Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 14, 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 | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 119,596,866 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,244 | $ 7,232 |
Prepaid expenses | 21,500 | 57,300 |
Deposits | 1,218 | 1,218 |
TOTAL CURRENT ASSETS | 23,962 | 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 $148,645 and $134,023 | 396,467 | 411,090 |
Investment | 115,000 | |
Total other assets | 511,467 | 411,090 |
TOTAL ASSETS | 535,429 | 477,196 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 3,606,909 | 3,170,114 |
Accounts payable and accrued expenses - related parties | 227,069 | 48,103 |
Loans payable | 98,700 | 27,000 |
Deferred revenue | 200,000 | |
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 $0 and $6,421 | 5,894,200 | 5,462,779 |
Convertible notes payable | 60,000 | |
Preferred stock dividend liability | 4,487,106 | 3,950,545 |
TOTAL CURRENT LIABILITIES | 18,034,248 | 16,218,805 |
CONTINGENCIES | ||
STOCKHOLDERS' DEFICIT | ||
Common stock, $ .0001 par value; 230,000,000 shares authorized; 119,596,866, and 118,596,866 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 11,960 | 11,860 |
Additional paid in capital | 58,205,076 | 56,390,489 |
Deferred compensation | (12,500) | (31,250) |
Accumulated deficit | (75,691,910) | (72,112,722) |
Noncontrolling interests | (11,459) | |
STOCKHOLDERS' DEFICIT | (17,498,819) | (15,741,609) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 535,429 | 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 ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Patents and trademarks, accumulated amortization | $ 148,645 | $ 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 | 119,596,866 | 118,596,866 |
Common stock, shares outstanding | 119,596,866 | 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 | $ 0 | $ 6,421 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
SALES | ||||
OPERATING EXPENSES | ||||
Sales and marketing | 5,163 | 19,657 | 13,363 | 226,575 |
Product development | 314,679 | 305,215 | 489,180 | 751,926 |
General and administrative | 1,435,925 | 604,090 | 2,007,864 | 1,111,883 |
Total operating expenses | 1,755,767 | 928,962 | 2,510,407 | 2,090,384 |
NET OPERATING LOSS | (1,755,767) | (928,962) | (2,510,407) | (2,090,384) |
OTHER EXPENSE | ||||
Interest expense | (213,452) | (126,076) | (543,679) | (315,644) |
NET LOSS | (1,969,219) | (1,055,038) | (3,054,086) | (2,406,028) |
LESS: Accrued preferred dividends | (268,281) | (268,280) | (536,561) | (536,561) |
Net loss attributable to noncontrolling interests | 5,026 | 11,459 | ||
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (2,232,474) | $ (1,323,318) | $ (3,579,188) | $ (2,942,589) |
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $ (0.02) | $ (0.01) | $ (0.03) | $ (0.02) |
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 119,180,199 | 117,934,293 | 118,680,199 | 117,850,959 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Deficit - 6 months ended Jun. 30, 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 | 266,564 | 266,564 | |||||||
Issuance of common stock for settlement of litigation | $ 50 | 169,400 | 169,450 | ||||||
Issuance of common stock for settlement of litigation, shares | 500,000 | ||||||||
Issuance of common stock for investment | $ 50 | 114,950 | 115,000 | ||||||
Issuance of common stock for investment, shares | 500,000 | ||||||||
Fair value of options for services | 1,080,423 | 1,080,423 | |||||||
Amortization of deferred compensation | 18,750 | 18,750 | |||||||
Accrued preferred dividends | (536,561) | (536,561) | |||||||
Conversion of convertible notes payable for equity | 183,250 | 183,250 | |||||||
Net loss | (3,042,627) | (11,459) | (3,054,086) | ||||||
Balance at Jun. 30, 2018 | $ 11 | $ 3 | $ 11,960 | $ 58,205,076 | $ (12,500) | $ (75,691,910) | $ (11,459) | $ (17,498,819) | |
Balance, shares at Jun. 30, 2018 | 107,850 | 28,378 | 119,596,866 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (3,054,086) | $ (2,406,028) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Fair value of warrants issued for extension of notes payable | 266,564 | |
Fair value of options issued in exchange for services | 1,080,422 | 181,733 |
Fair value of common stock issued in exchange for services | 18,750 | 9,167 |
Fair value of common stock issued for settlement of litigation | 169,450 | |
Accretion of discount on notes payable | 6,421 | 64,407 |
Depreciation and amortization | 14,978 | 21,589 |
(Increase) decrease in assets | ||
Prepaid expenses | 35,800 | (25,000) |
Increase in liabilities | ||
Accounts payable and accrued expenses | 436,795 | 606,665 |
Accounts payable and accrued expenses - related parties | 178,968 | 33,059 |
Deferred revenue | 200,000 | |
Net cash used in operating activities | (645,938) | (1,514,408) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of equipment | (9,389) | |
Net cash used in investing activities | (9,389) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from loans payable | 131,175 | 59,000 |
Repayment of loans payable | (59,475) | (30,000) |
Proceeds from convertible notes payable - stockholders | 325,000 | 1,300,000 |
Proceeds from notes payable - stockholders | 200,000 | |
Repayment of notes payable - stockholders | (10,800) | |
Proceeds from convertible notes payable | 243,250 | |
Net cash provided by financing activities | 639,950 | 1,518,200 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (5,988) | (5,597) |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 7,232 | 52,719 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 1,244 | 47,122 |
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 dividends | 536,561 | 536,561 |
Fair value of warrants issued as discount for note payable | 48,218 | |
Exchange of 10% secured convertible notes payable for 3.5% secured convertible notes payable | 100,000 | 600,000 |
Exchange of notes payable for 3.5% secured convertible notes payable | 200,000 | |
Issuance of common stock for investment | 115,000 | |
Conversion of convertible notes payable for equity | $ 183,250 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 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, Virtual Piggy, Inc. changed its name to Rego Payment Architectures, Inc. 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 individual parents will be able 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, 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. ZOOM Payment Solutions, LLC (“ZPS, LLC”) ZPS, LLC was formed in the state of Delaware on December 15, 2017, and Rego Payment Architectures, Inc. owned 78% of ZPS, LLC. At June 30, 2018, the Company has decided to dissolve ZPS, LLC. ZOOM Solutions, Inc. (“ZS”) ZS (formerly Zoom Payment Solutions, Inc.) 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. ZS is the holding company for various subsidiaries that will utilize REGO’s payment platform to address emerging markets. The Company has licensed its technology to ZS (formerly Zoom Payment Solutions, Inc.), as the Company determined that to extend the Company’s business runway, the Company needed to adapt its technology to include blockchain, token development and cloud storage. ZS was formed to implement these specified new technologies and growth opportunities in conjunction with other business partners, as appropriate. ZOOM Payment Solutions, Inc. (“ZPS”) ZPS (formerly 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. ZPS is a wholly owned subsidiary of ZS with the core focus on providing mobile payments solutions. ZPS has secured a sublicense from ZS for Oink (a payment platform owned by REGO) and access to the patents from REGO and will be launching a fully COPPA compliant platform in third quarter of 2018. ZPS is also currently in discussions with several Northwest Arkansas (“NW”) companies to provide a white label payments application for their employees inclusive of a family wallet as well as financial literacy education. ZPS has also commenced initial discussions with a communications company from Montreal, Canada to collaborate on global payments solutions for the unbanked and underbanked. ZOOM Blockchain Solutions, Inc. (“ZBS”) ZBS was incorporated on April 20, 2018 as an 85% owned subsidiary of ZS. This company focuses on blockchain as a business solution for the retail and Consumer Packaged Goods (“CPG”) industries. ZBS provides a boutique agency approach to work with companies in NW Arkansas to build disruptive networks that will provide an enhanced customer experience, drive efficiency and build transparency and trust from the consumer base. ZBS has commenced discussions and is under a Non-Disclosure Agreement with a leading retailer to provide a blockchain solution for the enterprise. ZBS is also negotiating a joint venture in the auto sector to develop a disruptive play, powered by blockchain, that will enable a consumer centric approach to buying and selling cars as well as provide a concierge approach to car supply and maintenance. ZOOM Auto Solutions, Inc. (“ZAS”) ZAS (formerly Zoom Mining Solutions) was incorporated in the State of Delaware on February 19, 2018 as a wholly owned subsidiary of ZCS. It is now a wholly owned subsidiary of ZBS and will be providing blockchain solutions to the auto industry. There were minimal operations during the three and six months ended June 30, 2018. ZOOM Cloud Solutions, Inc. (“ZCS”) ZCS (formerly Zoom Canada Solutions, Inc.) was incorporated on April 20, 2018 as an 85% owned subsidiary of ZS. ZCS provides highly secure cloud storage as a service with the following benefits: END-TO-END PRIVATE CONNECTIVITY – The network of meshed carrier class private circuits will provide a secure, low latency private cloud experience. The speed, security, and bandwidth are simultaneously increased in the network, as well as the enterprises productivity. UNLIMITED CLOUD CAPABILITES - The data resides in a dedicated environment called a Hyperscale Converged Cloud Infrastructure, which is a leading-edge technology. Through an intuitive platform interface, the team will design, test, develop, manage, and deploy networks from anywhere. This includes, but is not limited to, virtualized, scalable work environments, scalable storage capabilities, state-of-the-art voice and unified communications solutions, cloud computing, backup and more. SMARTLY DESIGNED - The Cloud platform will be custom-engineered on purpose-built hardware to deliver a highly-efficient and dense infrastructure to the market. Through proprietary Software Defined Distributed Virtual Routing, the consumer gets increased network speeds, agility, scalability and reduced latency as well as application mobility, security, data integrity and, most importantly, control. The Company’s principal office is located in Cerritos, California. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All significant intercompany transactions and balances have been eliminated in consolidation. Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed. 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 and six months ended June 30, 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 August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. Recently Issued Accounting Pronouncements Not Yet Adopted As of June 30, 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 | 6 Months Ended |
Jun. 30, 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 and to license its technology to joint ventures in specified verticals. As of August 14, 2018, the Company has a cash position of approximately $90,000. 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 August 31, 2018. |
INVESTMENT
INVESTMENT | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT | NOTE 3 – INVESTMENT In April 2018, Crowd Cart, Inc. issued 500,000 shares 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., at a fair value of $115,000, 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 expired July 30, 2018. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTIES | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - RELATED PARTIES | NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES - RELATED PARTIES As of June 30, 2018 and December 31, 2017, the Company owed the Chief Executive Officer a total of $103,054 and $27,998, including $102,034 and $25,690 in unpaid salary and expenses of $1,020 and $2,308. As of June 30, 2018 and December 31, 2017, the Company owed the Chief Financial Officer $45,765 and $9,331 including $45,765 and $9,299 in unpaid salary and expenses of $0 and $32 . The Company owed the Secretary of the Company a total of $0 and $5,774 for unpaid salary as of June 30, 2018 and December 31, 2017. The Company owed a company owned by a more than 5% beneficial owner $70,250 and $5,000 as of June 30, 2018 and December 31, 2017. Additionally as of June 30, 2018 and December 31, 2017, the Company owed the son of a more than 5% beneficial owner $8,000 and $0, pursuant to a consulting agreement. |
LOANS PAYABLE
LOANS PAYABLE | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | NOTE 5 – LOANS PAYABLE During the six months ended June 30, 2018, the Company received loans in the amount of $131,175 with no formal repayment terms and 10% interest on loans after May 22, 2018 amounting to $71,260. The Company repaid $59,475 of these loans during the six months ended June 30, 2018. The balance of the loans payable as of June 30, 2018 and December 31, 2017 was $98,700 and $27,000. Interest accrued on the loans was $5,741 and $0 as of June 30, 2018 and December 31, 2017. Interest expense related to these loans payable was $676 for the three and six months ended June 30, 2018 and $1,295 and $2,589 for the three and six months ended June 30, 2017. |
DEFERRED REVENUE
DEFERRED REVENUE | 6 Months Ended |
Jun. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
DEFERRED REVENUE | NOTE 6 – DEFERRED REVENUE 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. |
10% SECURED CONVERTIBLE NOTES P
10% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS | 6 Months Ended |
Jun. 30, 2018 | |
Convertible Debt [Abstract] | |
10% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS | NOTE 7 – 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 (See Note 9). 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 as interest expense. The Notes are recorded as a current liability as of June 30, 2018 and December 31, 2017 in the amount of $3,360,264 and $3,460,264. Interest accrued on the Notes was $1,129,706 and $952,693 as of June 30, 2018 and December 31, 2017. Interest expense other than the warrant related interest expense above, related to these Notes payable was $88,507 and $177,013 for the three and six months ended June 30, 2018 and $95,096 and $198,465 for the three and six months ended June 30, 2017. |
NOTES PAYABLE - STOCKHOLDERS
NOTES PAYABLE - STOCKHOLDERS | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE - STOCKHOLDERS | NOTE 8 – NOTES PAYABLE - STOCKHOLDER On December 14, 2017, the Company issued a promissory note in the amount of $100,000, which is 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 and six months ended June 30, 2018, the promissory note holder received additional warrants to purchase 325,000 shares and 650,000 shares of the Company’s common stock with an exercise price of $0.90, expiring in two years. The warrants were valued at $137,761, 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 193.8% to 223.4%, risk free interest rate of 1.96% to 2.56% and expected option term of 2 years. The warrant value of $137,761 was expensed as interest expense of $74,827 and $137,761 during the three and six months ended June 20, 2018. The notes payable are recorded as a current liability as of June 30, 2018 and December 31, 2017 in the amount of $100,000. Interest accrued on the notes as of June 30, 2018 and December 31, 2017 was $0. Interest expense representing the fair value of warrants related to these notes payable was $74,827 and $137,761 for the three and six months ended June 30, 2018 and $0 for the three and six months ended June 30, 2017. |
3.5% SECURED CONVERTIBLE NOTES
3.5% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS | 6 Months Ended |
Jun. 30, 2018 | |
Convertible Debt [Abstract] | |
3.5% SECURED CONVERTIBLE PROMISSORY NOTES PAYABLE | NOTE 9 – 3.5% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS 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 cash and the exchange of $100,000 outstanding principal amount of 10% Secured Convertible Notes (See Note 7). In June 2018, the Company issued $75,000 aggregate principal amount of its New Secured Notes to certain accredited investors. The New Secured Note holders as of June 28, 2018 agreed to extend the maturity date of the notes to June 30, 2019. The Company has agreed to increase the interest rate on the New Secured Notes from 3.5% to 4.0%. The New Secured Notes are recorded as a short-term liability in the amount of $5,894,200 and $5,462,779, net of discount of $0 and $6,421 as of June 30, 2018 and December 31, 2017. Interest accrued on the New Secured Notes was $241,033 and $148,299 as of June 30, 2018 and December 31, 2017. Interest expense, including accretion of discounts, related to these notes payable was $49,442 and $99,426 for the three and six months ended June 30, 2018 and $27,221 and $49,369 for the three and six months ended June 30, 2017. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2018 | |
Convertible Debt [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 10 – CONVERTIBLE NOTES PAYABLE Through June 30, 2018, Zoom Payment Solutions, Inc. and Zoom Payment Solutions, LLC received $243,250 for convertible notes payable. The notes are non-interest bearing. The notes were 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 Oil Optimization, Inc.; or (ii) Common stock of Zoom Payment Solutions, Inc. at various conversion prices per share of common stock; As of June 30, 2018, the Company converted $183,250 of the convertible notes into 8,929 shares of Zoom Solutions, Inc. common stock in accordance with the individual convertible note agreements. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 – INCOME TAXES Income tax expense was $0 for the three and six months ended June 30, 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 and six months ended June 30, 2018, and there was no accrual for uncertain tax positions as of June 30, 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 and six months ended June 30, 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 | 6 Months Ended |
Jun. 30, 2018 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
CONVERTIBLE PREFERRED STOCK | NOTE 12 – 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 June 30, 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 June 30, 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 June 30, 2018, the value of the cumulative 8% dividends for all preferred stock was $4,487,106. 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 | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 13 – 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 and six months ended June 30, 2018, the Company expensed $9,375 and $18,750 and for the three and six months ended June 30, 2017, $2,292 and $9,167 relative to restricted stock awards. In June 2018, the Company issued 500,000 shares of common stock, fair value $169,450 as a settlement for litigation. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 14 – 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 June 30, 2018, options to purchase 8,723,333 shares of common stock have been issued and are unexercised, and 6,426,667 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. 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 June 30, 2018, under the 2013 Plan grants of restricted stock and options to purchase 4,971,666 shares of common stock have been issued and are outstanding or unexercised, and 28,334 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. 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 three 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 in total, which was expensed immediately. On June 6, 2018, the Company issued options to purchase 200,000 shares of the Company’s common stock to a consultant. The options have an exercise price of $0.2595, vest immediately and have a term of 5 years, with a fair value of $58,330, which was expensed immediately. On June 11, 2018, the Company issued options to purchase 500,000 shares of the Company’s common stock to an employee. The options have an exercise price of $0.90, 1/3 vested immediately and the remainder will vest over 2 years. The options have a term of 5 years, with a fair value of $138,277, which will be expensed over the vesting period. The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted during the six months ended June 30, 2018: 2018 Risk Free Interest Rate 2.64 % Expected Volatility 162.7 % Expected Life (in years) 5 Dividend Yield 0 % Weighted average estimated fair value of options $ 0.25 The following table summarizes the activities for the Company’s stock options for the six months ended June 30, 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 Granted 3,700,000 0.35 Expired (505,000 ) 1.69 - - Balance June 30, 2018 12,345,000 $ 0.65 3.8 305 Exercisable at June 30, 2018 6,270,000 $ 0.44 3.4 $ 293 Exercisable at June 30, 2018 and expected to vest thereafter 12,345,000 $ 0.65 3.8 $ 305 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $0.31 for the Company’s common stock on June 30, 2018. For the three and six months ended June 30, 2018, the Company expensed $946,666 and $1,080,422 and $93,366 and $181,733 for the three and six months ended June 30, 2017 with respect to options. In accordance with FASB ASC 505-50, Equity – Equity-Based Payments to Non-Employees Compensation—Stock Compensation—Awards Classified as Equity As of June 30, 2018, there was $522,067 of unrecognized compensation cost related to outstanding stock options. This amount is expected to be recognized over a weighted-average period of 1.4 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 June 30, 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 six months ended June 30, 2018: Unvested Options Weighted - Average Grant Number of Date Fair Shares Value Balance December 31, 2017 5,811,670 $ 0.13 Granted 3,700,000 0.25 Vested (3,436,670 ) 0.28 Balance June 30, 2018 6,075,000 0.14 The following table summarizes the activities for the Company’s warrants for the six months ended June 30, 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 1,342,020 0.90 1.0 - Expired (131,700 ) 0.90 - - Balance June 30, 2018 2,402,020 $ 0.90 1.7 $ - Exercisable at June 30, 2018 2,402,020 $ 0.90 1.7 $ - Exercisable at June 30, 2018 and expected to vest thereafter 2,402,020 $ 0.90 1.7 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.31 for the Company’s common stock on June 30, 2018. All warrants were vested on the date of grant. |
OPERATING LEASES
OPERATING LEASES | 6 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
OPERATING LEASES | N OTE 15 – OPERATING LEASES For the three and six months ended June 30, 2018, total rent expense under leases amounted to $16,705 and $21,672. For the three and six months ended June 30, 2017, total rent expense under leases amounted to $43,725 and $78,675. At June 30, 2018, the Company was obligated for $4,633 per month through September 30, 2018 under a non-cancelable operating lease arrangements for property. The Company was also obligated under an operating lease arrangement for $3,223 per month with the first six months free through April 20, 2019. The Company is expensing $1,612 per month pursuant to this lease. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16 – 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 and six months ended June 30, 2018, the Company expensed $45,000 and $90,000 and for the three and six months ended June 30, 2017, the Company expensed $39,500 and $79,500 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 and six months ended June 30, 2018 and 2017, the Company expensed $15,000 and $30,000 to this consultant. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS The Company has issued 2 year warrants to purchase 150,000 shares of the Company’s common stock, from June 30, 2018 through the date of this report, with an exercise price of $0.90, to a stockholder in conjunction with notes payable issued in December 2017 (See Note 8). From April 1, 2018 through the date of this report, the Company has received loans from stockholders in the amount of $8,000 and repaid $7,100. On July 23, 2018, the Company issued options to purchase in aggregate 800,000 shares of the Company’s common stock to eight employees. The options have an exercise price of $0.90, vest 266,667 immediately and the remainder over two years. The options have a term of five years with a fair value of $199,127. In July and August 2018, the Company issued $491,885 aggregate principal amount of its New Secured Notes to certain accredited investors. The aggregate consideration consisted of $295,943 and the exchange of $195,942 outstanding principal amount of 10% Secured Convertible Notes. In July and August 2018, the Company converted $60,000 of the convertible notes payable into 15,000 shares of Zoom Solutions, Inc. common stock in accordance with the individual convertible note agreements. |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 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, Virtual Piggy, Inc. changed its name to Rego Payment Architectures, Inc. 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 individual parents will be able 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, 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. ZOOM Payment Solutions, LLC (“ZPS, LLC”) ZPS, LLC was formed in the state of Delaware on December 15, 2017, and Rego Payment Architectures, Inc. owned 78% of ZPS, LLC. At June 30, 2018, the Company has decided to dissolve ZPS, LLC. ZOOM Solutions, Inc. (“ZS”) ZS (formerly Zoom Payment Solutions, Inc.) 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. ZS is the holding company for various subsidiaries that will utilize REGO’s payment platform to address emerging markets. The Company has licensed its technology to ZS (formerly Zoom Payment Solutions, Inc.), as the Company determined that to extend the Company’s business runway, the Company needed to adapt its technology to include blockchain, token development and cloud storage. ZS was formed to implement these specified new technologies and growth opportunities in conjunction with other business partners, as appropriate. ZOOM Payment Solutions, Inc. (“ZPS”) ZPS (formerly 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. ZPS is a wholly owned subsidiary of ZS with the core focus on providing mobile payments solutions. ZPS has secured a sublicense from ZS for Oink (a payment platform owned by REGO) and access to the patents from REGO and will be launching a fully COPPA compliant platform in third quarter of 2018. ZPS is also currently in discussions with several Northwest Arkansas (“NW”) companies to provide a white label payments application for their employees inclusive of a family wallet as well as financial literacy education. ZPS has also commenced initial discussions with a communications company from Montreal, Canada to collaborate on global payments solutions for the unbanked and underbanked. ZOOM Blockchain Solutions, Inc. (“ZBS”) ZBS was incorporated on April 20, 2018 as an 85% owned subsidiary of ZS. This company focuses on blockchain as a business solution for the retail and Consumer Packaged Goods (“CPG”) industries. ZBS provides a boutique agency approach to work with companies in NW Arkansas to build disruptive networks that will provide an enhanced customer experience, drive efficiency and build transparency and trust from the consumer base. ZBS has commenced discussions and is under a Non-Disclosure Agreement with a leading retailer to provide a blockchain solution for the enterprise. ZBS is also negotiating a joint venture in the auto sector to develop a disruptive play, powered by blockchain, that will enable a consumer centric approach to buying and selling cars as well as provide a concierge approach to car supply and maintenance. ZOOM Auto Solutions, Inc. (“ZAS”) ZAS (formerly Zoom Mining Solutions) was incorporated in the State of Delaware on February 19, 2018 as a wholly owned subsidiary of ZCS. It is now a wholly owned subsidiary of ZBS and will be providing blockchain solutions to the auto industry. There were minimal operations during the three and six months ended June 30, 2018. ZOOM Cloud Solutions, Inc. (“ZCS”) ZCS (formerly Zoom Canada Solutions, Inc.) was incorporated on April 20, 2018 as an 85% owned subsidiary of ZS. ZCS provides highly secure cloud storage as a service with the following benefits: END-TO-END PRIVATE CONNECTIVITY – The network of meshed carrier class private circuits will provide a secure, low latency private cloud experience. The speed, security, and bandwidth are simultaneously increased in the network, as well as the enterprises productivity. UNLIMITED CLOUD CAPABILITES - The data resides in a dedicated environment called a Hyperscale Converged Cloud Infrastructure, which is a leading-edge technology. Through an intuitive platform interface, the team will design, test, develop, manage, and deploy networks from anywhere. This includes, but is not limited to, virtualized, scalable work environments, scalable storage capabilities, state-of-the-art voice and unified communications solutions, cloud computing, backup and more. SMARTLY DESIGNED - The Cloud platform will be custom-engineered on purpose-built hardware to deliver a highly-efficient and dense infrastructure to the market. Through proprietary Software Defined Distributed Virtual Routing, the consumer gets increased network speeds, agility, scalability and reduced latency as well as application mobility, security, data integrity and, most importantly, control. The Company’s principal office is located in Cerritos, California. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All significant intercompany transactions and balances have been eliminated in consolidation. Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed. 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 and six months ended June 30, 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 August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted As of June 30, 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) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Weighted-average Assumptions Used to Estimate the Fair Values of Stock Options Granted | The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted during the six months ended June 30, 2018: 2018 Risk Free Interest Rate 2.64 % Expected Volatility 162.7 % Expected Life (in years) 5 Dividend Yield 0 % Weighted average estimated fair value of options $ 0.25 |
Schedule of Stock Option Activity | The following table summarizes the activities for the Company’s stock options for the six months ended June 30, 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 Granted 3,700,000 0.35 Expired (505,000 ) 1.69 - - Balance June 30, 2018 12,345,000 $ 0.65 3.8 305 Exercisable at June 30, 2018 6,270,000 $ 0.44 3.4 $ 293 Exercisable at June 30, 2018 and expected to vest thereafter 12,345,000 $ 0.65 3.8 $ 305 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $0.31 for the Company’s common stock on June 30, 2018. |
Schedule of Unvested Options Activity | The following table summarizes the activities for the Company’s unvested stock options for the six months ended June 30, 2018: Unvested Options Weighted - Average Grant Number of Date Fair Shares Value Balance December 31, 2017 5,811,670 $ 0.13 Granted 3,700,000 0.25 Vested (3,436,670 ) 0.28 Balance June 30, 2018 6,075,000 0.14 |
Schedule of Warrant Activity | The following table summarizes the activities for the Company’s warrants for the six months ended June 30, 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 1,342,020 0.90 1.0 - Expired (131,700 ) 0.90 - - Balance June 30, 2018 2,402,020 $ 0.90 1.7 $ - Exercisable at June 30, 2018 2,402,020 $ 0.90 1.7 $ - Exercisable at June 30, 2018 and expected to vest thereafter 2,402,020 $ 0.90 1.7 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.31 for the Company’s common stock on June 30, 2018. |
MANAGEMENT PLANS (Details)
MANAGEMENT PLANS (Details) - USD ($) | Aug. 14, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Subsequent Event [Line Items] | |||||
Cash positions | $ 1,244 | $ 7,232 | $ 47,122 | $ 52,719 | |
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash positions | $ 90,000 |
INVESTMENT (Details)
INVESTMENT (Details) | 1 Months Ended |
Apr. 30, 2018USD ($)shares | |
Parent Company [Member] | |
Shares issued | 500,000 |
Shares issued, value | $ | $ 115,000 |
Crowd Cart, Inc. [Member] | |
Shares issued | 500,000 |
Ownership interest | 5.00% |
Additional shares received | 500,000 |
Zoom Payment Solutions [Member] | |
Contribution in equity capital | $ | $ 500,000 |
ACCOUNTS PAYABLE AND ACCRUED 28
ACCOUNTS PAYABLE AND ACCRUED EXPENSES RELATED PARTIES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Due to related party | $ 227,069 | $ 48,103 |
Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | 103,054 | 27,998 |
Chief Executive Officer [Member] | Unpaid payroll [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | 102,034 | 25,690 |
Chief Executive Officer [Member] | Expenses [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | 1,020 | 2,308 |
Chief Financial Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | 45,765 | 9,331 |
Chief Financial Officer [Member] | Unpaid payroll [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | 45,765 | 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 | 0 | 5,774 |
Beneficial Owner [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | $ 70,250 | $ 5,000 |
Ownership percentage | 5.00% | 5.00% |
Son of Beneficial Owner [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | $ 8,000 | $ 0 |
Ownership percentage | 5.00% | 5.00% |
LOANS PAYABLE (Details)
LOANS PAYABLE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | May 22, 2018 | Dec. 31, 2017 | |
Aggregate loan amount received | $ 131,175 | $ 59,000 | ||||
Repayment of loans payable | 59,475 | 30,000 | ||||
Loans payable | $ 98,700 | 98,700 | $ 27,000 | |||
Interest rate | 10.00% | |||||
Interest accrued | 5,741 | 5,741 | $ 0 | |||
Interest expense, notes payable | 74,827 | 137,761 | ||||
Minimum [Member] | ||||||
Aggregate loan amount received | 71,260 | |||||
Loans Payable [Member] | ||||||
Interest expense, notes payable | $ 676 | $ 1,295 | $ 676 | $ 2,589 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) | Jun. 30, 2018 | May 31, 2018 | Dec. 31, 2017 |
Revenue Recognition and Deferred Revenue [Abstract] | |||
Company received as a down payment | $ 200,000 | $ 200,000 |
10% SECURED CONVERTIBLE NOTES31
10% SECURED CONVERTIBLE NOTES PAYABLE - STOCKHOLDERS (Details) - USD ($) | Mar. 06, 2018 | May 11, 2015 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||||||
Maturity date | Sep. 6, 2018 | |||||||
Interest expense, notes payable | $ 74,827 | $ 137,761 | ||||||
Additional notes issued to stockholders | $ 940,000 | 325,000 | $ 1,300,000 | |||||
10% Secured convertible notes payable - stockholders | 3,360,264 | 3,360,264 | $ 3,460,264 | |||||
Accounts payable and accrued expenses | 3,606,909 | 3,606,909 | 3,170,114 | |||||
Accrued interest | $ 5,741 | $ 5,741 | 0 | |||||
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 | 150,000 | ||||||
Exchange of 10% secured convertible notes payable for 3.5% secured convertible notes payable | $ 100,000 | $ 100,000 | 600,000 | |||||
Notes payable - stockholder | $ 100,000 | $ 100,000 | 100,000 | |||||
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 | $ 95,096 | $ 177,013 | $ 198,465 | ||||
Accrued interest | 1,129,706 | 1,129,706 | 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 | $ 3,360,264 | $ 3,460,264 | |||||
Preferred Class B [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Conversion price (in dollars per share) | $ 0.90 | $ 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 | $ 2,000,000 | ||||||
Interest rate | 10.00% | 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 | $ 90 | ||||||
Conversion price at which preferred stock is convertible into common stock (in dollars per share) | $ 0.90 | $ 0.90 |
NOTES PAYABLE-STOCKHOLDERS (Det
NOTES PAYABLE-STOCKHOLDERS (Details) - USD ($) | Dec. 14, 2017 | May 11, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||||
Common stock which can be purchased by warrants | 150,000 | 150,000 | |||||
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 | $ 74,827 | $ 137,761 | |||||
Note payable maturity date | Sep. 6, 2018 | ||||||
Interest accrued including commitment fee amount | 0 | $ 0 | |||||
Notes payable current Liability | 100,000 | 100,000 | $ 100,000 | ||||
Warrant [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Interest expense, notes payable | $ 74,827 | $ 0 | $ 137,761 | $ 0 | |||
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 | $ 0.90 | ||||
Term of warrants | 2 years | 2 years | |||||
Fair value of warrants | $ 137,761 | $ 137,761 | $ 137,761 | ||||
Expected volatility, minimum | 193.80% | ||||||
Expected volatility, maximum | 223.40% | ||||||
Risk-free interest rate, minimum | 1.96% | ||||||
Risk-free interest rate, maximum | 2.56% | ||||||
Expected life | 2 years | ||||||
Additional common stock which can be purchased by warrants | 325,000 | 650,000 | 25,000 | ||||
Note payable maturity date | Dec. 21, 2017 |
3.5% SECURED CONVERTIBLE NOTE33
3.5% SECURED CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | May 11, 2015 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Aug. 26, 2016 |
Debt Instrument [Line Items] | ||||||||
Interest accrued | $ 5,741 | $ 5,741 | $ 0 | |||||
Interest expense, notes payable | $ 74,827 | 137,761 | ||||||
Proceeds from convertible notes | $ 940,000 | 325,000 | $ 1,300,000 | |||||
Cash value of notes converted | 48,218 | |||||||
Common stock which can be purchased by warrants | 150,000 | 150,000 | ||||||
3.5% Secured Convertible Note [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest accrued | $ 241,033 | $ 241,033 | 148,299 | |||||
Interest expense, notes payable | 49,442 | $ 27,221 | 99,426 | $ 49,369 | ||||
Notes payable Short-term Liability | 5,894,200 | 5,894,200 | 5,462,779 | |||||
Net discount of note payable | 0 | $ 6,421 | ||||||
3.5% Secured Convertible Note [Member] | Investor [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Note payable principal amount issued | $ 350,000 | |||||||
Proceeds from convertible notes | 250,000 | |||||||
Amount of notes converted | $ 100,000 | |||||||
New Secured Notes [Member] | Investor [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Note payable principal amount issued | $ 75,000 | $ 75,000 | ||||||
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) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | ||
Debt conversion shares issued, value | $ 48,218 | |
Zoom Payment Solutions, Inc. and Zoom Payment Solutions, LLC [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from convertible debt | $ 243,250 | |
Zoom Solutions, Inc. [Member] | ||
Debt Instrument [Line Items] | ||
Debt conversion shares issued | 8,929 | |
Debt conversion shares issued, value | $ 183,250 | |
Canadian Company [Member] | ||
Debt Instrument [Line Items] | ||
Conversion price | $ 0.125 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
Unrecognized tax benefits | 0 | 0 | ||
Change in unrecognized tax benefits | 0 | 0 | ||
Accrual for uncertain tax positions | $ 0 | $ 0 |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Aug. 31, 2016 | Apr. 30, 2014 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||||||
Shares issuable upon exercise of warrants | 150,000 | 150,000 | |||||
Cumulative dividends | $ 268,281 | $ 268,280 | $ 536,561 | $ 536,561 | |||
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 | $ 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 | $ 4,487,106 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Equity Issued [Line Items] | ||||
Compensation expense | $ 946,666 | $ 93,366 | $ 1,080,422 | $ 181,733 |
(RSUs) [Member] | ||||
Equity Issued [Line Items] | ||||
Compensation expense | $ 9,375 | $ 2,292 | $ 18,750 | $ 9,167 |
(RSUs) [Member] | Consultant [Member] | ||||
Equity Issued [Line Items] | ||||
Shares issued | 50,000 | |||
Common stock, fair value | $ 169,450 |
STOCK OPTIONS AND WARRANTS (Nar
STOCK OPTIONS AND WARRANTS (Narrative) (Details) - USD ($) | Jun. 11, 2018 | Jun. 06, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Apr. 12, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation | $ 946,666 | $ 93,366 | $ 1,080,422 | $ 181,733 | ||||
Intrinsic value of stock options exercised | 4,208 | |||||||
Compensation cost of related outstanding stock options | $ 522,067 | $ 522,067 | ||||||
Weighted-average period | 1 year 4 months 24 days | |||||||
Option issued to purchase common stock | 119,596,866 | 119,596,866 | 118,596,866 | |||||
Options granted exercise price | $ 0.90 | |||||||
Board of Members and Chief Financial Officer [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total options | 3,000,000 | |||||||
Option issued to purchase common stock | 750,000 | |||||||
Options granted exercise price | $ 0.2595 | |||||||
Awards granted vesting period | 5 years | |||||||
Fair value of option | $ 728,345 | |||||||
Ownership interest | 5.00% | |||||||
Consultant [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Option issued to purchase common stock | 200,000 | |||||||
Options granted exercise price | $ 0.2595 | |||||||
Awards granted vesting period | 5 years | |||||||
Fair value of option | $ 58,330 | |||||||
Employee [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Option issued to purchase common stock | 500,000 | |||||||
Options granted exercise price | $ 0.90 | |||||||
Awards granted vesting period | 5 years | |||||||
Fair value of option | $ 138,277 | |||||||
Equity Incentive Plan 2008 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized under plan | 25,000,000 | 25,000,000 | ||||||
Number of shares of common stock that have been issued and are unexercised under the plan | 8,723,333 | 8,723,333 | ||||||
Shares available for grant | 6,426,667 | 6,426,667 | ||||||
Equity Incentive Plan 2013 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized under plan | 5,000,000 | 5,000,000 | ||||||
Number of shares of common stock that have been issued and are unexercised under the plan | 4,971,666 | 4,971,666 | ||||||
Shares available for grant | 28,334 | 28,334 |
STOCK OPTIONS AND WARRANTS (Wei
STOCK OPTIONS AND WARRANTS (Weighted Average Assumptions Used to Estimate Fair Value of Stock Option and Warrant Grants) (Details) - Stock Options [Member] | 6 Months Ended |
Jun. 30, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk Free Interest Rate | 2.64% |
Expected volatility | 162.70% |
Expected Life (in years) | 5 years |
Dividend yield | 0.00% |
Weighted average estimated fair value of options during the period | $ 0.25 |
STOCK OPTIONS AND WARRANTS (Sch
STOCK OPTIONS AND WARRANTS (Schedule of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | ||
Weighted-Average Exercise Price | |||
Granted | $ 0.90 | ||
Closing stock price | $ 0.31 | ||
Stock Options [Member] | |||
Number of Shares | |||
Balance December 31, 2017 | 9,150,000 | ||
Granted | 3,700,000 | ||
Expired | (505,000) | ||
Balance June 30, 2018 | 12,345,000 | 9,150,000 | |
Exercisable at June 30, 2018 | 6,270,000 | ||
Exercisable at June 30, 2018 and expected to vest thereafter | 12,345,000 | ||
Weighted-Average Exercise Price | |||
Balance December 31, 2017 | $ 0.83 | ||
Granted | 0.35 | ||
Expired | 1.69 | ||
Balance June 30, 2018 | 0.65 | $ 0.83 | |
Exercisable at June 30, 2018 | 0.44 | ||
Exercisable at June 30, 2018 and expected to vest thereafter | $ 0.65 | ||
Balance June 30, 2018 | 3 years 9 months 18 days | 3 years 7 months 6 days | |
Exercisable at June 30, 2018 | 3 years 4 months 24 days | ||
Exercisable at June 30, 2018 and expected to vest thereafter | 3 years 9 months 18 days | ||
Balance December 31, 2017 | [1] | $ 66 | |
Balance June 30, 2018 | [1] | 305 | $ 66 |
Exercisable at June 30, 2018 | [1] | 293 | |
Exercisable at June 30, 2018 and expected to vest thereafter | [1] | $ 305 | |
Closing stock price | $ 0.31 | ||
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $0.31 for the Company's common stock on June 30, 2018. |
STOCK OPTIONS AND WARRANTS (S41
STOCK OPTIONS AND WARRANTS (Schedule of Unvested Options) (Details) - Stock Options [Member] | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Shares | |
Balance | shares | 5,811,670 |
Granted | shares | 3,700,000 |
Vested | shares | (3,436,670) |
Balance | shares | 6,075,000 |
Weighted-Average Grant Date Fair Value | |
Balance | $ / shares | $ 0.13 |
Granted | $ / shares | 0.25 |
Vested | $ / shares | 0.28 |
Balance | $ / shares | $ 0.14 |
STOCK OPTIONS AND WARRANTS (S42
STOCK OPTIONS AND WARRANTS (Schedule of Warrant Activity) (Details) | 6 Months Ended | |
Jun. 30, 2018USD ($)$ / sharesshares | ||
Number of Shares | ||
Balance December 31, 2017 | shares | 1,191,700 | |
Granted | shares | 1,342,020 | |
Expired | shares | (131,700) | |
Balance June 30, 2018 | shares | 2,402,020 | |
Exercisable at June 30, 2018 | shares | 2,402,020 | |
Exercisable at June 30, 2018 and expected to vest thereafter | shares | 2,402,020 | |
Weighted Average Exercise Price | ||
Balance December 31, 2017 | $ 0.90 | |
Granted | 0.90 | |
Expired | 0.90 | |
Balance June 30, 2018 | 0.90 | |
Exercisable at June 30, 2018 | 0.90 | |
Exercisable at June 30, 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 | |
Balance as of June 30, 2018 | 1 year 8 months 12 days | |
Exercisable at June 30, 2018 | 1 year 8 months 12 days | |
Exercisable at June 30, 2018 and expected to vest thereafter | 1 year 8 months 12 days | |
Aggregate Intrinsic Value | ||
Balance December 31, 2017 | $ | [1] | |
Balance June 30, 2018 | $ | [1] | |
Exercisable at June 30, 2018 | $ | [1] | |
Exercisable as of June 30, 2018 and expected to vest thereafter | $ | [1] | |
Closing stock price | $ 0.31 | |
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.31 for the Company's common stock on June 30, 2018. |
OPERATING LEASES (Details)
OPERATING LEASES (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Apr. 20, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Leased Assets [Line Items] | |||||
Total rent expense under leases | $ 16,705 | $ 43,725 | $ 21,672 | $ 78,675 | |
Monthly lease payment | 1,612 | ||||
Subsequent Event [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly lease payment | $ 3,223 | ||||
California Team Office [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly lease payment | $ 4,633 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Beneficial Owner [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 5.00% | 5.00% | 5.00% | ||
Related party expenses | $ 45,000 | $ 39,500 | $ 90,000 | $ 79,500 | |
Consulting agreement cost | 15,000 | ||||
Payment to consultant | $ 15,000 | $ 30,000 | $ 15,000 | $ 30,000 | |
Son of Beneficial Owner [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 5.00% | 5.00% | 5.00% | ||
Consulting agreement cost | $ 5,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Aug. 14, 2018 | Jul. 23, 2018 | Apr. 02, 2018 | May 11, 2015 | Aug. 14, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jul. 31, 2018 |
Subsequent Event [Line Items] | |||||||||
Common stock which can be purchased by warrants | 150,000 | ||||||||
Proceeds from stockholders | $ 8,000 | $ 200,000 | |||||||
Repayments of stockholders | $ 7,100 | ||||||||
Term for warrant issued | 2 years | ||||||||
Debt conversion shares issued, value | 48,218 | ||||||||
Proceeds from convertible notes | $ 940,000 | $ 325,000 | $ 1,300,000 | ||||||
Options granted exercise price | $ 0.90 | ||||||||
3.5% Secured Convertible Note [Member] | Investor [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Note payable principal amount issued | $ 350,000 | ||||||||
Proceeds from convertible notes | 250,000 | ||||||||
Amount of notes converted | $ 100,000 | ||||||||
Zoom Solutions, Inc. [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt conversion shares issued | 8,929 | ||||||||
Debt conversion shares issued, value | $ 183,250 | ||||||||
Subsequent Event [Member] | 3.5% Secured Convertible Note [Member] | Investor [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Note payable principal amount issued | $ 451,885 | $ 451,885 | $ 491,885 | ||||||
Proceeds from convertible notes | 295,943 | ||||||||
Amount of notes converted | $ 195,942 | ||||||||
Subsequent Event [Member] | Zoom Solutions, Inc. [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt conversion shares issued | 15,000 | ||||||||
Debt conversion shares issued, value | $ 60,000 | ||||||||
Eight Employees [Member] | Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Options granted | 800,000 | ||||||||
Options vested | 266,667 | ||||||||
Options granted exercise price | $ 0.90 | ||||||||
Options expiration period | 5 years | ||||||||
Awards granted vesting period | 2 years | ||||||||
Fair value of option | $ 199,127 |