Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 29, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | APPLIED ENERGETICS, INC. | ||
Entity Central Index Key | 879,911 | ||
Trading Symbol | aerg | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 154,785,520 | ||
Entity Public Float | $ 10,549,000 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | Q4 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
Revenues from governmental entities or contractors | $ 0 | $ 0 |
Cost of revenue | 0 | 0 |
Gross profit | 0 | 0 |
Operating expenses | ||
General and administrative | 495,169 | 225,323 |
Total operating expenses | 495,169 | 225,323 |
Operating loss | (495,169) | (225,323) |
Other income | ||
Gain on asset disposal | 0 | 1,000 |
Other income | 2,542 | 0 |
Interest income | 22 | 472 |
Total other income | 2,564 | 1,472 |
Provision for income taxes | 0 | 0 |
Net loss | (492,605) | (223,851) |
Preferred stock dividends | (34,005) | (34,005) |
Net loss attributable to common stockholders | $ (526,610) | $ (257,856) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) |
Weighted average number of shares outstanding, basic and diluted (in Shares) | 93,207,438 | 91,785,520 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 680 | $ 136,840 |
Other assets | 312 | |
Total current assets | 992 | 136,840 |
TOTAL ASSETS | 992 | 136,840 |
Current liabilities | ||
Accounts payable | 66,986 | |
Accrued expenses - current | 233,833 | 7,063 |
Accrued dividends | 48,080 | 48,079 |
Total current liabilities | 348,899 | 55,142 |
Total liabilities | 348,899 | 55,142 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY [Abstract] | ||
Series A Convertible Preferred Stock, $.001 par value, 2,000,000 shares authorized and 13,602 shares issued and outstanding at December 31, 2016 and at December 31, 2015 (Liquidation preference $340,050 and $340,050, respectively) | 14 | 14 |
Common stock, $.001 par value, 500,000,000 shares authorized; 154,785,520 and 91,785,520 shares issued and outstanding at December 31, 2016 and at December 31, 2015, respectively | 154,785 | 91,785 |
Additional paid-in capital | 79,179,432 | 79,179,432 |
Accumulated deficit | (79,682,138) | (79,189,533) |
Total stockholders' (deficit) equity | (347,907) | 81,698 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 992 | $ 136,840 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
STOCKHOLDERS' EQUITY [Abstract] | ||
Series A convertible preferred stock, par value (in Dollars per Share) | $ 0.001 | $ 0.001 |
Series A convertible preferred stock, shares authorized (in Shares) | 2,000,000 | 2,000,000 |
Series A convertible preferred stock, shares issued (in Shares) | 13,602 | 13,602 |
Series A convertible preferred stock, shares outstanding (in Shares) | 13,602 | 13,602 |
Common stock, par value (in Dollars per Share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in Shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in Shares) | 91,785,520 | 91,785,520 |
Common stock, shares outstanding (in Shares) | 91,785,520 | 91,785,520 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2014 | $ 32,305 | $ 107 | $ 91,785 | $ 79,236,839 | $ (79,296,426) |
Balance (in Shares) at Dec. 31, 2014 | 107,172 | 91,785,520 | |||
Purchase of preferred stock | 273,244 | $ (93) | (57,407) | 330,744 | |
Purchase of preferred stock (in Shares) | (93,570) | ||||
Net loss | (223,851) | (223,851) | |||
Balance at Dec. 31, 2015 | 81,698 | $ 14 | $ 91,785 | 79,179,432 | (79,189,533) |
Balance (in Shares) at Dec. 31, 2015 | 13,602 | 91,785,520 | |||
Stock-based compensaiton expense | 63,000 | $ 63,000 | |||
Stock-based compensaiton expense (in Shares) | 63,000,000 | ||||
Net loss | (492,605) | (492,605) | |||
Balance at Dec. 31, 2016 | $ (347,907) | $ 14 | $ 154,785 | $ 79,179,432 | $ (79,682,138) |
Balance (in Shares) at Dec. 31, 2016 | 13,602 | 154,785,520 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (492,605) | $ (223,851) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Gain on equipment disposal | 0 | (1,000) |
Non-cash stock based compensation expense | 63,000 | 0 |
Changes in assets and liabilities: | ||
Prepaid expenses and other assets | (312) | 59,305 |
Accounts payable | 66,987 | (4,967) |
Accrued expenses | 226,770 | (379) |
Net cash used in operating activities | (136,160) | (170,892) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from disposal of equipment | 0 | 1,000 |
Net cash provided by investing activities | 0 | 1,000 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payment on purchase of preferred stock | 0 | (57,500) |
Net cash used in financing activities | 0 | (57,500) |
Net decrease in cash and cash equivalents | (136,160) | (227,392) |
Cash and cash equivalents, beginning of period | 136,840 | 364,232 |
Cash and cash equivalents, end of period | 680 | 136,840 |
Supplemental Cash Flow Information | ||
Cancellation of preferred stock dividend | 0 | 330,744 |
Cash paid for interest and taxes | $ 0 | $ 0 |
ORGANIZATION OF BUSINESS AND SU
ORGANIZATION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
ORGANIZATION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - ORGANIZATION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements include the accounts of Applied Energetics, Inc. and its wholly owned subsidiary North Star Power Engineering, Inc. (“North Star”) (collectively, "company," "Applied Energetics," "we," "our" or "us"). All intercompany balances and transactions have been eliminated. Certain reclassifications have been made to prior period financial statement amounts to conform to the current presentation. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the year ended December 31, 2016, the company incurred a net loss of approximately $493,000, had negative cash flows from operations of $136,000 and may incur additional future losses due to the reduction in Government contract activity. These matters raise substantial doubt as to the company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should the company be unable to continue as a going concern. Nature of Business Applied Energetics, Inc. is a corporation organized and existing under the laws of the State of Delaware. Our executive office is located at 2480 west Ruthrauff Road, Suite 140 Q, Tucson, Arizona, 85705 and our telephone number is (520) 628-7415. The company is a “shell company” as such term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. As of October 3, 2014, the company suspended its previous business activities. Prior to October 3, 2014, the company engaged in the design, development and manufacture of applied energy systems for military and commercial applications and Ultra Short Pulse lasers and high voltage lasers for commercial applications. The Company is planning to reactivate its previous business activities pursuant to a Teaming and Consulting Agreement with Applied Optical Sciences, Inc. and Stephen W. McCahon, one of the Company’s founders. The company owns intellectual property that is integral and necessary for the development of Laser Guided Energy and Direct Discharge Electrical products for military and commercial uses (the “Products”) and the Consultants have the facilities and technical knowhow to utilize the company’s intellectual property in the development of the Products; and the Parties have agreed to cooperate in the proposal and fulfillment of research and development contracts for branches of the Department of Defense, agencies of the Federal Government and other Defense contractors. If the reactivation of our former business is successful we will no longer be a “shell company” but will be classified as a Development Stage Company until we achieve significant revenues from our reactivated business. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its assumptions on historical experiences and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In addition, management considers the basis and methodology used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other relevant matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation. Such estimates and assumptions could change in the future as more information becomes known which could impact the amounts reported and disclosed herein. Significant estimates include revenue recognition under the percentage of completion method of contract accounting, the valuation of inventory, carrying amounts of long-lived assets, valuation assumptions for share-based payments and measurements of income tax assets and liabilities. Revenue Recognition A majority of revenue under long-term government contracts is recorded under the percentage of completion method. Revenue, billable monthly under cost plus fixed fee contracts, is recorded as costs are incurred and includes estimated earned fees in the proportion that costs incurred to date bear to total estimated costs. Costs include direct labor, direct materials, subcontractor costs and manufacturing and administrative overhead allowable under the contract. General and administrative expenses allowable under the terms of contracts are allocated per contract, depending on its direct labor and material proportion to total direct labor and material of all contracts. As contracts can extend over one or more accounting periods, revisions in earnings estimated during the course of work are reflected during the accounting period in which the facts become known. When the current contract estimate indicates a loss, a provision is made for the total anticipated loss in the current period. We do not generally provide an allowance for returns from our government customers because our customer agreements do not provide for a right of return. The asset caption “accounts receivable” includes costs and estimated earnings in excess of billings on uncompleted contracts, which represents revenue recognized in excess of amounts billed. Such revenue is billable under the terms of contracts at the end of the year, but was not invoiced until the following year and is generally expected to be collected within one year. Revenue for other products and services is recognized when such products and services are delivered or performed and, in connection with certain sales to Government agencies, when the products and services are accepted, which is normally negotiated as part of the initial contract. Revenue from commercial, non-Governmental, customers is based on fixed price contracts where the sale is recognized upon acceptance of the product or performance of the service and when payment is probable. Contract costs are deferred in the same manner as inventory costs and are charged to operations as the related revenue from contracts is recognized. When a current contract estimate indicates a loss, a provision is made for the total anticipated loss in the period in which such facts become evident. Net Loss Attributable to Common Stockholders Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period before giving effect to stock options, stock warrants, restricted stock units and convertible securities outstanding, which are considered to be dilutive common stock equivalents. Diluted net loss per common share is calculated based on the weighted average number of common and potentially dilutive shares outstanding during the period after giving effect to dilutive common stock equivalents. Contingently issuable shares are included in the computation of basic loss per share when issuance of the shares is no longer contingent. The number of options, restricted stock units and our Series A Convertible Preferred Stock, which were not included in the computation of earnings per share because the effect was antidilutive, was 38,256 and 67,422 for the years ended December 31, 2016 and 2015, respectively. Fair Value of Current Assets and Liabilities The carrying amount of accounts payable approximate fair value due to the short maturity of these instruments. Cash and Cash Equivalents Cash equivalents are investments in money market funds or securities with an initial maturity of three months or less. These money market funds are invested in government and US treasury based securities. Income Taxes Deferred tax assets and liabilities are recognized currently for the future tax consequences attributable to the temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized. Our valuation allowance is currently 100% of our assets. We consider all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed for some portion or all of a net deferred tax asset. Judgment is used in considering the relative impact of negative and positive evidence. In arriving at these judgments, the weight given to the potential effect of negative and positive evidence is commensurate with the extent to which it can be objectively verified. We record a valuation allowance to reduce our deferred tax assets and review the amount of such allowance annually. When we determine certain deferred tax assets are more likely than not to be utilized, we will reduce our valuation allowance accordingly. Share-Based Payments Employee stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The fair value of each option grant is estimated at the date of grant using the Black-Scholes-Merton option valuation model. We make the following assumptions relative to this model: (i) the annual dividend yield is zero as we do not pay dividends on common stock, (ii) the weighted-average expected life is based on a midpoint scenario, where the expected life is determined to be half of the time from grant to expiration, regardless of vesting, (iii) the risk free interest rate is based on the U.S. Treasury security rate for the expected life, and (iv) the volatility is based on the level of fluctuations in our historical share price for a period equal to the weighted-average expected life. We estimate forfeitures when recognizing compensation expense and adjust this estimate over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative adjustment, which is recognized in the period of change and which impacts the amount of unamortized compensation expense to be recognized in future periods. Significant Concentrations and Risks We maintain cash balances at a commercial bank and, at times, balances exceed FDIC limits. Substantially all of our accounts receivable are with agents or departments of the US Federal Government which, although concentrated in one group of common entities, does not expose us to significant credit risk. Research and Development Costs Research and development costs include experimentation, design, and enhancement of proprietary technologies and products and are expensed as incurred. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 12 Months Ended |
Dec. 31, 2016 | |
NEW ACCOUNTING STANDARDS [Abstract] | |
NEW ACCOUNTING STANDARDS | NOTE 2 – NEW ACCOUNTING STANDARDS The company has reviewed all issued accounting pronouncements and plans to adopt those that are applicable to it. The company does not expect the adoption of any other pronouncements to have an impact on its results of operations or financial position. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 3 – STOCKHOLDERS’ EQUITY Authorized Capital Stock Our authorized capital stock consists of 500,000,000 shares of common stock at a par value of $.001 per share and 2,000,000 shares of preferred stock at a par value of $.001 per share. On April 10, 2012, our stockholders approved an amendment to our certificate of incorporation to increase our authorized common stock from 125,000,000 to 500,000,000 shares at such time as our Board of Directors determined that effecting such amendment will be in the best interests of our company and our stockholders. A certificate of amendment to increase our authorize common stock from 125,000,000 to 500,000,000 shares was filed and accepted and recorded by the Secretary of State of the State of Delaware on March 3, 2016. Preferred Stock As of December 31, 2016 and 2015 there were 13,602 and 13,602 shares of Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”) outstanding, respectively. The company has not paid the dividends commencing with the quarterly dividend due August 1, 2013. Dividend arrearages as of December 31, 2016 including previously accrued dividends included in our balance sheet are approximately $119,000. Our Board of Directors suspended the declaration of the dividend, commencing with the dividend payable as of February 1, 2015 since we did not have a surplus (as such term is defined in the Delaware general corporation Law) as of December 31, 2014, until such time as we have a surplus or net profits for a fiscal year. Our Series A Preferred Stock has a liquidation preference of $25.00 per Share. The Series A Preferred Stock bears dividends at the rate of 6.5% of the liquidation preference per share per annum, which accrues from the date of issuance, and is payable quarterly. Dividends may be paid in: (i) cash, (ii) shares of our common stock (valued for such purpose at 95% of the weighted average of the last sales prices of our common stock for each of the trading days in the ten trading day period ending on the third trading day prior to the applicable dividend payment date), provided that the issuance and/or resale of all such shares of our common stock are then covered by an effective registration statement and the company’s common stock is listed on a U.S. national securities exchange or the Nasdaq Stock Market at the time of issuance or (iii) any combination of the foregoing. If the company fails to make a dividend payment within five business days following a dividend payment date, the dividend rate shall immediately and automatically increase by 1% from 6.5% of the liquidation preference per offered share of Series A preferred stock to 7.5% of such liquidation preference. If a payment default shall occur on two consecutive dividend payment dates, the dividend rate shall immediately and automatically increase to 10% of the liquidation preference for as long as such payment default continues and shall immediately and automatically return to the Initial dividend rate at such time as the payment default is no longer continuing. Each share of Series A Preferred Stock is convertible at any time at the option of the holder into a number of shares of common stock equal to the liquidation preference (plus any unpaid dividends for periods prior to the dividend payment date immediately preceding the date of conversion by the holder) divided by the conversion price (initially $12.00 per share, subject to adjustment in the event of a stock dividend or split, reorganization, recapitalization or similar event.) If the closing sale price of the common stock is greater than 140% of the conversion price on 20 out of 30 trading days, the company may redeem the Series A Preferred Stock in whole or in part at any time through October 31, 2010, upon at least 30 days' notice, at a redemption price, payable in cash, equal to 100% of the liquidation preference of the shares to be redeemed, plus unpaid dividends thereon to, but excluding, the redemption date, subject to certain conditions. In addition, beginning November 1, 2010, the company may redeem the Series A Preferred Stock in whole or in part, upon at least 30 days' notice, at a redemption price, payable in cash, equal to 100% of the liquidation preference of the Series A Preferred Stock to be redeemed, plus unpaid dividends thereon to, but excluding, the redemption date, under certain conditions. If a change of control occurs, each holder of shares of Series A Convertible Preferred Stock that are outstanding immediately prior to the change of control shall have the right to require the corporation to purchase, out of legally available funds, any outstanding shares of Series A Convertible Preferred Stock at the defined purchase price. The purchase price is defined as: per share of Preferred Stock, 101% of the liquidation preference thereof, plus all unpaid and accumulated dividends, if any, to the date of purchase thereof. The purchase price is payable, at the corporation's option, (x) in cash, (y) in shares of the common stock at a discount of 5% from the fair market value of Common Stock on the Purchase Date (i.e. valued at a 95% discount of the Common Stock on the Purchase Date), or (z) any combination thereof. If the Corporation pays all or a portion of the Purchase Price in Common Stock, no fractional shares of Common Stock will be issued; instead, the company will round the applicable number of shares of Common Stock up to the nearest whole number of shares; provided that the Corporation may pay the Purchase Price (or a portion thereof), whether in cash or in shares of Common Stock, only if the Corporation has funds legally available for such payment and may pay the Purchase Price (or a portion thereof) in shares of its Common Stock only if (i) the Common Stock is listed on a U.S. national securities exchange or the Nasdaq Stock Market at the time of issuance and (ii) a shelf registration statement covering the issuance by the Corporation and/or resales of the Common Stock issuable as payment of the Purchase Price is effective on the Payment Date unless such shares are eligible for immediate resale in the public market by non-affiliates of the Corporation. Dividends on our Preferred Stock are payable quarterly on the first day of February, May, August and November, in cash or shares of Common Stock, at our discretion. In the fourth quarter of 2015, the company purchased 93,570 shares of its Series A Convertible Preferred Stock for approximately $58,000. The company cancelled the shares and returned them to unissued status. The company also reversed approximately $331,000 of accrued dividends payable. Share-Based Payments Applied Energetics adopted an Amended and Restated 2007 Stock Incentive Plan (“2007 Plan”) that provides for the grant of any or all of the following types of awards: (1) stock options, (2) restricted stock, (3) deferred stock, (4) stock appreciation rights, and (5) other stock-based awards, including restricted stock units, for periods up to 10 years. Stock options granted under the plans are generally for a fixed number of shares to employees and directors with an exercise price equal to the fair market value of the shares at the date of grant. Options granted to employees will generally vest over two to four years. Most options granted have a contractual life of 5 years from the grant date. Restricted stock granted under the plans to employees generally vest immediately and/or over a period of up to four years. Some restricted stock granted under the plans vest only upon meeting certain departmental or company-wide performance goals. Both restricted stock and options granted to non-employee directors generally vest immediately on the date of grant. We have, from time to time, also granted non-plan options to certain officers, directors and employees. Total stock-based compensation expense for grants to officers, employees and consultants was approximately $63,000 and $-0- for the years ended December 31, 2016 and 2015, respectively, which was charged to general and administrative expense. In March, 2016 the Company sold, in exchange for services, 35,000,000 shares of its common stock to Consultants and 20,000,000 common shares to the Chief Executive Officer for $0.001 per share. At December 31, 2016 and 2015, there were outstanding options to purchase -0- and 32,000, respectively, of common stock. There were no unvested restricted stock units outstanding and there were no unvested restricted stock awards outstanding as of December 31, 2016 and December 31, 2015. The following table sets forth information regarding awards under our 2007 Stock Incentive Plan: As of December 31, 2016 Share Options Restricted Restricted Shares 2007 Stock Incentive Plan 10,000,000 - - - 343,067 Total - - - 343,067 On September 10, 2007, the stockholders of Applied Energetics approved the adoption of the company’s 2007 Plan. A total of 10,000,000 shares of common stock have been reserved for distribution pursuant to the 2007 Plan. Grants from the 2007 Plan can be either service based, where the grant vests with the passage of time, or performance based, where the grant vests based on the attainment of a pre-defined company or departmental goal. We have the practice of issuing new stock to satisfy the exercise of stock options. The fair value of restricted stock and restricted stock units was estimated using the closing price of our common stock on the date of award and fully recognized upon vesting. No options were granted in 2016 or 2015. There are 343,067 aggregate shares available for grant from the Stock Incentive Plans as of December 31, 2016. The following table summarizes the activity of our stock options for the years ended December 31, 2016, and 2015: Shares Weighted Average Outstanding at December 31, 2014 32,000 $ 0.51 Granted - $ - Exercised - $ - Forfeited or expired - $ - Outstanding at December 31, 2015 32,000 $ 0.51 Granted - $ - Exercised - $ - Forfeited or expired (32,000 ) $ 0.51 Outstanding at December 31, 2016 - $ - Exercisable at December 31, 2016 - $ - As of December 31, 2016 and December 31, 2015, the aggregate intrinsic value (amount by which Applied Energetics’ closing stock price on the last trading day of the year exceeds the exercise price of the option) of options outstanding was $0, as the exercise price was greater than the market price. As of December 31, 2016 and 2015, the weighted average remaining contractual life of options outstanding and options exercisable was -0- and 0.45 years, respectively. At December 31, 2016, there was $0 of unrecognized compensation costs related to unvested stock options, net of estimated forfeitures. There was no activity of our restricted stock units and restricted stock grants for the years ended December 31, 2016 and 2015: As of December 31, 2016, there was no unrecognized stock-based compensation related to unvested restricted stock, net of estimated forfeitures. Compensation expense recorded for shares and options delivered to non-employee consultants for the years ended December 31, 2016 and 2015 was approximately $0 and $0, respectively. |
SIGNIFICANT CUSTOMERS
SIGNIFICANT CUSTOMERS | 12 Months Ended |
Dec. 31, 2016 | |
SIGNIFICANT CUSTOMERS [Abstract] | |
SIGNIFICANT CUSTOMERS | NOTE 4– SIGNIFICANT CUSTOMERS The majority of our customers are either the Government or contractors to the Government and represent -0-% and -0-% of our revenue for 2016 and 2015, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 5 – COMMITMENTS AND CONTINGENCIES Operating Leases In May 2016, we moved and entered into a month-to-month lease agreement to lease office space in Tucson, Arizona. Rent expense was approximately $4,000 and $12,000 for 2016 and 2015, respectively. At December 31, 2016, we had approximately $325 in future minimum lease payments due in less than a year. Guarantees We agree to indemnify our officers and directors for certain events or occurrences arising as a result of the officers or directors serving in such capacity. The maximum amount of future payments that we could be required to make under these indemnification agreements is unlimited. However, we maintain a director's and officer’s liability insurance policy that limits our exposure and enables us to recover a portion of any future amounts paid. As a result, we believe the estimated fair value of these indemnification agreements is minimal because of our insurance coverage and we have not recognized any liabilities for these agreements as of December 31, 2016 and 2015. Litigation Three of the Company’s shareholders commenced an action entitled Superius Securities Group, Inc.et. al. vs George Farley, et.al. (CA No. 2017-0024-VCMR) in the Court of Chancery of the state of Delaware (the “Action”), The complaint asserts that in March 2016, George Farley (‘Farley”), Chairman of the Board of Directors, Farley, as sole director of Applied Energetics, Inc. (“AERG” or the “Company”), acted without proper shareholder approval to amend AERG’s certificate of incorporation to increase the number of its authorized shares of stock from 125 million to 500 million. However, the Complaint acknowledges that the amendment was approved by a majority of AERG’s shareholders in an April 10, 2012 proxy vote. The Complaint makes no allegations that there was any defect in that vote. The proxy for the amendment expressly permitted such an increase in the number of AERG’s authorized shares “for any proper corporate purpose, including, without limitation, in connection with stock splits, stock dividends, sale of our Common Stock, employee stock incentive plan, other stock ownership plans, acquisitions and to engage in other types of capital raises or strategic transactions.” The Complaint asserts that Farley breached his fiduciary duties of “loyalty, honesty and due care by issuing shares of stock to himself and the Company’s legal counsel at below fair market value, and failing to pursue corporate opportunities allegedly in the best interests of the Company and its stockholders. The Company believes that the shareholder’s compliant is not meritorious and has filed a memorandum of law in support of a motion to dismiss the shareholder’s complaint in the Chancery Court of the State of Delaware. We may from time to time be involved in legal proceedings arising from the normal course of business. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 6 – INCOME TAXES The reconciliation of the difference between income taxes at the statutory rate and the income tax provision for the years ended: December 31 , 2016 2015 Computed tax at statutory rate $ (181,894 ) $ (76,270 ) State taxes (27,093 ) (13,459 ) Change in valuation allowance 208,988 89,729 Other - - Provision (benefit) for taxes $ - $ - Deferred tax assets (liabilities) consist of the following: December 31 , 2016 2015 Deferred Tax Assets: Accruals and reserves $ - $ - Depreciation and amortization - - Federal tax credit carryforwards 239,098 239,098 State tax credit carryforwards 340,399 340,399 Net operating loss 21,033,083 20,753,940 Goodwill amortization - - ASC 718 stock compensation - - Valuation allowance (21,612,580 ) (21,333,437 ) Total deferred tax assets $ - $ - We believe that sufficient uncertainty exists regarding the future realization of our deferred tax assets and thus a full valuation allowance is required. The valuation allowance for the year ended December 31, 2015 and 2016 decreased by $879,000 in 2015 and increased by $279,000 in 2016 due to changes in deferred tax assets. As of December 31, 2016, we have cumulative federal and Arizona net operating loss carryforwards of approximately $59.2 million and $5.8 million, respectively, which can be used to offset future income subject to taxes. Federal net operating loss carryforwards begin to expire in 2020. Arizona net operating loss carryforwards begin to expire in 2032. In addition there are federal net operating loss carryforwards is approximately $27.1 million from USHG related to pre-merger losses. We also have pre-merger federal capital loss carryforwards of approximately $520,000. As of December 31, 2016, we had cumulative unused research and development tax credits of approximately $239,000 and $340,000, which can be used to reduce future federal and Arizona income taxes, respectively. As of December 31, 2016, we have cumulative unused federal minimum tax credit carryforwards from USHG of approximately $244,000. The federal minimum tax credit carryforwards are not subject to expiration under current federal tax law. Utilization of our USHG pre-merger net operating loss carryforwards and tax credits is subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss carryforwards and tax credit carryforwards before utilization. We have unrecognized tax benefits attributable to losses and minimum tax credit carryforwards that were incurred by USHG prior to the merger in March 2004 as follows: Balance at December 31, 2014 $ 9,635,824 Additions related to prior year tax positions - Additions related to current year tax positions - Reductions related to prior year tax positions and settlements Balance at December 31, 2015 $ 9,635,824 Additions related to prior year tax positions - Additions related to current year tax positions - Reductions related to prior year tax positions and settlements - Balance at December 31, 2016 $ 9,635,824 These benefits are not recognized as a result of uncertainty regarding the utilization of the loss carryforwards and minimum tax credits. If in the future we utilize the attributes and resolve the uncertainty in our favor, the full amount will favorably impact our effective income tax rate. The company considers the U.S. and Arizona to be major tax jurisdictions. As of December 31, 2016, for federal tax purposes the tax years 2013, 2014 and 2015 and for Arizona the tax years 2013 through 2016 remain open to examination. The company currently does not expect any material changes to unrecognized tax positions within the next twelve months. We recognize interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2016 and 2015, we had no accrued interest or penalties related to our unrecognized tax benefits. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2016 | |
SUBSEQUENT EVENT [Abstract] | |
SUBSEQUENT EVENT | NOTE 7 – SUBSEQUENT EVENT The company’s management has evaluated subsequent events occurring after December 31, 2016, the date of our most recent balance sheet, through the date our financial statements were issued. In March 2017, the company issued 2,500,000 shares of common stock in exchange for $62,500 received from five individuals. In March 2017. The company granted each member of the Scientific Advisory Board options to purchase 2 million shares of $.001 par value common stock at a price of $0.05 per share. These options have a five year term and vest to the extent of 500,000 shares on the first anniversary of the grant and to the extent of 62,500 options per month during the 24 months following the initial vesting date. The company also granted each member of the Scientific Advisory Board performance options to purchase 1.5 million shares of $0.001 par value common stock at a price of $0.25 per share. These options have a five year term and vest on the date the company has cumulative revenues of $5 million. |
ORGANIZATION OF BUSINESS AND 14
ORGANIZATION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation and Nature of Business | Basis of Presentation The consolidated financial statements include the accounts of Applied Energetics, Inc. and its wholly owned subsidiary North Star Power Engineering, Inc. (“North Star”) (collectively, "company," "Applied Energetics," "we," "our" or "us"). All intercompany balances and transactions have been eliminated. Certain reclassifications have been made to prior period financial statement amounts to conform to the current presentation. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the year ended December 31, 2016, the company incurred a net loss of approximately $493,000, had negative cash flows from operations of $136,000 and may incur additional future losses due to the reduction in Government contract activity. These matters raise substantial doubt as to the company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should the company be unable to continue as a going concern. Nature of Business Applied Energetics, Inc. is a corporation organized and existing under the laws of the State of Delaware. Our executive office is located at 2480 west Ruthrauff Road, Suite 140 Q, Tucson, Arizona, 85705 and our telephone number is (520) 628-7415. The company is a “shell company” as such term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. As of October 3, 2014, the company suspended its previous business activities. Prior to October 3, 2014, the company engaged in the design, development and manufacture of applied energy systems for military and commercial applications and Ultra Short Pulse lasers and high voltage lasers for commercial applications. The Company is planning to reactivate its previous business activities pursuant to a Teaming and Consulting Agreement with Applied Optical Sciences, Inc. and Stephen W. McCahon, one of the Company’s founders. The company owns intellectual property that is integral and necessary for the development of Laser Guided Energy and Direct Discharge Electrical products for military and commercial uses (the “Products”) and the Consultants have the facilities and technical knowhow to utilize the company’s intellectual property in the development of the Products; and the Parties have agreed to cooperate in the proposal and fulfillment of research and development contracts for branches of the Department of Defense, agencies of the Federal Government and other Defense contractors. If the reactivation of our former business is successful we will no longer be a “shell company” but will be classified as a Development Stage Company until we achieve significant revenues from our reactivated business. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its assumptions on historical experiences and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In addition, management considers the basis and methodology used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other relevant matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation. Such estimates and assumptions could change in the future as more information becomes known which could impact the amounts reported and disclosed herein. Significant estimates include revenue recognition under the percentage of completion method of contract accounting, the valuation of inventory, carrying amounts of long-lived assets, valuation assumptions for share-based payments and measurements of income tax assets and liabilities. |
Revenue Recognition | Revenue Recognition A majority of revenue under long-term government contracts is recorded under the percentage of completion method. Revenue, billable monthly under cost plus fixed fee contracts, is recorded as costs are incurred and includes estimated earned fees in the proportion that costs incurred to date bear to total estimated costs. Costs include direct labor, direct materials, subcontractor costs and manufacturing and administrative overhead allowable under the contract. General and administrative expenses allowable under the terms of contracts are allocated per contract, depending on its direct labor and material proportion to total direct labor and material of all contracts. As contracts can extend over one or more accounting periods, revisions in earnings estimated during the course of work are reflected during the accounting period in which the facts become known. When the current contract estimate indicates a loss, a provision is made for the total anticipated loss in the current period. We do not generally provide an allowance for returns from our government customers because our customer agreements do not provide for a right of return. The asset caption “accounts receivable” includes costs and estimated earnings in excess of billings on uncompleted contracts, which represents revenue recognized in excess of amounts billed. Such revenue is billable under the terms of contracts at the end of the year, but was not invoiced until the following year and is generally expected to be collected within one year. Revenue for other products and services is recognized when such products and services are delivered or performed and, in connection with certain sales to Government agencies, when the products and services are accepted, which is normally negotiated as part of the initial contract. Revenue from commercial, non-Governmental, customers is based on fixed price contracts where the sale is recognized upon acceptance of the product or performance of the service and when payment is probable. Contract costs are deferred in the same manner as inventory costs and are charged to operations as the related revenue from contracts is recognized. When a current contract estimate indicates a loss, a provision is made for the total anticipated loss in the period in which such facts become evident. |
Net Loss Attributable to Common Stockholders | Net Loss Attributable to Common Stockholders Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period before giving effect to stock options, stock warrants, restricted stock units and convertible securities outstanding, which are considered to be dilutive common stock equivalents. Diluted net loss per common share is calculated based on the weighted average number of common and potentially dilutive shares outstanding during the period after giving effect to dilutive common stock equivalents. Contingently issuable shares are included in the computation of basic loss per share when issuance of the shares is no longer contingent. The number of options, restricted stock units and our Series A Convertible Preferred Stock, which were not included in the computation of earnings per share because the effect was antidilutive, was 38,256 and 67,422 for the years ended December 31, 2016 and 2015, respectively. |
Fair Value of Current Assets and Liabilities | Fair Value of Current Assets and Liabilities The carrying amount of accounts payable approximate fair value due to the short maturity of these instruments. |
Cash and Cash Equivalients | Cash and Cash Equivalents Cash equivalents are investments in money market funds or securities with an initial maturity of three months or less. These money market funds are invested in government and US treasury based securities. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized currently for the future tax consequences attributable to the temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized. Our valuation allowance is currently 100% of our assets. We consider all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed for some portion or all of a net deferred tax asset. Judgment is used in considering the relative impact of negative and positive evidence. In arriving at these judgments, the weight given to the potential effect of negative and positive evidence is commensurate with the extent to which it can be objectively verified. We record a valuation allowance to reduce our deferred tax assets and review the amount of such allowance annually. When we determine certain deferred tax assets are more likely than not to be utilized, we will reduce our valuation allowance accordingly. |
Share-Based Payments | Share-Based Payments Employee stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The fair value of each option grant is estimated at the date of grant using the Black-Scholes-Merton option valuation model. We make the following assumptions relative to this model: (i) the annual dividend yield is zero as we do not pay dividends on common stock, (ii) the weighted-average expected life is based on a midpoint scenario, where the expected life is determined to be half of the time from grant to expiration, regardless of vesting, (iii) the risk free interest rate is based on the U.S. Treasury security rate for the expected life, and (iv) the volatility is based on the level of fluctuations in our historical share price for a period equal to the weighted-average expected life. We estimate forfeitures when recognizing compensation expense and adjust this estimate over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative adjustment, which is recognized in the period of change and which impacts the amount of unamortized compensation expense to be recognized in future periods. |
Significant Concentrations and Risks | Significant Concentrations and Risks We maintain cash balances at a commercial bank and, at times, balances exceed FDIC limits. Substantially all of our accounts receivable are with agents or departments of the US Federal Government which, although concentrated in one group of common entities, does not expose us to significant credit risk. |
Research and Development Costs | Research and Development Costs Research and development costs include experimentation, design, and enhancement of proprietary technologies and products and are expensed as incurred. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Information regarding awards under 2007 Stock Incentive Plan | The following table sets forth information regarding awards under our 2007 Stock Incentive Plan: As of December 31, 2016 Share Options Restricted Restricted Shares 2007 Stock Incentive Plan 10,000,000 - - - 343,067 Total - - - 343,067 |
Schedule of Stock Option Activity | The following table summarizes the activity of our stock options for the years ended December 31, 2016, and 2015: Shares Weighted Average Outstanding at December 31, 2014 32,000 $ 0.51 Granted - $ - Exercised - $ - Forfeited or expired - $ - Outstanding at December 31, 2015 32,000 $ 0.51 Granted - $ - Exercised - $ - Forfeited or expired (32,000 ) $ 0.51 Outstanding at December 31, 2016 - $ - Exercisable at December 31, 2016 - $ - |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
Reconciliation of Income Taxes | The reconciliation of the difference between income taxes at the statutory rate and the income tax provision for the years ended: December 31 , 2016 2015 Computed tax at statutory rate $ (181,894 ) $ (76,270 ) State taxes (27,093 ) (13,459 ) Change in valuation allowance 208,988 89,729 Other - - Provision (benefit) for taxes $ - $ - |
Schedue of Deferred Tax Assets | Deferred tax assets (liabilities) consist of the following: December 31 , 2016 2015 Deferred Tax Assets: Accruals and reserves $ - $ - Depreciation and amortization - - Federal tax credit carryforwards 239,098 239,098 State tax credit carryforwards 340,399 340,399 Net operating loss 21,033,083 20,753,940 Goodwill amortization - - ASC 718 stock compensation - - Valuation allowance (21,612,580 ) (21,333,437 ) Total deferred tax assets $ - $ - |
Schedule of Unrecognized Tax Benefits and Carryforwards | We have unrecognized tax benefits attributable to losses and minimum tax credit carryforwards that were incurred by USHG prior to the merger in March 2004 as follows: Balance at December 31, 2014 $ 9,635,824 Additions related to prior year tax positions - Additions related to current year tax positions - Reductions related to prior year tax positions and settlements Balance at December 31, 2015 $ 9,635,824 Additions related to prior year tax positions - Additions related to current year tax positions - Reductions related to prior year tax positions and settlements - Balance at December 31, 2016 $ 9,635,824 |
ORGANIZATION OF BUSINESS AND 17
ORGANIZATION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
ORGANIZATION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Net loss | $ (492,605) | $ (223,851) |
Cash flows from operations | $ (136,160) | $ (170,892) |
Antidilutive options, restricted stock units, and Series A Convertible Preferred Stock shares excluded from of earnings per share (in Shares) | 38,256 | 67,422 |
Deferred income tax asset valuation allowance percentage (in Percent) | 100.00% |
STOCKHOLDERS' EQUITY (Narrative
STOCKHOLDERS' EQUITY (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2014 | Apr. 10, 2012 | |
Authorized Capital Stock | ||||||||
Common stock, shares authorized (in Shares) | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Common stock, par value (in Dollars per Share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Series A convertible preferred stock, shares authorized (in Shares) | 2,000,000 | 2,000,000 | 2,000,000 | |||||
Series A convertible preferred stock, par value (in Dollars per Share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Pre Articles of Incorporation amendment authorized common stock | 125,000,000 | 125,000,000 | 125,000,000 | |||||
Preferred Stock | ||||||||
Series A convertible preferred stock, shares outstanding (in Shares) | 13,602 | 13,602 | 13,602 | |||||
Preferred stock, amount of preferred dividends in arrears | $ 119,000 | |||||||
Series A covertible preferred stock, liquidation preference (in Dollars per Share) | $ 25 | |||||||
Series A convertible preferred stock, dividend rate (in Percent) | 6.50% | |||||||
Valuation of dividends payable in shares, percent of the weighted average of common stock sales price on the last ten trading days ending on the third trading day prior to applicable dividend payment date (in Percent) | 95.00% | |||||||
Amount of dividend rate increase if distribution not made within five business days following dividend payment date (in Percent) | 1.00% | |||||||
Series A convertible preferred stock, increased dividend rate, if company fails to pay dividends within five days of dividend payment date (in Percent) | 7.50% | |||||||
Series A convertible preferred stock, dividend rate increased, if company fails to pay dividends on two consecutive dividend payment dates (in Percent) | 10.00% | |||||||
Preferred stock conversion price per share (in Dollars per Share) | $ 12 | |||||||
Minimum percent of closing stock price to conversion price, on 20 out of 30 days, to permit Company to redeem preferred sotck with 30 days notice at a conversion price of 100% of the liquidation preference of the shares to be redeemed (in Percent) | 140.00% | |||||||
Notice period for Company redemption of preferred stock (in Duration) | 30 days | |||||||
Purchase price per share, percent of liquidation preference required of Company to holders of Series A Convertible Preferred Stock (in Percent) | 100.00% | |||||||
Purchase price per share, percent of liquidation preference required of Company on change of control (in Percent) | 101.00% | |||||||
Percent discounting of common stock value required if change of control triggers Company redemption of preferred stock, and Company elects to redeem via common stock issuance (in Percent) | 5.00% | |||||||
Purchase of preferred stock (in Shares) | 93,570 | |||||||
Payment for the purchase and cancellation of Shares of Company Series A Convertible Preferred Stock | $ 58,000 | |||||||
Reversal of convertible preferred stock dividend accrual | $ 331,000 | |||||||
Share-Based Payments | ||||||||
Maximum expiration period of share based awards (in Duration) | 10 years | |||||||
Share based award general vesting period minimum (in Duration) | 2 years | |||||||
Share based award general vesting period maximum (in Duration) | 4 years | |||||||
Contractual life of most options granted (in Duration) | 5 years | |||||||
Restricted stock maximum vesting period for grants not vesting immediately (in Duration) | 4 years | |||||||
Share-based compensation expense | $ 63,000 | $ 0 | ||||||
Shares issued for consulting services (in Shares) | 35,000,000 | |||||||
Shares issued for services of CEO (in Shares) | 20,000,000 | |||||||
Share price of shares issued for services (in Dollars per Share) | $ 0.001 | |||||||
Share-based compensation, options outstanding (in Shares) | 32,000 | 0 | 32,000 | 0 | 32,000 | |||
Restricted stock and restricted stock units outstanding (in Shares) | 0 | 0 | 0 | |||||
Shares authorized for issuance under share-based plans (in Shares) | 10,000,000 | |||||||
Share-based compensation, options granted (in Shares) | 0 | 0 | ||||||
Shares available for grant (in Shares) | 343,067 | |||||||
Intrinsic value of outstanding options | $ 0 | |||||||
Weighted average remaining contractual life of options outstanding and exercisable (in Duration) | 0 days | 5 months 12 days | ||||||
Unrecognized compensation costs related to unvested options net of forfeitures | $ 0 | |||||||
Share-based compensation, unvested restricted stock unrecognized compensation cost | 0 | |||||||
Compensation expense recorded for shares and options delivered to nonemployee consultants | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY (Schedule
STOCKHOLDERS' EQUITY (Schedule of 2007 Stock Incentive Plan) (Details) - shares | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized for issuance under share-based plans (in Shares) | 10,000,000 | |||
Share-based compensation, options outstanding (in Shares) | 0 | 0 | 32,000 | 32,000 |
Restricted stock and restricted stock units outstanding (in Shares) | 0 | 0 | ||
Shares available for grant (in Shares) | 343,067 |
STOCKHOLDERS' EQUITY (Schedul20
STOCKHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2014 | |
STOCKHOLDERS' EQUITY [Abstract] | ||||
Share-based compensation, options outstanding (in Shares) | 32,000 | 32,000 | ||
Share-based compensation, options granted (in Shares) | 0 | 0 | ||
Share-based compensation, options exercised (in Shares) | 0 | 0 | ||
Options forfeited or expired (in Shares) | 32,000 | |||
Share-based compensation, options outstanding (in Shares) | 0 | 32,000 | ||
Share-based compensation, options outstanding, weighted average exercise price (in Dollars per Share) | $ .51 | $ .51 | ||
Weighted average exercise price of options granted (in Dollars per Share) | 0 | 0 | ||
Weighted average exercise price of options exercised (in Dollars per Share) | 0 | 0 | ||
Weighted average exercise price of options forfeited or expired (in Dollars per Share) | $ .51 | 0 | ||
Weighted average exercise price of options exercisable (in Dollars per Share) | 0 | $ 0 | ||
Share-based compensation, options outstanding, weighted average exercise price (in Dollars per Share) | $ .51 | |||
Share-based compensation, options exercisable (in Shares) | 0 | 0 | 0 |
SIGNIFICANT CUSTOMERS (Narrativ
SIGNIFICANT CUSTOMERS (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
SIGNIFICANT CUSTOMERS [Abstract] | ||
Revenues from governmental entities or contractors | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Jun. 30, 2016USD ($)shares | Apr. 10, 2012shares | |
COMMITMENTS AND CONTINGENCIES [Abstract] | ||||
Rent expense | $ | $ 4,000 | $ 12,000 | ||
Future minimum lease payments due in less than a year | $ | $ 325 | |||
Number of shareholders who commenced litigation against the Company (in Integer) | 3 | |||
Pre Articles of Incorporation amendment authorized common stock | shares | 125,000,000 | 125,000,000 | 125,000,000 | |
Common stock, shares authorized (in Shares) | shares | 500,000,000 | 500,000,000 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
INCOME TAXES [Abstract] | ||
Change in valuation allowance | $ 279,000 | $ (879,000) |
Arizona operating loss carryforward | 59,200,000 | |
Federal operating loss carryforward | 5,800,000 | |
Pre-USHG merger operating loss carryforward | 27,100,000 | |
Pre-USHG merger capital loss carryforward | 520,000 | |
Federal research and development tax credits | 239,000 | |
State research and development tax credits | 340,000 | |
Pre-USHG merger cumulative unused tax credits | 244,000 | |
Accrued interest or penalties related to unrecognized tax benefits | $ 0 | $ 0 |
INCOME TAXES (Schedule Reconcil
INCOME TAXES (Schedule Reconciling Income Taxes at the Statutory Tax Rate to Income Taxes at the Effective Tax Rate) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
INCOME TAXES [Abstract] | ||
Computed tax at statutory rate | $ (181,894) | $ (76,270) |
State taxes | (27,093) | (13,459) |
Change in valuation allowance | 208,958 | 89,729 |
Other reconciliations | 0 | 0 |
Provision (benefit) for taxes | $ 0 | $ 0 |
INCOME TAXES (Schedule of Compo
INCOME TAXES (Schedule of Components of Deferred Tax Assets) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Tax Assets: [Abstract] | ||
Accruals and reserves | $ 0 | $ 0 |
Depreciation and amortization | 0 | 0 |
Federal tax credit carryforwards | 239,098 | 239,098 |
State tax credit carryforwards | 340,399 | 340,399 |
Net operating loss | 21,033,083 | 20,753,940 |
Goodwill amortization | 0 | 0 |
ASC 718 stock compensation | 0 | 0 |
Valuation allowance | (21,612,580) | (21,333,437) |
Total deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Schedule of Pre-U
INCOME TAXES (Schedule of Pre-USHG Merger Tax Losses and Credit Carryforwards) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
INCOME TAXES [Abstract] | |||
Pre-USHG Merger unrecognized tax benefits | $ 9,635,824 | $ 9,635,824 | $ 9,635,824 |
SUBSEQUENT EVENT (Narrative) (D
SUBSEQUENT EVENT (Narrative) (Details) | 1 Months Ended | ||
Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares | |
SUBSEQUENT EVENT [Abstract] | |||
Subsequent event shares issued (in Shares) | shares | 2,500,000 | ||
Subsequent event proceeds from shares issued | $ | $ 62,500 | ||
Subsequent event investors in shares (in Integer) | 5 | ||
Subsequent event options issued to each member of advisory board, two million options tranche (in Shares) | shares | 2,000,000 | ||
Common stock, par value (in Dollars per Share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 |
Subsequent event purchase price of options issued to each member of advisiory board, two million option tranche (in Dollars per Share) | $ / shares | $ 0.05 | ||
Subsequent event term of options issued two million option tranche (in Duration) | 5 years | ||
Subsequent event options vesting period from issuance for five hundred thousand options, two million options tranche (in Duration) | 1 year | ||
Subsequent event options vesting period from initial vesting date for sixty-two thousand five hundred options, two million option tranche (in Duration) | 24 months | ||
Subsequent event options issued to each member of advisory board, 1.5 Million options tranche (in Shares) | shares | 1,500,000 | ||
Subsequent event purchase price of options issued to each member of advisiory board, 1.5 million option tranche (in Dollars per Share) | $ / shares | $ 0.25 | ||
Subsequent event term of options issued, 1.5 million option tranche (in Duration) | 5 years | ||
Subsequent event revenue target value for vesting of 1.5 million option tranche | $ | $ 5,000,000 |