Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 17, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Dthera Sciences | ||
Entity Central Index Key | 1,586,372 | ||
Document Type | 10-KT | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 2,517,747 | ||
Entity Common Stock, Shares Outstanding | 43,069,401 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash | $ 12,191 | $ 27,238 |
Prepaid expenses | 0 | 21,390 |
Deposits | 1,000 | 1,000 |
TOTAL CURRENT ASSETS | 13,191 | 49,628 |
LONG TERM ASSETS | ||
Property and equipment, net | 914 | 1,648 |
TOTAL LONG TERM ASSETS | 914 | 1,648 |
TOTAL ASSETS | 14,105 | 51,276 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 268,564 | 167,958 |
Accounts payable and accrued expenses, related party | 3,515 | 0 |
Derivative liability | 234,502 | 0 |
Notes payable-related party | 0 | 61,064 |
Notes payable | 20,000 | 0 |
Current portion of convertible notes payable-related party, net | 0 | 29,114 |
Current portion of convertible notes payable, net | 67,345 | 189,243 |
TOTAL CURRENT LIABILITIES | 593,926 | 447,379 |
LONG TERM LIABILITIES | ||
Convertible notes payable, net | 0 | 270,000 |
Convertible notes payable-related party, net | 0 | 30,000 |
TOTAL LONG TERM LIABILITIES | 0 | 300,000 |
TOTAL LIABILITIES | 593,926 | 747,379 |
Preferred Stock, 10,000,000 shares authorized, $0.0001 par value; Redeemable preferred stock Series A, 150,000 Designated; $0.0001 Par Value; 112,690 and 0 shares issued and outstanding as at December 31, 2016 and December 31, 2015, respectively | 11 | 0 |
STOCKHOLDERS' DEFICIT | ||
Common stock 200,000,000 Shares Authorized; $0.001 Par Value; 36,181,101 and 14,353,093 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | 36,181 | 14,353 |
Additional paid in capital | 1,362,387 | 73,140 |
Accumulated deficit | (1,978,400) | (783,596) |
Total Stockholders' Deficit | (579,832) | (696,103) |
Total Liabilities and Stockholders' Deficit | $ 14,105 | $ 51,276 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred stock, par value | $ .0001 | $ .0001 |
Preferred stock, authorized/designated | 10,000,000 | 10,000,000 |
Common stock Par value | $ 0.001 | $ 0.001 |
Common stock, Authorized | 200,000,000 | 200,000,000 |
Common stock, Issued | 36,181,101 | 14,353,091 |
Common stock, outstanding | 36,181,101 | 14,353,091 |
Redeemable Series A Preferred Stock [Member] | ||
Preferred stock, authorized/designated | 150,000 | 150,000 |
Preferred stock, shares issued | 112,690 | 0 |
Preferred stock, shares outstanding | 112,690 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
REVENUES | ||
Sales | $ 0 | $ 0 |
Cost of services | 0 | 0 |
GROSS PROFIT | 0 | 0 |
OPERATING EXPENSES | ||
Depreciation and amortization | 6,159 | 915 |
General and administrative | 690,248 | 590,569 |
Professional fees | 343,694 | 156,573 |
TOTAL OPERATING EXPENSES | 1,040,101 | 748,057 |
OPERATING LOSS | (1,040,101) | (748,057) |
OTHER EXPENSES | ||
Interest expense | (126,115) | (21,350) |
Derivative expense | (37,616) | 0 |
Gain on derivative liability | 33,114 | 0 |
Gain on settlement of debt | 34,874 | 0 |
Impairment of intangible assets | (58,960) | (7,100) |
TOTAL OTHER EXPENSES | (154,703) | (28,450) |
Provision for income taxes | 0 | 0 |
NET LOSS | $ (1,194,804) | $ (776,507) |
Loss per share - Basic and diluted | $ (.05) | $ (.06) |
WEIGHTED AVERAGE SHARES OUTSTANDING - Basic and diluted | 23,767,632 | 11,971,621 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Preferred Stock | Common Stock [Member] | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2014 | 0 | 7,701,659 | |||
Beginning balance, value at Dec. 31, 2014 | $ 0 | $ 7,702 | $ 2,298 | $ (7,089) | $ 2,911 |
Common stock issued for cash, shares issued | 6,301,358 | ||||
Common stock issued for cash, value | $ 6,301 | 3,699 | 10,000 | ||
Common stock issued for services, shares | 350,076 | ||||
Common stock issued for services, value | $ 350 | 33,150 | 33,500 | ||
Fair value of options vested | 33,993 | 33,993 | |||
Net loss | (776,507) | (776,507) | |||
Ending balance, shares at Dec. 31, 2015 | 0 | 14,353,093 | |||
Ending balance, value at Dec. 31, 2015 | $ 0 | $ 14,353 | 73,140 | (783,596) | (696,103) |
Common stock issued for cash, shares issued | 314,500 | ||||
Common stock issued for cash, value | $ 315 | 62,585 | 62,900 | ||
Common stock issued for services, shares | 438,363 | ||||
Common stock issued for services, value | $ 438 | 41,437 | 41,875 | ||
Common stock issued for patent, shares | 616,133 | ||||
Common stock issued for patent, value | $ 617 | 58,344 | 58,960 | ||
Common stock issued for conversion of debt, shares | 4,388,997 | ||||
Common stock issued for conversion of debt, value | $ 4,389 | 725,785 | 730,174 | ||
Common stock issued in lieu of interest, shares | 70,015 | ||||
Common stock issued in lieu of interest, value | $ 70 | 6,630 | 6,700 | ||
Preferred stock issued for conversion of debt, shares | 112,690 | ||||
Preferred stock issued for conversion of debt, value | $ 11 | 112,679 | 112,690 | ||
Fair value of options vested | 241,433 | 241,433 | |||
Common stock issued for share exchange agreement, shares | 16,000,000 | ||||
Common stock issued for share exchange agreement, value | $ 16,000 | 40,354 | 56,354 | ||
Net loss | (1,194,804) | (1,194,804) | |||
Ending balance, shares at Dec. 31, 2016 | 112,690 | 36,181,101 | |||
Ending balance, value at Dec. 31, 2016 | $ 11 | $ 36,181 | $ 1,362,387 | $ (1,978,400) | $ (579,832) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,194,804) | $ (776,507) |
Adjustments for non-cash items: | ||
Amortization and depreciation | 73,505 | 4,272 |
Impairment of intangible assets | 58,960 | 7,100 |
Common stock issued for services | 16,750 | 33,500 |
Gain on extinguishment of debt | (34,874) | 0 |
Gain on derivative liability | (33,114) | 0 |
Initial derivative expense | 37,616 | 0 |
Fair value of stock options vested | 241,433 | 33,993 |
Operating expenses paid on behalf of the company by related parties | 20,627 | 69,499 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 21,390 | (21,390) |
Deposits | 0 | (1,000) |
Accounts payable and accrued liabilities | 291,891 | 148,556 |
Accrued interest | 58,773 | 17,993 |
NET CASH USED IN OPERATING ACTIVITIES | (441,847) | (483,984) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Property and equipment | 0 | (2,166) |
Intangible assets | 0 | (7,100) |
NET CASH USED IN INVESTING ACTIVITIES | 0 | (9,266) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of common stock | 62,900 | 10,000 |
Proceeds from issuance of notes payable | 20,000 | 0 |
Proceeds from issuance of notes payable - related party | 0 | 135,000 |
Proceeds from issuance of convertible notes | 330,000 | 456,333 |
Proceeds from issuance of notes payable - related party | 94,000 | 0 |
Proceeds from issuance of convertible notes - related party | 0 | 58,667 |
Payments of notes payable - related party | (80,100) | (148,153) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 426,800 | 511,847 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (15,047) | 18,597 |
CASH AND CASH EQUIVALENTS - Beginning of period | 27,238 | 8,641 |
CASH AND CASH EQUIVALENTS - End of period | 12,191 | 27,238 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Shares issued for assets | 58,960 | 0 |
Common stock issued for accrued interest | 6,700 | 0 |
Preferred Series A shares issued in settlement of debt | 112,690 | 0 |
Shares issued in settlement of debt | 731,391 | 0 |
Net liabilities assumed in share exchange agreement | 56,354 | 0 |
Debt discounts on convertible debt | $ 240,000 | $ 10,000 |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Description of Business Dthera Sciences (formerly Knowledge Machine International, Inc.) is a Nevada corporation, and was incorporated on December 27, 2012. The Company offers a subscription-based service that captures, shares, and stores photos and audio in cloud. It offers a proprietary platform (the “Platform”), which enables users to preserve and share memories, and will initially target a Quality of Life benefit in certain patient populations, principally patients suffering from Alzheimer’s disease and dementia. On September 21, 2016, the Company acquired a new operating subsidiary, EveryStory, Inc., a Delaware corporation (“EveryStory”). Following the acquisition (referred to herein as the “EveryStory Transaction”), the Company’s business is to develop a Digital Therapeutic technology designed to deliver Reminiscence Therapy to certain patient populations, principally patients suffering from Alzheimer’s disease and dementia with the goal of a Quality of Life benefit and reduction in anxiety in those populations. As of the date of this Report, EveryStory was our only subsidiary. In connection with the EveryStory Transaction, the Company dissolved its other former subsidiary entity and terminated its prior business operations. Acquisition of EveryStory; EveryStory Transaction On September 21, 2016, the Company entered into an Amended and Restated Acquisition and Share Exchange Agreement (the “A&R Agreement”) with EveryStory, Inc., a Delaware corporation (“EveryStory”), and each of its shareholder (the “Shareholders”), and closed the acquisition (the “Acquisition”) of the ownership of EveryStory (the “Closing”). The Company acquired all of the outstanding shares of EveryStory, and agreed to issue an aggregate of 77,377,713 pre-split /15,477,604 post-split shares of the Company’s common stock to the EveryStory holders, with the understanding that an additional 21,942,062 pre-split/4,388,997 post-split shares were issued to holders of EveryStory convertible debt instruments which are convertible or exercisable into shares of EveryStory common stock (collectively, the “Exchange Shares”). Additionally, prior to Closing, the parties agreed that certain shares of the Company’s common stock were to be returned to the Company for cancellation, resulting in the current Company’s shareholders owning an aggregate of 40,875,000 pre-split/8,000,000 post-split shares of the Company’s common stock immediately prior to the Closing. Pursuant to the A&R Agreement, the 99,319,775 pre-split/ 19,866,601 post-split Exchange Shares issued or to be issued to the EveryStory constituted 75% of the total issued and outstanding shares of the Company’s common stock, and the legacy Company shareholders (who were the owners of the Company’s common stock immediately prior to the Closing) owned an aggregate of 40,875,000 shares, which constituted 25% of the total outstanding Company common stock. The Company’s and EveryStory’s management agreed, and the A&R Agreement provides, that following the Closing, the Company will conduct a reverse stock split (discussed in more detail below), following which the outstanding shares of the Company’s Series A Preferred Stock will convert into a total of 8,000,000 post-reverse-split common stock. Following such conversion, the EveryStory owners will own or have the right to receive shares of the Company’s common stock equal to 55% of the then-outstanding Company common stock, and the Company legacy shareholders will own shares of the Company’s common stock equal to 45% of the then-outstanding Company common stock, consisting of 8,000,000 shares of Company common stock issued on conversion of the Company’s Series A Preferred Stock (22.5%) and 8,000,000 shares of the Company’s common stock owned by the other legacy Company shareholders (22.5%). As a result of the Closing of the A&R Agreement, EveryStory became our wholly owned subsidiary. Additionally (as discussed more fully below), our directors and officers immediately prior to the Closing appointed the EveryStory management to become our new officers and directors, and then resigned from their positions with us. In addition, we terminated our pre-closing business operations and agreed to dissolve our other wholly owned subsidiary, Knowledge Machine. Immediately prior to the Closing, there were 40,875,000 shares of the Company’s common stock. In connection with the Closing, the Company issued an aggregate of 77,377,713 pre-split/ 15,477,604 post-split shares to the EveryStory shareholders, and 21,942,062 pre-split/4,388,997 post-split shares were issued to the holders of EveryStory convertible debt instruments, and the parties to the A&R Agreement understand and anticipate that all such holders would exercise and convert their securities into the reserved shares of the Company. On November 2, 2016, a reverse stock split (the “Reverse Split”) of the Company’s common stock took effect. The ratio of the Reverse Split was 1:5.109375, meaning one new share for each 5.109375 old shares of the Company’s common stock. Except as specifically noted or indicated herein, all share numbers provided in this Annual Report are given on a post-reverse-split basis. Accounting Basis The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). As disclosed in a Current Report on Form 8-K filed November 17, 2016, the Company recently changed to a December 31 fiscal year end. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates are made in relation to the allowance for doubtful accounts and the fair value of certain financial instruments. Principles of Consolidation The consolidated financial statements include the accounts of Dthera Sciences and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. Cash and Cash Equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of three months or less. As of December 31, 2016 and 2015, the Company’s cash balances were within the FDIC insurance coverage limits. Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments. The Company accounts for its derivative liabilities and non-employee stock options, at fair value, on a recurring basis under level 2. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under Accounting Standards Codification (“ASC”) 815, "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion feature. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments, including stock purchase options and convertible debt, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. For convertible debt with embedded derivatives, the Company uses the Binomial Lattice model to value the embedded derivatives. Debt Issuance Costs and Debt Discount The Company may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Concentration of Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions. For the year ended December 31, 2016 and 2015 there were no customers that accounted for a material portion of total revenues. Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment: Description Useful Lives Office Equipment and Computers 2 to 3 years Expenditures associated with upgrades and enhancements that improve, add functionality, or otherwise extend the life of property and equipment are capitalized, while expenditures that do not, such as repairs and maintenance, are expensed as incurred. Valuation of Long-Lived Assets Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses both an estimate of undiscounted future net cash flows of the assets over the remaining useful lives and a replacement cost method when determining their fair values. If the carrying values of the assets exceed the fair value of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their fair values. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests. Revenue Recognition The Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Where arrangements have multiple elements, revenue is allocated to the elements based on the relative selling price method and revenue is recognized based on the Company’s policy for each respective element. Software Development The Company accounts for internal use software development costs in accordance with authoritative guidance related to accounting for the costs of app and web software developed or obtained for internal use. Software development costs that are incurred in the preliminary development stage are expensed as incurred. Once certain criteria have been met (“application development stage”), direct costs incurred in developing or obtaining computer software are capitalized. Costs in the post-implementation/operation stage, including costs related to training and software maintenance, are expensed as incurred. Research and Development The Company engages in new software development efforts. Research and development expenses relating to possible future software are expensed as incurred. Research and development expenses were approximately $0 for the years ended December 31, 2016 and 2015. Advertising Expenses The Company expenses advertising costs as incurred. Advertising may consist of media or online advertising and marketing. As such, advertising expenses were approximately $86,037 and $85,049 for the years ended December 31, 2016 and 2015, respectively. Stock-Based Compensation The Company accounts for share based payments in accordance with Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company estimates the fair value of the award using a valuation technique. For this purpose, the Company uses the Black-Scholes option pricing model. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. Compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock. ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505. Loss Per Share Basic loss per Common Share is computed by dividing losses attributable to Common shareholders by the weighted-average number of shares of Common Stock outstanding during the period. Diluted loss per Common Share is computed by dividing loss attributable to Common shareholders by the weighted-average number of Shares of Common Stock outstanding during the period increased to include the number of additional Shares of Common Stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding convertible Preferred Stock, stock options, warrants, and convertible debt. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s Common Stock can result in a greater dilutive effect from potentially dilutive securities. For the years ended December 31, 2016 and 2015, all of the Company’s potentially dilutive securities (options and convertible debt) were excluded from the computation of diluted earnings per share as they were anti-dilutive. The total number of potentially dilutive Common Shares that were excluded were 3,596,198 and 741,418 at the years ended December 31, 2016 and 2015, respectively. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. In July 2006, the Financial Accounting Standards Board (“FASB”) issued ASC 740, Accounting for Uncertainty in Income Taxes The Company’s policy is to recognize both interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties on unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest and penalties since its inception. The Company files income tax returns in the U.S. federal tax jurisdiction and various state tax jurisdictions. The tax years for 2013 to 2016 remain open for federal and/or state tax jurisdictions. The Company is currently not under examination by any other tax jurisdictions for any tax years. Recent Accounting Pronouncements Management has considered all other recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements. |
2. Going Concern
2. Going Concern | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | The Company's financial statements are prepared using U.S. GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of the date of this Report, the Company had an accumulated deficit of $1,978,400, negative working capital of $580,735, and no revenues to cover its operating costs, which raises substantial doubt about its ability to continue as a going concern. As of the date of this Report, the Company had not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The future of the Company as an operating business will depend on its ability to (1) obtain sufficient capital contributions and/or financing as may be required to sustain its operations, and (2) to achieve adequate revenues from its operations. Management's plan to address these issues includes, (a) continued exercise of tight cost controls to conserve cash, (b) obtaining additional financing, (c) placing revenue producing services into place, and (d) identifying and executing on additional revenue generating opportunities. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. |
3. Property and Equipment
3. Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | The Company’s property and equipment were comprised of the following as of December 31, 2016 and 2015: December 31, December 31, Computer and Equipment 2,816 2,816 Less: Accumulated Depreciation (1,902 ) (1,168 ) Net Property and Equipment $ 914 $ 1,648 |
4. Asset Acquisition
4. Asset Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Asset Acquisition | On June 5, 2016, EveryStory issued The Company evaluated this acquisition in accordance with ASC 805, Business Combinations (10-55-4) to discern whether the assets and operations of SIT met the definition of a business. The Company concluded there were not a sufficient number of key processes obtained to develop the inputs into outputs, nor could such processes be easily obtained by the Company. Accordingly, the Company accounted for this transaction as the acquisition of assets. The transaction was accounted for in accordance with asset acquisition guidance found in ASC 805. The consideration transferred and assets acquired recognized is as follows: Consideration paid: Common Stock $ 58,960 Consideration received: Intangible assets $ 58,960 Net value of assets purchased: $ 58,960 |
5. Intangible Assets
5. Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | The Company’s intangible assets were comprised of the following of December 31, 2016 and 2015: December 31, December 31, Technology asset purchase $ 58,960 $ 7,100 Less: Accumulated Amortization – – Less: Impairment (58,960 ) (7,100 ) Net Intangible Assets $ – $ – The Company impaired intangible assets related to the technology asset purchase and patent purchase due to no revenue production, totaling $58,960 and $7,100, for the years ended December 31, 2016 and 2015, respectively. |
6. Loans Payable
6. Loans Payable | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Loans Payable | Notes Payable – Related Parties Notes payable due to related parties consisted of the following as of December 31, 2016 and 2015: Balance December 31, 2015 $ 61,064 Cash additions 94,000 Expense additions 20,627 Cash payments (80,100 ) Conversions (95,591 ) Balance December 31, 2016 $ – During the years ended December 31, 2016 and 2015, EveryStory’s Founder and CEO advanced $88,000 and $110,000, and expense additions of $20,627 and $68,904, and was repaid $66,000 and $75,000, respectively. The notes bear an interest rate of 0% per annum. During the years ended December 31, 2016 and 2015, EveryStory’s Founder and CTO advanced $6,000 and $25,000, and expense additions of $0 and $595, and was repaid $14,100 and $73,153, respectively. The notes bear an interest rate of 0% per annum. On September 21, 2016, the Company’s wholly owned subsidiary (EveryStory) issued 112,690 shares of the EveryStory Series A Preferred Stock to the CEO and CTO in exchange for and as full payment of amounts to them which included $6,096 of accrued expenses, $95,591 of related party loans, $10,000 of convertible notes payable and $1,003 of accrued interest on the convertible notes payable. The EveryStory Series A Preferred Stock are redeemable at any time for cash on a dollar-per-dollar basis at a redemption price of $1.00 per share. If not redeemed for cash, the shares of EveryStory Series A Preferred Stock can be convertible into shares of common stock, using a post-split conversion price of $0.10 per share pursuant to the A&R Agreement. Notes Payable Notes payable consisted of the following as of December 31, 2016 and 2015: Balance December 31, 2015 $ – Cash additions 20,000 Expense additions – Cash payments – Conversions – Balance December 31, 2016 $ 20,000 On August 3, 2016, the Company entered into a promissory note purchase agreement with an unrelated individual for $20,000. This note is due on demand. In lieu of interest, EveryStory issued Convertible Notes Payable – Related Parties Convertible notes payable due to related parties consisted of the following as of December 31, 2016 and 2015: Balance December 31, 2015 $ 60,000 Cash additions – Expense additions – Conversions (60,000 ) Debt discount from debt issuance costs – Balance December 31, 2016 $ – On June 29, 2015, EveryStory issued to two related party individuals convertible notes for $30,000 that mature on December 31, 2016. The notes bear an interest rate of 12% per annum and are convertible into shares of EveryStory’s common stock at the lesser of 70% of the price per share paid by the investors for the next preferred stock in a qualified financing or the quotient of $2,000,000 divided by the fully diluted capitalization of the Company immediately prior to the closing date of the qualified financing. On November 18, 2015, EveryStory issued to two related party individuals convertible notes for $30,000 that mature on November 18, 2017. The notes bear an interest rate of 12% per annum and are convertible into shares of EveryStory’s common stock at the lesser of 60% of the lowest price per share paid by the investors for the next preferred stock in a qualified financing or the quotient of $5,000,000 divided by the fully diluted capitalization of EveryStory immediately prior to the closing date of the qualified financing. On September 21, 2016, in connection with the EveryStory Transaction and the A&R Agreement, the Company's CEO converted the full balance of notes totaling $10,000 of principal and $1,003 of interest into series A preferred stock, and a director of the Company converted $50,000 of principal and $6,231 of interest into an aggregate of 337,998 shares of Dthera common stock. Convertible Notes Payable Notes payable due to non-related parties consisted of the following as of December 31, 2016, and December 31, 2015: Balance December 31, 2015 $ 465,000 Cash additions 330,000 Expense additions 10,000 Conversions (565,000 ) Debt discount (172,655 ) Balance December 31, 2016 $ 67,345 On June 29, 2015, EveryStory issued to ten unrelated individuals convertible notes in the aggregate amount of $195,000 that mature on December 31, 2016. The notes bear an interest rate of 12% per annum and are convertible into shares of EveryStory’s common stock at the lesser of 70% of the price per share paid by the investors for the next preferred stock in a qualified financing or the quotient of $2,000,000 divided by the fully diluted capitalization of EveryStory immediately prior to the closing date of the qualified financing. On September 21, 2016, all of these convertible notes were converted into common stock based on the terms of the A&R Agreement. On October 20, 2015, EveryStory issued to an unrelated individual a convertible note for $5,000 that matures on October 20, 2017. The note bears an interest rate of 12% per annum and is convertible into shares of EveryStory’s common stock at the lesser of 60% of the lowest price per share paid by the investors for the next preferred stock in a qualified financing or the quotient of $5,000,000 divided by the fully diluted capitalization of EveryStory immediately prior to the closing date of the qualified financing. On September 21, 2016, this convertible note was converted into common stock based on the terms of the A&R Agreement. On November 18, 2015, EveryStory issued to eleven unrelated individuals convertible notes in the aggregate amount of $265,000 that mature on November 18, 2017. The notes bear an interest rate of 12% per annum and are convertible into shares of EveryStory’s common stock at the lesser of 60% of the lowest price per share paid by the investors for the next preferred stock in a qualified financing or the quotient of $5,000,000 divided by the fully diluted capitalization of EveryStory immediately prior to the closing date of the qualified financing. On September 21, 2016, all of these convertible notes were converted into common stock based on the terms of the A&R Agreement. On February 9, 2016, EveryStory issued to an unrelated individual two convertible notes for $100,000 that mature on February 9, 2018. The notes bear an interest rate of 0% per annum and are convertible into shares of EveryStory’s common stock at the $1.60 per share. On September 21, 2016, these convertible notes were converted into common stock based on the terms of the A&R Agreement. On September 21, 2016, in connection with the EveryStory Transaction and the A&R Agreement, note holders converted their convertible notes in the aggregate amount of $565,000 and interest totaling $56,256 into an aggregate of 3,726,981 shares of Dthera common stock. Effective September 22, 2016, the Company conducted a private offering of convertible notes (the “ Note Offering Note SPA Convertible Notes |
7. Derivative Liabilities
7. Derivative Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | The Company evaluates its fair value hierarchy disclosures each quarter. The Company has convertible debentures with embedded conversion features, which is accounted for as a derivative liability and measured at fair value on a recurring basis. As of December 31, 2016 this derivative liability had an estimated fair value of $234,502. The following table presents information about our derivative liability, which was our only financial instrument measured at fair value on a recurring basis using significant inputs other than level one inputs that are either directly or indirectly observable (Level 2) as of December 31, 2016: Balance at December 31, 2015 $ – Additions related to embedded conversion features 267,616 Change in Fair Value of Derivative (33,114 ) Balance at December 31, 2016 $ 234,502 The fair value of this derivative liability was calculated using the Binomial Lattice model, valuing the derivative liability within the notes based on a probability weighted discounted cash flow model. These models are based on future projections of the various potential outcomes. The features in the notes that were analyzed and incorporated into the model included the conversion feature with the reset provisions; redemption provisions; and the default provisions. Assumptions used to calculate the fair value of the derivative liability were as follows: December 31, 2016 Expected term in years 0.98 – 0.70 years Risk-free interest rates 0.56 – 0.71% Volatility 166.9 – 188.4% Dividend yield 0% |
8. Preferred Stock
8. Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Preferred Stock | The Company has authorized 10,000,000 Preferred Stock, of which it has designated 150,000 shares of $0.0001 par value per share Series A Redeemable Preferred Stock. The Series A Preferred Stock has a stated value of $1.00 per share, of which 112,690 and 0 shares were issued and outstanding as of December 31, 2016 and 2015, respectively. On September 13, 2016, the Company issued 112,690 shares of A Preferred Stock to the CEO and CTO in exchange for amounts owed to them which included $6,096 of accrued expenses, $95,591 of related party loans, $10,000 of convertible notes payable and $1,003 of accrued interest on the convertible notes payable. The Series A Preferred stock are redeemable at any time for cash on a dollar-per-dollar basis at a redemption price of $1.00 per share. If not redeemed for cash, according to the A&R Agreement the shares of Series A Preferred Stock can be converted into shares of Common Stock using a post-split conversion price of $0.10 per share pursuant to the A&R Agreement. Series A Redeemable Preferred Stock The Series A Preferred Stock have the following rights and preferences: · Redeemable at any time at the option of the holder for cash on a dollar-per-dollar basis at a redemption of $1.00 per share. · Convertible into shares of Common Stock using a conversion price of $0.10 per share. · No general voting rights until converted into Common Stock. · Entitled to receive dividends at a rate per annum of 8% · Liquidation preference upon a liquidation event. |
9. Common Stock
9. Common Stock | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Common Stock | The Company has authorized 200,000,000 shares of $0.001 par value per share Common Stock, of which 181,069,775 pre-split/36,181,101 post-split shares and 14,353,093 shares were issued outstanding as of December 31, 2016, and December 31, 2015, respectively. Year Ended December 31, 2016 On June 5, 2016, EveryStory issued 88,000 shares of its common stock, which were exchanged for 616,133 shares of Dthera common stock for the purchase agreement for an SIT Patent for a value of $58,960. On August 3, 2016, EveryStory issued On September 15, 2016, EveryStory issued 25,000 shares of its common stock, which were exchanged for 175,038 shares of Dthera common stock valued at $16,750 for services . On September 16, 2016, EveryStory issued 37,500 shares of its common stock, which were exchanged for 263,325 shares of Dthera common stock valued at $25,125 in settlement of $60,000 of accrued consulting fees . This resulted in a gain on settlement of $34,875. On September 21, 2016, as part of the A&R Agreement, EveryStory issued 625,033 shares of its common stock, which were exchanged for 4,388,997 shares of Dthera common stock, for the conversion of debt for a value of $730,174. In connection with the A&R Agreement, the parties agreed that the prior shareholders of the Company would own an aggregate of 16,000,000 post-split shares of the Company’s common stock as part of the agreement totaling $56,354. The reverse stock split is discussed in more detail in Note 1 above. From November to December 2016 the Company issued 314,500 shares of common stock at $0.20 per share for cash proceeds of $62,900, pursuant to the private placement offering. Year Ended December 31, 2015 EveryStory issued 900,000 shares of its common stock for net cash proceeds of $10,000 to EveryStory founders. EveryStory also issued 50,000 shares of its common stock for services valued at $33,500. As of December 31, 205 there was 2,050,000 shares of EveryStory stock issued and outstanding. |
10. Stock Purchase Options
10. Stock Purchase Options | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Purchase Options | In 2015, the Board of Directors of EveryStory approved the adoption of the EveryStory’s Stock Option Plan (“the Plan”). The purpose of the Plan is to advance the interests of EveryStory by encouraging and enabling acquisition of a financial interest in EveryStory by employees, consultants, and other key individuals. The Plan is intended to aid EveryStory in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with EveryStory. A maximum of 680,000 shares of EveryStory's Common Stock is reserved for issuance under stock options to be issued under the Plan. The Plan permits the grant of incentive stock options, non-statutory stock options and restricted stock awards. The Plan is administered by the Board of Directors or, at its direction, a Compensation Committee comprised of officers of EveryStory. Stock Purchase Options During the year ended December 31, 2016, EveryStory issued non-employee options to purchase a total of 106,100 shares of EveryStory common stock, which would exchange for 742,860 shares of Dthera common stock, which were originally valued at $63,678. EveryStory issued the options in conjunction with services. The EveryStory options were converted into Dthera options on September 21, 2016, pursuant to the A&R Agreement. As the options holders are non-employees, the values attributable to these options are remeasured on a quarterly basis and amortized over the service period and until they have fully vested over a 3 year vesting period. The Company believes that the fair value of the stock options is more reliably measurable than the fair value of the services received. The fair value of the stock options granted were revalued at each reporting date using the Black-Scholes valuation model. As of December 31, 2016, the company remeasured the options at a value of $1,609,669 to be recognized over the vesting period, of which $199,969 has been recognized. During the year ended December 31, 2015, EveryStory issued options to purchase a total of 486,200 shares of EveryStory common stock, which would exchange for 3,404,134 shares of Dthera common stock, valued at $75,457 with multiple vesting periods. The options were valued using the Black-Scholes options pricing model under the assumptions noted below. The price per share for Common Stock for the stock options was based on the relative fair market value of the Common Stock using the backsolve valuation method of applying the Option Pricing Method (OPM). The options were converted into Dthera options on September 21, 2016, pursuant to the A&R Agreement. Further, according to the option agreements entered into in 2015, these options vested immediately when EveryStory Options converted to Dthera options. The following table summarizes the changes in options outstanding of the Company during the year ending December 31, 2016: Number of Weighted Outstanding, December 31, 2015 3,404,134 0.10 Granted 742,860 0.10 Exercised – – Outstanding, December 31, 2016 4,146,994 0.10 Exercisable, December 31, 2016 3,404,134 0.10 Stock option expense of $241,433 and $33,993 was recorded in the years ended December 31, 2016 and December 31, 2015, respectively. Total remaining unrecognized compensation cost related to unvested stock options is approximately $1,409,700 and is expected to be recognized over a period of 2.67 years. |
11. Income Taxes
11. Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | There was no provision for, or benefit from, income tax during the years ended December 31, 2015 and 2014 respectively. The components of the net deferred tax asset as of December 31, 2016 and 2015: December 31, December 31, Operating loss carry forwards $ 672,656 $ 266,423 Depreciation & amortization (2,480 ) (386 ) Loss on impairment (22,460 ) (2,414 ) Stock-based compensation (117,416 ) (21,091 ) Total Deferred Tax Assets 530,300 242,532 Valuation allowance (530,300 ) (242,532 ) Net Deferred Tax Asset $ – $ – Federal and state net operating loss carry forwards were $1,978,400 and $783,596 as of December 31, 2016 and 2015, respectively. The net operating loss carry forwards expire between 2033 and 2036. The following is a reconciliation of the amount of benefit that would result from applying the federal statutory rate to pretax loss with the provision for income taxes for the years ended December 31, 2016 and 2015, respectively: December 31, December 31, Tax at statutory rate (34%) $ (406,233 ) $ (264,012 ) Non-deductible expenses 118,465 23,817 Change in valuation allowance 287,768 240,195 State tax benefit, net of federal tax effect – – Provision for Income Taxes $ – $ – In June 2006, FASB issued FASB ASC 740-10-05-6. The Company adopted FASB ASC 740-10-05-6 on January 1, 2013. Under FASB ASC 740-10-05-6, tax benefits are recognized only for the tax positions that are more likely than not be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the company's tax return that do not meet these recognition and measurement standards. Upon the adoption of FASB ASC 740-10-05-6, the Company had no liabilities for unrecognized tax benefits and, as such, the adoption had no impact on its financial statements, and the Company has recorded no additional interest or penalties. The Adoption of FASB ASC 740-10-05-6 did not impact the Company's effective tax rates. The Company's policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits with the income tax expense. For the years ended December 31, 2016, and 2015, the Company did not recognize any interest or penalties in its Statement of Operations, nor did it have any interest or penalties accrued in its Balance Sheet at December 31, 2016 and 2016 relating to unrecognized benefits. The tax years 2013 through 2016 remain open to examination for federal income tax purposes and by other major taxing jurisdictions to which the Company is subject. |
12. Fair Value Measurements
12. Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Liabilities measured at fair value on a recurring basis at December 31, 2016, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of options $ – $ 1,609,669 $ – $ 1,609,669 Fair value of derivatives $ – $ 234,502 $ – $ 234,502 Fair value is calculated using the Black-Scholes options pricing model for the stock options and the Binomial Lattice model for the derivatives. Liabilities measured at fair value on a recurring basis at December 31, 2015, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of options $ – $ 75,457 $ – $ 75,457 Fair value of derivatives $ – $ – $ – $ – Fair value is calculated using the Black-Scholes options pricing model for the stock options. |
13. Subsequent Events
13. Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
13. Subsequent Events | In accordance with ASC 855, Company’s management reviewed all material events through the date of this filing and determined that there were the following material subsequent events to report: In February 2017, the Company issued a short-term note to a related party individual for $50,000 due on demand. The note bore an interest rate of 10% per annum interest within the 90 day period and will increase to 20% interest if not fully paid back within 90 days. On April 9, 2017, the Company paid the full balance of $50,000. In March 2017, the Company repaid convertible notes in the original principal amount of $240,000 (the “Convertible Notes”). The Convertible Notes were issued by the Company shortly before the EveryStory transaction. In connection with the repayment of the Convertible Notes, the Company repaid a total of $240,000 in principal and $18,000 in interest, and agreed to issue 83,300 shares of the Company’s common stock to the holders of the Convertible Notes. The shares of stock were issued pursuant to Section 4(a)(2) of the Securities Act of 1933 and regulations promulgated thereunder. Each of the holders of the Convertible Notes represented to the Company that it was an accredited investor, that it was acquiring the shares for its own account and for investment purposes, and not with an intent to distribute. From January through March 2017, pursuant to the private placement offering (the “Private Offering”) the Company issued 6,805,000 shares of common stock for gross proceeds of approximately $1,171,000. The Company’s management intends to use the proceeds to repay certain convertible debt instruments and to use the proceeds for general corporate purposes and working capital. |
1. Summary of Significant Acc20
1. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Dthera Sciences (formerly Knowledge Machine International, Inc.) is a Nevada corporation, and was incorporated on December 27, 2012. The Company offers a subscription-based service that captures, shares, and stores photos and audio in cloud. It offers a proprietary platform (the “Platform”), which enables users to preserve and share memories, and will initially target a Quality of Life benefit in certain patient populations, principally patients suffering from Alzheimer’s disease and dementia. On September 21, 2016, the Company acquired a new operating subsidiary, EveryStory, Inc., a Delaware corporation (“EveryStory”). Following the acquisition (referred to herein as the “EveryStory Transaction”), the Company’s business is to develop a Digital Therapeutic technology designed to deliver Reminiscence Therapy to certain patient populations, principally patients suffering from Alzheimer’s disease and dementia with the goal of a Quality of Life benefit and reduction in anxiety in those populations. As of the date of this Report, EveryStory was our only subsidiary. In connection with the EveryStory Transaction, the Company dissolved its other former subsidiary entity and terminated its prior business operations. Acquisition of EveryStory; EveryStory Transaction On September 21, 2016, the Company entered into an Amended and Restated Acquisition and Share Exchange Agreement (the “A&R Agreement”) with EveryStory, Inc., a Delaware corporation (“EveryStory”), and each of its shareholder (the “Shareholders”), and closed the acquisition (the “Acquisition”) of the ownership of EveryStory (the “Closing”). The Company acquired all of the outstanding shares of EveryStory, and agreed to issue an aggregate of 77,377,712 shares of the Company’s common stock to the EveryStory holders, with the understanding that an additional 45,247,288 shares were to be reserved for issuance to holders of EveryStory derivative securities which were convertible or exercisable into shares of EveryStory common stock (collectively, the “Exchange Shares”). (PLEASE NOTE: The share totals provided in this Note’s discussion of the EveryStory Transaction are given as pre-reverse-split figures. All other Company share totals in this Annual Report, except as specifically noted, are given as post-reverse-split totals.) Additionally, prior to Closing, the parties agreed that certain shares of the Company’s common stock were to be returned to the Company for cancellation, resulting in the current Company’s shareholders owning an aggregate of 40,875,000 shares of the Company’s common stock immediately prior to the Closing. Pursuant to the A&R Agreement, the 122,625,000 Exchange Shares issued or to be issued to the EveryStory constituted 75% of the total issued and outstanding shares of the Company’s common stock, and the legacy Company shareholders (who were the owners of the Company’s common stock immediately prior to the Closing) owned an aggregate of 40,875,000 shares, which constituted 25% of the total outstanding Company common stock. The Company’s and EveryStory’s management agreed, and the A&R Agreement provides, that following the Closing, the Company would conduct a reverse stock split (discussed in more detail below), following which the outstanding shares of the Company’s Series A Preferred Stock would convert into a total of 8,000,000 post-reverse-split common stock. Following such conversion, the EveryStory owners would own or have the right to receive shares of the Company’s common stock equal to 55.3% of the then-outstanding Company common stock, and the Company legacy shareholders would own shares of the Company’s common stock equal to 44.7% of the then-outstanding Company common stock, consisting of 8,000,000 shares of Company common stock issued on conversion of the Company’s Series A Preferred Stock (22.3%) and 8,000,000 shares of the Company’s common stock owned by the other legacy Company shareholders (22.3%). As a result of the Closing of the A&R Agreement, EveryStory became a wholly owned subsidiary of the Company. Additionally, the directors and officers of the Company immediately prior to the Closing appointed the EveryStory management to become officers and directors of the Company, and then resigned from their positions with the Company. In addition, the Company terminated its pre-Closing business operations and agreed to dissolve its other wholly owned subsidiary, Knowledge Machine, Inc. Immediately prior to the Closing, there were 40,875,000 (pre-reverse-split) shares of the Company’s common stock. In connection with the Closing, the Company issued an aggregate of 77,377,712 (pre-reverse-split) shares to the EveryStory shareholders, and 45,247,288 (pre-reverse-split) shares were reserved for issuance to the holders of EveryStory options and convertible debt instruments, and the parties to the A&R Agreement understand and anticipate that all such holders would exercise and convert their securities into the reserved shares of the Company. On November 2, 2016, a reverse stock split (the “Reverse Split”) of the Company’s common stock took effect. The ratio of the Reverse Split was 1:5.109375, meaning one new share for each 5.109375 old shares of the Company’s common stock. Except as specifically noted or indicated herein, all share numbers provided in this Annual Report are given on a post-reverse-split basis. |
Accounting Basis | Accounting Basis The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). As disclosed in a Current Report on Form 8-K filed November 17, 2016, the Company recently changed to a December 31 fiscal year end. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates are made in relation to the allowance for doubtful accounts and the fair value of certain financial instruments. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Dthera Sciences and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. |
Cash and cash equivalents | Cash and Cash Equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of three months or less. As of December 31, 2016 and 2015, the Company’s cash balances were within the FDIC insurance coverage limits. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments. The Company accounts for its derivative liabilities and non-employee stock options, at fair value, on a recurring basis under level 2. |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under Accounting Standards Codification (“ASC”) 815, "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion feature. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments, including stock purchase options and convertible debt, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. For convertible debt with embedded derivatives, the Company uses the Binomial Lattice model to value the embedded derivatives. |
Debt Issuance Costs and Debt Discount | Debt Issuance Costs and Debt Discount The Company may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Concentration of Risk | Concentration of Risk Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions. For the year ended December 31, 2016 and 2015 there were no customers that accounted for a material portion of total revenues. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment: Description Useful Lives Office Equipment and Computers 2 to 3 years Expenditures associated with upgrades and enhancements that improve, add functionality, or otherwise extend the life of property and equipment are capitalized, while expenditures that do not, such as repairs and maintenance, are expensed as incurred. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses both an estimate of undiscounted future net cash flows of the assets over the remaining useful lives and a replacement cost method when determining their fair values. If the carrying values of the assets exceed the fair value of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their fair values. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Where arrangements have multiple elements, revenue is allocated to the elements based on the relative selling price method and revenue is recognized based on the Company’s policy for each respective element. |
Cost of Revenues | Cost of Revenues The Company’s cost of revenues includes expenses related to revenues. Depreciation is not included within cost of sales. |
Software Development | Software Development The Company accounts for internal use software development costs in accordance with authoritative guidance related to accounting for the costs of app and web software developed or obtained for internal use. Software development costs that are incurred in the preliminary development stage are expensed as incurred. Once certain criteria have been met (“application development stage”), direct costs incurred in developing or obtaining computer software are capitalized. Costs in the post-implementation/operation stage, including costs related to training and software maintenance, are expensed as incurred. |
Research and Development | Research and Development The Company engages in new software development efforts. Research and development expenses relating to possible future software are expensed as incurred. Research and development expenses were approximately $0 for the years ended December 31, 2016 and 2015. |
Advertising Expenses | Advertising Expenses The Company expenses advertising costs as incurred. Advertising may consist of media or online advertising and marketing. As such, advertising expenses were approximately $86,038 and $85,049 for the years ended December 31, 2016 and 2015. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for share based payments in accordance with Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company estimates the fair value of the award using a valuation technique. For this purpose, the Company uses the Black-Scholes option pricing model. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. Compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock. ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505. |
Loss Per Share | Loss Per Share Basic loss per Common Share is computed by dividing losses attributable to Common shareholders by the weighted-average number of shares of Common Stock outstanding during the period. Diluted loss per Common Share is computed by dividing loss attributable to Common shareholders by the weighted-average number of Shares of Common Stock outstanding during the period increased to include the number of additional Shares of Common Stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding convertible Preferred Stock, stock options, warrants, and convertible debt. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s Common Stock can result in a greater dilutive effect from potentially dilutive securities. For the years ended December 31, 2016 and 2015, all of the Company’s potentially dilutive securities (options and convertible debt) were excluded from the computation of diluted earnings per share as they were anti-dilutive. The total number of potentially dilutive Common Shares that were excluded were 3,596,198 and 741,418 at the years ended December 31, 2016 and 2015, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. In July 2006, the Financial Accounting Standards Board (“FASB”) issued ASC 740, Accounting for Uncertainty in Income Taxes The Company’s policy is to recognize both interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties on unrecognized tax benefits expected to result in payment of cash within one year are classified as accrued liabilities, while those expected beyond one year are classified as other liabilities. The Company has not recorded any interest and penalties since its inception. The Company files income tax returns in the U.S. federal tax jurisdiction and various state tax jurisdictions. The tax years for 2013 to 2016 remain open for federal and/or state tax jurisdictions. The Company is currently not under examination by any other tax jurisdictions for any tax years. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management has considered all other recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements. |
3. Property and Equipment (Tabl
3. Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment schedule | December 31, December 31, Computer and Equipment 2,816 2,816 Less: Accumulated Depreciation (1,902 ) (1,168 ) Net Property and Equipment $ 914 $ 1,648 |
4. Asset Acquisition (Tables)
4. Asset Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Consideration transferred | Consideration paid: Common Stock $ 58,960 Consideration received: Intangible assets $ 58,960 Net value of assets purchased: $ 58,960 |
5. Intangible Assets (Tables)
5. Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | December 31, December 31, Technology asset purchase $ 58,960 $ 7,100 Less: Accumulated Amortization – – Less: Impairment (58,960 ) (7,100 ) Net Intangible Assets $ – $ – |
6. Loans Payable (Tables)
6. Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable - related parties | Balance December 31, 2015 $ 61,064 Cash additions 94,000 Expense additions 20,627 Cash payments (80,100 ) Conversions (95,591 ) Balance December 31, 2016 $ – |
Schedule of notes payable | Balance December 31, 2015 $ – Cash additions 20,000 Expense additions – Cash payments – Conversions – Balance December 31, 2016 $ 20,000 |
Schedule of convertible notes payable - related parties | Balance December 31, 2015 $ 60,000 Cash additions – Expense additions – Conversions (60,000 ) Debt discount from debt issuance costs – Balance December 31, 2016 $ – |
Schedule of convertible notes payable | Balance December 31, 2015 $ 465,000 Cash additions 330,000 Expense additions 10,000 Conversions (565,000 ) Debt discount (172,655 ) Balance December 31, 2016 $ 67,345 |
7. Derivative Liabilities (Tabl
7. Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative liability - Level 2 | Balance at December 31, 2015 $ – Additions related to embedded conversion features 267,616 Change in Fair Value of Derivative (33,114 ) Balance at December 31, 2016 $ 234,502 |
Assumptions | December 31, 2016 Expected term in years 0.98 – 0.70 years Risk-free interest rates 0.56 – 0.71% Volatility 166.9 – 188.4% Dividend yield 0% |
10. Stock Purchase Options (Tab
10. Stock Purchase Options (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Option activity | Number of Weighted Outstanding, December 31, 2015 3,404,134 0.10 Granted 742,860 0.10 Exercised – – Outstanding, December 31, 2016 4,146,994 0.10 Exercisable, December 31, 2016 3,404,134 0.10 |
11. Income Taxes (Tables)
11. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of deferred tax asset | December 31, December 31, Operating loss carry forwards $ 672,656 $ 266,423 Depreciation & amortization (2,480 ) (386 ) Loss on impairment (22,460 ) (2,414 ) Stock-based compensation (117,416 ) (21,091 ) Total Deferred Tax Assets 530,300 242,532 Valuation allowance (530,300 ) (242,532 ) Net Deferred Tax Asset $ – $ – |
Reconciliation of income tax expense | December 31, December 31, Tax at statutory rate (34%) $ (406,233 ) $ (264,012 ) Non-deductible expenses 118,465 23,817 Change in valuation allowance 287,768 240,195 State tax benefit, net of federal tax effect – – Provision for Income Taxes $ – $ – |
12. Fair Value Measurements (Ta
12. Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Liabilities measured at fair value on a recurring basis at December 31, 2016, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of options $ – $ 1,609,669 $ – $ 1,609,669 Fair value of derivatives $ – $ 234,502 $ – $ 234,502 Fair value is calculated using the Black-Scholes options pricing model for the stock options and the Binomial Lattice model for the derivatives. Liabilities measured at fair value on a recurring basis at December 31, 2015, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of options $ – $ 75,457 $ – $ 75,457 Fair value of derivatives $ – $ – $ – $ – |
1. Summary of Significant Acc29
1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Research and development expenses | $ 0 | $ 0 |
Advertising expense | $ 86,037 | $ 85,049 |
Antidilutive shares excluded from EPS | 3,596,198 | 741,418 |
Office Equipment and Computers [Member] | ||
Property and equipment useful lives | 2 to 3 years |
2. Going Concern (Details Narra
2. Going Concern (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (1,978,400) | $ (783,596) |
Working capital | $ (580,735) |
3. Property and Equipment (Deta
3. Property and Equipment (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Computer and equipment | $ 2,816 | $ 2,816 |
Less: Accumulated depreciation | (1,902) | (1,168) |
Net property and equipment | $ 914 | $ 1,648 |
4. Asset Acquisition (Details)
4. Asset Acquisition (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Business Combinations [Abstract] | |
Consideration paid, stock value | $ 58,960 |
Consideration received, intangible assets | 58,960 |
Net value of assets purchased | $ 58,960 |
5. Intangible Assets (Details)
5. Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Technology asset purchase | $ 58,960 | $ 7,100 |
Less: Accumulated Amortization | 0 | 0 |
Less: Impairment | (58,960) | (7,100) |
Net Intangible Assets | $ 0 | $ 0 |
6. Loans Payable (Details)
6. Loans Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash additions | $ 20,000 | $ 0 |
Notes Payable - Related Parties [Member] | ||
Balance, beginning | 61,064 | |
Cash additions | 94,000 | |
Cash payments | (80,100) | |
Conversions | (95,591) | |
Balance, ending | 0 | 61,064 |
Notes Payable [Member] | ||
Balance, beginning | 0 | |
Cash additions | 20,000 | |
Expense additions | 0 | |
Cash payments | 0 | |
Conversions | 0 | |
Balance, ending | 20,000 | 0 |
Convertible Notes Payable - Related Parties [Member] | ||
Balance, beginning | 60,000 | |
Cash additions | 0 | |
Expense additions | 0 | |
Cash payments | 0 | |
Conversions | (60,000) | |
Debt discount from debt issuance costs | 0 | |
Balance, ending | 0 | 60,000 |
Convertible Notes Payable [Member] | ||
Balance, beginning | 465,000 | |
Cash additions | 330,000 | |
Expense additions | 10,000 | |
Conversions | (565,000) | |
Debt discount from debt issuance costs | (172,655) | |
Balance, ending | $ 67,345 | $ 465,000 |
6. Loans Payable (Details Narra
6. Loans Payable (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Proceeds from related party | $ 94,000 | $ 0 |
Repayments to related party | 80,100 | 148,153 |
Common stock issued in lieu of interest, value | 6,700 | |
Proceeds from convertible debt | $ 330,000 | 456,333 |
Total Conversions [Member] | ||
Stock issued for conversion of debt, shares issued | 4,459,012 | |
Debt converted, amount | $ 625,000 | |
Interest converted, amount | 63,713 | |
Chief Executive Officer [Member] | ||
Debt converted, amount | 10,000 | |
Interest converted, amount | 1,003 | |
Director [Member] | ||
Debt converted, amount | 50,000 | |
Interest converted, amount | $ 6,231 | |
CEO and a Director [Member] | Common Stock [Member] | ||
Stock issued for conversion of debt, shares issued | 337,998 | |
Notes Payable - Related Parties [Member] | ||
Debt converted, amount | $ 95,591 | |
Notes Payable - Related Parties [Member] | Founder and CEO [Member] | ||
Proceeds from related party | 88,000 | 110,000 |
Expense additions | 20,627 | 68,904 |
Repayments to related party | 66,000 | 75,000 |
Notes Payable - Related Parties [Member] | Founder and CTO [Member] | ||
Proceeds from related party | 6,000 | 25,000 |
Expense additions | 0 | 595 |
Repayments to related party | 14,100 | $ 73,153 |
Notes Payable - Related Parties [Member] | CEO And CTO [Member] | Accrued Expenses [Member] | ||
Debt converted, amount | 6,096 | |
Notes Payable - Related Parties [Member] | CEO And CTO [Member] | Related Party Loans [Member] | ||
Debt converted, amount | 95,591 | |
Notes Payable - Related Parties [Member] | CEO And CTO [Member] | Convertible Notes Payable [Member] | ||
Debt converted, amount | 10,000 | |
Notes Payable - Related Parties [Member] | CEO And CTO [Member] | Accrued Interest [Member] | ||
Debt converted, amount | $ 1,003 | |
Notes Payable - Related Parties [Member] | CEO And CTO [Member] | EveryStory Series A Preferred Stock [Member] | ||
Stock issued for conversion of debt, shares issued | 112,690 | |
Notes Payable [Member] | ||
Expense additions | $ 0 | |
Debt converted, amount | $ 0 | |
Notes Payable [Member] | Unrelated Individual [Member] | ||
Common stock issued in lieu of interest, shares | 70,015 | |
Common stock issued in lieu of interest, value | $ 6,700 | |
Convertible Notes Payable - Related Parties [Member] | ||
Expense additions | 0 | |
Debt converted, amount | $ 60,000 | |
Convertible Notes Payable - Related Parties [Member] | Two Individuals [Member] | ||
Debt issuance date | Jun. 29, 2015 | |
Proceeds from convertible debt | $ 30,000 | |
Debt maturity date | Dec. 31, 2016 | |
Debt stated interest rate | 12.00% | |
Convertible Notes Payable - Related Parties [Member] | Two Individuals [Member] | ||
Debt issuance date | Nov. 18, 2015 | |
Proceeds from convertible debt | $ 30,000 | |
Debt maturity date | Nov. 18, 2017 | |
Debt stated interest rate | 12.00% | |
Convertible Notes Payable [Member] | ||
Expense additions | $ 10,000 | |
Debt converted, amount | 565,000 | |
Convertible Notes Payable [Member] | Unrelated Individual [Member] | ||
Debt converted, amount | $ 5,000 | |
Debt issuance date | Oct. 20, 2015 | |
Proceeds from convertible debt | $ 5,000 | |
Debt maturity date | Oct. 20, 2017 | |
Debt stated interest rate | 12.00% | |
Convertible Notes Payable [Member] | Ten Individuals [Member] | ||
Debt converted, amount | $ 195,000 | |
Debt issuance date | Jun. 29, 2015 | |
Proceeds from convertible debt | $ 195,000 | |
Debt maturity date | Dec. 31, 2016 | |
Debt stated interest rate | 12.00% | |
Convertible Notes Payable [Member] | 11 Unrelated Individuals [Member] | ||
Debt converted, amount | $ 265,000 | |
Proceeds from convertible debt | $ 265,000 | |
Debt maturity date | Nov. 18, 2017 | |
Debt stated interest rate | 12.00% | |
Convertible Notes Payable [Member] | Note Holders [Member] | EveryStory Transaction [Member] | ||
Stock issued for conversion of debt, shares issued | 3,726,981 | |
Debt converted, amount | $ 565,000 | |
Interest converted, amount | 56,256 | |
Two Convertible Notes Payable [Member] | Unrelated Individual [Member] | ||
Debt converted, amount | 100,000 | |
Convertible Note SPA [Member] | ||
Interest expense | 67,345 | |
Unamortized debt discount | 172,655 | |
Note payable balance | $ 240,000 |
7. Derivative Liabilities (Deta
7. Derivative Liabilities (Details - Level 2) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Derivative liability, beginning balance | $ 0 |
Derivative liability, ending balance | 234,502 |
Convertible Notes [Member] | |
Derivative liability, beginning balance | 0 |
Issuances | 267,616 |
Change in Fair Value of Derivative | $ (33,114) |
7. Derivative Liabilities (De37
7. Derivative Liabilities (Details - Assumptions) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Expected term in years | 0.98 - 0.70 years |
Risk-free interest rates | 0.56 - 0.71% |
Volatility | 166.9 - 188.4% |
Dividend yield | 0.00% |
8. Preferred Stock (Details Nar
8. Preferred Stock (Details Narrative) - Redeemable Series A Preferred Stock [Member] - CEO And CTO [Member] | 12 Months Ended |
Dec. 31, 2016USD ($)shares | |
Stock issued for settlement of debt, shares issued | shares | 112,690 |
Accrued Expenses [Member] | |
Stock issued for settlement of debt, amount | $ 6,096 |
Related Party Loans [Member] | |
Stock issued for settlement of debt, amount | 95,591 |
Convertible Notes Payable [Member] | |
Stock issued for settlement of debt, amount | 10,000 |
Accrued Interest [Member] | |
Stock issued for settlement of debt, amount | $ 1,003 |
9. Common Stock (Details Narrat
9. Common Stock (Details Narrative) - USD ($) | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Common stock outstanding | 36,181,101 | 36,181,101 | 14,353,091 |
Stock issued for services, value | $ 41,875 | $ 33,500 | |
Stock issued for patent, value | 58,960 | ||
Gain on settlement of debt | 34,874 | 0 | |
Common stock issued for cash, value | $ 62,900 | $ 10,000 | |
Private Placement [Member] | |||
Common stock issued for cash, shares issued | 314,500 | ||
Proceeds from private placement | $ 62,900 | ||
EveryStory | |||
Stock issued for services, shares | 50,000 | ||
Stock issued for services, value | $ 33,500 | ||
Common stock issued for cash, shares issued | 900,000 | ||
Common stock issued for cash, value | $ 10,000 | ||
Stock exchanged, shares exchanged | (950,000) | ||
Dthera Sciences [Member] | |||
Stock exchanged, shares issued | 6,651,434 | ||
Pre-Split Shares [Member] | |||
Common stock outstanding | 181,069,775 | 181,069,775 | |
Pre-Split Shares [Member] | EveryStory | Common Stock [Member] | |||
Stock issued for services, shares | 25,000 | ||
Stock issued for services, value | $ 16,750 | ||
Stock issued for patent, shares | 88,000 | ||
Stock issued for patent, value | $ 58,960 | ||
Stock issued for settlement of accrued consulting fees, shares | 37,500 | ||
Stock issued for settlement of accrued consulting fees, value | $ 25,125 | ||
Conversion of debt, stock issued | 625,033 | ||
Conversion of interest, stock issued | 10,000 | ||
Post-Split Shares [Member] | |||
Common stock outstanding | 36,181,101 | 36,181,101 | |
Post-Split Shares [Member] | EveryStory | |||
Shares owned post-split | 16,000,000 | 16,000,000 | |
Value of shares owned | $ 56,354 | $ 56,354 | |
Post-Split Shares [Member] | Dthera Sciences [Member] | Common Stock [Member] | |||
Stock issued for services, shares | 175,038 | ||
Stock issued for patent, shares | 616,133 | ||
Stock issued for settlement of accrued consulting fees, shares | 263,325 | ||
Gain on settlement of debt | $ 34,875 | ||
Conversion of debt, stock issued | 4,388,997 | ||
Conversion of debt, amount converted | $ 730,174 | ||
Conversion of interest, stock issued | 70,015 | ||
Conversion of interest, amount converted | $ 6,700 |
10. Stock Purchase Options (Det
10. Stock Purchase Options (Details - Option activity) - Options [Member] | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Options | |
Options outstanding, beginning balance | shares | 3,404,134 |
Options granted | shares | 742,860 |
Options outstanding, ending balance | shares | 4,146,994 |
Options exercisable | shares | 3,404,134 |
Weighted Average Exercise Price | |
Weighted average exercise price, options outstanding, beginning balance | $ / shares | $ .10 |
Weighted average exercise price, options granted | $ / shares | .10 |
Weighted average exercise price, options outstanding, ending balance | $ / shares | .10 |
Weighted average exercise price, options exercisable | $ / shares | $ .10 |
10. Stock Purchase Options (D41
10. Stock Purchase Options (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share based compensation | $ 241,433 | $ 33,993 |
Unrecognized stock option expense | $ 1,409,700 | |
Unrecognized compensation term for recognition | 2 years 8 months 1 day | |
Options [Member] | ||
Options granted | 742,860 | |
Options [Member] | EveryStory | ||
Shares reserved for issuance | 680,000 | |
Options [Member] | EveryStory | Pre-Split Shares [Member] | ||
Options granted | 106,100 | 486,200 |
Options granted, value | $ 63,678 | $ 75,457 |
Options [Member] | Dthera Sciences [Member] | Post-Split Shares [Member] | ||
Options granted | 742,860 | 3,404,134 |
Options granted, value | $ 1,609,669 | $ 7,447 |
Share based compensation | $ 199,969 |
11. Income Taxes (Details - Def
11. Income Taxes (Details - Deferred tax assets) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Operating loss carry forwards | $ 672,656 | $ 266,423 |
Depreciation & amortization | (2,480) | (386) |
Loss on impairment | (22,460) | (2,414) |
Stock-based compensation | (117,416) | (21,091) |
Total Deferred Tax Assets | 530,300 | 242,532 |
Valuation allowance | (530,300) | (242,532) |
Net Deferred Tax Asset | $ 0 | $ 0 |
11. Income Taxes (Details - Rec
11. Income Taxes (Details - Reconciliation) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Tax at statutory rate (34%) | $ (406,233) | $ (264,012) |
Non-deductible expenses | 118,465 | 23,817 |
Change in valuation allowance | 287,768 | 240,195 |
State tax benefit, net of federal tax effect | 0 | 0 |
Provision for Income Taxes | $ 0 | $ 0 |
11. Income Taxes (Details Narra
11. Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 1,978,400 | $ 783,596 |
Operating loss beginning expiration date | Dec. 31, 2033 | |
Federal statutory rate | 34.00% |
12. Fair Value Measurements (De
12. Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Fair value of options | $ 1,609,669 | $ 75,457 |
Fair value of derivatives | 234,502 | 0 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair value of options | 0 | 0 |
Fair value of derivatives | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair value of options | 1,609,669 | 75,457 |
Fair value of derivatives | 234,502 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair value of options | 0 | 0 |
Fair value of derivatives | $ 0 | $ 0 |