Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Apr. 14, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Entity Registrant Name | FLEXPOINT SENSOR SYSTEMS INC | ||
Entity Central Index Key | 925,660 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 78,363,464 | ||
Entity Public Float | $ 3,797,178 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 22,706 | |
Accounts receivable, net of allowance of $102,140 and $7,140 | 84,499 | 98,557 |
Notes receivable, net of allowance of $86,806 and $0 | 86,806 | |
Deposits and prepaid expenses | 9,348 | 11,949 |
Total Current Assets | 93,847 | 220,018 |
Long-Term Deposits | 6,550 | 6,550 |
Property and Equipment, net of accumulated depreciation of $586,767 and $586,394 | 10,823 | |
Patents and Proprietary Technology, net of accumulated amortization of $876,037 and $793,103 | 96,358 | 179,292 |
Goodwill | 4,896,917 | 4,896,917 |
Total Assets | 5,104,495 | 5,302,777 |
Current Liabilities | ||
Accounts payable | 172,602 | 160,437 |
Accounts payable - related party | 1,420 | 322 |
Accrued liabilities | 741,778 | 375,244 |
Convertible notes payable, net of discount of $0 and $763,352 | 1,184,660 | 205,105 |
Convertible notes payable to related party, net of discount of $0 and $0 | 20,000 | 40,000 |
Derivative liabilities | 76,295 | |
Total Liabilities | 2,196,755 | 781,108 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock - $0.001 par value; 1,000,000 shares authorized; no shares issued or outstanding | ||
Common stock - $0.001 par value; 100,000,000 shares authorized; 78,363,464 shares and 71,627,114 shares issued and outstanding, respectively | 78,363 | 71,627 |
Stock subscriptions receivable | 9,958 | |
Additional paid-in capital | 29,052,188 | 28,569,711 |
Accumulated deficit | (26,222,811) | (24,129,627) |
Total Stockholders' Equity | 2,907,740 | 4,521,669 |
Total Liabilities and Stockholders' Equity | $ 5,104,495 | $ 5,302,777 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for bad debts | $ 102,140 | $ 7,140 |
Notes receivable, net of allowance | 86,806 | 0 |
Property and Equipment, accumulated depreciation | 586,767 | 586,394 |
Patents and Proprietary Technology, accumulated amortization | 876,037 | 793,103 |
Convertible notes payable, discount | 0 | 763,352 |
Convertible notes payable to related party, discount | $ 0 | $ 0 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 78,363,464 | 71,627,114 |
Common stock, shares outstanding | 78,363,464 | 71,627,114 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Engineering, Contract and Testing Revenue | $ 314,494 | $ 138,347 |
Operating Costs and Expenses | ||
Amortization of patents and proprietary technology | 82,934 | 101,389 |
Cost of revenue | 23,055 | 6,707 |
Administrative and marketing expense | 878,584 | 896,003 |
Research and development expense | 318,445 | 279,138 |
Total Operating Costs and Expenses | 1,303,018 | 1,283,237 |
Other Income (Expense) | ||
Interest expense | (1,068,389) | (1,591,993) |
Interest income | 47 | 6,396 |
Loss on extinguishment of debt | (915) | (168,286) |
Gain on stock debt exchange | 156,743 | |
Loss on change in fair value of derivative liabilities | (35,403) | |
Net Other Income (Expense) | (1,104,660) | (1,597,140) |
Net Loss | $ (2,093,184) | $ (2,742,030) |
Basic and Diluted Loss Per Common Share | $ (0.03) | $ (0.05) |
Basic and Diluted Weighted-Average Common Shares Outstanding | 72,404,678 | 60,339,443 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Subscriptions Payable [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2014 | $ 53,377 | $ 24,990,927 | $ (21,387,594) | $ 3,656,710 | |
Balance, shares at Dec. 31, 2014 | 53,377,114 | ||||
Beneficial conversion features | 2,287,505 | 2,287,505 | |||
Shares issued for convertible notes | $ 14,850 | 760,223 | 775,073 | ||
Shares issued for convertible notes, shares | 14,850,000 | ||||
Shares issued in settlement of accrued liabilities | $ 3,400 | 282,400 | $ 285,800 | ||
Shares issued in settlement of accrued liabilities, shares | 3,400,000 | ||||
Stock issued for stock subscription, shares | 18,250,000 | ||||
Stock subscription receivable | 9,958 | $ 9,958 | |||
Stock options issued | 248,656 | 248,656 | |||
Net loss | (2,742,030) | (2,742,030) | |||
Balance at Dec. 31, 2015 | $ 71,627 | 28,569,711 | 9,958 | (24,129,627) | $ 4,521,669 |
Balance, shares at Dec. 31, 2015 | 71,627,114 | 71,627,114 | |||
Prior-period adjustment | (160,000) | $ (160,000) | |||
Beneficial conversion features | 118,083 | 118,083 | |||
Shares issued for convertible notes | $ 6,650 | 328,368 | 335,018 | ||
Shares issued for convertible notes, shares | 6,650,000 | ||||
Stock issued for stock subscription | $ 86 | 9,872 | (9,958) | ||
Stock issued for stock subscription, shares | 86,350 | 6,736,350 | |||
Stock options issued | 26,154 | $ 26,154 | |||
Net loss | (2,093,184) | (2,093,184) | |||
Balance at Dec. 31, 2016 | $ 78,363 | $ 29,052,188 | $ (26,222,811) | $ 2,907,740 | |
Balance, shares at Dec. 31, 2016 | 78,363,464 | 78,363,464 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (2,093,184) | $ (2,742,030) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 373 | |
Bad debt expense | 181,806 | 4,539 |
Stock-based compensation | 26,154 | 248,656 |
Stock subscription for compensation | 9,958 | |
Amortization of patents and proprietary technology | 82,934 | 101,389 |
Amortization of discount on note payable | 922,327 | 1,473,341 |
Loss (Gain) on extinguishment of debt | 915 | 168,286 |
Loss (Gain) on conversion of notes payable to common stock | (156,743) | |
Loss (Gain) on change in fair value of derivative liabilities | 35,403 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (80,942) | (24,048) |
Deposits and prepaid expenses | 2,601 | (60) |
Accounts payable | 12,165 | (28,641) |
Accounts payable - related party | 1,098 | (390) |
Accrued liabilities | 402,219 | 368,816 |
Net Cash Used in Operating Activities | (506,131) | (576,927) |
Cash Flows from Investing Activities: | ||
Note receivable interest income | (6,336) | |
Payment for note receivable | (51,157) | |
Payment for equipment | (11,196) | |
Payments for patents | (2,181) | |
Net Cash Used in Investing Activities | (11,196) | (59,674) |
Cash Flows from Financing Activities: | ||
Proceeds from borrowings under note payable | 51,000 | |
Proceeds from borrowings under convertible note payable | 460,000 | 590,000 |
Proceeds from borrowings under convertible note payable - related party | 20,000 | |
Proceeds from bank overdrafts | 14,621 | |
Net Cash Provided by Financing Activities | 494,621 | 641,000 |
Net Change in Cash and Cash Equivalents | (22,706) | 4,399 |
Cash and Cash Equivalents at Beginning of Period | 22,706 | 18,307 |
Cash and Cash Equivalents at End of Period | 22,706 | |
Supplemental Cash Flow Information: | ||
Cash paid for income taxes | ||
Cash paid for interest | ||
Supplemental Disclosure on Noncash Investing and Financing Activities | ||
Convertible notes issued in debt extinguishments | 1,049,824 | |
Recognition of discounts on convertible notes payable | 137,426 | 2,287,505 |
Recognition of discounts on convertible notes payable | 40,892 | |
Common shares issued in conversion of debt | 335,018 | 775,073 |
Common shares issued in conversion of accrued liabilities | 285,800 | |
Stock issued for subscription payable | $ 9,958 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS | NOTE 1 Nature of Operations Principles of Consolidation Use of Estimates Cash and Cash Equivalents Fair Value Measurements - Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. The carrying value of the Companys cash, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity. The Company has classified the inputs used in valuing its derivative liabilities as Level 3 inputs. The Company valued its derivatives using the binomial lattice model. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed below are that of volatility and market price of the underlying common stock of the Company. Accounts Receivable Inventories Going Concern From 2008 through 2016 the Company raised $4,959,278 in additional capital, including accrued interest, through the issuance of long and short-term notes to related and other parties. All of the notes had an annual interest rate of 10% or 15% and were secured by the Companys business equipment. The notes also had a conversion feature for restricted common shares ranging from $0.05 to $0.20 per share with maturity dates of December 31, 2016. In October 2015, the Company issued 3,400,000 shares of its restricted common stock to extinguish $330,000 of accrued liabilities arising from investor relations services at an average price of $0.084 per share. In November and December of 2015, $470,000 in convertible notes were converted into 9,400,000 shares of the Companys restricted common stock at a conversion price of $0.05 per share. In June of 2016 a stock subscription in the amount of $9,958 was converted into 86,350 shares of restricted common stock. In November of 2016, $335,018 in convertible notes and accrued interest were converted into 6,650,000 shares of restricted common stock at an average conversion price of approximately $0.05 per share. Property and Equipment Valuation of Long-lived Assets Intangible Assets Research and Development Goodwill Revenue Recognition Stock-Based Compensation Basic and Diluted Loss Per Share Concentrations and Credit Risk - Income Taxes - Recent Accounting Pronouncements Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230); Classification of Certain Cash Receipts and Cash Payments In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation (Topic 718); Improvements to Employee Share-Based Payments Accounting In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update ("ASU") 2016-02, L eases. The Company has reviewed all other FASB-issued ASU accounting pronouncements and interpretations thereof that have effective dates during the period reported and in future periods. The Company has carefully considered the new pronouncements that alter previous GAAP and does not believe that any new or modified principles will have a material impact on the companys reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Companys financial management and certain standards are under consideration. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTE 2 NOTES RECEIVABLE On June 23, 2010, the Company, along with David B. Beck, the Company's Director of Engineering, filed a complaint against R&D Products, LLC, Persimmon Investments, Inc. and Jules A. deGreef, the managing member of R&D Products, LLC. The complaint alleged that all of the intellectual properties owned by R&D Products and Mr. deGreef, specifically patented applications using Bend Sensor ® ® On April 9, 2013, the parties of the above referenced litigation reached a favorable universal settlement agreement that reinforces the Company's rights to the intellectual properties and their related products, including the medical bed. In order to secure the Company had exclusive rights to all patents and intellectual properties associated with this litigation the Company advanced to Mr. deGreef $25,000 to bring current all of the filing and maintenance fees for the patents detailed in the law suit. The advance is secured by a promissory note with an annual interest rate of 10% to be paid no later than December 31, 2015. During 2016 the Company established an allowance of $31,813 for the note receivable from Mr. deGreef. On April 1, 2015, the Company paid $51,157 for the assumption and assignment of a convertible promissory note receivable issued by Bend Tech, LLC (Bend Tech; one of the Companys customers see also Note 1, Concentrations and Credit Risk |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments | |
DERIVATIVE INSTRUMENTS | NOTE 3 DERIVATIVE INSTRUMENTS The derivative liability as of December 31, 2016, in the amount of $76,295 has a level 3 classification. The following table provides a summary of changes in fair value of the Companys Level 3 financial liabilities as of December 31, 2016 and 2015: Total Balance, December 31, 2014 - Recognition of derivative liabilities upon initial valuation - Change in fair value of derivative liabilities - Conversions of derivative liabilities into equity instruments - Balance, December 31, 2015 - Recognition of derivative liabilities upon initial valuation 40,892 Change in fair value of derivative liabilities 35,403 Conversions of derivative liabilities into equity instruments - Balance, December 31, 2016 76,295 During the year ended 2016, the Company issued convertible promissory notes which are convertible into common stock. Due to the Companys lack of authorized shares necessary to settle all convertible instruments, in accordance with ASC 815-40-25, the Company determined that the conversion features related to these notes are derivative instruments since we do not have control to increase the number of authorized shares to settle all convertible instruments. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of debenture and to fair value as of each subsequent reporting date. At December 31, 2016, the Company marked to market the fair value of the derivatives and determined a fair value of $76,295. The Company recorded a loss from change in fair value of derivatives of $35,403 for the year ended December 31, 2016. The fair value of the embedded derivatives was determined using binomial lattice model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 116.02% to 143.14%, (3) weighted average risk-free interest rate of 0.18% to 0.85% (4) expected life of 0.08 to 1.00 years, and (5) the quoted market price of the Companys common stock at each valuation date. In accordance ASC 840-15-25, the Company has implemented a sequencing policy with respect to all outstanding convertible instruments. The Company evaluates its contracts based upon earliest issuance date. Liabilities measured at fair value on a recurring basis are summarized as follows: Level 1 Level 2 Level 3 Total Derivative Liabilities - - 76,295 76,295 Total $ - $ - $ 76,295 $ 76,295 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 PROPERTY AND EQUIPMENT Depreciation is computed using the straight-line method and is recognized over the estimated useful lives of the property and equipment, which range from three to ten years. Depreciation expense was $373 and $-0- for the years ended December 31, 2016 and 2015, respectively and is included in the administrative and marketing expense on the statement of operations. No impairment was recognized during the twelve months ended December 31, 2016. Property and equipment at December 31, 2016 and 2015 consisted of the following: Property and Equipment December 31, 2016 2015 Machinery and equipment $ 543,249 $ 532,053 Office equipment 40,455 40,455 Furniture and fixtures 13,470 13,470 Software 416 416 Total Property and Equipment 597,590 586,394 Less: Accumulated depreciation (586,767) (586,394) Net Property and Equipment $ 10,823 $ -0- |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 5 GOODWILL AND INTANGIBLE ASSETS Intangible Assets December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 173,313 $ 150,427 $ 22,886 Proprietary Technology 799,082 725,610 73,472 Total Amortizing Asset $ 972,395 $ 876,037 $ 96,358 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 173,313 $ 134,153 $ 39,160 Proprietary Technology 799,082 658,950 140,132 Total Amortizing Asset $ 972,395 $ 793,103 $ 179,292 Patent amortization was $16,274 and $19,789 for the year ended December 31, 2016 and 2015, respectively. Amortization related to proprietary technology was $66,660 and $81,600 for the years ended December 31, 2016 and 2015. Patent and proprietary technology amortization is charged to operations. Estimated aggregate amortization expense for each of the next three years is $45,798 in 2017, $30,290 in 2018, and $20,270 in 2019, at which time the patents will be fully amortized. Goodwill Upon emerging from bankruptcy protection in 2004, the Company engaged Houlihan Valuation Advisors, an independent valuation firm, to assess the fair value of the Companys goodwill, patents and other proprietary technology at the date of emergence. The appraisal was completed during 2005. The Company continues to evaluate the fair value of its intangible assets using similar methods as those used by the valuation firm. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6 There was no provision for, or benefit from, income tax during the years ended December 31, 2016 and 2015 respectively. The components of the net deferred tax asset as of December 31, 2016 and 2015, including temporary differences and operating loss carry forwards that arose prior to reorganization from bankruptcy, are as follows: December 31 2016 2015 Operating loss carry forwards $ 8,062,514 $ 8,131,464 Origination and amortization of interest on convertible notes 840,044 526,453 Allowance for doubtful accounts 61,814 - Change in derivative liabilities 12,037 - Options issued for services 646,764 637,872 Total Deferred Tax Assets $ 9,623,173 $ 9,295,789 Valuation allowance (9,623,173) (9,295,789) Net Deferred Tax Asset $ -- $ -- Federal and state net operating loss carry forwards at December 31, 2016 and 2015 were $22,742,451and $21,796,597, respectively. A portion of the net operating loss carry forwards includes losses incurred prior to February 24, 2004, when a change of greater than 50% in ownership of the Company occurred. As a result of the change of ownership, only a portion of the net operating loss carry forwards incurred prior to the change becomes available each year. The net operating loss carry forwards begin to expire in 2020. The following is a reconciliation of the amount of benefit that would result from applying the federal statutory rate to pretax loss with the provision for income taxes for the years ended December 31, 2016 and 2015, respectively: For the Years Ended December 31 2016 2015 Tax at statutory rate (34%) $ (711,683) $ (877,090) Options issued for services 8,892 84,543 Origination and amortization of interest on convertible notes 313,591 500,936 Allowance for doubtful accounts 61,814 - Change in derivative liabilities 12,037 - Change in valuation allowance (315,348) (292,411) Provision for Income Taxes $ -- $ -- Under FASB ASC 740-10-05-6, tax benefits are recognized only for the tax positions that are more likely than not be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the company's tax return that do not meet these recognition and measurement standards. The Company's policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits with the income tax expense. For the years ended December 31, 2016, and 2015, the Company did not recognized any interest or penalties in its Statement of Operations, nor did it have any interest or penalties accrued in its Balance sheet at December 31, 2016 and 2015 relating to unrecognized benefits. The tax years 2016, 2015, 2014 and 2013 remain open to examination for federal income tax purposes and by other major taxing jurisdictions to which the Company is subject. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 7 CONVERTIBLE NOTES PAYABLE Convertible Notes Payable Third Parties On August 8, 2011, the Company entered into a convertible note payable with a former Director for $40,000. This note is due on December 31, 2015, bears an annual interest rate of 10% annual interest (15% default interest) and is secured by business equipment. During 2015, the Company secured additional financing to cover its ongoing operations in the amount of $590,000 by issuing various convertible notes bearing 10% annual interest (15% default interest), secured by business assets and carrying exercise prices ranging between $0.025 and $0.07 per share. Additionally during 2015, the Company issued $51,000 for a non-convertible note payable bearing 10% annual interest (15% default interest) and secured by the $51,157 note receivable held by the Company (see Note 2). During 2015, all of these notes (both convertible and non-convertible issued in 2014 and 2015) and accrued interest were either converted into common stock or extinguished and consolidated into two remaining convertible notes payable to two investors in principal amounts of $684,660 and $123,797 (with respective maturity dates of December 31, 2016 and November 30, 2016). Both notes are convertible at $0.05 per share, bear 10% annual interest rates (15% default interest) and are secured by business assets. On January 20, 2016, the Company entered into a promissory convertible note with Capital Communications LLC for up to $300,000 which was funded in tranches of $50,000 for each of the six months thereafter. Accordingly, on January 26, 2016, February 26, 2016, March 31, 2016, April 29, 2016, June 10, 2016 and July 7, 2016, the Company received proceeds for an aggregate total of $300,000 from Capital Communications LLC. The note has an annual interest rate of 10% and is secured by the Company's business equipment. The principal amount of the note, and all accrued interest is due and payable on or before December 31, 2016 and each note has a conversion feature for restricted common shares at $0.06 per share . The fair value of the common stock at the date of the January 26, 2016 advance was $0.08, establishing an intrinsic value of $0.02, which created a Beneficial Conversion Feature (BCF) of $16,500. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. The fair value of the common stock at the date of the February 26, 2016 advance was $0.10, establishing an intrinsic value of $0.04, which created a BCF of $29,167. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. The fair value of the common stock at the date of the March 31, 2016 advance was $0.07, creating an intrinsic value of $0.01, which created a BCF of $5,333. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. Since the fair value of the common stock at the date of the April 29, 2016 advance was $0.05, no BCF was recorded. The fair value of the common stock at the date of the June 10, 2016 advance was $0.07, establishing an intrinsic value of $0.01, which created a BCF of $5,750. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. The fair value of the common stock at the date of the July 7, 2016 advance was $0.09, creating an intrinsic value of $0.03, which created a BCF of $21,333. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. The Company entered into a new convertible promissory note for up to $300,000 from a third party on July 1, 2016. The note has an annual interest rate of 10% and is secured by the Companys equipment. The note has a conversion feature for restricted common shares at $0.07 per share and a maturity date of December 31, 2016. The Company drew $40,000 against that note on August 11, 2016, $40,000 on September 23, 2016, $40,000 on November 1, 2016, and $40,000 on December 1, 2016. The fair value of the common stock at the date of the August 11, 2016 advance was $0.16, establishing an intrinsic value of $0.09, which created a BCF of $40,000. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. The fair value of the common stock at the date of the September 23, 2016 advance was $0.08, establishing an intrinsic value of $0.01, which created a BCF of $4,971. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. The fair value of the common stock at the date of the November 1, 2016 advance was $0.08, establishing an intrinsic value of $0.01, which created a BCF of $5,657. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. The fair value of the common stock at the date of the December 1, 2016 advance was $0.08, establishing an intrinsic value of $0.01, which created a BCF of $7,429. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. At December 31, 2016, the principal balance of convertible notes payable was $1,184,660 the unamortized discount was $0 and interest accrued and unpaid was $118,055. The Company recorded interest expense of $1,006,543 during the year ended December 31, 2016 as it amortized the discount charges generated by the issuance of convertible notes payable. On November 21, 2016, the Board of Directors approved the conversion of $123,797 in convertible notes held by Liberty Partners, LLC, plus $12,821 in interest accrued and unpaid, to 2,700,000 shares of restricted common stock at an average conversion price of approximately $0.05 per share. On November 22, 2016, the Board of Directors approved the conversion of $160,000 in convertible notes held by Compass Equity Partners, LLC, plus $38,400 in interest accrued and unpaid, to 3,950,000 shares of restricted common stock at an average conversion price of approximately $0.05 per share. Convertible Note Payable Related Parties On July 1, 2016 and September 22, 2016, the Company issued two promissory notes for $10,000 each to an officer of the Company. The notes bear interest at the rate of 10%, have a conversion feature for restricted common shares at $0.07 per share and a maturity date of December 31, 2016. Since the fair value of the common stock at the date of the July 1, 2016 advance was $0.07, no BCF was recorded. The fair value of the common stock at the date of the September 22, 2016 advance from an officer was $0.08, establishing an intrinsic value of $0.01, which created a BCF of $1,286. The BCF was recorded as a debt discount and is being amortized over the life of the note. The debt discount remaining as of December 31, 2016 was $0. At December 31, 2016 the Convertible Notes Payable Related Parties principal was $20,000, the unamortized discount was $0 and interest accrued and unpaid was $621. The Company recorded interest expense of $1,907 during the year ended December 31, 2016 as it amortized the discount charges generated by the issuance of convertible notes payable. Due to the Companys lack of authorized shares necessary to settle these convertible instruments, in accordance with ASC 815-40-25, the Company determined that the conversion features related to these notes are derivative instruments since we do not have control to increase the number of authorized shares to settle these convertible instruments. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of the Notes and to fair value as of each subsequent reporting date. At the inception of the Note, the Company determined the fair value of the derivatives were $40,892. The fair value of the embedded derivatives were determined using the Binominal Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 116.02% to 143.14%, (3) weighted average risk-free interest rate of 0..18% to 0.85% (4) expected life of 0.08 to 1.00 years, and (5) the quoted market price of the Companys common stock at each valuation date. The determined fair value of the aggregate derivatives of $40,892 was charged as a debt discount up to the net proceeds of the notes. For the year ended December 31, 2016, the Company amortized $40,892 of debt discount to current period operations as interest expense. |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STOCK | NOTE 8 Preferred Stock There are 1,000,000 shares of preferred stock with a par value of $0.001 per share authorized. At December 31, 2016 and 2015, there were no shares of preferred stock issued or outstanding. Common Stock There are 100,000,000 shares of common stock with a par value of $0.001 per share authorized. During the year ended December 31, 2016, there were 6,736,350 shares of common stock issued. During the year ended December 31, 2015, there were 18,250,000 shares of common stock issued. On January 12, 2015, the Board of Directors approved the conversion of $165,000 in convertible notes held by Capital Communications LLC, plus $33,023 in interest accrued and unpaid, to 2,800,000 shares of restricted common stock at an average conversion price of $0.07 per share On January 20, 2015, the Board of Directors approved the conversion of $135,000 in convertible notes held by Empire Fund Managers, plus $23,760 in interest accrued and unpaid, to 2,650,000 shares of restricted common stock at an average conversion price of $0.06 per share. In October 2015, the Board of Directors approved the issuance of 3,400,000 shares of restricted common stock to extinguish $330,000 in accrued liabilities arising from investor relations services, at an average price of $0.084 per share. In November and December 2015, the Board of Directors approved the conversion of $470,000 in convertible notes to 9,400,000 shares of restricted common stock. In June 2016, the Board of Directors approved the issuance of 86,350 shares of restricted common stock to an employee to fully satisfy the terms of a stock subscription agreement. In November 2016, the Board of Directors approved the conversion of $123,797 in convertible notes held by Liberty Partners, LLC, plus $12,821 in interest accrued and unpaid, to 2,700,000 shares of restricted common stock at an average price of approximately $0.05 per share. In November 2016, the Board of Directors approved the conversion of $160,000 in convertible notes held by Compass Equity Partners, LLC, plus $38,400 in interest accrued and unpaid, to 3,950,000 shares of restricted common stock at an average price of approximately $0.05 per share. |
STOCK OPTION PLANS
STOCK OPTION PLANS | 12 Months Ended |
Dec. 31, 2016 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |
STOCK OPTION PLANS | NOTE 9 On August 25, 2005, the Board of Directors of the Company approved and adopted the 2005 Stock Incentive Plan (the Plan). The Plan became effective upon its adoption by the Board and continued in effect for ten years, terminating on August 25, 2015. This plan was approved by the stockholders of the Company at their annual meeting of shareholders on November 22, 2005. Under the Plan, the exercise price for all options issued will not be less than the average quoted closing market price of the Companys trading common stock for the thirty day period immediately preceding the grant date plus a premium of ten percent. The maximum aggregate number of shares that may be awarded under the plan is 2,500,000 shares. On August 24, 2015, the Board of Directors approved the issuance of options to purchase 2,185,000 shares of the Companys common stock. Of the total issued, 1,960,000 options were issued to replace options held by directors and employees which were to expire and 225,000 options were issued to new employees. Of the options issued, 640,000 have an option price of $0.14 per share, 900,000 have an option price of $0.15 per share, 396,667 have an option price of $0.20 per share, and 33,333 have an option price of $0.25 per share. Options issued as replacement shall have immediate vesting terms. Options which are not replacements shall vest over a two year four month period in equal installments on the last day of 2015, 2016 and 2017, respectively. Projected data related to the expected volatility and expected life of stock options is based upon historical and other information, and notably, the Company's common stock has limited trading history. Changes in these subjective assumptions can materially affect the fair value of the estimate, and therefore, the existing valuation models do not provide a precise measure of the fair value of the Company's employee stock options. Between August 25, 2005 and December 31, 2016, the Company granted options to employees to purchase an aggregate 3,096,000 shares of common stock at exercise prices ranging from $0.15 to $2.07 per share. The options vest over three years and expire 10 years from the date of grant. The Company used the following assumptions in estimating the fair value of the options granted: · Market value at the time of issuance Range of $0.14 to 2.07 · Expected term Range of 3.7 years to 10.0 years · Risk-free interest rate Range of 1.60% to 4.93% · Dividend yield 0% · Expected volatility 200% to 424% · Weighted-average fair value - $0.16 to $2.07 As of the years ended December 31, 2005 through 2016, the Company recognized a total of $2,423,825 of stock-based compensation expense, which includes charges of $26,451 in 2016 and $248,656 in 2015, leaving $19,944 and $46,009 in unrecognized expense as of December 31, 2016 and 2015, respectively. There were 2,185,000 and 2,185,000 employee stock options outstanding at December 31, 2016 and 2015, respectively. A summary of all employee options outstanding and exercisable under the plan as of December 31, 2016, and changes during the year then ended is set forth below: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at the beginning of period 2,185,000 $ 0.16 9.66 $ -- Granted -- -- -- -- Expired -- -- -- -- Forfeited -- -- -- -- Outstanding at the end of Period 2,185,000 $ 0.16 8.66 $ -- Exercisable at the end of Period 1,970,000 $ 0.16 8.65 $ -- A summary of all employee options outstanding and exercisable under the plan as of December 31, 2015, and changes during the year then ended is set forth below: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at the beginning of period 2,024,000 $ 1.10 1.65 $ -- Granted 2,185,000 0.16 9.66 -- Expired -- -- -- -- Forfeited (2,024,000) 1.10 -- -- Outstanding at the end of Period 2,185,000 $ 0.16 9.66 $ -- Exercisable at the end of Period 1,755,000 $ 0.15 9.66 $ -- |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 The Company currently occupies a manufacturing facility in Draper, Utah. The lease on the facility expired on December 31, 2014, at which time the Company entered into a three year extension which will expire on December 31, 2017. Either party may terminate the lease upon 90 day written notice. Under the terms of the lease the Company paid $8,950 per month in 2015 (the same rate as in 2014), paid $9,300 per month in 2016 and will pay $9,600 per month in 2017. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS At December 31, 2016 and 2015, the Company had accounts payable of $1,420 and $322 to its Chief Executive Office for reimbursement of various operating expenses paid by him in the course of business. On July 1, 2016 and September 22, 2016, the Company issued two promissory notes for $10,000 each to an officer of the Company. The notes bear interest at the rate of 10%, have a conversion feature for restricted common shares at $0.07 per share and a maturity date of December 31, 2016. |
REVISION OF PRIOR YEAR FINANCIA
REVISION OF PRIOR YEAR FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Revision Of Prior Year Financial Statements | |
REVISION OF PRIOR YEAR FINANCIAL STATEMENTS | NOTE 12-REVISION OF PRIOR YEAR FINANCIAL STATEMENTS The Company identified an error relating to the calculation of the gain on stock debt exchange during the year ended December, 2015. The effect of the error is to increase notes payable and net loss by $160,000 for the year ended December 31, 2015. In accordance with the guidance provided by the SECs Staff Accounting Bulletin 99, Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements As a result of the aforementioned correction of accounting errors, the relevant annual financial statements have been revised as follows: Effects on financials for the Year Ended December 31, 2015: December 31, 2015 Consolidated Balance Sheet As Previously Reported Adjustment As Revised Convertible debentures 45,105 160,000 205,105 Accumulated deficit (23,969,627) (160,000) (24,129,627) Total stockholders deficit 4,681,669 (160,000) 4,521,669 For the Year Ended December 31, 2015 Consolidated Statement of Operations As Previously Reported Adjustment As Revised Gain on stock debt exchange 316,743 (160,000) 156,743 Net other income (expense) (1,437,140) (160,000) (1,597,140) Net loss for the period (2,582,030) (160,000) (2,742,030) Loss per common share $ (0.04) $(0.01) $(0.05) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 - SUBSEQUENT EVENTS Subsequent to December 31, 2016, the Company has drawn $120,000 against the convertible note with Capital Communications, LLC dated July 1, 2016. |
NATURE OF BUSINESS (Policies)
NATURE OF BUSINESS (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Fair Value Measurements | Fair Value Measurements - Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. The carrying value of the Companys cash, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity. The Company has classified the inputs used in valuing its derivative liabilities as Level 3 inputs. The Company valued its derivatives using the binomial lattice model. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed below are that of volatility and market price of the underlying common stock of the Company. |
Accounts Receivable | Accounts Receivable |
Inventories | Inventories |
Going Concern | Going Concern From 2008 through 2016 the Company raised $4,959,278 in additional capital, including accrued interest, through the issuance of long and short-term notes to related and other parties. All of the notes had an annual interest rate of 10% or 15% and were secured by the Companys business equipment. The notes also had a conversion feature for restricted common shares ranging from $0.05 to $0.20 per share with maturity dates of December 31, 2016. In October 2015, the Company issued 3,400,000 shares of its restricted common stock to extinguish $330,000 of accrued liabilities arising from investor relations services at an average price of $0.084 per share. In November and December of 2015, $470,000 in convertible notes were converted into 9,400,000 shares of the Companys restricted common stock at a conversion price of $0.05 per share. In June of 2016 a stock subscription in the amount of $9,958 was converted into 86,350 shares of restricted common stock. In November of 2016, $335,018 in convertible notes and accrued interest were converted into 6,650,000 shares of restricted common stock at an average conversion price of approximately $0.05 per share. |
Property and Equipment | Property and Equipment |
Valuation of Long-lived Assets | Valuation of Long-lived Assets |
Intangible Assets | Intangible Assets |
Research and Development | Research and Development |
Goodwill | Goodwill |
Revenue Recognition | Revenue Recognition |
Stock-Based Compensation | Stock-Based Compensation |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share |
Concentrations and Credit Risk | Concentrations and Credit Risk - |
Income Taxes | Income Taxes - |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230); Classification of Certain Cash Receipts and Cash Payments In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation (Topic 718); Improvements to Employee Share-Based Payments Accounting In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update ("ASU") 2016-02, L eases. The Company has reviewed all other FASB-issued ASU accounting pronouncements and interpretations thereof that have effective dates during the period reported and in future periods. The Company has carefully considered the new pronouncements that alter previous GAAP and does not believe that any new or modified principles will have a material impact on the companys reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Companys financial management and certain standards are under consideration. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments Tables | |
Schedule of Changes in Level 3 Financial Liabilities | Total Balance, December 31, 2014 - Recognition of derivative liabilities upon initial valuation - Change in fair value of derivative liabilities - Conversions of derivative liabilities into equity instruments - Balance, December 31, 2015 - Recognition of derivative liabilities upon initial valuation 40,892 Change in fair value of derivative liabilities 35,403 Conversions of derivative liabilities into equity instruments - Balance, December 31, 2016 76,295 |
Schedule of Liabilities Measured at Fair Value on Recurring Basis | Level 1 Level 2 Level 3 Total Derivative Liabilities - - 76,295 76,295 Total $ - $ - $ 76,295 $ 76,295 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and Equipment December 31, 2016 2015 Machinery and equipment $ 543,249 $ 532,053 Office equipment 40,455 40,455 Furniture and fixtures 13,470 13,470 Software 416 416 Total Property and Equipment 597,590 586,394 Less: Accumulated depreciation (586,767) (586,394) Net Property and Equipment $ 10,823 $ -0- |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 173,313 $ 150,427 $ 22,886 Proprietary Technology 799,082 725,610 73,472 Total Amortizing Asset $ 972,395 $ 876,037 $ 96,358 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 173,313 $ 134,153 $ 39,160 Proprietary Technology 799,082 658,950 140,132 Total Amortizing Asset $ 972,395 $ 793,103 $ 179,292 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Asset | December 31 2016 2015 Operating loss carry forwards $ 8,062,514 $ 8,131,464 Origination and amortization of interest on convertible notes 840,044 526,453 Allowance for doubtful accounts 61,814 - Change in derivative liabilities 12,037 - Options issued for services 646,764 637,872 Total Deferred Tax Assets $ 9,623,173 $ 9,295,789 Valuation allowance (9,623,173) (9,295,789) Net Deferred Tax Asset $ -- $ -- |
Schedule of Effective Income Tax Rate Reconciliation | For the Years Ended December 31 2016 2015 Tax at statutory rate (34%) $ (711,683) $ (877,090) Options issued for services 8,892 84,543 Origination and amortization of interest on convertible notes 313,591 500,936 Allowance for doubtful accounts 61,814 - Change in derivative liabilities 12,037 - Change in valuation allowance (315,348) (292,411) Provision for Income Taxes $ -- $ -- |
STOCK OPTION PLANS (Tables)
STOCK OPTION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |
Schedule of Stock Option Activity | Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at the beginning of period 2,185,000 $ 0.16 9.66 $ -- Granted -- -- -- -- Expired -- -- -- -- Forfeited -- -- -- -- Outstanding at the end of Period 2,185,000 $ 0.16 8.66 $ -- Exercisable at the end of Period 1,970,000 $ 0.16 8.65 $ -- A summary of all employee options outstanding and exercisable under the plan as of December 31, 2015, and changes during the year then ended is set forth below: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at the beginning of period 2,024,000 $ 1.10 1.65 $ -- Granted 2,185,000 0.16 9.66 -- Expired -- -- -- -- Forfeited (2,024,000) 1.10 -- -- Outstanding at the end of Period 2,185,000 $ 0.16 9.66 $ -- Exercisable at the end of Period 1,755,000 $ 0.15 9.66 $ -- |
REVISION OF PRIOR YEAR FINANC26
REVISION OF PRIOR YEAR FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Revision Of Prior Year Financial Statements Tables | |
Schedule of Effects on Financials | December 31, 2015 Consolidated Balance Sheet As Previously Reported Adjustment As Revised Convertible debentures 45,105 160,000 205,105 Accumulated deficit (23,969,627) (160,000) (24,129,627) Total stockholders deficit 4,681,669 (160,000) 4,521,669 For the Year Ended December 31, 2015 Consolidated Statement of Operations As Previously Reported Adjustment As Revised Gain on stock debt exchange 316,743 (160,000) 156,743 Net other income (expense) (1,437,140) (160,000) (1,597,140) Net loss for the period (2,582,030) (160,000) (2,742,030) Loss per common share $ (0.04) $(0.01) $(0.05) |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 12 Months Ended | 108 Months Ended | |||||
Nov. 30, 2016 | Jun. 30, 2016 | Oct. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Sep. 22, 2016 | Jul. 01, 2016 | |
Nature Of Business [Line Items] | |||||||||
Accounts receivable, allowance for bad debts | $ 7,140 | $ 102,140 | $ 7,140 | $ 102,140 | |||||
Net loss | 2,093,184 | 2,742,030 | |||||||
Cash used in operating activities | 506,131 | 576,927 | |||||||
Accumulated deficit | 24,129,627 | 26,222,811 | 24,129,627 | 26,222,811 | |||||
Proceeds from notes payable - related parties | 20,000 | $ 4,959,278 | |||||||
Conversion of note payable, conversion price per share | $ 0.07 | $ 0.07 | |||||||
Impairment of intangible assets | |||||||||
Stock-based compensation expense for employees | $ 26,154 | $ 248,656 | |||||||
Anti-dilutive securities excluded from computation of earnings per share amount | 23,399,094 | 16,165,502 | |||||||
Loss on extinguishment of the debt | $ (915) | $ (168,286) | |||||||
Minimum [Member] | |||||||||
Nature Of Business [Line Items] | |||||||||
Debt instrument, interest rate | 10.00% | 10.00% | |||||||
Conversion of note payable, conversion price per share | $ 0.05 | $ 0.05 | |||||||
Intangible assets, useful lives | 5 years | ||||||||
Property and equipment, useful life | 3 years | ||||||||
Maximum [Member] | |||||||||
Nature Of Business [Line Items] | |||||||||
Debt instrument, interest rate | 15.00% | 15.00% | |||||||
Conversion of note payable, conversion price per share | $ 0.20 | $ 0.20 | |||||||
Intangible assets, useful lives | 15 years | ||||||||
Property and equipment, useful life | 10 years | ||||||||
Sales [Member] | Customer One [Member] | |||||||||
Nature Of Business [Line Items] | |||||||||
Risk percentage | 38.00% | ||||||||
Accounts Receivable [Member] | Customer One [Member] | |||||||||
Nature Of Business [Line Items] | |||||||||
Risk percentage | 17.00% | 68.00% | |||||||
Notes Receivable [Member] | Customer One [Member] | |||||||||
Nature Of Business [Line Items] | |||||||||
Risk percentage | 100.00% | ||||||||
Restricted Stock [Member] | |||||||||
Nature Of Business [Line Items] | |||||||||
Convertible debt, amount converted | $ 335,018 | $ 9,958 | $ 470,000 | ||||||
Shares issued from conversion of convertible debt | 6,650,000 | 86,350 | 9,400,000 | ||||||
Common stock, price per share | $ 0.05 | $ 0.084 | $ 0.05 | $ 0.05 | |||||
Shares issued in settlement of accrued liabilities, shares | 3,400,000 | ||||||||
Accrued liabilities extinguished from issuance of restricted common stock | $ 330,000 |
NOTES RECEIVABLE (Details)
NOTES RECEIVABLE (Details) - USD ($) | Apr. 09, 2013 | Dec. 31, 2016 |
Legal Proceedings [Line Items] | ||
Payment for note receivable | $ 51,157 | |
Maturity date | Apr. 1, 2015 | |
Conversion right, ownership percentage | 5.00% | |
Notes Receivable One [Member] | Bend Tech LLC [Member] | ||
Legal Proceedings [Line Items] | ||
Allowance of notes receivables | $ 54,993 | |
Notes Receivable One [Member] | Mr. deGreef [Member] | ||
Legal Proceedings [Line Items] | ||
Allowance of notes receivables | $ 31,813 | |
Notes Receivable One [Member] | Settled Litigation [Member] | R&D Products, LLC [Member] | ||
Legal Proceedings [Line Items] | ||
Interest rate | 10.00% | |
Notes receivable | $ 25,000 |
DERIVATIVE INSTRUMENTS (Narrati
DERIVATIVE INSTRUMENTS (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative liabilities | $ 76,295 | |
Loss on change in fair value of derivative liabilities | $ (35,403) | |
Derivative Classification [Member] | ||
Dividend yield | 0.00% | |
Derivative Classification [Member] | Minimum [Member] | ||
Expected volatility | 116.02% | |
Risk-free interest rate | 0.18% | |
Expected life | 9 months 18 days | |
Derivative Classification [Member] | Maximum [Member] | ||
Expected volatility | 143.14% | |
Risk-free interest rate | 0.85% | |
Expected life | 1 year |
DERIVATIVE INSTRUMENTS (Schedul
DERIVATIVE INSTRUMENTS (Schedule of Changes in Level 3 Financial Liabilities) (Details) - Derivative Financial Instruments, Liabilities [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Balance | ||
Recognition of derivative liabilities upon initial valuation | 40,892 | |
Change in fair value of derivative liabilities | 35,403 | |
Conversions of derivative liabilities into equity instruments | ||
Balance | $ 76,295 |
DERIVATIVE INSTRUMENTS (Sched31
DERIVATIVE INSTRUMENTS (Schedule of Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] | Dec. 31, 2016USD ($) |
Liabilities, fair value | $ 76,295 |
Derivative Financial Instruments, Liabilities [Member] | |
Liabilities, fair value | 76,295 |
Level 1 [Member] | |
Liabilities, fair value | |
Level 1 [Member] | Derivative Financial Instruments, Liabilities [Member] | |
Liabilities, fair value | |
Level 2 [Member] | |
Liabilities, fair value | |
Level 2 [Member] | Derivative Financial Instruments, Liabilities [Member] | |
Liabilities, fair value | |
Level 3 [Member] | |
Liabilities, fair value | 76,295 |
Level 3 [Member] | Derivative Financial Instruments, Liabilities [Member] | |
Liabilities, fair value | $ 76,295 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment | ||
Total Property and Equipment | $ 597,590 | $ 586,394 |
Less: Accumulated depreciation | (586,767) | (586,394) |
Net Property and Equipment | 10,823 | |
Depreciation | 373 | |
Impairment of long-lived assets | ||
Minimum [Member] | ||
Property and Equipment | ||
Property and equipment, estimated useful lives | 3 years | |
Maximum [Member] | ||
Property and Equipment | ||
Property and equipment, estimated useful lives | 10 years | |
Machinery and Equipment [Member] | ||
Property and Equipment | ||
Total Property and Equipment | $ 543,249 | 532,053 |
Office Equipment [Member] | ||
Property and Equipment | ||
Total Property and Equipment | 40,455 | 40,455 |
Furniture and Fixtures [Member] | ||
Property and Equipment | ||
Total Property and Equipment | 13,470 | 13,470 |
Software [Member] | ||
Property and Equipment | ||
Total Property and Equipment | $ 416 | $ 416 |
GOODWILL AND INTANGIBLE ASSET33
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Components of Intangible Assets | ||
Gross Carrying Amount | $ 972,395 | $ 972,395 |
Accumulated Amortization | 876,037 | 793,103 |
Net Carrying Amount | 96,358 | 179,292 |
Amortization expense | 82,934 | 101,389 |
Estimated aggregate amortization expense: | ||
2,017 | 45,798 | |
2,018 | 30,290 | |
2,019 | 20,270 | |
Goodwill impairment | ||
Patents [Member] | ||
Components of Intangible Assets | ||
Gross Carrying Amount | 173,313 | 173,313 |
Accumulated Amortization | 150,427 | 134,153 |
Net Carrying Amount | 22,886 | 39,160 |
Amortization expense | 16,274 | 19,789 |
Proprietary Technology [Member] | ||
Components of Intangible Assets | ||
Gross Carrying Amount | 799,082 | 799,082 |
Accumulated Amortization | 725,610 | 658,950 |
Net Carrying Amount | 73,472 | 140,132 |
Amortization expense | $ 66,660 | $ 81,600 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal and state net operating loss carry forwards | $ 22,742,451 | $ 21,796,597 |
Net operating loss carryforwards, expiration dates | Dec. 31, 2020 | |
Interest and penalties expense from unrecognized tax benefits | ||
Accrued interest and penalties for unrecognized tax benefits |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets, net: | ||
Operating loss carry forwards | $ 8,062,514 | $ 8,131,464 |
Origination and amortization of interest on convertible notes | 840,044 | 526,453 |
Allowance for doubtful accounts | 61,814 | |
Change in derivative liabilities | 12,037 | |
Options issued for services | 646,764 | 637,872 |
Total Deferred Tax Assets | 9,623,173 | 9,295,789 |
Valuation allowance | (9,623,173) | (9,295,789) |
Net Deferred Tax Asset |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Effective income tax rate reconciliation: | ||
Tax at statutory rate (34%) | $ (711,683) | $ (877,090) |
Options issued for services | 8,892 | 84,543 |
Origination and amortization of interest on convertible notes | 313,591 | 500,936 |
Allowance for doubtful accounts | 61,814 | |
Change in derivative liabilities | 12,037 | |
Change in valuation allowance | (315,348) | (292,411) |
Provision for Income Taxes |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Jul. 01, 2016 | Jan. 20, 2016 | Dec. 31, 2016 | Nov. 30, 2016 | Nov. 22, 2016 | Nov. 21, 2016 | Sep. 30, 2016 | Sep. 22, 2016 | Aug. 31, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Feb. 26, 2016 | Jan. 26, 2016 | Jul. 07, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 01, 2016 | Nov. 01, 2016 | Sep. 23, 2016 | Aug. 11, 2016 | Apr. 29, 2016 |
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 10,000 | $ 10,000 | ||||||||||||||||||||
Interest rate | 10.00% | 10.00% | ||||||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2016 | Dec. 31, 2016 | ||||||||||||||||||||
Proceeds from borrowings under convertible note payable | $ 460,000 | $ 590,000 | ||||||||||||||||||||
Interest expense | 1,006,543 | |||||||||||||||||||||
Convertible notes payable, balance | $ 1,184,660 | 1,184,660 | ||||||||||||||||||||
Beneficial conversion feature | 118,083 | 2,287,505 | ||||||||||||||||||||
Discount balance | 0 | 0 | 763,352 | |||||||||||||||||||
Accrued interest | $ 118,055 | 118,055 | ||||||||||||||||||||
Debt instrument, conversion price | $ 0.07 | $ 0.07 | ||||||||||||||||||||
Loss on extinguishment of the debt | $ (915) | (168,286) | ||||||||||||||||||||
Liberty Partners, LLC [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Conversion of convertible notes, amount | $ 123,797 | $ 123,797 | ||||||||||||||||||||
Conversion of convertible notes, interest accrued and unpaid, amount | $ 12,821 | $ 12,821 | ||||||||||||||||||||
Conversion of convertible notes, shares issued | 2,700,000 | 2,700,000 | ||||||||||||||||||||
Debt instrument, conversion price | $ 0.05 | $ 0.05 | ||||||||||||||||||||
Compass Equity Partners, LLC [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Conversion of convertible notes, amount | $ 160,000 | |||||||||||||||||||||
Conversion of convertible notes, interest accrued and unpaid, amount | $ 38,400 | |||||||||||||||||||||
Conversion of convertible notes, shares issued | 3,950,000 | |||||||||||||||||||||
Debt instrument, conversion price | $ 0.05 | |||||||||||||||||||||
Minimum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, interest rate | 10.00% | 10.00% | ||||||||||||||||||||
Debt instrument, conversion price | $ 0.05 | $ 0.05 | ||||||||||||||||||||
Maximum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, interest rate | 15.00% | 15.00% | ||||||||||||||||||||
Debt instrument, conversion price | $ 0.20 | $ 0.20 | ||||||||||||||||||||
Convertible Notes Payable to Related Party [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 40,000 | $ 40,000 | ||||||||||||||||||||
Debt instrument, issuance date | Aug. 8, 2011 | |||||||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2015 | |||||||||||||||||||||
Debt instrument, interest rate | 10.00% | 10.00% | ||||||||||||||||||||
Debt instrument, default rate | 15.00% | 15.00% | ||||||||||||||||||||
Interest expense | $ 1,907 | |||||||||||||||||||||
Convertible notes payable, balance | $ 20,000 | 20,000 | ||||||||||||||||||||
Discount balance | 0 | 0 | ||||||||||||||||||||
Accrued interest | $ 621 | $ 621 | ||||||||||||||||||||
2015 Various Convertible Notes [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 590,000 | |||||||||||||||||||||
Debt instrument, interest rate | 10.00% | |||||||||||||||||||||
Debt instrument, default rate | 15.00% | |||||||||||||||||||||
2015 Various Convertible Notes [Member] | Minimum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, conversion price | $ 0.025 | |||||||||||||||||||||
2015 Various Convertible Notes [Member] | Maximum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, conversion price | $ 0.07 | |||||||||||||||||||||
Notes Payable Third Parties [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 300,000 | $ 51,000 | ||||||||||||||||||||
Debt instrument, issuance date | Jul. 1, 2016 | |||||||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2016 | |||||||||||||||||||||
Debt instrument, interest rate | 10.00% | 10.00% | ||||||||||||||||||||
Debt instrument, default rate | 15.00% | |||||||||||||||||||||
Debt instrument, collateral amount | $ 51,157 | |||||||||||||||||||||
Debt instrument, conversion price | $ 0.07 | |||||||||||||||||||||
Drew amount of note | $ 40,000 | $ 40,000 | $ 40,000 | $ 40,000 | ||||||||||||||||||
New Convertible Notes Payable One [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 684,660 | |||||||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2016 | |||||||||||||||||||||
Debt instrument, interest rate | 10.00% | |||||||||||||||||||||
Debt instrument, default rate | 15.00% | |||||||||||||||||||||
Debt instrument, conversion price | $ 0.05 | |||||||||||||||||||||
New Convertible Notes Payable Two [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 123,797 | |||||||||||||||||||||
Debt instrument, maturity date | Nov. 30, 2016 | |||||||||||||||||||||
Debt instrument, interest rate | 10.00% | |||||||||||||||||||||
Debt instrument, default rate | 15.00% | |||||||||||||||||||||
Debt instrument, conversion price | $ 0.05 | |||||||||||||||||||||
The 2016 Capital Communication Notes [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 300,000 | |||||||||||||||||||||
Debt instrument, issuance date | Jan. 20, 2016 | |||||||||||||||||||||
Debt instrument, maturity date | Dec. 31, 2016 | |||||||||||||||||||||
Debt instrument, interest rate | 10.00% | |||||||||||||||||||||
Proceeds from borrowings under convertible note payable | $ 300,000 | |||||||||||||||||||||
Debt instrument, conversion price | $ 0.06 | |||||||||||||||||||||
The 2016 Capital Communication Notes [Member] | Debt Issuance, Each of Six Months After Issuance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 50,000 | |||||||||||||||||||||
September 22, 2016 advance [Member] | Officer [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.08 | $ 0.08 | ||||||||||||||||||||
Intrinsic value | $ 0.01 | |||||||||||||||||||||
Beneficial conversion feature | $ 1,286 | |||||||||||||||||||||
Discount balance | $ 0 | $ 0 | ||||||||||||||||||||
July 1, 2016 advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.07 | $ 0.07 | ||||||||||||||||||||
September 23, 2016 advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.08 | |||||||||||||||||||||
Intrinsic value | $ 0.01 | |||||||||||||||||||||
Beneficial conversion feature | $ 4,971 | |||||||||||||||||||||
Discount balance | $ 0 | $ 0 | ||||||||||||||||||||
August 11, 2016 advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.16 | |||||||||||||||||||||
Intrinsic value | $ 0.09 | |||||||||||||||||||||
Beneficial conversion feature | $ 40,000 | |||||||||||||||||||||
Discount balance | 0 | 0 | ||||||||||||||||||||
July 7, 2016 Advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | 0.09 | |||||||||||||||||||||
Intrinsic value | $ 0.03 | |||||||||||||||||||||
Beneficial conversion feature | $ 21,333 | |||||||||||||||||||||
Discount balance | 0 | 0 | ||||||||||||||||||||
June 10 Advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.07 | |||||||||||||||||||||
Intrinsic value | $ 0.01 | |||||||||||||||||||||
Beneficial conversion feature | $ 5,750 | |||||||||||||||||||||
Discount balance | 0 | 0 | ||||||||||||||||||||
Advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.05 | |||||||||||||||||||||
March 31 Advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.07 | |||||||||||||||||||||
Intrinsic value | $ 0.01 | |||||||||||||||||||||
Beneficial conversion feature | $ 5,333 | |||||||||||||||||||||
Discount balance | 0 | 0 | ||||||||||||||||||||
February 26 Advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.10 | |||||||||||||||||||||
Intrinsic value | $ 0.04 | |||||||||||||||||||||
Beneficial conversion feature | $ 29,167 | |||||||||||||||||||||
Discount balance | 0 | 0 | ||||||||||||||||||||
January 26 Advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.08 | |||||||||||||||||||||
Intrinsic value | $ 0.02 | |||||||||||||||||||||
Beneficial conversion feature | $ 16,500 | |||||||||||||||||||||
Discount balance | 0 | 0 | ||||||||||||||||||||
November 1, 2016 advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | 0.08 | |||||||||||||||||||||
Intrinsic value | $ 0.01 | |||||||||||||||||||||
Beneficial conversion feature | $ 5,657 | |||||||||||||||||||||
Discount balance | $ 0 | $ 0 | ||||||||||||||||||||
December 1, 2016 advance [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Fair value of common stock | $ 0.08 | $ 0.08 | ||||||||||||||||||||
Intrinsic value | $ 0.01 | |||||||||||||||||||||
Beneficial conversion feature | $ 7,429 | |||||||||||||||||||||
Discount balance | 0 | $ 0 | ||||||||||||||||||||
Derivative Classification [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest expense | 40,892 | |||||||||||||||||||||
Fair value of derivatives | $ 40,892 | $ 40,892 | ||||||||||||||||||||
Dividend yield | 0.00% | |||||||||||||||||||||
Derivative Classification [Member] | Minimum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Expected volatility | 116.02% | |||||||||||||||||||||
Risk-free interest rate | 0.18% | |||||||||||||||||||||
Expected life | 9 months 18 days | |||||||||||||||||||||
Derivative Classification [Member] | Maximum [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Expected volatility | 143.14% | |||||||||||||||||||||
Risk-free interest rate | 0.85% | |||||||||||||||||||||
Expected life | 1 year |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||||||
Nov. 30, 2016 | Nov. 21, 2016 | Jun. 30, 2016 | Jun. 30, 2016 | Oct. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 22, 2016 | Jul. 01, 2016 | |
Debt Conversion [Line Items] | ||||||||||
Conversion price | $ 0.07 | $ 0.07 | ||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | |||||||
Preferred stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Preferred stock, shares issued | 0 | 0 | 0 | |||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||||
Common stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Stock issued | 6,736,350 | 18,250,000 | ||||||||
Loss on extinguishment of the debt | $ (915) | $ (168,286) | ||||||||
Liberty Partners, LLC [Member] | ||||||||||
Debt Conversion [Line Items] | ||||||||||
Conversion of convertible notes, amount | $ 123,797 | $ 123,797 | ||||||||
Conversion of convertible notes, interest accrued and unpaid, amount | $ 12,821 | $ 12,821 | ||||||||
Conversion of convertible notes, shares issued | 2,700,000 | 2,700,000 | ||||||||
Conversion price | $ 0.05 | $ 0.05 | ||||||||
The $1,125,000 [Member] | Debt Conversion, January 20, 2015 [Member] | ||||||||||
Debt Conversion [Line Items] | ||||||||||
Debt conversion, date | Jan. 20, 2015 | |||||||||
Conversion of convertible notes, amount | $ 135,000 | |||||||||
Conversion of convertible notes, interest accrued and unpaid, amount | $ 23,760 | |||||||||
Conversion of convertible notes, shares issued | 2,650,000 | |||||||||
Average conversion price for converted debt instruments | $ 0.06 | |||||||||
The $1,125,000 [Member] | Debt Conversion, January 12, 2015 [Member] | ||||||||||
Debt Conversion [Line Items] | ||||||||||
Debt conversion, date | Jan. 12, 2015 | |||||||||
Conversion of convertible notes, amount | $ 165,000 | |||||||||
Conversion of convertible notes, interest accrued and unpaid, amount | $ 33,023 | |||||||||
Conversion of convertible notes, shares issued | 2,800,000 | |||||||||
Average conversion price for converted debt instruments | $ 0.07 | |||||||||
Restricted Stock [Member] | ||||||||||
Debt Conversion [Line Items] | ||||||||||
Conversion of convertible notes, amount | $ 470,000 | |||||||||
Conversion of convertible notes, shares issued | 6,650,000 | 86,350 | 9,400,000 | |||||||
Average conversion price for converted debt instruments | $ 0.084 | |||||||||
Shares issued in settlement of accrued liabilities, shares | 3,400,000 | |||||||||
Accrued liabilities extinguished from issuance of restricted common stock | $ 330,000 | |||||||||
Stock valuation price per share | $ 0.05 | $ 0.084 | $ 0.05 | $ 0.05 | ||||||
Restricted Stock [Member] | Employee [Member] | ||||||||||
Debt Conversion [Line Items] | ||||||||||
Stock issued | 86,350 | |||||||||
Restricted Stock [Member] | Consulting firm [Member] | ||||||||||
Debt Conversion [Line Items] | ||||||||||
Conversion of convertible notes, amount | $ 160,000 | |||||||||
Conversion of convertible notes, interest accrued and unpaid, amount | $ 38,400 | |||||||||
Conversion of convertible notes, shares issued | 3,950,000 | |||||||||
Conversion price | $ 0.05 |
STOCK OPTION PLANS (Narrative)
STOCK OPTION PLANS (Narrative) (Details) - USD ($) | Aug. 24, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted during period | 2,185,000 | ||||||
Option pricing assumptions | |||||||
Weighted-average fair value of options granted | $ 0.16 | ||||||
Charges included in Stock-based compensation expense | $ 26,451 | $ 248,656 | $ 2,423,825 | ||||
Options outstanding | 2,185,000 | 2,185,000 | 2,024,000 | 2,185,000 | 2,185,000 | 2,024,000 | |
Unrecognized compensation cost related to employee stock options | $ 19,944 | $ 46,009 | $ 19,944 | $ 19,944 | |||
2005 Stock Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Effective term | 10 years | ||||||
Shares authorized | 2,500,000 | 2,500,000 | 2,500,000 | ||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issuance of options for purchase of common shares | 2,185,000 | ||||||
Options granted during period | 3,096,000 | ||||||
Exercise price of stock options granted, minimum | $ 0.15 | ||||||
Exercise price of stock options granted, maximum | $ 2.07 | ||||||
Option vesting period | 3 years | ||||||
Option expiration period | 10 years | ||||||
Option pricing assumptions | |||||||
Dividend yield | 0.00% | ||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Director [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issuance of options for purchase of common shares | 1,960,000 | ||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Employee [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issuance of options for purchase of common shares | 225,000 | ||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Exercise Price Range One [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issuance of options for purchase of common shares | 640,000 | ||||||
Exercise price of stock options granted | $ 0.14 | ||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Exercise Price Range Two [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issuance of options for purchase of common shares | 900,000 | ||||||
Exercise price of stock options granted | $ 0.15 | ||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Exercise Price Range Three [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issuance of options for purchase of common shares | 396,667 | ||||||
Exercise price of stock options granted | $ 0.20 | ||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Exercise Price Range Four [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issuance of options for purchase of common shares | 33,333 | ||||||
Exercise price of stock options granted | $ 0.25 | ||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Minimum [Member] | |||||||
Option pricing assumptions | |||||||
Market value per share at time of issuance | $ 0.14 | $ 0.14 | $ 0.14 | ||||
Expected term | 3 years 8 months 12 days | ||||||
Risk-free interest rate | 1.60% | ||||||
Expected volatility | 200.00% | ||||||
Weighted-average fair value of options granted | $ 0.16 | ||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Maximum [Member] | |||||||
Option pricing assumptions | |||||||
Market value per share at time of issuance | $ 2.07 | $ 2.07 | $ 2.07 | ||||
Expected term | 10 years | ||||||
Risk-free interest rate | 4.93% | ||||||
Expected volatility | 424.00% | ||||||
Weighted-average fair value of options granted | $ 2.07 |
STOCK OPTION PLANS (Schedule of
STOCK OPTION PLANS (Schedule of Stock Option Activity) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shares | |||
Outstanding at the beginning of period | 2,185,000 | 2,024,000 | 2,024,000 |
Granted | 2,185,000 | ||
Expired | |||
Forfeited | (2,024,000) | ||
Outstanding at the end of Period | 2,185,000 | 2,185,000 | 2,024,000 |
Exercisable at the end of the Period, shares | 1,970,000 | 1,755,000 | |
Weighted Average Exercise Price | |||
Outstanding at the beginning of period | $ 0.16 | $ 1.10 | $ 1.10 |
Granted | 0.16 | ||
Expired | |||
Forfeited | 1.10 | ||
Outstanding at the end of Period | 0.16 | 0.16 | $ 1.10 |
Exercisable at the end of Period, weighted average exercise price | $ 0.16 | $ 0.15 | |
Weighted Average Remaining Contractual Life (Years) | |||
Outstanding, weighted average remaining contractual life (years) | 8 years 7 months 28 days | 9 years 7 months 28 days | 1 year 7 months 24 days |
Granted | 9 years 7 months 28 days | ||
Exercisable at the end of Period, weighted average remaining contractual life (years) | 8 years 7 months 24 days | 9 years 7 months 28 days | |
Aggregate Intrinsic Value | |||
Outstanding at the beginning of period | |||
Granted | |||
Expired | |||
Forfeited | |||
Outstanding at the end of Period | |||
Exercisable at the end of the Period, aggregate intrinsic value |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Operating lease expiration period | Dec. 31, 2017 |
Lease, monthly payment in 2015 | $ 8,950 |
Lease, monthly payment in 2016 | 9,300 |
Lease, monthly payment in 2017 | $ 9,600 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jul. 01, 2016 | Sep. 22, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||||
Accounts payable - related party | $ 1,420 | $ 322 | ||
Promissory notes issued to officer | $ 10,000 | $ 10,000 | ||
Interest rate | 10.00% | 10.00% | ||
Conversion price | $ 0.07 | $ 0.07 | ||
Maturity date | Dec. 31, 2016 | Dec. 31, 2016 | ||
Chief Executive Officer [Member] | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable - related party | $ 1,420 | $ 322 |
REVISION OF PRIOR YEAR FINANC43
REVISION OF PRIOR YEAR FINANCIAL STATEMENTS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Convertible debentures | $ 1,184,660 | $ 205,105 | |
Accumulated deficit | (26,222,811) | (24,129,627) | |
Total stockholders' deficit | 2,907,740 | 4,521,669 | $ 3,656,710 |
Gain on stock debt exchange | 156,743 | ||
Net other income (expense) | (1,104,660) | (1,597,140) | |
Net loss for the period | $ (2,093,184) | $ (2,742,030) | |
Loss per common share | $ (0.03) | $ (0.05) | |
As Previously Reported [Member] | |||
Convertible debentures | $ 45,105 | ||
Accumulated deficit | (23,969,627) | ||
Total stockholders' deficit | 4,681,669 | ||
Gain on stock debt exchange | 316,743 | ||
Net other income (expense) | (1,437,140) | ||
Net loss for the period | $ (2,582,030) | ||
Loss per common share | $ (0.04) | ||
Adjustment [Member] | |||
Convertible debentures | $ 160,000 | ||
Accumulated deficit | (160,000) | ||
Total stockholders' deficit | (160,000) | ||
Gain on stock debt exchange | (160,000) | ||
Net other income (expense) | (160,000) | ||
Net loss for the period | $ (160,000) | ||
Loss per common share | $ (0.01) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Subsequent Event [Line Items] | |||
Proceeds from borrowings under convertible note payable | $ 460,000 | $ 590,000 | |
Capital Communications, LLC dated July 1, 2016 [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from borrowings under convertible note payable | $ 120,000 |