Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 10, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Dthera Sciences | |
Entity Central Index Key | 1,586,372 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | Yes | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 51,410,508 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 | |
Entity Small Business | true | |
Entity Emerging Growth | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 70,192 | $ 303,483 |
Restricted cash | 20,000 | 20,000 |
Prepaid expenses | 630,014 | 95,176 |
Deposits | 3,200 | 2,500 |
TOTAL CURRENT ASSETS | 723,406 | 421,159 |
LONG TERM ASSETS | ||
Property and equipment, net | 88,957 | 77,365 |
Computer software development costs, net | 186,420 | 0 |
TOTAL LONG TERM ASSETS | 275,377 | 77,365 |
TOTAL ASSETS | 998,783 | 498,524 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 529,228 | 436,472 |
Deferred revenue | 3,945 | 1,800 |
Notes payable | 100,000 | |
TOTAL CURRENT LIABILITIES | 633,173 | 438,272 |
TOTAL LIABILITIES | 633,173 | 438,272 |
STOCKHOLDERS' EQUITY | ||
Common stock 600,000,000 shares authorized; $0.001 par value; 50,641,277 and 47,043,304 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 50,641 | 47,043 |
Additional paid in capital | 6,356,696 | 4,550,156 |
Accumulated deficit | (6,041,727) | (4,536,947) |
TOTAL STOCKHOLDERS' EQUITY | 365,610 | 60,252 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 998,783 | $ 498,524 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock Par value | $ 0.001 | $ 0.001 |
Common stock, Authorized | 600,000,000 | 600,000,000 |
Common stock, Issued | 50,641,277 | 47,043,304 |
Common stock, outstanding | 50,641,277 | 47,043,304 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
REVENUES | $ 0 | $ 0 | $ 0 | $ 0 |
OPERATING EXPENSES | ||||
General and administrative | 835,521 | 1,245,545 | 1,418,305 | 1,582,382 |
Research and development | 53,488 | 75,699 | 78,188 | 91,334 |
TOTAL OPERATING EXPENSES | 889,009 | 1,321,244 | 1,496,493 | 1,673,716 |
OPERATING LOSS | (889,009) | (1,321,244) | (1,496,493) | (1,673,716) |
OTHER INCOME (EXPENSES) | ||||
Interest expense | (1,837) | 0 | (2,117) | (185,847) |
Gain on derivative liability | 0 | 0 | 0 | 142,835 |
Loss on extinguishment of debt | 0 | 0 | 0 | (91,593) |
Loss on disposal of fixed assets | (3,391) | 0 | (6,170) | 0 |
TOTAL OTHER EXPENSES | (5,228) | 0 | (8,287) | (134,605) |
NET LOSS | $ (894,237) | $ (1,321,244) | $ (1,504,780) | $ (1,808,321) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and diluted | 50,604,108 | 7,206,135 | 49,296,116 | 13,447,438 |
Loss per common share - Basic and diluted | $ (0.02) | $ (0.18) | $ (0.03) | $ (0.13) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,504,780) | $ (1,808,321) |
Adjustments for non-cash items: | ||
Amortization of debt discount | 0 | 172,655 |
Depreciation | 1,856 | 433 |
Loss on disposal of fixed assets | 6,170 | 0 |
Loss on extinguishment of debt | 0 | 91,593 |
Gain on derivative liability | 0 | (142,835) |
Common stock issued for services | 39,177 | 0 |
Fair value of options vested | 214,805 | 1,051,538 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (534,838) | 0 |
Deposits | (700) | 0 |
Accounts payable and accrued liabilities | 94,901 | (104,038) |
NET CASH USED IN OPERATING ACTIVITIES | (1,683,409) | (738,975) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (19,618) | (49,866) |
Development of software | (186,420) | 0 |
NET CASH USED IN INVESTING ACTIVITIES | (206,038) | (49,866) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Common stock issuance | 1,556,156 | 1,215,750 |
Proceeds from notes payable | 100,000 | 50,000 |
Payments on convertible notes | 0 | (240,000) |
Payments on notes payable | 0 | (70,000) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,656,156 | 955,750 |
NET CHANGE IN CASH | (233,291) | 166,909 |
CASH AT BEGINNING OF PERIOD | 303,483 | 12,191 |
CASH AT END OF PERIOD | 70,192 | 179,100 |
Cash paid for interest | 465 | 19,890 |
Cash paid for taxes | 800 | 800 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Common stock issued in extinguishment of debt | $ 0 | $ 183,260 |
1. Condensed Financial Statemen
1. Condensed Financial Statements | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Financial Statements | NOTE 1– CONDENSED FINANCIAL STATEMENTS The accompanying financial statements of Dthera Sciences (the “Company”) have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2018, and for all periods presented herein, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2017 audited financial statements. The results of operations for the periods ended June 30, 2018 and 2017, are not necessarily indicative of the operating results for the full years. |
2. Going Concern
2. Going Concern | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2 – 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 $ 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 products into place, and (d) identifying and executing on additional revenue generating opportunities. There is a risk that the Company will be unable to achieve the above results or obtain adequate financing on terms considered satisfactory to the Company, or at all. |
3. Summary of Significant Accou
3. Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Dthera Sciences is a Nevada corporation. The Company, based in San Diego, CA, is a digital therapeutics company focused on developing innovative quality of life therapies for the elderly and those suffering from cognitive decline. The Company’s lead product, ReminX, is an artificial-intelligence-powered consumer health product designed to digitally deliver reminiscence therapy to individuals suffering from neurodegenerative diseases such as Dementia and Alzheimer’s disease, as well as seniors experiencing limited social interaction with others (“Social Isolation”). Additional products are under development that are expected to directly target the symptoms of Alzheimer’s disease and other dementias, such as anxiety, depression, and cognitive decline, and for which Company may seek FDA clearance or approval as well as reimbursement. Accounting Basis The Company’s financial statements are prepared using the accrual basis of accounting in accordance with U.S. GAAP. The Company has 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 expenses during the reporting periods. Significant estimates are made in relation to 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. Software Development The Company accounts for internal use software development costs in accordance with authoritative guidance related to accounting for the costs of application 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. Some costs in post-implementation stage can be capitalized if the modifications add additional functionality in the future. The application development stage begin in the first fiscal quarter of 2018 and the post-implementation/operation stage is expected to be reached in the third fiscal quarter of 2018. Research and Development The Company engages in new software and hardware development efforts. Research and development expenses relating to possible future software and hardware are expensed as incurred. Research and development expenses were $53,488 and $78,188 for the three and six months ended June 30, 2018, respectively, and $75,699 and $91,334 for the three and six months ended June 30, 2017, respectively. Reclassification Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation. Professional Fees and Depreciation are presented with General and Administrative expenses. Research and Development costs have been presented separately from General and Administrative expenses. Related Party Advances are presented with Accounts Payable and Accrued Liabilities and Restricted Cash is presented separately from Cash. Loss Per Common 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 stock options and warrants. 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 six months ended June 30, 2018 and Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customer (Topic 606) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) (“ASU 2018-07”). ASU 2018-07 provides for improvements to nonemployee share-based payment accounting by expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The awards will be measured at grant date, consistent with accounting for employee share-based payment awards. The measurement date has been redefined as the date at which the grantor and grantee reach a mutual understanding of the key terms and conditions of the award. The requirement to reassess classification of equity-classified awards upon vesting has been eliminated. ASU 2018-07 will have a material impact on the Company’s financial statements as a significant number of options were granted to nonemployees. The Company will adopt ASU 2018-07 in the third fiscal quarter of 2018. |
4. Property and Equipment
4. Property and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4 – PROPERTY AND EQUIPMENT The Company’s property and equipment were comprised of the following as of June 30, 2018, and December 31, 2017: June 30, 2018 December 31, 2017 Computer and Equipment $ 10,805 $ 10,237 Assets Used to Fulfill Contract Obligations 82,284 70,195 Less: Accumulated Depreciation (4,132) (3,067) Net Property and Equipment $ 88,957 $ 77,365 Depreciation on the assets used to fulfill contract obligations will begin when put into use and will be depreciated over a 3-year period. Depreciation expense for the three and six months ended June 30, 2018 was $900 and $1,856, respectively. Depreciation expense for the three and six months ended June 30, 2017, was $255 and $433, respectively. The Company recorded a loss on disposal of fixed assets in the three and six-months ended June 30, 2018 of $3,391 and $6,170, respectively, with no related expense in the three and six months ended June 30, 2017. |
5. Computer Software Developmen
5. Computer Software Development Costs | 6 Months Ended |
Jun. 30, 2018 | |
Research and Development [Abstract] | |
Computer Software Development Costs | NOTE 5 – COMPUTER SOFTWARE DEVELOPMENT COSTS The Company’s capitalized application development stage costs related to computer software development under ASC 350-40 “Intangibles-Goodwill and Other- Internal-Use Software” No amortization expense has been recognized for the capitalized software development costs through June 30, 2018. Amortization on these capitalized software development costs will begin when placed in service and will be amortized over the life of the software. |
6. Notes Payable
6. Notes Payable | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 6 – NOTES PAYABLE On May 11, 2018, the Company issued a short-term promissory note to an unrelated party for $50,000 due 30 days from the date of issuance. The note bears an interest rate of 14.4% per annum, and the Company has the right to pre-pay with no penalty or premium. The Company’s obligation to repay the note was secured by the grant of a security interest in the assets of the Company. On June 10, 2018, the Company extended the term of the above short-term promissory note of $50,000 to October 31, 2018. All other terms remained the same. On June 28, 2018, the Company issued a short-term promissory note to an unrelated party for $50,000 due 90 days from the date of issuance. The note bears interest at a rate of 12% per annum, and the Company has the right to pre-pay with no penalty or premium. The Company’s obligation to repay the note was secured by the grant of a security interest in the assets of the Company. |
7. Common Stock
7. Common Stock | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Common Stock | NOTE 7 – COMMON STOCK As of June 30, 2018, the Company was authorized to issue 600,000,000 shares of $0.001 par value per share Common Stock, of which 50,641,277 and 47,043,304 shares were issued outstanding as of June 30, 2018, and December 31, 2017, respectively. During the six months ended June 30, 2018, the Company issued 3,211,108 shares of Common Stock for $1,524,350 in cash in connection with a private placement offering. During the six months ended June 30, 2018, option holders exercised 296,865 options at $0.11 per share of common stock for $31,806. During the six months ended June 30, 2018, the Company issued 90,000 shares of common stock in exchange for strategic advisory services. The fair value of the stock compensation was $39,177 of which $13,059 was recognized in general and administrative expenses for the three and six months ended June 30, 2018 with the remainder in prepaid assets for future services. |
8. Stock Options and Warrants
8. Stock Options and Warrants | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Warrants | NOTE 8 – STOCK OPTIONS AND WARRANTS Stock Purchase Options On March 21, 2018, the Company’s Board of Directors voted to grant to sixteen individuals options to purchase up to an aggregate of 1,500,000 shares of the Company’s common stock. The terms of the options are as follows: the options vest one-third on the first anniversary of the date of grant; one-third on the second anniversary of the date of grant; and one-third on the third anniversary of the date of grant; the options have a contractual life of eight years from the date of grant; and the exercise price is $0.65, which was the market price of the options on the date of the grant. Included in the grants were options to purchase up to 250,000 shares to the Company’s President and Chief Executive Officer, and options to purchase up to 250,000 shares to the Company’s Chief Technical Officer. The options were not issued pursuant to a stock option or stock incentive plan. On April 6, 2018, the Company’s Board of Directors approved the grant of 250,000 shares of the Company’s common stock to the newest member of the Board of Directors. The terms of the options are as follows: the options vest one-third on the first anniversary of the date of grant; one-third on the second anniversary of the date of grant; and one-third on the third anniversary of the date of grant; the options have a contractual life of eight years from the date of grant; and the exercise price is $0.65. On June 13, 2018, the Company’s Board of Directors approved the grant of 60,000 options to purchase shares of the Company’s common stock, to a consultant in exchange for services. The options granted had an exercise price of $0.45 per share. One-sixth of the options shall vest each month for six months, the first one-sixth will vest in June 2018 and the last one-sixth will vest in November 2018. The grants expire on the eighth anniversary of the date of grant. On June 28, 2018, the Company’s Board of Directors approved the grant of an aggregate of 600,000 options to purchase shares of the Company’s common stock, consisting of grants of 25,000 options to 24 employees and consultants to the Company who had been instrumental in helping the Company get to the point of the initial launch. The options granted had an exercise price of $0.42 per share, and vest one-third on each of the first, second, and third anniversaries of the date of grant, and expire on the eighth anniversary of the date of grant. On June 28, 2018, the Company’s Board of Directors approved the grant of an aggregate of 250,000 options to purchase shares of the Company’s common stock, consisting of grants of 125,000 options to two Board Members of the Company. The options granted had an exercise price of $0.42 per share, and vest one-third on each of the first, second, and third anniversaries of the date of grant, and expire on the eighth anniversary of the date of grant. As the holders of the Company’s outstanding options are employees and non-employees, the values attributable to non-employee options are re-measured on a quarterly basis and amortized over the service period and until they fully vest over a 3-year vesting period. Stock options issued to employees are valued on the date of issuance and amortized over the service period until they fully vest 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 non-employee stock options granted was re-measured at each reporting date using the Black-Scholes valuation model. As of June 30, 2018, the Company re-measured the unvested options at a value of $2,097,912 to be recognized over the vesting period. The Company recorded $142,914 and $214,805 of stock-based compensation expense in the three and six months ended June 30, 2018, respectively. The Company recorded $862,384 and $1,051,538 of stock-based compensation expense in the three and six months ended June 30, 2017, respectively. The following table summarizes the changes in options outstanding of the Company during the six months ending June 30, 2018: Number of Options Weighted Average Exercise Price per Share Outstanding, December 31, 2017 1,382,351 $ 0.30 Granted 2,660,000 $ 0.55 Exercised (296,865 ) $ 0.11 Cancelled (25,000 ) $ 0.65 Outstanding, June 30, 2018 3,720,486 $ 0.49 Exercisable, June 30, 2018 930,403 $ 0.35 As of June 30, 2018, the Company had $ 1,490,285 Stock Purchase Warrants During the six months ended June 30, 2018, the Company did not issue any warrants. The following table summarizes the changes in warrants outstanding during the six months ended June 30, 2018 : Number of Warrants Weighted Average Exercise Price per Share Outstanding, December 31, 2017 6,553,860 $ 0.45 Outstanding, June 30, 2018 6,553,860 $ 0.45 Exercisable, June 30, 2018 – – The warrants are contractually exercisable two years after the grant date and expire four years after the grant date. There is a 30-day mandatory exercise period triggered by the Company’s stock trading on a national exchange at a price of more than $2.50 per share for 30 consecutive trading days. If warrants are not exercised within 30 days of the mandatory exercise period termination, the warrants will be forfeited. |
9. Fair Value Measurements
9. Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 9 - FAIR VALUE MEASUREMENTS Equities measured at fair value on a recurring basis at June 30, 2018, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of options $ – $ 2,097,912 $ – $ 2,097,912 Equities measured at fair value on a recurring basis at December 31, 2017, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of options $ – $ 960,518 $ – $ 960,518 Fair value is calculated using the Black-Scholes options pricing model for options. |
10. Subsequent Events
10. Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 - 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: Promissory Notes On July 2, 2018, the Company issued a short-term note to an unrelated party for $100,000 due 60 days from the date of issuance. The note bears an interest rate of 12% per annum, and the Company has the right to pre-pay with no penalty or premium. The Company’s obligation to repay the note was secured by the grant of a security interest in the assets of the Company. On July 2, 2018, the Company received $50,000 for a short-term promissory note to an unrelated party due 60 days from the date of issuance. The note bears interest at a rate of 12% per annum, and the Company has the right to pre-pay with no penalty or premium. The Company’s obligation to repay the note was secured by the grant of a security interest in the assets of the Company. Sale of Common Stock On July 20, 2018, the Company received cash proceeds of $500,000 in connection with a subscription agreement with an investor to sell 769,231 common shares at $0.65 per share. This closed a private placement offering of shares of its common stock (the “Offering”). The Company had commenced the Offering in late 2017. |
3. Summary of Significant Acc16
3. Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Dthera Sciences is a Nevada corporation. The Company, based in San Diego, CA, is a digital therapeutics company focused on developing innovative quality of life therapies for the elderly and those suffering from cognitive decline. The Company’s lead product, ReminX, is an artificial-intelligence-powered consumer health product designed to digitally deliver reminiscence therapy to individuals suffering from neurodegenerative diseases such as Dementia and Alzheimer’s disease, as well as seniors experiencing limited social interaction with others (“Social Isolation”). Additional products are under development that are expected to directly target the symptoms of Alzheimer’s disease and other dementias, such as anxiety, depression, and cognitive decline, and for which Company may seek FDA clearance or approval as well as reimbursement. |
Accounting Basis | Accounting Basis The Company’s financial statements are prepared using the accrual basis of accounting in accordance with U.S. GAAP. The Company has 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 expenses during the reporting periods. Significant estimates are made in relation to 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. |
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 application 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. Some costs in post-implementation stage can be capitalized if the modifications add additional functionality in the future. The application development stage begin in the first fiscal quarter of 2018 and the post-implementation/operation stage is expected to be reached in the third fiscal quarter of 2018. |
Research and Development | Research and Development The Company engages in new software and hardware development efforts. Research and development expenses relating to possible future software and hardware are expensed as incurred. Research and development expenses were $53,488 and $78,188 for the three and six months ended June 30, 2018, respectively, and $75,699 and $91,334 for the three and six months ended June 30, 2017, respectively. |
Reclassification | Reclassification Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation. Professional Fees and Depreciation are presented with General and Administrative expenses. Research and Development costs have been presented separately from General and Administrative expenses. Related Party Advances are presented with Accounts Payable and Accrued Liabilities and Restricted Cash is presented separately from Cash. |
Loss Per Common Share | Loss Per Common 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 stock options and warrants. 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 six months ended June 30, 2018 and |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customer (Topic 606) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) (“ASU 2018-07”). ASU 2018-07 provides for improvements to nonemployee share-based payment accounting by expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The awards will be measured at grant date, consistent with accounting for employee share-based payment awards. The measurement date has been redefined as the date at which the grantor and grantee reach a mutual understanding of the key terms and conditions of the award. The requirement to reassess classification of equity-classified awards upon vesting has been eliminated. ASU 2018-07 will have a material impact on the Company’s financial statements as a significant number of options were granted to nonemployees. The Company will adopt ASU 2018-07 in the third fiscal quarter of 2018. |
4. Property and Equipment (Tabl
4. Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment schedule | June 30, 2018 December 31, 2017 Computer and Equipment $ 10,805 $ 10,237 Assets Used to Fulfill Contract Obligations 82,284 70,195 Less: Accumulated Depreciation (4,132) (3,067) Net Property and Equipment $ 88,957 $ 77,365 |
8. Stock Purchase Options and W
8. Stock Purchase Options and Warrants (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Option activity | Number of Options Weighted Average Exercise Price per Share Outstanding, December 31, 2017 1,382,351 $ 0.30 Granted 2,660,000 $ 0.55 Exercised (296,865 ) $ 0.11 Cancelled (25,000 ) $ 0.65 Outstanding, June 30, 2018 3,720,486 $ 0.49 Exercisable, June 30, 2018 930,403 $ 0.35 |
Schedule of warrants outstanding | Number of Warrants Weighted Average Exercise Price per Share Outstanding, December 31, 2017 6,553,860 $ 0.45 Outstanding, June 30, 2018 6,553,860 $ 0.45 Exercisable, June 30, 2018 – – |
9. Fair Value Measurements (Tab
9. Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Equities measured at fair value on a recurring basis at June 30, 2018, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of options $ – $ 2,097,912 $ – $ 2,097,912 Equities measured at fair value on a recurring basis at December 31, 2017, are summarized as follows: Level 1 Level 2 Level 3 Total Fair value of options $ – $ 960,518 $ – $ 960,518 |
2. Going Concern (Details Narra
2. Going Concern (Details Narrative) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (6,041,727) | $ (4,536,947) |
3. Summary of Significant Acc21
3. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Research and development expenses | $ 53,488 | $ 75,699 | $ 78,188 | $ 91,334 |
Antidilutive shares excluded from EPS | 2,805,256 | 1,369,033 |
4. Property and Equipment (Deta
4. Property and Equipment (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Computer and equipment | $ 10,805 | $ 10,237 |
Assets used to fulfill contract obligations | 82,284 | 70,195 |
Less: Accumulated depreciation | (4,132) | (3,067) |
Net property and equipment | $ 88,957 | $ 77,365 |
4. Property and Equipment (De23
4. Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 900 | $ 255 | $ 1,856 | $ 433 |
Loss on disposal of fixed assets | $ (3,391) | $ 0 | $ (6,170) | $ 0 |
5. Computer Software Developm24
5. Computer Software Development Costs (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Research and Development [Abstract] | ||
Capitalized software development costs | $ 186,420 | $ 0 |
Amortization of software development costs | $ 0 |
6. Notes Payable (Details Narra
6. Notes Payable (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Sep. 30, 2017 | |
Note Payable 1 [Member] | ||
Debt issuance date | May 11, 2018 | |
Debt face value | $ 50,000 | |
Debt stated interest rate | 14.40% | |
Note Payable 2[Member] | ||
Debt issuance date | Jun. 28, 2018 | |
Debt face value | $ 50,000 | |
Debt stated interest rate | 12.00% |
7. Common Stock (Details Narrat
7. Common Stock (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Common stock Par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, Authorized | 600,000,000 | 600,000,000 | 600,000,000 |
Common stock, Issued | 50,641,277 | 50,641,277 | 47,043,304 |
Common stock, outstanding | 50,641,277 | 50,641,277 | 47,043,304 |
Stock issued in exchange of strategic advisory services, shares | 90,000 | ||
Fair value of stock compensation | $ 39,177 | $ 13,059 | |
Options Exercised [Member] | |||
Stock issued upon exercise of options, shares | 296,865 | ||
Options exercised, exercise price | $ 0.11 | ||
Proceeds from options exercised | $ 31,806 | ||
Private Placement [Member] | |||
Stock issued new, shares | 3,211,108 | ||
Proceeds from private placement | $ 1,524,350 |
8. Stock Purchase Options and27
8. Stock Purchase Options and Warrants (Details - Option activity) - Equity Option [Member] | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Options | |
Options outstanding, beginning balance | shares | 1,382,351 |
Options granted | shares | 2,660,000 |
Options exercised | shares | (296,865) |
Options cancelled | shares | (25,000) |
Options outstanding, ending balance | shares | 3,720,486 |
Options exercisable | shares | 930,403 |
Weighted Average Exercise Price | |
Weighted average exercise price, options outstanding beginning | $ / shares | $ 0.30 |
Weighted average exercise price, options granted | $ / shares | 0.55 |
Weighted average exercise price, options exercised | $ / shares | 0.11 |
Weighted average exercise price, options cancelled | $ / shares | 0.65 |
Weighted average exercise price, options outstanding ending | $ / shares | 0.49 |
Weighted average exercise price, options exercisable | $ / shares | $ 0.35 |
8. Stock Purchase Options and28
8. Stock Purchase Options and Warrants (Details - Warrants) - Warrants [Member] - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Warrants outstanding | 6,553,860 | 6,553,860 |
Warrants exercisable | 0 | |
Weighted average exercise price | $ 0.45 | $ 0.45 |
Weighted average exercise price, exercisable | $ 0 |
8. Stock Purchase Options and29
8. Stock Purchase Options and Warrants (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share based compensation | $ 142,914 | $ 862,384 | $ 214,805 | $ 1,051,538 |
Unrecognized stock option expense | $ 1,490,285 | $ 1,490,285 | ||
Options [Member] | ||||
Options granted | 1,500,000 | |||
Options vesting period | The terms of the options are as follows: the options vest one-third on the first anniversary of the date of grant; one-third on the second anniversary of the date of grant; and one-third on the third anniversary of the date of grant | |||
Options granted, value | $ 2,097,912 | |||
Options [Member] | President [Member] | ||||
Options granted | 250,000 | |||
Options [Member] | Chief Executive Officer [Member] | ||||
Options granted | 250,000 | |||
Options [Member] | Newest member of Board of Directors [Member] | ||||
Options granted | 250,000 | |||
Option exericse price | $ 0.65 | |||
Options [Member] | TwentyFour employees and consultants [Member] | ||||
Options granted | 600,000 | |||
Option exericse price | $ 0.42 | |||
Options [Member] | Two Board Members [Member] | ||||
Options granted | 250,000 | |||
Option exericse price | $ 0.42 |
9. Fair Value Measurements (Det
9. Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Fair value of options | $ 2,097,912 | $ 960,518 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair value of options | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair value of options | 2,097,912 | 960,518 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair value of options | $ 0 | $ 0 |