DarkPulse (DPLS) 10-Q 13 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 13, 2017
Due from related party, payable in common stock
Entity Registrant Name	KLEVER MARKETING INC
Entity Central Index Key	866,439
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
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		60,822,567
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,017

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash	$ 4,203	$ 4,934
Total current assets	4,203	4,934
Other assets - intangibles, net	613,307	628,878
Total assets	617,510	633,812
CURRENT LIABILITIES
Accounts payable	223,346	382,518
Accrued liabilities	567,823	514,624
Accrued preferred stock dividends	21,864	7,909
Related party notes payable	38,000	31,500
Total current liabilities	851,033	936,551
Total liabilities	851,033	936,551
STOCKHOLDERS' DEFICIT
Common stock (par value $0.01), 250,000,000 shares authorized, 60,822,567 and 59,731,567 shares issued at September 30, 2017 and December 31, 2016, respectively	608,226	597,316
Treasury stock, 100,000 shares	(1,000)	(1,000)
Paid in capital in excess of par value	18,365,052	18,349,816
Accumulated deficit	(19,210,687)	(19,253,558)
Total stockholders' deficit	(233,523)	(302,739)
Total liabilities and stockholders' deficit	617,510	633,812
Preferred Class A [Member]
STOCKHOLDERS' DEFICIT
Convertible preferred stock	1,564	1,500
Preferred Class B [Member]
STOCKHOLDERS' DEFICIT
Convertible preferred stock	1,237	1,187
Preferred Class C [Member]
STOCKHOLDERS' DEFICIT
Convertible preferred stock	$ 2,085	$ 2,000

Condensed Balance Sheets (Unau3

Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Convertible preferred stock - par value	$ .01
Convertible preferred stock - shares authorized	2,000,000
Convertible preferred stock - shares issued	488,608	468,688
Common stock par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	60,822,567	59,731,567
Common stock, shares outstanding	60,822,567	59,731,567
Treasury stock shares	100,000	100,000
Preferred Class A [Member]
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares authorized	300,000	150,000
Convertible preferred stock - shares issued	156,376	150,000
Convertible preferred stock - shares outstanding	156,376	150,000
Convertible preferred stock - liquidation preference (in Dollars)	$ 4,077,558
Preferred Class B [Member]
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares authorized	250,000	125,000
Convertible preferred stock - shares issued	123,732	118,688
Convertible preferred stock - shares outstanding	123,732	118,688
Convertible preferred stock - liquidation preference (in Dollars)	$ 2,109,539
Preferred Class C [Member]
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares authorized	400,000	200,000
Convertible preferred stock - shares issued	208,500	200,000
Convertible preferred stock - shares outstanding	208,500	200,000
Convertible preferred stock - liquidation preference (in Dollars)	$ 1,380,088

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Revenues	$ 0	$ 0	$ 0	$ 0
OPERATING EXPENSES
General and administrative	36,916	66,351	128,985	212,208
Research and development	297	414	891	1,043
Total operating expenses	37,213	66,765	129,876	213,251
Loss from operations	(37,213)	(66,765)	(129,876)	(213,251)
OTHER INCOME (EXPENSE)
Interest expense - related parties	(535)	(386)	(1,395)	(1,149)
Interest and other income	0	0	575	0
Gain on settlement of debt	0	0	174,728	0
Total other income (expense)	(535)	(386)	173,908	(1,149)
Income (loss) before income taxes	(37,748)	(67,151)	44,032	(214,400)
Income taxes	(309)	(300)	(1,161)	(893)
Net income (loss)	$ (38,057)	$ (67,451)	$ 42,871	$ (215,293)
Income (loss) per common share - basic and diluted	$ 0	$ 0	$ 0	$ 0
Weighted average number of common shares outstanding - Basic	60,822,567	58,429,771	60,527,089	58,008,395
Weighted average number of common shares outstanding - Diluted	60,822,567	58,429,771	89,267,618	58,008,395

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 42,871	$ (215,293)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization	24,471	21,723
Gain on settlement of debt	(174,728)	0
Changes in operating assets and liabilities:
Increase in accounts payable	15,556	25,907
Increase in accrued liabilities	53,199	123,770
Net cash used by operating activities	(38,631)	(43,893)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in intangible assets	(8,900)	(36,591)
Net cash used by investing activities	(8,900)	(36,591)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	40,300	62,500
Proceeds from related party notes payable	12,500	0
Repayment of related party notes payable	(6,000)	0
Net cash provided by financing activities	46,800	62,500
Net decrease in cash	(731)	(17,984)
Cash at beginning of period	4,934	31,782
Cash at end of period	4,203	13,798
Cash Paid For:
Interest	116	0
Income taxes	241	0
Non-Cash Investing and Financing Activities:
Accrual for preferred stock dividends payable with preferred shares	32,703	77,896
Preferred stock issued to pay dividends	18,748	100,030
Common stock issued to pay dividends	$ 0	$ 1,322

1. BASIS OF FINANCIAL STATEMENT

1. BASIS OF FINANCIAL STATEMENT PRESENTATION	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF FINANCIAL STATEMENT PRESENTATION	Klever Marketing, Inc. (the “Company”) was created to develop, market and distribute an electronic shopping cart or mobile telephone 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. The accompanying unaudited, condensed 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, 2016 Annual Report on Form 10-K. Operating results for the three months and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

2. SIGNIFICANT ACCOUNTING POLIC

2. SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	The Company’s significant accounting policies are described in the notes to the Company’s audited financial statements included in its December 31, 2016 Annual Report on Form 10-K. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. Income (Loss) Per Common Share Basic net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share of common stock is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents than outstanding. Potential dilutive common share equivalents consist of shares issuable upon exercise of outstanding stock options and the exercise of convertible preferred stock. For the nine months ended September 30, 2017, 28,740,529 common stock equivalents related to convertible preferred stock have been included in the calculation of diluted income per common share. For the three months ended September 30, 2017 and 2016 and for the nine months ended September 30, 2016 these common stock equivalents have not been included in the calculation of diluted loss per share because they are anti-dilutive. Common stock equivalents related to the conversion of stock options have not been included in the calculation of diluted loss per common share for all periods because they are anti-dilutive. Therefore, basic income or loss per common share is the same as diluted income or loss per common share for the three months ended September 30, 2017 and 2016 and the nine months ended September 30, 2016. Reclassifications Certain amounts in the 2016 condensed financial statements have been reclassified to conform with the current year presentation. Recently Issued Accounting Pronouncements In July 2017, the FASB issued Accounting Standards Update ("ASU") 2017-11, "Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; 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." Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, "Distinguishing Liabilities from Equity," because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently unable to determine the impact on its consolidated financial statements of the adoption of this new accounting pronouncement. In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-4, “Intangibles – Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment.” This update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity should apply the amendments in this update on a prospective basis. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition. That disclosure should be provided in the first annual period and in the interim period within the first annual period when the entity initially adopts the amendments in this update. A public business entity that is an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. In January 2017, the FASB issued ASU No. 2017-1, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments of this ASU are effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this Update are to be applied prospectively on or after the effective date. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

3. GOING CONCERN UNCERTAINTY

3. GOING CONCERN UNCERTAINTY	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN UNCERTAINTY	As shown in the accompanying condensed financial statements, during the nine months ended September 30, 2017 and 2016, the Company did not generate any revenue from product sales and reported net income of $42,871 (resulting primarily from a favorable debt settlement) and a net loss of $215,293, respectively. As of September 30, 2017, the Company’s current liabilities exceeded its current assets by $846,830 and the Company had a total stockholders’ deficit of $233,523. As of September 30, 2017, the Company had $4,203 of cash. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern. 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 2017 and into calendar year 2018. However, management cannot make any assurances that such financing will be secured.

4. INTANGIBLE ASSETS

4. INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	Intangible assets consist of the following: September 30, December 31, Capitalized software development costs $ 552,503 $ 552,503 Patents and trademarks 168,564 159,664 Accumulated amortization of patents and trademarks (107,760 ) (83,289 ) $ 613,307 $ 628,878 The Company capitalizes software development costs incurred from the time technological feasibility has been obtained until the product is generally released to customers. Amortization of capitalized software development costs begins when the products are available to customers and is computed using the straight-line method over the remaining estimated economic life of the product. Currently, the Company anticipates amortization of software development costs to commence in fiscal year 2018. The Company achieved technological feasibility with regard to its mobile phone technology during the fourth quarter of 2010. No software development costs were incurred and capitalized during the three months and nine months ended September 30, 2017, and no amortization expense for software development costs was recorded for the three and nine months ended September 30, 2017 and 2016. The costs of patents and trademarks are amortized on a straight-line basis over 5 years from the date the patent or trademark is issued. Intangible assets with indefinite lives are tested for impairment on an annual basis or when the facts and circumstances suggest that the carrying amount of the assets may not be recovered. Amortization expense for patents and trademarks was $8,429 and $7,584 for the three months ended September 30, 2017 and 2016 and $24,471 and $21,627 for the nine months ended September 30, 2017 and 2016, respectively.

5. ACCRUED LIABILITIES

5. ACCRUED LIABILITIES	9 Months Ended
	Sep. 30, 2017
Payables and Accruals [Abstract]
ACCRUED LIABILITIES	Accrued liabilities consist of the following: September 30, December 31, Compensation - officers and bookkeeper $ 523,625 $ 472,625 Taxes 41,689 40,769 Accrued interest – related party 2,509 1,230 $ 567,823 $ 514,624

6. PREFERRED STOCK

6. PREFERRED STOCK	9 Months Ended
	Sep. 30, 2017
Preferred Stock
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, par value $0.01 per share, for all classes. Effective April 9, 2017, the Board of Directors of the Company approved an increase in the number of authorized shares of preferred stock to: 300,000 shares of Class A Voting Preferred Stock (“Class A Shares”); 250,000 shares of Class B Voting Stock (“Class B Shares”) and 400,000 shares of Class C Voting Preferred Stock (“Class C Shares”). As of September 30, 2017 and December 31, 2016, there were 488,608 and 468,688 total preferred shares issued and outstanding for all classes. As of September 30, 2017, 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 September 30, 2017, the Company had accrued and unpaid preferred stock dividends totaling $21,864 compared to $7,909 as of December 31, 2016. To date, all accrued dividends for preferred stock have been authorized for payment through the issuance of shares of preferred and common stock based on the ratios for each class of preferred stock described below. Class A Voting Preferred Stock As of September 30, 2017 and December 31, 2016, there were 156,376 and 150,000 Class A Shares outstanding, respectively. Each Class A Share is 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 As of September 30, 2017 and December 31, 2016, there were 123,732 and 118,688 Class B Shares outstanding, respectively. Each Class B Share is 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 As of September 30, 2017 and December 31, 2016, there were 208,500 and 200,000 Class C Shares outstanding, respectively. Each Class C Share is 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.

7. COMMON STOCK

7. COMMON STOCK	9 Months Ended
	Sep. 30, 2017
STOCKHOLDERS' DEFICIT
COMMON STOCK	In accordance with the Company’s bylaws, the Company has authorized a total of 250,000,000 shares of common stock, par value $0.01 per share. As of September 30, 2017 and December 31, 2016, there were 60,822,567 and 59,731,567 common shares issued and outstanding, respectively. During the nine months ended September 30, 2017, the Company issued a total of 1,091,000 shares of common stock to investors for $40,300 cash. During the nine months ended September 30, 2016, the Company issued 1,250,000 shares of common stock to an investor for $32,500 cash and 25,918 shares of common stock to a company that is controlled by the Company’s CEO in payment of accrued preferred stock dividends.

8. STOCK OPTIONS

8. STOCK OPTIONS	9 Months Ended
	Sep. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK OPTIONS	The Company’s 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, 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 nine months ended September 30, 2017, the Company did not issue any stock options. A summary of the Company’s stock option awards as of September 30, 2017, and changes during the nine months then ended is as follows: Shares Weighted Weighted Aggregate Outstanding at December 31, 2016 2,800,000 $ 0.050 1.08 Granted – $ – Exercised – $ – Forfeited or expired – $ – Outstanding and exercisable 2,800,000 $ 0.050 .34 $ – The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on our closing stock price of $0.0058 as of September 30, 2017, which would have been received by the holders of in-the-money options had the option holders exercised their options as of that date.

9. RELATED PARTY TRANSACTIONS

9. RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	The Company periodically receives funding from its CEO, CFO, directors and stockholders to fund operating costs of the Company. Jerry Wright, a director, loaned the Company $30,000 during the year ended December 31, 2015, which bears interest at the rate of 6% per annum. The related party note payable had a principal balance of $25,500 as of September 30, 2017 and December 31, 2016, and accrued interest payable of $2,360 and $1,216 as of September 30, 2017 and December 31, 2016, respectively. The loan was to have been paid by June 30, 2016, and is currently in default. PSF Inc., a company controlled by the Company’s CEO, loaned the Company $6,000 during the year ended December 31, 2016, which bears interest at the rate of 4% per annum. The related party note payable had a principal balance of $0 and $6,000 at September 30, 2017 and December 31, 2016, respectively, and accrued interest payable of $0 and $15 as of September 30, 2017 and December 31, 2016, respectively. The loan was paid in full in July 2017. In July 2017, a stockholder of the Company loaned the Company $12,500, which bears interest at the rate of 5% per annum. The note is unsecured and had a principal balance of $12,500 and accrued interest payable of $149 as of September 30, 2017. The Company’s CEO and the bookkeeper, who is the wife of the CEO, provide consulting services to the Company through companies controlled by the individuals. The Company accrued $15,000 and $40,500 for compensation for the CEO during the three months ended September 30, 2017 and 2016, respectively, and $45,000 and $121,500 during the nine months ended September 30, 2017 and 2016, respectively. The CEO voluntarily reduced his monthly compensation to $5,000 per month effective October 1, 2016, pending completion of a major funding. Accrued compensation to the CEO totaled $490,625 and $445,625 as of September 30, 2017 and December 31, 2016, respectively. The bookkeeper earned $3,000 and $4,500 during the three months ended September 30, 2017 and 2016, respectively, and $6,000 and $13,500 during the nine months ended September 30, 2017 and 2016, respectively. The bookkeeper voluntarily reduced her monthly compensation to $1,000 per month effective January 1, 2017, pending completion of a major funding. Accrued compensation to the bookkeeper totaled $33,000 as of September 30, 2017 and December 31, 2016.

10. SUBSEQUENT EVENTS

10. SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	The Company evaluated events occurring after the date of the accompanying condensed balance sheets through the date the financial statements were issued and has identified the following subsequent events that it believes require disclosure: In October 2017, the Board of Directors of the Company authorized the issuance of 6,646 shares of Class A preferred stock valued at $11,782, 5,258 shares of Class B preferred stock valued at $6,094 and 8,862 shares of Class C preferred stock valued at $3,988 in payment of accrued preferred stock dividends of $21,864.

2. SIGNIFICANT ACCOUNTING POL16

2. SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.
Income (Loss) Per Common Share	Income (Loss) Per Common Share Basic net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share of common stock is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents than outstanding. Potential dilutive common share equivalents consist of shares issuable upon exercise of outstanding stock options and the exercise of convertible preferred stock. For the nine months ended September 30, 2017, 28,740,529 common stock equivalents related to convertible preferred stock have been included in the calculation of diluted income per common share. For the three months ended September 30, 2017 and 2016 and for the nine months ended September 30, 2016 these common stock equivalents have not been included in the calculation of diluted loss per share because they are anti-dilutive. Common stock equivalents related to the conversion of stock options have not been included in the calculation of diluted loss per common share for all periods because they are anti-dilutive. Therefore, basic income or loss per common share is the same as diluted income or loss per common share for the three months ended September 30, 2017 and 2016 and the nine months ended September 30, 2016.
Reclassifications	Reclassifications Certain amounts in the 2016 condensed financial statements have been reclassified to conform with the current year presentation.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In July 2017, the FASB issued Accounting Standards Update ("ASU") 2017-11, "Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; 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." Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, "Distinguishing Liabilities from Equity," because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently unable to determine the impact on its consolidated financial statements of the adoption of this new accounting pronouncement. In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-4, “Intangibles – Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment.” This update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity should apply the amendments in this update on a prospective basis. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition. That disclosure should be provided in the first annual period and in the interim period within the first annual period when the entity initially adopts the amendments in this update. A public business entity that is an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. In January 2017, the FASB issued ASU No. 2017-1, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments of this ASU are effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this Update are to be applied prospectively on or after the effective date. The Company is currently unable to determine the impact on its financial statements of the adoption of this new accounting pronouncement. Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

4. INTANGIBLE ASSETS (Tables)

4. INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	September 30, December 31, Capitalized software development costs $ 552,503 $ 552,503 Patents and trademarks 168,564 159,664 Accumulated amortization of patents and trademarks (107,760 ) (83,289 ) $ 613,307 $ 628,878

5. ACCRUED LIABILITIES (Tables)

5. ACCRUED LIABILITIES (Tables)	9 Months Ended
	Sep. 30, 2017
Payables and Accruals [Abstract]
Accrued liabilities	September 30, December 31, Compensation - officers and bookkeeper $ 523,625 $ 472,625 Taxes 41,689 40,769 Accrued interest – related party 2,509 1,230 $ 567,823 $ 514,624

8. STOCK OPTIONS (Tables)

8. STOCK OPTIONS (Tables)	9 Months Ended
	Sep. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock option activity	Shares Weighted Weighted Aggregate Outstanding at December 31, 2016 2,800,000 $ 0.050 1.08 Granted – $ – Exercised – $ – Forfeited or expired – $ – Outstanding and exercisable 2,800,000 $ 0.050 .34 $ –

2. SIGNIFICANT ACCOUNTING POL20

2. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Accounting Policies [Abstract]
Antidilutive shares	0	0	28,740,529	0

3. GOING CONCERN UNCERTAINTY (D

3. GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
PreferredClassCMember
Net income (loss)	$ (38,057)	$ (67,451)	$ 42,871	$ (215,293)
Current liabilities greater than current assets	846,830		846,830
Stockholders deficit	(233,523)		(233,523)		$ (302,739)
Cash	$ 4,203	$ 13,798	$ 4,203	$ 13,798	$ 4,934	$ 31,782

4. INTANGIBLE ASSETS (Details)

4. INTANGIBLE ASSETS (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Capitalized software development costs	$ 552,503	$ 552,503
Patents and trademarks	168,564	159,664
Accumulated amortization of patents and trademarks	(107,760)	(83,289)
Other assets - intangibles, net	$ 613,307	$ 628,878

4. INTANGIBLE ASSETS (Details N

4. INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Software Development [Member]
Payments to develop software	$ 0		$ 0
Amortization expense	0	$ 0	0	$ 0
Patents and Trademarks [Member]
Amortization expense	$ 8,429	$ 7,584	$ 24,471	$ 21,627

5. ACCRUED LIABILITIES (Details

5. ACCRUED LIABILITIES (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Compensation - officers and bookkeeper	$ 523,625	$ 472,625
Taxes	41,689	40,769
Accrued interest - related party	2,509	1,230
Accrued Liabilities	$ 567,823	$ 514,624

6. PREFERRED STOCK (Details Nar

6. PREFERRED STOCK (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Convertible preferred stock - shares authorized	2,000,000
Convertible preferred stock - par value	$ .01
Convertible preferred stock - shares issued	488,608	468,688
Accrued and unpaid preferred dividends	$ 21,864	$ 7,909
Preferred Class A [Member]
Convertible preferred stock - shares authorized	300,000	150,000
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares issued	156,376	150,000
Convertible preferred stock - shares outstanding	156,376	150,000
Convertible preferred stock - liquidation preference per share (in Dollars)	$ 26
Preferred Class B [Member]
Convertible preferred stock - shares authorized	250,000	125,000
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares issued	123,732	118,688
Convertible preferred stock - shares outstanding	123,732	118,688
Convertible preferred stock - liquidation preference per share (in Dollars)	$ 17
Preferred Class C [Member]
Convertible preferred stock - shares authorized	400,000	200,000
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares issued	208,500	200,000
Convertible preferred stock - shares outstanding	208,500	200,000
Convertible preferred stock - liquidation preference per share (in Dollars)	$ 6.60
Convertible Preferred Stock Series A [Member]
Convertible preferred stock terms of conversion	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.
Convertible Preferred Stock Series B [Member]
Convertible preferred stock terms of conversion	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.
Convertible Preferred Stock Series C [Member]
Convertible preferred stock terms of conversion	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.

7. COMMON STOCK (Details Narrat

7. COMMON STOCK (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Common stock par value (in Dollars per share)	$ 0.01		$ 0.01
Common stock, shares authorized	250,000,000		250,000,000
Common stock, shares issued	60,822,567		59,731,567
Common stock, shares outstanding	60,822,567		59,731,567
Proceeds from issuance of common stock	$ 40,300	$ 62,500
Investors [Member]
Stock issued new, shares issued	1,091,000
Proceeds from issuance of common stock	$ 40,300
An Investor [Member]
Common stock, shares issued		25,918
Stock issued new, shares issued		1,250,000
Proceeds from issuance of common stock		$ 32,500

8. STOCK OPTIONS (Details - Opt

8. STOCK OPTIONS (Details - Option activity)	9 Months Ended
	Sep. 30, 2017USD ($)$ / sharesshares
Option shares
Options outstanding, beginning balance	2,800,000
Options granted	0
Options exercised	0
Options forfeited or expired	0
Options outstanding, ending balance	2,800,000
Options outstanding and exercisable	2,800,000
Weighted Average Exercise Price
Options outstanding, beginning balance | $ / shares	$ 0.050
Options granted | $ / shares	0
Options exercised | $ / shares	0
Options forfeited or expired | $ / shares	0
Options outstanding, ending balance | $ / shares	$ 0.050
Weighted average remaining contract term, beginning	1 year 29 days
Weighted average remaining contract term, period end	4 months 2 days
Aggregate intrinsic value | $	$ 0

8. STOCK OPTIONS (Details Narra

8. STOCK OPTIONS (Details Narrative) - $ / shares	9 Months Ended
	Sep. 30, 2017	Aug. 11, 2003
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Common stock reserved for issuance		20,000,000
Stock options granted	0
Closing stock price	$ 0.0058

9. RELATED PARTY TRANSACTIONS (

9. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Proceeds from related party loans			$ 12,500	$ 0
Repayment of related party loans			6,000	0
Due to related party	$ 38,000		38,000		$ 31,500
Accrued interest payable	2,509		2,509		1,230
Accrued compensation	523,625		$ 523,625		472,625
Jerry Wright [Member]
Interest rate			6.00%
Due to related party	25,500		$ 25,500		25,500	$ 30,000
Accrued interest payable	2,360		$ 2,360		1,216
Debt maturity date			Jun. 30, 2016
PSF, Inc. [Member]
Interest rate			4.00%
Due to related party	0		$ 0		6,000
Accrued interest payable	0		$ 0		15
Stockholder [Member]
Interest rate			5.00%
Due to related party	12,500		$ 12,500
Accrued interest payable	149		149
Chief Executive Officer [Member]
Employee related liabilities, current	15,000	$ 40,500	45,000	121,500
Accrued compensation	490,625		490,625		445,625
Bookkeeper [Member]
Employee related liabilities, current	3,000	$ 4,500	6,000	$ 13,500
Accrued compensation	$ 33,000		$ 33,000		$ 33,000