Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2018 | |
Document And Entity Information | |
Entity Registrant Name | CARDAX, INC. |
Entity Central Index Key | 1,544,238 |
Document Type | S1 |
Document Period End Date | Sep. 30, 2018 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
EntityExTransitionPeriod | false |
Trading Symbol | CDXI |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | |||
Cash | $ 198,574 | $ 2,236,837 | $ 158,433 |
Accounts receivable | 452,225 | 37,243 | |
Inventories | 326,174 | 340,425 | 10,827 |
Deposits and other assets | 119,066 | 90,831 | 122,876 |
Prepaid expenses | 24,052 | 22,838 | 19,919 |
Total current assets | 1,120,091 | 2,728,174 | 312,055 |
PROPERTY AND EQUIPMENT, net | 1,901 | 7,755 | |
INTANGIBLE ASSETS, net | 435,141 | 426,610 | 430,770 |
TOTAL ASSETS | 1,555,232 | 3,156,685 | 750,580 |
CURRENT LIABILITIES | |||
Accrued payroll and payroll related expenses, current portion | 3,450,570 | 3,404,610 | 3,510,464 |
Accounts payable and accrued expenses | 875,957 | 603,391 | 657,094 |
Fees payable to directors | 418,546 | 418,546 | 418,546 |
Employee settlement | 50,000 | 50,000 | 50,000 |
Total current liabilities | 4,795,073 | 4,562,162 | 4,636,104 |
ACCRUED PAYROLL AND PAYROLL RELATED EXPENSES, net of current portion | 94,885 | 85,615 | |
COMMITMENTS AND CONTINGENCIES | |||
Total liabilities | 4,889,958 | 4,647,777 | 4,636,104 |
STOCKHOLDERS' DEFICIT | |||
Preferred Stock - $0.001 par value; 50,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2018, and December 31, 2017, respectively | |||
Common stock - $0.001 par value; 400,000,000 shares authorized, 133,338,573 and 122,674,516 shares issued and outstanding as of September 30, 2018, and December 31, 2017, respectively | 133,339 | 122,675 | 85,069 |
Additional paid-in-capital | 58,067,566 | 56,401,069 | 51,963,269 |
Subscriptions receivable | (539,662) | ||
Deferred compensation | (10,125) | ||
Accumulated deficit | (60,995,969) | (57,919,096) | (55,933,862) |
Total stockholders' deficit | (3,334,726) | (1,405,477) | (3,885,524) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,555,232 | $ 3,156,685 | $ 750,580 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 | 400,000,000 |
Common stock, shares issued | 133,338,573 | 122,674,516 | 85,068,709 |
Common stock, shares outstanding | 133,338,573 | 122,674,516 | 85,068,709 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||||
REVENUES, net | $ 549,540 | $ 321,861 | $ 1,134,899 | $ 496,088 | $ 610,323 | $ 35,258 |
COST OF GOODS SOLD | 240,152 | 149,207 | 521,353 | 222,056 | 274,707 | 14,580 |
GROSS PROFIT | 309,388 | 172,654 | 613,546 | 274,032 | 335,616 | 20,678 |
OPERATING EXPENSES: | ||||||
General and administrative expenses | 1,070,085 | 831,673 | ||||
Sales and marketing | 535,242 | 117,181 | ||||
Salaries and wages | 387,119 | 129,670 | 1,202,576 | 451,351 | ||
Selling, general, and administrative expenses | 350,630 | 213,538 | 1,168,747 | 492,895 | ||
Professional fees | 225,875 | 124,769 | 637,042 | 299,569 | ||
Stock based compensation | 180,562 | 58,250 | 443,249 | 142,500 | 242,146 | 525,062 |
Research and development | 86,115 | 1,798 | 214,093 | 74,215 | 460,991 | 347,885 |
Depreciation and amortization | 6,718 | 7,388 | 23,853 | 22,189 | 29,422 | 29,101 |
Total operating expenses | 1,237,019 | 535,413 | 3,689,560 | 1,482,719 | 2,337,886 | 1,850,902 |
Loss from operations | (927,631) | (362,759) | (3,076,014) | (1,208,687) | (2,002,270) | (1,830,224) |
OTHER INCOME (EXPENSES): | ||||||
Other income | 556 | 12,598 | 17,253 | 47,082 | ||
Interest income | 7 | 676 | 1,941 | 1,844 | 3,320 | 2,362 |
Interest expense | (1,264) | (1,073) | (3,356) | (2,790) | (3,537) | (2,925) |
Total other (expenses) income, net | (1,257) | (397) | (859) | 11,652 | 17,036 | 46,519 |
Loss before the provision for income taxes | (928,888) | (363,156) | (3,076,873) | (1,197,035) | (1,985,234) | (1,783,705) |
PROVISION FOR INCOME TAXES | ||||||
NET LOSS | $ (928,888) | $ (363,156) | $ (3,076,873) | $ (1,197,035) | $ (1,985,234) | $ (1,783,705) |
NET LOSS PER SHARE | ||||||
Basic | $ (0.01) | $ 0 | $ (0.02) | $ (0.01) | $ (0.02) | $ (0.02) |
Diluted | $ (0.01) | $ 0 | $ (0.02) | $ (0.01) | $ (0.02) | $ (0.02) |
SHARES USED IN CALCULATION OF NET LOSS PER SHARE | ||||||
Basic | 130,083,598 | 100,587,843 | 125,271,516 | 92,513,317 | 99,951,385 | 76,227,524 |
Diluted | 130,083,598 | 100,587,843 | 125,271,516 | 92,513,317 | 99,951,385 | 76,227,524 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Deferred Compensation [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2015 | $ 69,088 | $ 50,333,188 | $ (54,150,157) | $ (3,747,881) | |
Balance, shares at Dec. 31, 2015 | 69,087,955 | ||||
Common stock grants to independent directors | $ 468 | 41,198 | 41,666 | ||
Common stock grants to independent directors, shares | 468,254 | ||||
Common stock grant to institutional investor | $ 1,500 | 105,000 | 106,500 | ||
Common stock grant to institutional investor, shares | 1,500,000 | ||||
Restricted stock issuances | $ 14,013 | 1,106,987 | 1,121,000 | ||
Restricted stock issuances, shares | 14,012,500 | ||||
Stock based compensation - options | 376,896 | $ 376,896 | |||
Stock option exercise, shares | |||||
Net loss | (1,783,705) | $ (1,783,705) | |||
Balance at Dec. 31, 2016 | $ 85,069 | 51,963,269 | (55,933,862) | (3,885,524) | |
Balance, shares at Dec. 31, 2016 | 85,068,709 | ||||
Common stock grants to independent directors | $ 793 | 149,207 | 150,000 | ||
Common stock grants to independent directors, shares | 793,025 | ||||
Restricted stock issuances | $ 34,108 | 4,044,327 | 4,078,435 | ||
Restricted stock issuances, shares | 34,107,883 | ||||
Stock based compensation - options | 61,771 | 61,771 | |||
Common stock issuance to institutional investor | $ 568 | 59,432 | 60,000 | ||
Common stock issuance to institutional investor, shares | 567,644 | ||||
Restricted stock issuance to a broker for fees | $ 559 | 44,141 | 44,700 | ||
Restricted stock issuance to a broker for fees, shares | 558,750 | ||||
Stock option exercise | $ 645 | (645) | |||
Stock option exercise, shares | 645,288 | 770,000 | |||
Warrant exercise | $ 733 | 39,267 | $ 40,000 | ||
Warrant exercise, shares | 733,217 | ||||
Deferred compensation | $ 200 | 40,300 | (10,125) | 30,375 | |
Deferred compensation, shares | 200,000 | ||||
Net loss | (1,985,234) | (1,985,234) | |||
Balance at Dec. 31, 2017 | $ 122,675 | $ 56,401,069 | $ (10,125) | $ (57,919,096) | $ (1,405,477) |
Balance, shares at Dec. 31, 2017 | 122,674,516 | ||||
Stock option exercise, shares | 156,997 | ||||
Net loss | $ (3,076,873) | ||||
Balance at Sep. 30, 2018 | $ (3,334,726) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (3,076,873) | $ (1,197,035) | $ (1,985,234) | $ (1,783,705) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 23,853 | 22,189 | 29,422 | 29,101 |
Stock based compensation | 443,249 | 142,500 | 242,146 | 230,833 |
Bad debt expense on note receivable and accrued interest | 89,933 | |||
Changes in assets and liabilities: | ||||
Accounts receivable | (193,168) | (276,303) | (37,243) | |
Inventories | 14,251 | (43,963) | (329,598) | (10,827) |
Deposits and other assets | (118,168) | (74,850) | 32,045 | (35,161) |
Prepaid expenses | (1,214) | (229) | (2,919) | (17,386) |
Accrued payroll and payroll related expenses | 55,230 | (25,720) | (20,239) | 269,638 |
Accounts payable and accrued expenses | 50,752 | 55,979 | (9,003) | 60,736 |
Net cash used in operating activities | (2,712,155) | (1,397,432) | (2,080,623) | (1,256,771) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Increase in intangible assets | (30,483) | (16,137) | (19,408) | (29,206) |
Net cash used in investing activities | (30,483) | (16,137) | (19,408) | (29,206) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from the issuance of common stock | 704,375 | 4,013,456 | 4,138,435 | 1,121,000 |
Proceeds from the exercise of warrants | 40,000 | 40,000 | ||
Net cash provided by financing activities | 704,375 | 4,053,456 | 4,178,435 | 1,121,000 |
NET DECREASE (INCREASE) IN CASH | (2,038,263) | 2,639,887 | 2,078,404 | (164,977) |
CASH AT THE BEGINNING OF THE PERIOD | 2,236,837 | 158,433 | 158,433 | 323,410 |
CASH AT THE END OF THE PERIOD | 198,574 | 2,798,320 | 2,236,837 | 158,433 |
SUPPLEMENTAL DISCLOSURES: | ||||
Cash paid for interest | 3,356 | 2,790 | 3,537 | 2,925 |
Cash paid for income taxes | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
Conversion of accounts payable into restricted stock | 44,700 | 44,700 | ||
Settlement of receivables with payables | 221,814 | |||
Subscription receivable recognized for common shares issued | $ 539,662 | |||
Conversion of accrued payroll and payroll related expenses into stock options | 227,784 | |||
Conversion of accounts payable into stock options | $ 66,445 |
Company Background
Company Background | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Company Background | NOTE 1 – COMPANY BACKGROUND Cardax Pharmaceuticals, Inc. (“Holdings”) was incorporated in the State of Delaware on March 23, 2006. Holdings was formed for the purpose of developing a platform of proprietary, exceptionally safe, small molecule compounds for large unmet medical needs where oxidative stress and inflammation play important causative roles. Holdings’ platform has application in arthritis, metabolic syndrome, liver disease, and cardiovascular disease, as well as macular degeneration and prostate disease. Holdings’ current primary focus is on the development of astaxanthin technologies. Astaxanthin is a naturally occurring marine compound that has robust anti-oxidant and anti-inflammatory activity. In May of 2013, Holdings formed a 100% owned subsidiary company called Cardax Pharma, Inc. (“Pharma”). Pharma was formed to maintain Holdings’ operations going forward, leaving Holdings as an investment holding company. On November 29, 2013, Holdings entered into a definitive merger agreement (“Merger Agreement”) with Koffee Korner Inc., a Delaware corporation (“Koffee Korner”) (OTCQB:KOFF), and its wholly owned subsidiary (“Koffee Sub”), pursuant to which, among other matters and subject to the conditions set forth in such Merger Agreement, Koffee Sub would merge with and into Pharma. In connection with such merger agreement and related agreements, upon the consummation of such merger, Pharma would become a wholly owned subsidiary of Koffee Korner and Koffee Korner would issue shares of its common stock to Holdings. At the effective time of such merger, Holdings would own a majority of the shares of the then issued and outstanding shares of common stock of Koffee Korner. On February 7, 2014, Holdings completed its merger with Koffee Korner, which was renamed to Cardax, Inc. (the “Company”) (OTCQB:CDXI). Concurrent with the merger: (i) the Company received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of the Company’s common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of the Company’s common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of the Company’s common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of the Company’s common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of the Company’s common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of the Company’s common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under accounting principles generally accepted in the United States of America (“U.S. GAAP”) guidance Accounting Standards Codification (“ASC”) No. 805-40, Business Combinations – Reverse Acquisitions On August 28, 2014, the Company entered into an Agreement and Plan of Merger (the “Holdings Merger Agreement”) with its principal stockholder, Holdings, pursuant to which Holdings would merge with and into the Company (the “Holdings Merger”). On September 18, 2015, the Company filed a Form S-4 with the SEC in contemplation of the Holdings Merger. There would not be any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings would receive an aggregate number of shares and warrants to purchase shares of the Company’s common stock equal to the aggregate number of shares of the Company’s common stock that were held by Holdings on the date of the closing of the Holdings Merger. The Company’s restricted shares of common stock held by Holdings would be cancelled upon the closing of the Holdings Merger. Accordingly, there would not be not any change to the Company’s fully diluted capitalization due to the Holdings Merger. On November 24, 2015, the Holdings Merger Agreement was amended and restated (the “Amended Holdings Merger Agreement”). Under the terms of Amended Holdings Merger Agreement, the shares of common stock, par value $0.001 per share of Holdings and the shares of all other issued and outstanding capital stock of Holdings that by their terms were convertible or could otherwise be exchanged for shares of Holdings common stock, would be converted into and exchanged for the Company’s shares of Common Stock in a ratio of approximately 2.2:1. In addition, the Company would grant Holdings’ option and warrant holders warrants to purchase the Company’s warrants at the same stock conversion ratio. On November 24, 2015, the Company filed an amendment to the Form S-4 with the SEC and on March 29, 2015, the Form S-4 was declared effective by the SEC. On December 30, 2015, the Company completed its merger with Holdings, pursuant to the Amended Holdings Merger Agreement. At closing, Holdings merged with and into the Company, with the Company surviving the Holdings Merger. Pursuant to the Amended Holdings Merger Agreement, there was not any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings received an aggregate number of shares and warrants to purchase shares of Company common stock equal to the aggregate number of shares of Company common stock that were held by Holdings on the date of the closing of the Holdings Merger. The Company’s restricted shares of common stock held by Holdings were cancelled upon the closing of the Holdings Merger. Accordingly, there was not any change to the Company’s fully diluted capitalization due to the Holdings Merger. The Company is engaged in the development and commercialization of dietary supplements and pharmaceuticals. The Company’s first commercial product, ZanthoSyn®, is a physician recommended anti-inflammatory supplement for health and longevity that provides astaxanthin with enhanced absorption and purity. The Company sells ZanthoSyn® primarily through wholesale and e-commerce channels. The Company is also developing astaxanthin and related compounds, including CDX-085, for pharmaceutical applications. The safety and efficacy of the Company’s products have not been directly evaluated in clinical trials or confirmed by the FDA. Going concern matters The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company incurred net losses of $928,888 and $3,076,873, for the three and nine-months ended September 30, 2018, respectively, and net losses of $363,156 and $1,197,035 for the three and nine-months ended September 30, 2017, respectively. The Company has incurred losses since inception resulting in an accumulated deficit of $60,995,969 as of September 30, 2018, and has had negative cash flows from operating activities since inception. The Company expects that its marketing program for ZanthoSyn® will continue to focus on outreach to physicians, healthcare professionals, retail personnel, and consumers, and anticipates further losses in the development of its business. As a result of these and other factors, management has determined there is substantial doubt about the Company’s ability to continue as a going concern. During the quarter ended September 30, 2018, the Company raised additional capital to carry out its business plan. As part of the Company’s efforts, it raised an additional $1.44 million in gross proceeds through the exchange of 9.6 million warrants via a warrant exchange offering that closed on July 27, 2018. As of September 30, 2018, $653,278 of this amount remained in an escrow account as subscriptions receivable and was collected on October 5, 2018, less $113,616 in placement fees and expenses, to net $539,662. The Company’s continued ability to raise additional capital through future equity and debt securities issuances is unknown. Obtaining additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties. | NOTE 1 – COMPANY BACKGROUND Cardax Pharmaceuticals, Inc. (“Holdings”) was incorporated in the State of Delaware on March 23, 2006. Holdings was formed for the purpose of developing a platform of proprietary, exceptionally safe, small molecule compounds for large unmet medical needs where oxidative stress and inflammation play important causative roles. Holdings’ platform has application in arthritis, metabolic syndrome, liver disease, and cardiovascular disease, as well as macular degeneration and prostate disease. Holdings’ current primary focus is on the development of astaxanthin technologies. Astaxanthin is a naturally occurring marine compound that has robust anti-oxidant and anti-inflammatory activity. In May of 2013, Holdings formed a 100% owned subsidiary company called Cardax Pharma, Inc. (“Pharma”). Pharma was formed to maintain Holdings’ operations going forward, leaving Holdings as an investment holding company. On November 29, 2013, Holdings entered into a definitive merger agreement (“Merger Agreement”) with Koffee Korner Inc., a Delaware corporation (“Koffee Korner”) (OTCQB:KOFF), and its wholly owned subsidiary (“Koffee Sub”), pursuant to which, among other matters and subject to the conditions set forth in such Merger Agreement, Koffee Sub would merge with and into Pharma. In connection with such merger agreement and related agreements, upon the consummation of such merger, Pharma would become a wholly owned subsidiary of Koffee Korner and Koffee Korner would issue shares of its common stock to Holdings. At the effective time of such merger, Holdings would own a majority of the shares of the then issued and outstanding shares of common stock of Koffee Korner. On February 7, 2014, Holdings completed its merger with Koffee Korner, which was renamed to Cardax, Inc. (the “Company”) (OTCQB:CDXI). Concurrent with the merger: (i) the Company received aggregate gross cash proceeds of $3,923,100 in exchange for the issuance and sale of an aggregate 6,276,960 of shares of the Company’s common stock, together with five year warrants to purchase an aggregate of 6,276,960 shares of the Company’s common stock at $0.625 per share, (ii) the notes issued on January 3, 2014, in the outstanding principal amount of $2,076,000 and all accrued interest thereon, automatically converted into 3,353,437 shares of the Company’s common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 3,321,600 shares of common stock at $0.625 per share, (iii) the notes issued in 2013, in the outstanding principal amount of $8,489,036 and all accrued interest thereon, automatically converted into 14,446,777 shares of the Company’s common stock upon the reverse merger at $0.625 per share, together with five year warrants to purchase 14,446,777 shares of common stock at $0.625 per share, (iv) stock options to purchase 15,290,486 shares of Holdings common stock at $0.07 per share were cancelled and substituted with stock options to purchase 6,889,555 shares of the Company’s common stock at $0.155 per share, (v) additional stock options to purchase 20,867,266 shares of the Company’s common stock at $0.625 per share were issued, and (vi) the notes issued in 2008 and 2009, in the outstanding principal amounts of $55,000 and $500,000, respectively, and all accrued interest thereon, were repaid in full. The assets and liabilities of Koffee Korner were distributed in accordance with the terms of a spin-off agreement on the closing date. The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under accounting principles generally accepted in the United States of America (“U.S. GAAP”) guidance Accounting Standards Codification (“ASC”) No. 805-40, Business Combinations – Reverse Acquisitions On August 28, 2014, the Company entered into an Agreement and Plan of Merger (the “Holdings Merger Agreement”) with its principal stockholder, Holdings, pursuant to which Holdings would merge with and into the Company (the “Holdings Merger”). On September 18, 2015, the Company filed a Form S-4 with the SEC in contemplation of the Holdings Merger. There would not be any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings would receive an aggregate number of shares and warrants to purchase shares of the Company’s common stock equal to the aggregate number of shares of the Company’s common stock that were held by Holdings on the date of the closing of the Holdings Merger. The Company’s restricted shares of common stock held by Holdings would be cancelled upon the closing of the Holdings Merger. Accordingly, there would not be not any change to the Company’s fully diluted capitalization due to the Holdings Merger. On November 24, 2015, the Holdings Merger Agreement was amended and restated (the “Amended Holdings Merger Agreement”). Under the terms of Amended Holdings Merger Agreement, the shares of common stock, par value $0.001 per share of Holdings and the shares of all other issued and outstanding capital stock of Holdings that by their terms were convertible or could otherwise be exchanged for shares of Holdings common stock, would be converted into and exchanged for the Company’s shares of common stock in a ratio of approximately 2.2:1. In addition, the Company would grant Holdings’ option and warrant holders warrants to purchase the Company’s warrants at the same stock conversion ratio. On November 24, 2015, the Company filed an amendment to the Form S-4 with the SEC and on December 29, 2015, the Form S-4 was declared effective by the SEC. On December 30, 2015, the Company completed its merger with Holdings, pursuant to the Amended Holdings Merger Agreement. At closing, Holdings merged with and into the Company, with the Company surviving the Holdings Merger. Pursuant to the Amended Holdings Merger Agreement, there was not any cash consideration exchanged in the Holdings Merger. Upon the closing of the Holdings Merger, the stockholders of Holdings received an aggregate number of shares and warrants to purchase shares of Company common stock equal to the aggregate number of shares of Company common stock that were held by Holdings on the date of the closing of the Holdings Merger. The Company’s restricted shares of common stock held by Holdings were cancelled upon the closing of the Holdings Merger. Accordingly, there was not any change to the Company’s fully diluted capitalization due to the Holdings Merger. The Company is engaged in the development, marketing, and distribution of consumer health products. The Company’s first commercial product, ZanthoSyn®, is a physician recommended anti-inflammatory supplement for health and longevity that features astaxanthin with optimal absorption and purity. The Company sells ZanthoSyn® primarily through e-commerce and wholesale channels. As a second-generation product, the Company is developing CDX-085, its patented astaxanthin derivative for highly concentrated astaxanthin product applications. The Company also plans to pursue pharmaceutical applications of astaxanthin and related compounds. The safety and efficacy of the Company’s products have not been directly evaluated in clinical trials or confirmed by the FDA. Going concern matters The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company incurred a net loss of $1,985,234 and $1,783,705 for the years ended December 31, 2017 and 2016, respectively. The Company has incurred losses since inception resulting in an accumulated deficit of $57,919,096 as of December 31, 2017, and has had negative cash flows from operating activities since inception. The Company expects that its marketing program for ZanthoSyn® will continue to focus on outreach to physicians, healthcare professionals, retail personnel, and consumers, and anticipates further losses in the development of its business. As a result of these and other factors, management has determined there is substantial doubt about the Company’s ability to continue as a going concern. In addition to the $4,138,435 raised in the year ended December 31, 2017, the Company plans to raise additional capital to carry out its business plan. The Company’s ability to raise additional capital through future equity and debt securities issuances is unknown. Obtaining additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties. On March 28, 2016, the Company furloughed all of its employees and independent contractors indefinitely and arranged with its Chief Executive Officer, David G. Watumull; its Chief Financial Officer, John B. Russell; and its Vice President, Operations, David M. Watumull, to continue their services for cash compensation equal to the minimum wage. In September 2017, the Company ended this furlough and restored their employees to 75% of their base pay. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited interim financial information The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. In the opinion of the Company’s management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2018 and 2017. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on March 27, 2018. Revenue from contracts with customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new standard related to revenue recognition. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this standard effective January 1, 2018, using the retrospective method. As there was no impact on contracts that were previously completed and no significant impact to contracts completed after adoption, there was no need to restate prior results from operations. The Company recognizes revenues from its contracts with customers for its products through wholesale and e-commerce channels when goods and services have been identified, the payment terms agreed to, the contract has commercial substance, both parties have approved the contract, and it is probable that the Company will collect all substantial consideration. The following table presents our revenues disaggregated by revenue source and geographical location. Sales and usage-based taxes are included as a component of revenues for the nine-months ended: September 30, 2018 September 30, 2017 Geographical area Source (Unaudited) (Unaudited) United States Nutraceuticals $ 1,118,486 $ 496,088 Hong Kong Nutraceuticals $ 16,413 $ - Sales discounts, rebates, promotional amounts to vendors, and returns and allowances are recorded as a reduction to sales in the period in which sales are recorded. The Company records shipping charges and sales tax gross in revenues and cost of goods sold. Sales discounts and other adjustments are recorded at the time of sale. Other significant accounting policies There have been no other material changes to our significant accounting policies during the nine-months ended September 30, 2018, as compared to the significant accounting policies described in our Annual Report. Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Fair Value Measurement Recently adopted accounting pronouncements In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 23) In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting The Company does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the condensed consolidated financial statements. Reclassifications The Company has made certain reclassifications to conform its prior periods’ data to the current presentation, such as reclassifying a separation agreement that has terms extending beyond one year. These reclassifications had no effect on the reported results of operations or cash flows. | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements have been consistently prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc., and its predecessor, Cardax Pharmaceuticals, Inc., which was merged with and into Cardax, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Estimates in these consolidated financial statements include asset valuations, estimates of future cash flows from and the economic useful lives of long-lived assets, valuations of stock compensation, certain accrued liabilities, income taxes and tax valuation allowances, and fair value estimates. Despite management’s intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from these estimates and assumptions. Cash The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company held no cash equivalents as of December 31, 2017 and 2016. The Company maintains cash deposit accounts at one financial institution. Accounts at this institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance at times may exceed these limits. As of December 31, 2017 and 2016, the Company had $1,988,139 and $0, respectively, in excess of federally insured limits on deposit. Accounts receivable Accounts receivable of $37,243 and $0 as of December 31, 2017 and 2016, respectively, consists of amounts due from sales of consumer health products. It is the Company’s policy to provide for an allowance for doubtful collections based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Normal receivables are due 60 days after the issuance of the invoice. Receivables past due more than 90 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. There was no allowance necessary as of December 31, 2017 and 2016. Inventories Inventories are stated at the lower of cost or market. Cost is determined using the average cost method. Market is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include third party costs for finished goods. The Company utilizes contract manufacturers and receives inventory in finished form. The Company provides a reserve against inventory for known or expected inventory obsolescence. The reserve is determined by specific review of inventory items for product age and quality that may affect salability. There were no reserves necessary for inventory as of December 31, 2017 and 2016. Property and equipment, net Property and equipment are recorded at cost, less depreciation. Equipment under capital lease obligations and leasehold improvements are amortized on the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Such amortization is included in depreciation and amortization in the consolidated financial statements. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets are as follows. Furniture and office equipment 7 years Research and development equipment 3 to 7 years Information technology equipment 5 years Software 3 years Major additions and improvements are capitalized, and routine expenditures for repairs and maintenance are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is charged to income for the period. Impairment of long-lived assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets, as appropriate, may not be recoverable. When the sum of the undiscounted future net cash flows expected to result from the use and the eventual disposition is less than the carrying amounts, an impairment loss would be measured based on the discounted cash flows compared to the carrying amounts. There was no impairment charge recorded for the years ended December 31, 2017 and 2016. Revenue recognition The Company recognizes revenue from the sale of its products through e-commerce and wholesale channels when the transfer of title and risk of loss occurs. For shipments with terms of FOB Shipping Point, revenue is recognized upon shipment. For shipments with terms of FOB Destination, revenue is recognized upon delivery. Sales returns and allowances are recorded as a reduction to sales in the period in which sales are recorded. The Company records shipping charges and sales tax gross in revenues and cost of goods sold. Sales discounts and other adjustments are recorded at the time of sale. Cost of goods sold Cost of goods sold is comprised of costs to manufacture or acquire products sold to customers, direct and indirect distribution costs, and other costs incurred in the sale of goods. Shipping and handling costs Shipping and handling costs are included in cost of goods sold. Shipping and handling costs were $10,366 and $3,884 for the years ended December 31, 2017 and 2016, respectively. Sales and use tax Revenues, as presented on the accompanying income statement, include taxes collected from customers and remitted to governmental authorities. Such taxes were $5,132 and $1,205 for the years ended December 31, 2017 and 2016, respectively. Research and development Research and development costs are expensed as incurred and consists primarily of salaries and wages of scientists and related personnel engaged in research and development activities, scientific consultations, manufacturing of product candidates, third-party research, laboratory supplies, rents associated with operating leased laboratory equipment, and scientific advisory boards. The focus of these costs is on the development of Astaxanthin technologies. For the years ended December 31, 2017 and 2016, research and development costs were $460,991 and $347,885, respectively. Advertising Advertising costs are expensed as incurred and are included as an element of sales and marketing costs in the accompanying consolidated statements of operations. For the years ended December 31, 2017 and 2016, advertising costs were $84,317 and $27,939, respectively. Income taxes The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax reporting purposes, net operating loss carry-forwards, and other tax credits measured by applying currently enacted tax laws. A valuation allowance is provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. The Company determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company files income tax returns in the United States (“U.S.”) Federal and the States of Hawaii and California jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company did not recognize any tax liabilities for income taxes associated with unrecognized tax benefits as of December 31, 2017 and 2016. The Company’s policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for income taxes in the consolidated statements of operations. Fair value measurements U.S. GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure 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). The three levels of the fair value hierarchy are described below: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2: Inputs to the valuation methodology include: ● Quoted prices for similar assets or liabilities in active markets; ● Quoted prices for identical or similar assets or liabilities in inactive markets; ● Inputs other than quoted prices that are observable for the asset or liability; and ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2017 and 2016, there were no recurring fair value measurements of assets and liabilities subsequent to initial recognition. Stock based compensation The Company accounts for stock based compensation costs under the provisions of ASC No. 718, Compensation—Stock Compensation Equity Basic and diluted net loss per share Basic earnings per common share is calculated by dividing net loss for the year by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by dividing net loss for the year by the sum of the weighted average number of common shares outstanding during the year plus the number of potentially dilutive common shares (“dilutive securities”) that were outstanding during the year. Dilutive securities include options granted pursuant to the Company’s stock option plans, and warrants issued to non-employees. Potentially dilutive securities are excluded from the computation of earnings per share in periods in which a net loss is reported, as their effect would be antidilutive. Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date The FASB issued four additional ASUs in 2016 that affect the guidance in ASU No. 2014-09, Revenue from Contracts with Customers ● In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ● In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing ● In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients Revenue from Contracts with Customers ● In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU No. 2016-02, Leases The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous U.S. GAAP. The guidance in ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently assessing the impact of this ASU on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 23) In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting The Company does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements. Reclassifications The Company has made certain reclassifications to conform its prior periods’ data to the current presentation. These reclassifications had no effect on the reported results of operations or cash flows. |
Inventories
Inventories | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||
Inventories | NOTE 3 – INVENTORIES Inventories consist of the following as of: September 30, 2018 (Unaudited) December 31, 2017 Finished goods $ 267,543 $ 240,917 Raw materials 58,631 98,937 Packing supplies and materials - 571 Total inventories $ 326,174 $ 340,425 | NOTE 3 – INVENTORIES Inventories consist of the following as of December 31: 2017 2016 Finished goods $ 240,917 $ 10,827 Raw materials 98,937 - Packing supplies and materials 571 - Total inventories $ 340,425 $ 10,827 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment, Net | NOTE 4 – PROPERTY AND EQUIPMENT, net Property and equipment, net, consists of the following as of: September 30, 2018 (Unaudited) December 31, 2017 Information technology equipment $ - $ 31,892 Less accumulated depreciation - (29,991 ) Total property and equipment, net $ - $ 1,901 Depreciation expense was $0 and $1,901, for the three and nine-months ended September 30, 2018, respectively, and $1,496 and $4,513, for the three and nine-months ended September 30, 2017, respectively. During the nine-months ended September 30, 2018, Company wrote off its fully depreciated equipment. There was no gain or loss recognized for this write-off. | NOTE 4 – PROPERTY AND EQUIPMENT, net Property and equipment, net, consists of the following as of December 31: 2017 2016 Information technology equipment $ 31,892 $ 31,892 Less accumulated depreciation (29,991 ) (24,137 ) Total property and equipment, net $ 1,901 $ 7,755 Depreciation expense was $5,854 and $6,168, for the years ended December 31, 2017 and 2016, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible Assets, Net | NOTE 5 – INTANGIBLE ASSETS, net Intangible assets, net, consists of the following as of: September 30, 2018 (Unaudited) December 31, 2017 Patents $ 522,575 $ 493,027 Less accumulated amortization (285,795 ) (263,843 ) 236,780 229,184 Patents pending 198,361 197,426 Total intangible assets, net $ 435,141 $ 426,610 Patents are amortized straight-line over a period of fifteen years. Amortization expense was $6,717 and $21,952 for the three and nine-months ended September 30, 2018, respectively, and $5,892 and $17,676 for the three and nine-months ended September 30, 2017, respectively. The Company has capitalized costs for several patents that are still pending. In those instances, the Company has not recorded any amortization. The Company will commence amortization when these patents are approved. The Company owns 25 issued patents, including 14 in the United States and 11 others in Europe, Canada, China, India, Japan, and Hong Kong. These patents will expire beginning in 2023 through 2028, subject to any patent term extensions of the individual patent. The Company has 3 foreign patent applications pending in Europe and Brazil. | NOTE 5 – INTANGIBLE ASSETS, net Intangible assets, net, consists of the following as of December 31: 2017 2016 Patents $ 493,027 $ 432,985 Less accumulated amortization (263,843 ) (240,275 ) 229,184 192,710 Patents pending 197,426 238,060 Total intangible assets, net $ 426,610 $ 430,770 Patents are amortized straight-line over a period of fifteen years. Amortization expense was $23,568 and $22,933 for the years ended December 31, 2017 and 2016, respectively. The Company has capitalized costs for several patents that are still pending. In those instances, the Company has not recorded any amortization. The Company will commence amortization when these patents are approved. The Company owns 22 issued patents, including 14 in the United States and 8 others in China, India, Japan, and Hong Kong. These patents will expire during the years of 2023 to 2028, subject to any patent term extensions of the individual patent. The Company has 4 foreign patent applications pending in Europe, Canada, and Brazil. |
Accrued Separation Costs
Accrued Separation Costs | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Separation Costs | NOTE 6 –ACCRUED SEPARATION COSTS On August 9, 2016, the Company entered into a separation agreement with an employee to pay $118,635 of accrued compensation over nine-years. This amount is included in accrued payroll and payroll related expenses in the accompanying balance sheets. This amount does not yield interest and matures as follows for the twelve-months ended September 30: 2019 $ 9,000 2020 9,000 2021 11,250 2022 12,000 2023 16,500 Thereafter 46,135 103,885 Less current portion (9,000 ) $ 94,885 |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Stockholders' Deficit | NOTE 7 – STOCKHOLDERS’ DEFICIT Warrant exchange In June 2018, the Company commenced an offering to exchange outstanding warrants for shares of common stock under a Form S-4 Registration Statement. These shares of common stock would be issued to warrant holders in exchange for (i) their outstanding warrants to purchase shares of common stock at $0.625 per share, and (ii) cash payment of $0.15 per share. This offering closed on July 27, 2018, and resulted in an exchange of 9.6 million warrants for $1,440,043 in gross proceeds and 9,600,286 shares of common stock. Of this amount, $653,278 was held in escrow as subscriptions receivable as of September 30, 2018 and received on October 5, 2018, less $113,616 in placement fees and expenses, to net $539,662. Self-directed stock issuance During the year ended December 31, 2017, the Company sold securities in a self-directed offering in the aggregate amount of $179,000, $3,774,456, and $124,979 at $0.08, $0.12, and $0.30, respectively, per unit. Each $0.08 unit consisted of 1 share of restricted common stock (2,237,500 shares), a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.08 per share, a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.12 per share, and a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.16 per share. Each $0.12 unit consisted of 1 share of restricted common stock (31,453,788 shares) and a five-year warrant to purchase 1 share of restricted common stock (31,453,788 warrant shares) at $0.12 per share. Each $0.30 unit consisted of 1 share of restricted common stock (416,595 shares) and a five-year warrant to purchase 1 share of restricted common stock (416,595 warrant shares) at $0.30 per share. Equity purchase agreement In July 2016, the Company entered into an equity purchase agreement (the “EPA”) and a registration rights agreement with an investor. Pursuant to the terms of the EPA, the Company has the right, but not the obligation, to sell shares of its common stock to the investor on the terms specified in the EPA. On the date of the EPA, the Company issued 1,500,000 shares to the investor. The total fair value of this stock on the date of grant was $106,500. These shares were fully vested upon issuance. During the nine-months ended September 30, 2018 and 2017, the Company sold 0 and 567,644 shares of common stock for $0 and $60,000, respectively, pursuant to the EPA. Payable settlement In May 2017, the Company settled a payable in the amount of $44,700 with a previously engaged broker dealer through the issuance of securities at $0.08 per unit. Each unit consisted of 1 share of restricted common stock (558,750 shares), a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.16 per share. Shares outstanding As of September 30, 2018 and December 31, 2017, the Company had a total of 133,338,573 and 122,674,516, respectively, shares of common stock outstanding. | NOTE 6 – STOCKHOLDERS’ DEFICIT Self-directed stock issuance During the year ended December 31, 2016, the Company sold securities in a self-directed offering in the aggregate amount of $1,121,000 at $0.08 per unit. Each unit consisted of 1 share of restricted common stock (14,012,500 shares), a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.16 per share. During the year ended December 31, 2017, the Company sold securities in a self-directed offering in the aggregate amount of $179,000, $3,774,456, and $124,979 at $0.08, $0.12, and $0.30, respectively, per unit. Each $0.08 unit consisted of 1 share of restricted common stock (2,237,500 shares), a five-year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.16 per share. Each $0.12 unit consisted of 1 share of restricted common stock (31,453,788 shares) and a five-year warrant to purchase 1 share of restricted common stock (31,453,788 warrant shares) at $0.12 per share. Each $0.30 unit consisted of 1 share of restricted common stock (416,595 shares) and a five-year warrant to purchase 1 share of restricted common stock (416,595 warrant shares) at $0.30 per share. Equity purchase agreement In July 2016, the Company entered into an equity purchase agreement (the “EPA”) and a registration rights agreement with an investor. Pursuant to the terms of the EPA, the Company has the right, but not the obligation, to sell shares of its common stock to the investor on the terms specified in the EPA. On the date of the EPA, the Company issued 1,500,000 shares to the investor. The total fair value of this stock on the date of grant was $106,500. These shares were fully vested upon issuance. During the years ended December 31, 2017 and 2016, the Company sold 567,644 and 0 shares of common stock for $60,000 and $0, respectively, pursuant to the EPA. Payable settlement In May 2017, the Company settled a payable in the amount of $44,700 with a previously engaged broker dealer through the issuance of securities at $0.08 per unit. Each unit consisted of 1 share of restricted common stock (558,750 shares), a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.16 per share. Shares outstanding As of December 31, 2017 and 2016, the Company had a total of 122,674,516 and 85,068,709 shares of common stock outstanding. |
Stock Grants
Stock Grants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Stock Grants | NOTE 8 – STOCK GRANTS Director stock grants During the nine-months ended September 30, 2018 and 2017, the Company granted its independent directors an aggregate of 906,774 and 418,025 shares of restricted common stock in the Company, respectively. These shares were fully vested upon issuance. The increase in number of shares issued was due to the expansion of the Board of Directors by two members in June 2018. The total fair value of this stock on the date of grant was $200,000 and $93,750 for the nine-months ended September 30, 2018 and 2017, respectively. Consultant stock grants On April 10, 2017, the Company granted a consultant 100,000 shares of restricted common stock valued at $0.23 per share. These shares were subject to a risk of forfeiture and vested quarterly in arrears commencing on April 1, 2017. The Company recognized $5,750 and $11,500 in stock based compensation related to this grant during the nine-months ended September 30, 2018 and 2017, respectively. On August 8, 2017, the Company granted a consultant 100,000 shares of restricted common stock valued at $0.175 per share. These shares were subject to a risk of forfeiture and vested 25% upon grant and quarterly in arrears thereafter commencing on September 1, 2017. The Company recognized $4,375 and $8,750 in stock based compensation related to this grant during the nine-months ended September 30, 2018 and 2017, respectively. | NOTE 7 – STOCK GRANTS Director stock grants During 2017 and 2016, the Company granted its independent directors an aggregate of 793,025 and 468,254, respectively, shares of restricted common stock in the Company. The expense recognized for these grants based on the grant date fair value was $150,000 and $41,666 for the years ended December 31, 2017 and 2016, respectively. These shares were fully vested upon issuance. Consultant stock grants On April 10, 2017, the Company granted a consultant 100,000 shares of restricted common stock valued at $0.23 per share. These shares are subject to a risk of forfeiture and vest quarterly in arrears commencing on April 1, 2017. The Company recognized $17,250 in stock based compensation related to this grant during the year ended December 31, 2017. On August 8, 2017, the Company granted a consultant 100,000 shares of restricted common stock valued at $0.175 per share. These shares are subject to a risk of forfeiture and vest 25% upon grant and quarterly in arrears thereafter commencing on September 1, 2017. The Company recognized $13,125 in stock based compensation related to this grant during the year ended December 31, 2017. |
Stock Option Plans
Stock Option Plans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock Option Plans | NOTE 9 – STOCK OPTION PLANS On February 7, 2014, the Company adopted the 2014 Equity Compensation Plan. Under this plan, the Company may issue options to purchase shares of common stock to employees, directors, advisors, and consultants. The aggregate number of shares that could be issued under this plan upon adoption was 30,420,148. On April 16, 2015, the majority stockholder of the Company approved an increase in the Company’s 2014 Equity Compensation Plan by 15 million shares. Under the terms of the 2014 Equity Compensation Plan and the 2006 Stock Incentive Plan (collectively, the “Plans”), incentive stock options may be granted to employees at a price per share not less than 100% of the fair market value at date of grant. If the incentive stock option is granted to a 10% stockholder, then the purchase or exercise price per share shall not be less than 110% of the fair market value per share of common stock on the grant date. Non-statutory stock options and restricted stock may be granted to employees, directors, advisors, and consultants at a price per share, not less than 100% of the fair market value at date of grant. Options granted are exercisable, unless specified differently in the grant documents, over a default term of ten years from the date of grant and generally vest over a period of four years. A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2017 36,821,969 $ 0.41 5.94 $ 301,273 Exercisable January 1, 2017 36,771,969 $ 0.41 5.94 $ 299,273 Canceled - Granted 2,161,458 Exercised (770,000 ) - Forfeited - Outstanding December 31, 2017 38,213,427 $ 0.41 5.23 $ 562,456 Exercisable December 31, 2017 36,213,427 $ 0.41 4.98 $ 562,456 Canceled (350,000 ) Granted 1,833,334 Exercised (156,997 ) - Forfeited (43,003 ) Outstanding September 30, 2018 39,496,761 $ 0.41 4.64 $ 986,808 Exercisable September 30, 2018 36,580,097 $ 0.41 4.28 $ 963,475 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price option recipients would have received if all options had been exercised on September 30, 2018, based on a valuation of the Company’s stock for that day. A summary of the Company’s non-vested options for the year ended December 31, 2017, and nine-months ended September 30, 2018, are presented below: Non-vested at January 1, 2017 50,000 Granted 2,161,458 Vested (211,458 ) Canceled - Non-vested at December 31, 2017 2,000,000 Granted 1,833,334 Vested (566,670 ) Canceled (350,000 ) Non-vested at September 30, 2018 2,916,664 The Company estimates the fair value of stock options granted on each grant date using the Black-Scholes option valuation model and recognizes an expense ratably over the requisite service period. The range of fair value assumptions related to options issued were as follows for the: Nine-months ended September 30, 2018 Year ended December 31, 2017 Dividend yield 0.0 % 0.0 % Risk-free rate 2.38% - 2.80 % 1.89% - 2.26 % Expected volatility 217% - 226 % 221% - 232 % Expected term 3 - 7 years 5 - 7 years The expected volatility was calculated based on the historical volatility of the Company. The risk-free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the stock options to be valued. The expected dividend yield was zero, because the Company does not anticipate paying a dividend within the relevant timeframe. Due to a lack of historical information needed to estimate the Company’s expected term, it was estimated using the simplified method allowed. The Company records forfeitures as they occur and reverses compensation cost previously recognized, in the period the award is forfeited, for an award that is forfeited before completion of the requisite service period. Stock option exercise During the nine-months ended September 30, 2018, the Company issued 156,997 shares of common stock in connection with the cashless exercise of stock options for 100,000, 50,000, and 50,000 shares of common stock exercisable at $0.06 per share with 43,003 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price. During the year ended December 31, 2017, the Company issued 645,288 shares of common stock in connection with the cashless exercise of stock options for 100,000, 45,000, and 625,000 shares of common stock exercisable at $0.155, $0.06, and $0.06, respectively, per share with 124,712 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price. Stock based compensation The Company recognized stock-based compensation expense related to options during the: Nine-months ended September 30 2018 2017 Number Amount Number Amount Employee compensation 450,000 $ 156,875 - $ - Compensation for outside services 375,000 76,250 50,000 3,500 Director compensation - - 161,458 25,000 Total 825,000 $ 233,125 211,458 $ 28,500 | NOTE 8 – STOCK OPTION PLANS On February 7, 2014, the Company adopted the 2014 Equity Compensation Plan. Under this plan, the Company may issue options to purchase shares of common stock to employees, directors, advisors, and consultants. The aggregate number of shares that may be issued under this plan is 30,420,148. On April 16, 2015, the majority stockholder of the Company approved an increase in the Company’s 2014 Equity Compensation Plan by 15 million shares. Under the terms of the 2014 Equity Compensation Plan and the 2006 Stock Incentive Plan (collectively, the “Plans”), incentive stock options may be granted to employees at a price per share not less than 100% of the fair market value at date of grant. If the incentive stock option is granted to a 10% stockholder, then the purchase or exercise price per share shall not be less than 110% of the fair market value per share of common stock on the grant date. Non-statutory stock options and restricted stock may be granted to employees, directors, advisors, and consultants at a price per share, not less than 100% of the fair market value at date of grant. Options granted are exercisable, unless specified differently in the grant documents, over a default term of ten years from the date of grant and generally vest over a period of four years. A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2016 34,167,354 $ 0.47 6.57 $ 974,066 Exercisable January 1, 2016 34,167,354 $ 0.47 6.57 $ 974,066 Canceled - Granted 6,156,580 Exercised - Forfeited (3,501,965 ) Outstanding December 31, 2016 36,821,969 $ 0.41 5.94 $ 301,273 Exercisable December 31, 2016 36,771,969 $ 0.41 5.94 $ 299,273 Canceled - Granted 2,161,458 Exercised (770,000 ) Forfeited - Outstanding December 31, 2017 38,213,427 $ 0.41 5.23 $ 562,456 Exercisable December 31, 2017 36,213,427 $ 0.41 4.98 $ 562,456 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price option recipients would have received if all options had been exercised on December 31, 2017, based on a valuation of the Company’s stock for that day. A summary of the Company’s non-vested options for the years ended December 31, 2017 and year ended December 31, 2016 are presented below: Non-vested at January 1, 2016 - Granted 6,156,580 Vested (6,106,580 ) Forfeited - Non-vested at December 31, 2016 50,000 Granted 2,161,458 Vested (211,458 ) Forfeited - Non-vested at December 31, 2017 2,000,000 The Company estimates the fair value of stock options granted on each grant date using the Black-Scholes option valuation model and recognizes an expense ratably over the requisite service period. The range of fair value assumptions related to options issued outstanding were as follows for the years ended December 31: 2017 2016 Dividend yield 0.0 % 0.0 % Risk-free rate 1.89% - 2.26 % 0.80% - 1.03 % Expected volatility 221% - 232 % 141% - 225 % Expected term 5 - 7 years 5 years The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company, and the historical volatility of the Company. The risk-free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the stock options to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant timeframe. Due to a lack of historical information needed to estimate the Company’s expected term, it was estimated using the simplified method allowed. The Company records forfeitures as they occur and reverses compensation cost previously recognized, in the period the award is forfeited, for an award that is forfeited before completion of the requisite service period. Stock option exercise During the year ended December 31, 2017, the Company issued 645,288 shares of common stock in connection with the cashless exercise of stock options for 100,000, 45,000, and 625,000 shares of common stock at $0.155, $0.06, and $0.06, respectively, per share with 124,712 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price. The Company recognized stock based compensation expense related to options during the: Years ended December 31 2017 2016 Number Amount Number Amount In lieu of accrued salaries - $ - 3,796,385 $ 227,784 In lieu of accrued fees for outside services - - 1,107,417 66,445 Compensation for outside services 50,000 3,500 50,000 3,500 Employee compensation (unvested) 2,000,000 33,271 - - Director compensation 161,458 25,000 1,152,778 79,167 Total 2,211,458 $ 61,771 6,106,580 $ 376,896 |
Warrants
Warrants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Warrants | NOTE 10 – WARRANTS The following is a summary of the Company’s warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2017 88,365,036 $ 0.30 3.50 $ 543,770 Exercisable January 1, 2017 88,365,036 $ 0.30 3.50 $ 543,770 Canceled - Granted 40,259,133 Exercised (798,000 ) Forfeited (392,047 ) Outstanding December 31, 2017 127,434,122 $ 0.24 3.15 $ 3,957,689 Exercisable December 31, 2017 127,434,122 $ 0.24 3.15 $ 3,957,689 Canceled - Granted 315,010 Exercised 9,600,286 Forfeited - Outstanding September 30, 2018 118,148,846 $ 0.20 2.57 $ 7,848,637 Exercisable September 30, 2018 118,148,846 $ 0.20 2.57 $ 7,848,637 The Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. The expected volatility is calculated based on the historical volatility of the Company. The risk-free interest rate used is based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected dividend yield is zero, because the Company does not anticipate paying a dividend within the relevant timeframe. Due to a lack of historical information needed to estimate the Company’s expected term, it is estimated using the simplified method allowed. The Company did not recognize any stock-based compensation expense related to warrants during the nine-months ended September 30, 2018 and 2017, respectively. Warrant exercise During the year ended December 31, 2017, the Company issued 233,217 shares of common stock in connection with the cashless exercise of a warrant for 298,000 shares of common stock at $0.10 per share with 64,783 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price. During the year ended December 31, 2017, the Company issued 500,000 shares of common stock in connection with the exercise of a warrant for 500,000 shares of common stock at $0.08 per share in exchange for $40,000. Warrant expiration During the year ended December 31, 2017, warrants to purchase an aggregate of 392,047 shares of restricted common stock expired. Warrant exchange In June 2018, the Company commenced an offering to exchange outstanding warrants for shares of common stock under a Form S-4 Registration Statement. These shares of common stock would be issued to warrant holders in exchange for (i) their outstanding warrants to purchase shares of common stock at $0.625 per share, and (ii) cash payment of $0.15 per share. This offering closed on July 27, 2018, and resulted in an exchange of 9.6 million warrants for $1,440,043 in gross proceeds and 9,600,286 shares of common stock. Of this amount, $653,278 was held in escrow as subscriptions receivable as of September 30, 2018. The subscriptions receivable amount was received on October 5, 2018, less $113,616 in placement fees and expenses, to net $539,662. As part of this exchange, warrants to purchase 315,010 shares of common stock at $0.21 per share were issued to investment bankers for their services. | NOTE 9 – WARRANTS The following is a summary of the Company’s warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2016 47,003,962 $ 0.46 3.49 $ 2,579,541 Exercisable January 1, 2016 47,003,962 $ 0.46 3.49 $ 2,579,541 Canceled - Granted 42,037,500 Exercised - Forfeited (676,426 ) Outstanding December 31, 2016 88,365,036 $ 0.30 3.50 $ 543,770 Exercisable December 31, 2016 88,365,036 $ 0.30 3.50 $ 543,770 Canceled - Granted 40,259,133 Exercised (798,000 ) Forfeited (392,047 ) Outstanding December 31, 2017 127,434,122 $ 0.24 3.15 $ 3,957,689 Exercisable December 31, 2017 127,434,122 $ 0.24 3.15 $ 3,957,689 The Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk-free interest rate used was based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected dividend yield was zero, as the Company does not anticipate paying a dividend within the relevant timeframe. The expected warrant term is the life of the warrant. The Company did not recognize any stock based compensation expense related to warrants during the years ended December 31, 2017 and 2016, respectively. Warrant exercise During the year ended December 31, 2017, the Company issued 233,217 shares of common stock in connection with the cashless exercise of a warrant for 298,000 shares of common stock at $0.10 per share with 64,783 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price. During the year ended December 31, 2017, the Company issued 500,000 shares of common stock in connection with the exercise of a warrant for 500,000 shares of common stock at $0.08 per share in exchange for $40,000. Warrant expiration During the years ended December 31, 2017 and 2016, warrants to purchase an aggregate of 392,047 and 676,426, respectively, shares of restricted common stock expired. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 10 – RELATED PARTY TRANSACTIONS Executive chairman agreement As part of an executive chairman agreement, a director provided services to the Company. This agreement was amended on April 1, 2015. Under the terms of this amendment, the director received $37,500 in equity instruments issued quarterly in arrears as compensation. Effective April 1, 2016, the director agreed to suspend any additional equity compensation, until otherwise agreed by the Company. Effective August 12, 2016, the Company accepted the request for a leave of absence and resignation by the director as Executive Chairman and member of the Board of Directors. The Company incurred $0 and $37,500 in stock based compensation to this director during the years ended December 31, 2017 and 2016, respectively. The amount payable to this director was $293,546 as of December 31, 2017 and 2016. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | NOTE 11 – INCOME TAXES The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. The effective tax rate for the three and nine-months ended September 30, 2018 and 2017, differs from the statutory rate of 21% as a result of state taxes (net of Federal benefit), permanent differences, and a reserve against deferred tax assets. The Company’s valuation allowance was primarily related to the operating losses. The valuation allowance is determined in accordance with the provisions of ASC No. 740, Income Taxes Recent tax legislation On March 22, 2018, the Tax Cuts and Jobs Act (“TCJA”) was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions that affect our business, such as reducing the U.S. federal statutory tax rate from 35% to 21% effective January 1, 2018. Uncertain tax positions The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (“uncertain tax positions”) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events. As of September 30, 2018 and December 31, 2017, there was no liability for income tax associated with unrecognized tax benefits. The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest income or expense in its condensed consolidated statements of operations, which is consistent with the recognition of these items in prior reporting periods. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | NOTE 11 – INCOME TAXES The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. In 2017, the Company adopted FASB issued ASU No. 2015-17, Income Taxes (Topic 740) There was not a provision for income taxes for the years ended December 31, 2017 and 2016. The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. The following table presents a reconciliation of the statutory Federal rate and the Company’s effective tax rate for the years ended December 31: 2017 2016 Tax provision (benefit) at Federal statutory rate (34.00 )% (34.00 )% Accrued compensation (0.32 )% 0.89 % Stock based compensation 4.15 % 10.01 % Depreciation and amortization 0.59 % 0.36 % Other 0.26 % 0.09 % Change in valuation allowance 29.32 % 22.65 % Effective tax rate 0.00 % 0.00 % The effective tax rate for the three and years ended December 31, 2017 and 2016, differs from the statutory rate of 34% as a result of state taxes (net of Federal benefit), permanent differences, and a reserve against deferred tax assets. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents significant components of the Company’s deferred tax assets and liabilities for the years ended December 31: 2017 2016 DEFERRED TAX ASSETS, net: Net operating loss carryforwards $ 8,705,467 $ 12,013,384 Accrued compensation 1,074,903 1,535,184 Stock based compensation 66,348 200,700 Credit carryforwards 71,910 100,318 Depreciation and amortization carryforwards (71,054 ) (87,903 ) Total 9,847,574 13,761,683 Less valuation allowance (9,847,574 ) (13,761,683 ) NET DEFERRED TAX ASSETS assets $ - $ - As of December 31, 2017, the Company had a Federal net operating loss carryforward of $33,345,946. The net operating loss carryforward expires at various dates beginning in 2026 if not utilized. In addition, the Company had a net operating loss carryforward for Hawaii income tax purposes of $26,606,541 as of December 31, 2017, which expires at various dates beginning in 2026 if not utilized. These amounts differ from the Company’s accumulated deficit due to permanent and temporary tax differences. The Company’s valuation allowance was primarily related to the operating losses. The valuation allowance is determined in accordance with the provisions of ASC No. 740, Income Taxes Recent tax legislation On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions that affect our business, such as reducing the U.S. federal statutory tax rate. The TCJA reduces the U.S. federal statutory tax rate from 35% to 21% effective January 1, 2018. As a result of TCJA, we recorded a change in our deferred tax asset of approximately, $3.8 million, which was offset by an adjustment to the allowance. Uncertain tax positions The Company is subject to taxation in the United States and two state jurisdictions. The preparation of tax returns requires management to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Management, in consultation with its tax advisors, files its tax returns based on interpretations that are believed to be reasonable under the circumstances. The income tax returns, however, are subject to routine reviews by the various taxing authorities. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by management (“uncertain tax positions”) and therefore may require the Company to pay additional taxes. Management evaluates the requirement for additional tax accruals, including interest and penalties, which the Company could incur as a result of the ultimate resolution of its uncertain tax positions. Management reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, completion of tax audits, expiration of statute of limitations, or upon occurrence of other events. As of December 31, 2017 and 2016, there was no liability for income tax associated with unrecognized tax benefits. The Company recognizes accrued interest related to unrecognized tax benefits as well as any related penalties in interest income or expense in its consolidated statements of operations, which is consistent with the recognition of these items in prior reporting periods. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. State tax credits The Company received a refundable tax credit of $17,253 and $47,082 from the State of Hawaii during the years ended December 31, 2017 and 2016, respectively. This amount is recorded as other income in the consolidated statement of operations. |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Basic and Diluted Net Loss Per Share | NOTE 12 – BASIC AND DILUTED NET LOSS PER SHARE The following table sets forth the computation of the Company’s basic and diluted net loss per share for: Three-months ended September 30, 2018 (Unaudited) Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (928,888 ) 130,083,598 $ (0.01 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (928,888 ) 130,083,598 $ (0.01 ) Three-months ended September 30, 2017 (Unaudited) Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (363,156 ) 100,587,843 $ (0.00 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (363,156 ) 100,587,843 $ (0.00 ) Nine-months ended September 30, 2018 (Unaudited) Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (3,076,873 ) 125,271,516 $ (0.02 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (3,076,873 ) 125,271,516 $ (0.02 ) Nine-months ended September 30, 2017 (Unaudited) Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,197,035 ) 92,513,317 $ (0.01 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (1,197,035 ) 92,513,317 $ (0.01 ) The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive for the periods ended: September 30, 2018 September 30, 2017 (Unaudited) (Unaudited) Common stock options 39,496,761 36,838,427 Common stock warrants 118,148,846 127,018,546 Total common stock equivalents 157,645,607 163,856,973 | NOTE 12 – BASIC AND DILUTED NET LOSS PER SHARE The following table sets forth the computation of the Company’s basic and diluted net loss per share for the years ended December 31: 2017 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,985,234 ) 99,951,385 $ (0.02 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (1,985,234 ) 99,951,385 $ (0.02 ) 2016 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,783,705 ) 76,227,524 $ (0.02 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (1,783,705 ) 76,227,524 $ (0.02 ) The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive for the years ended December 31: 2017 2016 Common stock options 38,213,427 36,821,969 Common stock warrants 127,434,122 88,365,036 Total common stock equivalents 165,647,549 125,187,005 |
Leases
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | ||
Leases | NOTE 13 – LEASES Manoa Innovation Center The Company entered into an automatically renewable month-to-month lease for office space on August 13, 2010. Under the terms of this lease, the Company must provide a written notice 45 days prior to vacating the premises. Total rent expense under this agreement as amended was $8,760 and $29,662, for the three and nine-months ended September 30, 2018, respectively, and $8,164 and $23,935, for the three and nine-months ended September 30, 2017, respectively. Fleet Lease In January 2018, the Company entered into a vehicle lease arrangement with a rental company for three vehicles. The terms of the leases require total monthly payments of $1,619 for three years. These leases convert to month-to-month leases in January 2021 unless terminated. Total rent expense under this agreement was $5,602 and $14,953, for the three and nine-months ended September 30, 2018, respectively, and $0 for the three and nine-months ended September 30, 2017. | NOTE 13 – LEASES Manoa Innovation Center The Company entered into an automatically renewable month-to-month lease for office space on August 13, 2010. Under the terms of this lease, the Company must provide a written notice 45 days prior to vacating the premises. Total rent expense under this agreement as amended was $29,690 and $32,049, for the years ended December 31, 2017 and 2016, respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 14 – COMMITMENTS Patent payable As part of the formation of the Company, a patent license was transferred to the Company. The original license began in 2006. Under the terms of the license the Company agreed to pay $10,000 per year through 2015 and royalties of 2% on any revenues resulting from the license. There were no revenues generated by this license during the years ended December 31, 2017 and 2016. The remaining obligation of $20,000 as of December 31, 2017 and 2016, is recorded as a part of accounts payable on the consolidated balance sheets. The license expired in February 2016. Employee settlement As of December 31, 2017 and 2016, the Company owed a former employee a severance settlement payable in the amount of $50,000 for accrued vacation benefits. As part of the severance settlement, a stock option previously granted to the former employee was fully vested and extended. BASF agreement and license In November 2006, the Company entered into a joint development and supply agreement with BASF SE (“BASF”). Under the agreement, the Company granted BASF an exclusive world-wide license to the Company’s rights related to the development and commercialization of Astaxanthin consumer health products; the Company retains all rights related to Astaxanthin pharmaceutical products. The Company is to receive specified royalties based on future net sales of such Astaxanthin consumer health products. No royalties were realized from this agreement during the years ended December 31, 2017 and 2016. Capsugel agreement On August 18, 2014, the Company entered into a collaboration agreement with Capsugel US, LLC (“Capsugel”) for the joint commercial development of Astaxanthin products (“Capsugel Astaxanthin Products”) for the consumer health market that contain nature-identical synthetic Astaxanthin and use Capsugel’s proprietary formulation technology. The agreement provides for the parties to jointly administer activities under a product development plan that will include identifying at least one mutually acceptable third party marketer who will further develop, market and distribute Capsugel Astaxanthin Products. Capsugel will share revenues with the Company based on net sales of products that are developed under the collaboration. No revenues were realized from this agreement during the years ended December 31, 2017 and 2016. In January 2016, the Company suspended development of a Capsugel Astaxanthin Product, ASTX-1F, based on certain technical issues which, together with other business and regulatory issues, materially impeded the formulation of ASTX-1F as a commercially viable product for the consumer health market. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 14 – SUBSEQUENT EVENTS The Company evaluated all material events through the date the financials were ready for issuance. On October 5, 2018, the Company received the subscriptions receivable amount outstanding of $653,278, less $113,616 in placement fees and expenses, to net $539,662. | NOTE 15 – SUBSEQUENT EVENTS The Company evaluated all material events through the date the financials were ready for issuance and noted the following non-recognized events for disclosure. In January 2018: (i) an unvested option to purchase 50,000 shares of common stock was fully vested and the expiration modified from 90 days post termination of services to September 2027; (ii) an option to purchase 500,000 shares of common stock was granted to a service provider and shall be exercisable at $0.16 per share, vest over 4 years, and expire in 10 years; (iii) an option to purchase 166,667 shares of common stock was granted to a service provider and shall be exercisable at $0.16 per share, vest over 1 year, and expire in 5 years; and (iv) an option to purchase 166,667 shares of common stock was granted to an employee and shall be exercisable at $0.16 per share, vest over 1 year, and expire in 5 years. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of presentation The consolidated financial statements have been consistently prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc., and its predecessor, Cardax Pharmaceuticals, Inc., which was merged with and into Cardax, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Use of Estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Estimates in these consolidated financial statements include asset valuations, estimates of future cash flows from and the economic useful lives of long-lived assets, valuations of stock compensation, certain accrued liabilities, income taxes and tax valuation allowances, and fair value estimates. Despite management’s intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from these estimates and assumptions. | |
Cash | Cash The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company held no cash equivalents as of December 31, 2017 and 2016. The Company maintains cash deposit accounts at one financial institution. Accounts at this institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance at times may exceed these limits. As of December 31, 2017 and 2016, the Company had $1,988,139 and $0, respectively, in excess of federally insured limits on deposit. | |
Accounts Receivable | Accounts receivable Accounts receivable of $37,243 and $0 as of December 31, 2017 and 2016, respectively, consists of amounts due from sales of consumer health products. It is the Company’s policy to provide for an allowance for doubtful collections based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Normal receivables are due 60 days after the issuance of the invoice. Receivables past due more than 90 days are considered delinquent. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. There was no allowance necessary as of December 31, 2017 and 2016. | |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined using the average cost method. Market is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include third party costs for finished goods. The Company utilizes contract manufacturers and receives inventory in finished form. The Company provides a reserve against inventory for known or expected inventory obsolescence. The reserve is determined by specific review of inventory items for product age and quality that may affect salability. There were no reserves necessary for inventory as of December 31, 2017 and 2016. | |
Property and Equipment, Net | Property and equipment, net Property and equipment are recorded at cost, less depreciation. Equipment under capital lease obligations and leasehold improvements are amortized on the straight-line method over the shorter period of the lease term or the estimated useful life of the equipment. Such amortization is included in depreciation and amortization in the consolidated financial statements. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets are as follows. Furniture and office equipment 7 years Research and development equipment 3 to 7 years Information technology equipment 5 years Software 3 years Major additions and improvements are capitalized, and routine expenditures for repairs and maintenance are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is charged to income for the period. | |
Impairment of Long-lived Assets | Impairment of long-lived assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets, as appropriate, may not be recoverable. When the sum of the undiscounted future net cash flows expected to result from the use and the eventual disposition is less than the carrying amounts, an impairment loss would be measured based on the discounted cash flows compared to the carrying amounts. There was no impairment charge recorded for the years ended December 31, 2017 and 2016. | |
Revenue Recognition | Revenue recognition The Company recognizes revenue from the sale of its products through e-commerce and wholesale channels when the transfer of title and risk of loss occurs. For shipments with terms of FOB Shipping Point, revenue is recognized upon shipment. For shipments with terms of FOB Destination, revenue is recognized upon delivery. Sales returns and allowances are recorded as a reduction to sales in the period in which sales are recorded. The Company records shipping charges and sales tax gross in revenues and cost of goods sold. Sales discounts and other adjustments are recorded at the time of sale. | |
Cost of Goods Sold | Cost of goods sold Cost of goods sold is comprised of costs to manufacture or acquire products sold to customers, direct and indirect distribution costs, and other costs incurred in the sale of goods. | |
Shipping and Handling Costs | Shipping and handling costs Shipping and handling costs are included in cost of goods sold. Shipping and handling costs were $10,366 and $3,884 for the years ended December 31, 2017 and 2016, respectively. | |
Sales and Use Tax | Sales and use tax Revenues, as presented on the accompanying income statement, include taxes collected from customers and remitted to governmental authorities. Such taxes were $5,132 and $1,205 for the years ended December 31, 2017 and 2016, respectively. | |
Research and Development | Research and development Research and development costs are expensed as incurred and consists primarily of salaries and wages of scientists and related personnel engaged in research and development activities, scientific consultations, manufacturing of product candidates, third-party research, laboratory supplies, rents associated with operating leased laboratory equipment, and scientific advisory boards. The focus of these costs is on the development of Astaxanthin technologies. For the years ended December 31, 2017 and 2016, research and development costs were $460,991 and $347,885, respectively. | |
Advertising | Advertising Advertising costs are expensed as incurred and are included as an element of sales and marketing costs in the accompanying consolidated statements of operations. For the years ended December 31, 2017 and 2016, advertising costs were $84,317 and $27,939, respectively. | |
Income Taxes | Income taxes The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax reporting purposes, net operating loss carry-forwards, and other tax credits measured by applying currently enacted tax laws. A valuation allowance is provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. The Company determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company files income tax returns in the United States (“U.S.”) Federal and the States of Hawaii and California jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company did not recognize any tax liabilities for income taxes associated with unrecognized tax benefits as of December 31, 2017 and 2016. The Company’s policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for income taxes in the consolidated statements of operations. | |
Fair Value Measurements | Fair value measurements U.S. GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure 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). The three levels of the fair value hierarchy are described below: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2: Inputs to the valuation methodology include: ● Quoted prices for similar assets or liabilities in active markets; ● Quoted prices for identical or similar assets or liabilities in inactive markets; ● Inputs other than quoted prices that are observable for the asset or liability; and ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2017 and 2016, there were no recurring fair value measurements of assets and liabilities subsequent to initial recognition. | |
Stock Based Compensation | Stock based compensation The Company accounts for stock based compensation costs under the provisions of ASC No. 718, Compensation—Stock Compensation Equity | |
Basic and Diluted Net Loss Per Share | Basic and diluted net loss per share Basic earnings per common share is calculated by dividing net loss for the year by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by dividing net loss for the year by the sum of the weighted average number of common shares outstanding during the year plus the number of potentially dilutive common shares (“dilutive securities”) that were outstanding during the year. Dilutive securities include options granted pursuant to the Company’s stock option plans, and warrants issued to non-employees. Potentially dilutive securities are excluded from the computation of earnings per share in periods in which a net loss is reported, as their effect would be antidilutive. | |
Unaudited Interim Financial Information | Unaudited interim financial information The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. In the opinion of the Company’s management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended September 30, 2018 and 2017. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on March 27, 2018. | |
Revenue from Contracts with Customers | Revenue from contracts with customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new standard related to revenue recognition. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this standard effective January 1, 2018, using the retrospective method. As there was no impact on contracts that were previously completed and no significant impact to contracts completed after adoption, there was no need to restate prior results from operations. The Company recognizes revenues from its contracts with customers for its products through wholesale and e-commerce channels when goods and services have been identified, the payment terms agreed to, the contract has commercial substance, both parties have approved the contract, and it is probable that the Company will collect all substantial consideration. The following table presents our revenues disaggregated by revenue source and geographical location. Sales and usage-based taxes are included as a component of revenues for the nine-months ended: September 30, 2018 September 30, 2017 Geographical area Source (Unaudited) (Unaudited) United States Nutraceuticals $ 1,118,486 $ 496,088 Hong Kong Nutraceuticals $ 16,413 $ - Sales discounts, rebates, promotional amounts to vendors, and returns and allowances are recorded as a reduction to sales in the period in which sales are recorded. The Company records shipping charges and sales tax gross in revenues and cost of goods sold. Sales discounts and other adjustments are recorded at the time of sale. | |
Other Significant Accounting Policies | Other significant accounting policies There have been no other material changes to our significant accounting policies during the nine-months ended September 30, 2018, as compared to the significant accounting policies described in our Annual Report. | |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Fair Value Measurement | |
Recently Adopted Accounting Pronouncements | Recently adopted accounting pronouncements In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 23) In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting The Company does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the condensed consolidated financial statements. | Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date The FASB issued four additional ASUs in 2016 that affect the guidance in ASU No. 2014-09, Revenue from Contracts with Customers ● In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ● In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing ● In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients Revenue from Contracts with Customers ● In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU No. 2016-02, Leases The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous U.S. GAAP. The guidance in ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently assessing the impact of this ASU on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 23) In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting The Company does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the consolidated financial statements. |
Reclassifications | Reclassifications The Company has made certain reclassifications to conform its prior periods’ data to the current presentation, such as reclassifying a separation agreement that has terms extending beyond one year. These reclassifications had no effect on the reported results of operations or cash flows. | Reclassifications The Company has made certain reclassifications to conform its prior periods’ data to the current presentation. These reclassifications had no effect on the reported results of operations or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Schedule of Revenue Source and Geographical Location for Sales and Usage-Based Taxes | The following table presents our revenues disaggregated by revenue source and geographical location. Sales and usage-based taxes are included as a component of revenues for the nine-months ended: September 30, 2018 September 30, 2017 Geographical area Source (Unaudited) (Unaudited) United States Nutraceuticals $ 1,118,486 $ 496,088 Hong Kong Nutraceuticals $ 16,413 $ - | |
Schedule of Depreciation of Estimated Useful Lives | Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets are as follows. Furniture and office equipment 7 years Research and development equipment 3 to 7 years Information technology equipment 5 years Software 3 years |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||
Schedule of Inventories | Inventories consist of the following as of: September 30, 2018 (Unaudited) December 31, 2017 Finished goods $ 267,543 $ 240,917 Raw materials 58,631 98,937 Packing supplies and materials - 571 Total inventories $ 326,174 $ 340,425 | Inventories consist of the following as of December 31: 2017 2016 Finished goods $ 240,917 $ 10,827 Raw materials 98,937 - Packing supplies and materials 571 - Total inventories $ 340,425 $ 10,827 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment, Net | Property and equipment, net, consists of the following as of: September 30, 2018 (Unaudited) December 31, 2017 Information technology equipment $ - $ 31,892 Less accumulated depreciation - (29,991 ) Total property and equipment, net $ - $ 1,901 | Property and equipment, net, consists of the following as of December 31: 2017 2016 Information technology equipment $ 31,892 $ 31,892 Less accumulated depreciation (29,991 ) (24,137 ) Total property and equipment, net $ 1,901 $ 7,755 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Intangible Assets, Net | Intangible assets, net, consists of the following as of: September 30, 2018 (Unaudited) December 31, 2017 Patents $ 522,575 $ 493,027 Less accumulated amortization (285,795 ) (263,843 ) 236,780 229,184 Patents pending 198,361 197,426 Total intangible assets, net $ 435,141 $ 426,610 | Intangible assets, net, consists of the following as of December 31: 2017 2016 Patents $ 493,027 $ 432,985 Less accumulated amortization (263,843 ) (240,275 ) 229,184 192,710 Patents pending 197,426 238,060 Total intangible assets, net $ 426,610 $ 430,770 |
Accrued Separation Costs (Table
Accrued Separation Costs (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Payroll and Payroll Related Expenses | This amount does not yield interest and matures as follows for the twelve-months ended September 30: 2019 $ 9,000 2020 9,000 2021 11,250 2022 12,000 2023 16,500 Thereafter 46,135 103,885 Less current portion (9,000 ) $ 94,885 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Schedule of Stock Option Activity | A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2017 36,821,969 $ 0.41 5.94 $ 301,273 Exercisable January 1, 2017 36,771,969 $ 0.41 5.94 $ 299,273 Canceled - Granted 2,161,458 Exercised (770,000 ) - Forfeited - Outstanding December 31, 2017 38,213,427 $ 0.41 5.23 $ 562,456 Exercisable December 31, 2017 36,213,427 $ 0.41 4.98 $ 562,456 Canceled (350,000 ) Granted 1,833,334 Exercised (156,997 ) - Forfeited (43,003 ) Outstanding September 30, 2018 39,496,761 $ 0.41 4.64 $ 986,808 Exercisable September 30, 2018 36,580,097 $ 0.41 4.28 $ 963,475 | A summary of stock option activity is as follows: Options Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2016 34,167,354 $ 0.47 6.57 $ 974,066 Exercisable January 1, 2016 34,167,354 $ 0.47 6.57 $ 974,066 Canceled - Granted 6,156,580 Exercised - Forfeited (3,501,965 ) Outstanding December 31, 2016 36,821,969 $ 0.41 5.94 $ 301,273 Exercisable December 31, 2016 36,771,969 $ 0.41 5.94 $ 299,273 Canceled - Granted 2,161,458 Exercised (770,000 ) Forfeited - Outstanding December 31, 2017 38,213,427 $ 0.41 5.23 $ 562,456 Exercisable December 31, 2017 36,213,427 $ 0.41 4.98 $ 562,456 |
Schedule of Non-Vested Shares Granted Under Stock Option Plan | A summary of the Company’s non-vested options for the year ended December 31, 2017, and nine-months ended September 30, 2018, are presented below: Non-vested at January 1, 2017 50,000 Granted 2,161,458 Vested (211,458 ) Canceled - Non-vested at December 31, 2017 2,000,000 Granted 1,833,334 Vested (566,670 ) Canceled (350,000 ) Non-vested at September 30, 2018 2,916,664 | A summary of the Company’s non-vested options for the years ended December 31, 2017 and year ended December 31, 2016 are presented below: Non-vested at January 1, 2016 - Granted 6,156,580 Vested (6,106,580 ) Forfeited - Non-vested at December 31, 2016 50,000 Granted 2,161,458 Vested (211,458 ) Forfeited - Non-vested at December 31, 2017 2,000,000 |
Schedule of Fair Value Assumptions | The range of fair value assumptions related to options issued were as follows for the: Nine-months ended September 30, 2018 Year ended December 31, 2017 Dividend yield 0.0 % 0.0 % Risk-free rate 2.38% - 2.80 % 1.89% - 2.26 % Expected volatility 217% - 226 % 221% - 232 % Expected term 3 - 7 years 5 - 7 years | The range of fair value assumptions related to options issued outstanding were as follows for the years ended December 31: 2017 2016 Dividend yield 0.0 % 0.0 % Risk-free rate 1.89% - 2.26 % 0.80% - 1.03 % Expected volatility 221% - 232 % 141% - 225 % Expected term 5 - 7 years 5 years |
Schedule of Recognized Stock Based Compensation Expense | The Company recognized stock-based compensation expense related to options during the: Nine-months ended September 30 2018 2017 Number Amount Number Amount Employee compensation 450,000 $ 156,875 - $ - Compensation for outside services 375,000 76,250 50,000 3,500 Director compensation - - 161,458 25,000 Total 825,000 $ 233,125 211,458 $ 28,500 | The Company recognized stock based compensation expense related to options during the: Years ended December 31 2017 2016 Number Amount Number Amount In lieu of accrued salaries - $ - 3,796,385 $ 227,784 In lieu of accrued fees for outside services - - 1,107,417 66,445 Compensation for outside services 50,000 3,500 50,000 3,500 Employee compensation (unvested) 2,000,000 33,271 - - Director compensation 161,458 25,000 1,152,778 79,167 Total 2,211,458 $ 61,771 6,106,580 $ 376,896 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Schedule of Stock Warrants Activity | The following is a summary of the Company’s warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2017 88,365,036 $ 0.30 3.50 $ 543,770 Exercisable January 1, 2017 88,365,036 $ 0.30 3.50 $ 543,770 Canceled - Granted 40,259,133 Exercised (798,000 ) Forfeited (392,047 ) Outstanding December 31, 2017 127,434,122 $ 0.24 3.15 $ 3,957,689 Exercisable December 31, 2017 127,434,122 $ 0.24 3.15 $ 3,957,689 Canceled - Granted 315,010 Exercised 9,600,286 Forfeited - Outstanding September 30, 2018 118,148,846 $ 0.20 2.57 $ 7,848,637 Exercisable September 30, 2018 118,148,846 $ 0.20 2.57 $ 7,848,637 | The following is a summary of the Company’s warrant activity: Warrants Weighted average exercise price Weighted average remaining contractual term in years Aggregate intrinsic value Outstanding January 1, 2016 47,003,962 $ 0.46 3.49 $ 2,579,541 Exercisable January 1, 2016 47,003,962 $ 0.46 3.49 $ 2,579,541 Canceled - Granted 42,037,500 Exercised - Forfeited (676,426 ) Outstanding December 31, 2016 88,365,036 $ 0.30 3.50 $ 543,770 Exercisable December 31, 2016 88,365,036 $ 0.30 3.50 $ 543,770 Canceled - Granted 40,259,133 Exercised (798,000 ) Forfeited (392,047 ) Outstanding December 31, 2017 127,434,122 $ 0.24 3.15 $ 3,957,689 Exercisable December 31, 2017 127,434,122 $ 0.24 3.15 $ 3,957,689 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Taxes Rate | The following table presents a reconciliation of the statutory Federal rate and the Company’s effective tax rate for the years ended December 31: 2017 2016 Tax provision (benefit) at Federal statutory rate (34.00 )% (34.00 )% Accrued compensation (0.32 )% 0.89 % Stock based compensation 4.15 % 10.01 % Depreciation and amortization 0.59 % 0.36 % Other 0.26 % 0.09 % Change in valuation allowance 29.32 % 22.65 % Effective tax rate 0.00 % 0.00 % |
Schedule of Deferred Income Tax Assets and Liabilities | The following table presents significant components of the Company’s deferred tax assets and liabilities for the years ended December 31: 2017 2016 DEFERRED TAX ASSETS, net: Net operating loss carryforwards $ 8,705,467 $ 12,013,384 Accrued compensation 1,074,903 1,535,184 Stock based compensation 66,348 200,700 Credit carryforwards 71,910 100,318 Depreciation and amortization carryforwards (71,054 ) (87,903 ) Total 9,847,574 13,761,683 Less valuation allowance (9,847,574 ) (13,761,683 ) NET DEFERRED TAX ASSETS assets $ - $ - |
Basic and Diluted Net Loss Pe_2
Basic and Diluted Net Loss Per Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Schedule of Basic and Diluted Net Income (Loss) | The following table sets forth the computation of the Company’s basic and diluted net loss per share for: Three-months ended September 30, 2018 (Unaudited) Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (928,888 ) 130,083,598 $ (0.01 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (928,888 ) 130,083,598 $ (0.01 ) Three-months ended September 30, 2017 (Unaudited) Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (363,156 ) 100,587,843 $ (0.00 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (363,156 ) 100,587,843 $ (0.00 ) Nine-months ended September 30, 2018 (Unaudited) Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (3,076,873 ) 125,271,516 $ (0.02 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (3,076,873 ) 125,271,516 $ (0.02 ) Nine-months ended September 30, 2017 (Unaudited) Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,197,035 ) 92,513,317 $ (0.01 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (1,197,035 ) 92,513,317 $ (0.01 ) | The following table sets forth the computation of the Company’s basic and diluted net loss per share for the years ended December 31: 2017 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,985,234 ) 99,951,385 $ (0.02 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (1,985,234 ) 99,951,385 $ (0.02 ) 2016 Net Loss (Numerator) Shares (Denominator) Per share amount Basic loss per share $ (1,783,705 ) 76,227,524 $ (0.02 ) Effect of dilutive securities—Common stock options and warrants - - - Diluted loss per share $ (1,783,705 ) 76,227,524 $ (0.02 ) |
Schedule of Computation of Diluted Net Income (Loss) Per Share | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive for the periods ended: September 30, 2018 September 30, 2017 (Unaudited) (Unaudited) Common stock options 39,496,761 36,838,427 Common stock warrants 118,148,846 127,018,546 Total common stock equivalents 157,645,607 163,856,973 | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive for the years ended December 31: 2017 2016 Common stock options 38,213,427 36,821,969 Common stock warrants 127,434,122 88,365,036 Total common stock equivalents 165,647,549 125,187,005 |
Company Background (Details Nar
Company Background (Details Narrative) - USD ($) | Jul. 27, 2018 | Nov. 24, 2015 | Feb. 07, 2014 | Jan. 03, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Jun. 30, 2018 | May 31, 2013 | Dec. 31, 2009 | Dec. 31, 2008 |
Ownership interest | 100.00% | ||||||||||||||
Proceeds from sale of common stock | $ 3,923,100 | $ 60,000 | $ 0 | ||||||||||||
Number of common stock shares sold | 6,276,960 | 567,644 | 0 | ||||||||||||
Warrants term | 5 years | 5 years | 5 years | ||||||||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | 14,446,777 | ||||||||||||
Cashless exercise of warrants | 6,276,960 | 3,321,600 | 14,446,777 | ||||||||||||
Warrant exercise price per share | $ 0.625 | $ 0.625 | $ 0.625 | $ 0.625 | |||||||||||
Outstanding principal amount of notes payable | $ 2,076,000 | $ 8,489,036 | |||||||||||||
Shares of common stock issued upon conversion of notes payable | 3,353,437 | 14,446,777 | |||||||||||||
Warrants converted into common stock upon reverse merger | $ 0.625 | $ 0.625 | |||||||||||||
Stock options cancelled | 15,290,486 | ||||||||||||||
Stock option cancelled price per share | $ 0.07 | ||||||||||||||
Stock options issued in substitution of cancelled options | 6,889,555 | ||||||||||||||
Stock options issued in substitution of cancelled options, price per share | $ 0.155 | ||||||||||||||
Additional stock options issued purchase number of common stock | 20,867,266 | ||||||||||||||
Additional stock options issued purchase number of common stock, price per share | $ 0.625 | ||||||||||||||
Outstanding principal notes repaid in full | $ 500,000 | $ 55,000 | |||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Company's shares of common stock in ratio approximately | Common Stock in a ratio of approximately 2.2:1 | ||||||||||||||
Net losses | $ 928,888 | $ 363,156 | $ 3,076,873 | $ 1,197,035 | $ 1,985,234 | $ 1,783,705 | |||||||||
Accumulated deficit | 60,995,969 | 60,995,969 | $ 57,919,096 | $ 55,933,862 | |||||||||||
Escrow account | 653,278 | 653,278 | |||||||||||||
Placement fees and expenses | $ 225,875 | $ 124,769 | 637,042 | $ 299,569 | |||||||||||
October 5, 2018 [Member] | |||||||||||||||
Amount reduced in placement fees and expenses | 113,616 | ||||||||||||||
Placement fees and expenses | 539,662 | ||||||||||||||
Warrant [Member] | |||||||||||||||
Cashless exercise of warrants | 392,047 | ||||||||||||||
Warrant exercise price per share | $ 0.625 | ||||||||||||||
Proceeds from warrants issuances | $ 1,440,000 | $ 1,440,043 | |||||||||||||
Cashless exercise of warrants | 9,600,000 |
Company Background (Details N_2
Company Background (Details Narrative) (10-K) - USD ($) | Nov. 24, 2015 | Feb. 07, 2014 | Jan. 03, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Jun. 30, 2018 | May 31, 2013 | Dec. 31, 2009 | Dec. 31, 2008 |
Accounting Policies [Abstract] | ||||||||||||||
Ownership interest | 100.00% | |||||||||||||
Proceeds from sale of common stock | $ 3,923,100 | $ 60,000 | $ 0 | |||||||||||
Number of common stock shares sold | 6,276,960 | 567,644 | 0 | |||||||||||
Warrants term | 5 years | 5 years | 5 years | |||||||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | 14,446,777 | |||||||||||
Warrant exercise price per share | $ 0.625 | $ 0.625 | $ 0.625 | $ 0.625 | ||||||||||
Outstanding principal amount of notes payable | $ 2,076,000 | $ 8,489,036 | ||||||||||||
Shares of common stock issued upon conversion of notes payable | 3,353,437 | 14,446,777 | ||||||||||||
Warrants converted into common stock upon reverse merger | $ 0.625 | $ 0.625 | ||||||||||||
Stock options cancelled | 15,290,486 | |||||||||||||
Stock option cancelled price per share | $ 0.07 | |||||||||||||
Stock options issued in substitution of cancelled options | 6,889,555 | |||||||||||||
Stock options issued in substitution of cancelled options, price per share | $ 0.155 | |||||||||||||
Additional stock options issued purchase number of common stock | 20,867,266 | |||||||||||||
Additional stock options issued purchase number of common stock, price per share | $ 0.625 | |||||||||||||
Outstanding principal notes repaid in full | $ 500,000 | $ 55,000 | ||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Company's shares of common stock in ratio approximately | Common Stock in a ratio of approximately 2.2:1 | |||||||||||||
Net losses | $ 928,888 | $ 363,156 | $ 3,076,873 | $ 1,197,035 | $ 1,985,234 | $ 1,783,705 | ||||||||
Accumulated deficit | $ 60,995,969 | $ 60,995,969 | 57,919,096 | $ 55,933,862 | ||||||||||
Additional paid in capital to business plan | $ 4,138,435 | |||||||||||||
Percentage of employee base salary | 75.00% | 75.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Revenue Source and Geographical Location for Sales and Usage-Based Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total revenue | $ 549,540 | $ 321,861 | $ 1,134,899 | $ 496,088 | $ 610,323 | $ 35,258 |
United States [Member] | ||||||
Total revenue | 1,118,486 | 496,088 | ||||
Hong Kong [Member] | ||||||
Total revenue | $ 16,413 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash equivalents | ||||||
Federal deposit insurance | 1,988,139 | 0 | ||||
Accounts receivable | $ 452,225 | $ 452,225 | 37,243 | |||
Allowance for accounts receivable | ||||||
Inventory reserves | ||||||
Shipping and handling costs | 10,366 | 3,884 | ||||
Sales taxes | 5,132 | 1,205 | ||||
Research and development costs | 86,115 | $ 1,798 | 214,093 | $ 74,215 | 460,991 | 347,885 |
Advertising expenses | $ 84,317 | 27,939 | ||||
Minimum percentage of income tax benefit | 50.00% | |||||
Unrecognized tax benefit | ||||||
Maximum [Member] | ||||||
Federal deposit insurance | $ 250,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Depreciation of Estimated Useful Lives (Details) (10-K) | 12 Months Ended |
Dec. 31, 2017 | |
Furniture and Office Equipment [Member] | |
Estimated useful lives | 7 years |
Research and Development Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Research and Development Equipment [Member] | Maximum [Member] | |
Estimated useful lives | 7 years |
Information Technology Equipment [Member] | |
Estimated useful lives | 5 years |
Software [Member] | |
Estimated useful lives | 3 years |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | |||
Finished goods | $ 267,543 | $ 240,917 | $ 10,827 |
Raw materials | 58,631 | 98,937 | |
Packing supplies and materials | 571 | ||
Total inventories | $ 326,174 | $ 340,425 | $ 10,827 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 0 | $ 1,496 | $ 1,901 | $ 4,513 | $ 5,854 | $ 6,168 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Total property and equipment, net | $ 1,901 | $ 7,755 | |
Information Technology Equipment [Member] | |||
Information technology equipment | 31,892 | 31,892 | |
Less accumulated depreciation | (29,991) | (24,137) | |
Total property and equipment, net | $ 1,901 | $ 7,755 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)UnitsPatentApplications | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)PatentApplications | Dec. 31, 2016USD ($) | |
Patent, amortization period | 15 years | 15 years | ||||
Amortization expense | $ | $ 6,717 | $ 5,892 | $ 21,952 | $ 17,676 | $ 23,568 | $ 22,933 |
Patents, units | 25 | 22 | ||||
Patents expiration date | Patents will expire beginning in 2023 through 2028 | Patents will expire during the years of 2023 to 2028 | ||||
United States [Member] | ||||||
Patents, units | 14 | 14 | ||||
Europe, Canada, China, India, Japan, and Hong Kong [Member] | ||||||
Patents, units | 11 | |||||
Europe, Canada, and Brazil [Member] | ||||||
Number of patent application pending | 3 | 4 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details Narrative) (10-K) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)UnitsPatentApplications | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)PatentApplications | Dec. 31, 2016USD ($) | |
Patent, amortization period | 15 years | 15 years | ||||
Amortization expense | $ | $ 6,717 | $ 5,892 | $ 21,952 | $ 17,676 | $ 23,568 | $ 22,933 |
Patents, units | 25 | 22 | ||||
Patents expiration date | Patents will expire beginning in 2023 through 2028 | Patents will expire during the years of 2023 to 2028 | ||||
United States [Member] | ||||||
Patents, units | 14 | 14 | ||||
China, India, Japan And Hong Kong [Member] | ||||||
Patents, units | 8 | |||||
Europe, Canada, and Brazil [Member] | ||||||
Number of patent application pending | 3 | 4 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Patents | $ 522,575 | $ 493,027 | $ 432,985 |
Less accumulated amortization | (285,795) | (263,843) | (240,275) |
Patents, Total | 236,780 | 229,184 | 192,710 |
Patents pending | 198,361 | 197,426 | 238,060 |
Total intangible assets, net | $ 435,141 | $ 426,610 | $ 430,770 |
Accrued Separation Costs (Detai
Accrued Separation Costs (Details Narrative) | Aug. 09, 2016USD ($) |
Payables and Accruals [Abstract] | |
Accrued compensation expenses | $ 118,635 |
Accrued Separation Costs - Sche
Accrued Separation Costs - Schedule of Accrued Payroll and Payroll Related Expenses (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Payables and Accruals [Abstract] | |
2,019 | $ 9,000 |
2,020 | 9,000 |
2,021 | 11,250 |
2,022 | 12,000 |
2,023 | 16,500 |
Thereafter | 46,135 |
Accrued Separation Costs, gross | 103,885 |
Less current portion | (9,000) |
Accrued Separation Costs, net | $ 94,885 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jul. 27, 2018 | Feb. 07, 2014 | May 31, 2017 | Jul. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | Nov. 24, 2015 | Jan. 03, 2014 | Dec. 31, 2013 |
Number of common stock issued | 9,600,286 | |||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Warrants price per share | $ 0.625 | $ 0.625 | $ 0.625 | $ 0.625 | ||||||||||
Share price | 0.15 | |||||||||||||
Escrow account | $ 653,278 | $ 653,278 | ||||||||||||
Placement fees and expenses | $ 225,875 | $ 124,769 | 637,042 | $ 299,569 | ||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 704,375 | $ 4,013,456 | $ 4,138,435 | $ 1,121,000 | ||||||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | 14,446,777 | |||||||||||
Number of common stock shares sold | 6,276,960 | 567,644 | 0 | |||||||||||
Proceeds from sale of common stock | $ 3,923,100 | $ 60,000 | $ 0 | |||||||||||
Common stock, shares outstanding | 133,338,573 | 133,338,573 | 122,674,516 | 85,068,709 | ||||||||||
Equity Purchase Agreement [Member] | ||||||||||||||
Number of common stock shares sold | 0 | 567,644 | ||||||||||||
Proceeds from sale of common stock | $ 0 | $ 60,000 | ||||||||||||
Equity Purchase Agreement [Member] | Investor [Member] | ||||||||||||||
Number of common stock issued | 1,500,000 | |||||||||||||
Fair value of stock grant fully vested | $ 106,500 | |||||||||||||
October 5, 2018 [Member] | ||||||||||||||
Amount reduced in placement fees and expenses | 113,616 | |||||||||||||
Placement fees and expenses | 539,662 | |||||||||||||
Restricted Stock One [Member] | ||||||||||||||
Issuance of stock per share | $ 0.12 | |||||||||||||
Restricted common stock price per share | $ 0.08 | $ 0.08 | ||||||||||||
Warrants to purchase of common stock shares | 2,237,500 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Restricted Stock Two [Member] | ||||||||||||||
Issuance of stock per share | $ 0.30 | |||||||||||||
Restricted common stock price per share | $ 0.12 | 0.12 | ||||||||||||
Warrants to purchase of common stock shares | 2,237,500 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Restricted Stock Three [Member] | ||||||||||||||
Restricted common stock price per share | $ 0.16 | $ 0.16 | ||||||||||||
Warrants to purchase of common stock shares | 2,237,500 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Restricted Stock Four [Member] | ||||||||||||||
Restricted common stock price per share | $ 0.12 | |||||||||||||
Warrants to purchase of common stock shares | 31,453,788 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Restricted Stock Five [Member] | ||||||||||||||
Restricted common stock price per share | $ 0.30 | |||||||||||||
Warrants to purchase of common stock shares | 416,595 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Restricted Stock Six [Member] | ||||||||||||||
Restricted common stock price per share | $ 0.30 | |||||||||||||
Warrants to purchase of common stock shares | 416,595 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Restricted Common Stock [Member] | ||||||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 44,700 | |||||||||||||
Issuance of stock per share | $ 0.08 | |||||||||||||
Conversion stock, description | Each unit consisted of 1 share of restricted common stock (558,750 shares), a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.16 per share. | |||||||||||||
Number of restricted common stock | 558,750 | |||||||||||||
Restricted Common Stock One [Member] | ||||||||||||||
Restricted common stock price per share | $ 0.08 | |||||||||||||
Warrants to purchase of common stock shares | 558,750 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Restricted Common Stock Two [Member] | ||||||||||||||
Restricted common stock price per share | $ 0.12 | |||||||||||||
Warrants to purchase of common stock shares | 558,750 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Restricted Common Stock Three [Member] | ||||||||||||||
Restricted common stock price per share | $ 0.16 | |||||||||||||
Warrants to purchase of common stock shares | 558,750 | |||||||||||||
Warrants term | 5 years | |||||||||||||
Warrant [Member] | ||||||||||||||
Warrants price per share | $ 0.625 | |||||||||||||
Cashless exercise of warrants | 9,600,000 | |||||||||||||
Proceeds from warrants issuances | $ 1,440,000 | $ 1,440,043 | ||||||||||||
Warrants to purchase of common stock shares | 392,047 | |||||||||||||
Self Directed Stock Issuance one [Member] | ||||||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 179,000 | |||||||||||||
Issuance of stock per share | $ 0.08 | |||||||||||||
Self Directed Stock Issuance Two [Member] | ||||||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 3,774,456 | |||||||||||||
Issuance of stock per share | $ 0.12 | |||||||||||||
Self Directed Stock Issuance Three [Member] | ||||||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 124,979 | |||||||||||||
Issuance of stock per share | $ 0.30 | |||||||||||||
Self Directed Stock Issuance [Member] | ||||||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 1,121,000 | |||||||||||||
Issuance of stock per share | $ 0.08 | |||||||||||||
Conversion stock, description | Each $0.08 unit consisted of 1 share of restricted common stock (2,237,500 shares), a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.08 per share, a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.12 per share, and a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.16 per share. Each $0.12 unit consisted of 1 share of restricted common stock (31,453,788 shares) and a five-year warrant to purchase 1 share of restricted common stock (31,453,788 warrant shares) at $0.12 per share. Each $0.30 unit consisted of 1 share of restricted common stock (416,595 shares) and a five-year warrant to purchase 1 share of restricted common stock (416,595 warrant shares) at $0.30 per share. | Each unit consisted of 1 share of restricted common stock (14,012,500 shares), a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.16 per share. | ||||||||||||
Number of restricted common stock | 2,237,500 |
Stockholders' Deficit (Detail_2
Stockholders' Deficit (Details Narrative) (10-K) - USD ($) | Jul. 27, 2018 | Feb. 07, 2014 | Jan. 03, 2014 | May 31, 2017 | Jul. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 |
Sold securities in a self-directed offering, aggregate amount | $ 704,375 | $ 4,013,456 | $ 4,138,435 | $ 1,121,000 | ||||||
Warrants to purchase of common stock shares | 6,276,960 | 3,321,600 | 14,446,777 | |||||||
Warrants term | 5 years | 5 years | 5 years | |||||||
Number of common stock issued | 9,600,286 | |||||||||
Number of common stock shares sold | 6,276,960 | 567,644 | 0 | |||||||
Proceeds from sale of common stock | $ 3,923,100 | $ 60,000 | $ 0 | |||||||
Common stock, shares outstanding | 133,338,573 | 122,674,516 | 85,068,709 | |||||||
Equity Purchase Agreement [Member] | ||||||||||
Number of common stock shares sold | 0 | 567,644 | ||||||||
Proceeds from sale of common stock | $ 0 | $ 60,000 | ||||||||
Equity Purchase Agreement [Member] | Investor [Member] | ||||||||||
Number of common stock issued | 1,500,000 | |||||||||
Fair value of stock grant fully vested | $ 106,500 | |||||||||
Restricted Stock One [Member] | ||||||||||
Issuance of stock per share | $ 0.12 | |||||||||
Warrants to purchase of common stock shares | 2,237,500 | 14,012,500 | ||||||||
Restricted common stock price per share | $ 0.08 | $ 0.08 | ||||||||
Warrants term | 5 years | 5 years | ||||||||
Restricted Stock Two [Member] | ||||||||||
Issuance of stock per share | $ 0.30 | |||||||||
Warrants to purchase of common stock shares | 2,237,500 | 14,012,500 | ||||||||
Restricted common stock price per share | $ 0.12 | $ 0.12 | ||||||||
Warrants term | 5 years | 5 years | ||||||||
Restricted Stock Three [Member] | ||||||||||
Warrants to purchase of common stock shares | 2,237,500 | 14,012,500 | ||||||||
Restricted common stock price per share | $ 0.16 | $ 0.16 | ||||||||
Warrants term | 5 years | 5 years | ||||||||
Restricted Stock Four [Member] | ||||||||||
Warrants to purchase of common stock shares | 31,453,788 | |||||||||
Restricted common stock price per share | $ 0.12 | |||||||||
Warrants term | 5 years | |||||||||
Restricted Stock Five [Member] | ||||||||||
Warrants to purchase of common stock shares | 416,595 | |||||||||
Restricted common stock price per share | $ 0.30 | |||||||||
Warrants term | 5 years | |||||||||
Restricted Common Stock [Member] | ||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 44,700 | |||||||||
Issuance of stock per share | $ 0.08 | |||||||||
Conversion stock, description | Each unit consisted of 1 share of restricted common stock (558,750 shares), a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (558,750 warrant shares) at $0.16 per share. | |||||||||
Restricted Common Stock One [Member] | ||||||||||
Warrants to purchase of common stock shares | 558,750 | |||||||||
Restricted common stock price per share | $ 0.08 | |||||||||
Warrants term | 5 years | |||||||||
Restricted Common Stock Two [Member] | ||||||||||
Warrants to purchase of common stock shares | 558,750 | |||||||||
Restricted common stock price per share | $ 0.12 | |||||||||
Warrants term | 5 years | |||||||||
Restricted Common Stock Three [Member] | ||||||||||
Warrants to purchase of common stock shares | 558,750 | |||||||||
Restricted common stock price per share | $ 0.16 | |||||||||
Warrants term | 5 years | |||||||||
Self Directed Stock Issuance [Member] | ||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 1,121,000 | |||||||||
Issuance of stock per share | $ 0.08 | |||||||||
Conversion stock, description | Each $0.08 unit consisted of 1 share of restricted common stock (2,237,500 shares), a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.08 per share, a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.12 per share, and a five year warrant to purchase 1 share of restricted common stock (2,237,500 warrant shares) at $0.16 per share. Each $0.12 unit consisted of 1 share of restricted common stock (31,453,788 shares) and a five-year warrant to purchase 1 share of restricted common stock (31,453,788 warrant shares) at $0.12 per share. Each $0.30 unit consisted of 1 share of restricted common stock (416,595 shares) and a five-year warrant to purchase 1 share of restricted common stock (416,595 warrant shares) at $0.30 per share. | Each unit consisted of 1 share of restricted common stock (14,012,500 shares), a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.08 per share, a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.12 per share, and a five-year warrant to purchase 1 share of restricted common stock (14,012,500 warrant shares) at $0.16 per share. | ||||||||
Self Directed Stock Issuance one [Member] | ||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 179,000 | |||||||||
Issuance of stock per share | $ 0.08 | |||||||||
Self Directed Stock Issuance Two [Member] | ||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 3,774,456 | |||||||||
Issuance of stock per share | $ 0.12 | |||||||||
Self Directed Stock Issuance Three [Member] | ||||||||||
Sold securities in a self-directed offering, aggregate amount | $ 124,979 | |||||||||
Issuance of stock per share | $ 0.30 |
Stock Grants (Details Narrative
Stock Grants (Details Narrative) - USD ($) | Sep. 02, 2017 | Sep. 02, 2017 | Aug. 08, 2017 | Apr. 10, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted common stock, value | $ 44,700 | |||||||
Stock compensation expense | $ 443,249 | $ 142,500 | $ 242,146 | $ 230,833 | ||||
Director [Member] | ||||||||
Restricted common stock, shares | 906,774 | 418,025 | 793,025 | 468,254 | ||||
Restricted common stock, value | $ 200,000 | $ 93,750 | $ 150,000 | $ 41,666 | ||||
Consultant [Member] | ||||||||
Restricted common stock, shares | 100,000 | 100,000 | ||||||
Restricted common stock, per share | $ 0.175 | $ 0.23 | ||||||
Stock compensation expense | 4,375 | 8,750 | ||||||
Share-based payment forfeiture and vesting rights, percentage | 25.00% | 25.00% | ||||||
Consultant [Member] | April 10, 2017 [Member] | ||||||||
Stock compensation expense | $ 5,750 | $ 11,500 | $ 17,250 |
Stock Grants (Details Narrati_2
Stock Grants (Details Narrative) (10-K) - USD ($) | Sep. 02, 2017 | Sep. 02, 2017 | Aug. 08, 2017 | Apr. 10, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted common stock, value | $ 44,700 | |||||||
Stock compensation expense | $ 443,249 | $ 142,500 | $ 242,146 | $ 230,833 | ||||
Director [Member] | ||||||||
Restricted common stock, shares | 906,774 | 418,025 | 793,025 | 468,254 | ||||
Restricted common stock, value | $ 200,000 | $ 93,750 | $ 150,000 | $ 41,666 | ||||
Consultant [Member] | ||||||||
Restricted common stock, shares | 100,000 | 100,000 | ||||||
Restricted common stock, per share | $ 0.175 | $ 0.23 | ||||||
Stock compensation expense | 4,375 | 8,750 | ||||||
Share-based payment forfeiture and vesting rights, percentage | 25.00% | 25.00% | ||||||
Consultant [Member] | April 10, 2017 [Member] | ||||||||
Stock compensation expense | $ 5,750 | $ 11,500 | 17,250 | |||||
Consultant [Member] | August 8, 2017 [Member] | ||||||||
Stock compensation expense | $ 13,125 |
Stock Option Plans (Details Nar
Stock Option Plans (Details Narrative) - USD ($) | Jul. 27, 2018 | Feb. 07, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 16, 2015 |
Aggregate number of shares issuable under this plan | 825,000 | 211,458 | 2,211,458 | 6,106,580 | |||
Options default term | 4 years 11 months 23 days | 5 years 11 months 8 days | 6 years 6 months 25 days | ||||
Dividend yield | $ 0 | ||||||
Number of common stock issued | 9,600,286 | ||||||
Common stock per share | $ 0.07 | ||||||
Stock Option Exercise [Member] | |||||||
Number of common stock issued | 156,997 | 645,288 | |||||
Cashless exercise of a stock option, shares | 100,000 | 100,000 | |||||
Common stock per share | $ 0.06 | $ 0.155 | |||||
Number of common stock withheld with aggregate exercise price | 43,003 | 124,712 | |||||
Stock Option Exercise One [Member] | |||||||
Cashless exercise of a stock option, shares | 50,000 | 45,000 | |||||
Common stock per share | $ 0.06 | ||||||
Stock Option Exercise Two [Member] | |||||||
Cashless exercise of a stock option, shares | 50,000 | 625,000 | |||||
Common stock per share | $ 0.06 | ||||||
2014 Equity Compensation Plan [Member] | |||||||
Aggregate number of shares issuable under this plan | 30,420,148 | ||||||
Shares authorized | 15,000,000 | ||||||
2014 Equity Compensation Plan and 2006 Stock Incentive Plan [Member] | |||||||
Percentage of stock option granted to stockholders | 10.00% | 10.00% | |||||
Options default term | 10 years | ||||||
Generally vest term | 4 years | ||||||
2014 Equity Compensation Plan and 2006 Stock Incentive Plan [Member] | Maximum [Member] | |||||||
Percentage granted to employees at a price per share | 100.00% | 100.00% | |||||
Percentage exercise price per share | 110.00% | 110.00% | |||||
Percentage restricted stock to related parties price per share | 100.00% | 100.00% |
Stock Option Plans (Details N_2
Stock Option Plans (Details Narrative) (10-K) - $ / shares | Jul. 27, 2018 | Feb. 07, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 16, 2015 |
Aggregate number of shares issuable under this plan | 825,000 | 211,458 | 2,211,458 | 6,106,580 | |||
Number of common stock issued | 9,600,286 | ||||||
Common stock per share | $ 0.07 | ||||||
Stock Option Exercise [Member] | |||||||
Number of common stock issued | 156,997 | 645,288 | |||||
Cashless exercise of a stock option, shares | 100,000 | 100,000 | |||||
Common stock per share | $ 0.06 | $ 0.155 | |||||
Number of common stock withheld with aggregate exercise price | 43,003 | 124,712 | |||||
Stock Option Exercise One [Member] | |||||||
Cashless exercise of a stock option, shares | 50,000 | 45,000 | |||||
Common stock per share | $ 0.06 | ||||||
Stock Option Exercise Two [Member] | |||||||
Cashless exercise of a stock option, shares | 50,000 | 625,000 | |||||
Common stock per share | $ 0.06 | ||||||
2014 Equity Compensation Plan [Member] | |||||||
Aggregate number of shares issuable under this plan | 30,420,148 | ||||||
Shares authorized | 15,000,000 | ||||||
2014 Equity Compensation Plan and 2006 Stock Incentive Plan [Member] | |||||||
Percentage of stock option granted to stockholders | 10.00% | 10.00% | |||||
2014 Equity Compensation Plan and 2006 Stock Incentive Plan [Member] | Maximum [Member] | |||||||
Percentage granted to employees at a price per share | 100.00% | 100.00% | |||||
Percentage exercise price per share | 110.00% | 110.00% | |||||
Percentage restricted stock to related parties price per share | 100.00% | 100.00% |
Stock Option Plans - Schedule o
Stock Option Plans - Schedule of Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options Outstanding, Beginning balance | 38,213,427 | 36,821,969 | 34,167,354 |
Options Exercisable, Beginning balance | 36,213,427 | 36,771,969 | 34,167,354 |
Options, Canceled | (350,000) | ||
Options, Granted | 1,833,334 | 2,161,458 | 6,156,580 |
Options, Exercised | (156,997) | (770,000) | |
Options, Forfeited | (43,003) | (3,501,965) | |
Options Outstanding, Ending balance | 39,496,761 | 38,213,427 | 36,821,969 |
Options Exercisable, Ending balance | 36,580,097 | 36,213,427 | 36,771,969 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.41 | $ 0.41 | $ 0.47 |
Weighted Average Exercise Price, Exercisable, Beginning balance | 0.41 | 0.41 | 0.47 |
Weighted Average Exercise Price, Canceled | |||
Weighted Average Exercise Price, Granted | |||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Exercise Price, Outstanding, Ending balance | 0.41 | 0.41 | 0.41 |
Weighted Average Exercise Price, Exercisable, Ending balance | $ 0.41 | $ 0.41 | $ 0.41 |
Weighted Average Remaining Contractual Term in Years, Outstanding Beginning | 5 years 2 months 23 days | 5 years 11 months 8 days | 6 years 6 months 25 days |
Weighted Average Remaining Contractual Term in Years, Exercisable, Beginning | 4 years 11 months 23 days | 5 years 11 months 8 days | 6 years 6 months 25 days |
Weighted Average Remaining Contractual Term in Years, Outstanding Ending | 4 years 7 months 21 days | 5 years 2 months 23 days | 5 years 11 months 8 days |
Weighted Average Remaining Contractual Term in Years, Exercisable, Ending | 4 years 3 months 11 days | 4 years 11 months 23 days | 5 years 11 months 8 days |
Aggregate Intrinsic Value, Outstanding Beginning balance | $ 562,456 | $ 301,273 | $ 974,066 |
Aggregate Intrinsic Value, Exercisable Beginning balance | 562,456 | 299,273 | 974,066 |
Aggregate Intrinsic Value, Outstanding Ending balance | 986,808 | 562,456 | 301,273 |
Aggregate Intrinsic Value, Exercisable Ending balance | $ 963,475 | $ 562,456 | $ 299,273 |
Stock Option Plans - Schedule_2
Stock Option Plans - Schedule of Non-vested Shares Granted Under Stock Option Plan (Details) - shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Non-vested, Options Outstanding, Beginning balance | 2,000,000 | 50,000 | |
Non-vested, Options Granted | 1,833,334 | 2,161,458 | 6,156,580 |
Non-vested, Options Vested | (566,670) | (211,458) | (6,106,580) |
Non-vested, Options Canceled | (350,000) | ||
Non-vested, Options Outstanding, Ending balance | 2,916,664 | 2,000,000 | 50,000 |
Stock Option Plans - Schedule_3
Stock Option Plans - Schedule of Fair Value Assumptions (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected term | 5 years | ||
Minimum [Member] | |||
Risk-free rate | 2.38% | 1.89% | 0.80% |
Expected volatility | 217.00% | 221.00% | 141.00% |
Expected term | 3 years | 5 years | |
Maximum [Member] | |||
Risk-free rate | 2.80% | 2.26% | 1.03% |
Expected volatility | 226.00% | 232.00% | 225.00% |
Expected term | 7 years | 7 years |
Stock Option Plans - Schedule_4
Stock Option Plans - Schedule of Recognized Stock Based Compensation Expense (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
In lieu of accrued salaries, shares | 3,796,385 | |||
In lieu of accrued salaries | $ 227,784 | |||
In lieu of accrued fees for outside services, shares | 1,107,417 | |||
In lieu of accrued fees for outside services | $ 66,445 | |||
Employee compensation , shares | 450,000 | 2,000,000 | ||
Employee compensation | $ 156,875 | $ 33,271 | ||
Compensation for outside services, shares | 375,000 | 50,000 | 50,000 | 50,000 |
Compensation for outside services | $ 76,250 | $ 3,500 | $ 3,500 | $ 3,500 |
Director compensation, shares | 161,458 | 161,458 | 1,152,778 | |
Director compensation | $ 25,000 | $ 25,000 | $ 79,167 | |
Stock based compensation expense, shares | 825,000 | 211,458 | 2,211,458 | 6,106,580 |
Stock based compensation expense | $ 233,125 | $ 28,500 | $ 61,771 | $ 376,896 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | Jul. 27, 2018 | May 02, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | Nov. 24, 2015 | Feb. 07, 2014 | Jan. 03, 2014 | Dec. 31, 2013 |
Dividend yield | $ 0 | ||||||||||||
Stock compensation expense | $ 443,249 | $ 142,500 | $ 242,146 | $ 230,833 | |||||||||
Number of common stock issued | 9,600,286 | ||||||||||||
Warrant price per share | $ 0.625 | $ 0.625 | $ 0.625 | $ 0.625 | |||||||||
Number of common stock value issued | $ 60,000 | ||||||||||||
Warrants to purchase an aggregate number of shares | 6,276,960 | 3,321,600 | 14,446,777 | ||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Escrow account | $ 653,278 | $ 653,278 | |||||||||||
Placement fees and expenses | $ 225,875 | $ 124,769 | $ 637,042 | 299,569 | |||||||||
Investment Bankers [Member] | |||||||||||||
Common stock par value | $ 0.21 | $ 0.21 | |||||||||||
Issuance of shares issued for services | 315,010 | ||||||||||||
October 5, 2018 [Member] | |||||||||||||
Amount reduced in placement fees and expenses | $ 113,616 | ||||||||||||
Placement fees and expenses | 539,662 | ||||||||||||
Warrant [Member] | |||||||||||||
Stock compensation expense | 0 | $ 0 | $ 0 | $ 0 | |||||||||
Cashless exercise of warrants | 9,600,000 | ||||||||||||
Warrant price per share | $ 0.625 | ||||||||||||
Warrants to purchase an aggregate number of shares | 392,047 | ||||||||||||
Cash payments | $ 0.15 | ||||||||||||
Proceeds from warrants issuances | $ 1,440,000 | $ 1,440,043 | |||||||||||
Warrant Exercise [Member] | |||||||||||||
Number of common stock issued | 233,217 | ||||||||||||
Cashless exercise of warrants | 298,000 | ||||||||||||
Warrant price per share | $ 0.10 | ||||||||||||
Aggregate fair market value of common stock withheld | 64,783 | ||||||||||||
Warrants to purchase an aggregate number of shares | 298,000 | ||||||||||||
Warrant Exercise One [Member] | |||||||||||||
Number of common stock issued | 500,000 | ||||||||||||
Cashless exercise of warrants | 500,000 | ||||||||||||
Warrant price per share | $ 0.08 | ||||||||||||
Number of common stock value issued | $ 40,000 | ||||||||||||
Warrants to purchase an aggregate number of shares | 500,000 |
Warrants (Details Narrative) (1
Warrants (Details Narrative) (10-K) - USD ($) | Jul. 27, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | Feb. 07, 2014 | Jan. 03, 2014 | Dec. 31, 2013 |
Stock compensation expense | $ 443,249 | $ 142,500 | $ 242,146 | $ 230,833 | |||||
Number of common stock shares issued | 9,600,286 | ||||||||
Cashless exercise of warrants | 6,276,960 | 3,321,600 | 14,446,777 | ||||||
Warrant price per share | $ 0.625 | $ 0.625 | $ 0.625 | $ 0.625 | |||||
Number of common stock value issued | 60,000 | ||||||||
Warrant [Member] | |||||||||
Stock compensation expense | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Cashless exercise of warrants | 392,047 | ||||||||
Warrant price per share | $ 0.625 | ||||||||
Warrants to purchase an aggregate number of shares | 392,047 | 676,426 | |||||||
Warrant Exercise [Member] | |||||||||
Number of common stock shares issued | 233,217 | ||||||||
Cashless exercise of warrants | 298,000 | ||||||||
Warrant price per share | $ 0.10 | ||||||||
Aggregate fair market value of common stock withheld | 64,783 | ||||||||
Warrant Exercise One [Member] | |||||||||
Number of common stock shares issued | 500,000 | ||||||||
Cashless exercise of warrants | 500,000 | ||||||||
Warrant price per share | $ 0.08 | ||||||||
Number of common stock value issued | $ 40,000 |
Warrants - Schedule of Stock Wa
Warrants - Schedule of Stock Warrants Activity (Details) - Warrant [Member] - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Warrants, Outstanding, Beginning balance | 127,434,122 | 88,365,036 | 47,003,962 |
Warrants, Exercisable, Beginning balance | 127,434,122 | 88,365,036 | 47,003,962 |
Warrants, Canceled | |||
Warrants, Granted | 315,010 | 40,259,133 | 42,037,500 |
Warrants, Exercised | 9,600,286 | (798,000) | |
Warrants, Forfeited | (392,047) | (676,426) | |
Warrants, Outstanding, Ending balance | 118,148,846 | 127,434,122 | 88,365,036 |
Warrants, Exercisable, Ending balance | 118,148,846 | 127,434,122 | 88,365,036 |
Weighted Average Exercise Price, Outstanding, Beginning | $ 0.24 | $ 0.30 | $ 0.46 |
Weighted Average Exercise Price, Exercisable, Beginning | 0.24 | 0.30 | 0.46 |
Weighted Average Exercise Price, Canceled | |||
Weighted Average Exercise Price, Granted | |||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Exercise Price, Outstanding, Ending | 0.20 | 0.24 | 0.30 |
Weighted Average Exercise Price, Exercisable, Ending | $ 0.20 | $ 0.24 | $ 0.30 |
Weighted Average Remaining Contractual Term in Years, Beginning Outstanding | 3 years 1 month 24 days | 3 years 6 months | 3 years 5 months 27 days |
Weighted Average Remaining Contractual Term in Years, Beginning Exercisable | 3 years 1 month 24 days | 3 years 6 months | 3 years 5 months 27 days |
Weighted Average Remaining Contractual Term in Years, Ending Outstanding | 2 years 6 months 25 days | 3 years 1 month 24 days | 3 years 6 months |
Weighted Average Remaining Contractual Term in Years, Ending Exercisable | 2 years 6 months 25 days | 3 years 1 month 24 days | 3 years 6 months |
Aggregate Intrinsic Value, Outstanding, Beginning | $ 3,957,689 | $ 543,770 | $ 2,579,541 |
Aggregate Intrinsic Value, Exercisable, Beginning | 3,957,689 | 543,770 | 2,579,541 |
Aggregate Intrinsic Value, Outstanding, Ending | 7,848,637 | 3,957,689 | 543,770 |
Aggregate Intrinsic Value, Exercisable, Ending | $ 7,848,637 | $ 3,957,689 | $ 543,770 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Settled in option value | $ 233,125 | $ 28,500 | $ 61,771 | $ 376,896 | ||
Stock compensation expense | $ 180,562 | $ 58,250 | $ 443,249 | $ 142,500 | 242,146 | 525,062 |
Director [Member] | ||||||
Settled in option value | 37,500 | |||||
Stock compensation expense | 0 | 37,500 | ||||
Amounts payable | $ 293,546 | $ 293,546 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | Mar. 22, 2018 | Dec. 22, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Effective tax statutory rate | 35.00% | 35.00% | 21.00% | 21.00% | 21.00% | 21.00% | 34.00% | 34.00% |
Effective January 1, 2018 [Member] | ||||||||
Effective tax statutory rate | 21.00% |
Income Taxes (Details Narrati_2
Income Taxes (Details Narrative) (10-K) - USD ($) | Mar. 22, 2018 | Dec. 22, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Effective tax statutory rate | 35.00% | 35.00% | 21.00% | 21.00% | 21.00% | 21.00% | 34.00% | 34.00% |
Reduced tax rate | 21.00% | |||||||
Deferred tax asset | $ 3,800,000 | $ 3,800,000 | ||||||
Unrecognized tax benefits | ||||||||
Refundable tax credit | 17,253 | $ 47,082 | ||||||
Hawaii Income Tax Purposes [Member] | ||||||||
Operating loss carry forwards | $ 26,606,541 | |||||||
Operating loss carry forwards expiration year | 2,026 | |||||||
Federal [Member] | ||||||||
Operating loss carry forwards | $ 33,345,946 | |||||||
Operating loss carry forwards expiration year | 2,026 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Taxes Rate (Details) (10-K) | Mar. 22, 2018 | Dec. 22, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||||||||
Tax provision (benefit) at Federal statutory rate | (35.00%) | (35.00%) | (21.00%) | (21.00%) | (21.00%) | (21.00%) | (34.00%) | (34.00%) |
Accrued compensation | (0.32%) | (0.89%) | ||||||
Stock based compensation | 4.15% | 10.01% | ||||||
Depreciation and amortization | 0.59% | 0.36% | ||||||
Other | 0.26% | 0.09% | ||||||
Change in valuation allowance | 29.32% | 22.65% | ||||||
Effective tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Details) (10-K) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 8,705,467 | $ 12,013,384 |
Accrued compensation | 1,074,903 | 1,535,184 |
Stock based compensation | 66,348 | 200,700 |
Credit carryforwards | 71,910 | 100,318 |
Depreciation and amortization carryforwards | (71,054) | (87,903) |
Total | 9,847,574 | 13,761,683 |
Less valuation allowance | (9,847,574) | (13,761,683) |
Net Deferred Tax Assets |
Basic and Diluted Net Loss Pe_3
Basic and Diluted Net Loss Per Share - Schedule of Basic and Diluted Net Income (Loss) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||||||
Net loss (numerator) Basic loss per share, basic | $ (928,888) | $ (363,156) | $ (3,076,873) | $ (1,197,035) | $ (1,985,234) | $ (1,783,705) |
Net loss (numerator) Effect of dilutive securities-common stock options and warrants | ||||||
Net loss (numerator) Diluted loss per share, diluted | $ (928,888) | $ (363,156) | $ (3,076,873) | $ (1,197,035) | $ (1,985,234) | $ (1,783,705) |
Shares (denominator) Basic loss per shares , basic | 130,083,598 | 100,587,843 | 125,271,516 | 92,513,317 | 99,951,385 | 76,227,524 |
Shares (denominator) Effect of dilutive securities-common stock options and warrants | ||||||
Shares (denominator) Diluted loss per shares, diluted | 130,083,598 | 100,587,843 | 125,271,516 | 92,513,317 | 99,951,385 | 76,227,524 |
Per share amount Basic loss per share, basic | $ (0.01) | $ 0 | $ (0.02) | $ (0.01) | $ (0.02) | $ (0.02) |
Per share amount Effect of dilutive securities-common stock options and warrants | ||||||
Per share amount Diluted loss per share, diluted | $ (0.01) | $ 0 | $ (0.02) | $ (0.01) | $ (0.02) | $ (0.02) |
Basic and Diluted Net Loss Pe_4
Basic and Diluted Net Loss Per Share - Schedule of Computation of Diluted Net Income (Loss) Per Share (Details) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total common stock equivalents | 157,645,607 | 163,856,973 | 165,647,549 | 125,187,005 |
Common Stock Warrants [Member] | ||||
Total common stock equivalents | 118,148,846 | 127,018,546 | 127,434,122 | 88,365,036 |
Common Stock Options [Member] | ||||
Total common stock equivalents | 39,496,761 | 36,838,427 | 38,213,427 | 36,821,969 |
Commitments (Details Narrative)
Commitments (Details Narrative) (10-K) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Payment for license cost | $ 10,000 | ||
Percentage of royalties revenue | 2.00% | ||
License revenue | |||
License payable | 20,000 | 20,000 | |
Employee settlement | 50,000 | 50,000 | $ 50,000 |
Revenues | 610,323 | 35,258 | |
BASF Agreement And License [Member] | |||
Royalties | |||
Capsugel Agreement [Member] | |||
Revenues |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Rent expenses | $ 5,602 | $ 0 | $ 14,953 | $ 0 | |||
Total monthly payment | $ 1,619 | ||||||
Lease Settlement Agreement [Member] | Manoa Innovation Center [Member] | |||||||
Rent expenses | $ 8,760 | $ 8,164 | $ 29,662 | $ 23,935 | $ 29,690 | $ 32,049 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 05, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Escrow account | $ 653,278 | $ 653,278 | |||
Placement fees and expenses | $ 225,875 | $ 124,769 | $ 637,042 | $ 299,569 | |
Subsequent Event [Member] | |||||
Escrow account | $ 653,278 | ||||
Placement fees and expenses | 539,662 | ||||
Amount reduced in placement fees and expenses | $ 113,616 |
Subsequent Events (Details Na_2
Subsequent Events (Details Narrative) (10-K) - $ / shares | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Option to purchase shares of common stock was granted | 1,833,334 | 2,161,458 | 6,156,580 | ||
Exercisable price | $ 0.41 | $ 0.41 | $ 0.41 | $ 0.47 | |
Subsequent Event [Member] | Tranche One [Member] | |||||
Option to purchase shares of common stock was granted | 50,000 | ||||
Share-based compensation arrangement by share-based payment award, expiration period | 90 days | ||||
Termination date | Sep. 30, 2027 | ||||
Subsequent Event [Member] | Tranche Two [Member] | |||||
Option to purchase shares of common stock was granted | 500,000 | ||||
Share-based compensation arrangement by share-based payment award, expiration period | 10 years | ||||
Exercisable price | $ 0.16 | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 4 years | ||||
Subsequent Event [Member] | Tranche Three [Member] | |||||
Option to purchase shares of common stock was granted | 166,667 | ||||
Share-based compensation arrangement by share-based payment award, expiration period | 5 years | ||||
Exercisable price | $ 0.16 | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 1 year | ||||
Subsequent Event [Member] | Tranche Four [Member] | Employee [Member] | |||||
Option to purchase shares of common stock was granted | 166,667 | ||||
Share-based compensation arrangement by share-based payment award, expiration period | 5 years | ||||
Exercisable price | $ 0.16 | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 1 year |