| SIGNIFICANT ACCOUNTING POLICIES | A summary
of the significant accounting policies consistently applied in the preparation of the accompanying financial statements are as
follows: Accounting
Method The Company’s
financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US
GAAP”) and reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management,
are necessary for fair presentation of the financial statements. 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. Cash and Cash Equivalents The Company
considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company did not have
any cash equivalents as of and for the years ended December 31, 2017 and 2016. Valuation
of Long-Lived Assets Long-lived
assets such as capitalized software development and licenses, office equipment and intangible assets with definite useful lives
are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be
recoverable or in the period in which the held for sale criteria are met. For assets held and used, this analysis consists of
comparing the asset’s carrying value to the expected future cash flows to be generated from the asset on an undiscounted
basis. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values
are determined based on quoted market values, discounted cash flows, or external appraisals, as applicable. Long-lived assets
are reviewed for impairment at the individual asset or the asset group level for which the lowest level of independent cash flows
can be identified. The Company recorded an impairment loss for the year ended December 31, 2017 of $290,260. Property
and Equipment Property
and equipment consisted of office equipment with a cost of $3,350 and with accumulated depreciation of $3,350 as of December 31,
2017 and 2016. Depreciation of office equipment is computed using the straight-line method over an estimated economic useful life
of 3 years. Depreciation expense was $0 and $96 for the years ended December 31, 2017 and 2016, respectively. Upon sale
or other disposition of property and equipment, the cost and related accumulated depreciation or amortization are removed from
the accounts and any gain or loss is included in the determination of income or loss. Expenditures
for maintenance and repairs are charged to expense as incurred. Major overhauls and betterments are capitalized and depreciated
over their estimated economic useful lives. Intangible
Assets Intangible assets consist of capitalized
software development costs and patents and trademarks. 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. 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. During the year ended December 31, 2017,
the Company reduced the book value of the capitalized software development costs by an impairment expense of $290,260. As of December
31, 2017 and 2016, the Company had capitalized software development costs of $262,243 and $552,503, respectively. No amortization
expense was recorded for the years ended December 31, 2017 and 2016. Patents
and Trademarks The
Company capitalizes the cost of patents and trademarks and amortizes the capitalized costs on a straight-line basis over 5
years from the date the patent or trademark is issued. At December 31, 2017, patents and trademarks have a cost of $168,564,
accumulated amortization of $114,097, and had a net book value of $54,467. At December 31, 2016, patents and trademarks have
a cost of $159,664, accumulated amortization of $83,289, and had a net book value of $76,375. Amortization expense was
$30,808 and $29,263 for the years ended December 31, 2017 and 2016, respectively. Future amortization expense of the
Company’s existing patents and trademarks over their remaining lives will be $21,922 for 2018, $15,587 for 2019,
$11,141 for 2020, $4,452 for 2021 and $815 for 2022. 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. Revenue
Recognition The Company
currently has no revenues from its operations. We anticipate that revenues from product sales, net of estimated returns and allowances,
will be recognized when evidence of an arrangement is in place, related prices are fixed and determinable, contractual obligations
have been satisfied, title and risk of loss have been transferred to the customer and collection of the resulting receivable is
reasonably assured. Concentration
of Credit Risk The Company
has no significant concentrations of credit risk. 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 years
ended December 31, 2017 and 2016, the Company incurred net losses; therefore, common stock equivalents related to the conversion
of stock options and convertible preferred stock have not been included in the calculation of diluted loss per common shares because
they are anti-dilutive. Therefore, basic loss per common share is the same as diluted loss per common share for both years. For
the years ended December 31, 2017 and 2016, the Company has excluded a total of 32,761,983 and 30,368,773 common shares, respectively,
for exercisable options and potential conversion of convertible preferred stock. 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 in the accompanying financial statements at December 31, 2017 and December
31, 2016. At December 31, 2017, we determined that the statute of limitations had expired and no accrual for uncertain tax positions
was needed and wrote off the $40,200 balance. The Company
includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision
for income taxes. As of December 31, 2017 and 2016, the Company had $0 and $9,868 of accrued interest and penalties related to
uncertain tax positions. Research
and Development The Company
continues to develop additional 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 providing "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. For the years
ended December 31, 2017 and 2016, the Company incurred research and development expenses of $895 and $1,343 respectively. Fair Value
of Financial Instruments The FASB
provides the framework for measuring fair value. ASC 820-10-50, Fair Value Measurements In determining
fair value, the Company utilizes observable market data when available, or models that incorporate observable market data. In
addition to market information, the Company incorporates transaction-specific details that, in management’s judgment, market
participants would take into account in measuring fair value. In arriving
at fair-value estimates, the Company utilizes the most observable inputs available for the valuation technique employed. If a
fair-value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement is characterized based
upon the lowest level of input that is significant to the fair-value measurement. The carrying
amounts reported in the accompanying balance sheets as of December 31, 2017 and 2016 for cash and current liabilities each qualify
as financial instruments, which management believes 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. 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. 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. |
