Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 11, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MassRoots, Inc. | ||
Entity Central Index Key | 0001589149 | ||
Trading Symbol | MSRT | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 22,362,655 | ||
Entity Common Stock, Shares Outstanding | 182,390,849 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 29,568 | $ 1,201,587 |
Prepaid expenses | 14,000 | 16,556 |
TOTAL CURRENT ASSETS | 43,568 | 1,218,143 |
Property and equipment - net | 6,733 | 55,146 |
OTHER ASSETS | ||
Investments | 247,912 | 403,249 |
Software Cost, net of amortization of $25,701 and $389,059 | 234,864 | 863,941 |
Deposits and other assets | 36,000 | 33,502 |
Total Other Assets | 518,776 | 1,300,692 |
TOTAL ASSETS | 569,077 | 2,573,981 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 959,668 | 1,257,783 |
Accrued payroll and related | 2,992,023 | 1,601,232 |
Advances | 958,650 | 800,394 |
Convertible notes payable, net of debt discount of $209,898 and $248,009 | 2,495,102 | 796,991 |
Derivative liability | 9,493,307 | |
TOTAL CURRENT LIABILITIES | 7,405,443 | 13,949,707 |
TOTAL LIABILITIES | 7,405,443 | 13,949,707 |
STOCKHOLDERS' DEFICIT | ||
Blank check preferred stock, $0.001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, $0.001 par value, 500,000,000 shares authorized; 168,706,472 and 112,165,839 shares issued and outstanding | 168,707 | 112,166 |
Common stock to be issued, 80,000 and 12,572,500 shares, respectively | 80 | 12,573 |
Additional paid in capital | 73,770,195 | 63,315,749 |
Subscriptions receivable | (564,000) | |
Accumulated deficit | (80,775,348) | (74,252,214) |
TOTAL STOCKHOLDERS' DEFICIT | (6,836,366) | (11,375,726) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 569,077 | $ 2,573,981 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Software Cost, amortization | $ 25,701 | $ 389,059 |
Debt discount | $ 209,898 | $ 248,009 |
Blank check preferred stock, par value | $ 0.001 | $ 0.001 |
Blank check preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Blank check preferred stock, shares issued | 0 | 0 |
Blank check preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 168,706,472 | 112,165,839 |
Common stock, shares outstanding | 168,706,472 | 112,165,839 |
Common stock to be issued | 80,000 | 12,572,500 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statements Of Operations | ||
REVENUES | $ 19,597 | $ 319,242 |
OPERTING EXPENSES | ||
Cost of revenues | 994 | 630 |
Advertising | 501,451 | 960,239 |
Impairment expense | 606,714 | 3,796,991 |
Payroll and related expense | 907,870 | 3,104,407 |
Payroll taxes related to stock-based compensation | 1,269,871 | 1,599,489 |
Stock based compensation | 5,654,371 | 22,107,949 |
Amortization of Software costs | 438,264 | 389,059 |
Other general and administrative expenses | 4,524,577 | 5,164,438 |
Total General and Administrative expenses | 13,904,112 | 37,123,202 |
(LOSS) FROM OPERATIONS | (13,884,515) | (36,803,960) |
OTHER INCOME (EXPENSE) | ||
Loss on change in fair value of derivative liabilities | (160,597) | (7,000,835) |
Gain on sale of securities | 75,000 | |
Interest expense | (1,971,329) | (659,774) |
Total Other Income (Expense) | (2,131,926) | (7,585,609) |
Net Loss before Income Taxes | (16,016,441) | (44,389,569) |
Provision for Income taxes (benefit) | ||
NET (LOSS) | $ (16,016,441) | $ (44,389,569) |
Net loss per common share-basic and diluted | $ (0.1) | $ (0.46) |
Weighted average common shares outstanding-basic and diluted | 155,885,213 | 97,213,230 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - 12 months ended Dec. 31, 2018 - USD ($) | Common Stock | Common Stock to be Issued | Additional Paid-In Capital | Subscriptions Receivable | Accumulated Deficit | Total |
Balance at Dec. 31, 2017 | $ 112,166 | $ 12,573 | $ 63,315,749 | $ (564,000) | $ (74,252,214) | $ (11,375,726) |
Balance, shares at Dec. 31, 2017 | 112,165,839 | 12,572,500 | ||||
Reclassify fair value of derivative liabilities to retained earnings | $ 9,493,307 | 9,493,307 | ||||
Issuance of common stock previously to be issued | $ 14,363 | $ (14,363) | $ 564,000 | $ 564,000 | ||
Issuance of common stock previously to be issued, shares | 14,362,500 | (14,362,500) | ||||
Common stock shares to be retired in 2018 | $ (1,790) | $ 1,790 | ||||
Common stock shares to be retired in 2018, shares | (1,790,000) | 1,790,000 | ||||
Common stock issued upon conversion of debentures | $ 3,743 | $ 632,507 | $ 636,250 | |||
Common stock issued upon conversion of debentures, shares | 3,742,648 | 3,742,716 | ||||
Common stock issued in lieu of interest expense | $ 325 | 52,158 | $ 52,483 | |||
Common stock issued in lieu of interest expense, Shares | 324,881 | |||||
Sale of common stock | $ 13,700 | 2,726,300 | 2,740,000 | |||
Sale of common stock, shares | 13,700,000 | |||||
Common shares issued upon cashless exercise of options | $ 95 | (95) | ||||
Common shares issued upon cashless exercise of options, shares | 95,134 | 95,134 | ||||
Common shares issued upon cashless exercise of warrants | $ 7,906 | (7,906) | ||||
Common shares issued upon cashless exercise of warrants, shares | 7,906,470 | |||||
Common stock issued upon exercise of warrants for cash | $ 4,605 | $ 80 | 632,545 | $ 637,230 | ||
Common stock issued upon exercise of warrants for cash, shares | 4,605,000 | 80,000 | 4,605,000 | |||
Common stock issued for services | $ 13,594 | 3,494,593 | $ 3,508,187 | |||
Common stock issued for services, shares | 13,594,000 | 13,594,000 | ||||
Fair Value of warrants repriced due to price protection | 160,597 | $ 160,597 | ||||
Fair value of vesting options | 2,146,184 | 2,146,184 | ||||
Issuance of convertible warrants | 617,563 | 617,563 | ||||
Net Loss | (16,016,441) | (16,016,441) | ||||
Balance at Dec. 31, 2018 | $ 168,707 | $ 80 | $ 73,770,195 | $ (80,775,348) | $ (6,836,366) | |
Balance, shares at Dec. 31, 2018 | 168,706,472 | 80,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (16,016,441) | $ (44,389,569) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 443,062 | 416,253 |
Impairment expense | 606,714 | 3,796,991 |
Stock based compensation | 5,654,371 | 22,107,949 |
Interest and amortization of debt discounts | 1,839,960 | 652,921 |
Financing cost | 32,500 | |
Gain on sale of securities | (75,000) | |
Loss on disposal of property and equipment | 47,612 | 55,849 |
Payroll tax expense related to stock based compensation | 1,599,489 | |
Loss on change in fair value of derivative liabilities | 160,597 | 7,000,835 |
Changes in operating assets and liabilities | ||
Increase in accounts receivables | 6,889 | |
Increase in prepaid expenses | 2,556 | (19,803) |
Decrease in advances | (10,394) | |
(Decrease)/ Increase in accounts payable | (298,115) | 620,781 |
Decrease in deferred revenue | (27,010) | |
Increase in accrued expenses | 1,116,176 | 255,960 |
Decrease in security deposit | (2,498) | |
Net Cash used in operating activities | (6,423,900) | (7,997,465) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash acquired from acquisition of DDDigtal LLC | 8,672 | |
Cash acquired from acquisition of Odava, Inc | 2,601 | |
Proceeds from sale of securities | 250,000 | |
Cash paid related to acquisition of Odava, Inc | (40,570) | |
Purchase of equity investment | (100,002) | |
Purchase of convertible promissory note | (300,000) | |
Investment in DDDigital LLC | (78,000) | |
Investment in Weedpass application | (260,565) | |
Purchase of Property and Equipment | (3,996) | (57,534) |
Net Cash used in investing activities | (264,561) | (314,833) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of convertible notes | 3,567,500 | 942,500 |
Proceeds from common stock sales | 3,304,000 | 2,676,644 |
Proceeds from exercise of warrants | 637,230 | 4,759,762 |
Repayment of advance | (360,000) | 770,000 |
Proceeds from advances | 528,650 | |
Repayment of convertible notes | (2,160,938) | (9,511) |
Net cash provided by financing activities | 5,516,442 | 9,139,395 |
NET DECREASE IN CASH | (1,172,019) | 827,097 |
Cash, beginning of period | 1,201,587 | 374,490 |
Cash, end of period | 29,568 | 1,201,587 |
Supplemental disclosures of cash flow information: | ||
Cash paid during period for interest | 131,369 | |
Cash paid during period for taxes | ||
Non cash investing and financing activities: | ||
Common stock issued in settlement of debt | 636,250 | 108,100 |
Proceeds received from subscriptions receivable | 564,000 | |
Common stock issued to acquire DDDigtal LLC | 2,883,220 | |
Net assets acquired from acquisition of DDDigtal LLC | 15,448 | |
Common stock issued to acquire Odava, Inc | 1,966,250 | |
Net assets acquired from acquisition of Odava, Inc | 2,601 | |
Reclassification of liability warrants from equity in connection with the sale of common stock | 1,003,870 | |
Reclassification of derivative liability to equity upon warrant exercise(s) | 610,966 | |
Derivative liability reclassed to retained earnings | 9,493,307 | |
Interest settled with common stock | $ 52,483 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION MassRoots, Inc. (“MassRoots” or the “Company”) has created a technology platform for the cannabis industry focused on enabling users to share their cannabis content, follow their favorite dispensaries, and stay connected with the legalization movement. The Company was incorporated in the State of Delaware on April 26, 2013. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Our consolidated financial statements include the accounts of DDDigtal, Inc., Odava, Inc., MassRoots Supply Chain, Inc., and MassRoots Blockchain Technologies, Inc., our wholly-owned subsidiaries. All intercompany transactions were eliminated during consolidation. Acquisitions DDDigtal Inc. On December 15, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Whaxy Inc., a wholly-owned subsidiary of the Company (“Merger Subsidiary”), DDDigtal Inc., a Colorado corporation (“DDDigtal”), Zachary Marburger, an individual acting solely in his capacity as stockholder representative of DDDigtal, and all of the stockholders of DDDigtal. Pursuant to the Merger Agreement, the parties agreed to merge Merger Subsidiary with and into DDDigtal, whereby DDDigtal survived as a wholly-owned subsidiary of MassRoots (the “Merger”). The primary reason for this combination was the acquisition of DDDigtal’s menu management software, which has been integrated with MassRoots’ business portal to expand the services provided to our clients. On January 25, 2017 (the “Effective Date”), the Merger became effective upon the filing of certificates of merger with the respective Secretary of State of the States of Delaware and Colorado, in such forms as required by, and executed in accordance with, the relevant provisions of the Delaware General Corporation Law and the Colorado Business Corporation Act. Pursuant to the terms of the Merger Agreement, each share of DDDigtal’s common stock was exchanged such number of shares of the Company’s common stock (or a fraction thereof), based on an exchange ratio equal to approximately 5.273-for-1, such that 1 share of the Company’s common stock was issued for every 5.273 shares of DDDigtal’s common stock. On the Effective Date, the Company issued an aggregate of 2,926,830 shares of the Company’s common stock on a pro rata basis to all stockholders of DDDigtal in exchange for all of the outstanding shares of common stock of DDDigtal’s. In addition, on the Effective Date, each share of the common stock of Merger Subsidiary was exchanged for one share of common stock of DDDigtal, and all shares of DDDigtal common stock outstanding immediately prior to the Effective Date were automatically cancelled and retired. As of the Effective Date, DDDigtal continued as a surviving wholly-owned subsidiary of the Company, and the Merger Subsidiary ceased to exist. Pursuant to the terms of the Merger Agreement, in December 2016, the Company paid each of Zachary Marburger and Micah Davidson $40,000 and $20,000, respectively, as repayment for outstanding debts owed by DDDigtal to such individuals. As a condition to the closing of the Merger, the Company hired Zachary Marburger as its Vice President of Strategy, and engaged Micah Davidson as a Senior Software Engineer. As a condition of Mr. Marburger’s employment and pursuant to the terms of the Merger Agreement, the Company paid Mr. Marburger an additional $40,000 following the one-year anniversary of his employment with the Company. A summary of consideration is as follows: Cash (paid in December 2016) $ 60,000 2,926,830 shares of the Company’s common stock 2,883,220 Liabilities assumed 40,140 Total purchase price $ 2,983,360 The following summarizes the current estimates of fair value of assets acquired and liabilities assumed: Cash $ 8,672 Accounts receivable 3,583 Property and equipment 3,333 Goodwill 2,967,772 Assets acquired $ 2,983,360 During management’s annual review of these assets for fiscal year 2017, it was determined that the fair-market value of DDDigtal’s menu management software was $1,253,000 based upon projected cash-flows and valuations of comparable software services. This value was to be amortized over an expected three-year useful life. The remaining $1,714,772 in goodwill was impaired and written-off in December 2017. During management’s annual review of these assets for fiscal year 2018, the remaining value of these assets was written-off due to minimal revenue generated from this software. Odava, Inc. On July 5, 2017, the Company entered into an Agreement and Plan of Merger (the “July 2017 Merger Agreement”) with MassRoots Compliance Technology, Inc., a wholly-owned subsidiary of the Company (“MCT”), Odava, Inc., a Delaware corporation (“Odava”), and Scott Kveton, an individual acting solely in his capacity as a stockholder representative of Odava. Pursuant to the July 2017 Merger Agreement, the parties agreed to merge MCT with and into Odava, whereby Odava survived as a wholly-owned subsidiary of MassRoots (the “Odava Merger”). The primary reason for this combination was the acquisition of Whaxy’s point-of-sale software for dispensaries, which MassRoots planned to offer as an additional service to its clients. On July 13, 2017 (the “Odava Merger Effective Date”), the Odava Merger became effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware, in the form as required by and executed in accordance with the relevant provisions of the Delaware General Corporation Law. Pursuant to the terms of the July 2017 Merger Agreement, each share of Odava’s common stock was exchanged for such number of shares of MassRoots’ common stock (or a fraction thereof), based on an exchange ratio equal to approximately 4.069-for-1, such that one share of MassRoots’ common stock was issued for approximately every 4.069 shares of Odava’s common stock. On the Odava Merger Effective Date, the Company issued an aggregate of 3,250,000 shares of common stock pro rata to all stockholders of Odava in exchange for all of their shares of Odava’s common stock. In addition, on the Odava Merger Effective Date, shares of the common stock of MCT were converted into and exchanged for one share of common stock of Odava, and all shares of Odava common stock outstanding immediately prior to the Odava Merger Effective Date were automatically cancelled and retired. As of the Odava Merger Effective Date. Odava continued as a wholly-owned subsidiary of Massroots, and MCT ceased to exist. In addition, the Company issued an aggregate of 2,600,000 shares of its common stock to the founders of Odava in connection with the Odava Merger. Furthermore, pursuant to the terms of the Odava Merger Agreement, the Company paid each of Scott Kveton and Steven Osborn $30,000 and $5,000, respectively, as repayment for outstanding debts owed by Odava to such individuals. As a condition to the closing of the Odava Merger, the Company hired Scott Kveton as its new Director of Business Development, and Steven Osborn as its Principal Architect. A summary of consideration is as follows: Cash and costs incurred $ 40,570 3,250,000 shares of the Company’s common stock 1,966,250 Total purchase price $ 2,006,820 The following summarizes the current estimates of fair value of assets acquired and liabilities assumed: Cash $ 2,601 Goodwill 2,004,219 Assets acquired $ 2,006,820 The Company accounts for and reports acquired goodwill under Accounting Standards Codification (“ASC”) subtopic 350-10, Intangibles-Goodwill and Other (“ASC 350-10”). In accordance with ASC 350-10, at least annually, the Company tests its intangible assets for impairment or more often if events and circumstances warrant. Any write-downs will be included in results from operations. The above estimated fair value of the intangible assets is based on a preliminary purchase price allocation prepared by management. As this software has never been monetized and market conditions have changed significantly since the acquisition, the value of this asset is significantly impaired and we have written off the $2,006,820 in goodwill associated with Odava. The Company accounts for acquisitions in accordance with the provisions of ASC 805 Business Combinations (“ASC 805”). The Company assigns to all identifiable assets acquired a portion of the cost of the acquired company equal to the estimated fair value of such assets at the date of acquisition. The Company records the excess of the cost of the acquired company over the sum of the amounts assigned to identifiable assets acquired as goodwill. |
Going Concern and Management's
Going Concern and Management's Liquidity Plans | 12 Months Ended |
Dec. 31, 2018 | |
Going Concern and Management's Liquidity Plans [Abstract] | |
GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS | NOTE 2 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS As of December 31, 2018, the Company had cash of $29,568 and working capital deficit (current liabilities in excess of current assets) of $7,361,875. During the twelve months ended December 31, 2018, the Company used net cash in operating activities of $6,423,900. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. During the year ended December 31, 2018, the Company received $637,230, $3,304,000, $528,650 and $3,567,500 from the exercise of common stock warrants, sale of common stock, advances including from the issuance of Simple Agreements for Future Tokens and proceeds from issuance of convertible notes, respectively. The Company does not have cash sufficient to fund operations for the next fiscal year. The Company’s primary source of operating funds since inception has been cash proceeds from the public and private placements of the Company’s securities, including debt securities, and proceeds from the exercise of warrants and options. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. The Company will require additional financing to fund future operations. Management’s plans with regard to these matters encompass the following actions: 1) obtain funding from new and current investors to alleviate the Company’s working capital deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability to translate its user base into sales. However, the outcome of management’s plans cannot be ascertained with any degree of certainty. Accordingly, the accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business for one year from the date the financial statements are issued. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of MassRoots, Inc. and its wholly-owned operating subsidiaries. All material intercompany accounts and transactions are eliminated in consolidation. 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, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include stock-based compensation, fair values relating to derivative liabilities and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. Fair Value of Financial Instruments The Financial Accounting Standards Board (“FASB”) ASC subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. The Company follows ASC 825-10, which permits entities to choose to measure many financial instruments and certain other items at fair value. Cash and Cash Equivalents For purposes of the Statement of Cash Flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. Property and Equipment Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives of three to five years. Repair and maintenance costs are expensed as occurred. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Accounts Receivable and Allowance for Doubtful Accounts The Company monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. The allowance for doubtful accounts is estimated based on an assessment of the Company’s ability to collect on customer accounts receivable. There is judgment involved with estimating the allowance for doubtful accounts and if the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against revenues. The Company writes-off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection. Revenue Recognition The Company recognizes revenue when services are realized or realizable and earned less estimated future doubtful accounts. The Company’s revenues accounted for under ASC Topic 606 generally do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. In accordance with ASC 606, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which MassRoots expects to be entitled in exchange for those goods or services. MassRoots recognizes revenue in accordance with that core principle by applying the following: (i) Identify the contract(s) with a customer; (ii) Identify the performance obligation in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; and (v) Recognize revenue when (or as) MassRoots satisfies a performance obligation. The Company primarily generates revenue by charging businesses to advertise on the network. The Company has the ability to target advertisements directly to a clients’ target audience, based on their location, on their mobile devices. In cases where clients sign advertising contracts for an extended period of time, the Company only realizes revenue for services provided during that quarter and defers all other revenue to future periods. Acquisitions and Subsidiaries Subsidiaries are all entities over which MassRoots has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether MassRoots controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to MassRoots. The purchase method of accounting is used to account for the acquisition of subsidiaries by MassRoots. The cost of an acquisition is measured as the fair value of the assets transferred in consideration, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the MassRoots’ share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. For the twelve months ended December 31, 2018 and 2017, the Company charged to operations $501,451 and $960,239, respectively, as advertising expense. Stock Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Income Taxes The Company follows ASC subtopic 740-10, Income Taxes- (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Convertible Instruments U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under ASC 480. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Derivative Financial Instruments The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company’s free-standing derivatives consisted of warrants to purchase common stock that were issued in connection with the issuance of debt and sale of common stock, and of embedded conversion options with convertible debentures. The Company evaluated these derivatives to assess their proper classification in the balance sheet as of December 31, 2017 using the applicable classification criteria enumerated under ASC 815 Derivatives and Hedging. The Company determined that certain embedded conversion and/or exercise features do not contain fixed settlement provisions. The convertible debentures contain a conversion feature such that the Company could not ensure it would have adequate authorized shares to meet all possible conversion demands. As such, the Company was required to record the derivatives which do not have fixed settlement provisions as liabilities and mark to market all such derivatives to fair value at the end of each reporting period. Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for impairment is required to be performed by management at least annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Intangible assets are stated at cost and reviewed annually to examine any impairments, usually assuming an estimated useful lives of three to five years. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Indefinite Lived Intangibles and Goodwill Assets The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Chief Executive Officer, or decision-making group, in deciding the method to allocate resources and assess performance. The Company currently has one reportable segment for financial reporting purposes, which represents the Company’s core business. Net Earnings (Loss) Per Common Share The Company computes earnings (loss) per share under ASC subtopic 260-10, Earnings Per Share. Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted income (loss) per share, for the year ended December 31, 2018 and 2017 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period. Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows: December 31, December 31, Common stock issuable upon conversion of convertible debentures 13,146,218 6,147,059 Options to purchase common stock 27,371,765 14,377,570 Warrants to purchase common stock 74,910,002 35,187,847 Totals 115,427,985 55,712,476 Reclassification Certain reclassifications have been made to the prior years’ data to conform to the current year presentation. These reclassifications had no effect on reported income (losses). Recent Accounting Pronouncements FASB Accounting Standards Updates (“ASU”) 2017-04 (Topic 350), “Intangibles – Goodwill and Others” FASB ASU 2017-01 (Topic 805), “Business Combinations: Clarifying the Definition of a Business” FASB ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)” “Statement of Cash Flows” FASB ASU No. 2014-09 (Topic 606), “Revenue from Contracts with Customers” “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” “Principal versus Agent Considerations (Reporting Gross versus Net)”, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” “Narrow-Scope Improvements and Practical Expedients” The Company has applied the guidance using the modified retrospective transition method. The Company does not believe the adoption of ASU 2014-09 had a material impact on the Company’s financial position or results of operations but such adoption resulted in additional disclosures regarding the Company’s revenue recognition policies. The Company also does not believe the adoption of ASU 2014-09 required material or significant changes to its internal controls over financial reporting. In connection with the application of that guidance and the adoption of ASU 2014-09, the Company has expanded its revenue recognition inquiries and updated its questionnaires to identify matters that would signal variable consideration implications under the new guidance. FASB ASU No. 2014-15, “Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern, which is included in ASC 205, Presentation of Financial Statements ” – The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. The Company has adopted this standard and included the necessary disclosures in the footnotes to its financial statements. The adoption of this standard has not had a material impact on the Company’s financial position and results of operations. FASB ASU 2016-02, Leases (Topic 842) FASB ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting” FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) FASB issued ASU 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity, and Derivatives and Hedging (“ASU 2017-11”) FASB ASU No. 2018-07 (Topic 718), “Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting” – There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | NOTE 4 – INVESTMENTS In 2016, the Company paid a $60,000 acquisition deposit to acquire DDDigital, LLC. As of December 31, 2018 and 2017, the carrying value of our investments in privately held companies totaled $247,912 and $403,249, respectively. These investments are accounted for as cost method investments, as we own less than 20% of the voting securities and do not have the ability to exercise significant influence over operating and financial policies of the entities. To facilitate the integration with dispensary point of sale systems, in 2015, the Company invested $175,000 in exchange for preferred shares of Flowhub LLC (“Flowhub”), a seed-to-sale system, equal to 8.95% of the then outstanding equity of Flowhub. The preferred shares are considered non-marketable securities. On May 12, 2017, the Company sold its preferred shares in Flowhub for net proceeds of $250,000. The gain on sale of securities of $75,000 was recorded in current period operations. During the twelve months ended December 31, 2017, the Company acquired 23,810 shares of Class A common stock of Hightimes Holding Corp. for $100,002, or $4.20 per share. As a result of a forward share split of 1.9308657-for-one on January 15, 2018, MassRoots currently owns 45,974 shares of Class A common stock. The acquired Class A common stock are considered non-marketable securities. On July 13, 2017, the Company purchased an unsecured convertible promissory note in the principal amount of $300,000 from CannaRegs, Ltd, a Colorado limited liability company (“CannaRegs”). The note bears interest at a rate of 5% per annum and matures on at December 19, 2019. In the event CannaRegs consummates an equity financing in excess of $2,000,000 prior to the maturity date of the note, the outstanding principal and any accrued and unpaid interest automatically converts into equity securities of the same class or series issued by CannaRegs at the lesser of: a) 90% of the price paid per equity security or b) a price reflecting a valuation cap of $4,500,000. On July 17, 2017, MassRoots converted the note into 430,622 shares of CannaRegs’ common stock. In 2018, CannaRegs re-incorporated as a Delaware C corporation under the name Regs Technology, Inc. (“Regs Technology”), keeping the same capitalization structure and business operations. Based on an equity raise priced at $0.3434 per share completed by Regs Technology in February 2019, MassRoots values its holdings at $147,876 as of December 31, 2018. The Company recorded an impairment expense of $155,336 on its holdings during fiscal year 2018. MassRoots owns less than 1% of Regs Technology’s issued and outstanding shares as of December 31, 2018. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment as of December 31, 2018 and December 31, 2017 is summarized as follows: December 31, December 31, Computers $ 6,366 $ 55,244 Office equipment 17,621 43,590 Subtotal 23,987 98,834 Less accumulated depreciation (17,254 ) (43,688 ) Property and equipment, net $ 6,733 $ 55,146 Depreciation expense for the years ended December 31, 2018 and 2017 was $4,797 and $27,914, respectively. The Company incurred a loss on the write-off of property and equipment of $47,612 and $55,849 for fiscal years December 31, 2018 and 2017, respectively. |
Software Costs
Software Costs | 12 Months Ended |
Dec. 31, 2018 | |
Software Costs [Abstract] | |
SOFTWARE COSTS | NOTE 6 – SOFTWARE COSTS On December 15, 2016, the Company entered into the Merger Agreement with Whaxy, a wholly-owned subsidiary of the Company, DDDigtal, a Colorado corporation, Zachary Marburger, an individual acting solely in his capacity as stockholder representative, and all of the stockholders of DDDigtal. Pursuant to the Merger Agreement, the parties agreed to merge Merger Subsidiary with and into DDDigtal, whereby DDDigtal survived as a wholly-owned subsidiary of MassRoots. On January 25, 2017 the Merger was completed and became effective upon the filing of certificates of merger with the respective Secretary of State of the States of Delaware and Colorado, in such forms as required by, and executed in accordance with, the relevant provisions of the Delaware General Corporation Law and the Colorado Business Corporation Act. Pursuant to the terms of the Merger Agreement, each share of DDDigtal’s common stock was to be exchanged for a number of shares of the Company’s common stock (or a fraction thereof), based on an exchange ratio, as ultimately calculated, equal to approximately 5.273-for-1, such that 1 share of the Company’s common stock was issued for every 5.273 shares of DDDigtal’s common stock. On the Effective Date, the Company issued an aggregate of 2,926,830 shares of the Company’s common stock pro rata to all stockholders of DDDigtal in exchange for all of the outstanding shares of DDDigtal’s common stock. At the same time, each share of the common stock of Merger Subsidiary was converted into and exchanged for one share of common stock of DDDigtal held by the Company, and all shares of DDDigtal common stock outstanding immediately prior to the Effective Date were automatically cancelled and retired. At the Effective Date, DDDigtal continued as a surviving wholly-owned subsidiary of the Company and Merger Subsidiary ceased to exist. In addition, pursuant to the terms of the Merger Agreement, the Company paid cash consideration, in December 2016, of $40,000 to Zachary Marburger and $20,000 to Micah Davidson, as repayment of outstanding debts owed by DDDigtal to such individuals. As a condition to the closing of the Merger, the Company hired Zachary Marburger as its Vice President of Strategy and engaged Micah Davidson as a Senior Software Engineer. As a condition of Mr. Marburger’s employment and pursuant to the Merger Agreement, the Company paid Mr. Marburger an additional $40,000 following the one-year anniversary of his constant employment with the Company. Cash (paid in December 2016) $ 60,000 2,926,830 shares of the Company’s common stock 2,883,220 Liabilities assumed 40,140 Total purchase price $ 2,983,360 Cash $ 8,672 Accounts receivable 3,583 Property and equipment 3,333 Software 1,253,000 (1) Goodwill 1,714,772 Assets acquired $ 2,983,360 (1) The estimated useful life for software development is assumed at three years. The acquisition was completed in January 2017, however the allocation of proceeds to identifiable assets was recognized during fourth quarter of 2017. During management’s annual review of these assets for fiscal year 2018, the remaining value of these assets was written-off due to minimal revenue generated from this software. MassRoots recorded an impairment expense of $415,378 during fiscal year 2018 for these assets, as compared to $1,714,772 during fiscal year 2017, a reduction of $1,299,394. In January 2018, MassRoots entered into a Master Services Agreement with MEV, LLC (“MEV”) pursuant to which MEV will assist with the development and servicing of the Company’s technology platform, including its mobile applications, business portal and WeedPass. MassRoots has capitalized the billable costs of engineers that were devoted to building the system and developing additional features that enhanced its ability to generate revenue. MassRoots did not capitalize any costs associated with maintenance, user-testing, analysis and planning of the system. The Company is amortizing these capitalized costs using a straight-line methodology over five years, beginning July 5, 2018. During fiscal year 2018, MassRoots paid MEV $521,839 with respect to the development and maintenance of its platform, of which MassRoots has capitalized $260,565 in development costs. |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 7 – CONVERTIBLE NOTES PAYABLE On March 24, 2014, the Company issued convertible debentures to certain accredited investors in the aggregate principal amount of $269,100. The debentures originally matured on March 24, 2016 and accrued no interest. The debentures are convertible into shares of the Company’s common stock at $0.10 per share. In March 2016, the debentures were amended to extend the maturity date to March 24, 2018. In 2016, the Company issued an aggregate of 1,010,000 shares of its common stock in settlement of $101,000 of outstanding debentures and during the twelve months ended December 31, 2017, the Company issued an aggregate of 1,081,000 shares of its common stock in settlement of $108,100 of outstanding debentures. In February 2016, the Company issued to a service provider a twelve month convertible debenture at 15% interest with a principal amount of $35,000 along with three-year warrants to purchase up to 35,000 shares of common stock at $1.00 per share. The convertible debenture is payable at maturity, and convertible at the investor’s determination at a price equal to 90% of the price of a subsequent public underwritten offering if one occurs over $5 million, or, if no such subsequent offering occurs, at $0.75 per share. During the year ended December 31, 2016, the Company issued an aggregate of 343,767 shares in full settlement of the debenture obligation. On March 14, 2016, the Company sold to investors six month secured convertible original issue discount notes with a principal amount in the aggregate of $1,514,669, together with five-year warrants to purchase an amount of shares of the Company’s common stock equal to the number of shares of common stock issuable upon the conversion of the notes in full and having an exercise price of $1.00 per share with reset provisions. If the Company exercises its right to prepay the note, the Company must make payment to the investor of an amount in cash equal to the sum of the then outstanding principal amount of the note that it desires to prepay, multiplied by (a) 1.2, during the first 90 days after the execution of the note, or (b) 1.35, at any point thereafter. The notes are convertible into shares of the Company’s common stock at a price per share equal to the lower of (i) $1.00, and (ii) a 25% discount to the price at which the Company next conducts an offering after the issuance date of the note; provided, however, for any part of the principal amount of the note that is not paid at its maturity date, or September 14, 2016, the conversion price for such amount is equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company’s common stock occurring during the fifteen days prior to the notes’ maturity date. The notes require that any net proceeds received in subsequent offerings made by the Company first be used to repay the notes’ outstanding principal amount. Because the notes were not repaid by the maturity date, the investors became entitled to receive, in aggregate, but calculated pro rata to the principal amounts remaining outstanding at the time of maturity, up to 500,000 shares of the Company’s common stock. Gross proceeds received by the Company for the notes and warrants in this offering were $1,420,000, while net proceeds were $1,271,600 (excluding any legal fees). On September 14, 2016, upon maturity of the notes, the Company was unable to make the required payment of the then outstanding aggregate principal amount of $966,384 and was in default under the notes. Penalties in aggregate of $584,735 were added to the carrying amount of the notes and were charged to current period interest. During the year ended December 31, 2016, the Company paid an aggregate of $1,479,498 cash and issued 1,754,462 shares of its common stock upon conversion of $619,906 of the debenture obligation and accrued interest. In addition, the Company issued an aggregate of 304,523 shares of its common stock as penalty shares valued at $163,621 and was charged to current period interest. As of December 31, 2016, the debentures were paid in full. On August 17, 2017, the Company issued secured convertible notes to certain accredited investors in the aggregate principal amount of $1,045,000. The notes matured on February 18, 2018 and accrued no interest. Net proceeds received by the Company were $942,500 after deduction of legal and other fees. If the Company exercises its right to prepay the notes, the Company shall make payment to the investors in an amount equal to the sum of the then outstanding principal amount of the notes that the Company desires to prepay, multiplied by (a) 1.1, during the first 90 days after the execution of the note, or (b) 1.25, at any point thereafter. The notes are convertible into shares of the Company’s common stock at a price per share equal to the lower of (i) $0.75 and (ii) a 25% discount to the price at which the Company next conducts an offering after the issuance date of the notes; provided, however, if any part of the principal amount of the notes remains unpaid at its maturity date, the conversion price will be equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company’s common stock occurring during the fifteen days prior to the notes’ maturity date. In connection with the issuance of the notes, the Company and the investors also entered into a security agreement pursuant to which the notes were secured by all of the assets of the Company currently held or thereafter acquired. In connection with the issuance of the notes, the Company issued five-year warrants to purchase an aggregate of 2,090,000 shares of Company’s common stock with an initial exercise price of $0.50. The warrants contain certain anti-dilutive (reset) provisions. From January 1 to January 16, 2018, the Company made payment to the holders of the notes in an aggregate of (i) $510,937.50 in cash and (ii) pursuant to the right of conversion of the notes, an aggregate of 3,742,648 shares of the Company’s common stock. The Company believes that it has completed all of its obligations under the notes and they are retired. On July 5, 2018, the Company issued secured convertible notes to certain accredited investors in the aggregate principal amount of $1,650,000. The notes have a maturity date of January 5, 2019 and accrued no interest. Net proceeds received by the Company were $1,492,500 after deduction of legal and other fees. If the Company exercises its right to prepay the notes, the Company shall make payment to the investors in an amount equal to the sum of the then outstanding principal amount of the notes that the Company desires to prepay, multiplied by (a) 1.1, during the first 90 days after the execution of the note, or (b) 1.25, at any point thereafter. The notes are convertible into shares of the Company’s common stock at a price per share equal to the lower of (i) $0.25 and (ii) a 15% discount to the price at which the Company next conducts an offering after the issuance date of the notes; provided, however, if any part of the principal amount of the notes remains unpaid after the maturity date, the conversion price will be equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company’s common stock occurring during the fifteen days prior to the notes’ maturity date. In connection with the issuance of the notes, the Company and the investors also entered into a security agreement pursuant to which the notes are secured by all of the assets of the Company currently held as of July 5, 2018 or thereafter acquired. The Company also issued five-year warrants to purchase an aggregate of 6,600,000 shares of Company’s common stock with an initial exercise price of $0.25. The warrants contain certain anti-dilutive (reset) provisions. In December 2018, the Company made payments of $1,762,500 to holders of July 2018 notes On December 17, 2018, the Company issued a secured convertible promissory note. The note in the principal amount of $2,225,000 (including an original issuance discount of $200,000) matures December 17, 2019 and bears interest at a rate of 8% per annum (which shall be increased to 22% upon the occurrence of an event of default). The Company shall have the right to prepay the note for an amount equal to 125% multiplied by the portion of the Outstanding Balance (as defined in the note) being prepaid. In addition, the note is secured by the Security Agreement (as defined below). The investor shall have the right to convert the Outstanding Balance of the note at any time into shares of common stock of the Company at a conversion price of $0.35 per share, subject to adjustment. Commencing on June 17, 2019, the investor shall have the right to redeem all or any portion of the note; provided, however, the investor may not request redemption in an amount that exceeds $350,000 during any single calendar month; provided, further however, upon the occurrence of an event of default, the redemption amount in any calendar month may exceed $350,000. Payments on redemption amounts may be made in cash, by converting the redemption amount into shares of the Company’s common stock at a conversion price of the lesser of (a) $0.35 per share, subject to adjustment and (b) the Market Price (as defined in the note), or a combination thereof. Upon the occurrence of an event of default, the investor may accelerate the note pursuant to which the Outstanding Balance will become immediately due and payable in cash at the Mandatory Default Amount (as defined in the note). The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased by the investor up to, but not exceeding, 9.99%. Pursuant to the terms of the Agreement, the Company also entered into a security agreement (the “Security Agreement”) on the closing date pursuant to which the Company granted the investor a security interest in the Collateral (as defined in the Security Agreement). As of December 31, 2018, the aggregate carrying value of the note was $2,105,102. During the twelve months ended December 31, 2018 and 2017, the Company amortized $1,020,673 and $652,921 of debt discounts to current period interest, respectively. |
Derivative Liabilities and Fair
Derivative Liabilities and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | NOTE 8 – DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS The Company identified conversion features embedded within convertible debt and certain warrants outstanding during the twelve months ended December 31, 2017. The Company determined that the features associated with the embedded conversion option and exercise prices, in the form of ratchet provisions, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. On January 4, 2017, warrant holders exercised outstanding warrants to purchase an aggregate of 682,668 shares of the Company’s common stock, and as such the Company transferred to estimated fair value of the embedded derivatives $610,967 from liability to equity. The Company estimated the fair value at the time of exercise using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 110.13%, (3) weighted average risk-free interest rate of 1.94%, (4) expected life of 4.20 years, and (5) estimated fair value of the Company’s common stock of $1.07 per share. On July 21, 2017, upon issuance of the warrants in connection with the sale of common stock, the Company determined that the features associated with the reset provisions embedded in the issued warrants, in the form of a ratchet provision, should be accounted for at fair value, as a derivative liability, as the Company could not determine if a sufficient number of shares would be available to settle all potential future conversion transactions. The Company estimated the fair value of the embedded derivatives of $1,003,870 using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 103.46%, (3) weighted average risk-free interest rate of 1.81% (4) expected life of 5.00 years, and (5) estimated fair value of the Company’s common stock of $0.5687 per share. The estimated fair value of the embedded derivative of $1,003,870 was reclassified from equity at the date of issuance. On August 17, 2017, upon issuance of the secured convertible notes and warrants, the Company determined that the features associated with the embedded conversion option and reset provisions embedded in the issued notes and warrants, in the form of a ratchet provision, should be accounted for at fair value, as a derivative liability, as the Company could not determine if a sufficient number of shares would be available to settle all potential future conversion transactions. The Company estimated the fair value of the embedded derivatives of $798,429 using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 102.73%, (3) weighted average risk-free interest rate of 1.11% to 1.78% (4) expected life of 0.49 to 5.00 years, and (5) estimated fair value of the Company’s common stock of $0.457 per share. The estimated fair value of the embedded derivative of $798,429 together with the issuance costs of $102,500 (aggregate of $900,929) was charged to debt discount and amortized over the term of the debenture with the excess charged to current period interest. On December 31, 2017, the Company estimated the fair value of the embedded derivatives of $9,493,307 using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 108.44%, (3) weighted average risk-free interest rate of 1.28% to 2.20%, (4) expected life of 0.13 to 4.65 years, and (5) estimated fair value of the Company’s common stock of $0.601 per share. The Company adopted the provisions of ASC 825-10, Financial Instruments (“ASC 825-10”). ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: ● Level 1 – Quoted prices in active markets for identical assets or liabilities. ● Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. All items required to be recorded or measured on a recurring basis are based upon Level 3 inputs. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. The Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed below. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed are that of volatility and market price of the underlying common stock of the Company. As of December 31, 2018 and December 31, 2017, the Company did not have any derivative instruments that were designated as hedges. Items recorded or measured at fair value on a recurring basis in the accompanying financial statements consisted of the following items as of December 31, 2018 and December 31, 2017: December 31, Quoted Prices Significant Significant Derivative liability $ - $ - $ - $ - December 31, Quoted Prices Significant Significant Derivative liability $ 9,493,307 $ - $ - $ 9,493,307 The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the two years ended December 31, 2018: Balance, January 1, 2017 $ 1,301,138 Transfers in due to issuance of liability warrants in connection with sale of common stock 1,003,870 Transfers in due to issuance of convertible notes and warrants with embedded conversion and Reset options 798,431 Transfers out due to warrant exercise (610,967 ) Mark to market to December 31, 2017 7,000,835 Balance, December 31, 2017 $ 9,493,307 Loss on change in warrant liabilities for the twelve months ended December 31, 2017 $ (7,000,835 ) Balance, January 1, 2018 $ 9,493,307 Cumulative effect adjustment to reclassify fair value of derivative liabilities to retained earnings (9,493,307 ) Balance, December 31, 2018 $ - Loss on change in warrant and derivative liabilities for the year ended December 31, 2018 $ - Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases, therefore increasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company’s expected volatility. Increases in expected volatility would generally result in higher fair value measurement. A 10% change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
CAPITAL STOCK | NOTE 9 – CAPITAL STOCK Preferred Stock The Company is authorized to issue 10,000,000 shares of blank check preferred stock, par value $0.001 per share. As of December 31, 2018, there were no shares of preferred stock issued and outstanding. Common Stock The Company is authorized to issue 500,000,000 shares of common stock, par value $0.001 per share. As of December 31, 2018, there were 168,706,472 shares of common stock issued and outstanding. The following common stock transactions were recorded during the years ended December 31, 2018 and 2017: During the year ended December 31, 2017, the Company issued an aggregate of 22,740,898 shares of its common stock for services valued at $15,474,330. During the year ended December 31, 2017, the Company sold an aggregate of 2,434,000 shares of its common stock and warrants to purchase shares of common stock for net proceeds of $2,676,444. During the year ended December 31, 2017, the Company issued an aggregate of 436,011 shares for its common stock upon the cashless exercise of common stock options. During the year ended December 31, 2017, the Company issued an aggregate of 355,689 shares of its common stock for the cashless exercise of common stock warrants. During the year ended December 31, 2017, the Company issued an aggregate of 1,081,000 shares of its common stock in settlement of $108,100 of convertible debt. During the year ended December 31, 2017, the Company issued an aggregate of 7,033,041 shares of its common stock upon the exercise of common stock warrants for net proceeds of $4,759,762. During the year ended December 31, 2017, the Company issued an aggregate of 2,926,830 shares of its common stock to acquire DDDigtal (Note 1). During the year ended December 31, 2017, the Company issued an aggregate of 3,250,000 shares of its common stock to acquire Odava (Note 1). During the year ended December 31, 2017, three former board members agreed to surrender an aggregate of 1,750,000 shares of the Company’s common stock in exchange for five-year warrants to purchase up to 4,850,000 shares of the Company’s common stock at an exercise price of $0.20 per share. As a result of the exchange in equity, the Company recorded stock-based compensation of $811,988. During the year ended December 31, 2018, the Company issued an aggregate of 14,362,500 shares of its common stock recorded as to be issued on December 31, 2017. During the year ended December 31, 2018, the Company retired an aggregate of 1,790,000 shares of its common stock recorded as to be retired on December 31, 2017 in exchange for warrants issued in December 2017. During the year ended December 31, 2018, the Company issued an aggregate of 13,594,000 shares of its common stock, having an aggregate fair value of $3,508,187, for services rendered. During the year ended December 31, 2018, the Company issued an aggregate of 95,134 shares for its common stock upon the cashless exercise of outstanding options. During the year ended December 31, 2018, the Company issued an aggregate of 7,906,470 shares of its common stock upon the cashless exercise of outstanding warrants. During the year ended December 31, 2018, the Company issued an aggregate of 3,742,648 shares of its common stock for the settlement of convertible debt with a principal amount of $636,250. During the year ended December 31, 2018, the Company issued an aggregate of 4,605,000 shares of its common stock upon the exercise of outstanding warrants for net proceeds of $637,230. During the year ended December 31, 2018, the Company issued an aggregate of 13,700,000 shares of common stock for cash proceeds of $2,740,000. During the year ended December 31, 2018, the Company received $564,000 recorded as subscription receivable as of December 31, 2017. During the year ended December 31, 2018, the Company issued an aggregate of 324,881 shares in lieu of interest expense $52,483. During the year ended December 31, 2018, the Company received cash proceeds of $6,000 upon the exercise of warrants . |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
WARRANTS | NOTE 10 – WARRANTS In July 2017, upon the sale of the Company’s common stock, the Company issued warrants to purchase up to 2,394,000 shares of the Company’s common stock at an exercise price of $0.65 per share, exercisable through July 24, 2022. These warrants contain certain anti-dilutive (reset) provisions (See Note 8). In August and September 2017, in connection with the issuance of convertible notes, the Company granted to the same investors five-year warrants to purchase an aggregate of 2,090,000 shares of the Company’s common stock at an exercise price $0.50 per share. The warrants may be exercised any time after the issuance through and including the fifth anniversary of its original issuance. The warrants have a fair market value of $715,432. The fair market value was calculated using the Binomial Option Pricing Model, assuming approximately 0.47% risk-free interest, 0% dividend yield, 102.73% volatility, and expected life of five years. These warrants contain certain anti-dilutive (reset) provisions (See Note 8). In December 2017, the Company issued warrants to purchase to up 4,850,000 shares of the Company’s common stock at an exercise price of $0.20 per share to former directors of the Company. The estimated fair value of $1,450,737 was charged to current period operations. The fair market value was calculated using the Black Scholes Option Pricing Model, assuming approximately 2.18% risk-free interest, 0% dividend yield, 223,02% volatility, and expected life of 5 years. In December 2017, upon the sale of the Company’s common stock, the Company issued warrants to purchase up to 10,250,000 shares of the Company’s common stock at an exercise price of $0.40 per share, exercisable through December 31, 2022. In December 2017, upon the sale of the Company’s common stock, the Company issued warrants to purchase up to 8,521,000 shares of the Company’s common stock at an exercise price of $0.20 per share, exercisable through December 31, 2022. The exercise price of the previously issued 4,484,000 warrants issued in connection with the July 2017 common stock sale and August and September convertible debt was reset from $0.65 and $0.50 per share, respectively, to $0.20. These warrants contain certain anti-dilutive (reset) provisions (See Note 8). In January 2018, the Company issued warrants to purchase up to 250,000 shares of the Company’s common stock at an exercise price of $0.20 per share to a service provider of the Company. The estimated fair value of $86,483 was charged to current period operations. The fair market value was calculated using the Black Scholes option pricing model, assuming approximately 2.49% risk-free interest, 0% dividend yield, 112.14% volatility, and expected life of five years. In January 2018, in conjunction with the sale of the Company’s common stock, the Company granted warrants to purchase up to 13,700,000 shares of the Company’s common stock at an exercise price of $0.40 per share, exercisable through January 31, 2023. Due to price protection provisions, the exercise price of the warrants was adjusted to $0.20 on July 26, 2018. In July 2018, the Company issued warrants to purchase up to an aggregate of 6,600,000 shares of the Company’s common stock as part of the sale of convertible debentures. In November 2018, MassRoots repriced warrants to purchase common stock covered by the Registration Statement on Form S-1 that was declared effective by the SEC on July 17, 2018 to $0.075 per share. Warrants outstanding and exercisable at December 31, 2018 are as follows: Exercise Price Warrants Weighted Avg. Warrants $0.01 – 0.25 69,194,998 4.14 69,254,998 0.26 – 0.50 565,002 2.42 565,002 0.51 – 0.75 50,000 1.27 50,000 0.76 – 1.00 5,100,002 0.75 5,100,002 74,910,002 74,970,002 A summary of the warrant activity for the years ended December 31, 2018 and 2017 is as follows: Shares Weighted- Weighted- Aggregate Outstanding at January 1, 2017 15,448,056 $ 0.81 1.4 $ 4,225,936 Grants 28,105,500 0.27 3.2 Exercised (7,728,209 ) 0.68 Forfeited/Cancelled (637,500 ) 0.62 Outstanding at December 31, 2017 35,187,847 $ 0.41 2.3 $ 9,314,959 Grants 60,832,338 0.08 Exercised (20,184,508 ) 0.21 Forfeited/Cancelled (925,675 ) 1.89 Vested and expected to vest at December 31, 2018 74,910,002 $ 0.14 3.89 $ - Exercisable at December 31, 2018 74,910,002 $ 0.14 3.89 $ - The aggregate intrinsic value outstanding stock warrants was $0, based on warrants with an exercise price less than the Company’s stock price of $0.059 as of December 31, 2018, which would have been received by the warrant holders had those warrant holders exercised their warrants as of that date. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTIONS | NOTE 11 – STOCK OPTIONS Our stockholders approved our 2014 Equity Incentive Plan in June 2014 (the “2014 Plan”), our 2015 Equity Incentive Plan in December 2015 (the “2015 Plan”), our 2016 Equity Incentive Plan (“2016 Plan”) in October 2016, our 2017 Equity Incentive Plan in December 2016 (“2017 Plan”) and our 2018 Equity Incentive Plan in June 2018 (the “2018 Plan”, and together with the 2014 Plan, 2015 Plan, 2016 Plan, 2017 Plan, and 2018 Plan the ” Prior Plans”). The 2014 Plan, the 2015 Plan, the 2016 Plan and the 2017 Plan are identical, except for number of shares reserved for issuance under each. As of December 31, 2018, the Company had granted an aggregate of 60,600,000 securities under the Plans, with 3,900,000 shares available for future issuances. The Plans provide for the grant of incentive stock options to our employees and our parent and subsidiary corporations’ employees, and for the grant of non-statutory stock options, stock bonus awards, restricted stock awards, performance stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. Our Prior Plans also provide that the grant of performance stock awards may be paid out in cash as determined by the committee administering the Prior Plans. During the year ended December 31, 2017, the Company granted ten-year options to purchase up to 2,854,000 shares of common stock. The fair value of $2,014,591, was determined using the Black-Scholes Option Pricing Model, assuming approximately 1.81% to 2.35% risk-free interest, 0% dividend yield, 103.66% to 110.16% volatility, and expected life of five to ten years and will be charged to operations over the vesting terms of the options. During the year ended December 31, 2018, the Company granted ten-year options outside of our Plans to purchase up to 13,250,000 shares of the Company’s common stock. The fair value of $2,146,193, was determined using the Black-Scholes option pricing model, assuming approximately 2.78% - 2.98% risk-free interest, 0% dividend yield, 112.67% -116.28% volatility, and expected life of ten years and will be charged to operations over the vesting terms of the options. The summary terms of the issuances are as follows: Exercise Price Number of Vesting Terms $ 0.20 12,000,000 Immediately 0.36 250,000 Immediately 0.40 1,000,000 Immediately Stock options outstanding and exercisable on December 31, 2018 are as follows: Exercise Price Number of Remaining Life Number of Options $0.01 – 0.25 13,056,786 9.24 13,056,786 0.26 - 0.50 1,939,631 8.26 1,939,631 0.51 – 0.75 1,820,112 7.68 1,820,112 0.76 - 1.00 9,926,072 7.71 9,926,072 1.01 - 2.00 629,164 7.61 629,164 27,371,765 27,371,765 A summary of the stock option activity for the years ended December 31, 2018 and 2017 is as follows: Shares Weighted- Weighted- Aggregate Outstanding at January 1, 2017 14,824,158 $ 0.52 8.37 $ 4,566,717 Grants 2,854,000 0.50 8.60 Exercised (436,011 ) 0.16 7.80 Forfeiture/Cancelled (2,454,761 ) 0.73 7.80 Outstanding at December 31, 2017 14,378,432 $ 0.76 7.48 $ 771,359 Grants 13,250,000 0.22 Exercised (256,667 ) 0.51 Forfeiture/Cancelled - Outstanding at December 31, 2018 27,371,765 0.50 8.67 $ - Exercisable at December 31, 2018 27,371,765 $ 0.50 8.67 $ - The aggregate intrinsic value of outstanding stock options was $0, based on options with an exercise price less than the Company’s stock price of $0.059 as of December 31, 2018, which would have been received by the option holders had those option holders exercised their options as of that date. Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option pricing model with a volatility figure derived from historical data. The Company accounts for the expected life of options based on the contractual life of options for non-employees. The fair value of all options that were vested as of the year ended December 31, 2018 and 2017 was $0 and $5,821,631, respectively. Unrecognized compensation expense of $0 at December 31, 2018 will be expensed in future periods. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 – INCOME TAXES The Tax Cuts and Jobs Acts (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate income tax rate from 35% to 21%. ASC 740, “Income Taxes”, requires that effects of changes in tax rates to be recognized in the period enacted. Recognizing the late enactment of the Act and complexity of accurately accounting for its impact, the Securities and Exchange Commission in SAB 118 provides guidance that allows registrants to provide a reasonable estimate of the Act in their financial statements and adjust the reported impact in a measurement period not to exceed one year. At December 31, 2018, the Company has available for federal income tax purposes a net operating loss carry forward of approximately $55,362,071, which begin expiring in the year 2033, that may be used to offset future taxable income. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, since in the opinion of management based upon the earnings history of the Company; it is more likely than not that the benefits will not be realized. Due to possible significant changes in the Company’s ownership, the future use of its existing net operating losses may be limited. All or portion of the remaining valuation allowance may be reduced in future years based on an assessment of earnings sufficient to fully utilize these potential tax benefits. During the year ended December 31, 2018, the Company has increased the valuation allowance from $11,090,000 to $14,503,490. The Company has adopted the provisions of ASC 740-10-25, which provides recognition criteria and a related measurement model for uncertain tax positions taken or expected to be taken in income tax returns. ASC 740-10-25 requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. Tax position that meet the more likely than not threshold are then measured using a probability weighted approach recognizing the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company had no tax positions relating to open income tax returns that were considered to be uncertain. Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), provide for annual limitations on the utilization of net operating loss and credit carryforwards if the Company were to undergo an ownership change, as defined in Section 382 of the Code. In general, an ownership change occurs whenever the percentage of the shares of a corporation owned, directly or indirectly, by 5-percent shareholders, as defined in Section 382 of the Code, increases by more than 50 percentage points over the lowest percentage of the shares of such corporation owned, directly or indirectly, by such 5-percent shareholders at any time over the preceding three years. In the event such ownership change occurs, the annual limitation may result in the expiration of the net operating losses prior to full utilization. The Company is required to file income tax returns in the U.S. Federal jurisdiction and in Colorado. The Company is no longer subject to income tax examinations by tax authorities for tax years ending before December 31, 2013. The Company’s deferred taxes as of December 31, 2018 and 2017 consist of the following: 2018 2017 Non-Current deferred tax asset: (Estimated) Net operating loss carry-forwards 14,503,490 11,090,000 Valuation allowance (14,503,490 ) (11,090,000 ) Net non-current deferred tax asset - - The Company is delinquent in filing its payroll taxes related to stock compensation awards. At December 31, 2018, the Company has, in payroll tax liabilities, including interest and penalties, of approximately $2,992,023, due to federal and state taxing authorities. The actual liability may be higher or lower due to interest or penalties assessed by federal and state taxing authorities. The Company expects to settle these liabilities by September 30, 2019. Income Taxes The Company follows ASC subtopic 740-10, Income Taxes- (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS On July 21, 2017, Isaac Dietrich, the Company’s Chief Executive Officer, participated in the Company’s private placement of securities, whereby Mr. Dietrich purchased $10,000 of the Company’s securities consisting of 20,000 shares of the Company’s common stock and warrants to purchase 20,000 shares at $0.65 per share. As a result of the ratchet provision in the warrants that was triggered by the Company’s December 2017 private placement, the number of warrants increased to 65,000 and the exercise price decreased to $0.20. As a result of the ratchet provision in the warrants that was triggered by the Company’s November 2018 warrant repricing, the number of warrants increased to 173,333 and the exercise price decreased to $0.075. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. From January 1, 2019 to April 15, 2019, MassRoots issued 80,000 shares of common stock that were recorded as to be issued as of December 31, 2018. From January 1, 2019 to April 15, 2019, MassRoots received $116,637 upon the exercise of warrants to purchase 1,555,160 shares of common stock which were recorded as to be issued. From January 1, 2019 to April 15, 2019, MassRoots issued 8,906,275 shares of common stock and recorded 1,196,078 as to be issued for the settlement of $392,580 in convertible debt from its July 2018 Offering. MassRoots issued an additional 250,000 shares of common stock under the maturity date kicker provision of the July 2018 notes. The July 2018 notes have been fully satisfied and are retired. From January 1, 2019 to April 15, 2019, MassRoots issued 448,102 shares of common stock upon the cashless exercise of 2,750,000 warrants to purchase common stock. From January 1, 2019 to April 15, 2019, MassRoots issued 1,050,000 shares of common stock for an interest expense. From January 1, 2019 to April 15, 2019, MassRoots granted options to purchase 250,000 shares of common stock at an exercise price of $0.075 per share. From January 1, 2019 to April 15, 2019, MassRoots issued 2,950,000 shares of common stock for services rendered. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of MassRoots, Inc. and its wholly-owned operating subsidiaries. All material intercompany accounts and transactions are eliminated in consolidation. |
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, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include stock-based compensation, fair values relating to derivative liabilities and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Financial Accounting Standards Board (“FASB”) ASC subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. The Company follows ASC 825-10, which permits entities to choose to measure many financial instruments and certain other items at fair value. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the Statement of Cash Flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives of three to five years. Repair and maintenance costs are expensed as occurred. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. The allowance for doubtful accounts is estimated based on an assessment of the Company’s ability to collect on customer accounts receivable. There is judgment involved with estimating the allowance for doubtful accounts and if the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against revenues. The Company writes-off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when services are realized or realizable and earned less estimated future doubtful accounts. The Company’s revenues accounted for under ASC Topic 606 generally do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. In accordance with ASC 606, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which MassRoots expects to be entitled in exchange for those goods or services. MassRoots recognizes revenue in accordance with that core principle by applying the following: (i) Identify the contract(s) with a customer; (ii) Identify the performance obligation in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; and (v) Recognize revenue when (or as) MassRoots satisfies a performance obligation. The Company primarily generates revenue by charging businesses to advertise on the network. The Company has the ability to target advertisements directly to a clients’ target audience, based on their location, on their mobile devices. In cases where clients sign advertising contracts for an extended period of time, the Company only realizes revenue for services provided during that quarter and defers all other revenue to future periods. |
Acquisitions and Subsidiaries | Acquisitions and Subsidiaries Subsidiaries are all entities over which MassRoots has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether MassRoots controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to MassRoots. The purchase method of accounting is used to account for the acquisition of subsidiaries by MassRoots. The cost of an acquisition is measured as the fair value of the assets transferred in consideration, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the MassRoots’ share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement. |
Advertising | Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. For the twelve months ended December 31, 2018 and 2017, the Company charged to operations $501,451 and $960,239, respectively, as advertising expense. |
Stock Based Compensation | Stock Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. |
Income Taxes | Income Taxes The Company follows ASC subtopic 740-10, Income Taxes- (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. |
Convertible Instruments | Convertible Instruments U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under ASC 480. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. |
Derivative Financial Instruments | Derivative Financial Instruments The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company’s free-standing derivatives consisted of warrants to purchase common stock that were issued in connection with the issuance of debt and sale of common stock, and of embedded conversion options with convertible debentures. The Company evaluated these derivatives to assess their proper classification in the balance sheet as of December 31, 2017 using the applicable classification criteria enumerated under ASC 815 Derivatives and Hedging. The Company determined that certain embedded conversion and/or exercise features do not contain fixed settlement provisions. The convertible debentures contain a conversion feature such that the Company could not ensure it would have adequate authorized shares to meet all possible conversion demands. As such, the Company was required to record the derivatives which do not have fixed settlement provisions as liabilities and mark to market all such derivatives to fair value at the end of each reporting period. |
Long-Lived Assets | Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for impairment is required to be performed by management at least annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Intangible assets are stated at cost and reviewed annually to examine any impairments, usually assuming an estimated useful lives of three to five years. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. |
Indefinite Lived Intangibles and Goodwill Assets | Indefinite Lived Intangibles and Goodwill Assets The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company tests for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Chief Executive Officer, or decision-making group, in deciding the method to allocate resources and assess performance. The Company currently has one reportable segment for financial reporting purposes, which represents the Company’s core business. |
Net Earnings (Loss) Per Common Share | Net Earnings (Loss) Per Common Share The Company computes earnings (loss) per share under ASC subtopic 260-10, Earnings Per Share. Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the "treasury stock" and/or "if converted" methods as applicable. The computation of basic and diluted income (loss) per share, for the year ended December 31, 2018 and 2017 excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period. Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows: December 31, December 31, Common stock issuable upon conversion of convertible debentures 13,146,218 6,147,059 Options to purchase common stock 27,371,765 14,377,570 Warrants to purchase common stock 74,910,002 35,187,847 Totals 115,427,985 55,712,476 |
Reclassification | Reclassification Certain reclassifications have been made to the prior years’ data to conform to the current year presentation. These reclassifications had no effect on reported income (losses). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements FASB Accounting Standards Updates (“ASU”) 2017-04 (Topic 350), “Intangibles – Goodwill and Others” FASB ASU 2017-01 (Topic 805), “Business Combinations: Clarifying the Definition of a Business” FASB ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)” “Statement of Cash Flows” FASB ASU No. 2014-09 (Topic 606), “Revenue from Contracts with Customers” “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” “Principal versus Agent Considerations (Reporting Gross versus Net)”, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” “Narrow-Scope Improvements and Practical Expedients” The Company has applied the guidance using the modified retrospective transition method. The Company does not believe the adoption of ASU 2014-09 had a material impact on the Company’s financial position or results of operations but such adoption resulted in additional disclosures regarding the Company’s revenue recognition policies. The Company also does not believe the adoption of ASU 2014-09 required material or significant changes to its internal controls over financial reporting. In connection with the application of that guidance and the adoption of ASU 2014-09, the Company has expanded its revenue recognition inquiries and updated its questionnaires to identify matters that would signal variable consideration implications under the new guidance. FASB ASU No. 2014-15, “Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern, which is included in ASC 205, Presentation of Financial Statements ” – The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. The Company has adopted this standard and included the necessary disclosures in the footnotes to its financial statements. The adoption of this standard has not had a material impact on the Company’s financial position and results of operations. FASB ASU 2016-02, Leases (Topic 842) FASB ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting” FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) FASB issued ASU 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity, and Derivatives and Hedging (“ASU 2017-11”) FASB ASU No. 2018-07 (Topic 718), “Compensation – Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting” – There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
DDDigtal Inc. [Member] | |
Schedule of business acquisition | Cash (paid in December 2016) $ 60,000 2,926,830 shares of the Company’s common stock 2,883,220 Liabilities assumed 40,140 Total purchase price $ 2,983,360 |
Schedule of fair value of assets acquired and liabilities assumed | Cash $ 8,672 Accounts receivable 3,583 Property and equipment 3,333 Goodwill 2,967,772 Assets acquired $ 2,983,360 |
Odava, Inc. [Member] | |
Schedule of business acquisition | Cash and costs incurred $ 40,570 3,250,000 shares of the Company’s common stock 1,966,250 Total purchase price $ 2,006,820 |
Schedule of fair value of assets acquired and liabilities assumed | Cash $ 2,601 Goodwill 2,004,219 Assets acquired $ 2,006,820 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of potentially dilutive securities excluded from the computation of basic and diluted net loss per share | December 31, December 31, Common stock issuable upon conversion of convertible debentures 13,146,218 6,147,059 Options to purchase common stock 27,371,765 14,377,570 Warrants to purchase common stock 74,910,002 35,187,847 Totals 115,427,985 55,712,476 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | December 31, December 31, Computers $ 6,366 $ 55,244 Office equipment 17,621 43,590 Subtotal 23,987 98,834 Less accumulated depreciation (17,254 ) (43,688 ) Property and equipment, net $ 6,733 $ 55,146 |
Software Costs (Tables)
Software Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Software Costs [Abstract] | |
Schedule of software costs | Cash (paid in December 2016) $ 60,000 2,926,830 shares of the Company’s common stock 2,883,220 Liabilities assumed 40,140 Total purchase price $ 2,983,360 Cash $ 8,672 Accounts receivable 3,583 Property and equipment 3,333 Software 1,253,000 (1) Goodwill 1,714,772 Assets acquired $ 2,983,360 (1) The estimated useful life for software development is assumed at three years. The acquisition was completed in January 2017, however the allocation of proceeds to identifiable assets was recognized during fourth quarter of 2017. During management’s annual review of these assets for fiscal year 2018, the remaining value of these assets was written-off due to minimal revenue generated from this software. MassRoots recorded an impairment expense of $415,378 during fiscal year 2018 for these assets, as compared to $1,714,772 during fiscal year 2017, a reduction of $1,299,394. |
Derivative Liabilities and Fa_2
Derivative Liabilities and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Schedule of fair value of financial liabilities | December 31, Quoted Prices Significant Significant Derivative liability $ - $ - $ - $ - December 31, Quoted Prices Significant Significant Derivative liability $ 9,493,307 $ - $ - $ 9,493,307 |
Schedule of changes in fair value of the Company's financial liabilities | Balance, January 1, 2017 $ 1,301,138 Transfers in due to issuance of liability warrants in connection with sale of common stock 1,003,870 Transfers in due to issuance of convertible notes and warrants with embedded conversion and Reset options 798,431 Transfers out due to warrant exercise (610,967 ) Mark to market to December 31, 2017 7,000,835 Balance, December 31, 2017 $ 9,493,307 Loss on change in warrant liabilities for the twelve months ended December 31, 2017 $ (7,000,835 ) Balance, January 1, 2018 $ 9,493,307 Cumulative effect adjustment to reclassify fair value of derivative liabilities to retained earnings (9,493,307 ) Balance, December 31, 2018 $ - Loss on change in warrant and derivative liabilities for the year ended December 31, 2018 $ - |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
Schedule of warrants outstanding and exercisable | Exercise Price Warrants Weighted Avg. Warrants $0.01 – 0.25 69,194,998 4.14 69,254,998 0.26 – 0.50 565,002 2.42 565,002 0.51 – 0.75 50,000 1.27 50,000 0.76 – 1.00 5,100,002 0.75 5,100,002 74,910,002 74,970,002 |
Schedule of warrant activity | Shares Weighted- Weighted- Aggregate Outstanding at January 1, 2017 15,448,056 $ 0.81 1.4 $ 4,225,936 Grants 28,105,500 0.27 3.2 Exercised (7,728,209 ) 0.68 Forfeited/Cancelled (637,500 ) 0.62 Outstanding at December 31, 2017 35,187,847 $ 0.41 2.3 $ 9,314,959 Grants 60,832,338 0.08 Exercised (20,184,508 ) 0.21 Forfeited/Cancelled (925,675 ) 1.89 Vested and expected to vest at December 31, 2018 74,910,002 $ 0.14 3.89 $ - Exercisable at December 31, 2018 74,910,002 $ 0.14 3.89 $ - |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of terms of issuances | Exercise Price Number of Vesting Terms $ 0.20 12,000,000 Immediately 0.36 250,000 Immediately 0.40 1,000,000 Immediately |
Schedule of stock options outstanding and exercisable | Exercise Price Number of Remaining Life Number of Options $0.01 – 0.25 13,056,786 9.24 13,056,786 0.26 - 0.50 1,939,631 8.26 1,939,631 0.51 – 0.75 1,820,112 7.68 1,820,112 0.76 - 1.00 9,926,072 7.71 9,926,072 1.01 - 2.00 629,164 7.61 629,164 27,371,765 27,371,765 |
Schedule of stock option activity | Shares Weighted- Weighted- Aggregate Outstanding at January 1, 2017 14,824,158 $ 0.52 8.37 $ 4,566,717 Grants 2,854,000 0.50 8.60 Exercised (436,011 ) 0.16 7.80 Forfeiture/Cancelled (2,454,761 ) 0.73 7.80 Outstanding at December 31, 2017 14,378,432 $ 0.76 7.48 $ 771,359 Grants 13,250,000 0.22 Exercised (256,667 ) 0.51 Forfeiture/Cancelled - Outstanding at December 31, 2018 27,371,765 0.50 8.67 $ - Exercisable at December 31, 2018 27,371,765 $ 0.50 8.67 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred taxes | 2018 2017 Non-Current deferred tax asset: (Estimated) Net operating loss carry-forwards 14,503,490 11,090,000 Valuation allowance (14,503,490 ) (11,090,000 ) Net non-current deferred tax asset - - |
Nature of Operations and Basi_3
Nature of Operations and Basis of Presentation (Details) - USD ($) | Jul. 05, 2017 | Dec. 31, 2018 |
DDDigtal Inc. [Member] | ||
Cash (paid in December 2016) | $ 60,000 | |
Shares of the Company's common stock | 2,883,220 | |
Liabilities assumed | 40,140 | |
Total purchase price | 2,983,360 | |
Odava, Inc. [Member] | ||
Cash and costs incurred | 40,570 | |
Shares of the Company's common stock | 1,966,250 | |
Total purchase price | $ 2,006,820 | $ 2,006,820 |
Nature of Operations and Basi_4
Nature of Operations and Basis of Presentation (Details 1) | Dec. 31, 2018USD ($) |
DDDigtal Inc. [Member] | |
Cash | $ 8,672 |
Accounts receivable | 3,583 |
Property and equipment | 3,333 |
Goodwill | 2,967,772 |
Assets acquired | 2,983,360 |
Odava, Inc. [Member] | |
Cash | 2,601 |
Goodwill | 2,004,219 |
Assets acquired | $ 2,006,820 |
Nature of Operations and Basi_5
Nature of Operations and Basis of Presentation (Details Textual) - USD ($) | Jul. 05, 2017 | Dec. 15, 2016 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Zachary Marburger [Member] | |||||
Nature of Operations and Basis of Presentation (Textual) | |||||
Company paid cash consideration | $ 40,000 | ||||
Additional amount paid one-year anniversary of his constant employment | 40,000 | ||||
Micah Davidson[Member] | |||||
Nature of Operations and Basis of Presentation (Textual) | |||||
Company paid cash consideration | $ 20,000 | ||||
DDDigtal Inc. [Member] | |||||
Nature of Operations and Basis of Presentation (Textual) | |||||
Shares issued of common stock | 2,926,830 | ||||
Stock split of common stock, description | The Company's common stock (or a fraction thereof), based on an exchange ratio equal to approximately 5.273-for-1, such that 1 share of the Company's common stock was issued for every 5.273 shares of DDDigtal's common stock. | ||||
Company paid cash consideration | $ 2,983,360 | ||||
Additional amount paid one-year anniversary of his constant employment | 40,140 | ||||
Goodwill | 2,967,772 | ||||
DDDigtal Inc. [Member] | Merger Agreement [Member] | |||||
Nature of Operations and Basis of Presentation (Textual) | |||||
Software | $ 1,253,000 | ||||
Goodwill | $ 1,714,772 | ||||
Odava, Inc. [Member] | |||||
Nature of Operations and Basis of Presentation (Textual) | |||||
Shares issued of common stock | 3,250,000 | ||||
Stock split of common stock, description | An exchange ratio equal to approximately 4.069-for-1, such that one share of MassRoots' common stock was issued for approximately every 4.069 shares of Odava's common stock. | ||||
Company paid cash consideration | $ 2,006,820 | 2,006,820 | |||
Goodwill | $ 2,004,219 | ||||
Estimated useful life for software development | 3 years | ||||
Business acquisition, description | The company issued an aggregate of 2,600,000 shares of its common stock to the founders of odava in connection with the odava merger. Furthermore, pursuant to the terms of the odava merger agreement, the company paid each of scott kveton and steven osborn $30,000 and $5,000, respectively, as repayment for outstanding debts owed by odava to such individuals |
Going Concern and Management'_2
Going Concern and Management's Liquidity Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Going Concern and Management's Liquidity Plans (Textual) | ||
Cash | $ 29,568 | |
Working capital deficit | 7,361,875 | |
Net cash in operating activities | $ (6,423,900) | $ (7,997,465) |
Going concern, description | These conditions raise substantial doubt about the Company's ability to continue as a going concern for one year from the issuance of the financial statements. | |
Proceeds from exercise of common stock warrants | $ 637,230 | 4,759,762 |
Proceeds from sale of common stock | 3,304,000 | $ 2,676,644 |
Issuance of debt notes | 528,650 | |
Proceeds from issuance of convertible notes | $ 3,567,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Common stock issuable upon conversion of convertible debentures | 13,146,218 | 6,147,059 |
Options to purchase common stock | 27,371,765 | 14,377,570 |
Warrants to purchase common stock | 74,910,002 | 35,187,847 |
Totals | 115,427,985 | 55,712,476 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (DetailsTextual) | 12 Months Ended | |
Dec. 31, 2018USD ($)Segments / Number | Dec. 31, 2017USD ($) | |
Summary of Significant Accounting Policies (Textual) | ||
Advertising | $ | $ 501,451 | $ 960,239 |
Number of reportable segments | Segments / Number | 1 | |
Long-Lived Assets [Member] | Minimum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful lifes | 3 years | |
Long-Lived Assets [Member] | Maximum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful lifes | 5 years | |
Property and Equipment [Member] | Minimum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful lifes | 3 years | |
Property and Equipment [Member] | Maximum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful lifes | 5 years |
Investments (Details)
Investments (Details) - USD ($) | Jan. 15, 2018 | Jul. 17, 2017 | Jul. 13, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Investments (Textual) | |||||||
Investments | $ 247,912 | $ 403,249 | |||||
Percentage of voting cost method investment | 20.00% | ||||||
Shares issued of common stock | 14,362,500 | ||||||
Share price | $ 0.601 | ||||||
Principal amount of note | $ 390,000 | ||||||
Sale of securities investments, description | The Company invested $175,000 in exchange for preferred shares of Flowhub LLC ("Flowhub"), a seed-to-sale system, equal to 8.95% of the then outstanding equity of Flowhub. The preferred shares are considered non-marketable securities. On May 12, 2017, the Company sold its preferred shares in Flowhub for net proceeds of $250,000. The gain on sale of securities of $75,000 was recorded in current period operations. | ||||||
DDDigital, LLC. [Member] | |||||||
Investments (Textual) | |||||||
Acquisition deposit | $ 60,000 | ||||||
Class A common stock [Member ] | |||||||
Investments (Textual) | |||||||
Shares issued of common stock | 45,974 | 23,810 | |||||
Shares issued of common stock, value | $ 100,002 | ||||||
Share price | $ 4.20 | ||||||
Forward stock split, description | Forward share split of 1.9308657-for-one | ||||||
Cannaregs [Member] | |||||||
Investments (Textual) | |||||||
Principal amount of note | $ 300,000 | ||||||
Note bears interest rate, per annum | 5.00% | ||||||
Maturity date of note | Dec. 19, 2019 | ||||||
Financing excess of notes | $ 2,000,000 | ||||||
Description of debt conversion | a) 90% of the price paid per equity security or b) a price reflecting a valuation cap of $4,500,000. | ||||||
Debt conversion shares issued | 430,622 | ||||||
Debt conversion instrument, rate | 1.00% | ||||||
Capitalization structure and business operations, description | Based on an equity raise priced at $0.3434 per share completed by Regs Technology in February 2019, MassRoots values its holdings at $147,876 as of December 31, 2018. The Company recorded an impairment expense of $155,336 on its holdings during fiscal year 2018. MassRoots owns less than 1% of Regs Technology's issued and outstanding shares as of December 31, 2018. |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Subtotal | $ 23,987 | $ 98,834 |
Less accumulated depreciation | (17,254) | (43,688) |
Property and equipment, net | 6,733 | 55,146 |
Computers [Member] | ||
Subtotal | 6,366 | 55,244 |
Office Equipment [Member] | ||
Subtotal | $ 17,621 | $ 43,590 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment (Textual) | ||
Depreciation expense | $ 4,797 | $ 27,914 |
Write-off of property and equipment | $ (47,612) | $ (55,849) |
Software Costs (Details)
Software Costs (Details) - Zachary Marburger [Member] | 12 Months Ended | |
Dec. 31, 2018USD ($) | ||
Cash (paid in December 2016) | $ 60,000 | |
2,926,830 shares of the Company's common stock | 2,883,220 | |
Liabilities assumed | 40,140 | |
Total purchase price | 2,983,360 | |
Cash | 8,672 | |
Accounts receivable | 3,583 | |
Property and equipment | 3,333 | |
Software | 1,253,000 | [1] |
Goodwill | 1,714,772 | |
Assets acquired | $ 2,983,360 | |
[1] | The estimated useful life for software development is assumed at three years. The acquisition was completed in January 2017, however the allocation of proceeds to identifiable assets was recognized during fourth quarter of 2017. During management's annual review of these assets for fiscal year 2018, the remaining value of these assets was written-off due to minimal revenue generated from this software. MassRoots recorded an impairment expense of $415,378 during fiscal year 2018 for these assets, as compared to $1,714,772 during fiscal year 2017, a reduction of $1,299,394. |
Software Costs (Details Textual
Software Costs (Details Textual) - USD ($) | Dec. 15, 2016 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Software Costs (Textual) | ||||
Development and maintenance, description | MassRoots paid MEV $521,839 with respect to the development and maintenance of its platform, of which MassRoots has capitalized $260,565 in development costs. | |||
Impairment expenses | $ 606,714 | $ 3,796,991 | ||
Amortization of software costs | $ 438,264 | 389,059 | ||
Software development [Member] | ||||
Software Costs (Textual) | ||||
Estimated useful life for software development | 3 years | |||
Impairment expenses | $ 415,378 | $ 1,714,772 | ||
Reduction of impairment expenses | $ 1,299,394 | |||
Micah Davidson[Member] | ||||
Software Costs (Textual) | ||||
Company paid cash consideration | $ 20,000 | |||
Zachary Marburger [Member] | ||||
Software Costs (Textual) | ||||
Company paid cash consideration | 40,000 | |||
Additional amount paid one-year anniversary of his constant employment | $ 40,000 | |||
DDDigtal [Member] | ||||
Software Costs (Textual) | ||||
Shares issued of common stock | 2,926,830 | |||
Merger Agreement, description | Each share of DDDigtal's common stock was to be exchanged for a number of shares of the Company's common stock (or a fraction thereof), based on an exchange ratio, as ultimately calculated, equal to approximately 5.273-for-1, such that 1 share of the Company's common stock was issued for every 5.273 shares of DDDigtal's common stock. |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | Dec. 17, 2018 | Jul. 05, 2018 | Jan. 16, 2018 | Sep. 14, 2016 | Mar. 14, 2016 | Aug. 17, 2017 | Feb. 28, 2016 | Mar. 24, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 29, 2016 |
Convertible Notes Payable (Textual) | ||||||||||||
Aggregate principal amount | $ 390,000 | |||||||||||
Warrants issued to purchase shares of common stock | 2,090,000 | |||||||||||
Warrants term | 5 years | |||||||||||
Warrants exercise price | $ 0.50 | |||||||||||
Warrants to purchase | 6,600,000 | |||||||||||
Initial exercise price | $ 0.25 | |||||||||||
Warrants term | 5 years | |||||||||||
Issue of common stock upon conversion | $ 636,250 | |||||||||||
Debentures carrying value | 2,105,102 | |||||||||||
Amortized of debt discounts to current period interest | $ 1,020,673 | $ 652,921 | ||||||||||
6 Month Secured Convertible Debt [Member] | ||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||
Aggregate principal amount | $ 966,384 | $ 1,514,669 | ||||||||||
Gross Proceeds | 1,420,000 | |||||||||||
Net proceeds received amount | $ 1,271,600 | |||||||||||
Description of debt conversion | If the Company exercises its right to prepay the note, the Company must make payment to the investor of an amount in cash equal to the sum of the then outstanding principal amount of the note that it desires to prepay, multiplied by (a) 1.2, during the first 90 days after the execution of the note, or (b) 1.35, at any point thereafter. The notes are convertible into shares of the Company's common stock at a price per share equal to the lower of (i) $1.00, and (ii) a 25% discount to the price at which the Company next conducts an offering after the issuance date of the note; provided, however, for any part of the principal amount of the note that is not paid at its maturity date, or September 14, 2016, the conversion price for such amount is equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company's common stock occurring during the fifteen days prior to the notes' maturity date. | |||||||||||
Aggregate shares in full settlement of the debenture obligation | 500,000 | |||||||||||
Warrants term | 5 years | |||||||||||
Warrants exercise price | $ 1 | |||||||||||
Aggregate penalties | $ 584,735 | |||||||||||
Secured Convertible Notes payable [Member] | ||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||
Description of debt conversion | The Note in the principal amount of $2,225,000 (including an original issuance discount of $200,000) matures December 17, 2019 and bears interest at a rate of 8% per annum (which shall be increased to 22% upon the occurrence of an event of default). The Company shall have the right to prepay the Note for an amount equal to 125% multiplied by the portion of the Outstanding Balance (as defined in the Note) being prepaid. In addition, the Note is secured by the Security Agreement (as defined below). The Investor shall have the right to convert the Outstanding Balance of the Note at any time into shares of common stock of the Company at a conversion price of $0.35 per share, subject to adjustment. | The Investor shall have the right to redeem all or any portion of the Note; provided, however, the Investor may not request redemption in an amount that exceeds $350,000 during any single calendar month; provided, further however, upon the occurrence of an event of default, the redemption amount in any calendar month may exceed $350,000. Payments on redemption amounts may be made in cash, by converting the redemption amount into shares of the Company's common stock at a conversion price of the lesser of (a) $0.35 per share, subject to adjustment and (b) the Market Price (as defined in the Note), or a combination thereof. Upon the occurrence of an event of default, the Investor may accelerate the Note pursuant to which the Outstanding Balance will become immediately due and payable in cash at the Mandatory Default Amount (as defined in the Note). The Company is prohibited from effecting a conversion of the Note to the extent that, as a result of such conversion, the Investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company's common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Note, which beneficial ownership limitation may be increased by the Investor up to, but not exceeding, 9.99%. | ||||||||||
Convertible Debt [Member] | ||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||
Aggregate principal amount | $ 269,100 | |||||||||||
Notes mature date | Mar. 24, 2016 | |||||||||||
Description of debt conversion | The Company issued an aggregate of 1,010,000 shares of its common stock in settlement of $101,000 of outstanding debentures and during the twelve months ended December 31, 2017, the Company issued an aggregate of 1,081,000 shares of its common stock in settlement of $108,100 of outstanding debentures. | |||||||||||
Aggregate shares in full settlement of the debenture obligation | 1,754,462 | |||||||||||
Price per share | $ 0.10 | |||||||||||
Company paid cash consideration | $ 1,479,498 | |||||||||||
Issue of common stock upon conversion | $ 619,906 | |||||||||||
Issue of common stock as penalty shares | 163,621 | |||||||||||
Twelve month convertible debenture [Member] | ||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||
Aggregate principal amount | $ 35,000 | |||||||||||
Description of debt conversion | The convertible debenture is payable at maturity, and convertible at the investor's determination at a price equal to 90% of the price of a subsequent public underwritten offering if one occurs over $5 million, or, if no such subsequent offering occurs, at $0.75 per share. | |||||||||||
Interest on debenture | 15.00% | |||||||||||
Aggregate shares in full settlement of the debenture obligation | 343,767 | |||||||||||
Warrants term | 3 years | 3 years | ||||||||||
Warrants exercise price | $ 1 | |||||||||||
Warrants to purchase | 35,000 | |||||||||||
Holder [Member] | ||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||
Company paid cash consideration | $ 1,762,500 | |||||||||||
Accredited investors [Member] | ||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||
Aggregate principal amount | $ 1,650,000 | $ 1,045,000 | ||||||||||
Notes mature date | Jan. 5, 2019 | Feb. 18, 2018 | ||||||||||
Net proceeds received amount | $ 1,492,500 | $ 942,500 | ||||||||||
Description of debt conversion | The Company shall make payment to the investors in an amount equal to the sum of the then outstanding principal amount of the notes that the Company desires to prepay, multiplied by (a) 1.1, during the first 90 days after the execution of the note, or (b) 1.25, at any point thereafter. The notes are convertible into shares of the Company's common stock at a price per share equal to the lower of (i) $0.25 and (ii) a 15% discount to the price at which the Company next conducts an offering after the issuance date of the notes; provided, however, if any part of the principal amount of the notes remains unpaid after the maturity date, the conversion price will be equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company's common stock occurring during the fifteen days prior to the notes' maturity date. | The Company shall make payment to the investors in an amount equal to the sum of the then outstanding principal amount of the notes that the Company desires to prepay, multiplied by (a) 1.1, during the first 90 days after the execution of the note, or (b) 1.25, at any point thereafter. The notes are convertible into shares of the Company's common stock at a price per share equal to the lower of (i) $0.75 and (ii) a 25% discount to the price at which the Company next conducts an offering after the issuance date of the notes; provided, however, if any part of the principal amount of the notes remains unpaid at its maturity date, the conversion price will be equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company's common stock occurring during the fifteen days prior to the notes' maturity date. | ||||||||||
Holders [Member] | ||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||
Description of debt conversion | The Company made payment to the holders of the notes in an aggregate of (i) $510,937.50 in cash and (ii) pursuant to the right of conversion of the notes, an aggregate of 3,742,648 shares of the Company's common stock. |
Derivative Liabilities and Fa_3
Derivative Liabilities and Fair Value Measurements (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative liability | $ 9,493,307 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Derivative liability | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Derivative liability | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Derivative liability | $ 9,493,307 |
Derivative Liabilities and Fa_4
Derivative Liabilities and Fair Value Measurements (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
Balance | $ 9,493,307 | $ 1,301,138 |
Transfers in due to issuance of liability warrants in connection with sale of common stock | 1,003,870 | |
Transfers in due to issuance of convertible notes and warrants with embedded conversion and Reset options | 798,431 | |
Transfers out due to warrant exercise | (610,967) | |
Cumulative effect adjustment to reclassify fair value of derivative liabilities to retained earnings | (9,493,307) | |
Mark to market | 7,000,835 | |
Balance | 9,493,307 | |
Loss on change in warrant liabilities | $ (7,000,835) |
Derivative Liabilities and Fa_5
Derivative Liabilities and Fair Value Measurements (Details Textual) - USD ($) | Jan. 04, 2017 | Aug. 17, 2017 | Jul. 21, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative Liabilities and Fair Value Measurements (Textual) | |||||
Warrants issued to purchase shares of common stock | 2,090,000 | ||||
Estimated fair value of embedded derivatives | $ 9,493,307 | ||||
Estimated fair value of common stock | $ 0.601 | ||||
Fair value, Description | A 10% change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value. | ||||
Minimum [Member] | |||||
Derivative Liabilities and Fair Value Measurements (Textual) | |||||
Weighted average risk-free interest rate | 1.28% | ||||
Expected life | 1 year 16 days | ||||
Maximum [Member] | |||||
Derivative Liabilities and Fair Value Measurements (Textual) | |||||
Weighted average risk-free interest rate | 2.20% | ||||
Expected life | 4 years 7 months 24 days | ||||
Binomial Option Pricing Model [Member] | |||||
Derivative Liabilities and Fair Value Measurements (Textual) | |||||
Dividend yield | 0.00% | ||||
Expected volatility | 102.73% | ||||
Estimated fair value of common stock | $ 0.457 | ||||
Fair value of the embedded derivative | $ 798,429 | ||||
Issuance costs | 102,500 | ||||
Aggregate of embedded derivative | $ 900,929 | ||||
Binomial Option Pricing Model [Member] | Minimum [Member] | |||||
Derivative Liabilities and Fair Value Measurements (Textual) | |||||
Weighted average risk-free interest rate | 1.11% | ||||
Expected life | 5 months 27 days | ||||
Binomial Option Pricing Model [Member] | Maximum [Member] | |||||
Derivative Liabilities and Fair Value Measurements (Textual) | |||||
Weighted average risk-free interest rate | 1.78% | ||||
Expected life | 5 years | ||||
Warrant holders [Member] | |||||
Derivative Liabilities and Fair Value Measurements (Textual) | |||||
Warrants issued to purchase shares of common stock | 682,668 | ||||
Dividend yield | 0.00% | ||||
Expected volatility | 110.13% | ||||
Weighted average risk-free interest rate | 1.94% | ||||
Expected life | 4 years 2 months 12 days | ||||
Estimated fair value of common stock | $ 1.07 | ||||
Fair value of the embedded derivative | $ 610,967 | ||||
Warrants in connection with the sale of common stock [Member] | |||||
Derivative Liabilities and Fair Value Measurements (Textual) | |||||
Dividend yield | 0.00% | ||||
Expected volatility | 103.46% | ||||
Weighted average risk-free interest rate | 1.81% | ||||
Expected life | 5 years | ||||
Estimated fair value of common stock | $ 0.5687 | ||||
Fair value of the embedded derivative | $ 1,003,870 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Capital Stock (Textual) | ||
Blank Check preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Blank Check preferred stock, par value | $ 0.001 | $ 0.001 |
Blank Check preferred stock, shares issued | 0 | 0 |
Blank Check preferred Stock, shares outstanding | 0 | 0 |
Common stock, Par value | $ 0.001 | $ 0.001 |
Common stock, Shares authorized | 500,000,000 | 500,000,000 |
Common stock, Shares issued | 168,706,472 | 112,165,839 |
Common stock, Shares outstanding | 168,706,472 | 112,165,839 |
Shares of common stock issued | 14,362,500 | |
Shares of common stock recorded as retired | 1,790,000 | |
Shares of common stock for services | 13,594,000 | 22,740,898 |
Shares of common stock for services, value | $ 3,508,187 | $ 15,474,330 |
Common stock issued upon cashless exercise of common stock options, shares | 95,134 | 436,011 |
Common shares issued upon cashless exercise of common stock warrants, shares | 7,906,470 | 355,689 |
Common stock issued in settlement of convertible debt, shares | 3,742,716 | 1,081,000 |
Convertible debt principal amount | $ 636,250 | $ 108,100 |
Common stock issued upon exercise of common stock warrants, shares | 4,605,000 | 7,033,041 |
Cash proceeds of common stock | $ 3,304,000 | $ 2,676,644 |
Common stock issued upon exercise of common stock warrants, net proceeds | $ 637,230 | $ 4,759,762 |
Common stock issued for cash, shares | 13,700,000 | |
Common stock for cash proceeds | $ 2,740,000 | |
Shares issued for stock payable | 324,881 | |
Stock payable | $ 52,483 | |
Common stock conversion rights, description | Three former board members agreed to surrender an aggregate of 1,750,000 shares of the Company's common stock in exchange for five-year warrants to purchase up to 4,850,000 shares of the Company's common stock at an exercise price of $0.20 per share. As a result of the exchange in equity, the Company recorded stock-based compensation of $811,988. | |
Common stock to be issued | 80,000 | 12,572,500 |
Subscriptions Receivable | $ 564,000 | |
Common stock and warrants to purchase shares of common stock, Shares | 2,434,000 | |
Common stock and warrants to purchase shares of common stock | 2,676,444 | |
Shares of common stock to acquire DDDigtal | 2,926,830 | |
Shares of common stock to acquire Odava | 3,250,000 | |
Issuance of stock warrants | 80,000 | |
Cash proceeds from stock warrants | $ 6,000 |
Warrants (Details)
Warrants (Details) - Warrants [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Warrants Outstanding | 74,910,002 |
Warrants Exercisable | 74,970,002 |
0.01 - 0.25 [Member] | |
Exercise Price, Minimum | $ / shares | $ 0.01 |
Exercise Price, Maximum | $ / shares | $ 0.25 |
Warrants Outstanding | 69,194,998 |
Weighted Avg. Remaining Life | 4 years 1 month 20 days |
Warrants Exercisable | 69,254,998 |
0.26 - 0.50 [Member] | |
Exercise Price, Minimum | $ / shares | $ 0.26 |
Exercise Price, Maximum | $ / shares | $ 0.50 |
Warrants Outstanding | 565,002 |
Weighted Avg. Remaining Life | 2 years 5 months 1 day |
Warrants Exercisable | 565,002 |
0.51 - 0.75 [Member] | |
Exercise Price, Minimum | $ / shares | $ 0.51 |
Exercise Price, Maximum | $ / shares | $ 0.75 |
Warrants Outstanding | 50,000 |
Weighted Avg. Remaining Life | 1 year 3 months 8 days |
Warrants Exercisable | 50,000 |
0.76 -1.00 [Member] | |
Exercise Price, Minimum | $ / shares | $ 0.76 |
Exercise Price, Maximum | $ / shares | $ 1 |
Warrants Outstanding | 5,100,002 |
Weighted Avg. Remaining Life | 9 months |
Warrants Exercisable | 5,100,002 |
Warrants (Details 1)
Warrants (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares, Exercised | (95,134) | (436,011) | |
Warrant Activity [Member] | |||
Shares, Outstanding | 15,448,056 | 35,187,847 | |
Shares, Grants | 28,105,500 | 60,832,338 | |
Shares, Exercised | (7,728,209) | (20,184,508) | |
Shares, Forfeited/Cancelled | (637,500) | (925,675) | |
Shares, Vested and expected to vest | 74,910,002 | ||
Shares, Outstanding | 35,187,847 | 15,448,056 | 35,187,847 |
Shares, Exercisable | 74,910,002 | ||
Weighted-Average Exercise Price, Outstanding | $ 0.81 | $ 0.41 | |
Weighted-Average Exercise Price, Grants | 0.27 | 0.08 | |
Weighted-Average Exercise Price, Exercised | 0.68 | 0.21 | |
Weighted-Average Exercise Price, Forfeited/Cancelled | 0.62 | 1.89 | |
Weighted-Average Exercise Price, Vested and expected to vest | 0.14 | ||
Weighted-Average Exercise Price, Outstanding | 0.41 | $ 0.81 | $ 0.41 |
Weighted-Average Exercise Price, Exercisable | $ 0.14 | ||
Weighted-Average Remaining Contractual Term, Outstanding | 3 years 10 months 21 days | 2 years 3 months 19 days | 1 year 4 months 24 days |
Weighted-Average Remaining Contractual Term, Grants | 3 years 2 months 12 days | ||
Weighted-Average Remaining Contractual Term, Exercisable | 3 years 10 months 21 days | ||
Aggregate Intrinsic Value, Outstanding | $ 9,314,959 | $ 4,225,936 | |
Aggregate Intrinsic Value, Vested and expected to vest | |||
Aggregate Intrinsic Value, Exercisable |
Warrants (Details Textual)
Warrants (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Aug. 31, 2017 | Jul. 31, 2017 | Dec. 31, 2018 | Jul. 26, 2018 | Jul. 17, 2018 | Jul. 21, 2017 | |
Warrants (Textual) | |||||||||
Common stock price per share | $ 0.65 | ||||||||
Issuance of additional common stock | 14,362,500 | ||||||||
Warrant [Member] | |||||||||
Warrants (Textual) | |||||||||
Warrants to purchase shares of common stock | 250,000 | 6,600,000 | |||||||
Estimated fair value of operations | $ 86,483 | ||||||||
Risk-free interest | 2.49% | 2.18% | 0.47% | 0.47% | |||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||||
Volatility | 112.14% | 223.02% | 102.73% | 102.73% | |||||
Expected life | 5 years | 5 years | 5 years | 5 years | |||||
Warrants, description | In conjunction with the sale of the Company's common stock, the Company granted warrants to purchase up to 13,700,000 shares of the Company's common stock at an exercise price of $0.40 per share, exercisable through January 31, 2023. Due to price protection provisions, the exercise price of the warrants was adjusted to $0.20 on July 26, 2018. | The aggregate intrinsic value outstanding stock warrants was $0, based on warrants with an exercise price less than the Company's stock price of $0.059 as of December 31, 2018. | |||||||
Common stock purchase price, per share | $ 0.20 | $ 0.20 | |||||||
Common stock price per share | $ 0.40 | $ 0.65 | |||||||
Issuance of additional common stock | 10,250,000 | 2,394,000 | |||||||
Fair value options to purchase of warrants | $ 1,450,737 | $ 715,432 | $ 715,432 | ||||||
Sale of common stock | 8,521,000 | ||||||||
Warrants price per share, description | August and September convertible debt was reset from $0.65 and $0.50 per share, respectively, to $0.20. | ||||||||
Warrant [Member] | Three Former Board [Member] | |||||||||
Warrants (Textual) | |||||||||
Warrants to purchase shares of common stock | 4,850,000 | ||||||||
Warrants to purchase per share | $ 0.20 | ||||||||
Warrant [Member] | Issuance of Convertible Notes [Member] | |||||||||
Warrants (Textual) | |||||||||
Warrants to purchase shares of common stock | 2,090,000 | 2,090,000 | |||||||
Warrants to purchase per share | $ 0.50 | $ 0.50 | |||||||
Common Stock [Member] | |||||||||
Warrants (Textual) | |||||||||
Warrants to purchase per share | $ 0.20 | $ 0.075 | |||||||
Sale of common stock | 13,700,000 |
Stock Options (Details)
Stock Options (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Exercise Price | $ 0.5 | $ 0.76 | $ 0.52 |
Number of Options | 27,371,765 | 14,378,432 | 14,824,158 |
0.40 [Member] | |||
Exercise Price | $ 0.40 | ||
Number of Options | 1,000,000 | ||
Vesting Terms | Immediately | ||
0.20 [Member] | |||
Exercise Price | $ 0.20 | ||
Number of Options | 12,000,000 | ||
Vesting Terms | Immediately | ||
0.36 [Member] | |||
Exercise Price | $ 0.36 | ||
Number of Options | 250,000 | ||
Vesting Terms | Immediately |
Stock Options (Details 1)
Stock Options (Details 1) - Stock Options [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Options | 27,371,765 | 14,378,432 | 14,824,158 |
Remaining Life In Years | 8 years 8 months 2 days | 7 years 5 months 23 days | |
Number of Options Exercisable | 27,371,765 | ||
Exercise Price | $ 0.51 | $ 0.16 | |
0.01 - 0.25 [Member] | |||
Number of Options | 13,056,786 | ||
Remaining Life In Years | 9 years 2 months 27 days | ||
Number of Options Exercisable | 13,056,786 | ||
0.26 - 0.50 [Member] | |||
Number of Options | 1,939,631 | ||
Remaining Life In Years | 8 years 3 months 4 days | ||
Number of Options Exercisable | 1,939,631 | ||
0.51 - 0.75 [Member] | |||
Number of Options | 1,820,112 | ||
Remaining Life In Years | 7 years 8 months 5 days | ||
Number of Options Exercisable | 1,820,112 | ||
0.76 - 1.00 [Member] | |||
Number of Options | 9,926,072 | ||
Remaining Life In Years | 7 years 8 months 16 days | ||
Number of Options Exercisable | 9,926,072 | ||
1.01 - 2.00 [Member] | |||
Number of Options | 629,164 | ||
Remaining Life In Years | 7 years 7 months 10 days | ||
Number of Options Exercisable | 629,164 | ||
Minimum [Member] | 0.01 - 0.25 [Member] | |||
Exercise Price | $ 0.01 | ||
Minimum [Member] | 0.26 - 0.50 [Member] | |||
Exercise Price | 0.26 | ||
Minimum [Member] | 0.51 - 0.75 [Member] | |||
Exercise Price | 0.51 | ||
Minimum [Member] | 0.76 - 1.00 [Member] | |||
Exercise Price | 0.76 | ||
Minimum [Member] | 1.01 - 2.00 [Member] | |||
Exercise Price | 1.01 | ||
Maximum [Member] | 0.01 - 0.25 [Member] | |||
Exercise Price | 0.25 | ||
Maximum [Member] | 0.26 - 0.50 [Member] | |||
Exercise Price | 0.50 | ||
Maximum [Member] | 0.51 - 0.75 [Member] | |||
Exercise Price | 0.75 | ||
Maximum [Member] | 0.76 - 1.00 [Member] | |||
Exercise Price | 1 | ||
Maximum [Member] | 1.01 - 2.00 [Member] | |||
Exercise Price | $ 2 |
Stock Options (Details 2)
Stock Options (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares, Exercised | (95,134) | (436,011) | |
Stock Options [Member] | |||
Shares, Outstanding | 14,378,432 | 14,824,158 | |
Shares, Grants | 13,250,000 | 2,854,000 | |
Shares, Exercised | (256,667) | (436,011) | |
Shares, Forfeiture/Cancelled | (2,454,761) | ||
Shares, Outstanding | 27,371,765 | 14,378,432 | 14,824,158 |
Shares, Exercisable | 27,371,765 | ||
Weighted-Average Exercise Price, Outstanding | $ 0.76 | $ 0.52 | |
Weighted-Average Exercise Price, Grans | 0.22 | 0.5 | |
Weighted-Average Exercise Price, Exercised | 0.51 | 0.16 | |
Weighted-Average Exercise Price, Forfeiture/Canceled | 0.73 | ||
Weighted-Average Exercise Price, Outstanding | 0.5 | $ 0.76 | $ 0.52 |
Weighted-Average Exercise Price, Exercisable | $ 0.5 | ||
Weighted-Average Remaining Contractual Term, Outstanding | 8 years 8 months 2 days | 7 years 5 months 23 days | |
Weighted-Average Remaining Contractual Term, Grants | 8 years 7 months 6 days | ||
Weighted-Average Remaining Contractual Term, Exercised | 7 years 9 months 18 days | ||
Weighted-Average Remaining Contractual Term, Forfeiture/Cancelled | 7 years 9 months 18 days | ||
Weighted-Average Remaining Contractual Term, Exercisable | 8 years 8 months 2 days | ||
Aggregate Intrinsic Value, Outstanding | $ 771,359 | $ 4,566,717 | |
Aggregate Intrinsic Value, Exercisable |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options (Textual) | |||
Number of shares reserved for issuance, description | The Company had granted an aggregate of 60,600,000 securities under the Plans, with 3,900,000 shares available for future issuances. | ||
Expected life, description | Expected life of ten years and will be charged to operations over the vesting terms of the options. | Expected life of five to ten years and will be charged to operations over the vesting terms of the options. | |
Options to purchase of common stock | 27,371,765 | 14,377,570 | |
Fair value of all options, vested | $ 0 | $ 5,821,631 | |
Unrecognized compensation expense | $ 0 | ||
Plan [Member] | |||
Stock Options (Textual) | |||
Dividend yield | 0.00% | 0.00% | |
Expected life | 10 years | 10 years | |
Options to purchase of common stock | 13,250,000 | 2,854,000 | |
Fair value options to purchase of common stock | $ 2,146,193 | $ 2,014,591 | |
Aggregate intrinsic value outstanding stock options | $ 0 | ||
Stock price | $ 0.059 | ||
Stock Options [Member] | |||
Stock Options (Textual) | |||
Aggregate intrinsic value outstanding stock options | $ 771,359 | $ 4,566,717 | |
Options outstanding | 27,371,765 | 14,378,432 | 14,824,158 |
Minimum [Member] | Plan [Member] | |||
Stock Options (Textual) | |||
Risk-free interest | 2.78% | 1.81% | |
Volatility | 112.67% | 103.66% | |
Maximum [Member] | Plan [Member] | |||
Stock Options (Textual) | |||
Risk-free interest | 2.98% | 2.35% | |
Volatility | 116.28% | 110.16% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Non-Current deferred tax asset: | ||
Net operating loss carry-forwards | $ 14,503,490 | $ 11,090,000 |
Valuation allowance | (14,503,490) | (11,090,000) |
Net non-current deferred tax asset |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal corporate income tax rate, description | U.S. federal corporate income tax rate from 35% to 21%. | |
Net operating loss carry forward | $ 55,362,071 | |
Operating loss carry forward expiring | Dec. 31, 2033 | |
Valuation allowance | $ 14,503,490 | $ 11,090,000 |
Payroll tax liabilities | $ 2,992,023 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2018 | Jul. 21, 2017 | Dec. 31, 2017 | |
Private placement of securities | $ 10,000 | ||
Number of securities | 20,000 | ||
Common stock and warrants to purchase | 20,000 | ||
Share price | $ 0.65 | ||
Warrant exercise price decreased | $ 0.075 | ||
Private Placement [Member] | |||
Number of warrants issued | 173,333 | 65,000 | |
Warrant exercise price decreased | $ 0.20 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 4 Months Ended | 12 Months Ended | |
Apr. 15, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Subsequent Events (Textual) | |||
MassRoots issued shares of common stock | 7,906,470 | 355,689 | |
Common stock issued | 13,594,000 | 22,740,898 | |
Issued for settlement of convertible debt | $ 528,650 | ||
Subsequent Events [Member] | |||
Subsequent Events (Textual) | |||
MassRoots issued shares of common stock | 80,000 | ||
Exercise of warrants for proceeds | 1,555,160 | ||
Proceeds from issuance of warrants | $ 116,637 | ||
Subsequent Events [Member] | Issuance One [Member] | |||
Subsequent Events (Textual) | |||
MassRoots issued shares of common stock | 8,906,275 | ||
MassRoots recorded shares of common stock | 1,196,078 | ||
Common stock issued | 250,000 | ||
Issued for settlement of convertible debt | $ 392,580 | ||
Subsequent Events [Member] | Issuance Two [Member] | |||
Subsequent Events (Textual) | |||
MassRoots issued shares of common stock | 448,102 | ||
Exercise of warrants for proceeds | 2,750,000 | ||
Subsequent Events [Member] | Interest expense [Member] | |||
Subsequent Events (Textual) | |||
MassRoots issued shares of common stock | 1,050,000 | ||
Subsequent Events [Member] | Issuance Four [Member] | |||
Subsequent Events (Textual) | |||
Granted options of common stock | 250,000 | ||
Exercise price | $ 0.075 | ||
Subsequent Events [Member] | Issuance Five [Member] | |||
Subsequent Events (Textual) | |||
Common stock issued | 2,950,000 |