Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | INFINITE GROUP INC | |
Entity Central Index Key | 884,650 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | IMCI | |
Entity Common Stock, Shares Outstanding | 29,461,883 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 14,102 | $ 42,436 |
Accounts receivable, net of allowances of $40,000 – 2017; $70,000 – 2016 | 335,615 | 243,477 |
Prepaid expenses and other current assets | 8,286 | 16,076 |
Total current assets | 358,003 | 301,989 |
Property and equipment, net | 21,436 | 26,079 |
Software, net | 26,250 | 105,000 |
Deposits | 6,667 | 8,985 |
Total assets | 412,356 | 442,053 |
Current Liabilities | ||
Accounts payable | 592,040 | 346,701 |
Accrued payroll | 336,724 | 219,454 |
Accrued interest payable | 744,596 | 671,437 |
Accrued retirement | 232,560 | 225,720 |
Accrued expenses - other | 61,623 | 81,754 |
Current maturities of long-term obligations | 1,255,999 | 836,999 |
Notes payable | 362,500 | 368,279 |
Notes payable - related parties | 63,353 | 0 |
Total current liabilities | 3,649,395 | 2,750,344 |
Long-term obligations: | ||
Notes payable - other | 720,141 | 1,150,225 |
Notes payable - Related parties | 572,615 | 534,326 |
Total liabilities | 4,942,151 | 4,434,895 |
Commitments | ||
Stockholders' deficiency: | ||
Common stock, $.001 par value, 60,000,000 shares authorized; 29,461,883 – 2017; 29,061,883 – 2016 shares issued and outstanding | 29,461 | 29,061 |
Additional paid-in capital | 30,603,416 | 30,562,618 |
Accumulated deficit | (35,162,672) | (34,584,521) |
Total stockholders' deficiency | (4,529,795) | (3,992,842) |
Total liabilities and stockholders' deficiency | $ 412,356 | $ 442,053 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets [Parenthetical] [Abstract] | ||
Allowances for accounts receivable (in dollars) | $ 40,000 | $ 70,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 29,461,883 | 29,061,883 |
Common stock, shares outstanding | 29,461,883 | 29,061,883 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Sales | $ 1,586,278 | $ 1,727,750 | $ 4,799,434 | $ 5,391,001 |
Cost of sales | 1,133,202 | 1,223,085 | 3,395,436 | 3,912,730 |
Gross profit | 453,076 | 504,665 | 1,403,998 | 1,478,271 |
Costs and expenses: | ||||
General and administrative | 290,142 | 297,346 | 867,097 | 947,978 |
Selling | 288,093 | 228,590 | 931,840 | 645,232 |
Total costs and expenses | 578,235 | 525,936 | 1,798,937 | 1,593,210 |
Operating loss | (125,159) | (21,271) | (394,939) | (114,939) |
Interest expense: | ||||
Related parties | (14,840) | (13,393) | (40,221) | (42,065) |
Other | (48,001) | (48,678) | (142,991) | (146,066) |
Total interest expense | (62,841) | (62,071) | (183,212) | (188,131) |
Net loss | $ (188,000) | $ (83,342) | $ (578,151) | $ (303,070) |
Net loss per share - basic and diluted | $ (.01) | $ 0 | $ (.02) | $ (.01) |
Weighted average shares outstanding - basic and diluted | 29,105,361 | 29,061,883 | 29,076,535 | 28,127,817 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (578,151) | $ (303,070) |
Adjustments to reconcile net loss to net cash (used) provided by operating activities: | ||
Stock based compensation | 25,198 | 31,301 |
Depreciation and amortization | 106,909 | 65,875 |
Reduction of accounts receivable allowances | (30,000) | 0 |
(Increase) decrease in assets: | ||
Accounts receivable | (62,138) | (313,253) |
Prepaid expenses and other assets | 10,108 | (5,799) |
Increase (decrease) in liabilities: | ||
Accounts payable | 245,339 | (72,388) |
Accrued expenses | 170,298 | 281,349 |
Accrued retirement | 6,840 | 6,573 |
Net cash used by operating activities | (105,597) | (309,412) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (5,608) | (4,073) |
Net cash used by investing activities | (5,608) | (4,073) |
Cash flows from financing activities: | ||
Proceeds from notes payable - related parties | 92,000 | 0 |
Proceeds from notes payable - other | 0 | 400,000 |
Repayments of notes payable - related parties | (3,350) | (5,984) |
Repayments of notes payable - other | (5,779) | (62,161) |
Net cash provided by financing activities | 82,871 | 331,855 |
Net (decrease) increase in cash | (28,334) | 18,370 |
Cash - beginning of period | 42,436 | 13,510 |
Cash - end of period | 14,102 | 31,880 |
Supplemental disclosure: | ||
Cash paid for - Interest | $ 89,986 | $ 106,760 |
1. Basis of Presentation
1. Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited financial statements of Infinite Group, Inc. (“Infinite Group, Inc.” or the “Company”) included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (U.S.) ("GAAP") for interim financial information and with instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. The December 31, 2016 balance sheet has been derived from the audited financial statements at that date, but does not include all disclosures required by GAAP. The accompanying unaudited financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the U.S. Securities and Exchange Commission (SEC). Results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2017. |
2. Management Plans - Capital R
2. Management Plans - Capital Resources | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Management Plans - Capital Resources | The Company reported net losses of $578,151 and $303,070 for the nine months ended September 30, 2017 and 2016, respectively, and stockholders’ deficiencies of $4,529,795 and $3,992,842 at September 30, 2017 and December 31, 2016, respectively. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern. Continue to Improve Operations and Capital Resources The Company's goal is to increase sales and generate cash flow from operations on a consistent basis. The Company uses a formal financial review and budgeting process as a tool for improvement that has aided expense reduction and internal performance. The Company’s business plans require improving the results of its operations in future periods. During June and July 2017, the Company raised $32,000 of additional working capital from related parties. In July 2017, the Company completed a financing with an officer of the Company to provide up to $100,000 of additional working capital. In consideration for providing the financing, the Company granted the officer a stock option for 400,000 shares of its common stock exercisable at $.04 per share, which was the closing price of the Company’s common stock on the grant date. Through September 30, 2017, the Company borrowed and has outstanding $60,000 under this financing. In September 2017, the Company completed a financing with a related party to provide up to $75,000 of additional working capital. See Note 9. Financing Agreement. On September 30, 2016, the Company extended the scheduled maturity of its $400,000 unsecured line of credit financing agreement (the “LOC Agreement”) with a member of its board of directors (“Board”) from December 31, 2017 to January 1, 2020. The Company also extended the maturity dates of notes payable of $146,300 and $264,000 from January 1, 2017 to January 1, 2020. In August 2016, the Company amended its financing agreement with its financial institution resulting in a reduction of its financing rate and an increase in its advance rate. See Note 5 . The Company believes the capital resources available under its factoring line of credit, cash from additional related party and third-party loans and cash generated by improving the results of its operations provide sources to fund its ongoing operations and to support the internal growth of the Company. Although the Company has no assurances, the Company believes that related parties, who have previously provided working capital, and third parties will continue to provide working capital loans on similar terms, as in the past, as may be necessary to fund its on-going operations for at least the next 12 months. If the Company experiences significant growth in its sales, the Company believes that this may require it to increase its financing line, finance additional accounts receivable, or obtain additional working capital from other sources to support its sales growth. |
3. Summary of Significant Accou
3. Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | There are several accounting policies that the Company believes are significant to the presentation of its financial statements. These policies require management to make complex or subjective judgments about matters that are inherently uncertain. Note 3 to the Company’s audited financial statements for the year ended December 31, 2016 presents a summary of significant accounting policies as included in the Company's Annual Report on Form 10-K as filed with the SEC. Reclassifications Fair Value of Financial Instruments Recent Accounting Pronouncements Not Yet Adopted - ● ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in May 2016. ASU No. 2016-12 amends the new revenue recognition standard to clarify the guidance on assessing collectability, presenting sales taxes, measuring noncash consideration, and certain transition matters. ● ASU No. 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” was issued in April 2016. ASU No. 2016-10 addresses implementation issues identified by the FASB-International Accounting Standards Board Joint Transition Resource Group for Revenue Recognition. ● ASU No. 2016-08 “Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” was issued in March 2016. ASU No. 2016-08 requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. The Company does not believe this guidance will have a material effect on the Company’s financial statements when adopted. In February 2016, the FASB issued amended guidance for lease arrangements to increase transparency and comparability by providing additional information to users of financial statements regarding an entity's leasing activities. The revised guidance seeks to achieve this objective by requiring reporting entities to recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. The guidance, which is required to be adopted in the first quarter of 2019, will be applied on a modified retrospective basis beginning with the earliest period presented. Early adoption is permitted. The Company is evaluating the effect that this standard will have on its financial statements and related disclosures. |
4. Sales and Cost of Sales
4. Sales and Cost of Sales | 9 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
Sales and Cost of Sales | For sales of third party software and project credits where the Company does not have the performance obligation to deliver the software or credits to the end user, the Company acts as an agent rather than a principal. Accordingly, cost of such sales is recorded as a reduction of sales and only the gross profit is included in sales in the accompanying statements of operations. The Company generated gross agent sales of $169,625 and $803,903 for the three and nine months ended September 30, 2017 and $124,490 for the three and nine months ended September 30, 2016. The related accounts receivables and accounts payable are recorded on a gross basis in the accompanying balance sheet at September 30, 2017. |
5. Sale of Certain Accounts Rec
5. Sale of Certain Accounts Receivable | 9 Months Ended |
Sep. 30, 2017 | |
Sale of Certain Accounts Receivable [Abstract] | |
Sale of Certain Accounts Receivable | The Company has available a financing line with a financial institution (the Purchaser), which enables the Company to sell accounts receivable to the Purchaser with full recourse against the Company. Pursuant to the provisions of FASB ASC 860, the Company reflects the transactions as a sale of assets and establishes an accounts receivable from the Purchaser for the retained amount less the costs and fees of the transaction and less any anticipated future loss in the value of the retained asset. Through August 28, 2016, the retained amount was equal to 15% of the total accounts receivable invoice sold to the Purchaser. The fee was charged at prime plus 4% against the average daily outstanding balance of funds advanced. On August 29, 2016, the Company amended its financing agreement with the Purchaser. The retained amount was revised to 10% of the total accounts receivable invoice sold to the Purchaser. The fee is charged at prime plus 3.6% (effective rate of 7.85% at September 30, 2017) against the average daily outstanding balance of funds advanced. The estimated future loss reserve for each receivable included in the estimated value of the retained asset is based on the payment history of the accounts receivable customer and is included in the allowance for doubtful accounts, if any. As collateral, the Company granted the Purchaser a first priority interest in accounts receivable and a blanket lien, which may be junior to other creditors, on all other assets. The financing line provides the Company the ability to finance up to $2,000,000 of selected accounts receivable invoices, which includes a sublimit for one of the Company’s customers of $1,500,000. During the nine months ended September 30, 2017, the Company sold $3,694,713 ($4,524,246 – September 30, 2016) of its accounts receivable to the Purchaser. As of September 30, 2017, $381,000 ($328,000 - December 31, 2016) of these receivables remained outstanding. Additionally, as of September 30, 2017, the Company had approximately $104,000 available under the financing line with the financial institution ($143,000 – December 31, 2016). After deducting estimated fees, allowance for bad debts and advances from the Purchaser, the net receivable from the Purchaser amounted to $38,099, at September 30, 2017 ($31,462 – December 31, 2016), and is included in accounts receivable in the accompanying balance sheets. There were no gains or losses on the sale of the accounts receivable because all were collected. The cost associated with the financing line totaled $35,944 for the nine months ended September 30, 2017 ($53,063 - September 30, 2016) and $12,196 for the three months ended September 30, 2017 ($14,502 - September 30, 2016). These financing line fees are classified on the statements of operations as interest expense. |
6. Earnings Per Share
6. Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Basic earnings per share is based on the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is based on the weighted average number of common shares outstanding, as well as dilutive potential common shares which, in the Company’s case, comprise shares issuable under convertible notes payable and stock options. The treasury stock method is used to calculate dilutive shares, which reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options and warrants assumed to be exercised. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive. The following table sets forth the computation of basic and diluted net loss per share. Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Numerator for basic and diluted net loss per share: Net loss $ (188,000 ) $ (83,342 ) $ (578,151 ) $ (303,070 ) Denominator for basic and diluted net loss per share: Weighted average common shares outstanding 29,105,361 29,061,883 29,076,535 28,127,817 Basic and diluted net loss per share $ (.01 ) $ .00 $ (.02 ) $ (.01 ) Anti-dilutive shares excluded from net loss per share 28,033,096 28,829,443 28,033,096 28,829,443 Certain common shares issuable under stock options and convertible notes payable have been omitted from the diluted net loss per share calculation because their inclusion is considered anti-dilutive because the exercise prices were greater than the average market price of the common shares or their inclusion would have been anti-dilutive. |
7. Software Purchase
7. Software Purchase | 9 Months Ended |
Sep. 30, 2017 | |
Research and Development [Abstract] | |
Software Purchase | On February 6, 2015, the Company purchased all rights to cyber security network vulnerability assessment reporting software (the “Software”). Under the purchase agreement, the Company agreed to pay the Seller the base purchase price of $180,000, of which $100,000 was paid in cash at the closing and the remaining $80,000 of which was paid by delivery at the closing of the Company’s secured promissory note. As security for its obligations under the promissory note, the Company granted the Seller a security interest in the Software. After April 7, 2015, the note accrues interest at 10% per annum. The remaining balance of $20,000 was payable on the note on September 30, 2016 but was not paid then although the balance was subsequently reduced during 2016 by $7,500. To date, the Seller has not taken any action to collect the amount past due on the note or to enforce the security interest in the Software. At September 30, 2017, the total principal amount payable under the note is $12,500 with accrued interest payable of $8,150 ($7,215 at December 31, 2016). The asset cost of $180,000 is amortized over its estimated useful life. The remaining balance at September 30, 2017 is $26,250 ($105,000 at December 31, 2016) which will be fully amortized by December 31, 2017. |
8. Notes Payable - Related Part
8. Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | The balance of the note payable to a member of the Company’s board of directors was $382,715 at September 30, 2017 ($386,065 at December 31, 2016). Principal and interest are paid monthly using an amortization schedule requiring annual principal payments of $8,000 with all remaining outstanding amounts due on January 1, 2020. The current portion of $10,680 is offset by the current portion of deferred financing costs of $4,327. The effective rate of interest was 7.10% at September 30, 2017. On June 29, 2017, the Company borrowed $20,000 under the terms of a 6% unsecured demand note from this board member. During June and July 2017, the Company borrowed $12,000 under the terms of 6% unsecured demand notes from an executive officer. On July 18, 2017, the Company entered into an unsecured line of credit financing agreement (the “Agreement”) with its Chief Operating Officer. The Agreement provides for working capital of up to $100,000 through July 31, 2022. Borrowings bear interest at 6%. The interest rate is adjusted annually, on January 1st of each year, to a rate equal to the prime rate in effect on December 31st of the immediately preceding year, plus one and one quarter percent, and in no event, is the interest rate less than 6% per annum. Interest is payable quarterly. As payment of an origination fee under the Agreement, the Company granted a stock option to purchase a total of 400,000 shares of the Company's common stock, par value $.001 per share at $.04 per share valued at $9,960. Such option became fully vested and exercisable on July 31, 2017. Through September 30, 2017, the Company borrowed and has outstanding $60,000 under the Agreement with proceeds used for working capital. A 7% note payable of $25,000 due to a related party matures on March 31, 2018 and is classified as a current liability in the accompanying balance sheet at September 30, 2017. |
9. Financing Agreement
9. Financing Agreement | 9 Months Ended |
Sep. 30, 2017 | |
Financing Agreement | |
Financing Agreement | On September 21, 2017, the Company entered into an unsecured line of credit financing agreement (the “LOC Note Agreement”) with a related party. The LOC Note Agreement provides for working capital of up to $75,000 through December 31, 2022. Borrowings bear interest at 6%. In consideration for providing the financing, the Company paid the lender a fee of 400,000 shares of its common stock valued at $.04 per share valued or $16,000 in the aggregate, using the closing price of the Company’s common stock on the date the agreement was executed. No amount was borrowed through September 30, 2017. |
10. Stock Option Plans and Agre
10. Stock Option Plans and Agreements | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Plans and Agreements | The Company has approved stock option plans and agreements covering up to an aggregate of 8,209,000 shares of common stock. Plan options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock based compensation consists of charges for stock option awards to employees, directors and consultants. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used for the nine months ended September 30, 2017 and 2016. 2017 2016 Risk-free interest rate 1.50% - 1.58% .88% - 1.50% Expected dividend yield 0% 0% Expected stock price volatility 100% 100% Expected life of options 2.75 to 3.0 years 2.50 to 5.75 years The Company recorded expense for options issued to employees and independent service providers of $15,294 and $23,364 for the three months ended September 30, 2017 and 2016, respectively, and $25,198 and $31,301 for the nine months ended September 30, 2017 and 2016, respectively. At September 30, 2017, there was approximately $7,300 of unrecognized compensation cost related to non-vested options. This cost is expected to be recognized over a weighted average period of approximately two years. The total fair value of shares that vested during the nine months ended September 30, 2017 was approximately $29,000 ($233,000 during the nine months ended September 30, 2016). The weighted average fair value of options granted during the nine months ended September 30, 2017 was $.03 ($.02 during the nine months ended September 30, 2016). No options were exercised during the nine months ended September 30, 2017 and 2016. A summary of all stock option activity for the nine months ended September 30, 2017 follows. Number of Options Outstanding Weighted Average Exercise Price Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2016 8,583,000 $ .12 Granted 680,000 $ .04 Expired (169,500 ) $ .41 Forfeited (1,462,500 ) $ .15 Outstanding at September 30, 2017 7,631,000 $ .12 4.4 years $ 4,900 At September 30, 2017: Vested or expected to vest and exercisable 6,693,000 $ .08 4.7 years $ 4,900 |
11. Related Party - Accrued Int
11. Related Party - Accrued Interest Payable | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party - Accrued Interest Payable | Included in accrued interest payable is accrued interest payable to related parties of $95,513 at September 30, 2017 ($81,347 - December 31, 2016). |
3. Summary of Significant Acc17
3. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary Of Significant Accounting Policies Policies | |
Reclassifications | The Company reclassifies amounts in its financial statements to comply with recently adopted accounting pronouncements. |
Fair Value of Financial Instruments | The carrying amounts reported in the balance sheets for cash, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the immediate short-term maturity of these financial instruments. The carrying value of notes payable and convertible notes payable approximates the fair value based on rates currently available from financial institutions and various lenders. |
Recent Accounting Pronouncements Not Yet Adopted | In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) which provides new accounting guidance on revenue from contracts with customers. The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017 and will be required to be applied retrospectively. Additional ASUs have been issued to amend or clarify this ASU as follows: ● ASU No. 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in May 2016. ASU No. 2016-12 amends the new revenue recognition standard to clarify the guidance on assessing collectability, presenting sales taxes, measuring noncash consideration, and certain transition matters. ● ASU No. 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” was issued in April 2016. ASU No. 2016-10 addresses implementation issues identified by the FASB-International Accounting Standards Board Joint Transition Resource Group for Revenue Recognition. ● ASU No. 2016-08 “Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” was issued in March 2016. ASU No. 2016-08 requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. The Company does not believe this guidance will have a material effect on the Company’s financial statements when adopted. In February 2016, the FASB issued amended guidance for lease arrangements to increase transparency and comparability by providing additional information to users of financial statements regarding an entity's leasing activities. The revised guidance seeks to achieve this objective by requiring reporting entities to recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. The guidance, which is required to be adopted in the first quarter of 2019, will be applied on a modified retrospective basis beginning with the earliest period presented. Early adoption is permitted. The Company is evaluating the effect that this standard will have on its financial statements and related disclosures. |
6. Earnings Per Share (Tables)
6. Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Numerator for basic and diluted net loss per share: Net loss $ (188,000 ) $ (83,342 ) $ (578,151 ) $ (303,070 ) Denominator for basic and diluted net loss per share: Weighted average common shares outstanding 29,105,361 29,061,883 29,076,535 28,127,817 Basic and diluted net loss per share $ (.01 ) $ .00 $ (.02 ) $ (.01 ) Anti-dilutive shares excluded from net loss per share 28,033,096 28,829,443 28,033,096 28,829,443 |
10. Stock Option Plans and Ag19
10. Stock Option Plans and Agreements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | 2017 2016 Risk-free interest rate 1.50% - 1.58% .88% - 1.50% Expected dividend yield 0% 0% Expected stock price volatility 100% 100% Expected life of options 2.75 to 3.0 years 2.50 to 5.75 years |
Schedule of Share-based Compensation, Stock Options, Activity | Number of Options Outstanding Weighted Average Exercise Price Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2016 8,583,000 $ .12 Granted 680,000 $ .04 Expired (169,500 ) $ .41 Forfeited (1,462,500 ) $ .15 Outstanding at September 30, 2017 7,631,000 $ .12 4.4 years $ 4,900 At September 30, 2017: Vested or expected to vest and exercisable 6,693,000 $ .08 4.7 years $ 4,900 |
2. Management Plans - Capital20
2. Management Plans - Capital Resources (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Management Plans - Capital Resources Details Narrative | |||||
Operating loss | $ (125,159) | $ (21,271) | $ (394,939) | $ (114,939) | |
Net loss | (188,000) | $ (83,342) | (578,151) | $ (303,070) | |
Stockholders' deficiency | $ (4,529,795) | $ (4,529,795) | $ (3,992,842) |
6. Earnings Per Share (Details)
6. Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator for basic and diluted net loss per share: | ||||
Net loss | $ (188,000) | $ (83,342) | $ (578,151) | $ (303,070) |
Denominator for basic and diluted net loss per share: | ||||
Weighted average shares outstanding - basic and diluted | 29,105,361 | 29,061,883 | 29,076,535 | 28,127,817 |
Net loss per share - basic and diluted | $ (.01) | $ 0 | $ (.02) | $ (.01) |
Anti-dilutive shares excluded from net loss per share calculation | 28,033,096 | 28,829,443 | 28,033,096 | 28,829,443 |
10. Stock Option Plans and Ag22
10. Stock Option Plans and Agreements (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Expected dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 100.00% | 100.00% |
Minimum [Member] | ||
Risk-free interest rate | 1.50% | 0.88% |
Expected life of options | 2 years 9 months | 2 years 6 months |
Maximum [Member] | ||
Risk-free interest rate | 1.58% | 1.50% |
Expected life of options | 3 years | 5 years 9 months |
10. Stock Option Plans and Ag23
10. Stock Option Plans and Agreements (Details 1) | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Options, Outstanding (in shares) at December 31, 2016 | shares | 8,583,000 |
Number of Options, Options granted (in shares) | shares | 680,000 |
Number of Options, Options expired (in shares) | shares | (169,500) |
Number of Options, Options forfeited (in shares) | shares | (1,462,500) |
Number of Options, Outstanding (in shares) at September 30, 2017 | shares | 7,631,000 |
Number of Options, Vested or expected to vest at September 30, 2017 | shares | 6,693,000 |
Number of Options, Exercisable (in shares) at September 30, 2017 | shares | 6,693,000 |
Weighted Average Exercise Price, Outstanding (in dollars per share) at December 31, 2016 | $ / shares | $ 0.12 |
Weighted Average Exercise Price, Options granted (in dollars per share) | $ / shares | 0.04 |
Weighted Average Exercise Price, Options expired (in dollars per share) | $ / shares | 0.41 |
Weighted Average Exercise Price, Options forfeited (in dollars per share) | $ / shares | 0.15 |
Weighted Average Exercise Price, Outstanding (in dollars per share) at September 30, 2017 | $ / shares | 0.12 |
Weighted Average Exercise Price, Vested or expected to vest at September 30, 2017 | $ / shares | 0.08 |
Weighted Average Exercise Price, Exercisable (in dollars per share) at September 30, 2017 | $ / shares | $ 0.08 |
Weighted-Average Remaining Contractual Term, Outstanding at September 30, 2017 | 4 years 4 months 24 days |
Weighted-Average Remaining Contractual Term, Vested or expected to vest at September 30, 2017 | 4 years 8 months 12 days |
Weighted-Average Remaining Contractual Term, Exercisable at September 30, 2017 | 4 years 8 months 12 days |
Aggregate Intrinsic Value, Outstanding (in dollars) at September 30, 2017 | $ | $ 4,900 |
Aggregate Intrinsic Value, Vested or expected to vest at September 30, 2017 | $ | 4,900 |
Aggregate Intrinsic Value, Exercisable (in dollars) at September 30, 2017 | $ | $ 4,900 |
11. Related Party - Accrued I24
11. Related Party - Accrued Interest Payable (Details Narrative) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party - Accrued Interest Payable Details Narrative | ||
Interest Payable, Related Parties | $ 95,513 | $ 81,347 |