Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 13, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Virtual Crypto Technologies, Inc. | |
Entity Central Index Key | 797,542 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 63,727,843 | |
Trading Symbol | VRCP | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | ||
Current assets: | ||||
Cash and cash equivalents | $ 724,107 | $ 2,959 | ||
Other current assets | 68,114 | 12,222 | ||
Short term investments | 42,133 | |||
Total current assets | 834,354 | 15,181 | ||
Restricted cash | 59 | |||
Property and Equipment | 14,290 | |||
Total assets | 834,354 | 29,530 | ||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 34,866 | 445,653 | ||
Accounts payable - related party | 82,331 | |||
Deferred revenues (Note 2) | 100,000 | |||
Employee payable | 101,396 | 98,476 | ||
Accrued interest payable (Note 3) | 67,846 | |||
Short term portion of convertible notes (Note 3) | 683,917 | 317,635 | ||
Liabilities held for sale(**) (Note 6) | [1] | 486,045 | ||
Total current liabilities | 1,406,224 | 1,011,941 | ||
Convertible notes (Note 3) | 606,165 | |||
Total liabilities | 1,406,224 | 1,618,106 | ||
Stockholders' deficit | ||||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none and 529 Series A shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | [2] | |||
Common stock, $0.0001 par value; 490,000,000 shares authorized; 63,727,843 and 22,543,008 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively (Note 4) | 6,373 | 2,255 | ||
Accumulated other comprehensive income | (19,337) | (19,337) | ||
Additional paid-in capital (Note 4) | 40,646,690 | 14,968,925 | ||
Receipt on account of shares (Note 4) | 80,000 | |||
Accumulated deficit | (41,205,596) | (16,620,419) | ||
Total stockholders' deficit | (571,870) | (1,588,576) | ||
Total liabilities and stockholders' deficit | $ 834,354 | $ 29,530 | ||
[1] | Includes $82,331 payable to a related party. | |||
[2] | less than $1 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2018 | |
Statement of Financial Position [Abstract] | ||
Payable to related parties | $ 82,331 | |
Stock conversion, Description | less than $1 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Series A preferred stock, shares issued | 529 | |
Series A preferred stock, shares outstanding | 529 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 490,000,000 | 490,000,000 |
Common stock, shares issued | 22,543,008 | 63,727,843 |
Common stock, shares outstanding | 22,543,008 | 63,727,843 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Expenses: | ||||
Research and development | 107,971 | 738,936 | ||
General and administrative | 175,735 | 30,885 | 1,596,533 | 583,911 |
Total operating expenses | 283,706 | 30,885 | 2,335,469 | 583,911 |
Loss from operations | (283,706) | (30,885) | (2,335,469) | (583,911) |
Finance income (expense), net | (259,866) | 75,000 | (22,249,708) | (240,354) |
Net income (loss) from continuing operations available to shareholders of the company | (543,572) | 44,115 | (24,585,177) | (824,265) |
Loss from discontinued operations (Note 6) available to shareholders of the company | (101,768) | (591,724) | ||
Net loss from continuing operations attributable to shareholders of the company | (543,572) | (57,654) | (24,585,177) | (1,415,989) |
Net loss attributable to shareholders of preferred stock | (5,216) | (47,691) | ||
Net loss from continuing operations | $ (543,572) | $ (52,438) | $ (24,585,177) | $ (1,368,298) |
Basic and diluted net income (loss) per share: | ||||
From continuing operations | $ (0.01) | $ 0.002 | $ (0.44) | $ (0.04) |
From discontinued operations | (0.01) | (0.03) | ||
Total basic and diluted net loss per share | $ (0.01) | $ (0.003) | $ (0.44) | $ (0.07) |
Weighted average shares outstanding - basic and diluted | 63,727,843 | 22,543,008 | 56,235,127 | 21,523,127 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Receipt on Account of Shares [Member] | Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total | |
Balance at Dec. 31, 2016 | $ 1,994 | $ 13,826,957 | $ (19,337) | $ (15,046,513) | $ (1,236,899) | |||
Balance, shares at Dec. 31, 2016 | 19,931,478 | |||||||
Common stock issued for cash | $ 132 | 526,081 | 526,213 | |||||
Common stock issued for cash, shares | 1,315,563 | |||||||
Cashless exercise of Warrants | $ 110 | (110) | ||||||
Cashless exercise of Warrants, shares | 1,096,395 | |||||||
Conversion of Convertible Note to shares | $ 7 | 10,393 | 10,400 | |||||
Conversion of Convertible Note to shares, shares | 74,572 | |||||||
Issuance of Common Shares, value | $ 12 | (12) | ||||||
Issuance of Common Shares, shares | 125,000 | |||||||
Issuance of Preferred Stock value | [1] | 529,000 | 529,000 | |||||
Issuance of Preferred Stock, shares | 529 | |||||||
Receipt on Account of Shares | 80,000 | 80,000 | ||||||
Receipt on Account of Shares, shares | ||||||||
Share based compensation | 76,616 | $ 76,616 | ||||||
Exercise of stock options, shares | ||||||||
Net loss for the period | (1,573,906) | $ (1,573,906) | ||||||
Balance at Dec. 31, 2017 | $ 2,255 | 14,968,925 | 80,000 | (19,337) | (16,620,419) | (1,588,576) | ||
Balance, shares at Dec. 31, 2017 | 22,543,008 | 529 | ||||||
Cashless exercise of Warrants | ||||||||
Share based compensation | 76,616 | |||||||
Common stock and warrants issued for cash | $ 2,770 | 1,938,180 | 1,940,950 | |||||
Common stock and warrants issued for cash, shares | 27,699,107 | |||||||
Common stock issued for services | $ 433 | 1,003,866 | 1,004,299 | |||||
Common stock issued for services, shares | 4,329,999 | |||||||
Warrants issued for services | 39,845 | 39,845 | ||||||
Exercise of stock options | $ 6 | 57 | $ 63 | |||||
Exercise of stock options, shares | 62,500 | 62,500 | ||||||
Issuance of new convertible note with a beneficial conversion feature | 100,000 | $ 100,000 | ||||||
Partial conversion of new convertible notes to shares | $ 30 | 2,970 | 3,000 | |||||
Partial conversion of new convertible notes to shares, shares | 300,000 | |||||||
Change is the terms of Convertible Note | 22,581,508 | 22,581,508 | ||||||
Partial conversion of convertible note to shares, value | $ 822 | 81,396 | 82,218 | |||||
Partial conversion of convertible note to shares, shares | 8,221,800 | |||||||
Cancellation of Preferred Shares | (150,000) | (150,000) | ||||||
Cancellation of Preferred Shares, shares | (529) | |||||||
Issuance of Shares in respect of proceeds received during 2017 | $ 57 | 79,943 | (80,000) | |||||
Issuance of Shares in respect of proceeds received during 2017, shares | 571,429 | |||||||
Net loss for the period | (24,585,177) | (24,585,177) | ||||||
Balance at Sep. 30, 2018 | $ 6,373 | $ 40,646,690 | $ (19,337) | $ (41,205,596) | $ (571,870) | |||
Balance, shares at Sep. 30, 2018 | 63,727,843 | |||||||
[1] | less than $1 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Parenthetical) | 12 Months Ended |
Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |
Stock conversion, Description | less than $1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities: | ||
Net loss | $ (24,585,177) | $ (1,368,298) |
Depreciation expense | 14,290 | 11,063 |
Amortization of debt discount | 769,134 | 360,599 |
loss from short-term investment | 7,867 | |
Shares issued for services | 1,044,144 | |
Finance loss arising from change in terms of convertible notes | 21,472,897 | |
Change in derivative liability | (336,272) | |
Non cash finance, general and administrative expenses arising from settlement with debt and warrant holders | 659,960 | |
Employee option expenses | 72,495 | |
Decrease in net liabilities for sale | (49,729) | |
Increase in accounts payable and accrued expenses | 13,032 | 121,939 |
Decrease in amounts due from related party | (64,372) | |
Increase in deferred revenues | 50,000 | |
Increase in accrued interest | (3,267) | |
Increase in other receivables | (56,323) | (21,875) |
Net cash used in continuing operating activities | (1,319,865) | (615,719) |
Investing Activities: | ||
Decrease in restricted cash | 11,868 | |
Purchase of fixed assets | (3,438) | |
Net cash used in investing activities | 8,430 | |
Financing Activities: | ||
Proceeds from sale of common stock and warrants (net of issuance expenses) | 1,940,950 | 526,232 |
Exercise of options | 63 | |
Receipt on account of stock | 80,000 | |
Issuance of convertible note | 100,000 | |
Net cash provided by financing activities | 2,041,013 | 606,232 |
Net increase (decrease) in cash | 721,148 | (1,057) |
Cash and cash equivalents - beginning of period | 2,959 | 4,486 |
Cash and cash equivalents - end of period | 724,107 | 3,429 |
Non-cash transactions: | ||
Increase in deferred revenues against short-term investment | 50,000 | |
Issuance of shares in respect of proceeds received during 2017 | (80,000) | |
Common stock issued pursuant to convertible note | 85,218 | |
Issuance of Preference Shares in connection with settlement with debt and warrant holders | 529,000 | |
Settlement agreement with debt and warrant holders accounted for as extinguishment and re issuance of debt: | ||
Extinguishment of convertible note | (470,200) | |
Re issuance of convertible note | $ 606,160 |
The Company and Significant Acc
The Company and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
The Company and Significant Accounting Policies | Note 1. The Company and Significant Accounting Policies. Organizational Background: Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Applications Corp. (the “Company,” “we,” “us” or “our”), was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International, Inc. (“Zaxis”). On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc. and the Company was reincorporated in Delaware under the name of Zaxis International, Inc. On December 30, 2014, Zaxis entered into an agreement with Emerald Medical Applications Ltd., a private limited liability company organized under the laws of the State of Israel (“Emerald Israel”). On March 16, 2015, Zaxis and Emerald Israel executed the Share Exchange Agreement, which closed on July 14, 2015 (the “Share Exchange Agreement”) and Emerald Israel became the Company’s wholly-owned subsidiary. Emerald Israel was engaged in the business of developing Emerald Israel’s DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare software for use in derma imaging and analytics for the detection of skin cancer. During the fourth quarter of 2015, in connection with the Share Exchange Agreement, the Company changed its name to Emerald Medical Applications Corp. The Share Exchange Agreement was accounted for as a reverse recapitalization. As a result, the historical financial statements of the Company were replaced with the historical financial statements of Emerald Israel. Reference is made to the disclosure under “ Cessation of Former Operations” New Business Developments On January 17, 2018, the Company formed a new wholly-owned subsidiary in Israel, Virtual Crypto Technologies Ltd. (the “New Subsidiary”), to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers and/or mobile devices. Reference is made to the disclosure under “Item 2. Management’s Discussion and Analysis and Results of Operations” located below in this Quarterly Report on Form 10-Q. Cessation of Former Operations On January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary, Emerald Israel, and on May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and nominated an Israeli advocate (attorney) as a special executor for Emerald Israel. To the extent that the liquidation procedure yields proceeds in excess of Emerald Israel’s current obligations, the first $250,000 of such excess will be distributed to the previous stockholders of the Company’s preferred stock (see Note 3) and any excess thereafter, to the Company. However, based on the Company’s current best estimate, it is not anticipated that any such excess proceeds will be achieved. See Note 6. Discontinued Operations. Going Concern The Company has incurred significant operating losses and negative cash flows from operating activities in relation to its DermaCompare operations, since inception. While the Company raised approximately $2 million in the first nine months of 2018 to fund the operations of its New Subsidiary, the Company will require additional capital resources in order to support the commercialization of the New Subsidiary’s technology and operations and maintain its research and development activities related to the New Subsidiary’s technology. The Company is addressing its liquidity needs by seeking additional funding from public and/or private sources. There are no assurances, however, that the Company will be able to obtain an adequate level of financial resources that are required for the Company’s short and long-term requirements, or at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Basis of Presentation and Significant Accounting Policies: The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly- owned subsidiary, the New Subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q. The financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the period. However, these results are not necessarily indicative of results for any other interim period or for the full fiscal year. The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates. Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on April 17, 2018 (the “Annual Report”). Recent Accounting Pronouncements The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on its financial statements. Following are newly issued standards or material updates to the Company’s previous assessments from the Annual Report: In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under GAAP. Under the new model, recognition of revenue occurs when a customer obtains control of the promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective with respect to the Company beginning in the first quarter of 2018; early adoption is prohibited. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. As the Company has not incurred revenues to date, it does not expect the new standard to have a material impact on its consolidated financial statements. In February 2016, the FASB issued a new lease accounting standard requiring the recognition of lease assets and liabilities on the balance sheet. This standard is effective beginning in the first quarter of 2019; early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. As the Company currently is not a party to any leasing arrangement, it does not expect the new standard to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” With respect to assets measured at amortized cost, such as held-to-maturity assets, the update requires presentation of the amortized cost net of a credit loss allowance. The update eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate can now reflect an entity’s current estimate of all future expected credit losses as opposed to the previous standard, when an entity only considered past events and current conditions. With respect to available for sale debt securities, the update requires that credit losses be presented as an allowance rather than as a write-down. The update is effective beginning in the first quarter of 2020; early adoption is permitted. As the Company has insignificant receivable balances, the Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, which includes Part I “Accounting for Certain Financial Instruments with Down Round Features” and Part II “Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests With a Scope Exception”. The ASU makes limited changes to the Board’s guidance on classifying certain financial instruments as either liabilities or equity. The ASU’s objective is to improve (1) the accounting for instruments with “down-round” provisions and (2) the readability of the guidance in ASC 480 on distinguishing liabilities from equity by replacing the indefinite deferral of certain pending content with scope exceptions. This standard is effective beginning in the first quarter of 2019; early adoption is permitted. The Company early adopted the standard, retrospectively, for each prior period presented in the financial statements included elsewhere herein. Accounting Standard Update 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued Accounting Standard Update 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07). ASU 2018-07 aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 will be measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the goods has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity-classified nonemployee share-based payment awards will be measured at the grant date. With respect to awards with performance conditions, ASU 2018-07 concludes that, consistent with the accounting for employee share-based payment awards, an entity will consider the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. ASU 2018-07 also requires that the classification of equity classified nonemployee share-based payment awards will continue to be subject to the requirements of Topic 718 unless the award was modified after the goods has been delivered, the service has been rendered, any other conditions necessary to earn the right to benefit from the instruments have been satisfied, and the nonemployee is no longer providing goods or services. This eliminates the requirement to reassess classification of such awards upon vesting. In addition, ASU 2018-07 includes certain Non-public Entity-Specific Amendments. ASU 2018-07 is effective for Public entities in annual periods beginning after 15 December 2018, and interim periods within those years (first quarter of 2019 for the Company). Early adoption is permitted, including in an interim period, but not before an entity adopts the new revenue guidance (which was adopted by the Company in its interim financial statements for 2018). An entity should only remeasure liability-classified awards that have not been settled by the date of adoption and equity-classified awards for which a measurement date has not been established through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Upon transition, the entity is required to measure these nonemployee awards at fair value as of the adoption date. The Company is evaluating the impact of ASU 2018-07 on its financial statements. |
Deferred Revenues
Deferred Revenues | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred Revenues | Note 2. Deferred Revenues. On January 24, 2018, the Company’s New Subsidiary entered into a binding term sheet (the “Chiron Term Sheet”) with Chiron Refineries Ltd. (“Chiron”), a public company listed on the Tel-Aviv Stock Exchange (TASE: CHR). Pursuant to the Chiron Term Sheet, (i) Virtual Crypto Israel, the New Subsidiary, shall appoint a wholly-owned subsidiary of Chiron, under the laws of the Turkish Republic of Northern Cyprus, as the exclusive distributor of Virtual Crypto Israel’s Products in the territory of the Republic of Turkey, including the territory of Turkish Republic of Northern Cyprus (the “Territory”); and (ii) such distributor shall have the right to appoint sub-distributors within the Territory. The appointment of the Chiron subsidiary as distributor is subject to the payment by the distributor of $250,000 to the Company as an appointment fee, of which $150,000 shall be deemed an advance payment by the distributor made on account of future purchases of our Products. During the nine -month period ended September 30, 2018, the Company received $100,000 as an appointment fee, which has been recorded as deferred revenues on the balance sheet. $50,000 was received in cash and $50,000 was received in the form of 380,143 shares of Chiron (the “Chiron Shares”). The value of the Chiron Shares at the date of issuance was $50,000 and was recorded as short-term investments in the condensed consolidated balance sheet. Any changes in fair value are recoded to finance expenses in the condensed consolidated statements of operations and comprehensive loss. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 3. Notes Payable. Notes payable and accrued interest as of September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 December 31, 2017 Principle $ 898,594 $ 920,484 Discount (214,677 ) - Accrued interest 71,162 Total 683,917 991,646 Issuances of convertibles notes during the nine months of 2018 From January 16, 2018 through January 23, 2018, the Company received from certain third-party accredited investors $100,000 in consideration for the issuance of convertible promissory notes (the “Notes”) as follows: (i) interest at the rate of 1% per annum; (ii) a conversion price of $0.01 per share of common stock; and (iii) repayable through to January 15, 2019, without penalty. The beneficial conversion feature was valued at $100,000, which resulted in a $100,000 discount recorded as a reduction of debt and an increase to additional paid in capital in the Statement of Stockholders’ Deficit. The discount is amortized to finance expenses in the condensed consolidated statements of operations and Comprehensive Loss over the term of the Notes. On January 23, 2018, $3,000 of the Notes was converted at $0.01 per share into 300,000 shares, based upon the Notes conversion price of $0.01 per share of common stock. Transfer and change of ownership of convertible notes during the nine months ended September 30, 2018 On January 24, 2018, Alpha Anstalt Capital (“Alpha”), Chi Squared Capital (“Chi”), Firstfire Global Opportunities Fund LTC, Goldmed Ltd, IlanMalca and Maz Partners, former holders of the Company’s convertible notes, sold their convertible notes previously issued by the Company in the aggregate amount of $958,611 (the “January 2018 Convertible Notes”) to certain new third-party accredited investors (the “New Investors”) and, in connection therewith, the Company and the New Investors agreed to: (i) amend the conversion price of the January 2018 Convertible Notes from $0.014 to $0.01; (ii) cancel the Class A warrants and Class B warrants issued together with the January 2018 Convertible Notes (see Note 4. Stockholders’ Equity for accounting treatment of the cancelled warrants); (iii) amend the interest rate from 8% to 1% per annum under the January 2018 Convertible Notes; (iv) extend the repayment/maturity date on the January 2018 Convertible Notes to January 23, 2019; and (iv) cancel the options granted to Alpha and Chi in July 2016 (the “Alpha-Chi Options”). The change in terms of the January 2018 Convertible Notes, including the cancellation of the above-referenced warrants, was accounted for as an extinguishment of the convertible notes and the issuance of new convertible notes. The Company recorded a finance expense in the amount of $21,622,897 in the Statement of Operations and Comprehensive Loss and an increase to Additional Paid-in Capital in the Statement of Stockholders’ Deficit of $22.6 million as a result of the transaction. The Company further concluded that the post-amended January 2018 Convertible Notes contain a beneficial conversion feature equal to the par value of the January 2018 Convertible Notes ($958,611) and accordingly, recorded a discount on the January 2018 Convertible Notes, to be amortized to finance expense in the Statement of Comprehensive Loss over the term of the January 2018 Convertible Notes. On January 24, 2018, $73,000 of the January 2018 Convertible Notes was converted, at the adjusted conversion price of $0.01 per share, into 7,300,000 shares of the Company’s common stock and, on March 19, 2018, a further $9,218 of the January 2018 Convertible Notes were converted, at the adjusted conversion price of $0.01 per share, into 921,800 shares of the Company’s common stock. Non-convertible note On July 8, 2014, the Company issued a convertible note to Axel Springer Plug & Play Accelerator GmbH in the amount of $29,719. Accrued interest as December 31, 2017 amounted to $3,316. Pursuant to terms of the original agreement, as of September 30, 2018 and December 31, 2017, the convertible note is no longer convertible. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 4. Stockholders’ Equity. Shares of the Company’s common stock confer upon their holders the right to receive notice to participate and vote in general meetings of shareholders of the Company, the right to receive dividends, if declared, and the right to receive a distribution of any surplus of assets upon liquidation of the Company. Shares of the Company’s preferred stock confer upon their holders the right to receive dividends when paid to holders of common stock of the Company on an as-converted basis, and the right to receive a distribution of any surplus of assets upon liquidation of the Company before any distribution or payment shall be made to the holders of any common stock. Changes in Shares of Preferred Stock During the Nine Months Ended September 30, 2018 On January 4, 2018, the Company and Emerald Israel entered into an agreement with Alpha Capital Ansalt and Chi Squared Inc. (collectively, the “Preferred Shareholders”), pursuant to which the Preferred Shareholders agreed to cancel their shares of Series A Preferred Convertible Stock in return for the receipt of up to $250,000 of proceeds from the liquidation of Emerald Israel, to the extent that such liquidation yields net positive proceeds (“Excess Net Assets”), as discussed under “ Cessation of Former Operations” Issuances of Shares of Common Stock During the Nine Months ended September 30, 2018 Between January 2018 and April 2018, the Company received the aggregate amount of $1,940,950 in subscription proceeds from certain “accredited investors” in consideration for the issuance of 27,697,855 units (the “Units”) at an offering price of $0.07 per Unit (the “$0.07 Unit Offering”), each consisting of: (i) one (1) share of the Company’s common stock (the “Shares”); (ii) one (1) common stock purchase warrant exercisable for a period of twelve months to purchase one additional Share at an exercise price of $0.14 per Share (the “Class F Warrants”); and (iii) one (1) common stock purchase warrant exercisable for a period of twelve months to purchase one additional Share at an exercise price of $0.28 per Share (the “Class G Warrants”). On February 8, 2018, the Company issued 571,429 units to two accredited investors in consideration for subscription proceeds of $80,000 which proceeds were received in August 2017 (the “August 2017 Unit Financing”). Each Unit in the August 2017 Unit Financing consisted of: (i) one (i) Share; (ii) one (1) Class A Warrant exercisable for a period of twelve months to purchase one (1) additional Share at a price of $0.14 per Share; and (iii) one (1) Class B Warrant exercisable for a period of twenty-four months to purchase one (1) additional Share at a price of $0.14 per Share. The offer and sale of the above-referenced Units, without registration under the Securities Act of 1933, as amended (the “Act”), was made in reliance upon the exemption provided by Section 4(2) of the Act and/or Regulation S and/or Regulation D promulgated by the SEC under the Act. On March 12, 2018, the Company issued a total of 3,629,999 restricted Shares to certain consultants, who were accredited investors, in connection with services rendered during the first quarter of 2018, which Shares were valued at $892,300, based on the closing Share price on the day prior to the issuance date. The above-mentioned amount was recorded as a charge to the Company’s Statement of Comprehensive Loss, with a corresponding credit to Additional Paid in Capital in the Company’s Condensed Consolidated Statement of Changes in Stockholders’ Deficit. On March 20, 2018, the Company issued a total of 62,500 restricted Shares in consideration for the exercise of a stock option at an exercise price of $0.01 per Share, which options were granted in connection with services rendered in October 2016. The Company recorded the proceeds on the exercise of the stock option in Additional Paid-in Capital in its Condensed Consolidated Statement of Changes in Stockholders’ Deficit. On April 20, 2018, the Company issued a total of 700,000 restricted Shares to certain consultants, who were accredited investors, in connection with services rendered during the second quarter of 2018, which Shares were valued at $112,000, based on the closing share price on the day prior to each of the issuances. The above-mentioned amount was recorded as a charge to the Company’s Statement of Comprehensive Loss, with a corresponding credit to Additional Paid in Capital in the Company’s Statement of Changes in Stockholders’ Equity. The issuance of the above-referenced Shares to consultants, without registration under the Act was made in reliance upon the exemption provided by Section 4(2) of the Act and/or Regulation S and/or Regulation D promulgated by the SEC under the Act. As described in Note 3. Notes Payable, the Company issued a total of 8,521,800 Shares in connection with the conversion on January 23, 2018 of $3,000 of a Note and in connection with the conversion on January 24, 2018 of $73,000 and $9,218 of the January 2018 Convertible Notes. Warrants As described in Note 3. Notes Payable, the Company’s 6,334,626 Class A Warrants and 5,400,478 Class B Warrants were cancelled during the first quarter of 2018, in connection with the change in terms of the convertible notes as discussed under “ Transfer and change of ownership of convertible notes during the nine months ended September 30, 2018 As described above in this Note 4. Stockholders’ Equity, the Company issued 27,697,855 Class F and 27,697,855, Class G Warrants in connection with the $0.07 Unit Offering. On January 26, 2018, the Company signed a two-year consulting agreement with Maz Partners, pursuant to which it will to provide investment and corporate finance advice to the Company in consideration for 200,000 Class H Warrants. Each Class H Warrant is exercisable through January 2020 to purchase one (1) Share at an exercise price of $0.14 per Share. The fair value of the Class H Warrants at the issuance date was $39,845 and was charged to General and administration expenses in the Statement of Comprehensive Loss with a corresponding credit to Additional Paid-in Capital in the Statement of Changes in Stockholders’ Deficit. As described above in this Note 4. Stockholders’ Equity, on February 8, 2018, the Company issued 571,429 Class B warrants and 571,429 Class B warrants in respect of the August 2017 Financing. The following table summarizes information of outstanding warrants issued to investors and consultants in exchange for their services as of September 30, 2018: Warrants Warrant Term Exercise Price Exercisable Investors – Class A Warrants 571,429 August 2019 $ 0.14 571,429 Investors – Class B Warrants 571,429 August 2019 $ 0.14 571,429 Alimi Ahmed - Class E Warrants 900,000 (1 ) $ 0.0001 900,000 Investors – Class F Warrants 27,692,855 January 2019 -April 2019 $ 0.14 27,697,855 Investors – Class G Warrants 27,692,855 January 2019 -April 2019 $ 0.28 27,697,855 Investors - Class H Warrants 200,000 January 2020 $ 0.14 200,000 (1) During 2015, a total of 2,700,000 Class E Warrants were issued by the Company to Lior Wayn pursuant to the terms of the Share Exchange Agreement and were exercisable in three equal tranches of 900,000 Shares each (the “Tranches”) at an exercise price of $0.0001 per share of the Company’s common stock, subject to and within 45 days of the Company achieving the milestones defined in the Share Exchange Agreement. On December 16, 2016, the Company terminated Lior Wayn’s employment agreements with the Company and Emerald Israel, and removed him as an executive officer and director. During 2017, Mr. Wayn transferred, sold and assigned his 5,212,878 shares of the Company’s common stock and 900,000 Class E Warrants that were fully-vested to an entity controlled by Mr. Alimi Ahmed, then a member of the Company’s Board of Directors. Effective as of December 31, 2016, the remaining 1,800,000 Class E Warrants that had been issued to Mr. Wayn were canceled. Employee Stock Options A summary of the Company’s activity related to issuances of options to the Company’s employees, executives, directors and consultants and related information for the nine months ended September 30, 2018 and the fiscal year ended December 31, 2017 is as follows: For the nine-month period ended September 30, 2018 For the year ended December 31, 2017 Amount of options Weighted average exercise price Aggregate intrinsic value Amount of options Weighted average exercise price Aggregate intrinsic value $ $ $ $ Outstanding at beginning of year 62,500 0.01 4,193,397 0.11 Granted Exercised (62,500 ) 0.01 - - Cancelled - - (4,130,397 ) (0.11 ) Outstanding at the end of period - - 62,500 0.01 Vested and expected-to-vest at end of period - - - 62,500 0.01 - The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair market value of the Company’s shares of common stock on September 30, 2018 and December 31, 2017, respectively, and the exercise price, multiplied by the number of in-the-money stock options on those dates) that would have been received by the stock option holders had all stock option holders exercised their stock options on those dates. The stock options outstanding as of September 30, 2018, and December 31, 2017, have been separated into exercise prices, as follows: Exercise price Stock options outstanding as of Weighted average remaining contractual life – years as of Stock options exercisable as of September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 0.01 - 62,500 - 8.25 - 62,500 0.01 - 62,500 - 8.25 - 62,500 Compensation expense recorded by the Company in respect of its stock-based employee compensation awards in accordance with ASC 718-10 was nil for each of the three- and nine -month periods ended September 30, 2018 (and for three- and nine -month periods ended September 30, 2017, was $58,650 and $117,301, respectively). |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 5. Related Party Transactions. Other than transactions and balances related to cash and share based compensation to the Company’s officers and directors, the issuances of convertible debt and warrants to Alpha Capital Ansalt and as otherwise set forth herein, the Company did not have any transactions and balances with related parties and executive officers during the nine months ended September 30, 2018 and 2017. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 6. Discontinued Operations. On January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary, Emerald Israel, and on May 2, 2018, the District Court of Lod, Israel (the “District Court”) issued a winding-up order for Emerald Israel and nominated an Israeli advocate (attorney) as a special executor to Emerald Israel. To the extent that the liquidation procedure yield proceeds in excess of Emerald Israel’s current obligations, the first $250,000 will be distributed to the previous shareholders of the Company’s preferred stock (see Note 3. Notes Payable) and any excess thereafter, to the Company. However, based on the Company’s current best estimate, it is not anticipated that such excess proceeds will be achieved. As such, financial results of Emerald Israel are presented as net loss from discontinued operations on the Consolidated Statements of Comprehensive Loss for the three and nine-month periods ended September 30, 2018 and 2017; and assets and liabilities of Emerald Israel to be disposed of are presented as Assets held for sale and Liabilities held for sale on the Consolidated Balance Sheet as of September 30, 2018. |
The Company and Significant A_2
The Company and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Organizational Background | Organizational Background: Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Applications Corp. (the “Company,” “we,” “us” or “our”), was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International, Inc. (“Zaxis”). On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc. and the Company was reincorporated in Delaware under the name of Zaxis International, Inc. On December 30, 2014, Zaxis entered into an agreement with Emerald Medical Applications Ltd., a private limited liability company organized under the laws of the State of Israel (“Emerald Israel”). On March 16, 2015, Zaxis and Emerald Israel executed the Share Exchange Agreement, which closed on July 14, 2015 (the “Share Exchange Agreement”) and Emerald Israel became the Company’s wholly-owned subsidiary. Emerald Israel was engaged in the business of developing Emerald Israel’s DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare software for use in derma imaging and analytics for the detection of skin cancer. During the fourth quarter of 2015, in connection with the Share Exchange Agreement, the Company changed its name to Emerald Medical Applications Corp. The Share Exchange Agreement was accounted for as a reverse recapitalization. As a result, the historical financial statements of the Company were replaced with the historical financial statements of Emerald Israel. Reference is made to the disclosure under “ Cessation of Former Operations” |
New Business Developments | New Business Developments On January 17, 2018, the Company formed a new wholly-owned subsidiary in Israel, Virtual Crypto Technologies Ltd. (the “New Subsidiary”), to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers and/or mobile devices. Reference is made to the disclosure under “Item 2. Management’s Discussion and Analysis and Results of Operations” located below in this Quarterly Report on Form 10-Q. |
Cessation of Former Operations | Cessation of Former Operations On January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary, Emerald Israel, and on May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and nominated an Israeli advocate (attorney) as a special executor for Emerald Israel. To the extent that the liquidation procedure yields proceeds in excess of Emerald Israel’s current obligations, the first $250,000 of such excess will be distributed to the previous stockholders of the Company’s preferred stock (see Note 3) and any excess thereafter, to the Company. However, based on the Company’s current best estimate, it is not anticipated that any such excess proceeds will be achieved. See Note 6. Discontinued Operations. |
Going Concern | Going Concern The Company has incurred significant operating losses and negative cash flows from operating activities in relation to its DermaCompare operations, since inception. While the Company raised approximately $2 million in the first nine months of 2018 to fund the operations of its New Subsidiary, the Company will require additional capital resources in order to support the commercialization of the New Subsidiary’s technology and operations and maintain its research and development activities related to the New Subsidiary’s technology. The Company is addressing its liquidity needs by seeking additional funding from public and/or private sources. There are no assurances, however, that the Company will be able to obtain an adequate level of financial resources that are required for the Company’s short and long-term requirements, or at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies: The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly- owned subsidiary, the New Subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q. The financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the period. However, these results are not necessarily indicative of results for any other interim period or for the full fiscal year. The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates. Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on April 17, 2018 (the “Annual Report”). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on its financial statements. Following are newly issued standards or material updates to the Company’s previous assessments from the Annual Report: In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under GAAP. Under the new model, recognition of revenue occurs when a customer obtains control of the promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective with respect to the Company beginning in the first quarter of 2018; early adoption is prohibited. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. As the Company has not incurred revenues to date, it does not expect the new standard to have a material impact on its consolidated financial statements. In February 2016, the FASB issued a new lease accounting standard requiring the recognition of lease assets and liabilities on the balance sheet. This standard is effective beginning in the first quarter of 2019; early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. As the Company currently is not a party to any leasing arrangement, it does not expect the new standard to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” With respect to assets measured at amortized cost, such as held-to-maturity assets, the update requires presentation of the amortized cost net of a credit loss allowance. The update eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate can now reflect an entity’s current estimate of all future expected credit losses as opposed to the previous standard, when an entity only considered past events and current conditions. With respect to available for sale debt securities, the update requires that credit losses be presented as an allowance rather than as a write-down. The update is effective beginning in the first quarter of 2020; early adoption is permitted. As the Company has insignificant receivable balances, the Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, which includes Part I “Accounting for Certain Financial Instruments with Down Round Features” and Part II “Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests With a Scope Exception”. The ASU makes limited changes to the Board’s guidance on classifying certain financial instruments as either liabilities or equity. The ASU’s objective is to improve (1) the accounting for instruments with “down-round” provisions and (2) the readability of the guidance in ASC 480 on distinguishing liabilities from equity by replacing the indefinite deferral of certain pending content with scope exceptions. This standard is effective beginning in the first quarter of 2019; early adoption is permitted. The Company early adopted the standard, retrospectively, for each prior period presented in the financial statements included elsewhere herein. Accounting Standard Update 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued Accounting Standard Update 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07). ASU 2018-07 aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 will be measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the goods has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity-classified nonemployee share-based payment awards will be measured at the grant date. With respect to awards with performance conditions, ASU 2018-07 concludes that, consistent with the accounting for employee share-based payment awards, an entity will consider the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. ASU 2018-07 also requires that the classification of equity classified nonemployee share-based payment awards will continue to be subject to the requirements of Topic 718 unless the award was modified after the goods has been delivered, the service has been rendered, any other conditions necessary to earn the right to benefit from the instruments have been satisfied, and the nonemployee is no longer providing goods or services. This eliminates the requirement to reassess classification of such awards upon vesting. In addition, ASU 2018-07 includes certain Non-public Entity-Specific Amendments. ASU 2018-07 is effective for Public entities in annual periods beginning after 15 December 2018, and interim periods within those years (first quarter of 2019 for the Company). Early adoption is permitted, including in an interim period, but not before an entity adopts the new revenue guidance (which was adopted by the Company in its interim financial statements for 2018). An entity should only remeasure liability-classified awards that have not been settled by the date of adoption and equity-classified awards for which a measurement date has not been established through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Upon transition, the entity is required to measure these nonemployee awards at fair value as of the adoption date. The Company is evaluating the impact of ASU 2018-07 on its financial statements. |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable and accrued interest as of September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 December 31, 2017 Principle $ 898,594 $ 920,484 Discount (214,677 ) - Accrued interest 71,162 Total 683,917 991,646 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Summary of Outstanding Warrants | The following table summarizes information of outstanding warrants issued to investors and consultants in exchange for their services as of September 30, 2018: Warrants Warrant Term Exercise Price Exercisable Investors – Class A Warrants 571,429 August 2019 $ 0.14 571,429 Investors – Class B Warrants 571,429 August 2019 $ 0.14 571,429 Alimi Ahmed - Class E Warrants 900,000 (1 ) $ 0.0001 900,000 Investors – Class F Warrants 27,692,855 January 2019 -April 2019 $ 0.14 27,697,855 Investors – Class G Warrants 27,692,855 January 2019 -April 2019 $ 0.28 27,697,855 Investors - Class H Warrants 200,000 January 2020 $ 0.14 200,000 (1) During 2015, a total of 2,700,000 Class E Warrants were issued by the Company to Lior Wayn pursuant to the terms of the Share Exchange Agreement and were exercisable in three equal tranches of 900,000 Shares each (the “Tranches”) at an exercise price of $0.0001 per share of the Company’s common stock, subject to and within 45 days of the Company achieving the milestones defined in the Share Exchange Agreement. On December 16, 2016, the Company terminated Lior Wayn’s employment agreements with the Company and Emerald Israel, and removed him as an executive officer and director. During 2017, Mr. Wayn transferred, sold and assigned his 5,212,878 shares of the Company’s common stock and 900,000 Class E Warrants that were fully-vested to an entity controlled by Mr. Alimi Ahmed, then a member of the Company’s Board of Directors. Effective as of December 31, 2016, the remaining 1,800,000 Class E Warrants that had been issued to Mr. Wayn were canceled. |
Summary of Employee Stock Option Activity | A summary of the Company’s activity related to issuances of options to the Company’s employees, executives, directors and consultants and related information for the nine months ended September 30, 2018 and the fiscal year ended December 31, 2017 is as follows: For the nine-month period ended September 30, 2018 For the year ended December 31, 2017 Amount of options Weighted average exercise price Aggregate intrinsic value Amount of options Weighted average exercise price Aggregate intrinsic value $ $ $ $ Outstanding at beginning of year 62,500 0.01 4,193,397 0.11 Granted Exercised (62,500 ) 0.01 - - Cancelled - - (4,130,397 ) (0.11 ) Outstanding at the end of period - - 62,500 0.01 Vested and expected-to-vest at end of period - - - 62,500 0.01 - |
Schedule of Stock Options Outstanding Exercise Price Range | The stock options outstanding as of September 30, 2018, and December 31, 2017, have been separated into exercise prices, as follows: Exercise price Stock options outstanding as of Weighted average remaining contractual life – years as of Stock options exercisable as of September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 0.01 - 62,500 - 8.25 - 62,500 0.01 - 62,500 - 8.25 - 62,500 |
The Company and Significant A_3
The Company and Significant Accounting Policies (Details Narrative) - USD ($) | Jan. 29, 2018 | Sep. 30, 2018 |
Accounting Policies [Abstract] | ||
Proceeds in excess of current obligations | $ 250,000 | |
Approximate amount of capital raised | $ 2,000,000 |
Deferred Revenues (Details Narr
Deferred Revenues (Details Narrative) - USD ($) | Jan. 24, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred revenues | $ 100,000 | ||
Received in cash | $ 50,000 | ||
Value of the shares at the date of issuance | |||
Chiron Refineries Ltd. [Member] | |||
Payment by distributor as an appointment fee | $ 250,000 | ||
Deemed advance payment | $ 150,000 | ||
Number of shares received during period | 380,143 | ||
Value of the shares at the date of issuance | $ 50,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Mar. 19, 2018 | Jan. 24, 2018 | Jan. 23, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Jul. 08, 2014 |
Consideration amount | $ 100,000 | |||||
Debt instruments, principal amount | $ 100,000 | $ 898,594 | $ 920,484 | |||
Debt bearing interest rate | 1.00% | |||||
Conversion price | $ 0.01 | |||||
Beneficial conversion feature | $ 100,000 | |||||
Reduction of debt discount | $ 100,000 | 214,677 | ||||
Finance expenses | 21,622,897 | |||||
Increased to additional paid in capital | 21,600,000 | |||||
Accrued interest | 3,316 | |||||
Alpha Chi Option [Member] | ||||||
Fair value of the derivative liabilities | ||||||
Play Accelerator GmbH [Member] | ||||||
Debt instruments, principal amount | $ 29,719 | |||||
January 2018 Convertible Notes [Member] | ||||||
Consideration amount | $ 958,611 | |||||
Conversion price | $ 0.01 | $ 0.01 | ||||
Conversion amount | $ 9,218 | $ 73,000 | ||||
Conversion shares | 921,800 | 7,300,000 | ||||
New Third Party Investors [Member] | ||||||
Consideration amount | $ 956,209 | |||||
Debt description | On the same day, the Company and the New Investors agreed to(i) amend the conversion price of the January 2018 Convertible Notes from $0.014 to $0.01 (ii) to cancel the Class A warrants and Class B warrants issued together with the January 2018 Convertible Notes (the "Cancelled Warrants") (see Note 4. Stockholders' Equity. for accounting treatment of the Cancelled Warrants), (iii) to amend the interest rate from 8% to 1% per annum under the January 2018 Convertible Notes; (iv) to extend the repayment date to January 23, 2019, and (iv) to cancel the option granted to Alpha and Chi in July 2016 ("Alpha Chi Option") | |||||
Axel Springer Plug [Member] | ||||||
Debt instruments, principal amount | $ 29,719 | |||||
Common Stock [Member] | ||||||
Conversion price | $ 0.01 | |||||
Conversion amount | $ 3,000 | |||||
Conversion shares | 300,000 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2018 | Jan. 23, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | |||
Principle | $ 898,594 | $ 100,000 | $ 920,484 |
Discount | (214,677) | $ (100,000) | |
Accrued interest | 71,162 | ||
Total | $ 683,917 | $ 991,646 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Apr. 20, 2018 | Mar. 20, 2018 | Mar. 12, 2018 | Feb. 08, 2018 | Jan. 26, 2018 | Jan. 04, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Cancellation of preferred shares | $ (150,000) | |||||||||||
Proceeds from issuance of common stock | ||||||||||||
Offering price per share | $ 0.01 | |||||||||||
Number of restricted shares issued | $ 112,000 | |||||||||||
Stock issued during period, shares, issued for services | 700,000 | 62,500 | ||||||||||
Stock issued during period, value, issued for services | 1,004,299 | |||||||||||
Convertible debt | $ 9,218 | 9,218 | ||||||||||
General and administration expenses | 175,735 | $ 30,885 | $ 1,596,533 | $ 583,911 | ||||||||
January 23, 2018 Convertible Notes [Member] | ||||||||||||
Conversion of convertible common stock shares | 8,521,800 | |||||||||||
Conversion of convertible common stock value | $ 3,000 | |||||||||||
January 24, 2018 Convertible Notes [Member] | ||||||||||||
Convertible debt | $ 73,000 | $ 73,000 | ||||||||||
Class F Warrant [Member] | ||||||||||||
Warrant Exercise Price | $ 0.14 | $ 0.14 | ||||||||||
Number of warrants issued | 27,697,855 | |||||||||||
Class G Warrant [Member] | ||||||||||||
Warrant Exercise Price | 0.28 | $ 0.28 | ||||||||||
Number of warrants issued | 27,697,855 | |||||||||||
Class A Warrant [Member] | ||||||||||||
Number of warrants cancelled during the period | 6,334,626 | |||||||||||
Class B Warrant [Member] | ||||||||||||
Number of warrants cancelled during the period | 5,400,478 | |||||||||||
Class B Warrant [Member] | Consulting Agreement [Member] | ||||||||||||
Number of warrants issued | 571,429 | |||||||||||
Class B Warrant [Member] | August 2017 Financing [Member] | Consulting Agreement [Member] | ||||||||||||
Number of warrants issued | 571,429 | |||||||||||
Warrant [Member] | ||||||||||||
Warrant unit offering price per share | $ 0.07 | $ 0.07 | ||||||||||
Share based employee compensation | $ 58,650 | $ 117,301 | ||||||||||
Class H Warrant [Member] | Consulting Agreement [Member] | ||||||||||||
Warrant Exercise Price | $ 0.14 | |||||||||||
Number of warrants issued | 200,000 | |||||||||||
Warrant expiration year | January 2,020 | |||||||||||
General and administration expenses | $ 39,845 | |||||||||||
Accredited Investors [Member] | ||||||||||||
Proceeds from issuance of common stock | $ 1,940,950 | |||||||||||
Number of common stock shares issued | 27,697,855 | |||||||||||
Offering price per share | $ 0.07 | |||||||||||
Two Accredited Investors [Member] | ||||||||||||
Number of common stock shares issued | 571,429 | |||||||||||
Two Accredited Investors [Member] | August 2017 Financing [Member] | ||||||||||||
Proceeds from issuance of common stock | $ 80,000 | |||||||||||
Two Accredited Investors [Member] | Class A Warrant [Member] | ||||||||||||
Offering price per share | $ 0.14 | |||||||||||
Two Accredited Investors [Member] | Class B Warrant [Member] | ||||||||||||
Offering price per share | $ 0.14 | |||||||||||
Consultants [Member] | ||||||||||||
Number of restricted shares issued, shares | 3,629,999 | |||||||||||
Number of restricted shares issued | $ 892,300 | |||||||||||
Series A Preferred Convertible Stock [Member] | ||||||||||||
Repurchase of shares, value | $ 250,000 | |||||||||||
Cancellation of preferred shares | $ 150,000 | |||||||||||
Amount of finance income | $ 150,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Outstanding Warrants (Details) - $ / shares | 9 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2015 | ||
Class E Warrant [Member] | |||
Warrant Exercise Price | $ 0.0001 | ||
Class E Warrant [Member] | Alimi Ahmed [Member] | |||
Warrants | 900,000 | ||
Warrant Term | [1] | (1) | |
Warrant Exercise Price | $ 0.0001 | ||
Warrant Exercisable | 900,000 | ||
Class F Warrant [Member] | |||
Warrant Exercise Price | $ 0.14 | ||
Class G Warrant [Member] | |||
Warrant Exercise Price | $ 0.28 | ||
Investors [Member] | Class A Warrant [Member] | |||
Warrants | 571,429 | ||
Warrant Term | August 2,019 | ||
Warrant Exercise Price | $ 0.14 | ||
Warrant Exercisable | 571,429 | ||
Investors [Member] | Class B Warrant [Member] | |||
Warrants | 571,429 | ||
Warrant Term | August 2,019 | ||
Warrant Exercise Price | $ 0.14 | ||
Warrant Exercisable | 571,429 | ||
Investors [Member] | Class F Warrant [Member] | |||
Warrants | 27,692,855 | ||
Warrant Term | January 2019 -April 2019 | ||
Warrant Exercise Price | $ 0.14 | ||
Warrant Exercisable | 27,697,855 | ||
Investors [Member] | Class G Warrant [Member] | |||
Warrants | 27,692,855 | ||
Warrant Term | January 2019 -April 2019 | ||
Warrant Exercise Price | $ 0.28 | ||
Warrant Exercisable | 27,697,855 | ||
Investors [Member] | Class H Warrant [Member] | |||
Warrants | 200,000 | ||
Warrant Term | January 2,020 | ||
Warrant Exercise Price | $ 0.14 | ||
Warrant Exercisable | 200,000 | ||
[1] | During 2015, a total of 2,700,000 Class E Warrants were issued by the Company to Lior Wayn pursuant to the terms of the Share Exchange Agreement and were exercisable in three equal tranches of 900,000 Shares each (the "Tranches") at an exercise price of $0.0001 per share of the Company's common stock, subject to and within 45 days of the Company achieving the milestones defined in the Share Exchange Agreement. On December 16, 2016, the Company terminated Lior Wayn's employment agreements with the Company and Emerald Israel, and removed him as an executive officer and director. During 2017, Mr. Wayn transferred, sold and assigned his 5,212,878 shares of the Company's common stock and 900,000 Class E Warrants that were fully-vested to an entity controlled by Mr. Alimi Ahmed, then a member of the Company's Board of Directors. Effective as of December 31, 2016, the remaining 1,800,000 Class E Warrants that had been issued to Mr. Wayn were canceled. |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Outstanding Warrants (Details) (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Mr. Wayn [Member] | |||
Sale of stock, number of shares issued in transaction | 5,212,878 | ||
Warrants issued, remaining | 1,800,000 | ||
Class E Warrant [Member] | |||
Issuance of warrants | 2,700,000 | ||
Warrants exercise price | $ 0.0001 | ||
Class E Warrant [Member] | Mr. Alimi Ahmed [Member] | |||
Number of warrants vested | 900,000 | ||
Class E Warrant [Member] | Tranche 1 [Member] | |||
Issuance of warrants | 900,000 | ||
Class E Warrant [Member] | Tranche 2 [Member] | |||
Issuance of warrants | 900,000 | ||
Class E Warrant [Member] | Tranche 3 [Member] | |||
Issuance of warrants | 900,000 |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Employee Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Number of options, Outstanding at beginning of year | 62,500 | 4,193,397 |
Number of options, Granted | ||
Number of options, Exercised | (62,500) | |
Number of options, Cancelled | (4,130,397) | |
Number of options, Outstanding at end of year | 62,500 | |
Number of options, Options exercisable at end of period | 62,500 | |
Weighted average exercise price, Outstanding at beginning of year | $ 0.01 | $ 0.11 |
Weighted average exercise price, Granted | ||
Weighted average exercise price, Exercised | 0.01 | |
Weighted average exercise price, Cancelled | (0.11) | |
Weighted average exercise price, Outstanding at end of year | 0.01 | |
Weighted average exercise price, Options exercisable at end of period | $ 0.01 | |
Aggregate intrinsic value, Outstanding at end of year | ||
Aggregate intrinsic value, Options exercisable at end of period |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options Outstanding Exercise Price Range (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Exercise price | $ 0.01 | $ 0.01 |
Stock options outstanding | 62,500 | |
Weighted average remaining contractual life | 0 years | 8 years 2 months 30 days |
Stock options exercisable | 62,500 | |
Exercise Price One [Member] | ||
Exercise price | $ 0.01 | $ 0.01 |
Stock options outstanding | 62,500 | |
Weighted average remaining contractual life | 0 years | 8 years 2 months 30 days |
Stock options exercisable | 62,500 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) | Jan. 29, 2018USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |
Proceeds from excess of current obligation | $ 250,000 |