Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 18, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | APPLIED ENERGETICS, INC. | |
Entity Central Index Key | 0000879911 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Incorporation, State Country Code | DE | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-14015 | |
Entity Common Stock, Shares Outstanding | 206,204,062 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 149,153 | $ 178,552 |
Subscription receivable | 60,000 | |
Inventory | 5,930 | |
Other assets | 64,296 | 10,923 |
Total current assets | 219,379 | 249,475 |
Long-term assets | ||
Property and equipment | 33,575 | 38,887 |
Deferred compensation | 2,291,667 | |
Other long-term assets | 585,244 | 441,507 |
Total long-term assets | 2,910,486 | 480,394 |
TOTAL ASSETS | 3,129,865 | 729,869 |
Current liabilities | ||
Accounts payable | 646,853 | 681,408 |
Accrued compensation | 384,833 | |
Accrued officer compensation | 206,000 | 206,000 |
Notes payable | 2,736,338 | |
Due to related parties | 50,000 | 50,000 |
Accrued expenses | 3,021 | 20 |
Accrued dividends | 48,079 | 48,079 |
Total current liabilities | 3,690,291 | 1,370,340 |
Long-term liabilities | ||
Long-term notes payable | 2,000,000 | |
Total liabilities | 5,690,291 | 1,370,340 |
Commitments and contingencies | ||
Stockholders' (deficit) | ||
Series A Convertible Preferred Stock, $.001 par value, 2,000,000 shares authorized; 13,602 shares issued and outstanding at September 30, 2019 and at December 31, 2018 | 14 | 14 |
Common stock, $.001 par value, 500,000,000 shares authorized; 204,197,396 and 201,697,396 shares issued and outstanding at September 30, 2019 and at December 31, 2018, respectively | 204,197 | 201,697 |
Additional paid-in capital | 84,722,612 | 82,637,749 |
Accumulated deficit | (87,487,249) | (83,479,931) |
Total stockholders' (deficit) | (2,560,426) | (640,471) |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | $ 3,129,865 | $ 729,869 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Series A convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Series A convertible preferred stock, authorized | 2,000,000 | 2,000,000 |
Series A convertible preferred stock, issued | 13,602 | 13,602 |
Series A convertible preferred stock, outstanding | 13,602 | 13,602 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 204,197,396 | 201,697,396 |
Common stock, outstanding | 204,197,396 | 201,697,396 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating expenses | ||||
General and administrative | $ 2,467,328 | $ 723,316 | $ 3,534,493 | $ 1,457,539 |
Selling and marketing | 52,562 | 158,895 | ||
Research and development | 67,670 | 48,508 | 236,221 | 98,000 |
Total operating expenses | 2,587,560 | 771,824 | 3,929,609 | 1,555,539 |
Operating loss | (2,587,560) | (771,824) | (3,929,609) | (1,555,539) |
Other (expense) | ||||
Interest (expense) | (46,783) | (174) | (77,708) | (244,820) |
Total other (expense) | (46,783) | (174) | (77,708) | (244,820) |
Net loss | (2,634,343) | (771,998) | (4,007,317) | (1,800,359) |
Preferred stock dividends | (8,501) | (8,501) | (25,504) | (25,504) |
Net loss attributable to common stockholders | $ (2,642,844) | $ (780,499) | $ (4,032,821) | $ (1,825,863) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.01) |
Weighted average number of shares outstanding, basic and diluted | 204,197,396 | 192,260,657 | 204,006,788 | 177,799,785 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2017 | $ 14 | $ 157,785 | $ 79,452,635 | $ (80,472,185) | $ (861,751) |
Balance (in shares) at Dec. 31, 2017 | 13,602 | 157,785,520 | |||
Stock-based compensation expense | 20,955 | 20,955 | |||
Shares issues for services | $ 6,243 | 182,281 | 188,524 | ||
Shares issues for services (in shares) | 6,242,710 | ||||
To recognize BCF of loans in quarter | 111,370 | 111,370 | |||
Net loss | (324,388) | (324,388) | |||
Balance at Mar. 31, 2018 | $ 14 | $ 164,028 | 79,767,241 | (80,796,573) | (865,290) |
Balance (in shares) at Mar. 31, 2018 | 13,602 | 164,028,230 | |||
Balance at Dec. 31, 2017 | $ 14 | $ 157,785 | 79,452,635 | (80,472,185) | (861,751) |
Balance (in shares) at Dec. 31, 2017 | 13,602 | 157,785,520 | |||
Net loss | (1,800,359) | ||||
Balance at Sep. 30, 2018 | $ 14 | $ 197,697 | 81,778,672 | (82,272,544) | (296,161) |
Balance (in shares) at Sep. 30, 2018 | 13,602 | 197,697,396 | |||
Balance at Mar. 31, 2018 | $ 14 | $ 164,028 | 79,767,241 | (80,796,573) | (865,290) |
Balance (in shares) at Mar. 31, 2018 | 13,602 | 164,028,230 | |||
Stock-based compensation expense | 13,642 | 13,642 | |||
Sale of common stock | $ 27,167 | 1,602,833 | 1,630,000 | ||
Sale of common stock (in shares) | 27,166,666 | ||||
Net loss | (703,973) | (703,973) | |||
Balance at Jun. 30, 2018 | $ 14 | $ 191,195 | 81,383,716 | (81,500,546) | 74,379 |
Balance (in shares) at Jun. 30, 2018 | 13,602 | 191,194,896 | |||
Stock-based compensation expense | 11,309 | 11,309 | |||
Shares issues for services | $ 3,502 | 206,647 | 210,149 | ||
Shares issues for services (in shares) | 3,502,500 | ||||
Sale of common stock | $ 3,000 | 177,000 | 180,000 | ||
Sale of common stock (in shares) | 3,000,000 | ||||
Net loss | (771,998) | (771,998) | |||
Balance at Sep. 30, 2018 | $ 14 | $ 197,697 | 81,778,672 | (82,272,544) | (296,161) |
Balance (in shares) at Sep. 30, 2018 | 13,602 | 197,697,396 | |||
Balance at Dec. 31, 2018 | $ 14 | $ 201,697 | 82,637,749 | (83,479,931) | (640,471) |
Balance (in shares) at Dec. 31, 2018 | 13,602 | 201,697,396 | |||
Stock-based compensation expense | 122,950 | 122,950 | |||
Sale of common stock | $ 2,500 | 147,500 | 150,000 | ||
Sale of common stock (in shares) | 2,500,000 | ||||
Net loss | (586,155) | (586,155) | |||
Balance at Mar. 31, 2019 | $ 14 | $ 204,197 | 82,908,199 | (84,066,086) | (953,676) |
Balance (in shares) at Mar. 31, 2019 | 13,602 | 204,197,396 | |||
Balance at Dec. 31, 2018 | $ 14 | $ 201,697 | 82,637,749 | (83,479,931) | (640,471) |
Balance (in shares) at Dec. 31, 2018 | 13,602 | 201,697,396 | |||
Net loss | (4,007,317) | ||||
Balance at Sep. 30, 2019 | $ 14 | $ 204,197 | 84,722,612 | (87,487,249) | (2,560,426) |
Balance (in shares) at Sep. 30, 2019 | 13,602 | 204,197,396 | |||
Balance at Mar. 31, 2019 | $ 14 | $ 204,197 | 82,908,199 | (84,066,086) | (953,676) |
Balance (in shares) at Mar. 31, 2019 | 13,602 | 204,197,396 | |||
Stock-based compensation expense | 386,318 | 386,318 | |||
Net loss | (786,820) | (786,820) | |||
Balance at Jun. 30, 2019 | $ 14 | $ 204,197 | 83,294,517 | (84,852,906) | (1,354,178) |
Balance (in shares) at Jun. 30, 2019 | 13,602 | 204,197,396 | |||
Stock-based compensation expense | 1,428,095 | 1,428,095 | |||
Stock-based compensation expense, Shares | |||||
Net loss | (2,634,343) | (2,634,343) | |||
Balance at Sep. 30, 2019 | $ 14 | $ 204,197 | $ 84,722,612 | $ (87,487,249) | $ (2,560,426) |
Balance (in shares) at Sep. 30, 2019 | 13,602 | 204,197,396 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,007,317) | $ (1,800,359) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation expense | 1,931,790 | 45,905 |
Loss on early payoff of note payable | 174,412 | |
Shares issued for services | 5,573 | 398,674 |
Amortization of beneficial conversion feature | 204,119 | |
Amortization of financing costs | 22,721 | |
Depreciation | 9,722 | |
Amortization of future compensation payable | 203,333 | |
Interest expense | 77,708 | 17,806 |
Changes in assets and liabilities: | ||
Other receivable | 57,445 | |
Other long term assets | (255,893) | |
Inventory | (5,930) | |
Prepaids and deposits | 5,433 | (19,895) |
Long term receivables - net | (141,182) | |
Accounts payable | (48,155) | 158,353 |
Accrued expenses and compensation | (381,833) | (60,799) |
Net cash used in operating activities | (2,293,413) | (1,114,956) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | (4,410) | (38,887) |
Net cash used in investing activities | (4,410) | (38,887) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from notes payable | 2,150,000 | 149,750 |
Proceeds from issuance of common stock | 150,000 | 1,690,000 |
Repayment on notes payable | (31,576) | (361,468) |
Net cash provided by financing activities | 2,268,424 | 1,478,282 |
Net increase (decrease) in cash and cash equivalents | (29,399) | 324,439 |
Cash and cash equivalents, beginning of period | 178,552 | 2,764 |
Cash and cash equivalents, end of period | 149,153 | 327,203 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 2,117 | 12,949 |
Cash paid for taxes | ||
Schedule of Non-Cash Information | ||
Discount on note payable on purchase of Applied Optical Sciences | 2,500,000 | |
Amortization of discount on note payable | (208,333) | |
Note payable on purchase of Applied Optical Sciences | $ (2,500,000) |
Basis of Presentation and Going
Basis of Presentation and Going Concern | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND GOING CONCERN | 1. BASIS OF PRESENTATION AND GOING CONCERN The accompanying interim unaudited condensed consolidated financial statements include the accounts of Applied Energetics, Inc. and its wholly owned subsidiary North Star Power Engineering, Inc. as of September 30, 2019 (collectively, "company," "Applied Energetics," "we," "our" or "us"). All intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made. The results for the three-month and nine-month period ended September 30, 2019, may not be indicative of the results for the entire year. The interim unaudited condensed consolidated financial statements should be read in conjunction with the company's audited consolidated financial statements contained in our Annual Report on Form 10-K. 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 nine months ended September 30, 2019, the company incurred a net loss of approximately $4,007,000, had negative cash flows from operations of $2,293,000 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 company's existence is dependent upon management's ability to develop profitable operations. Management is devoting substantially all of its efforts to developing its business and raising capital and there can be no assurance that the company's efforts will be successful. No assurance can be given that management's actions will result in profitable operations or the resolution of its liquidity problems. The accompanying consolidated financial statements do not include any adjustments that might result should the company be unable to continue as a going concern. In order to improve the company's liquidity, the company's management is actively pursuing additional equity financing through discussions with investment bankers and private investors. There can be no assurance that the company will be successful in its effort to secure additional equity financing. 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. LIQUIDITY AND MANAGEMENT'S PLAN The accompanying unaudited 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 nine months ended September 30, 2019, the company incurred a net loss of approximately $4,007,000, had negative cash flows from operations of approximately $2,293,000, conducted financing activities yielding $2,150,000 in proceeds from notes payable and $150,000 in proceeds from issuance of common stock, partially offset by payments on notes payable of $32,000 and expects to incur additional future losses due to the reactivation of its business activities. These matters raise substantial doubt as to the company's ability to continue as a going concern unless the company is able to obtain additional financing for its continuing operations. 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. As of September 30, 2019, the company had approximately $149,000 in cash and cash equivalents. USE OF ESTIMATES The preparation of consolidated financial statements in conformity with United States Generally Accepted Accounting Principles ("GAAP") 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 estimates 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 materially impact the amounts reported and disclosed herein. Significant estimates include measurements of income tax assets and liabilities. RECENT ACCOUNTING PRONOUNCEMENTS The company has reviewed 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. CORRECTION OF IMMATERIAL ERROR TO PREVIOUSLY ISSUED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Subsequent to the filing of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, the Company identified prior period misstatements in the June 30, 2019 financial statements included therein related to stock compensation expense. The misstatements resulted in the understatement statement of general and administrative expense in the Company's consolidated statements of operations. The Company assessed the materiality of these misstatements both quantitatively and qualitatively and determined the correction of these errors to be immaterial to the prior consolidated financial statements taken. As a result, the Company has corrected the misstatements in the accompanying financial statements. The misstatements had no impact basic and diluted earnings per share or on the net cash flows from operating, investing, or financing activities. The misstatements did not impact assets or liabilities The following tables summarize the impact of the correction to the prior financial statements Three months ended Adjustments Three months ended General and administrative $ 610,446 $ 37,511 $ 647,957 Total operating expenses 760,335 37,511 797,846 Operating loss (760,335 ) (37,511 ) (797,846 ) Net loss (786,820 ) (37,511 ) (824,331 ) Net loss attibutable to common stockholders (795,321 ) (37,511 ) (832,832 ) Net loss per common share - basic and diluted (0.01 ) - (0.01 ) Six months ended Adjustments Six months ended General and administrative $ 1,067,165 $ 37,511 $ 1,104,676 Total operating expenses 1,342,048 37,511 1,379,559 Operating loss (1,342,048 ) (37,511 ) (1,379,559 ) Net loss (1,372,973 ) (37,511 ) (1,410,484 ) Net loss attibutable to common stockholders (1,389,976 ) (37,511 ) (1,427,487 ) Net loss per common share - basic and diluted (0.01 ) - (0.01 ) June 30, Adjustments June 30, Common Stock $ 204,157 $ 204,157 Additional paid-in capital 83,294,517 (37,511 ) 83,257,006 Accumulated deficit (84,852,906 ) (37,511 ) (84,890,417 ) Total stockholder' (deficit) (1,354,232 ) (75,022.00 ) (1,429,254 ) |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | 2. SHARE-BASED COMPENSATION Share-Based Compensation For the nine months ended September 30, 2019 and 2018, share-based compensation expense totaled approximately $1,937,000 and $445,000, respectively. There was no related income tax benefit recognized because our deferred tax assets are fully offset by a valuation allowance. We determine the fair value of option grant share-based awards at their grant date, using a Black-Scholes-Merton Option-Pricing Model applying the assumptions in the following table: nine months ended September 30, 2019 2018 Expected life (years) 5.50-6.75 N/A Dividend yield - N/A Expected volatility 232% N/A Risk free interest rates 2.47% N/A Weighted average fair value of options at grant date $0.34 N/A For the nine months ended September 30, 2019, 6,650,000 options to purchase stock were granted and 1,500,000 options were forfeited, additionally, no options to purchase stock were exercised or expired and 75,000 restricted stock awards were granted; no restricted stock units were granted, vested or forfeited. At September 30, 2019, options to purchase 32,900,000 shares of common stock were outstanding with a weighted average exercise price of $0.152, a weighted average remaining contract term of approximately 6.7 years with an aggregate intrinsic value of $3,092,000. At September 30, 2019 options for 17,010,000 shares were exercisable. As of September 30, 2019, there was approximately $2,009,000 of unrecognized compensation cost related to unvested stock options granted and outstanding, net of estimated forfeitures. The cost is expected to be recognized on a weighted average basis over a period of approximately one year. During the nine months ended September 30, 2019, the company received $2,150,000 in proceeds from the issuance of notes payable, maturing in September 2019, with which the company also issued warrants to purchase 1,075,000 shares of the company's common stock, par value $0.001 per share at an exercise price of $0.07 per share for two years from the date of issuance. The notes bear interest of 10% payable at maturity. On maturity date, the company may elect to convert $850,000 of the balance of principal and interest due into shares of common stock at the conversion price of $0.10 a share. Also, under an Asset Purchase Agreement, dated as of May 24, 2019, by and between the company and Applied Optical Sciences, Inc., an Arizona corporation which is majority owned by the holder of in excess of 10% of the company's common stock, we issued warrants to purchase 2,500,000 shares of the company's common stock, par value $0.001 per share at an exercise price of $0.06 per share for ten years from the date of issuance. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | 3. NET LOSS PER SHARE Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during 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 convertible preferred stock, stock options, warrants and restricted stock units. Contingently issuable shares are included in the computation of basic loss per share when issuance of the shares is no longer contingent. Due to the losses from continuing operations for the nine months ended September 30, 2019 and 2018, basic and diluted loss per common share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. Potentially dilutive securities not included in the diluted loss per share calculation, due to net losses from continuing operations, were as follows: nine months ended 2019 2018 Options to purchase common shares 32,900,000 14,000,000 Warrants to purchase common shares 3,575,000 - Convertible preferred stock 46,049 43,215 Total potentially dilutive securities 36,521,049 14,043,215 |
Dividends
Dividends | 9 Months Ended |
Sep. 30, 2019 | |
Dividends [Abstract] | |
DIVIDENDS | 4. DIVIDENDS Dividends on Preferred Stock are accrued when the amount and kind of dividend is determined and are payable quarterly on the first day of February, May, August and November, in cash or shares of common stock. The holders of shares of Series A Convertible Preferred Stock are entitled to receive dividends at the initial rate of 6.5% of the liquidation preference per share (the "Initial Dividend Rate"), payable, at the option of the corporation, 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 or (iii) any combination of the foregoing. If the company fails to pay dividends in the five business days following a dividend payment date (a "Payment Default"), the dividend rate shall immediately and automatically increase to 7.5% of the liquidation preference per share for as long as such Payment Default continues (or return to the Initial Dividend Rate at such time as such Payment Default no longer continues), and 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. As of September 30, 2019, we had 13,602 shares of our 6.5% Series A Convertible Preferred Stock outstanding. The company has not paid the dividends commencing with the quarterly dividend due August 1, 2013. Dividend arrearages as of September 30, 2019 was approximately $213,000. 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. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | 5. NOTES PAYABLE During the nine months ended September 30, 2019, the company received $2,150,000 from ten non-affiliated individuals based on 10% Promissory Notes ("Notes"). $1,150,000 of the Notes mature September 1, 2019 and $1,000,000 of the notes mature December 1, 2019. The Notes are accompanied by a Common Stock Purchase Warrant (a "Warrant") entitling the holder to purchase one share of the company's common stock, par value $0.001 per share (the "Common Shares"), for each $2.00 of Note principle, at an exercise price of $0.07 per share, for two years from the date of issuance. On September 15, 2017 the company borrowed $53,000 under a convertible note maturing September 20, 2018. The note bears interest of 12% payable at maturity. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid. The note is convertible into shares of the company's $0.001 par value common stock after March 24, 2018 (the "Initial Conversion Date"). The conversion rate is variable and will be 58% of the average of the lowest one-day trading price during the twenty trading days preceding the holders notice of conversion. The number of shares issuable on conversion is limited to 4.99% of the company's then issued and outstanding common stock. The company at the request of the note holder has reserved 36,369,879 shares of its $0.001 common stock for conversion. The note can be prepaid at the company's option until the Initial Conversion Date. The company issued the note holder warrants to purchase 1,320,598 shares of its $0.001 par value common stock at an exercise price of $0.0301, The Warrants are exercisable at any time over a 7-year period commencing on the date of issuance. The company calculated a beneficial conversion feature of $53,000 on this note against which approximately $53,000 has been amortized. The above transaction of a note for $53,000 and attached warrants of 1,320,598 shares were put in place by previous management. On March 12, 2018, the company's newly elected board of directors discussed its options concerning the above referenced loan and attached warrant and agreed that it would be in the best interest of the company and its shareholders to pay in full the $53,000 convertible note funded on October 18, 2017, and additionally repurchase the warrant. On March 16, 2018, the company paid in full the $53,000 convertible note and cancelled its associated warrant to purchase 1,320,598 shares of common stock in a negotiated transaction. This note carried special early stock conversion rights at a material discount to market, and was considered to be a dilutive derivative event that could harm the future abilities of the company to operate and raise money. The total cost to the company to pay off this $53,000 note before the conversion date was $81,000. Additionally, the company cancelled the above referenced attached warrant which allowed the loan holder to purchase 1,320,598 shares of common stock at a material discount to the market. This warrant was given to the noteholder by previous management as an incentive to make the above referenced loan. The cost to the company to cancel the warrant was $40,000. The total combined cost to the company to cancel the loan and warrant was $121,000. The payment was comprised of $56,000 principal and accrued interest, prepayment premium of $25,000 and $40,000 to buy back the warrant. The note was paid in full on March 16, 2018. The company borrowed the $121,000 used to pay off this loan before the conversion date, via an interest free loan from two directors of the company. On January 8, 2018 the company borrowed $105,000 under a convertible note maturing August 28, 2018. The note bears interest of 12% payable at maturity. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid. The note is convertible into shares of the company's $0.001 par value common stock after April 27, 2018 (the "Initial Conversion Date"). The conversion rate is variable and will be 55% of the lowest one-day trading price during the twenty trading days preceding the holders notice of conversion. The number of shares issuable on any conversion is limited to 4.99% of the company's then issued and outstanding common stock. The note holder may increase the 4,99% limit to 9.99% on 61 days prior notice to the company. The company, at the request of the note holder, has reserved 40 million shares of its $0.001 common stock for conversion. The note can be prepaid at the company's option until May 29, 2018. The company also entered into a security agreement pledging substantially all of its assets except for those related to Laser Guided Energy as collateral for the note. The above transaction of a note for $105,000 was put in place by previous management. On April 25, 2018, the company's newly elected board of directors discussed its options concerning the above referenced convertible loan funded on January 08, 2017 in the amount of $105,000, the board agreed that it would be in the best interest of the company and its shareholders to pay in full the referenced note before its conversion date. The note carried special early stock conversion rights at a material discount to market, in addition it pledged virtually all the assets of the company as collateral. The company's board of directors considered this to be a significant derivative event that was extremely dilutive to existing shareholders. Additionally, it was the opinion of the company's board of directors that this loan harmed the future abilities of the company to operate as a going concern and would make it nearly impossible to raise money in the future. The cost to the company to pay off this $105,000 note before the conversion date was $163,000 The payment was executed as paid in full on April 27, 2018 and was comprised of $109,000 principal and accrued interest, and a prepayment premium of $54,000 for a total of $163,000. On March 8, 2018 the company borrowed $26,500 under a convertible note maturing December 15, 2018. The note bears interest of 12% payable at maturity. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid. The note is convertible into shares of the company's $0.001 par value common stock after September 5, 2018 (the "Initial Conversion Date"). The conversion rate is variable and will be 51% of the average of the lowest one day trading price during the thirty trading days preceding the holders notice of conversion. The number of shares issuable on conversion is limited to 4.99% of the company's then issued and outstanding Common Stock. The company at the request of the Note Holder has reserved 11,008,640 shares of its $0.001 common stock for conversion. The note can be prepaid at the company's option until the Initial Conversion Date. The above transaction of a note for $26,500 was put in place by previous management. On May 4, 2018 the company's newly elected board of directors discussed its options concerning the above referenced convertible loan funded on December 27, 2017 in the amount of $26,500 and agreed that it would be in the best interest of the company and its shareholders to pay in full the referenced note which was put in place by previous management. This note carried special early stock conversion rights at a material discount to market and was considered by the company to be a dilutive derivative event that could harm the future abilities of the company to operate and raise money. The cost to the company to pay off this $26,500 note before the conversion date was $37,000. The payment was comprised of $27,000 principal and accrued interest, and prepayment premium of $10,000. The note was paid in full on May 18, 2018. The following reconciles notes payable as of September 30, 2019 and December 31, 2018: September 30, December 31, Convertible notes payable $ - $ (98,903 ) Notes payable 4,680,000 - Accrued interest 63,586 (13,250 ) Payments on notes payable (61,577 ) - Financing costs - (3,317 ) Transfer from prepaid 54,329 - Amortization of financing costs - 22,721 Beneficial conversion feature - (111,370 ) Amortization of beneficial conversion feature - 204,119 $ 4,736,338 $ - |
Due to Related Parties
Due to Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
DUE TO RELATED PARTIES | 6. DUE TO RELATED PARTIES It has come to the board's attention that on July 31, 2018, our now deceased CEO deposited $50,000 into the company's account. Although it has been suggested that the funds may have been intended for use toward Mr. Dearmin's healthcare, the board does not know for certain what the purpose of the funds were or the nature of any intended investment. Accordingly, the board is investigating the appropriate disposition of the funds which will likely be to the estate of Mr. Dearmin. Until such a determination is made, the board does not intend to use these funds for any corporate purpose. For reporting purposes, the company has treated the deposit as a due to related party. |
Shareholders Deficit
Shareholders Deficit | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS DEFICIT | 7. SHAREHOLDERS DEFICIT During January 2019, the company received $150,000 from three individuals based on subscription agreements with the company for which the company issued 2,500,000 shares of its common stock. On January 24, 2018, we issued 1,242,710 shares of common stock in settlement of invoices valued at $38,524 with a vendor. This transaction was consummated by previous management to pay its attorney fees. On December 4, 2017 previous management entered into a financial services agreement with BMA Securities for which, on January 26, 2018, it issued 5,000,000 shares of stock valued at $150,000. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | 8. LEGAL PROCEEDINGS As previously reported in our Current Report on Form 8-K filed on July 9, 2018, on July 3, 2018, we commenced a lawsuit in the Court of Chancery of the State of Delaware against the company's former director and principal executive officer George Farley and AnneMarieCo LLC ("AMC"). The lawsuit alleges to the following six causes of action: 1. Breach of Fiduciary Duty of Loyalty against George Farley 2. Breach of Fiduciary Duty of Care against George Farley 3. Aiding and Abetting Breach of Fiduciary Duty against AMC 4. Conversion against George Farley 5. Fraudulent Transfer against George Farley and AMC 6. Injunctive Relief against George Farley and AMC This report provides an update on the progress of the litigation. In connection with the lawsuit, the company requested a temporary restraining order prohibiting Mr. Farley and AMC from selling their 25 million shares of the company's common stock which the company alleges were improperly issued. On July 20, 2018, the Delaware Court of Chancery, Vice Chancellor Tamika Montgomery-Reeves presiding, entered a "status quo" order upon the stipulation of the parties, whereby Mr. Farley and AMC agreed not to transfer, alienate or sell any of their shares pending a ruling on the company's motion for a preliminary injunction. On July 26, 2018, the Delaware Court of Chancery entered a scheduling order setting dates and deadlines for, among other matters, a hearing and briefing schedule on the amount of the bond the company would be required to post to maintain the "status quo" order through the preliminary injunction hearing, a hearing and briefing schedule on the motion for a preliminary injunction, and a discovery schedule. Also, in connection with the lawsuit, on August 8, 2018, the company filed a motion to disqualify Mr. Farley's attorney, Ryan Whalen, who had previously represented the company. On August 14, 2018, the Delaware Court of Chancery issued an order requiring the company to post a bond in the total amount of $200,446.52. On August 21, 2018, the company posted the bond via Atlantic Specialty Insurance company acting as surety. Pursuant to the contract between the company and Atlantic Specialty Insurance company, the company deposited $200,446.52 in cash as collateral for the surety agreement. On August 23, 2018, the Delaware Court of Chancery court extended the hearing date on the company's motion for a preliminary injunction to October 23, 2018, and simultaneously ordered an increase in the bond amount of $55,446.52. On August 30, 2018, the company posted the increased bond amount, again with Atlantic Specialty Insurance Company acting as surety, and deposited the additional $55,446.52 in cash with the surety. On September 7, 2018, the Delaware Court of Chancery entered an order setting a briefing schedule on the company's motion to disqualify Mr. Whalen. On September 10, 2018, the Delaware Court of Chancery entered an order governing the production and exchange of confidential documents and information among the parties in discovery. In another Current Report on Form 8-K filed September 13, 2018, the company updated the status of the litigation to include events that occurred up to that date. This report further updates the progress of the litigation. On October 16, 2018, the Delaware Court of Chancery entered a scheduling order continuing the hearing date on the company's motion for a preliminary injunction against defendants George Farley and AMC to December 14, 2018. The October 16, 2018 order also required the company to increase its bond amount by an additional $185,301.86 ($80,301.86 for AMC and $105,000.00 for Mr. Farley) to account for the continued hearing date. On October 24, 2018, the company posted the additional bond amount of $185,301.86. On October 16, 2018, the Delaware Court of Chancery issued an order denying the company's motion to disqualify Mr. Whalen. On January 23, 2019, the Delaware Court of Chancery issued a Memorandum Opinion, granting a preliminary injunction prohibiting Mr. Farley and AMC from selling their 25 million shares of the company's common stock, which the company alleges were improperly issued. On January 24, 2019, the Delaware Court of Chancery issued a revised Memorandum Opinion correcting calculations regarding the increased bond amount. In granting the preliminary injunction, the Court found that the company met "its considerable burden" of demonstrating it was likely to win its lawsuit against Mr. Farley and AMC. Specifically, the Court found it was "reasonably probable" Mr. Farley had unlawfully issued the 25 million shares without proper authorization, Mr. Farley had breached his duty of loyalty to the company, Mr. Farley was unlikely to prove the stock issuance was procedurally or substantively "fair" to the company, and Mr. Farley had fraudulently transferred 20 million of the shares to AMC. Finally, the Court ruled because Farley and AMC's 25 million shares represented approximately one eighth of the company's outstanding ownership, the injunction was necessary to protect the company's capital structure, ability to attract new investors, ability to raise new capital and continue deployment of its plans now underway to revitalize its business. In its Memorandum Opinion, the Court also required that the company post additional bond money, bringing the total cash collateral for the surety agreement to $582,377.26. The company posted the additional bond amount, and deposited the additional cash amount with the surety, on January 29, 2019. On March 4, 2019, the company filed an amended complaint adding claims against Mr. Farley concerning loans Mr. Farley caused the company take from PowerUp Lending Group Ltd. and Auctus Fund LLC from September 2017 through March 2018. Mr. Farley responded to the amended complaint by filing a motion to dismiss the lawsuit based on Delaware Court of Chancery Rules 12(b)(3) and 12(b)(7). On September 28, 2019, the Delaware Chancery Court denied this motion. On July 7, 2019, the company filed a motion to reduce or eliminate the cash bond requirement. As previously reported, the cash bond was required by the Delaware Chancery Court. On September 30, 2019, the Delaware Chancery Court denied the motion. On July 19, 2019, Mr. Farley and AMC filed answers and amended counter claims in response to the Company's amended complaint. The amended counter claims add claims under Delaware General Corporate Law section 205, seeking to validate the stock issuances at issue in the litigation. On July 29, 2019, the Delaware Chancery Court entered a scheduling order which, among other deadlines, rescheduled the trial date to begin on January 21, 2020. However, recently the judge presiding in the case, Vice Chancellor Montgomery-Reeves, was appointed and confirmed to the Delaware Supreme Court. Though no formal order has yet issued, the company expects the trial date to be postponed to mid-2020. On September 26, 2019, the company filed a motion for partial summary judgment concerning the issuance of company stock to Mr. Farley without having been authorized by a quorum of the board of directors. The previous hearing date of November 20, 2019, has been postponed while the case awaits a new judge assignment. In a related matter, on February 8, 2019, the company filed a complaint against Stein Riso Mantel McDonough, LLP ("Stein Riso"), its former counsel, in the United States District Court for the Southern District of New York alleging the following: 1. breach of fiduciary duty; 2. legal malpractice; 3. aiding and abetting a breach of fiduciary duty; 4. voidance of fees under New York Rules of Professional Conduct 1.8; 5. violation of New York Rule of Professional Conduct 1.5; 6. securities fraud; 7. breach of contract; and 8. unjust enrichment. The complaint against Stein Riso followed the issuance, on January 23, 2019, of a Memorandum Opinion granting the company's motion for a preliminary injunction by the Delaware Court of Chancery in the case against George Farley and AMC. Stein Riso has responded to the complaint by filing a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The company amended its complaint in response. On July 31, 2019, Stein Riso responded to the company's amended complaint by filing another motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). The company filed an opposition to this motion on August 14, 2019. Stein Riso filed a reply brief on September 13, 2019. The United States District Court has not yet ruled on the motion. On July 3, 2019, Gusrae, Kaplan & Nusbaum and its partner, Ryan Whalen, counsel for defendants, George Farley and AnneMarie Co. LLC, in the litigation brought by the company and pending in Delaware, filed a claim in the District Court for the Southern District of New York against the company its directors, officers, attorneys and a consultant. The action alleges libel, securities fraud and related claims. The company believes that this suit lacks merit and intends to dispute these allegations. The company filed a motion to dismiss the complaint on October 24, 2019. The plaintiffs have not yet filed a response to this motion. Based on the discussion in the order granting its preliminary injunction (as previously reported) and the potential outcome of the case, on September 24, 2019, the company has filed a complaint in the Court of Common Pleas in the County of Beaufort, South Carolina, to prevent the sale of certain property located there (or in the alternative, to require payment of proceeds from any sale of the property into the registry of the court until a final decision is entered in the matter), in order to protect the company from having property disposed of. On July 24, 2019 the Farley defendants and AnneMarieco, LLC filed an Answer to the South Carolina lawsuit in which they deny all allegations made against them. On that same date, they also filed a Motion to Dismiss the South Carolina case on numerous grounds. We are currently preparing a response to that Motion, and anticipate a hearing being held in the next sixty (60) days. As with any litigation, the company cannot predict the outcome with certainty, but the company expects to provide further updates on the status of the litigation as circumstances warrant. |
Acquisition of Applied Optical
Acquisition of Applied Optical Sciences | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
ACQUISITION OF APPLIED OPTICAL SCIENCES | 9. ACQUISITION OF APPLIED OPTICAL SCIENCES On May 24, 2019, the Company entered into an Asset Purchase Agreement (the "APA") with Applied Optical Sciences, LLC ("AOS") to acquire certain assets. In addition, the company also contemporaneously entered into a consulting agreement with SWM Consulting LLC (or Stephen McCahon the sole owner and a founder of the Company) to lead scientific efforts, develop new IP, assist with business development and provide various other services. The term of the Consulting Agreement is 3-years and cannot be terminated by either party other than for cause. Consideration payable to SWM Consulting LLC (based on consulting agreement) is $180,000 for the first year and $250,000 in the second and third years for a total of $680,000 over the three-year term. Consideration payable to AOS (based on APA) is a Promissory Note issued to the shareholders of AOS for $2,500,000. The promissory note shall be repaid in equal semi-annual installments, the first of such payments being due on the first anniversary of the issue date (July 2019) and subsequent payments being due on the last day of each six-month period thereafter, the final such payment being due on the third anniversary of the Issue Date. The Promissory Note may be prepaid at any time (in whole or in part). Additional consideration was a Warrant to purchase 2,500,000 shares of the Company's stock at an exercise price of $0.06 per share (executed on July 10, 2019). The note payable is reported in the current and long term notes payable with the discount being reported in current and long term other assets. The discount is amortized to compensation on a straight line basis over three years. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 10. SUBSEQUENT EVENTS In October 2019, the company received $602,000 from two non-affiliates for a subscription agreement to purchase the company's common stock at $0.30 a share. The company's management has evaluated subsequent events occurring after September 30, 2019, the date of our most recent balance sheet, through the date our financial statements were issued. |
Basis of Presentation and Goi_2
Basis of Presentation and Going Concern (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND MANAGEMENTÂ’S PLAN | LIQUIDITY AND MANAGEMENT'S PLAN The accompanying unaudited 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 nine months ended September 30, 2019, the company incurred a net loss of approximately $4,007,000, had negative cash flows from operations of approximately $2,293,000, conducted financing activities yielding $2,150,000 in proceeds from notes payable and $150,000 in proceeds from issuance of common stock, partially offset by payments on notes payable of $32,000 and expects to incur additional future losses due to the reactivation of its business activities. These matters raise substantial doubt as to the company's ability to continue as a going concern unless the company is able to obtain additional financing for its continuing operations. 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. As of September 30, 2019, the company had approximately $149,000 in cash and cash equivalents. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of consolidated financial statements in conformity with United States Generally Accepted Accounting Principles ("GAAP") 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 estimates 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 materially impact the amounts reported and disclosed herein. Significant estimates include measurements of income tax assets and liabilities. |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS The company has reviewed 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. CORRECTION OF IMMATERIAL ERROR TO PREVIOUSLY ISSUED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Subsequent to the filing of the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, the Company identified prior period misstatements in the June 30, 2019 financial statements included therein related to stock compensation expense. The misstatements resulted in the understatement statement of general and administrative expense in the Company's consolidated statements of operations. The Company assessed the materiality of these misstatements both quantitatively and qualitatively and determined the correction of these errors to be immaterial to the prior consolidated financial statements taken. As a result, the Company has corrected the misstatements in the accompanying financial statements. The misstatements had no impact basic and diluted earnings per share or on the net cash flows from operating, investing, or financing activities. The misstatements did not impact assets or liabilities The following tables summarize the impact of the correction to the prior financial statements Three months ended Adjustments Three months ended General and administrative $ 610,446 $ 37,511 $ 647,957 Total operating expenses 760,335 37,511 797,846 Operating loss (760,335 ) (37,511 ) (797,846 ) Net loss (786,820 ) (37,511 ) (824,331 ) Net loss attibutable to common stockholders (795,321 ) (37,511 ) (832,832 ) Net loss per common share - basic and diluted (0.01 ) - (0.01 ) Six months ended Adjustments Six months ended General and administrative $ 1,067,165 $ 37,511 $ 1,104,676 Total operating expenses 1,342,048 37,511 1,379,559 Operating loss (1,342,048 ) (37,511 ) (1,379,559 ) Net loss (1,372,973 ) (37,511 ) (1,410,484 ) Net loss attibutable to common stockholders (1,389,976 ) (37,511 ) (1,427,487 ) Net loss per common share - basic and diluted (0.01 ) - (0.01 ) June 30, Adjustments June 30, Common Stock $ 204,157 $ 204,157 Additional paid-in capital 83,294,517 (37,511 ) 83,257,006 Accumulated deficit (84,852,906 ) (37,511 ) (84,890,417 ) Total stockholder' (deficit) (1,354,232 ) (75,022.00 ) (1,429,254 ) |
Basis of Presentation and Goi_3
Basis of Presentation and Going Concern (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of the impact of the correction to the prior financial statements | Three months ended Adjustments Three months ended General and administrative $ 610,446 $ 37,511 $ 647,957 Total operating expenses 760,335 37,511 797,846 Operating loss (760,335 ) (37,511 ) (797,846 ) Net loss (786,820 ) (37,511 ) (824,331 ) Net loss attibutable to common stockholders (795,321 ) (37,511 ) (832,832 ) Net loss per common share - basic and diluted (0.01 ) - (0.01 ) Six months ended Adjustments Six months ended General and administrative $ 1,067,165 $ 37,511 $ 1,104,676 Total operating expenses 1,342,048 37,511 1,379,559 Operating loss (1,342,048 ) (37,511 ) (1,379,559 ) Net loss (1,372,973 ) (37,511 ) (1,410,484 ) Net loss attibutable to common stockholders (1,389,976 ) (37,511 ) (1,427,487 ) Net loss per common share - basic and diluted (0.01 ) - (0.01 ) June 30, Adjustments June 30, Common Stock $ 204,157 $ 204,157 Additional paid-in capital 83,294,517 (37,511 ) 83,257,006 Accumulated deficit (84,852,906 ) (37,511 ) (84,890,417 ) Total stockholder' (deficit) (1,354,232 ) (75,022.00 ) (1,429,254 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of share-based compensation | nine months ended September 30, 2019 2018 Expected life (years) 5.50-6.75 N/A Dividend yield - N/A Expected volatility 232% N/A Risk free interest rates 2.47% N/A Weighted average fair value of options at grant date $0.34 N/A |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of net loss per share | nine months ended 2019 2018 Options to purchase common shares 32,900,000 14,000,000 Warrants to purchase common shares 3,575,000 - Convertible preferred stock 46,049 43,215 Total potentially dilutive securities 36,521,049 14,043,215 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable [Abstract] | |
Schedule of notes payable | September 30, December 31, Convertible notes payable $ - $ (98,903 ) Notes payable 4,680,000 - Accrued interest 63,586 (13,250 ) Payments on notes payable (61,577 ) - Financing costs - (3,317 ) Transfer from prepaid 54,329 - Amortization of financing costs - 22,721 Beneficial conversion feature - (111,370 ) Amortization of beneficial conversion feature - 204,119 $ 4,736,338 $ - |
Basis of Presentation and Goi_4
Basis of Presentation and Going Concern (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
General and administrative | $ 2,467,328 | $ 723,316 | $ 3,534,493 | $ 1,457,539 | ||
Total operating expenses | 2,587,560 | 771,824 | 3,929,609 | 1,555,539 | ||
Operating loss | (2,587,560) | (771,824) | (3,929,609) | (1,555,539) | ||
Net loss attibutable to common stockholders | $ (2,642,844) | $ (780,499) | $ (4,032,821) | $ (1,825,863) | ||
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.01) | ||
As Previously Reported [Member] | ||||||
General and administrative | $ 610,446 | $ 1,067,165 | ||||
Total operating expenses | 760,335 | 1,342,048 | ||||
Operating loss | (760,335) | (1,342,048) | ||||
Net loss | (786,820) | (1,372,973) | ||||
Net loss attibutable to common stockholders | $ (795,321) | $ (1,389,976) | ||||
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) | ||||
Adjustments [Member] | ||||||
General and administrative | $ 37,511 | $ 37,511 | ||||
Total operating expenses | 37,511 | 37,511 | ||||
Operating loss | (37,511) | (37,511) | ||||
Net loss | (37,511) | (37,511) | ||||
Net loss attibutable to common stockholders | $ (37,511) | $ (37,511) | ||||
Net loss per common share - basic and diluted | ||||||
As Corrected [Member] | ||||||
General and administrative | $ 647,957 | $ 1,104,676 | ||||
Total operating expenses | 797,846 | 1,379,559 | ||||
Operating loss | (797,846) | (1,379,559) | ||||
Net loss | (824,331) | (1,410,484) | ||||
Net loss attibutable to common stockholders | $ (832,832) | $ (1,427,487) | ||||
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) |
Basis of Presentation and Goi_5
Basis of Presentation and Going Concern (Details 1) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Common Stock | $ 204,197 | $ 201,697 | |
Additional paid-in capital | 84,722,612 | 82,637,749 | |
Accumulated deficit | $ (87,487,249) | $ (83,479,931) | |
As Previously Reported [Member] | |||
Common Stock | $ 204,157 | ||
Additional paid-in capital | 83,294,517 | ||
Accumulated deficit | (84,852,906) | ||
Total stockholder' (deficit) | (1,354,232) | ||
Adjustments [Member] | |||
Common Stock | |||
Additional paid-in capital | (37,511) | ||
Accumulated deficit | (37,511) | ||
Total stockholder' (deficit) | (75,022) | ||
As Corrected [Member] | |||
Common Stock | 204,157 | ||
Additional paid-in capital | 83,257,006 | ||
Accumulated deficit | (84,890,417) | ||
Total stockholder' (deficit) | $ (1,429,254) |
Basis of Presentation and Goi_6
Basis of Presentation and Going Concern (Details Textual) - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basis of Presentation and Going Concern (Textual) | ||||
Net loss | $ (4,028,000) | |||
Cash flows from operations | (2,293,000) | |||
Proceeds from issuance of common stock | 150,000 | $ 1,690,000 | ||
Proceeds from note payable | 2,150,000 | 149,750 | ||
Payment on note payable | 32,000 | |||
Cash and cash equivalents | 149,153 | $ 327,203 | $ 178,552 | $ 2,764 |
Interim Unaudited Condensed Consolidated Financial Statements [Member] | ||||
Basis of Presentation and Going Concern (Textual) | ||||
Net loss | (4,028,000) | |||
Cash flows from operations | (2,293,000) | |||
Proceeds from issuance of common stock | 150,000 | |||
Proceeds from note payable | 1,150,000 | |||
Cash and cash equivalents | $ 149,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Expected life (years) | ||
Dividend yield | ||
Expected volatility | 232.00% | |
Risk free interest rates | 2.47% | |
Weighted average fair value of options at grant date | $ 0.34 | |
Minimum [Member] | ||
Expected life (years) | 5 years 6 months | |
Maximum [Member] | ||
Expected life (years) | 6 years 9 months |
Share-Based Compensation (Det_2
Share-Based Compensation (Details Textual) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Share-Based Compensation (Textual) | |||
Share-based compensation expense | $ 1,937,000 | $ 445,000 | |
Proceeds from the issuance of notes payable | $ 2,150,000 | $ 149,750 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Maturity date | Sep. 30, 2019 | ||
Conversion price (in dollars per shares) | $ 0.10 | ||
Number of warrants issued | 1,075,000 | ||
Exercise price of warrants | $ 0.07 | ||
Restricted stock awards granted | 75,000 | ||
Asset purchase agreement, description | An Arizona corporation which is majority owned by the holder of in excess of 10% of the company's common stock, we issued warrants to purchase 2,500,000 shares of the company's common stock, par value $0.001 per share at an exercise price of $0.06 per share for ten years from the date of issuance. | ||
Stock Option [Member] | |||
Share-Based Compensation (Textual) | |||
Share-based compensation, option awards, granted | 6,650,000 | ||
Options to purchase stock were forfeited | 1,500,000 | ||
Share-based compensation, options exercised | 0 | ||
Share-based compensation, options forfeited | 0 | ||
Share-based compensation, options expired | 0 | ||
Share-based compensation, options outstanding | 32,900,000 | ||
Share-based compensation, options outstanding, weighted average exercise price (in dollars per share) | $ 0.152 | ||
Share-based compensation, options outstanding, weighted average remaining contractual term | 6 years 8 months 12 days | ||
Options outstanding aggregate intrinsic value | $ 3,092,000 | ||
Options exercisable (in shares) | 17,010,000 | ||
Unrecognized compensation costs related to unvested equity awards, net of estimated forfeitures | $ 2,009,000 | ||
Weighted average basis over period | 1 year | ||
Proceeds from the issuance of notes payable | $ 2,150,000 | ||
Conversion of principal amount | $ 850,000 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 36,521,049 | 14,043,215 |
Options to Purchase Common Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 32,750,000 | 14,000,000 |
Warrants to Purchase Common Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 3,575,000 | |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 46,049 | 43,215 |
Dividends (Details)
Dividends (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Dividends (Textual) | ||
Initial dividend rate | 6.50% | |
Increase in dividend rate on default of payment | 7.50% | |
Increase in dividend rate on two consecutive default of payment | 10.00% | |
Series A convertible preferred stock outstanding (in shares) | 13,602 | 13,602 |
Amount of arrears dividend | $ 213,000 | |
Series A preferred stock has a liquidation preference (in dollars per share) | $ 25 | |
Percentage of weighted average of common stock sales price | 95.00% | |
Percentage of preferred stock outstanding | 6.50% |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Convertible notes payable | $ (98,903) | |
Notes payable | 4,680,000 | |
Accrued interest | 63,586 | (13,250) |
Payments on notes payable | (61,577) | |
Financing costs | (3,317) | |
Transfer from prepaid | 54,329 | |
Amortization of financing costs | 22,721 | |
Beneficial conversion feature | (111,370) | |
Amortization of beneficial conversion feature | 204,119 | |
Notes payable, current | $ 2,736,338 | |
Promissory Notes [Member] | ||
Description of affiliated individuals | The company received $2,150,000 from ten non-affiliated individuals based on 10% Promissory Notes ("Notes"). $1,150,000 of the Notes mature September 1, 2019 and $1,000,000 of the notes mature December 1, 2019. |
Notes Payable (Details Textual)
Notes Payable (Details Textual) - USD ($) | May 04, 2018 | Apr. 25, 2018 | Mar. 16, 2018 | Mar. 16, 2018 | Mar. 08, 2018 | Jan. 08, 2018 | Sep. 15, 2017 | Oct. 18, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Mar. 12, 2018 |
Notes Payable (Textual) | ||||||||||||
Debt face amount | $ 98,903 | |||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||||
Conversion price (in dollars per share) | 0.10 | |||||||||||
Issued of warrants or exercise price | $ 0.07 | |||||||||||
Convertible beneficial conversion feature | $ 111,370 | |||||||||||
Repayment of convertible notes | $ 53,000 | 31,576 | $ 361,468 | |||||||||
Conversion and cancellation cost of notes and warrants | $ 121,000 | |||||||||||
Payment of principal and accrued interest | 56,000 | |||||||||||
12% Convertible Notes Due December 15, 2018 [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Debt face amount | $ 26,500 | |||||||||||
Debt maturity date | Dec. 15, 2018 | |||||||||||
Debt interest rate (in percent) | 12.00% | |||||||||||
Description of interest rate terms | Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid. | |||||||||||
Conversion price (in dollars per share) | $ 0.001 | |||||||||||
Convertible note, initial conversion date | Sep. 5, 2018 | |||||||||||
Description of conversion for convertible notes | The conversion rate is variable and will be 51% of the average of the lowest one day trading price during the thirty trading days preceding the holders notice of conversion. The number of shares issuable on conversion is limited to 4.99% of the company's then issued and outstanding Common Stock. | |||||||||||
Repayment of convertible notes | $ 26,500 | |||||||||||
Conversion and cancellation cost of notes and warrants | 37,000 | |||||||||||
Payment of principal and accrued interest | 27,000 | |||||||||||
Prepayment premium | $ 10,000 | |||||||||||
12% Convertible Notes Due September 20, 2018 [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Debt face amount | $ 53,000 | |||||||||||
Debt maturity date | Sep. 20, 2018 | |||||||||||
Debt interest rate (in percent) | 12.00% | |||||||||||
Description of interest rate terms | Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid. | |||||||||||
Conversion price (in dollars per share) | $ 0.001 | |||||||||||
Convertible note, initial conversion date | Mar. 24, 2018 | |||||||||||
Description of conversion for convertible notes | The conversion rate is variable and will be 58% of the average of the lowest one-day trading price during the twenty trading days preceding the holders notice of conversion. The number of shares issuable on conversion is limited to 4.99% of the company's then issued and outstanding common stock. | |||||||||||
Repayment of convertible notes | $ 53,000 | |||||||||||
Cancellation of warrant purchase | 1,320,598 | |||||||||||
Conversion and cancellation cost of notes and warrants | 81,000 | |||||||||||
Payment of principal and accrued interest | 25,000 | |||||||||||
Borrowings for repayment of notes | $ 121,000 | $ 121,000 | ||||||||||
12% Convertible Notes Due September 20, 2018 [Member] | Note warrant [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Conversion price (in dollars per share) | $ 0.001 | |||||||||||
Number of warrants purchase | 1,320,598 | |||||||||||
Issued of warrants or exercise price | $ 0.0301 | |||||||||||
Issued of warrants or exercisable | 7 years | |||||||||||
Convertible beneficial conversion feature | $ 53,000 | |||||||||||
Convertible beneficial conversion amortized | $ 53,000 | |||||||||||
Cancellation of warrant purchase | 1,320,598 | |||||||||||
Payment of principal and accrued interest | $ 40,000 | |||||||||||
Prepayment premium | $ 40,000 | |||||||||||
12% Convertible Notes Due August 28, 2018 [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Debt face amount | $ 105,000 | |||||||||||
Debt maturity date | Aug. 28, 2018 | |||||||||||
Debt interest rate (in percent) | 12.00% | |||||||||||
Description of interest rate terms | Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid. | |||||||||||
Conversion price (in dollars per share) | $ 0.001 | |||||||||||
Convertible note, initial conversion date | Apr. 27, 2018 | |||||||||||
Description of conversion for convertible notes | The conversion rate is variable and will be 55% of the lowest one-day trading price during the twenty trading days preceding the holders notice of conversion. The number of shares issuable on any conversion is limited to 4.99% of the company's then issued and outstanding common stock. The note holder may increase the 4,99% limit to 9.99% on 61 days prior notice to the company. The company, at the request of the note holder, has reserved 40 million shares of its $0.001 common stock for conversion. | |||||||||||
Repayment of convertible notes | $ 105,000 | |||||||||||
Conversion and cancellation cost of notes and warrants | 163,000 | |||||||||||
Payment of principal and accrued interest | 109,000 | |||||||||||
Prepayment premium | 54,000 | |||||||||||
Total prepayment premium | $ 163,000 | |||||||||||
Note holder [Member] | 12% Convertible Notes Due December 15, 2018 [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Conversion price (in dollars per share) | $ 0.001 | |||||||||||
Number of shares reserved for conversion (in shares) | 11,008,640 | |||||||||||
Note holder [Member] | 12% Convertible Notes Due September 20, 2018 [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Conversion price (in dollars per share) | $ 0.001 | |||||||||||
Number of shares reserved for conversion (in shares) | 36,369,879 | |||||||||||
Note holder [Member] | 12% Convertible Notes Due August 28, 2018 [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Conversion price (in dollars per share) | $ 0.001 | |||||||||||
Number of shares reserved for conversion (in shares) | 40,000,000 | |||||||||||
Non affiliated Individuals [Member] | 10% Promissory Notes Due September 01, 2019 [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Debt face amount | $ 1,150,000 | |||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||||||
Exercise price | $ 0.07 | |||||||||||
Debt maturity date | Sep. 1, 2019 | |||||||||||
Debt interest rate (in percent) | 10.00% | |||||||||||
Two Directors [Member] | 12% Convertible Notes Due September 20, 2018 [Member] | ||||||||||||
Notes Payable (Textual) | ||||||||||||
Borrowings for repayment of notes | $ 121,000 |
Due to Related Parties (Details
Due to Related Parties (Details) | Jul. 31, 2018USD ($) |
CEO [Member] | |
Due to Related Parties (Textual) | |
Deposited | $ 50,000 |
Shareholders Deficit (Details)
Shareholders Deficit (Details) - USD ($) | Jan. 31, 2019 | Jan. 26, 2018 | Jan. 24, 2018 |
Vendor [Member] | |||
Shareholders Deficit (Textual) | |||
Number of common stock issued | 1,242,710 | ||
Common stock value | $ 38,524 | ||
Subscription Agreements [Member] | |||
Shareholders Deficit (Textual) | |||
Number of common stock issued | 2,500,000 | ||
Common stock value | $ 150,000 | ||
Financial Services Agreement [Member] | |||
Shareholders Deficit (Textual) | |||
Number of common stock issued | 5,000,000 | ||
Common stock value | $ 150,000 |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) | Jan. 29, 2019 | Jan. 23, 2019 | Oct. 24, 2018 | Oct. 16, 2018 | Aug. 30, 2018 | Aug. 23, 2018 | Aug. 21, 2018 | Aug. 14, 2018 | Jul. 03, 2018 | Sep. 30, 2019 |
Legal Proceedings (Textual) | ||||||||||
Cash deposited | $ 200,446.52 | |||||||||
Additional cash deposited | $ 18,530,186 | $ 55,446.52 | ||||||||
Collateral for the Surety Agreement [Member] | ||||||||||
Legal Proceedings (Textual) | ||||||||||
Cash deposited | $ 200,446.52 | |||||||||
Additional cash deposited | $ 582,377.26 | |||||||||
Mr. Farley and AMC [Member] | ||||||||||
Legal Proceedings (Textual) | ||||||||||
Number of shares issued in transaction | 25,000,000 | 25,000,000 | ||||||||
Additional cash deposited | $ 185,301.86 | |||||||||
Description of preliminary injunction | In granting the preliminary injunction, the Court found that the company met "its considerable burden" of demonstrating it was likely to win its lawsuit against Mr. Farley and AMC. Specifically, the Court found it was "reasonably probable" Mr. Farley had unlawfully issued the 25 million shares without proper authorization, Mr. Farley had breached his duty of loyalty to the company, Mr. Farley was unlikely to prove the stock issuance was procedurally or substantively "fair" to the company, and Mr. Farley had fraudulently transferred 20 million of the shares to AMC. Finally, the Court ruled because Farley and AMC's 25 million shares represented one eighth of the company's outstanding ownership, the injunction was necessary to protect the company's capital structure, ability to attract new investors, ability to raise new capital and continue deployment of its plans now underway to revitalize its business. | |||||||||
Mr. Farley [Member] | ||||||||||
Legal Proceedings (Textual) | ||||||||||
Additional cash deposited | 10,500,000 | |||||||||
AMC [Member] | ||||||||||
Legal Proceedings (Textual) | ||||||||||
Additional cash deposited | $ 80,301.86 | |||||||||
Atlantic Specialty Insurance Company [Member] | Collateral for the Surety Agreement [Member] | ||||||||||
Legal Proceedings (Textual) | ||||||||||
Additional cash deposited | $ 55,446.52 |
Acquisition of Applied Optica_2
Acquisition of Applied Optical Sciences (Details) | 1 Months Ended |
May 24, 2019 | |
Asset Purchase Agreement [Member] | |
Acquisition of Applied Optical Sciences (Textual) | |
Agreement, Description | The term of the Consulting Agreement is 3-years and cannot be terminated by either party other than for cause. Consideration payable to SWM Consulting LLC (based on consulting agreement) is $180,000 for the first year and $250,000 in the second and third years for a total of $680,000 over the three-year term. Consideration payable to AOS (based on APA) is a Promissory Note issued to the shareholders of AOS for $2,500,000. The promissory note shall be repaid in equal semi-annual installments, the first of such payments being due on the first anniversary of the issue date (July 2019) and subsequent payments being due on the last day of each six-month period thereafter, the final such payment being due on the third anniversary of the Issue Date. The Promissory Note may be prepaid at any time (in whole or in part). Additional consideration was a Warrant to purchase 2,500,000 shares of the Company's stock at an exercise price of $0.06 per share (executed on July 10, 2019). The note payable is reported in the current and long term notes payable with the discount being reported in current and long term other assets. The discount is amortized to compensation on a straight line basis over three years. |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended |
Oct. 31, 2019 | |
Subsequent Event [Member] | Subscription agreement [Member] | |
Subsequent Events (Textual) | |
Subsequent event, description | the company received $602,000 from two non-affiliates for a subscription agreement to purchase the company's common stock at $0.30 a share. |