American Battery Materials (BLTHD) 10-Q 14 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 08, 2017
Document And Entity Information
Entity Registrant Name	U-Vend, Inc.
Entity Central Index Key	1,487,718
Document Type	10-Q
Trading Symbol	UVND
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		26,264,992
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,017

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash	$ 42,944	$ 61,914
Accounts receivable	32,068	16,543
Inventory (net)	124,289	76,212
Prepaid expenses and other assets	47,577	39,101
Total current assets	246,878	193,770
Noncurrent assets:
Property and equipment (net)		710,605
Security deposits	664,887	17,386
Other assets (net)	18,047
Intangible asset (net)	130,201	173,601
Goodwill	642,340	642,340
Total noncurrent assets	1,455,475	1,543,932
Total assets	1,702,353	1,737,702
Current liabilities:
Accounts payable	607,600	433,440
Accrued expenses	105,856	105,584
Accrued interest	337,410	215,640
NHL and MLB sponsorship liability	1,343,708	906,754
Amounts due to officers and directors	474,603	288,396
Senior convertible notes, net of discount	389,789	360,775
Promissory notes payable	480,135	498,101
Convertible notes payable, net of discount	1,388,175	696,480
Current capital lease obligation, net of discounts	263,906	261,372
Total current liabilities	5,391,182	3,766,542
Noncurrent liabilities:
Convertible notes payable, net of discount	586,213	1,084,923
Warrant liabilities	177,924	184,680
Total noncurrent liabilities	764,137	1,269,603
Total liabilities	6,155,319	5,036,145
Commitments and contingencies
Stockholders' deficiency:
Common stock, $.001 par value, 600,000,000 shares authorized, 26,214,992 shares issued and outstanding (24,664,992 - 2016)	26,215	24,664
Additional paid-in capital	5,253,072	5,111,776
Accumulated deficit	(9,732,253)	(8,434,883)
Total stockholders' deficiency	(4,452,966)	(3,298,443)
Total liabilities and stockholders' deficiency	$ 1,702,353	$ 1,737,702

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	26,214,992	24,664,992
Common stock, shares outstanding	26,214,992	24,664,992

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Revenue	$ 441,156	$ 381,481	$ 771,182	$ 675,023
Cost of revenue	221,465	178,874	390,356	322,490
Gross profit	219,691	202,607	380,826	352,533
Operating expenses:
Selling	398,762	318,820	786,867	620,844
General and administrative	393,751	361,967	702,767	635,544
Operating expenses	792,513	680,787	1,489,634	1,256,388
Operating loss:	(572,822)	(478,180)	(1,108,808)	(903,855)
Other (income) expense, net:
Gain on change in fair value of debt and warrant liabilities	(13,989)	(78,980)	(25,358)	(108,185)
Amortization of debt discount and deferred financing costs	23,620	109,076	47,416	136,007
Interest expense	84,623	60,981	165,364	117,646
Unrealized (gain) loss on foreign currency	(667)	612	1,140	9,027
Other (income) expense, net	93,587	91,689	188,562	154,495
Net loss	$ (666,409)	$ (569,869)	$ (1,297,370)	$ (1,058,350)
Net loss per share- basic and diluted (in dollars per share)	$ (0.03)	$ (0.03)	$ (0.05)	$ (0.06)
Weighted average common shares outstanding - basic and diluted (in shares)	25,378,325	18,198,816	25,212,770	18,198,541

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net loss	$ (1,297,370)	$ (1,058,350)
Adjustments to reconcile net loss to net cash used by operating activities:
Stock based compensation	122,847	85,292
Gain on fair value of warrant liabilities	(25,358)	(108,185)
Depreciation	84,196	71,007
Amortization of intangible assets	43,400	43,400
Amortization of debt discount and deferred financing costs	47,416	40,167
Unrealized loss on foreign currency	1,140	9,027
Settlement of debt interest, fees and penalties with convertible notes		95,840
(Increase) decrease in assets:
Accounts receivable	(15,525)	(12,358)
Inventory	(48,077)	(15,639)
Prepaid expenses and other assets	(9,137)	30,107
Increase in liabilities:
Accounts payable and accrued expenses	611,385	311,538
Accrued interest	121,350	70,849
Amount due to officers and directors	186,207	184,020
Net cash used by operating activities	(177,526)	(253,285)
Cash flows from investing activities:
Purchase of property and equipment	(38,478)	(40,766)
Net cash used by investing activities	(38,478)	(40,766)
Cash flows from financing activities:
Proceeds from common stock warrant exercises	20,000
Proceeds from convertible notes	220,000
Proceeds from promissory notes	37,300	503,300
Principal repayment of convertible note	(50,000)
Principal repayments of promissory notes	(30,266)	(49,800)
Deferred financing costs paid		(100,000)
Net cash provided by financing activities	197,034	353,500
Net (decrease) increase in cash	(18,970)	59,449
Cash - beginning of period	61,914	139,677
Cash - end of period	42,944	199,126
Cash paid for:
Interest	41,000	44,000
Non-cash investing and financing activities:
Debt discount related to warrant liability and beneficial conversion feature	18,602	106,285
Issuance of common shares and warrants as debt financing or extension costs		7,000
Conversion of senior convertible notes into common stock		22,500
Issuance of common shares to pay due to officers		500,000
Issuance of senior convertible note to settle interest, fees and penalties due		108,804
Issuance of convertible notes to settle principal, interest, fees and penalties	$ 25,000	$ 761,597

NATURE OF BUSINESS AND SUMMARY

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2017
Accounting Policies [Abstract]
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES U-Vend, Inc. (the “Company”) entered the business of developing, marketing and distributing various self-serve electronic kiosks and mall/airport co-branded islands throughout North America with the merger with U-Vend Canada, Inc. on January 7, 2014. The Company seeks to place its kiosks in high-traffic host locations such as big box stores, restaurants, malls, airports, casinos, universities, and colleges. Currently, the Company leases, owns and operates their kiosks but intends to also provide the kiosks, through a distributor relationship, to the entrepreneur wanting to own their own business. The Company’s vending kiosks incorporate advanced wireless technology, creative concepts, and ease of management. The Company’s kiosks have been designed to be tech-savvy and can be managed online 24 hours a day/7 days a week, accepting traditional cash input as well as credit and debit cards. Host locations and suppliers have been drawn to this distribution concept of product vending based on the advantages of reduced labor and lower product theft as compared to non-kiosk merchandising platforms. The Company takes a solutions development approach for the marketing of products through a variety of kiosk offerings. The Company’s approach to the market can include the addition of a digital LCD monitor to most makes and models in a kiosk program. This would allow the Company to offer digital advertising as a national and/or local loop basis and a corresponding additional revenue stream for the Company. Management’s plans The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis. The Company incurred a loss of $1,297,370 during the six months ended June 30, 2017, has incurred accumulated losses totaling $9,732,253, and has a working capital deficit of $5,144,304 at June 30, 2017. These factors, among others, indicate that the Company may be unable to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. To fund the Company’s operations for the next 12 months, to allow the Company to continue the development of its business plans and satisfy its obligations on a timely basis the Company needs to raise additional financing. Should additional financing not be available, the Company will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that the Company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing. On January 7, 2014, U-Vend, Inc. (formerly Internet Media Services, Inc. (“IMS”)) entered into an Exchange of Securities Agreement with U-Vend Canada, Inc., and the shareholders of U-Vend Canada, Inc. (“U-Vend Canada”). The Company believes the merger with U-Vend Canada will provide it with business operations and also working capital. The Company is in discussion to raise additional capital to execute on its current business plans. There is no assurance that future financing arrangements will be successful or that the operating results of U-Vend, Inc. will yield sufficient cash flow to execute the Company’s business plans or satisfy its obligations. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis of Presentation - The preparation of financial statements, in conformity with accounting principles generally accepted in the United States (U.S. GAAP), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates and assumptions. Principles of Consolidation Common Shares Issued and Earnings Per Share As of June 30, 2017, there were approximately 91.3 million (53.1 million at June 30, 2016) shares potentially issuable under convertible debt agreements, options, and warrants that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the periods presented. Fair Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ASC 820 “Fair Value Measurement” establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Reclassifications Accounting Pronouncements In May 2014, the FASB issued new accounting guidance, ASU 2014-09 “Revenue from Contracts with Customers”. The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods and services to customers. The updated guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the effect the updated standard will have on the consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The adoption of this standard during the three months ended March 31, 2017, did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued an accounting standard update ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company has not yet evaluated nor has it determined the effect of the standard on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for the Company on January 1, 2017. The adoption of this standard during the three months ended March 31, 2017 did not have a material impact on our consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” to clarify two aspects of Topic 606: (i) identifying performance obligations and (ii) the licensing implementation guidance, while retaining the related principles for those areas. The Company is evaluating the impact, if any, the adoption of this standard will have on the consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments”, which clarifies the treatment of several types of cash receipts and payments for which there was diversity in practice. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is evaluating the impact, if any, the adoption of this standard will have on the consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows”, regarding the presentation of restricted cash on the statement of cash flows. The standards update requires that the reconciliation of the beginning and end of period cash amounts shown in the statement of cash flows include restricted cash. When restricted cash is presented separately from cash and cash equivalents on the balance sheet, a reconciliation is required between the amounts presented on the statement of cash flows and the balance sheet. Also, the new guidance requires the disclosure of information about the nature of the restrictions. The standards update is effective retrospectively for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the impact, if any, the adoption of this standard will have on the consolidated financial statements and related disclosures.

DEBT

DEBT	6 Months Ended
	Jun. 30, 2017
Debt Disclosure [Abstract]
DEBT	NOTE 2. DEBT Senior Convertible Notes The Company entered into a Securities Purchase Agreement (“2013 SPA”) dated June 18, 2013 with Cobrador Multi-Strategy Partners, LP (“Investor” or “Cobrador”) pursuant to Cobrador providing an aggregate of $400,000 financing through senior convertible notes and warrants. Pursuant to 2013 SPA, there were an aggregate of 11.2 million Series A Warrants expiring at various dates between June 2017 and December 2018 and an aggregate of 12 million Series B Warrants expiring at various dates between June 2018 and November 2019. During the six months ended June 30, 2017, the Company revised the exercise price of Series B Warrants from $.06 to $.05 due to down round provisions. During the three and six months ended June 30, 2017, the Company amortized debt discount of $14,507 and $29,015, respectively related to the Senior Convertible Note. As of June 30, 2017, the Senior Convertible Note had a carrying value of $389,789 net of discount of $29,015. Promissory Notes Payable During the three months ended March 31, 2017, the Company issued an unsecured promissory note and borrowed an amount of $25,000. The promissory notes bear interest at 10% per annum and due on April 30, 2017. Subsequently, the due date was extended to May 31, 2017. In June 2017, this promissory note was converted into a convertible note. In addition, during the six months ended June 30, 2017, the Company borrowed $12,300 pursuant to an unsecured promissory note. The note bears interest at 19% and the borrowings are payable together with interest over a period of six months from the date of borrowing. The Company repaid an aggregate of $30,266 of borrowings during the six months ended June 30, 2017 and the balance outstanding on these notes at June 30, 2017 was $6,150 ($24,116 at December 31, 2016). Convertible Notes Payable The Company has a 18% convertible note payable in Canadian dollars that was assumed in connection with the U-Vend Canada merger on January 7, 2014 in the principal carrying value of $75,200 as of June 30, 2017, which was due for repayment in September 2014. During the three and six months ended June 30, 2017, the Company recorded an unrealized (gain) loss on foreign currency translation and an unrealized (gain) loss on foreign currency translation related to this note and the related accrued interest of $(667) ($612 in 2016) and $1,140 ($9,027 in 2016), respectively. During the six months ended June 30, 2017, the Company issued four Convertible Notes in the face amount of $220,000. In addition, the Company issued a Convertible Note in face amount of $25,000 in settlement of a previously issued promissory note. The notes are due in 24 months and bear interest at 9.5% and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with these borrowings, the Company granted a total of 4,900,000 warrants with an exercise price of $0.05 per share with a five year expiration. The Company allocated $18,602 to debt discount based on the computed fair value of the convertible notes and warrants issued, and the debt discount is classified as derivative warrant liability due to the “down round provision” in the warrants. During the three and six months ended June 30, 2017, the Company amortized $2,187 and $3,663, respectively, of debt discount resulting in unamortized debt discount of $14,939 and carrying value of $230,061 at June 30, 2017. During the three and six months ended June 30, 2017, the Company amortized $6,102 and $12,204, respectively, of debt discount related to Convertible Notes issued in 2016. As of June 30, 2017, outstanding 2016 Convertible Notes had a face value of $1,126,597 and debt discount of $29,470 resulting in carrying value of $1,097,127. During the six months ended June 30, 2017, the Company repaid $50,000 in payment of one Convertible note previously issued. As of June 30, 2017, two of the Convertible Notes in the aggregate amount of $150,200 are due for repayment. The terms of the notes, amongst other things, provide for payment of additional interest if repayments are not made on due dates. The Company is in discussion with the noteholders for an extension of the repayment date. However, as of August 9, 2017 no agreement has been concluded. Additional interest payable, if any, on the notes as of June 30, 2017 was immaterial.

STOCKHOLDERS' DEFICIENCY

STOCKHOLDERS' DEFICIENCY	6 Months Ended
	Jun. 30, 2017
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' DEFICIENCY	NOTE 3. STOCKHOLDERS’ DEFICIENCY During the six months ended June 30, 2016, the Company granted 1,150,000 shares of its common shares to its employee and consultants and, $42,840 representing the fair value of the shares was charged to operations. In addition, during the six months ended June 30, 2017, $80,007 ($85,292 in 2016) was charged to operations as stock based compensation costs for the options and the restricted shares granted. During the six months ended June 30, 2017, the Company issued 400,000 shares of common stock upon exercise of warrants for $20,000. At June 30, 2017, the Company had the following warrant securities outstanding: Warrants Exercise Price Expiration 2011 Private placement warrants 12,500 $ 30.00 March 2018 2013 Series A warrants Senior convertible notes 4,500,000 $ 0.05 August 2017-December 2017 2013 Series B warrants Senior convertible notes 6,000,000 $ 0.05 June 2018-December 2018 2014 Series A warrants Senior convertible notes 6,000,000 $ 0.05 January 2018-December 2018 2014 Series B warrants Senior convertible notes 6,000,000 $ 0.05 January 2019-November 2019 2014 Warrants for services 656,364 $ 0.22 December 2019 2014 Warrants for services 1,184,000 $ 0.06 June 2018-December 2018 2014 Issued to Director for debt 312,500 $ 0.24 July 2017 2014 Issued with 2014 SPA convertible debt 208,334 $ 0.22 August 2019 2014 Issued with equipment financing obligation 200,000 $ 0.26 October 2017 2014 Issued with 2014 SPA convertible debt 35,000 $ 0.05 October 2019-November 2019 2015 Issued with 2014 SPA convertible debt 116,668 $ 0.22 January 2020-March 2020 2015 Issued with convertible financing obligation 110,200 $ 0.26 January 2018-October 2018 2015 Issued with 2015 SPA convertible debt 735,002 $ 0.22 April 2020- November 2020 2015 Issued for services 407,067 $ 0.22 April 2020-November 2020 2015 Warrants issued for equipment 318,182 $ 0.22 January 2020 2016 Warrants issued with 2016 SPA convertible debt 2,239,990 $ 0.05 June 2021 2015 Warrants issued with sale of common shares 779,413 $ 0.30 November 2017 -December 2017 2016 Warrants issued for consulting services 850,000 $ 0.05 June 2021 2016 Warrants issued for lease extension 150,000 $ 0.05 August 2019 2016 Warrants with Convertible notes 338,236 $ 0.05 August 2021-September 2021 2016 Warrants issued for services 200,000 $ 0.07 October 2019 2016 Warrants issued for lease extension 200,000 $ 0.05 October 2021 2016 Warrants issued with Convertible Notes 5,000,000 $ 0.05 November -December 2021 2017 Warrants issued with Convertible notes 4,900,000 $ 0.05 January -June 2022 41,453,456 During the six months ended June 30, 2017, 1,638,785 warrants expired unexercised.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Jun. 30, 2017
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS The following table provides a summary of changes in derivative warrant liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2017 and the year ended December 31, 2016. June 30, December 31, Balance at beginning of period $ 184,680 $ 310,960 Allocation of proceeds related to convertible and promissory notes to derivative liabilities due to “down round” provision 18,602 51,001 Unrealized gain on fair value adjustment (25,358 ) (177,281 ) $ 177,924 $ 184,680 The fair value of warrants outstanding at June 30, 2017 and December 31, 2016 has been determined based on the consideration of the enterprise value of the Company, the limited market of the shares issuable under the agreement and modeling of the Monte Carlo simulation using multiple volatility assumptions. Warrants issued in and prior to 2012 are significantly out of the money and diluted therefore, management has deemed the fair value of these to be de minimis. Due to certain unobservable inputs in the fair value calculations of the warrants, derivative warrant liabilities are classified as Level 3.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	NOTE 5. RELATED PARTY TRANSACTIONS Effective February 1, 2017, the Company appointed David Graber as the Company’s Chief Executive Officer. Mr. Graber is affiliated with For the six months ended June 30, 2017 and 2016, the Company incurred approximately $108,000 and $56,000, respectively of interest expenses for the borrowings from Cobrador, and included in the accrued interest at June 30, 2017.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 6. SUBSEQUENT EVENTS In July 2017, the Company entered into a services agreement with a consultant and issued a total of 50,000 shares of restrictive common stock for services to be rendered.

NATURE OF BUSINESS AND SUMMAR12

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2017
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation - The preparation of financial statements, in conformity with accounting principles generally accepted in the United States (U.S. GAAP), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates and assumptions.
Principles of Consolidation	Principles of Consolidation
Common Shares Issued and Earnings Per Share	Common Shares Issued and Earnings Per Share As of June 30, 2017, there were approximately 91.3 million (53.1 million at June 30, 2016) shares potentially issuable under convertible debt agreements, options, and warrants that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the periods presented.
Fair Value of Financial Instruments	Fair Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ASC 820 “Fair Value Measurement” establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Reclassifications	Reclassifications
Accounting Pronouncements	Accounting Pronouncements In May 2014, the FASB issued new accounting guidance, ASU 2014-09 “Revenue from Contracts with Customers”. The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods and services to customers. The updated guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the effect the updated standard will have on the consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The adoption of this standard during the three months ended March 31, 2017, did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued an accounting standard update ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company has not yet evaluated nor has it determined the effect of the standard on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for the Company on January 1, 2017. The adoption of this standard during the three months ended March 31, 2017 did not have a material impact on our consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” to clarify two aspects of Topic 606: (i) identifying performance obligations and (ii) the licensing implementation guidance, while retaining the related principles for those areas. The Company is evaluating the impact, if any, the adoption of this standard will have on the consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments”, which clarifies the treatment of several types of cash receipts and payments for which there was diversity in practice. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company is evaluating the impact, if any, the adoption of this standard will have on the consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows”, regarding the presentation of restricted cash on the statement of cash flows. The standards update requires that the reconciliation of the beginning and end of period cash amounts shown in the statement of cash flows include restricted cash. When restricted cash is presented separately from cash and cash equivalents on the balance sheet, a reconciliation is required between the amounts presented on the statement of cash flows and the balance sheet. Also, the new guidance requires the disclosure of information about the nature of the restrictions. The standards update is effective retrospectively for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the impact, if any, the adoption of this standard will have on the consolidated financial statements and related disclosures.

STOCKHOLDERS' DEFICIENCY (Table

STOCKHOLDERS' DEFICIENCY (Tables)	6 Months Ended
	Jun. 30, 2017
Stockholders' Equity Note [Abstract]
Schedule of outstanding warrant securities	At June 30, 2017, the Company had the following warrant securities outstanding: Warrants Exercise Price Expiration 2011 Private placement warrants 12,500 $ 30.00 March 2018 2013 Series A warrants Senior convertible notes 4,500,000 $ 0.05 August 2017-December 2017 2013 Series B warrants Senior convertible notes 6,000,000 $ 0.05 June 2018-December 2018 2014 Series A warrants Senior convertible notes 6,000,000 $ 0.05 January 2018-December 2018 2014 Series B warrants Senior convertible notes 6,000,000 $ 0.05 January 2019-November 2019 2014 Warrants for services 656,364 $ 0.22 December 2019 2014 Warrants for services 1,184,000 $ 0.06 June 2018-December 2018 2014 Issued to Director for debt 312,500 $ 0.24 July 2017 2014 Issued with 2014 SPA convertible debt 208,334 $ 0.22 August 2019 2014 Issued with equipment financing obligation 200,000 $ 0.26 October 2017 2014 Issued with 2014 SPA convertible debt 35,000 $ 0.05 October 2019-November 2019 2015 Issued with 2014 SPA convertible debt 116,668 $ 0.22 January 2020-March 2020 2015 Issued with convertible financing obligation 110,200 $ 0.26 January 2018-October 2018 2015 Issued with 2015 SPA convertible debt 735,002 $ 0.22 April 2020- November 2020 2015 Issued for services 407,067 $ 0.22 April 2020-November 2020 2015 Warrants issued for equipment 318,182 $ 0.22 January 2020 2016 Warrants issued with 2016 SPA convertible debt 2,239,990 $ 0.05 June 2021 2015 Warrants issued with sale of common shares 779,413 $ 0.30 November 2017 -December 2017 2016 Warrants issued for consulting services 850,000 $ 0.05 June 2021 2016 Warrants issued for lease extension 150,000 $ 0.05 August 2019 2016 Warrants with Convertible notes 338,236 $ 0.05 August 2021-September 2021 2016 Warrants issued for services 200,000 $ 0.07 October 2019 2016 Warrants issued for lease extension 200,000 $ 0.05 October 2021 2016 Warrants issued with Convertible Notes 5,000,000 $ 0.05 November -December 2021 2017 Warrants issued with Convertible notes 4,900,000 $ 0.05 January -June 2022 41,453,456

FAIR VALUE OF FINANCIAL INSTR14

FAIR VALUE OF FINANCIAL INSTRUMENTS OPEN (Tables)	6 Months Ended
	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Schedule of fair value of derivative warrant liabilities	The following table provides a summary of changes in derivative warrant liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2017 and the year ended December 31, 2016. June 30, December 31, Balance at beginning of period $ 184,680 $ 310,960 Allocation of proceeds related to convertible and promissory notes to derivative liabilities due to “down round” provision 18,602 51,001 Unrealized gain on fair value adjustment (25,358 ) (177,281 ) $ 177,924 $ 184,680

NATURE OF BUSINESS AND SUMMAR15

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accounting Policies [Abstract]
Net loss	$ (666,409)	$ (569,869)	$ (1,297,370)	$ (1,058,350)
Accumulated deficit	(9,732,253)		(9,732,253)		$ (8,434,883)
Working capital deficit	$ 5,144,304		$ 5,144,304
Anti-dilutive shares excluded from calculation of diluted earnings per share			91,300,000	53,100,000

DEBT (Details Narrative)

DEBT (Details Narrative)	3 Months Ended			6 Months Ended
	Jun. 30, 2017USD ($)Number$ / sharesshares	Mar. 31, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)Number$ / sharesshares	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)	Jun. 18, 2013USD ($)
Warrants outstanding | shares	41,453,456			41,453,456
Convertible notes payable, net of discount	$ 1,388,175			$ 1,388,175		$ 696,480
Repayment of convertible notes				50,000
Unrealized gain (loss) on foreign currency conversion	667		$ (612)	(1,140)	$ (9,027)
Warrant liabilities	177,924			177,924		184,680
Proceeds from promissory notes				37,300	503,300
Principal repayments of promissory notes				30,266	49,800
Promissory notes payable	$ 480,135			480,135		498,101
Principal repayment of convertible note				$ (50,000)
Senior Notes [Member]
Total debt financing available							$ 400,000
Senior Notes [Member] | Class A Warrants [Member]
Warrants outstanding | shares	11,200,000			11,200,000
Senior Notes [Member] | Class B Warrants [Member]
Warrants outstanding | shares	12,000,000			12,000,000
Revised warrant exercise price | $ / shares	$ 0.06			$ 0.06
Warrant exercise price | $ / shares	$ 0.05			$ 0.05
Senior Convertible Notes [Member]
Debt instrument discount	$ 29,015			$ 29,015
Amortization of debt discount				14,507	29,015
Convertible notes payable, net of discount	$ 389,789			$ 389,789
Convertible Notes [Member]
Interest rate	18.00%			18.00%
Convertible notes payable, net of discount	$ 75,200			$ 75,200
Repayment of convertible notes				30,000
Unrealized gain (loss) on foreign currency conversion	(667)		$ 612	1,140	$ 9,027
Principal repayment of convertible note				(30,000)
2017 Convertible Notes [Member]
Senior convertible notes, net of discount	$ 204,536			$ 204,536
Warrants granted with debt | shares				4,900,000
Warrant exercise price | $ / shares	$ 0.05			$ 0.05
Number of notes issued during period | Number				4
Number of notes due for repayment | Number	2			2
Interest rate	9.50%			9.50%
Face amount of debt	$ 220,000			$ 220,000
Debt instrument discount	14,939			14,939
Amortization of debt discount	2,187			3,663
Convertible notes payable, net of discount	$ 230,061			$ 230,061
Debt conversion price | $ / shares	$ 0.05			$ 0.05
Warrant liabilities	$ 18,602			$ 18,602
Debt term				24 months
Due for repayment long-term debt	150,200			$ 150,200
2016 Convertible Notes [Member]
Face amount of debt	1,126,597			1,126,597
Debt instrument discount	29,470			29,470
Amortization of debt discount	6,102			12,204
Convertible notes payable, net of discount	$ 1,097,127			$ 1,097,127
2016 Promissory Notes [Member]
Interest rate	10.00%			10.00%
Unsecured Promissory Notes [Member]
Interest rate	10.00%			10.00%
Proceeds from promissory notes		$ 25,000
Principal repayments of promissory notes				$ 30,266
Promissory notes payable	$ 6,150			6,150		$ 24,116
2016 Convertible Notes [Member]
Face amount of debt	$ 25,000			$ 25,000

STOCKHOLDERS' DEFICIENCY (Detai

STOCKHOLDERS' DEFICIENCY (Details)	6 Months Ended
	Jun. 30, 2017$ / sharesshares
Warrants	41,453,456
2011 Private Placement Warrants [Member]
Warrants	12,500
Exercise Price | $ / shares	$ 30
Expiration	March 2,018
2013 Series A Warrants Senior Convertible Notes [Member]
Warrants	4,500,000
Exercise Price | $ / shares	$ 0.05
Expiration	August 2017-December 2017
2013 Series B Warrants Senior Convertible Notes [Member]
Warrants	6,000,000
Exercise Price | $ / shares	$ 0.05
Expiration	June 2018-December 2018
2014 Series A Warrants Senior Convertible Notes [Member]
Warrants	6,000,000
Exercise Price | $ / shares	$ 0.05
Expiration	January 2018-December 2018
2014 Series B Warrants Senior Convertible Notes [Member]
Warrants	6,000,000
Exercise Price | $ / shares	$ 0.05
Expiration	January 2019-November 2019
2014 Warrants For Services [Member]
Warrants	656,364
Exercise Price | $ / shares	$ 0.22
Expiration	December 2,019
2014 Warrants For Services # 2 [Member]
Warrants	1,184,000
Exercise Price | $ / shares	$ 0.06
Expiration	June 2018-December 2018
2014 Issued To Director For Debt [Member]
Warrants	312,500
Exercise Price | $ / shares	$ 0.24
Expiration	July 2,017
2014 Issued With 2014 SPA Convertible Debt [Member]
Warrants	208,334
Exercise Price | $ / shares	$ 0.22
Expiration	August 2,019
2014 Issued With Equipment Financing Obligation [Member]
Warrants	200,000
Exercise Price | $ / shares	$ 0.26
Expiration	October 2,017
2014 Issued with 2014 SPA convertible debt [Member]
Warrants	35,000
Exercise Price | $ / shares	$ 0.05
Expiration	October 2019-November 2019
2015 Issued with 2014 SPA convertible debt [Member]
Warrants	116,668
Exercise Price | $ / shares	$ 0.22
Expiration	January 2020-March 2020
2015 Issued with convertible financing obligation [Member]
Warrants	110,200
Exercise Price | $ / shares	$ 0.26
Expiration	January 2018-October 2018
2015 Issued for 2015 SPA Convertible Debt [Member]
Warrants	735,002
Exercise Price | $ / shares	$ 0.22
Expiration	April 2020- November 2020
2015 Issued for Services [Member]
Warrants	407,067
Exercise Price | $ / shares	$ 0.22
Expiration	April 2020-November 2020
2015 Warrants issued for equipment [Member]
Warrants	318,182
Exercise Price | $ / shares	$ 0.22
Expiration	January 2,020
2016 Warrants issued with 2016 SPA convertible debt [Member]
Warrants	2,239,990
Exercise Price | $ / shares	$ 0.05
Expiration	June 2,021
2015 Warrants issued with sale of common shares [Member]
Warrants	779,413
Exercise Price | $ / shares	$ 0.30
Expiration	November 2017 -December 2017
2016 Warrants issued for consulting services [Member]
Warrants	850,000
Exercise Price | $ / shares	$ 0.05
Expiration	June 2,021
2016 Warrants issued for lease extension [Member]
Warrants	150,000
Exercise Price | $ / shares	$ 0.05
Expiration	August 2,019
2016 Warrants with Convertible notes [Member]
Warrants	338,236
Exercise Price | $ / shares	$ 0.05
Expiration	August 2021-September 2021
2016 Warrants issued for services [Member]
Warrants	200,000
Exercise Price | $ / shares	$ 0.07
Expiration	October 2,019
2016 Warrants issue for lease extension [Member]
Warrants	200,000
Exercise Price | $ / shares	$ 0.05
Expiration	October 2,021
2016 Warrants issued with Convertible Notes [Member]
Warrants	5,000,000
Exercise Price | $ / shares	$ 0.05
Expiration	November -December 2021
2017 Warrants issued with Convertible Notes [Member]
Warrants	4,400,000
Exercise Price | $ / shares	$ 0.05
Expiration	January - June 2022

STOCKHOLDERS' DEFICIENCY (Det18

STOCKHOLDERS' DEFICIENCY (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Stock based compensation	$ 80,007	$ 85,292
Proceeds from common stock warrant exercises	$ 20,000
Common stock granted to employee and consultant (shares)	1,150,000
Common stock granted to employee and consultant	$ 42,480
Warrant [Member]
Number of common share issued	400,000
Proceeds from common stock warrant exercises	$ 20,000
Number of warrants expired	1,638,785

FAIR VALUE OF FINANCIAL INSTR19

FAIR VALUE OF FINANCIAL INSTRUMENTS OPEN (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Changes in derivative warrant liabilities
Balance, beginning	$ 184,680
Balance, ending	177,924	$ 184,680
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Changes in derivative warrant liabilities
Balance, beginning	184,680	310,960
Allocation of proceeds related to convertible and promissory notes to derivative liabilities due to "down round" provision	18,602	51,001
Unrealized gain on fair value adjustment	(25,358)	(177,281)
Balance, ending	$ 177,924	$ 184,680

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - Mr. David Graber [Member] - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Senior Convertible Notes and Convertible Notes [Member]
Face amount of debt	$ 1,454,591		$ 1,434,591
Debt instrument discount	36,850		68,047
Senior convertible notes, net of discount	1,417,741		$ 1,366,544
Convertible Notes [Member]
Proceeds from related party debt	20,000
Interest expense - related party	$ 108,000	$ 56,000

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative)	1 Months Ended
	Jul. 31, 2017shares
Subsequent Event [Member]
Issuance of shares for services (shares)	50,000