Applied Energetics (AERG) 10-Q 15 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 14, 2018
Document And Entity Information
Entity Registrant Name	APPLIED ENERGETICS, INC.
Entity Central Index Key	879,911
Document Type	10-Q
Trading Symbol	AERG
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		176,028,564
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 4,937	$ 2,764
Other assets	10,497	312
Total current assets	15,434	3,076
Property and equipment	4,905
TOTAL ASSETS	20,339	3,076
Current liabilities
Accounts payable	79,773	80,743
Accrued compensation	313,506	266,480
Accrued officer compensation	206,000	230,500
Notes payable net of unamoritized discount of $128,938 at March 31, 2018 and $102,219 at December 31, 2017	108,991	53,097
Due to related parties	129,280
Accrued expenses		185,927
Accrued dividends	48,079	48,079
Total current liabilities	885,629	864,826
Total liabilities	885,629	864,826
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 March 31, 2018 and at December 31, 2017	14	14
Common stock, $.001 par value, 500,000,000 shares authorized; 164,028,230 and 157,785,520 shares issued and outstanding at March 31, 2018 and at December 31, 2017, respectively	164,028	157,785
Additional paid-in capital	79,767,241	79,452,635
Accumulated deficit	(80,796,573)	(80,472,184)
Total stockholders' (deficit)	(865,290)	(861,750)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)	$ 20,339	$ 3,076

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Notes payable of unamortized discount	$ 128,938	$ 102,219
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	164,028,230	157,785,520
Common stock, outstanding	164,028,230	157,785,520

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating expenses
General and administrative	$ 192,070	$ 117,064
Research and development	27,150
Total operating expenses	219,220	117,064
Operating loss	(219,220)	(117,064)
Other (expense)
Interest (expense)	(105,168)
Total other (expense)	(105,168)
Net loss	(324,388)	(117,064)
Preferred stock dividends	(8,501)	(8,501)
Net loss attributable to common stockholders	$ (332,889)	$ (125,565)
Net loss per common share - basic and diluted (in dollars per share)	$ (0.01)	$ (0.01)
Weighted average number of shares outstanding, basic and diluted (in shares)	162,321,759	154,812,993

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (324,388)	$ (117,064)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash stock based compensation expense	20,955	7,901
Loss on early payoff of note payable	65,019
Shares issued for services	188,524
Amortization of beneficial conversion feature	88,542
Amortization of financing costs	9,359
Interest expense	7,267
Changes in assets and liabilities:
Prepaids and deposits	(5,185)	74,125
Accounts payable	28,137	1,429
Accrued expenses and compensation	(163,402)
Net cash used in operating activities	(85,172)	(33,609)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	(4,905)
Net cash used by investing activities	(4,905)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable net of financing costs	92,250
Proceeds from issuance of common stock		62,500
Net cash provided by financing activities	92,250	62,500
Net increase in cash and cash equivalents	2,173	28,891
Cash and cash equivalents, beginning of period	2,764	680
Cash and cash equivalents, end of period	4,937	$ 29,571
Supplemental Cash Flow Information Cash paid for interest and taxes

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION 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 March 31, 2018 (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 period ended March 31, 2018, 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. 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 three months ended March 31, 2018, the company incurred a net loss of approximately $324,000, had negative cash flows from operations of approximately $85,000 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 March 31, 2018, the company had approximately $5,000 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.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2018
Share-based Compensation [Abstract]
SHARE-BASED COMPENSATION	2. SHARE-BASED COMPENSATION Share-Based Compensation – Contractors For the three months ended March 31, 2018 and 2017, share-based compensation expense totaled approximately $21,000 and $8,000, 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: Three months ended March 31, 2018 2017 Expected life (years) — 5 Dividend yield 0 % 0 % Expected volatility 0 % 80 % Risk free interest rates 0.00 % 1.97 % Weighted average fair value of options at grant date $ — $ 0.02980 For the three months ended March 31, 2018, no options to purchase stock were granted, additionally, no options to purchase stock were exercised, expired or forfeited; no restricted stock units were granted, vested or forfeited; and no restricted stock awards were granted, vested or forfeited. At March 31, 2018, options to purchase 14,000,000 shares of common stock were outstanding with a weighted average exercise price of $0.136 with a weighted average remaining contract term of approximately 4.0 years with an aggregate intrinsic value of $12,000. At March 31, 2018 options for 2,000,000 shares were exercisable. As of March 31, 2018, there was approximately $76,000 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 four years. During the three months ended March 31, 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 for a total of 8,000,000 shares being granted. 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. During the three months ended March 31, 2017 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 for a total of 6,000,000 shares being granted. These options have a five year term and vest on the date the company has cumulative revenues of $5 million.

NET LOSS PER SHARE

NET LOSS PER SHARE	3 Months Ended
	Mar. 31, 2018
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 three months ended March 31, 2018 and 2017, 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: Three months ended March 31, 2018 2017 Options to purchase common shares 14,000,000 14,000,000 Convertible preferred stock 41,798 38,965 Total potentially dilutive securities 14,041,798 14,038,965

DIVIDENDS

DIVIDENDS	3 Months Ended
	Mar. 31, 2018
Dividends [Abstract]
DIVIDENDS	4. DIVIDENDS Dividends on Preferred Stock are accrued when the amount and kind of the 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 cash or shares of common stock or a combination of cash and common stock. Upon the occurrence of the company’s failure 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 March 31, 2018, 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 March 31, 2018 was approximately $162,000. 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 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.

NOTES PAYABLE

NOTES PAYABLE	3 Months Ended
	Mar. 31, 2018
Notes Payable [Abstract]
NOTES PAYABLE	5. NOTES PAYABLE On September 15, 2017 the company borrowed $53,000 under a convertible note maturing June 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 it’s $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 October 18, 2017 the company borrowed $33,000 under a convertible note maturing July 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 April 16, 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 18,062,397 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 calculated a beneficial conversion feature of approximately $24,000 on this note against which $14,000 has been amortized. The above transaction of a note for $33,000 was put in place by previous management. On April 10, 2018, the company’s newly elected board of directors discussed its options concerning the above referenced convertible loan funded on October 18, 2017 in the amount of $33,000 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 $33,000 note before the conversion date was $51,000. The payment was comprised of $35,000 principal and accrued interest, and prepayment premium of $16,000. The note was paid in full on April 12, 2018. On November 16, 2017 the company borrowed $38,000 under a convertible note maturing August 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 May 16, 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 20,716,914 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 calculated a beneficial conversion feature of approximately $28,000 on this note against which $13,000 has been amortized. The above transaction of a note for $38,000 was put in place by previous management. On May 4, 2017 the company’s newly elected board of directors discussed its options concerning the above referenced convertible loan funded on November 16, 2017 in the amount of $38,000 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 $38,000 note before the conversion date was $58,000. The payment was comprised of $40,000 principal and accrued interest, and prepayment premium of $18,000. The note was paid in full on May 7, 2018. On December 27, 2017 the company borrowed $28,000 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 April 16, 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 17,164,750 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 calculated a beneficial conversion feature of approximately $20,000 on this note against which $7,000 has been amortized. The above Note for $28,000 is current and in good standing. 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 a 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 Note for $26,500 is current and in good standing. The following reconciles notes payable as of March 31, 2018 and December 31, 2017: March 31, 2018 December 31, 2017 Convertible notes payable $ 230,500 $ 152,000 Accrued interest 7,429 3,316 Financing costs (25,250 ) (12,000 ) Amortization of financing costs 11,888 2,529 Beneficial conversion feature (236,060 ) (124,689 ) Amortization of beneficial conversion feature 120,484 31,941 $ 108,991 $ 53,097

DUE TO RELATED PARTIES

DUE TO RELATED PARTIES	3 Months Ended
	Mar. 31, 2018
Related Party Transactions [Abstract]
DUE TO RELATED PARTIES	6. DUE TO RELATED PARTIES During the three months ended March 31, 2018, the company, under its new management, has borrowed $129,280 from two members of its board of directors. These loans are interest free and are payable on demand.

EQUITY

EQUITY	3 Months Ended
	Mar. 31, 2018
Equity [Abstract]
EQUITY	7. EQUITY 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. On January 24, 2018, we issued 1,242,710 shares of common stock in settlement of invoices valued at $38,524.26 with a vendor. This transaction was consummated by previous management to pay its attorney fees.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS	3 Months Ended
	Mar. 31, 2018
Loss Contingency [Abstract]
LEGAL PROCEEDINGS	8. LEGAL PROCEEDINGS We may from time to time be involved in legal proceedings arising from the normal course of business.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	9. SUBSEQUENT EVENTS Capital Contributions to the Company: On April 12, 2018 the company received $120,000 from an individual making a capital contribution to the company. On April 16, 2018 the company received $30,000 from an individual based on a subscription agreement with the company. On April 17, 2018 the company received $100,020 from an individual based on a subscription agreement with the company. On April 26, 2018 the company received $90,000 from an individual based on a subscription agreement with the company. On May 4, 2018 the company received $30,000 from an individual based on a subscription agreement with the company. On May 8, 2018 the company received $120,000 from an individual based on a subscription agreement with the company. On May 14, 2018 the company received $30,000 from an individual based on a subscription agreement with the company. On May 14, 2018 the company received $200,000 from an individual based on a subscription agreement with the company. The company’s management has evaluated subsequent events occurring after March 31, 2018, the date of our most recent balance sheet, through the date our financial statements were issued. Where applicable, all material subsequent events have been disclosed in their respective footnotes.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY AND MANAGEMENT'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 three months ended March 31, 2018, the company incurred a net loss of approximately $324,000, had negative cash flows from operations of approximately $85,000 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 March 31, 2018, the company had approximately $5,000 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.

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2018
Share-based Compensation [Abstract]
Schedule of share- based compensation	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: Three months ended March 31, 2018 2017 Expected life (years) — 5 Dividend yield 0 % 0 % Expected volatility 0 % 80 % Risk free interest rates 0.00 % 1.97 % Weighted average fair value of options at grant date $ — $ 0.02980

NET LOSS PER SHARE (Tables)

NET LOSS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Schedule of net loss per share	Potentially dilutive securities not included in the diluted loss per share calculation, due to net losses from continuing operations, were as follows: Three months ended March 31, 2018 2017 Options to purchase common shares 14,000,000 14,000,000 Convertible preferred stock 41,798 38,965 Total potentially dilutive securities 14,041,798 14,038,965

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	3 Months Ended
	Mar. 31, 2018
Notes Payable [Abstract]
Schedule of notes payble	The following reconciles notes payable as of March 31, 2018 and December 31, 2017: March 31, 2018 December 31, 2017 Convertible notes payable $ 230,500 $ 152,000 Accrued interest 7,429 3,316 Financing costs (25,250 ) (12,000 ) Amortization of financing costs 11,888 2,529 Beneficial conversion feature (236,060 ) (124,689 ) Amortization of beneficial conversion feature 120,484 31,941 $ 108,991 $ 53,097

BASIS OF PRESENTATION (Details

BASIS OF PRESENTATION (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ (324,388)	$ (117,064)
Cash flows from operations	(85,172)	(33,609)
Cash and cash equivalents	$ 4,937	$ 29,571	$ 2,764	$ 680

SHARE BASED COMPENSATION (Detai

SHARE BASED COMPENSATION (Details) - $ / shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected life (years)		5 years
Dividend yield	0.00%	0.00%
Expected volatility	0.00%	80.00%
Risk free interest rates	0.00%	1.97%
Weighted average fair value of options at grant date (in dollars per share)		$ 0.02980

SHARE BASED COMPENSATION (Det21

SHARE BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 20,955	$ 7,901
Common stock, par value (in dollars per share)	$ 0.001		$ 0.001
Unrecognized compensation costs related to unvested equity awards, net of estimated forfeitures	$ 76,000
Weighted average basis over period	4 years
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, option awards, granted	0
Share-based compensation, options exercised	0
Share-based compensation, options forfeited	0
Share-based compensation, options expired	0
Share-based compensation, options outstanding	14,000,000
Share-based compensation, options outstanding, weighted average exercise price (in dollars per share)	$ 0.136
Share-based compensation, options outstanding, weighted average remaining contractual term	4 years
Options outstanding aggregate intrinsic value	$ 12,000
Options exercisable (in shares)	2,000,000
Employee Stock Option [Member] | $.25 per Share Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, option awards, granted		6,000,000
Employee Stock Option [Member] | $.25 per Share Price [Member] | Scientific Advisory Board Members [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, option awards, granted		1,500,000
Common stock, par value (in dollars per share)		$ 0.001
Exercise price of options granted (in dollars per share)		$ 0.25
Term of options		5 years
Cumulative revenue targeted		$ 5,000,000
Employee Stock Option [Member] | $.05 per Share Price [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, option awards, granted		8,000,000
Employee Stock Option [Member] | $.05 per Share Price [Member] | Scientific Advisory Board Members [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, option awards, granted		2,000,000
Common stock, par value (in dollars per share)		$ 0.001
Exercise price of options granted (in dollars per share)		$ 0.05
Number of options vesting on first anniversary from grant date		500,000
Number of options vesting monthly from grant date		62,500
Term of options vest monthly		24 months
Term of options		5 years
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, non-option instruments granted	0
Share-based compensation, non-option instruments vested	0
Share-based compensation, non-option instruments forfeited	0
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, non-option instruments granted	0
Share-based compensation, non-option instruments vested	0
Share-based compensation, non-option instruments forfeited	0

NET LOSS PER SHARE (Details)

NET LOSS PER SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities	14,041,798	14,038,965
Options to Purchase Common Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities	14,000,000	14,000,000
Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities	41,798	38,965

DIVIDENDS (Details Narrative)

DIVIDENDS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Stockholders' Equity Note [Abstract]
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	$ 162,000
Series A covertible preferred stock liquidation preference (in dollars per share)	$ 25
Percentage of weighted average of common stock sales price	95.00%
Percentage of increase in dividend rate	1.00%

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Notes Payable [Abstract]
Convertible notes payable	$ 230,500	$ 152,000
Accrued interest	7,429	3,316
Financing costs	(25,250)	(12,000)
Amortization of financing costs	11,888	2,529
Beneficial conversion feature	(236,060)	(124,689)
Amortization of beneficial conversion feature	120,484	31,941
Notes payable	$ 108,991	$ 53,097

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - USD ($)

Apr. 25, 2018

Apr. 10, 2018

Mar. 16, 2018

Mar. 08, 2018

Jan. 08, 2018

Dec. 27, 2017

Nov. 16, 2017

Oct. 18, 2017

Sep. 15, 2017

May 04, 2017

Mar. 31, 2018

Dec. 31, 2017

Debt face amount

$ 230,500

$ 152,000

Convertible beneficial conversion feature

$ 236,060

$ 124,689

Conversion and cancellation cost of notes and warrants

$ 121,000

12% Convertible Notes Due June 20, 2018 [Member]

Debt face amount

$ 53,000

Debt maturity date

Jun. 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 maturity 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

Conversion and cancellation cost of notes and warrants

81,000

Payment of principal and accrued interest

25,000

12% Convertible Notes Due June 20, 2018 [Member] | Two Directors [Member]

Borrowings for repayment of notes

$ 121,000

12% Convertible Notes Due June 20, 2018 [Member] | Note warrant [Member]

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 June 20, 2018 [Member] | Note holder [Member]

Conversion price (in dollars per share)

$ 0.001

Number of shares reserved for conversion (in shares)

36,369,879

12% Convertible Notes Due July 20, 2018 [Member]

Debt face amount

$ 33,000

Debt maturity date

Jul. 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 maturity date

Apr. 16, 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.

Convertible beneficial conversion feature

$ 24,000

Convertible beneficial conversion amortized

$ 14,000

12% Convertible Notes Due July 20, 2018 [Member] | Subsequent Event [Member]

Repayment of convertible notes

$ 33,000

Conversion and cancellation cost of notes and warrants

51,000

Payment of principal and accrued interest

35,000

Prepayment premium

$ 16,000

12% Convertible Notes Due July 20, 2018 [Member] | Note holder [Member]

Conversion price (in dollars per share)

$ 0.001

Number of shares reserved for conversion (in shares)

18,062,397

12% Convertible Notes Due August 20, 2018 [Member]

Debt face amount

$ 38,000

Debt maturity date

Aug. 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 maturity date

May 16, 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.

Convertible beneficial conversion feature

$ 28,000

Convertible beneficial conversion amortized

$ 13,000

Repayment of convertible notes

$ 38,000

Conversion and cancellation cost of notes and warrants

58,000

Payment of principal and accrued interest

40,000

Prepayment premium

$ 18,000

12% Convertible Notes Due August 20, 2018 [Member] | Note holder [Member]

Conversion price (in dollars per share)

$ 0.001

Number of shares reserved for conversion (in shares)

20,716,914

12% Convertible Notes Due September 20, 2018 [Member]

Debt face amount

$ 28,000

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 maturity date

Apr. 16, 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.

Convertible beneficial conversion feature

$ 20,000

Convertible beneficial conversion amortized

$ 7,000

12% Convertible Notes Due September 20, 2018 [Member] | Note holder [Member]

Conversion price (in dollars per share)

$ 0.001

Number of shares reserved for conversion (in shares)

17,164,750

12% Convertible Notes Due August 28, 2018 [Member]

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 maturity 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.

12% Convertible Notes Due August 28, 2018 [Member] | Subsequent Event [Member]

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

12% Convertible Notes Due August 28, 2018 [Member] | Note holder [Member]

Conversion price (in dollars per share)

$ 0.001

Number of shares reserved for conversion (in shares)

40,000,000

12% Convertible Notes Due December 15, 2018 [Member]

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 maturity 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.

12% Convertible Notes Due December 15, 2018 [Member] | Note holder [Member]

Conversion price (in dollars per share)

$ 0.001

Number of shares reserved for conversion (in shares)

11,008,640

DUE TO RELATED PARTIES (Details

DUE TO RELATED PARTIES (Details Narrative) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Related Party Transactions [Abstract]
Due to related parties	$ 129,280

EQUITY (Details Narrative)

EQUITY (Details Narrative) - USD ($)	Jan. 26, 2018	Jan. 24, 2018
Number of shares issued for settlement of invoices (in shares)		1,242,710
Amount of shares issued for settlement of invoices		$ 38,524.26
Financial Services Agreement [Member] | BMA Securities [Member]
Number of shares issued (in shares)	5,000,000
Amount of shares issued	$ 150,000

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	May 15, 2018	May 14, 2018	May 08, 2018	May 04, 2018	Apr. 26, 2018	Apr. 17, 2018	Apr. 16, 2018	Apr. 12, 2018
Subsequent Event [Member]
Contribution of capital individual	$ 200,000	$ 30,000	$ 120,000	$ 30,000	$ 90,000	$ 100,020	$ 30,000	$ 120,000