10% Secured convertible notes payable - stockholders | 3,360,264 | $ 3,460,264 | |||
Accounts payable and accrued expenses | $ 3,333,207 | $ 3,170,114 | |||
Expected Volatility Rate, Minimum | 203.50% | ||||
Expected Volatility Rate, Maximum | 205.60% | ||||
Risk Free Interest Rate, Minimum | 1.96% | ||||
Risk Free Interest Rate, Maximum | 2.28% | ||||
Common stock which can be purchased by warrants | 150,000 | 325,000 | |||
Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Expected life | 2 years | ||||
10% Secured Convertible Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 10.00% | ||||
Interest expense, notes payable | $ 88,507 | $ 103,370 | |||
Accrued interest | 1,041,199 | $ 952,693 | |||
Common stock which can be purchased by warrants | 692,020 | ||||
Exercise price | $ 0.90 | ||||
Warrant term | 2 years | ||||
Fair value of warrants | $ 128,803 | 128,803 | |||
Notes payable Short-term Liability | $ 3,360,264 | $ 3,460,264 | |||
Preferred Class B [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price (in dollars per share) | $ 0.90 | ||||
Convertible Promissory Notes due March 5, 2016, Issued on March 6, 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Note payable included per unit | $ 2,000,000 | ||||
Interest rate | 10.00% | ||||
Convertible Promissory Notes due March 5, 2016 [Member] | Preferred Class B [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price (in dollars per share) | $ 90 | ||||
Conversion price at which preferred stock is convertible into common stock (in dollars per share) | $ 0.90 | ||||
Secured Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Note payable included per unit | $ 100,000 | ||||
Interest rate | 3.50% | ||||
Convertible debt | $ 100,000 |
NOTES PAYABLE-STOCKHOLDERS (Det
NOTES PAYABLE-STOCKHOLDERS (Details) - USD ($) | Dec. 14, 2017 | May 11, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||
Common stock which can be purchased by warrants | 150,000 | 325,000 | |||
Fair value of warrants | $ 62,934 | $ 67,886 | |||
Expected volatility, minimum | 203.50% | ||||
Expected volatility, maximum | 205.60% | ||||
Risk-free interest rate, minimum | 1.96% | ||||
Risk-free interest rate, maximum | 2.28% | ||||
Interest expense, notes payable | $ 62,934 | $ 67,886 | |||
Note payable maturity date | Sep. 6, 2018 | ||||
Interest accrued including commitment fee amount | 5,065 | 5,065 | |||
Notes payable current Liability | $ 100,000 | $ 100,000 | |||
Promissory Note Due December 21, 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 100,000 | ||||
Common stock which can be purchased by warrants | 160,000 | ||||
Exercise price of warrants | $ 0.90 | $ 0.90 | |||
Term of warrants | 2 years | 2 years | |||
Fair value of warrants | $ 62,934 | $ 62,934 | |||
Expected volatility, minimum | 201.70% | ||||
Expected volatility, maximum | 236.20% | ||||
Risk-free interest rate | 1.90% | ||||
Expected life | 2 years | ||||
Additional common stock which can be purchased by warrants | 325,000 | 25,000 | |||
Note payable maturity date | Dec. 21, 2017 |
3.5% SECURED CONVERTIBLE NOTE29
3.5% SECURED CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | May 11, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Aug. 26, 2016 |
Debt Instrument [Line Items] | |||||
Interest expense, notes payable | $ 62,934 | $ 67,886 | |||
Proceeds from convertible notes | $ 940,000 | 250,000 | 500,000 | ||
Cash value of notes converted | 33,210 | ||||
Common stock which can be purchased by warrants | 150,000 | 325,000 | |||
3.5% Secured Convertible Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest accrued | $ 195,018 | $ 148,299 | |||
Interest expense, notes payable | 49,983 | $ 18,312 | |||
Notes payable Short-term Liability | 5,716,043 | 5,462,779 | |||
Net discount of note payable | 3,157 | $ 6,421 | |||
3.5% Secured Convertible Note [Member] | Investor [Member] | |||||
Debt Instrument [Line Items] | |||||
Note payable principal amount issued | $ 350,000 | ||||
Interest rate | 10.00% | ||||
Proceeds from convertible notes | $ 250,000 | ||||
Amount of notes converted | $ 100,000 | ||||
Convertible Promissory Notes due June 30, 2018, Issued on August 26, 2016 [Member] | |||||
Debt Instrument [Line Items] | |||||
Note payable principal amount issued | $ 600,000 | ||||
Interest rate | 3.50% |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) | 3 Months Ended |
Mar. 31, 2018USD ($)$ / shares | |
Parent Company [Member] | |
Debt Instrument [Line Items] | |
Conversion price | $ / shares | $ 500 |
Zoom Payment Solutions, Inc. and Zoom Payment Solutions, LLC [Member] | |
Debt Instrument [Line Items] | |
Proceeds from convertible debt | $ | $ 183,250 |
Stockholders of Rego Payment Architectures, Inc. [Member] | |
Debt Instrument [Line Items] | |
Proceeds from convertible debt | $ | $ 122,750 |
Canadian Company [Member] | |
Debt Instrument [Line Items] | |
Conversion price | $ / shares | $ 0.125 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 0 | $ 0 | |
Net operating loss carryforwards | 0 | $ 0 | |
Change in unrecognized tax benefits | 0 | ||
Accrual for uncertain tax positions | $ 0 |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Apr. 30, 2014 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||||
Shares issuable upon exercise of warrants | 150,000 | 325,000 | |||
Cumulative dividends | $ 268,280 | $ 268,280 | |||
Preferred Class A [Member] | |||||
Class of Stock [Line Items] | |||||
Dividend rate | 8.00% | ||||
Beneficial conversion feature | $ 3,489,000 | $ 0 | $ 0 | ||
Preferred Class B [Member] | |||||
Class of Stock [Line Items] | |||||
Dividend rate | 8.00% | ||||
Conversion price | $ 0.90 | ||||
Series C [Member] | |||||
Class of Stock [Line Items] | |||||
Issuance of shares of common stock, shares | 150,000 | ||||
Equity issuance, price per share | $ 7.20 | ||||
Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Dividend rate | 8.00% | ||||
Cumulative dividends | $ 4,218,826 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity Issued [Line Items] | ||
Compensation expense | $ 133,756 | $ 88,442 |
(RSUs) [Member] | ||
Equity Issued [Line Items] | ||
Compensation expense | $ 9,375 | $ 6,875 |
STOCK OPTIONS AND WARRANTS (Nar
STOCK OPTIONS AND WARRANTS (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ 133,756 | $ 88,442 |
Intrinsic value of stock options exercised | 2,866 | |
Compensation cost of related outstanding stock options | $ 549,734 | |
Weighted-average period | 1 year 2 months 12 days | |
Equity Incentive Plan 2008 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized under plan | 25,000,000 | |
Number of shares of common stock that have been issued and are unexercised under the plan | 7,273,333 | |
Shares available for grant | 7,876,667 | |
Equity Incentive Plan 2013 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized under plan | 5,000,000 | |
Number of shares of common stock that have been issued and are unexercised under the plan | 1,921,666 | |
Shares available for grant | 1,928,334 |
STOCK OPTIONS AND WARRANTS (Sch
STOCK OPTIONS AND WARRANTS (Schedule of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | ||
Weighted-Average Exercise Price | |||
Granted | $ 0.90 | ||
Closing stock price | $ 0.23 | ||
Stock Options [Member] | |||
Number of Shares | |||
Balance December 31, 2017 | 9,150,000 | ||
Expired | (155,000) | ||
Balance March 31, 2018 | 8,995,000 | 9,150,000 | |
Exercisable at March 31, 2018 | 3,244,996 | ||
Exercisable at March 31, 2018 and expected to vest thereafter | 8,995,000 | ||
Weighted-Average Exercise Price | |||
Balance December 31, 2017 | $ 0.83 | ||
Expired | 1.19 | ||
Balance March 31, 2018 | 0.82 | $ 0.83 | |
Exercisable at March 31, 2018 | 0.75 | ||
Exercisable at March 31, 2018 and expected to vest thereafter | $ 0.82 | ||
Balance March 31, 2018 | 3 years 4 months 24 days | 3 years 7 months 6 days | |
Exercisable at March 31, 2018 | 1 year 9 months 18 days | ||
Exercisable at March 31, 2018 and expected to vest thereafter | 3 years 4 months 24 days | ||
Balance December 31, 2017 | [1] | $ 66 | |
Balance March 31, 2018 | [1] | 57 | $ 66 |
Exercisable at March 31, 2018 | [1] | 56 | |
Exercisable at March 31, 2018 and expected to vest thereafter | [1] | $ 57 | |
Closing stock price | [1] | $ 0.23 | |
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $0.23 for the Company's common stock on March 31, 2018. |
STOCK OPTIONS AND WARRANTS (S36
STOCK OPTIONS AND WARRANTS (Schedule of Unvested Options) (Details) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Shares | |
Balance | shares | 5,811,670 |
Vested | shares | (61,666) |
Balance | shares | 5,750,004 |
Weighted-Average Grant Date Fair Value | |
Balance | $ / shares | $ 0.13 |
Vested | $ / shares | 0.37 |
Balance | $ / shares | $ 0.13 |
STOCK OPTIONS AND WARRANTS (S37
STOCK OPTIONS AND WARRANTS (Schedule of Warrant Activity) (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)$ / sharesshares | ||
Number of Shares | ||
Balance December 31, 2017 | shares | 1,191,700 | |
Granted | shares | 1,017,020 | |
Expired | shares | (96,700) | |
Balance March 31, 2018 | shares | 2,112,020 | |
Exercisable at March 31, 2018 | shares | 2,112,020 | |
Exercisable at March 31, 2018 and expected to vest thereafter | shares | 2,112,020 | |
Weighted Average Exercise Price | ||
Balance December 31, 2017 | $ 0.90 | |
Granted | 0.90 | |
Expired | 0.90 | |
Balance March 31, 2018 | 0.90 | |
Exercisable at March 31, 2018 | 0.90 | |
Exercisable at March 31, 2018 and expected to vest thereafter | $ 0.90 | |
Weighted- Average Remaining Contractual Term in Years) | ||
Balance December 31, 2017 | 1 year 10 months 25 days | |
Granted | 1 year 10 months 25 days | |
Balance as of March 31, 2018 | 1 year 9 months 18 days | |
Exercisable at March 31, 2018 | 1 year 10 months 25 days | |
Exercisable at March 31, 2018 and expected to vest thereafter | 1 year 10 months 25 days | |
Aggregate Intrinsic Value | ||
Balance December 31, 2017 | $ | [1] | |
Balance March 31, 2018 | $ | [1] | |
Exercisable at March 31, 2018 | $ | [1] | |
Exercisable as of March 31, 2018 and expected to vest thereafter | $ | [1] | |
Closing stock price | $ 0.23 | |
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.23 for the Company's common stock on March 31, 2018. |
OPERATING LEASES (Details)
OPERATING LEASES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Leased Assets [Line Items] | ||
Total rent expense under leases | $ 4,967 | $ 34,950 |
California Team Office [Member] | ||
Operating Leased Assets [Line Items] | ||
Monthly lease payment | $ 1,218 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Due to related party | $ 149,292 | $ 48,103 | |
Beneficial Owner [Member] | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 5.00% | 5.00% | 5.00% |
Due to related party | $ 37,800 | $ 5,000 | |
Related party expenses | 45,000 | $ 55,811 | |
Consulting agreement cost | $ 37,800 | $ 15,000 | |
Son of Beneficial Owner [Member] | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 5.00% | 5.00% | |
Consulting agreement cost | $ 5,000 | $ 5,000 | |
Payment to consultant | $ 15,000 | $ 15,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Apr. 12, 2018 | Apr. 02, 2018 | May 31, 2018 | Apr. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Subsequent Event [Line Items] | |||||||
Options granted exercise price | $ 0.90 | ||||||
Common stock which can be purchased by warrants | 150,000 | 325,000 | |||||
Proceeds from stockholders | $ 200,000 | ||||||
Option issued to purchase common stock | 118,596,866 | 118,596,866 | |||||
Term for warrant issued | 2 years | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from stockholders | $ 37,650 | ||||||
Repayments of stockholders | $ 34,025 | ||||||
Proceeds from down payment to develop software | $ 200,000 | ||||||
Subsequent Event [Member] | Crowd Cart, Inc. [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Shares issued | 500,000 | ||||||
Ownership interest | 5.00% | ||||||
Option to receive additional shares | 500,000 | ||||||
Contribution of equity capital into Zoom Payment Solutions by investors introduced by crowd cart | $ 500,000 | ||||||
Option expiration date | Jun. 16, 2018 | ||||||
Subsequent Event [Member] | Crowd Cart, Inc. [Member] | Parent Company [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Shares issued | 500,000 | ||||||
Subsequent Event [Member] | Board Members and Chief Financial Officer [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Options granted exercise price | $ 0.2595 | ||||||
Awards granted vesting period | 5 years | ||||||
Option issued to purchase common stock | 750,000 | ||||||
Total options | 3,000,000 | ||||||
Fair value of option | $ 728,345 |