DarkPulse (DPLS) 10-Q 14 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 11, 2015
SUPPLEMENTAL DISCLOSURES
Entity Registrant Name	KLEVER MARKETING INC
Entity Central Index Key	866,439
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		55,626,162
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,015

Balance Sheets

Balance Sheets - USD ($)	Jun. 30, 2015	Dec. 31, 2014
CURRENT ASSETS
Cash	$ 31,578	$ 23,194
Total Current Assets	31,578	23,194
Capitalized software development and licenses	510,273	451,706
Office equipment	3,350	3,350
Less accumulated depreciation	(2,876)	(2,522)
Total Fixed Assets	510,747	452,534
OTHER ASSETS
Intangibles, net	80,285	64,699
Total Other Assets	80,285	64,699
TOTAL ASSETS	622,610	540,427
CURRENT LIABILITIES
Accounts payable	343,665	315,180
Accrued liabilities	291,040	201,814
Preferred stock dividends	26,118	30,063
Related party notes less discount of $11,721 and $0, respectively	18,279	3,500
Total Current Liabilities	679,102	550,557
Total Liabilities	679,102	550,557
STOCKHOLDERS' EQUITY
Common stock (par value $0.01), 250,000,000 shares authorized, 55,376,162 and 53,691,043 shares issued and outstanding, at June 30, 2015 and December 31, 2014, respectively.	553,762	536,910
Treasury stock, 100,000 shares at June 30, 2015 and December 31, 2014	(1,000)	(1,000)
Paid in capital in excess of par value	18,203,077	17,935,076
Retained deficit	(18,816,603)	(18,485,214)
Total Stockholders' Deficit	(56,492)	(10,130)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	622,610	540,427
Preferred Class A
STOCKHOLDERS' EQUITY
Convertible preferred stock	1,382	1,326
Preferred Class B
STOCKHOLDERS' EQUITY
Convertible preferred stock	1,048	1,005
Preferred Class C
STOCKHOLDERS' EQUITY
Convertible preferred stock	$ 1,842	$ 1,767

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Discount on related party notes payable	$ 11,721	$ 0
Convertible preferred stock - shares authorized	2,000,000	2,000,000
Common stock par value	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	55,376,162	53,691,043
Common stock, shares outstanding	55,376,162	53,691,043
Treasury stock shares	100,000	100,000
Preferred Class A
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares authorized	150,000	150,000
Convertible preferred stock - shares issued	138,217	132,582
Convertible preferred stock - shares outstanding	138,217	132,582
Convertible preferred stock - liquidation preference	$ 3,593,642
Preferred Class B
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares authorized	125,000	125,000
Convertible preferred stock - shares issued	104,757	100,486
Convertible preferred stock - shares outstanding	104,757	100,486
Convertible preferred stock - liquidation preference	$ 1,780,869
Preferred Class C
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares authorized	200,000	200,000
Convertible preferred stock - shares issued	184,194	176,685
Convertible preferred stock - shares outstanding	184,194	176,685
Convertible preferred stock - liquidation preference	$ 1,215,680

Statements of Operations

Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
OPERATING EXPENSES
General and administrative	$ 240,435	$ 67,950	$ 327,298	$ 134,612
Research and development	310	1,955	1,916	4,096
Total Operating Expenses	240,745	69,905	329,214	138,708
OTHER INCOME (EXPENSE)
Interest expense	(1,599)	0	(1,599)	0
Forgiveness of debt	0	10,609	0	10,609
Litigation settlements	0	33,000	0	74,250
Total Other Income (Expense)	(1,599)	43,609	(1,599)	84,859
NET LOSS BEFORE INCOME TAXES	(242,344)	(26,296)	(330,813)	(53,849)
INCOME TAXES	(289)	(385)	(576)	(659)
NET LOSS	$ (242,633)	$ (26,681)	$ (331,389)	$ (54,508)
BASIC AND FULLY DILUTED INCOME (LOSS) PER COMMON SHARE	$ 0	$ 0	$ (0.01)	$ 0
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED	55,005,283	52,263,781	54,531,187	51,997,653

Statement of Stockholders' Equi

Statement of Stockholders' Equity - 6 months ended Jun. 30, 2015 - USD ($)	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings / Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2014	409,753	53,691,043
Beginning balance, value at Dec. 31, 2014	$ 4,098	$ 536,910	$ (1,000)	$ 17,935,076	$ (18,485,214)	$ (10,130)
Common stock issued for cash, shares		1,685,119
Common stock issued for cash, value		$ 16,852		88,148		105,000
Stock-based compensation				162,912		162,912
Options issued in connection with related party debt				13,170		13,170
Accrual for preferred stock dividend				(67,907)		(67,907)
Preferred stock issued as dividends, shares	17,415
Preferred stock issued as dividends	$ 174			71,678		71,852
Net loss					(331,389)	(331,389)
Ending balance, shares at Jun. 30, 2015	427,168	55,376,162
Ending balance, value at Jun. 30, 2015	$ 4,272	$ 553,762	$ (1,000)	$ 18,203,077	$ (18,816,603)	$ (56,492)

Statements of Cash Flows

Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (331,389)	$ (54,508)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization	10,360	11,560
Stock-based compensation	162,912	0
Debt forgiveness	0	10,609
Amortization of debt discount	1,449	0
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable	28,485	(10,220)
Increase in accrued liabilities	89,226	56,054
Net Cash (Used by) Provided by Operating Activities	(38,957)	13,495
CASH FLOWS FROM INVESTING ACTIVITIES:
Capitalized software development costs	(58,567)	(61,689)
Intellectual property development costs	(25,592)	(5,640)
Net Cash Used by Investing Activities	(84,159)	(67,329)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from capital stock issued	105,000	25,000
Proceeds from related party loans	30,000	3,500
Repayments on related party loans	(3,500)	0
Net Cash Provided by Financing Activities	131,500	28,500
NET INCREASE (DECREASE) IN CASH	8,384	(25,334)
CASH AT BEGINNING OF PERIOD	23,194	51,654
CASH AT END OF PERIOD	31,578	26,320
Cash Paid For:
Interest	0	0
Income taxes	0	0
Non-Cash Transactions from Investing and Financing Activities:
Debt discount in connection with issuance of related party debt	13,170	0
Common stock to be issued for capitalized software development	0	8,496
Accrual for preferred stock dividends payable with preferred shares	67,907	43,255
Preferred stock issued to pay dividends	$ 71,852	$ 0

1. BASIS OF FINANCIAL STATEMENT

1. BASIS OF FINANCIAL STATEMENT PRESENTATION	6 Months Ended
	Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF FINANCIAL STATEMENT PRESENTATION	The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company's audited financial statements and notes thereto included in its December 31, 2014 Annual Report on Form 10-K. Operating results for the six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Klever Marketing, Inc. (the “Company”) was created to develop, market and distribute an electronic shopping cart device for in-store advertising, promotion and media content and retail shopper services and has not commenced its planned principal operations. The Company’s activities since inception have consisted principally of developing various applications of its electronic shopping cart concept including its mobile application for smart phones which the Company is currently testing in retail supermarkets, obtaining patents and trademarks related to its technology, and raising capital. The Company’s activities are subject to significant risks and uncertainties including failing to secure additional funding needed to finalize development of the Company’s technology and to commercialize its product in a profitable manner.

2. SIGNIFICANT ACCOUNTING POLIC

2. SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	Earnings Per Common Share The computations of basic and fully diluted earnings per share of common stock are based on the weighted average number of common shares outstanding during the period of the financial statements, plus the common stock equivalents which would arise from the exercise of stock options and warrants outstanding during the period, or the exercise of convertible preferred stock. For the periods where the Company incurred a net loss, common stock equivalents related to the conversion of preferred rights have not been included in the calculation of diluted earnings per share because they are anti-dilutive. Following is a reconciliation of the income (loss) per share for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ending June 30, Six Months Ending June 30, 2015 2014 2015 2014 Numerator: Net income (loss) $ (242,633 ) $ (26,681 ) $ (331,389 ) $ (54,508 ) Denominator: Weighted-average common shares outstanding Basic 55,005,283 52,263,781 54,531,187 51,997,653 Conversion of preferred rights – – – – Diluted 55,005,283 52,263,781 54,531,187 51,997,653 Income (loss) per share Basic Net income (loss) $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) Diluted Net income (loss) $ (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.00 ) Capitalized Software Development The Company capitalizes software development costs incurred from the time technological feasibility has been obtained until the product is generally released to customers. The Company achieved technological feasibility with regard to its mobile phone technology during the fourth quarter of 2010. The Company had $510,273 and $451,706 of capitalized software development costs as of June 30, 2015 and December 31, 2014, respectively. Research and Development The Company continues to develop its technology which facilitates the use of in-store advertising and coupon services through various technologies. As time and technology have progressed, the system being developed by the Company comprises mobile and other state of the art technology that facilitates retailers and package good companies to provide "product specific" point-of-purchase advertising to its customers using proprietary software. The Company is currently developing mobile smart phone technology that will provide similar functionality to the Klever-Kart System. During the six months ended June 30, 2015 and 2014, the Company incurred costs of $1,916 and $4,096 respectively, for research and development of its technologies. Stock-based Compensation The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. For options issued to related party lenders, the Company records the grant-date fair value of the options as a debt discount. The discount is then amortized over the term of the convertible debt as non-cash interest expense. Income Taxes The Company accounts for income taxes pursuant to ASC 740, Income Taxes ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the uncertain tax position to determine the amount to recognize in the financial statements. Our uncertain tax positions relate to certain state tax issues for which we have recorded an estimated current liability for in the accompanying financial statements at June 30, 2015 and December 31, 2014. There has been no significant change in the unrecognized tax benefit through June 30, 2015 except for accruing additional interest and penalties. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. The Company has not identified any uncertain tax positions for which it is reasonably possible that the total amount of liability for unrecognized tax positions will significantly increase or decrease within the next 12 months. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. The Company files income tax returns in the U.S. federal and Utah jurisdictions. Tax years 2011 to current remain open to examination by U.S. federal and state tax authorities. From inception through June 30, 2015, the Company has incurred net losses and, therefore, had no federal income tax liability. To date, the Company has incurred the statutory minimum tax liability for state taxes and has accrued for its uncertain state tax position described above. The net deferred tax asset generated by the loss carry-forwards has been fully reserved. The cumulative federal net operating loss carry-forward is approximately $14.9 million as of June 30, 2015, and will expire in the (Unaudited) years 2018 through 2035. The cumulative state net operating loss carry-forward is approximately $5.3 million as of June 30, 2015, and will expire in the years 2017 through 2030. Fair Value of Financial Instruments The FASB provides the framework for measuring fair value. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. The carrying amounts reported in the accompanying balance sheets as of June 30, 2015 and December 31, 2014 for cash and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and expected realization and their current market rate of interest. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date or earlier if allowed. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption. Adoption of ASU 2014-10 Development Stage Entities In June 2014, the FASB Development Stage Entities Development Stage Entities Risks and Uncertainties, The Company adopted this standard effective April 1, 2014. The Company’s financial statements have been impacted by the adoption of this ASU mainly by the removal of inception-to-date information in the Company’s statements of operations, cash flows, and stockholders’ equity. ASU 2014-09 Revenue from Contracts with Customers In May 2014, the FASB Revenue from Contracts with Customers Revenue Recognition Revenue from Contracts with Customers The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company’s current financial statements will not be affected by the adoption of ASU 2014-09 as the Company has not recognized revenues. ASU No. 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the entity’s ability to continue as a going concern, and if so, to provide related note disclosures. The standard is for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016. The Company is currently assessing the impact, if any, of implementing this guidance will have on the Company.

3. GOING CONCERN

3. GOING CONCERN	6 Months Ended
	Jun. 30, 2015
Going Concern
GOING CONCERN	As shown in the accompanying financial statements, the Company generated a net loss of $331,839 during the six months ended June 30, 2015. The Company did not generate any revenue from product sales during the six months ended June 30, 2015 or June 30, 2014. As of June 30, 2015, the Company’s current and total liabilities exceeded its current assets by $647,524. As of June 30, 2015, the Company had $31,578 of cash available on hand. The Company will require additional funding during the next twelve months to finance the growth of its current operations and achieve its strategic objectives. These factors, as well as the uncertain conditions that the Company faces relative to capital raising activities, create substantial doubt as to the Company’s ability to continue as a going concern. The Company is seeking to raise additional capital principally through private placement offerings and is targeting strategic partners in an effort to finalize the development of its products and begin generating revenues. The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements and expansion of its operations. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management is actively pursuing additional sources of financing sufficient to generate enough cash flow to fund its operations through calendar year 2015. However, management cannot make any assurances that such financing will be secured.

4. PREFERRED STOCK

4. PREFERRED STOCK	6 Months Ended
	Jun. 30, 2015
Preferred Stock, Including Additional Paid in Capital [Abstract]
PREFERRED STOCK	Authorized Shares In accordance with the Company’s bylaws, the Company has authorized a total of 2,000,000 shares of preferred stock for all classes. As of June 30, 2015 and December 31, 2014, there were 427,168 and 409,753 preferred shares issued and outstanding, for all classes, respectively. As of June 30, 2015, all of the Company’s outstanding preferred shares are owned by a Company that is controlled by the Company’s CEO. Preferred Stock Dividends As of June 30, 2015, the Company had accrued and unpaid preferred stock dividends of $26,118. To date all accrued dividends for preferred stock have been authorized for payment through the issuance of preferred stock based on the ratios for each class of preferred stock described below. Class A Voting Preferred Stock The Company has 150,000 shares of “Class A Voting Preferred Stock” (“Class A Shares”) authorized. As of June 30, 2015 and December 31, 2014, there were 138,217 and 132,582 Class A Shares outstanding, respectively. The Class A Shares are convertible into 99.035 shares of common stock. Holders of Class A Shares are entitled to receive dividends at the rate of $2.20 per share per annum, payable semi-annually. Dividends are cumulative and may be paid in cash or in kind through the distribution of .0425 Class A Shares, Series 1, for each outstanding Class A Share, on each dividend payment date. Class A Shares carry a liquidation preference of $26.00 per share plus any accrued but unpaid dividends on such shares, if any, and adjusted for combinations, splits, dividends or distributions of shares of stock with respect to such shares. Class A shares are redeemable by the Company, in whole or in part, at the option of the Board of Directors of the Company, at any time. Class B Voting Preferred Stock The Company has 125,000 shares of “Class B Voting Preferred Stock” (“Class B Shares”) authorized. As of June 30, 2015 and December 31, 2014, there were 104,757 and 100,486 Class B Shares outstanding, respectively. The Class B Shares are convertible into 64.754 shares of common stock. Holders of Class B Shares are entitled to receive dividends at the rate of $1.70 per share per annum, payable semi-annually. Dividends are cumulative and may be paid in cash or in kind through the distribution of .0425 Class B Shares for each outstanding Class B Share, on each dividend payment date. Class B Shares carry a liquidation preference of $17.00 per share plus any accrued but unpaid dividends on such shares, if any, and adjusted for combinations, splits, dividends or distributions of shares of stock with respect to such shares. Class B shares are redeemable by the Company, in whole or in part, at the option of the Board of Directors of the Company, at any time. Class C Voting Preferred Stock The Company has 200,000 shares of “Class C Voting Preferred Stock” (“Class C Shares”) authorized. As of June 30, 2015 and December 31, 2014, there were 184,194 and 176,685 Class C Shares outstanding, respectively. The Class C Shares are convertible into 25.140 shares of common stock. Holders of Class C Shares are entitled to receive dividends at the rate of $0.66 per share per annum, payable semi-annually. Dividends are cumulative and may be paid in cash or in kind through the distribution of .0425 Class C Shares for each outstanding Class C Share, on each dividend payment date. Class C Shares carry a liquidation preference of $6.60 per share plus any accrued but unpaid dividends on such shares, if any, and adjusted for combinations, splits, dividends or distributions of shares of stock with respect to such shares. Class C shares are redeemable by the Company, in whole or in part, at the option of the Board of Directors of the Company, at any time.

5. STOCK OPTIONS

5. STOCK OPTIONS	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK OPTIONS	The shareholders approved, by a majority vote, the adoption of the 1998 Stock Incentive Plan (the “Plan”). As amended on August 11, 2003, the Plan reserves 20,000,000 shares of common stock for issuance upon the exercise of options which may be granted from time-to-time to officers, directors and certain employees and consultants of the Company or its subsidiaries by the Board of Directors. The Plan permits the award of both qualified and non-qualified incentive stock options. During the six months ended June 30, 2015, the Company issued 100,000 options to an investor who simultaneously purchased shares in the Company, 2,800,000 options to officers and a director, and 500,000 options to a director in connection with a loan made to the Company. The weighted average grant-date fair value of options granted to officers and directors during the six months ended June 30, 2015 was $0.06. The summary of option activity for the six months ended June 30, 2015 is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life (years) Balance as of December 31, 2014 – – – Granted 3,400,000 $ 0.05 2.21 Exercised – – – Canceled – – – Expired – – – Balance as of June 30, 2015 3,400,000 $ 0.05 2.21 Outstanding and exercisable options presented by price range as of June 30, 2015 are as follows: Options Outstanding Options Exerciseable Weighted Average Weighted Weighted Number of Remaining Average Number of Average Exercise Options Life Exercise Options Exercise Price Outstanding (Years) Price Exercisable Price $ 0.075 100,000 0.25 $ 0.075 100,000 $ 0.075 $ 0.050 3,300,000 2.59 $ 0.050 3,300,000 $ 0.050 3,400,000 2.21 $ 0.051 3,400,000 $ 0.051 The estimated fair value of the Company’s stock options, less expected forfeitures, is amortized over the options’ vesting period on a straight-line basis. All of the options granted were fully vested upon issuance. The Company recognized $162,912 and $0 of equity-based compensation expense during the six months ended June 30, 2015 and 2014, respectively. The intrinsic values of outstanding and vested stock options were as follows: June 30, December 31, 2015 2014 Intrinsic value - options outstanding $ – $ – Intrinsic value - options exercisable $ – $ – Intrinsic value - options exercised $ – $ –

6. COMMON STOCK

6. COMMON STOCK	6 Months Ended
	Jun. 30, 2015
STOCKHOLDERS' EQUITY
COMMON STOCK	During the six months ended June 30, 2015, the Company issued 1,685,119 shares to investors for $105,000 in cash. As more fully described in Note 5, one investor also received options to purchase shares of the Company’s restricted common stock in connection with his investment in the Company. During the six months ended June 30, 2014, the Company issued 500,000 shares to an investor for $25,000 in cash. During the six months ended June 30, 2014, the Company issued 147,919 shares of common stock valued at $8,496 to consultants for services.

7. RELATED PARTY TRANSACTIONS

7. RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	The Company accrued $81,000 for compensation for the CEO during the six months ended June 30, 2015 and 2014 of which $0 was paid. The bookkeeper, who is the wife of the CEO, earned $9,000 during the six months ended June 30, 2015 for services provided to the Company of which $0 was paid. The bookkeeper, who is the wife of the CEO, earned $9,000 during the six months ended June 30, 2014 for services provided to the Company. $3,000 of these amounts were paid during the six months ended June 30, 2014. On June 1, 2015, an outside director of the Company loaned the Company $30,000. The loan has an interest rate of 6% and has a maturity date of December 31, 2015. The Company is required to make monthly principal and interest payments beginning in July 2015. The Company gave the director 500,000 options to purchase the Company’s common stock at $0.05 per share in connection with the loan. The options expire on December 31, 2015. The fair value of the options of $13,170 was recorded as a debt discount and is being amortized to interest expense over the life of the loan. As of June 30, 2015 and 2014, the unamortized discount associated with the loan was $11,721 and $0, respectively.

8. LITIGATION SETTLEMENTS

8. LITIGATION SETTLEMENTS	6 Months Ended
	Jun. 30, 2015
Litigation Settlements
LITIGATION SETTLEMENTS	The Company did not record any proceeds from litigation settlements during the six months ended June 30, 2015. During the six months ended June 30, 2014, the Company as Plaintiff settled certain lawsuits against various defendants for infringement against patents owned by the Company resulting in the Company recording $74,250 in net proceeds from litigation settlements.

9. SUBSEQUENT EVENTS

9. SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	On July 2, 2015, the Company sold 250,000 shares of common stock to an investor for $12,500. The Company has evaluated events subsequent to period end pursuant to the requirements of ASC 855 and has determined that there are no additional events to disclose.

2. SIGNIFICANT ACCOUNTING POL16

2. SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Basis of financial statement presentation	The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company's audited financial statements and notes thereto included in its December 31, 2014 Annual Report on Form 10-K. Operating results for the six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Klever Marketing, Inc. (the “Company”) was created to develop, market and distribute an electronic shopping cart device for in-store advertising, promotion and media content and retail shopper services and has not commenced its planned principal operations. The Company’s activities since inception have consisted principally of developing various applications of its electronic shopping cart concept including its mobile application for smart phones which the Company is currently testing in retail supermarkets, obtaining patents and trademarks related to its technology, and raising capital. The Company’s activities are subject to significant risks and uncertainties including failing to secure additional funding needed to finalize development of the Company’s technology and to commercialize its product in a profitable manner.
Earnings Per Common Share	Earnings Per Common Share The computations of basic and fully diluted earnings per share of common stock are based on the weighted average number of common shares outstanding during the period of the financial statements, plus the common stock equivalents which would arise from the exercise of stock options and warrants outstanding during the period, or the exercise of convertible preferred stock. For the periods where the Company incurred a net loss, common stock equivalents related to the conversion of preferred rights have not been included in the calculation of diluted earnings per share because they are anti-dilutive. Following is a reconciliation of the income (loss) per share for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ending June 30, Six Months Ending June 30, 2015 2014 2015 2014 Numerator: Net income (loss) $ (242,633 ) $ (26,681 ) $ (331,389 ) $ (54,508 ) Denominator: Weighted-average common shares outstanding Basic 55,005,283 52,263,781 54,531,187 51,997,653 Conversion of preferred rights – – – – Diluted 55,005,283 52,263,781 54,531,187 51,997,653 Income (loss) per share Basic Net income (loss) $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) Diluted Net income (loss) $ (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.00 )
Capitalized Software Development	Capitalized Software Development The Company capitalizes software development costs incurred from the time technological feasibility has been obtained until the product is generally released to customers. The Company achieved technological feasibility with regard to its mobile phone technology during the fourth quarter of 2010. The Company had $510,273 and $451,706 of capitalized software development costs as of June 30, 2015 and December 31, 2014, respectively.
Research and Development	Research and Development The Company continues to develop its technology which facilitates the use of in-store advertising and coupon services through various technologies. As time and technology have progressed, the system being developed by the Company comprises mobile and other state of the art technology that facilitates retailers and package good companies to provide "product specific" point-of-purchase advertising to its customers using proprietary software. The Company is currently developing mobile smart phone technology that will provide similar functionality to the Klever-Kart System. During the six months ended June 30, 2015 and 2014, the Company incurred costs of $1,916 and $4,096 respectively, for research and development of its technologies.
Stock-based Compensation	Stock-based Compensation The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. For options issued to related party lenders, the Company records the grant-date fair value of the options as a debt discount. The discount is then amortized over the term of the convertible debt as non-cash interest expense.
Income Taxes	Income Taxes The Company accounts for income taxes pursuant to ASC 740, Income Taxes ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the uncertain tax position to determine the amount to recognize in the financial statements. Our uncertain tax positions relate to certain state tax issues for which we have recorded an estimated current liability for in the accompanying financial statements at June 30, 2015 and December 31, 2014. There has been no significant change in the unrecognized tax benefit through June 30, 2015 except for accruing additional interest and penalties. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. The Company has not identified any uncertain tax positions for which it is reasonably possible that the total amount of liability for unrecognized tax positions will significantly increase or decrease within the next 12 months. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. The Company files income tax returns in the U.S. federal and Utah jurisdictions. Tax years 2011 to current remain open to examination by U.S. federal and state tax authorities. From inception through June 30, 2015, the Company has incurred net losses and, therefore, had no federal income tax liability. To date, the Company has incurred the statutory minimum tax liability for state taxes and has accrued for its uncertain state tax position described above. The net deferred tax asset generated by the loss carry-forwards has been fully reserved. The cumulative federal net operating loss carry-forward is approximately $14.9 million as of June 30, 2015, and will expire in the (Unaudited) years 2018 through 2035. The cumulative state net operating loss carry-forward is approximately $5.3 million as of June 30, 2015, and will expire in the years 2017 through 2030.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The FASB provides the framework for measuring fair value. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. The carrying amounts reported in the accompanying balance sheets as of June 30, 2015 and December 31, 2014 for cash and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and expected realization and their current market rate of interest.
Recent Accounting Pronouncements	Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date or earlier if allowed. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption. Adoption of ASU 2014-10 Development Stage Entities In June 2014, the FASB Development Stage Entities Development Stage Entities Risks and Uncertainties, The Company adopted this standard effective April 1, 2014. The Company’s financial statements have been impacted by the adoption of this ASU mainly by the removal of inception-to-date information in the Company’s statements of operations, cash flows, and stockholders’ equity. ASU 2014-09 Revenue from Contracts with Customers In May 2014, the FASB Revenue from Contracts with Customers Revenue Recognition Revenue from Contracts with Customers The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company’s current financial statements will not be affected by the adoption of ASU 2014-09 as the Company has not recognized revenues. ASU No. 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the entity’s ability to continue as a going concern, and if so, to provide related note disclosures. The standard is for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016. The Company is currently assessing the impact, if any, of implementing this guidance will have on the Company.

2. SIGNIFICANT ACCOUNTING POL17

2. SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Earnings Per Common Share	Three Months Ending June 30, Six Months Ending June 30, 2015 2014 2015 2014 Numerator: Net income (loss) $ (242,633 ) $ (26,681 ) $ (331,389 ) $ (54,508 ) Denominator: Weighted-average common shares outstanding Basic 55,005,283 52,263,781 54,531,187 51,997,653 Conversion of preferred rights – – – – Diluted 55,005,283 52,263,781 54,531,187 51,997,653 Income (loss) per share Basic Net income (loss) $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) Diluted Net income (loss) $ (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.00 )

5. STOCK OPTIONS (Tables)

5. STOCK OPTIONS (Tables)	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Option activity	Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life (years) Balance as of December 31, 2014 – – – Granted 3,400,000 $ 0.05 2.21 Exercised – – – Canceled – – – Expired – – – Balance as of June 30, 2015 3,400,000 $ 0.05 2.21
Options outstanding and exercisable	Options Outstanding Options Exerciseable Weighted Average Weighted Weighted Number of Remaining Average Number of Average Exercise Options Life Exercise Options Exercise Price Outstanding (Years) Price Exercisable Price $ 0.075 100,000 0.25 $ 0.075 100,000 $ 0.075 $ 0.050 3,300,000 2.59 $ 0.050 3,300,000 $ 0.050 3,400,000 2.21 $ 0.051 3,400,000 $ 0.051
Options intrinsic value	June 30, December 31, 2015 2014 Intrinsic value - options outstanding $ – $ – Intrinsic value - options exercisable $ – $ – Intrinsic value - options exercised $ – $ –

2. SIGNIFICANT ACCOUNTING POL19

2. SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator:
Net income (loss)	$ (242,633)	$ (26,681)	$ (331,389)	$ (54,508)
Denominator:
Weighted-average common shares outstanding Basic	55,005,283	52,263,781	54,531,187	51,997,653
Conversion of preferred rights	0	0	0	0
Diluted	55,005,283	52,263,781	54,531,187	51,997,653
Income (loss) per share
Net income (loss) per share - basic	$ 0	$ 0	$ (.01)	$ 0
Income (loss) per share - diluted	$ 0	$ 0	$ (0.01)	$ 0

2. SIGNIFICANT ACCOUNTING POL20

2. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Software development costs	$ 510,273		$ 510,273		$ 451,706
Research and development cost	310	$ 1,955	1,916	$ 4,096
Federal
Net operating loss carryforward	14,900,000		$ 14,900,000
Net operating loss carry-forward, expiration date			Years 2018 through 2035
State
Net operating loss carryforward	$ 5,300,000		$ 5,300,000
Net operating loss carry-forward, expiration date			Years 2017 through 2030

3. GOING CONCERN (Details Narra

3. GOING CONCERN (Details Narrative)	Jun. 30, 2015USD ($)
Going Concern
Current and total liabilities exceeded to current assets	$ (647,524)

4. PREFERRED STOCK (Details Nar

4. PREFERRED STOCK (Details Narrative) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Preferred Stock, Including Additional Paid in Capital [Abstract]
Preferred stock authorized	2,000,000	2,000,000
Accrued and unpaid preferred stock dividends	$ 26,118	$ 30,063

5. STOCK OPTIONS (Details - opt

5. STOCK OPTIONS (Details - option activity) - 6 months ended Jun. 30, 2015 - $ / shares	Total
Number of Shares
Outstanding, beginning balance	0
Granted	3,400,000
Exercised	0
Forfeited	0
Outstanding, ending balance	3,400,000
Weighted Average Exercise Price
Granted	$ .05
Outstanding, ending balance	$ .05
Weighed Average Remaining Contractual Life
Weighted average remaining life, options granted	2 years 2 months 16 days
Outstanding, ending balance	2 years 2 months 16 days

5. STOCK OPTIONS (Details - O24

5. STOCK OPTIONS (Details - Options outstanding and exercisable) - $ / shares	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Options Outstanding
Options outstanding	3,400,000	0
Weighted average remaining contractual life	2 years 2 months 16 days
Weighted average exercise price - outstanding	$ .05
Options Exercisable
Options exercisable	3,400,000
Weighted average exercise price, exercisable	$ .051
Exercise price $0.075
Options Outstanding
Options outstanding	100,000
Weighted average remaining contractual life	3 months
Weighted average exercise price - outstanding	$ .075
Options Exercisable
Options exercisable	100,000
Weighted average exercise price, exercisable	$ .075
Exercise price $0.050
Options Outstanding
Options outstanding	3,300,000
Weighted average remaining contractual life	2 years 7 months 2 days
Weighted average exercise price - outstanding	$ .050
Options Exercisable
Options exercisable	3,300,000
Weighted average exercise price, exercisable	$ .050

5. STOCK OPTIONS (Details - Int

5. STOCK OPTIONS (Details - Intrinsic value) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Intrinsic value - options outstanding	$ 0	$ 0
Intrinsic value - options exercisable	0	0
Intrinsic value - options exercised	$ 0	$ 0

5. STOCK OPTIONS (Details Narra

5. STOCK OPTIONS (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Options granted, shares	3,400,000
Weighted average grant-date fair value of options	$ .06
Stock-based compensation	$ 162,912	$ 0
Intrinsic value - options outstanding	0		$ 0
Intrinsic value - options exercisable	0		0
Intrinsic value - options exercised	$ 0		$ 0
Shares reserved for issuance	20,000,000
Stock options outstanding	3,400,000		0
Investor
Options granted, shares	100,000
Officers and a Director
Options granted, shares	2,800,000
Director
Options granted, shares	500,000

6. COMMON STOCK (Details Narrat

6. COMMON STOCK (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Common stock issued for cash, value	$ 105,000
Investors
Common stock issued for cash, shares	1,685,119
Common stock issued for cash, value	$ 105,000
Consultant
Stock issued for services, shares		147,919
Stock issued for services, value		$ 8,496
Investor
Common stock issued for cash, shares		500,000
Common stock issued for cash, value		$ 25,000

7. RELATED PARTY TRANSACTIONS (

7. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Proceeds from related party	$ 30,000	$ 3,500
Fair value of options granted	13,170
Unamortized discount	11,721		$ 0
Chief Executive Officer [Member]
Officer salaries paid	0	0
Accrued officer salaries	81,000	81,000
Wife of CEO
Professional fees earned	9,000	9,000
Professional fees paid	0	$ 3,000
Director
Proceeds from related party	$ 30,000
Debt interest rate	6.00%
Maturity date	Dec. 31, 2015
Options granted with loan	500,000
Fair value of options granted	$ 13,170
Unamortized discount	$ 11,721

9. LITIGATION SETTLEMENTS (Deta

9. LITIGATION SETTLEMENTS (Details Narrative)	6 Months Ended
	Jun. 30, 2014USD ($)
Litigation Settlements
Proceeds from litigation settlement	$ 74,250