Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Jan. 13, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | TRANSBIOTEC, INC. | |
Entity Central Index Key | 0001425627 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | true | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | No | |
Document Period End Date | Mar. 31, 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Entity Common Stock Shares Outstanding | 236,438,502 | |
EntityFileNumber | 000-53316 | |
EntityAddressAddressLine1 | 885 Arapahoe Road | |
EntityAddressPostalZipCode | 80302 | |
EntityTaxIdentificationNumber | 260731818 | |
EntityAddressCityOrTown | Boulder | |
LocalPhoneNumber | 4434430 | |
CityAreaCode | 303 | |
EntityAddressStateOrProvince | COLORADO |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 1,148 | $ 89 |
Prepaid expenses | 12,531 | 12,991 |
Total current assets | 13,679 | 13,080 |
Total Assets | 13,679 | 13,080 |
Current liabilities | ||
Accounts payable | 173,973 | 191,714 |
Accrued expenses | 419,251 | 421,000 |
Accrued interest payable | 572,975 | 537,118 |
Related party payables | 1,412,868 | 1,423,984 |
Derivative liabilities | 28,800 | |
Stock subscriptions payable | 1,674 | 1,271 |
Notes payable - current - related parties *Includes unamortized debt issuance costs related to detached warrants of $23,757 and $8,074 at March 31, 2019 and December 31, 2018, respectively | 726,837 | 697,770 |
Notes payable - current - non related parties * Includes unamortized beneficial conversion features related to convertible notes of $28,564 and $5,920 at March 31, 2019 and December 31, 2018, respectively | 170,010 | 163,654 |
Total current liabilities | 3,506,388 | 3,436,511 |
Total Liabilities | 3,506,388 | 3,436,511 |
Stockholders' Deficit | ||
Preferred stock, $0.00001 par value; 22,000,000 shares authorized, No shares issued or outstanding as of March 31, 2019 and December 31, 2018 | ||
Common stock, $0.00001 par value; 800,000,000 shares authorized; 152,205,625 and 109,409,930 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 1,522 | 1,172 |
Additional paid-in capital | 14,957,232 | 14,887,804 |
Accumulated deficit | (18,400,425) | (18,262,136) |
Total Transbiotec, Inc. stockholders' deficit | (3,441,657) | (3,373,146) |
Noncontrolling interest | (51,052) | (50,285) |
Total Stockholders' Deficit | (3,492,709) | (3,423,431) |
Total Liabilities and Stockholders' Deficit | 13,679 | 13,080 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, $0.00001 par value; 22,000,000 shares authorized, No shares issued or outstanding as of March 31, 2019 and December 31, 2018 | $ 14 | $ 14 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current liabilities | ||
Note payable current - related party, unamortized debt issuance costs | $ 23,757 | $ 8,074 |
Note payable current - non related party, beneficial conversion features related to convertible notes | $ 28,564 | $ 5,920 |
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 22,000,000 | 22,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, shares par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 152,205,625 | 109,409,930 |
Common stock, shares outstanding | 152,205,625 | 109,409,930 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 1,388,575 | 1,388,575 |
Preferred stock, shares outstanding | 1,388,575 | 1,388,575 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||
Revenues | ||
Operating expenses: | ||
General and administrative | 69,014 | 79,843 |
Total operating expenses | 69,014 | 79,843 |
Loss from operations | (69,014) | (79,843) |
Other expense: | ||
Loss on fair value adjustment - derivatives | (800) | |
Interest expense | (63,886) | (64,027) |
Amortization - beneficial conversion feature | (5,356) | |
Total other income (expense) | (70,042) | (64,027) |
Net loss | (139,056) | (143,870) |
Net loss attributable to noncontrolling interest | 767 | 821 |
Net loss attributable to TranBiotec, Inc. | $ (138,289) | $ (143,049) |
Net loss per share | ||
(Basic and fully diluted) | $ (0.001) | $ (0.001) |
Weighted average number of common shares outstanding | 130,145,018 | 109,409,930 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Total | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Stockholder Deficit TransBiotecInct [Member] | Noncontrolling Interest [Member] |
Balance, shares at Jan. 01, 2018 | 109,409,930 | 1,388,575 | |||||
Balance, amount at Jan. 01, 2018 | $ (2,964,137) | $ 1,096 | $ 14 | $ 14,785,051 | $ (17,703,171) | $ (2,917,010) | $ (47,127) |
Common stock issued to settle accounts payable, shares | 91,148 | ||||||
Common stock issued to settle accounts payable, amount | 428 | $ 1 | 427 | 428 | |||
Paid-in capital - fair value of stock warrants granted | 10,958 | 10,958 | 10,958 | ||||
Paid-in capital - gain on related party debt conversion | 7,776 | 7,776 | 7,776 | ||||
Net Income (Loss) | $ (143,870) | $ (143,049) | $ (143,049) | $ (821) | |||
Balance, shares at Mar. 31, 2018 | 109,501,078 | 1,388,575 | |||||
Balance, amount at Mar. 31, 2018 | $ (3,088,845) | $ 1,097 | $ 14 | $ 14,804,212 | $ (17,846,220) | $ (3,040,897) | $ (47,948) |
Balance, shares at Jan. 01, 2019 | 116,751,078 | 1,388,575 | |||||
Balance, amount at Jan. 01, 2019 | $ (3,423,431) | $ 1,172 | $ 14 | $ 14,887,804 | $ (18,262,136) | $ (3,373,146) | $ (50,285) |
Paid-in capital - fair value of stock warrants granted | 22,665 | 22,665 | 22,665 | ||||
Paid-in capital - gain on related party debt conversion | 8,113 | 8,113 | 8,113 | ||||
Net Income (Loss) | (139,056) | (138,289) | (138,289) | (767) | |||
Common stock issued for cash, amount | $ 39,000 | $ 350 | $ 38,650 | $ 39,000 | |||
Common stock issued for cash, shares | 35,454,547 | ||||||
Balance, shares at Mar. 31, 2019 | 152,205,625 | 1,388,575 | |||||
Balance, amount at Mar. 31, 2019 | $ (3,492,709) | $ 1,522 | $ 14 | $ 14,957,232 | $ (18,400,425) | $ (3,441,657) | $ (51,052) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Activities | ||
Net loss | $ (139,056) | $ (143,870) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative liability | 800 | |
Amortization - beneficial conversion feature | 5,356 | |
Stock warrants expense | 6,982 | 9,694 |
Changes in assets and liabilities: | ||
Prepaid expenses | 460 | (1,413) |
Accounts payable | (17,741) | (110,654) |
Accrued expenses | (1,749) | 14,179 |
Accrued interest payable | 35,857 | 42,374 |
Related party payables | (3,003) | |
Stock subscription payable | 403 | |
Net cash used in operating activities | (111,691) | (20,211) |
Financing Activities: | ||
Proceeds from notes payable - related parties | 44,750 | 20,300 |
Proceeds from notes payable - non-related parties | 29,000 | |
Proceeds from issuances of common stock - non-related parties | 39,000 | |
Net cash provided by financing activities | 112,750 | 20,300 |
Net Change In Cash | 1,059 | 89 |
Cash At The Beginning Of The Period | 89 | 142 |
Cash At The End Of The Period | 1,148 | 231 |
Schedule Of Non-Cash Investing And Financing Activities: | ||
Related party payables converted to capital | 8,113 | 8,204 |
Fair value of stock warrants granted | 22,665 | 10,958 |
Fair value of embedded conversion feature | 28,800 | |
Supplemental Disclosure: | ||
Cash paid for interest | 3,750 | |
Cash paid for income taxes |
ORGANIZATION, OPERATIONS AND SU
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | TransBiotec, Inc. (“TransBiotec – DE”), formerly Imagine Media LTD., was incorporated August, 2007 in the State of Delaware. A corporation also named TransBiotec, Inc. (“TransBiotec – CA”) was formed in the state of California July 4, 2004. Effective September 19, 2011 TransBiotec - DE was acquired by TransBiotec - CA in a transaction classified as a reverse acquisition as the shareholders of TransBiotec - CA retained the majority of the outstanding common stock of TransBiotec - DE after the share exchange. The financial statements represent the activity of TransBiotec - CA from July 4, 2004 forward, and the consolidated activity of TransBiotec - DE and TransBiotec - CA from September 19, 2011 forward. TransBiotec - DE and TransBiotec - CA are hereinafter referred to collectively as the "Company" or “We”. The Company has developed and plans to mark TransBiotec, Inc. (“TransBiotec – DE”), formerly Imagine Media LTD., was incorporated August, 2007 in the State of Delaware. A corporation also named TransBiotec, Inc. (“TransBiotec – CA”) was formed in the state of California July 4, 2004. Effective September 19, 2011 TransBiotec - DE was acquired by TransBiotec - CA in a transaction classified as a reverse acquisition as the shareholders of TransBiotec - CA retained the majority of the outstanding common stock of TransBiotec - DE after the share exchange. The financial statements represent the activity of TransBiotec - CA from July 4, 2004 forward, and the consolidated activity of TransBiotec - DE and TransBiotec - CA from September 19, 2011 forward. TransBiotec - DE and TransBiotec - CA are hereinafter referred to collectively as the "Company" or “We”. The Company has developed and plans to market and sell a non-invasive alcohol sensing system which includes an ignition interlock. The Company has not generated any revenues from its operations. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K filed with the SEC on April 17, 2019. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly the financial position for the three month period ended March 31, 2019 and for the year ended December 31, 2018, and results of operations and cash flows for the three month period ended March 31, 2019 and for the year ended December 31, 2018. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary, TransBiotec-CA. We have eliminated all intercompany transactions and balances between entities consolidated in these unaudited condensed financial statements. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability and beneficial conversion feature expenses. Actual results could differ from those estimates. Cash The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company does not have any cash equivalents as of March 31, 2019 and December 31, 2018. Income Tax The Company accounts for income taxes pursuant to Accounting Standards Codification (“ASC”) 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not recorded any deferred tax assets or liabilities at March 31, 2019 and December 31, 2018, respectively. Net Loss Per Share The basic and fully diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Financial Instruments Pursuant to ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments Level Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets: quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist primarily of cash, accounts payable, accrued expenses, accrued interest payable, notes payable, related party payables, convertible debentures, and other payables. Pursuant to ASC 820 and 825, the fair value of our derivative liabilities is determined based on “Level 3” inputs. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table presents assets and liabilities that are measured and recognized at fair value as of March 31, 2019 and December 31, 2018: March 31, 2019 Level 1 Level 2 Level 3 Derivative liabilites $ - $ - $ 28,800 $ - $ - $ 28,800 December 31, 2018 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ - $ - $ - $ - Beneficial Conversion Features From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. Derivative Instruments The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in fair value are recorded in the consolidated statement of operations under other income (expense). The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at its fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. For stock-based derivative financial instruments, the Company uses a Monte Carlo Simulation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. Stock-based Compensation Stock-based compensation cost to employees is measured by the Company at the grant date based on the fair value of the award and over the requisite service period under ASC718. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. Grants of stock to non-employees and other parties are accounted for in accordance with the ASC 505-50 “Equity-Based Payments to Non-Employees”. Minority Interest (Noncontrolling Interest) A subsidiary of the Company has minority members representing ownership interests of 1.38% at March 31, 2019 and December 31, 2018. The Company accounts for these minority, or noncontrolling interests, pursuant to ASC 810-10-65 whereby gains and losses in a subsidiary with a noncontrolling interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if that allocation results in a deficit noncontrolling interest balance. Research and Development The Company accounts for its research and development costs pursuant to ASC 730, whereby it requires the Company to disclose the amounts of costs for company and customer-sponsored research and development activities, if material. Research and development costs are expensed as incurred. The Company incurred research and development costs as it acquired new knowledge to bring about significant improvements in the functionality and design of its SOBR product. Research and development costs were none during the three month period ended March 31, 2019 and $8,855 during the three month period ended March 31, 2018. Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. New Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, clarifies Topic 718, Compensation – Stock Compensation In July 2017, the FASB issued ASU-2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Noncontrolling Interests of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In March 2018, the FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The amendments in this update provide guidance on when to record and disclose provisional amounts for certain income tax effects of the Tax Cuts and Jobs Act ("Tax Reform Act"). The amendments also require any provisional amounts or subsequent adjustments to be included in net income from continuing operations. Additionally, this ASU discusses required disclosures that an entity must make with regard to the Tax Reform Act. This ASU is effective immediately as new information is available to adjust provisional amounts that were previously recorded. The Company has decided to adopt this new standard; however, the Company currently has no revenue and only net operating loss carryforwards that result in a tax benefit during the three month period ended March 31, 2019. The Company also has no deferred tax assets (offset in full by a valuation allowance) or tax liabilities on its balance sheet as of March 31, 2019 and December 31, 2018. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting t and sell a non-invasive alcohol sensing system which includes an ignition interlock. The Company has not generated any revenues from its operations. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K filed with the SEC on April 17, 2019. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly the financial position for the three month period ended March 31, 2019 and for the year ended December 31, 2018, and results of operations and cash flows for the three month period ended March 31, 2019 and for the year ended December 31, 2018. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary, TransBiotec-CA. We have eliminated all intercompany transactions and balances between entities consolidated in these unaudited condensed financial statements. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability and beneficial conversion feature expenses. Actual results could differ from those estimates. Cash The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company does not have any cash equivalents as of March 31, 2019 and December 31, 2018. Income Tax The Company accounts for income taxes pursuant to Accounting Standards Codification (“ASC”) 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not recorded any deferred tax assets or liabilities at March 31, 2019 and December 31, 2018, respectively. Net Loss Per Share The basic and fully diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Financial Instruments Pursuant to ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments Level Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets: quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist primarily of cash, accounts payable, accrued expenses, accrued interest payable, notes payable, related party payables, convertible debentures, and other payables. Pursuant to ASC 820 and 825, the fair value of our derivative liabilities is determined based on “Level 3” inputs. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table presents assets and liabilities that are measured and recognized at fair value as of March 31, 2019 and December 31, 2018: March 31, 2019 Level 1 Level 2 Level 3 Derivative liabilites $ - $ - $ 28,800 $ - $ - $ 28,800 December 31, 2018 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ - $ - $ - $ - Beneficial Conversion Features From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. Derivative Instruments The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in fair value are recorded in the consolidated statement of operations under other income (expense). The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at its fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. For stock-based derivative financial instruments, the Company uses a Monte Carlo Simulation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. Stock-based Compensation Stock-based compensation cost to employees is measured by the Company at the grant date based on the fair value of the award and over the requisite service period under ASC718. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. Grants of stock to non-employees and other parties are accounted for in accordance with the ASC 505-50 “Equity-Based Payments to Non-Employees”. Minority Interest (Noncontrolling Interest) A subsidiary of the Company has minority members representing ownership interests of 1.38% at March 31, 2019 and December 31, 2018. The Company accounts for these minority, or noncontrolling interests, pursuant to ASC 810-10-65 whereby gains and losses in a subsidiary with a noncontrolling interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if that allocation results in a deficit noncontrolling interest balance. Research and Development The Company accounts for its research and development costs pursuant to ASC 730, whereby it requires the Company to disclose the amounts of costs for company and customer-sponsored research and development activities, if material. Research and development costs are expensed as incurred. The Company incurred research and development costs as it acquired new knowledge to bring about significant improvements in the functionality and design of its SOBR product. Research and development costs were none during the three month period ended March 31, 2019 and $8,855 during the three month period ended March 31, 2018. Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. New Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, clarifies Topic 718, Compensation – Stock Compensation In July 2017, the FASB issued ASU-2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Noncontrolling Interests of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In March 2018, the FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The amendments in this update provide guidance on when to record and disclose provisional amounts for certain income tax effects of the Tax Cuts and Jobs Act ("Tax Reform Act"). The amendments also require any provisional amounts or subsequent adjustments to be included in net income from continuing operations. Additionally, this ASU discusses required disclosures that an entity must make with regard to the Tax Reform Act. This ASU is effective immediately as new information is available to adjust provisional amounts that were previously recorded. The Company has decided to adopt this new standard; however, the Company currently has no revenue and only net operating loss carryforwards that result in a tax benefit during the three month period ended March 31, 2019. The Company also has no deferred tax assets (offset in full by a valuation allowance) or tax liabilities on its balance sheet as of March 31, 2019 and December 31, 2018. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2019 | |
GOING CONCERN | |
NOTE 2. GOING CONCERN | The Company has suffered recurring losses from operations and has a working capital deficit and stockholders' deficit, and in all likelihood, will be required to make significant future expenditures in connection with continuing marketing efforts along with general and administrative expenses. As of March 31, 2019, the accumulated deficit is $18,400,425, a cash balance of $1,148, carrying loans of principal and interest in default totaling $1,313,544, current notes payable and interest of $1,451,193 and cash outflows from operating activities of $111,691. These principal conditions or events, considered in the aggregate, indicate it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the financial statements are issued. As such, there is substantial doubt about the entity’s ability to continue as a going concern. On May 25, 2017, the Company increased their number of unauthorized shares from 100,000,000 to 800,000,000 as they hope to raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or others, and debt restructure (conversion of debt to equity). By doing so, the Company further hopes to generate revenues from sales of its alcohol sensing and ignition lock systems. The Company is currently engaged in talks with potential sales reps, funding sources, and manufacturers. The Company is also considering opportunities to create synergy with its SOBR product. On October 29, 2018, the Company entered into a non-binding Letter of Intent (“LOI”) with First Capital Holdings, LLC (“FCH”). The LOI sets forth the terms under which the Company could potentially acquire certain assets related to robotics equipment from FCH in exchange for shares of their common stock equal to 60% of our then outstanding common stock on a fully-diluted basis. The LOI is non-binding and subject to various conditions that must be met in order for the parties to close the transaction, including, but not limited to, (i) the Company being current in its reporting requirements under the Securities Exchange Act of 1934, as amended, (ii) the Company completing a reverse stock split of its common stock such that approximately 8,000,000 shares will be outstanding immediately prior to closing the transaction with no convertible instruments other than as set forth herein, (iii) the Company having no more than $125,000 in outstanding debt, all in the form of convertible notes that mature in two years post-closing and are convertible into shares of TransBiotec common stock at $2.00 per share; (iv) FCH completing any necessary audits and reviews of the financial statements related to the assets by a PCAOB-approved independent registered accounting firm, and (v) the parties executing definitive documents related to the potential transaction. On March 6, 2019, the parties entered into an amendment No. 1 to the LOI in order to extend certain dates in the LOI namely : (i) the date for the parties to complete initial due diligence was moved to March 29, 2018 (ii) the date for the parties to execute definitive agreements related to the transaction was moved to May 6, 2019, and (iii) the date to close the transaction was tentatively moved to August 31, 2019 (the “Amendment No.1”). On May 6, 2019, TransBiotec, Inc. (“The Company” or “TransBiotec” and “Buyer”) entered into an asset purchase agreement with IDTEC, LLC (“Seller”) in which TransBiotec agreed to acquire the Seller’s rights, title and interest to and in certain assets. The aggregate purchase price for the purchased assets shall be 12 million (12,000,000) restricted shares of the $0.00001 par value common stock of the Buyer; provided that the total number of shares of TransBiotec’s $0.00001 par value common stock issued and outstanding following a tentative closing date of January 6, 2020 shall not exceed 20 million (20,000,000) shares (on a fully dilated basis). Management believes actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern; however, these plans are speculative at this time, and no formal documentation of these plans, nor approvals of such plans, have occurred on or before March 31, 2019. As such, substantial doubt about the entity’s ability to continue as a going concern has not been alleviated as of March 31, 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
NOTE 3. RELATED PARTY TRANSACTIONS | In May 2011, the Company entered into an employment agreement with Mr. Bennington which expired on December 31, 2017. The employment agreement provided that the Company would pay Mr. Bennington a salary of $120,000 during the first year of the agreement, $156,000 during the second year of the agreement, $172,000 during the third year of the agreement, $190,000 during the fourth year of the agreement and $208,000 during the fifth year of the agreement. Since the Company was unable to compensate him as stipulated per the agreement, Mr. Bennington agreed to drop his yearly compensation, and resulting yearly accrual, to $120,000 per year with no yearly increases as stipulated in years 2 through 5. In September 2016, before the expiration of Mr. Bennington’s contract, the Company appointed Ivan Braiker as its sole CEO, and Mr. Bennington subsequently took a role as a member of the Board of Directors at a monthly rate of $5,000. In connection with his appointment, Mr. Braiker entered into a letter agreement with the Company, under which he accrued a monthly retainer of $7,500, to be paid only if the Company successfully closed financing of at least $200,000. Mr. Braiker was also granted options to purchase 1,500,000 shares of common stock at an exercise price of $0.0045 per share at a fair value of $6,290. In an act of good faith by the Company, Mr. Braiker was paid $15,000 in 2017 in relation to his letter agreement. Effective with his resignation on December 31, 2017, the Company did not owe, accrue for or pay Mr. Braiker any further compensation as he was unable to secure financing of $200,000 for the Company as stipulated per the letter agreement. Mr. Braiker was not compensated for his services as a member of our Board of Directors. As of March 31, 2019, and December 31, 2018, the Company had payables due to officers for accrued compensation and services of $474,156 and $474,156, respectively, recorded as related party payables on the condensed consolidated balance sheets. Due to cash flow constraints, the Company has experienced difficulty in compensating our directors for their service in their capacity as directors; therefore, such directors may receive stock options to purchase common shares as awarded by our Board of Directors or (as to future stock options) a compensation committee which may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with business related travel and attendance at meetings of our Board of Directors. Our Board of Directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. On December 3, 2014, Lanphere Law Group, a related party and the Company’s largest shareholder, entered into an agreement with the Company to convert 50% of its outstanding accounts payable of $428,668 to a note payable. This note payable represents one half of the balance in the amount of $214,334 of attorney fees and costs owed up until October 31, 2014. This agreement further provided that the remaining 50% of unpaid legal fees in accounts payable were to be paid and retained as a current payable. In addition, 50% of the attorney fees and costs incurred starting from November 1, 2014 are to be converted on a monthly basis to common stock at a price of $0.09 per share until the accounts payable balance for attorney fees is paid current. These payables were for legal expensesrecorded to general and administrative expense as incurred. The Company has recorded to equity, a total related party gain connected to these conversions during the three month period ended March 31, 2019 and 2018 of $8,113 and $7,776, respectively. Per this agreement as of March 31, 2019 and December 31, 2018, on a cumulative basis, approximately $201,831 of related party payables was converted into 2,242,565 common shares and $201,831 was converted into 2,242,565 common shares, respectively. The Company has a stock subscription payable due to Lanphere Law Group as of March 31, 2019 of $1,674 convertible into 337,894 of its common shares, and $1,271 convertible into 243,273 of its common shares as of December 31, 2018. On July 1, 2015, the Company amended the December 3, 2014 note payable agreement with Lanphere Law Group, a related party and the Company’s largest shareholder, which forgave $108,000 of the note payable’s principal balance. This debt forgiveness brought down the original principal balance on the note of $214,334 to a new principal balance of $106,335, and a related party gain of $108,000 was recorded to additional paid-in capital. This amendment also extended the note payable’s due date to December 2, 2015; however, this note is currently in default. On March 8, 2017, Lanphere Law Group, a related party and the Company’s largest shareholder, irrevocably elected to exercise warrants in order to acquire 32,248,932 shares of the Company’s common stock in exchange for an aggregate exercise price of $112,871, which was used for the deduction of $74,672 of principal and $38,199 of accrued interest related to the December 3, 2014 note payable agreement with Lanphere Law Group. The principal balance of the note after the debt deduction was $31,662. At March 31, 2019 and December 31, 2018, the principal balance of this note was $31,662 and $31,662, respectively. At March 31, 2019 and December 31, 2018, the accrued interest on this note was $7,119 and $5,539, respectively. The forgiveness of the note payable principal of $74,672 was recorded to equity and the $38,199 of related accrued interest was recorded to equity. After this exercise, Lanphere Law Group still owns warrants to acquire an additional 21,400,734 shares of our common stock. The Company entered into a lease agreement with Lanphere Law Group, a related party and the Company’s largest shareholder, whereas the Company is the tenant and is paying monthly rent of $4,100. The term of this operating lease runs from July 1, 2015 to June 30, 2019. As of July 1, 2019, the Company leases the same office space on a month to month basis. Rent expense, including CAM charges, for the three month period ended March 31, 2019 and 2018 of $13,105 and $13,105, respectively, was recorded to general and administrative expense. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2019 | |
NOTES PAYABLE | |
NOTE 4. NOTES PAYABLE | RELATED PARTIES The Company has four convertible notes payable to related parties that have a principal balance of $91,000 and $91,000 as of March 31, 2019 and December 31, 2018, respectively. These notes carry interest rates ranging from 7% - 9% and have due dates ranging from 1/23/2014 - 4/8/2015. All four notes are currently in default and carry a default interest rate of 10%. These notes carry conversion prices ranging from $0.0072 - $0.0800 per share. The Company evaluated these convertible notes and determined that, for the embedded conversion option, there was a beneficial conversion value to record. The beneficial conversion feature was amortized over the life of the notes, one year, and was fully amortized at March 31, 2019 and December 31, 2018. No beneficial conversion feature expense was incurred during the three month period ended March 31, 2019 and 2018. The Company has ten non-convertible notes payable to related parties that have a principal balance of $343,700 and $343,700 as of March 31, 2019 and December 31, 2018, respectively. These notes carry interest rates ranging from 0% - 10% and have due dates ranging from 8/03/2012 - 7/23/2016. Nine of the ten notes are currently in default and carry a default interest rate of 10%. The Company has twenty-nine notes payable with detached free-standing warrants to related parties that have a principal balance of $315,894 and $271,144 as of March 31, 2019 and December 31, 2018, respectively. These notes carry interest rates ranging from 7% - 10% and have due dates ranging from 8/05/2015 - 03/30/2020. Twenty-two of the twenty-nine notes, carrying a total principal balance of $236,144, are currently in default and carry a default interest rate of 10%. The exercise price for each note payable detached free-standing warrant ranges from $0.0018664652 - $0.0160. As of March 31, 2019 and December 31, 2018, these notes carried outstanding detached free-standing warrants of 34,535,165 and 23,953,003, respectively. The unamortized discount related to these warrants at March 31, 2019 and December 31, 2018 is $23,757 and $8,074, respectively. During the three month period ended March 31, 2019 and 2018, stock warrants amortization expense recorded to interest expense was $6,982 and $9,694, respectively. The reason for the decrease in stock warrants expense was directly related to the timing of funds borrowed and the related amortization of its stock warrants. The fair market value of stock warrants granted during the three month period ended March 31, 2019 and 2018 was $22,665 and $10,958, respectively. The fair market value of the outstanding stock warrants was calculated utilizing the Black-Sholes method using the following assumptions: risk free rates ranging between 1.03% - 2.67%, dividend yield of 0%, expected life of 5 years, volatility between 143% - 177%. Total interest expense for related party notes was $20,805 and $19,188 for the three month period ended March 31, 2019 and 2018, respectively. March 31, 2019 December 31, 2018 Convertible Notes Payable $ 91,000 $ 91,000 Conventional Non-Convertible Notes Payable 343,700 343,700 Notes Payable with Detached Free-standing Warrants 315,894 271,144 Unamortized Discount (23,757 ) (8,074 ) Net Related Party Notes Payable $ 726,837 $ 697,770 NON- RELATED PARTIES The Company has sixteen convertible notes payable to non-related parties that have a principal balance of $172,136 and $143,136 as of March 31, 2019 and December 31, 2018, respectively. These notes carry interest rates ranging from 5% - 30% and have due dates ranging from 2/08/2012 - 5/23/2019. Fourteen of the sixteen notes, carrying a total principal balance of $137,136, are currently in default and carry a default interest rate of 10%. These notes carry conversion prices ranging from $0.0017- $0.3235688 per share. On March 1, 2019, the Company entered into a convertible note payable agreement that converts to its common stock at a variable conversion price. As further discussed in Note 5 – Derivative Liability The Company has three non-convertible notes payable to non-related parties that have a principal balance of $21,438 and $21,438 as of March 31, 2019 and December 31, 2018, respectively. These notes carry interest rates ranging from 9% - 18% and have due dates ranging from 1/31/2013 - 11/11/2015. All three notes are currently in default and carry a default interest rate of 10%. The Company has one note payable with detached free-standing warrants to a non-related party that has a principal balance of $5,000 and $5,000 as of March 31, 2019 and December 31, 2018, respectively. This note carries an interest rate of 10% and had a due date of 9/11/2014. This note is currently in default. The exercise price for the attached warrants is $0.019 for a total amount of 50,000 common shares. At March 31, 2019 and December 31, 2018, this note carried outstanding detached free-standing warrants of 50,000 and 50,000, respectively. There was no unamortized discount related to these warrants as of March 31, 2019 and December 31, 2018, and no stock warrant amortization expense was recorded to interest expense during the three month period ended March 31, 2019 and 2018. Total interest expense for non-related party notes was $13,670 and $12,005 for the three month period ended March 31, 2019 and 2018, respectively. March 31, 2019 December 31, 2018 Convertible Notes Payable $ 172,136 $ 143,136 Conventional Non-Convertible Notes Payable 21,438 21,438 Notes Payable with Detached Free-standing Warrants 5,000 5,000 Unamortized Beneficial Conversion Feature (28,564 ) (5,920 ) Net Non-Related Party Notes Payable $ 170,010 $ 163,654 |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 3 Months Ended |
Mar. 31, 2019 | |
DERIVATIVE LIABILITY | |
NOTE 5. DERIVATIVE LIABILITY | On March 1, 2019, the Company borrowed $29,000 under a convertible promissory note agreement from an unrelated party that is due upon demand from the investor. The note bears interest at a rate of 10% per annum and is convertible into the Company’s common shares at a variable conversion price based on a 50% discount of the market price at an undetermined future date. The Company analyzed the conversion features of the note agreement for derivative accounting consideration under ASU 2017-11 (ASC 815-15 Derivatives and Hedging), and determined the embedded conversion features should be classified as a derivative because the exercise price of the convertible note is subject to a variable conversion rate and should be therefore accounted for at fair value under ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments. In accordance with ASC 815-15, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. The embedded derivative for the note is carried on the Company’s balance sheet at fair value. The derivative liability is marked to market each measurement period and any unrealized change in fair value is recorded as a component of the statement of operations and the associated fair value carrying amount on the balance sheet is adjusted by the change. The Company fair values the embedded derivative using a Monte Carlo simulation model based on the following assumptions: (1) expected volatility of 300%, (2) risk-free interest rate of 2.40%, and (3) expected life of 1 year. On March 1, 2019, the date of the note, the fair value of the embedded derivative was $28,000. The note embedded conversion feature of $28,000 that is recorded as a discount on the balance sheet will be amortized over the life of the note. Interest amortization expense of the embedded conversion feature was $2,333 during the three month period ended March 31, 2019. The fair value of the derivative is $28,800 and is recorded on the balance sheet as a derivative liability at March 31, 2019. The note was not converted during the three month period March 31, 2019. Utilizing level 3 inputs, the Company recorded fair market value adjustments of $800 and none during the three month period March 31, 2019 and 2018, respectively. A summary of the activity of the derivative liability is shown below: Balance at December 31, 2018 $ - Fair value of derivatives issued 28,000 Fair market value adjustments 800 Balance at March 31, 2019 $ 28,800 |
STOCK WARRANTS AND STOCK OPTION
STOCK WARRANTS AND STOCK OPTIONS | 3 Months Ended |
Mar. 31, 2019 | |
STOCK WARRANTS AND STOCK OPTIONS | |
NOTE 6. STOCK WARRANTS AND STOCK OPTIONS | The Company accounts for employee stock options and non-employee stock warrants under ASC 718 and ASC 505, whereby option costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable, utilizing the Black Sholes pricing model. Unless otherwise provided for, the Company covers option exercises by issuing new shares. Beginning on December 12, 2012, Michael A. Lanphere, a related party and non-employee, loaned the Company money for a variety of purposes, some for working capital and some to allow the Company to pay outstanding obligations. Each of these loans was made pursuant to the terms of a Loan Agreement with Promissory Note and Stock Fee (the “Agreements”). Under the terms of the Agreements, Mr. Lanphere was not only entitled to repayment of the principal amount loaned to us, with interest, but also what was termed in the Agreements as a “Stock Fee” that the parties are interpreting as a stock warrant, which permits Mr. Lanphere to acquire shares of our common stock in exchange for an exercise price that was estimated based on the date of the loan agreement. The number of shares to be issued to Mr. Lanphere as a Stock Fee under each Agreement was an estimate and varied based on the loan amount and the price of our common stock on the day of the loan and was calculated by this formula: sixty percent (60%) or eighty percent (80%) of the loan amount divided by the Company’s stock price on the day of the loan, but at a price per share no higher than two and one-half cents ($0.025). Each Stock Fee is fully vested immediately and expires five (5) years from the date of the loan. Although the Stock Fee could be taken by Mr. Lanphere as a stock grant or a stock warrant, due to the fully vested nature of the Stock Fee, Mr. Lanphere is deemed to beneficially own those shares on the date of each Agreement. The number of warrants outstanding to Mr. Lanphere at March 31, 2019 and December 31, 2018 are 21,400,745 and 10,818,583, respectively. The total outstanding balance of all non-employee stock warrants in TransBiotec, Inc. is 34,585,165 and 24,003,003 at March 31, 2019 and December 31 2018, respectively. There were 10,582,162 non-employee detached free-standing stock warrants granted during the three month period ended March 31, 2019 and 2,882,392 non-employee detached free-standing stock warrants granted during the three month period ended March 31, 2018. The fair value of these additional non-employee stock warrants granted during the three month period ended March 31, 2019 and during the year ended December 31, 2018 were determined using the Black-Sholes option pricing model based on the following assumptions: Mar. 31, 2019 Mar. 31, 2018 Exercise Price $ 0.00188664652 - $0.0114 $0.0042 - $0.0043 Dividend Yield 0 % 0 % Volatility 135% - 138 % 144 % Risk-free Interest Rate 2.31% – 2.53 % 2.65% – 2.67 % Expected Life of Options 5 Years 5 Years The following table summarizes the changes in the Company’s outstanding warrants during the three months ended March 31, 2019 and 2018 and as of March 31, 2019 and December 31, 2018: Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2017 16,120,611 $ 0.0044 - 0.0190 4.06 Years $ 0.0066 $ - Warrants Granted 2,882,392 $ 0.0042- 0.0043 4.91 Years $ 0.0042 $ 288 Warrants Exercised - - Warrants Expired - - Balance at March 31, 2018 19,003,003 $ 0.0042-0.0190 3.98 Years $ 0.0063 $ - Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2018 24,003,003 $0.0042 - 0.0190 3.45 Years $ 0.0058 $ - Warrants Granted 10,582,162 $ 0.0018664652- 0.0062 4.93 Years $ 0.0028 $ 13,537 Warrants Exercised - - Warrants Expired - - Balance at March 31, 2019 34,585,165 $ 0.0018664652-0.0190 3.73 Years $ 0.0049 $ - Exercisable at December 31, 2018 24,003,003 $ 0.0042 - 0.0190 3.45 Years $ 0.0058 $ - Exercisable at March 31, 2019 34,585,165 $ 0.0018664652 - 0.0190 3.73 Years $ 0.0049 $ - As of March 31, 2019 and December 31, 2018, there were three outstanding stock options to officers, directors, and consultants to purchase 1,775,000 shares of TransBiotec, Inc. common stock. The first outstanding stock option is dated October 1, 2014 and has an option price on that day of $0.0062, with an option exercise price of $0.25. The second outstanding option is dated October 27, 2014 at an option price on that day of $0.0066 with an option exercise price of $0.007, and the third outstanding option is dated August 15, 2016 at an option price on that day of $0.0045 with an option exercise price of $0.0045. These stock options vested upon grant. There were no stock options granted during the three months ended March 31, 2019 and 2018. The following table summarizes the changes in the Company’s outstanding stock options during the three month period ended March 31, 2019 and 2018, and as of March 31, 2019 and December 31, 2018: Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2017 2,225,000 $ 0.0045 - 0.25 3.00 Years $ 0.0204 $ - Options Granted - - Options Exercised - - Options Cancelled - - Options Expired - - Balance at March 31, 2018 2,225,000 $ 0.0045 – 0.25 2.76 Years $ 0.0204 $ - Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2018 1,775,000 $ 0.0045 - 0.25 2.32 Years $ 0.0083 $ - Options Granted - - Options Exercised - - Options Cancelled - - Options Expired - - Balance at March 31, 2019 1,775,000 $ 0.0045 – 0.25 2.07 Years $ 0.0083 $ - Exercisable at December 31, 2018 1,775,000 $ 0.0045 - 0.25 2.32 Years $ 0.0083 $ - Exercisable at March 31, 2019 1,775,000 $ 0.0045 - 0.25 2.07 Years $ 0.0083 $ - Executive Stock Options The Company had 250,000 outstanding executive stock options exercisable at $0.007 per share as of March 31, 2019 and December 31, 2018. Stock Subscriptions Payable The Company had stock subscriptions payable due to a related party of $1,674 convertible into 337,894 of its common shares at March 31, 2019. The Company had stock subscriptions payable due to a related party of $1,271 convertible into 243,273 of its common shares at December 31, 2018. The Company recorded a related party gain of $8,113 and $7,776 related to the outstanding stock subscriptions payable during the three month period ended March 31, 2019 and 2018, respectively. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 31, 2019 | |
COMMON STOCK | |
NOTE 7. COMMON STOCK | On March 31, 2018, the Company converted $8,204 of its related party payables into 91,148 issued shares of its common stock at $0.09 per share. $7,776 was recorded as a related party gain. On February 25, 2019, the Company issued 35,454,547 shares of its common stock to non-related parties for $39,000 in cash. |
PREFERRED STOCK
PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2019 | |
PREFERRED STOCK | |
NOTE 8. PREFERRED STOCK | On November 20, 2015, the Company’s Board of Directors authorized a class of stock designated as preferred stock with a par value of $0.00001 per share comprising 25,000,000 shares, 3,000,000 shares of which were classified as Series A Convertible Preferred stock. In each calendar year, the holders of the Series A Convertible Preferred stock are entitled to receive, when, as and if, declared by the Board of Directors, out of any funds and assets of the Company legally available, non-cumulative dividends, in an amount equal to any dividends or other Distribution on the common stock in such calendar year (other than a Common Stock Dividend). No dividends (other than a Common Stock Dividend) shall be paid and no distribution shall be made with respect to the common stock unless dividends shall have been paid or declared and set apart for payment to the holders of the Series A Convertible Preferred stock simultaneously. Dividends on the Series A Convertible Preferred stock shall not be mandatory or cumulative, and no rights or interest shall accrue to the holders of the Series A Convertible Preferred stock by reason of the fact that the Company shall fail to declare or pay dividends on the Series A Convertible Preferred stock, except for such rights or interest that may arise as a result of the Company paying a dividend or making a distribution on the common stock in violation of the terms. The holders of each share of Series A Convertible Preferred stock then outstanding shall be entitled to be paid, out of the Available Funds and Assets, and prior and in preference to any payment or Distribution (or any setting part of any payment or Distribution) of any Available Funds and Assets on any shares of common stock, and equal in preference to any payment or Distribution (or any setting part of any payment or Distribution) of any Available Funds and Assets on any shares of any other series of preferred stock that have liquidation preference, an amount per share equal to the Original Issue Price of the Series A Convertible Preferred stock plus all declared but unpaid dividends on the Series A Convertible Preferred stock. A reorganization, or any other consolidation or merger of the Company with or into any other corporation, or any other sale of all or substantially all of the assets of the Company, shall not be deemed a liquidation, dissolution, or winding up of the Company. Shares of the Series A Convertible Preferred stock are convertible at a 35% discount rate to the average closing price per share of the Company’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last fifteen (15) trading days immediately prior to conversion. However, no conversions of the Series A Convertible Preferred stock to shares of common stock can occur unless the average closing price per share of the Corporation’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last fifteen (15) trading days immediately prior to conversion is at least five cents ($0.05). The shares of Series A Convertible Preferred stock vote on an “as converted” basis. The right of conversion is limited by the fact the holder of the Series A Convertible Preferred stock may not convert if such conversion would cause the holder to beneficially own more than 4.9% of the Company’s common stock after giving effect to such conversion. As of March 31, 2019 and December 31, 2018, the Company has 1,388,575 issued shares of its Series A Convertible Preferred stock. During the three month ended March 31, 2019 and 2018, no dividends have been declared for holders of the Series A Convertible Preferred stock. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
NOTE 9. COMMITMENTS AND CONTINGENCIES | Operating Leases The Company leased office space under a long-term operating lease that expired in June 2019. As of July 1, 2019, the Company leases the same office space on a month to month basis. Rent expense under this lease, including CAM charges, was $13,105 and $13,105 for the three month period ended March 31, 2019 and March 31, 2018, respectively. Legal Proceedings On December 6, 2006, Orange County Valet and Security Patrol, Inc. filed a lawsuit against us in Orange County California State Superior Court for Breach of Contract in the amount of $11,164. A default judgment was taken against us in this matter. In mid-2013 we learned the Plaintiff’s perfected the judgment against us, but we have not heard from the Plaintiffs as of December 11, 2019. We currently have one outstanding judgment against us involving a past employee of the Company. The matter is under the purview of the State of California, Franchise Tax Board, Industrial Health and Safety Collections. We currently owe approximately $28,786, plus accrued interest, to our ex-employee for unpaid wages under these Orders and are working to get this amount paid off. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
SUBSEQUENT EVENTS | |
NOTE 10. SUBSEQUENT EVENTS | On October 29, 2018, TransBiotec, Inc. (“The Company” or “TransBiotec”) entered into a non-binding Letter of Intent (“LOI”) with First Capital Holdings, LLC (“FCH”). The LOI sets forth the terms under which The Company could potentially acquire certain assets related to robotics equipment from FCH in exchange for shares of our common stock equal to 60% of our then outstanding common stock on a fully-diluted basis. The LOI is non-binding and subject to various conditions that must be met in order for the parties to close the transaction, including, but not limited to, (i) TransBiotec being current in its reporting requirements under the Securities Exchange Act of 1934, as amended, (ii) TransBiotec completing a reverse stock split of its common stock such that approximately 8,000,000 shares will be outstanding immediately prior to closing the transaction with no convertible instruments other than as set forth herein, (iii) TransBiotec having no more than $125,000 in outstanding debt, all in the form of convertible notes that mature in two years post-closing and are convertible into shares of TransBiotec common stock at $2.00 per share; (iv) FCH completing any necessary audits and reviews of the financial statements related to the assets by a PCAOB-approved independent registered accounting firm, and (v) the parties executing definitive documents related to the potential transaction. On March 6, 2019, the parties entered into an amendment No. 1 to the LOI in order to extend certain dates in the LOI namely : (i) the date for the parties to complete initial due diligence was moved to March 29, 2018 (ii) the date for the parties to execute definitive agreements related to the transaction was moved to May 6, 2019, and (iii) the date to close the transaction was tentatively moved to November 13, 2019 (the “Amendment No.1”). On April 17, 2019, the Company borrowed $30,000 from a related party. The note payable carries an interest rate of 7% and matured on May 30, 2019. This note also contained a stock fee of 6,000,000 shares which will be used to pay down 80% of the note principal balance. This note is currently in default. On May 3, 2019, the Company borrowed $31,000 from a non-related party. The note payable carries an interest rate of 10% and is due on demand. On May 6, 2019, TransBiotec, Inc. (“The Company” or “TransBiotec” and “Buyer”) entered into an asset purchase agreement with IDTEC, LLC (“Seller”) in which TransBiotec agreed to acquire the Seller’s rights, title and interest to and in certain assets. The aggregate purchase price for the purchased assets shall be 12 million (12,000,000) restricted shares of the $0.00001 par value common stock of the Buyer; provided that the total number of shares of TransBiotec’s $0.00001 par value common stock issued and outstanding following a tentative closing date of January 6, 2020, shall not exceed 20 million (20,000,000) shares (on a fully dilated basis). On July 18, 2019, the Company borrowed $41,375 from a related party. The note payable carries an interest rate of 7% and matures on July 17, 2020. This note also contained a stock fee of 9,103,261 shares which will be used to pay the note principal balance in full. On August 8, 2019, the Company entered into an 8% Series A-1 Convertible Preferred Stock Investment Agreement with First Capital Ventures, LLC (“FCV”), and its assignee. The Company desires to raise between $1,000,000 and $2,000,000 from the sale of its 8% Series A-1 Convertible Preferred Stock and FCV intends to raise between $1,000,000 and $2,000,000 (net after offering expenses) in a special purchase vehicle (“SPV”) created by FCV to purchase the 8% Series A-1 Convertible Preferred Stock. The Company granted FCV and its assigns, the exclusive right to purchase the 8% Series A-1 Convertible Preferred Stock. The Company agreed to pay certain legal and other expenses of the SPV subsequent to the day in which the Company receives a minimum of $1,000,000 from the sale of 1,000,000 shares of the 8% Series A-1 Convertible Preferred Stock. The Company also agreed to cancel all shares of its issued and outstanding Series A Preferred Stock, immediately following the closing date and to pay $15,000 to the SPV for its legal costs and expenses and to pay or reimburse for any other costs or expenses related to the offering and sale of the interests in the SPV, including but not limited to, any sales commissions or other offering and organization expenses. The Company further agreed to issue FCV a three-year stock warrant to purchase 150,000 (post-split) shares of its Common Stock at an exercise price of $1.00 per share immediately following the closing date. The Company agreed to enter into a “business development” agreement with FCV, or its assignee, on the sale of the first $1,000,000 of 8% Series A-1 Convertible Preferred Stock and also granted FCV and its assigns, the right to use the name “SOBR SAFE” and any related intellectual property in connection with the SPV, and the offering of the Interests in the SPV. On August 23, 2019, the Company entered into a Common Stock Purchase Agreement (the “Bennington” SPA) with Charles Bennington, one of the Company’s officers and directors, under which the Company agreed to issue 14,000,000 shares of its common stock in exchange for Mr. Bennington forgiving $595,000 in accrued compensation due. The common shares were issued on or about August 28, 2019 at a per-share purchase price of $0.0425 per share. On August 23, 2019, the Company entered into a Share Exchange Agreement (the “Lanphere” SEA) with Michael Lanphere, one of the Company’s officers, under which the Company agreed to issue 5,206,430 shares of its common stock in exchange for 520,643 shares of the Company’s Series A Preferred Stock owned by Mr. Lanphere. The Series A Preferred stock were exchanged for the Company’s common shares at a price of $0.10 per share and were issued on or about August 28, 2019. On August 23, 2019, the Company entered into a Share Exchange Agreement (the “Justus” SEA) with Vernon Justus, an individual, under which the Company agreed to issue 8,679,320 shares of its common stock in exchange for 867,932 shares of the Company’s Series A Preferred Stock owned by Mr. Justus. The Series A Preferred stock were exchanged for the Company’s common shares at a price of $0.10 per share and were issued on or about August 28, 2019. On August 23, 2019, the Company entered into a Debt Conversion and Common Stock Purchase Plan (the “Lanphere” SPA) with Michael Lanphere, one of the Company’s officers, under which the Company agreed to issue 21,400,745 shares of its common stock in exchange for a reduction in the amounts owed to Mr. Lanphere under numerous promissory notes. Mr. Lanphere’s option to acquire the shares was under the terms of certain Loan Agreement with Promissory Note and Stock Fees agreements entered into with the Company and Mr. Lanphere. The amount of the debt reduction and, therefore the purchase price of the shares was $96,303.35. The common shares were issued on or about August 28, 2019 at an effective conversion price of $0.0045 per share. On August 23, 2019, the Company entered into a Debt Conversion and Common Stock Purchase Plan (the “Mishal” SPA) with Devadatt Mishal, one of the Company’s directors, under which the Company agreed to issue 13,134,420 shares of its common stock in exchange for a reduction in the amounts owed to Mr. Mishal under numerous promissory notes. Mr. Mishal’s option to acquire the shares was under the terms of certain Loan Agreement with Promissory Note and Stock Fees agreements entered into with the Company and Mr. Mishal. The amount of the debt reduction and, therefore the purchase price of the shares was $58,478.01. The common shares were issued on or about August 28, 2019 at an effective conversion price of $0.0043 per share. After the acquisition of the 13,134,420 shares under the Mishal SPA, the reporting person owned 20,534,857 shares of the Company’s common stock equal to approximately 9.5% of the Company’s outstanding common stock. On September 9, 2019, the Company’s Board of Directors approved the TransBiotec, Inc. 2019 Equity Incentive Plan, and authorized an aggregate of 128,000,000 shares of the Company’s common stock, subject to stock splits, recapitalizations, and other adjustments, for issuance to all employees of the Company, or any Subsidiary of the Company, to any non-employee director, consultants, and to independent contractors of the Company, or any Subsidiary and any joint venture partners of the Company or any Subsidiary. The Plan will be administered by the Compensation Committee of the Board of Directors (or the entire Board of Directors if the Company does not have a Compensation Committee). Under the Plan, the Committee may award Eligible Recipients with shares of its Common Stock in the form of Incentive Awards, Restricted Stock Awards, SARs, RSUs, Performance Awards, and Other Awards as defined in the Plan. The Common Stock under the Plan will come from authorized but unissued shares of the Company’s Common Stock. The Plan is intended to advance the interest of the Company and its stockholders by enabling the Company and its Subsidiaries to attract and retain persons of ability to perform services for the Company and its Subsidiaries by providing an incentive to such individuals through equity participation in the Company and by rewarding those individuals who contribute to the achievement of the Company’s operational and financial objectives. This Plan went effective on October 24, 2019 and allows our Board of Directors to issue stock grants, stock options and other equity incentive awards to our officers, directors, employees and consultants. On October 17, 2019 and October 28, 2019, Daljit Khangura and Devadatt Mishal, respectively, submitted their resignations from the Company’s Board of Directors. According to their resignation letters, there are no disagreements with either Mr. Khangura or Dr. Mishal. On October 25, 2019, Charles Bennington submitted his resignation as the Company’s Chief Executive Officer, effective with the appointment of his replacement. Mr. Bennington is continuing on as the Company’s President (our principal executive officer), our Secretary, and as a member of our Board of Directors. According to Mr. Bennington’s resignation letter, there are no disagreements with Mr. Bennington. On October 25, 2019, the Company entered into an Employment Agreement with Mr. Kevin Moore to serve as the Company’s Chief Executive Officer (the “Moore Agreement”). Under the terms of the Moore Agreement, Mr. Moore will serve as our Chief Executive Officer until October 24, 2022, unless either (i) the transaction that is the subject of that certain Asset Purchase Agreement with IDTEC, LLC, a Colorado limited liability company (the “IDTEC Transaction”), has not closed by January 31, 2020, in which case Mr. Moore’s employment will terminate immediately, or (ii) he is terminated pursuant to the other termination provisions set forth in the Moore Agreement. Under the terms of the Moore Agreement, Mr. Moore will perform services for the Company that are customary and usual for a chief executive officer of a company, in exchange for: (i) 800,000 shares of our common stock per month until the IDTEC Transaction closes, (ii) thereafter, an annual base salary of $213,000, (iii) sales bonuses based on the Company’s sales, and (iv) incentive stock options under our 2019 Equity Compensation Plan to acquire 35,200,000 shares of our common stock, at an exercise price of $0.00792, which is equal to 110% of the fair market value of our common stock on October 25, 2019, with the stock options to vest in 36 equal monthly installments of 977,777 shares during the three-year term of the Moore Agreement. The stock options have a ten year term. The Company will be issuing Mr. Moore a stock option agreement for the options he was issued under the Moore Agreement. On October 25, 2019, the Company entered into an Employment Agreement with Mr. David Gandini to serve as our Chief Revenue Officer (the “Gandini Agreement”). Under the terms of the Gandini Agreement, Mr. Gandini will serve as the Company’s Chief Revenue Officer until October 24, 2022, unless either (i) the transaction that is the subject of that certain Asset Purchase Agreement with IDTEC, LLC, a Colorado limited liability company (the “IDTEC Transaction”), has not closed by January 31, 2020, in which case Mr. Gandini’s employment will terminate immediately, or (ii) he is terminated pursuant to the other termination provisions set forth in the Gandini Agreement. Under the terms of the Gandini Agreement, Mr. Gandini will perform services for us that are customary and usual for a chief revenue officer of a company, in exchange for: (i) an annual base salary of $185,000, (ii) sales bonuses based on the Company’s sales, (iii) incentive stock options under our 2019 Equity Compensation Plan to acquire 24,000,000 shares of our common stock, at an exercise price of $0.00792, which is equal to 110% of the fair market value of our common stock on October 25, 2019, with the stock options to vest in 36 equal monthly installments of 666,666 shares during the three-year term of the Gandini Agreement, and (iv) an aggregate of 8,000,000 additional option shares (the “Pre-Vesting Option Shares”) to vest as follows: (i) 6,666,600 Pre-Vesting Option Shares representing the monthly vesting option shares for the ten months ended October 31, 2019 to vest on November 1, 2019; and (ii) the remaining 1,333,400 Pre-Vesting Option Shares representing the monthly vesting option shares for the two months ended December 31, 2019 shall vest on January 1, 2020. The stock options have a ten year term. The Company will be issuing Mr. Gandini a stock option agreement for the options he was issued under the Gandini Agreement. On October 25, 2019, the Company issued Charles Bennington, one of the Company’s officers and directors, an option to acquire 800,000 shares of our common stock under the Company’s 2019 Equity Incentive Plan. The stock option has an exercise price of $0.00792, which is equal to 110% of the fair market value of our common stock on October 25, 2019, with option vesting quarterly over a one year period commencing January 1, 2020. The stock option has a five year term. The issuance of the stock option was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, due to the fact Mr. Bennington is one of our officers and directors, is a sophisticated investor and familiar with our operations. On October 25, 2019, the Company issued Nick Noceti, the Company’s Chief Financial Officer, an option to acquire 800,000 shares of our common stock under our 2019 Equity Incentive Plan. The stock option has an exercise price of $0.00792, which is equal to 110% of the fair market value of our common stock on October 25, 2019, with option vesting quarterly over a two year period commencing January 1, 2020. The stock option has a five year term. The issuance of the stock option was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, due to the fact Mr. Noceti is the Company’s Chief Financial Officer, is a sophisticated investor and familiar with our operations. On October 25, 2019, the Company issued Gary Graham, one of the Company’s directors, an option to acquire 800,000 shares of our common stock under our 2019 Equity Incentive Plan. The stock option has an exercise price of $0.00792, which is equal to 110% of the fair market value of our common stock on October 25, 2019, with option vesting quarterly over a one year period commencing January 1, 2020. The stock option has a five year term. The issuance of the stock option was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, due to the fact Mr. Graham had been consulting with the Company for more than one year at the time of grant, is a sophisticated investor and familiar with our operations. On October 25, 2019, the Company issued stock options to acquire an aggregate of 6,400,000 shares of our common stock to four non-affiliated individuals and entities that have been working with the Company for over the last year. The stock options were issued under our 2019 Equity Incentive Plan at an exercise price of $0.00792, which is equal to 110% of the fair market value of our common stock on October 25, 2019, with the options vesting quarterly over a two year period commencing January 1, 2020. The stock options have either a two year or five year term. The issuance of the stock option was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, due to the fact the individuals and entities have been consulting with the Company for months, are sophisticated investors and familiar with our operations. On November 7, 2019, the Company’s Board of Directors appointed Gary Graham to its Board of Directors. Mr. Graham will serve in this capacity until the next meeting of stockholders or until his successor has been duly elected and qualified, or until the earlier of his death, resignation or removal. On November 22, 2019, the Company’s Board of Directors approved the appointment of Kevin Moore and David Gandini, Chief Executive Officer and Chief Revenue Officer, respectively, to the Company’s Board of Directors, effective December 2, 2019. They will serve in this capacity until the next meeting of stockholders or until their successor has been duly elected and qualified, or until the earlier of their death, resignation or removal. On December 12, 2019, the Company entered into a Series A-1 Preferred Stock Purchase Agreement (the “SPA”) with SOBR SAFE, LLC, a Delaware limited liability company and an entity controlled by Gary Graham, one of the Company’s Directors (“SOBR SAFE”), under which (i) the Company agreed to create a new series of convertible preferred stock entitled “Series A-1 Convertible Preferred Stock,” with Two Million (2,000,000) shares authorized and the following rights: (a) dividend rights of 8% per annum based on the original issuance price of $1 per share, (b) liquidation preference over the Company’s common stock, (c) conversion rights into shares of our common stock at $1 per share, (d) redemption rights such that the Company has the right, upon thirty (30) days written notice, at any time after one year from the date of issuance, to redeem the all or part of the Series A-1 Preferred Stock for 150% of the original issuance price, (e) no call rights by the Company, and (f) each share of Series A Convertible Preferred stock will vote on an “as converted” basis; and (ii) SOBR SAFE agreed to acquire One Million (1,000,000) shares of the Company’s Series A-1 Convertible Preferred Stock (the “Preferred Shares”), once created, in exchange for One Million Dollars ($1,000,000) (the “Purchase Price”). The Company received the Purchase Price on December 12, 2019 and will issue the Preferred Shares as soon as the Company receives confirmation from the State of Delaware that the Series A-1 Preferred Stock has been created. In connection with the closing of the SPA, holders of our common stock representing approximately 52% of the Company’s outstanding common stock and voting rights signed irrevocable proxies to Gary Graham and/or Paul Spieker for the purpose of allowing Mr. Graham and/or Mr. Spieker to vote those shares on any matters necessary to close the transaction that is the subject of the certain Asset Purchase Agreement May 6, 2019, as amended. The issuance of the Preferred Shares was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, due to the fact the principal of the manager of SOBR SAFE is one of our directors, and SOBR SAFE is an accredited investor and familiar with our operations. |
ORGANIZATION, OPERATIONS AND _2
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K filed with the SEC on April 17, 2019. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly the financial position for the three month period ended March 31, 2019 and for the year ended December 31, 2018, and results of operations and cash flows for the three month period ended March 31, 2019 and for the year ended December 31, 2018. |
Principles of consolidation | The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary, TransBiotec-CA. We have eliminated all intercompany transactions and balances between entities consolidated in these unaudited condensed financial statements. |
Use of Estimates | |
Cash | The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. The Company does not have any cash equivalents as of March 31, 2019 and December 31, 2018. |
Income tax | |
Net loss per share | The basic and fully diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. |
Financial Instruments | Pursuant to ASC Topic 820, Fair Value Measurements and Disclosures Financial Instruments Level Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets: quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist primarily of cash, accounts payable, accrued expenses, accrued interest payable, notes payable, related party payables, convertible debentures, and other payables. Pursuant to ASC 820 and 825, the fair value of our derivative liabilities is determined based on “Level 3” inputs. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The following table presents assets and liabilities that are measured and recognized at fair value as of March 31, 2019 and December 31, 2018: March 31, 2019 Level 1 Level 2 Level 3 Derivative liabilites $ - $ - $ 28,800 $ - $ - $ 28,800 December 31, 2018 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ - $ - $ - $ - |
Beneficial Conversion Features | From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. |
Derivative Instruments | The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in fair value are recorded in the consolidated statement of operations under other income (expense). The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option at its fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into warrant agreements, for which such instruments contained a variable conversion feature with no floor, the Company has adopted a sequencing policy in accordance with ASC 815-40-35-12 whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. For stock-based derivative financial instruments, the Company uses a Monte Carlo Simulation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instruments are initially recorded at their fair values and are then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. |
Stock based compensation | Stock-based compensation cost to employees is measured by the Company at the grant date based on the fair value of the award and over the requisite service period under ASC718. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit. Grants of stock to non-employees and other parties are accounted for in accordance with the ASC 505-50 “Equity-Based Payments to Non-Employees”. |
Minority Interest (Noncontrolling Interest) | A subsidiary of the Company has minority members representing ownership interests of 1.38% at March 31, 2019 and December 31, 2018. The Company accounts for these minority, or noncontrolling interests, pursuant to ASC 810-10-65 whereby gains and losses in a subsidiary with a noncontrolling interest are allocated to the noncontrolling interest based on the ownership percentage of the noncontrolling interest, even if that allocation results in a deficit noncontrolling interest balance. |
Research and Development | The Company accounts for its research and development costs pursuant to ASC 730, whereby it requires the Company to disclose the amounts of costs for company and customer-sponsored research and development activities, if material. Research and development costs are expensed as incurred. The Company incurred research and development costs as it acquired new knowledge to bring about significant improvements in the functionality and design of its SOBR product. Research and development costs were none during the three month period ended March 31, 2019 and $8,855 during the three month period ended March 31, 2018. |
Related Parties | Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. |
New Pronouncements | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, clarifies Topic 718, Compensation – Stock Compensation In July 2017, the FASB issued ASU-2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Noncontrolling Interests of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In March 2018, the FASB issued ASU 2018-05, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The amendments in this update provide guidance on when to record and disclose provisional amounts for certain income tax effects of the Tax Cuts and Jobs Act ("Tax Reform Act"). The amendments also require any provisional amounts or subsequent adjustments to be included in net income from continuing operations. Additionally, this ASU discusses required disclosures that an entity must make with regard to the Tax Reform Act. This ASU is effective immediately as new information is available to adjust provisional amounts that were previously recorded. The Company has decided to adopt this new standard; however, the Company currently has no revenue and only net operating loss carryforwards that result in a tax benefit during the three month period ended March 31, 2019. The Company also has no deferred tax assets (offset in full by a valuation allowance) or tax liabilities on its balance sheet as of March 31, 2019 and December 31, 2018. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting |
ORGANIZATION, OPERATIONS AND _3
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | |
Schedule of fair value of assets and liabilities | March 31, 2019 Level 1 Level 2 Level 3 Derivative liabilites $ - $ - $ 28,800 $ - $ - $ 28,800 December 31, 2018 Level 1 Level 2 Level 3 Derivative liabilities $ - $ - $ - $ - $ - $ - |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
NOTES PAYABLE | |
Schedule of notes payables - related parties | March 31, 2019 December 31, 2018 Convertible Notes Payable $ 91,000 $ 91,000 Conventional Non-Convertible Notes Payable 343,700 343,700 Notes Payable with Detached Free-standing Warrants 315,894 271,144 Unamortized Discount (23,757 ) (8,074 ) Net Related Party Notes Payable $ 726,837 $ 697,770 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
DERIVATIVE LIABILITY | |
Schedule of Activity of derivative liability | Balance at December 31, 2018 $ - Fair value of derivatives issued 28,000 Fair market value adjustments 800 Balance at March 31, 2019 $ 28,800 |
STOCK WARRANTS AND STOCK OPTI_2
STOCK WARRANTS AND STOCK OPTIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
STOCK WARRANTS AND STOCK OPTIONS (Tables) | |
Schedule of fair value of non-employee stock/warrants | Mar. 31, 2019 Mar. 31, 2018 Exercise Price $ 0.00188664652 - $0.0114 $0.0042 - $0.0043 Dividend Yield 0 % 0 % Volatility 135% - 138 % 144 % Risk-free Interest Rate 2.31% – 2.53 % 2.65% – 2.67 % Expected Life of Options 5 Years 5 Years |
Schedule of outstanding warrants | Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2017 16,120,611 $ 0.0044 - 0.0190 4.06 Years $ 0.0066 $ - Warrants Granted 2,882,392 $ 0.0042- 0.0043 4.91 Years $ 0.0042 $ 288 Warrants Exercised - - Warrants Expired - - Balance at March 31, 2018 19,003,003 $ 0.0042-0.0190 3.98 Years $ 0.0063 $ - Warrants Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2018 24,003,003 $0.0042 - 0.0190 3.45 Years $ 0.0058 $ - Warrants Granted 10,582,162 $ 0.0018664652- 0.0062 4.93 Years $ 0.0028 $ 13,537 Warrants Exercised - - Warrants Expired - - Balance at March 31, 2019 34,585,165 $ 0.0018664652-0.0190 3.73 Years $ 0.0049 $ - Exercisable at December 31, 2018 24,003,003 $ 0.0042 - 0.0190 3.45 Years $ 0.0058 $ - Exercisable at March 31, 2019 34,585,165 $ 0.0018664652 - 0.0190 3.73 Years $ 0.0049 $ - |
Schedule of outstanding options | Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2017 2,225,000 $ 0.0045 - 0.25 3.00 Years $ 0.0204 $ - Options Granted - - Options Exercised - - Options Cancelled - - Options Expired - - Balance at March 31, 2018 2,225,000 $ 0.0045 – 0.25 2.76 Years $ 0.0204 $ - Options Outstanding Number of Shares Exercise Price Per Share Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Balance at December 31, 2018 1,775,000 $ 0.0045 - 0.25 2.32 Years $ 0.0083 $ - Options Granted - - Options Exercised - - Options Cancelled - - Options Expired - - Balance at March 31, 2019 1,775,000 $ 0.0045 – 0.25 2.07 Years $ 0.0083 $ - Exercisable at December 31, 2018 1,775,000 $ 0.0045 - 0.25 2.32 Years $ 0.0083 $ - Exercisable at March 31, 2019 1,775,000 $ 0.0045 - 0.25 2.07 Years $ 0.0083 $ - |
ORGANIZATION OPERATIONS AND SUM
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Level 1 [Member] | ||
Derivative liabilites | ||
Derivative Assets (Liabilities), at Fair Value, Net | ||
Level 2 [Member] | ||
Derivative liabilites | ||
Derivative Assets (Liabilities), at Fair Value, Net | ||
Level 3 [Member] | ||
Derivative liabilites | 28,800 | |
Derivative Assets (Liabilities), at Fair Value, Net | $ 28,800 |
ORGANIZATION OPERATIONS AND S_2
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
ORGANIZATION OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | |||
State of incorporation | Delaware | ||
Date of Incorporation | Aug. 1, 2007 | ||
Research and development costs | $ 8,855 | ||
Noncontrolling ownership interest | 1.38% | 1.38% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
May 06, 2019 | Oct. 29, 2018 | May 25, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated deficit | $ (18,400,425) | $ (18,262,136) | |||||
Cash | 1,148 | $ 231 | $ 89 | $ 142 | |||
Principal and interest | 1,313,544 | ||||||
Current notes payable and interest | 1,451,193 | ||||||
Net cash used for operating activities | $ (111,691) | $ (20,211) | |||||
Increase in unauthorized shares, description | The Company increased their number of unauthorized shares from 100,000,000 to 800,000,000 as they hope to raise additional capital through the sale of its equity securities, through an offering of debt securities | ||||||
First Capital Holdings [Member] | Letter of Intent [Member] | Convertible Notes [Member] | |||||||
Debt, maturity terrm | 2 years | ||||||
Business acquisition, debt instrument, conversion price | $ 2 | ||||||
Business acquisition, consideration transferred, shares issued, percentage | 60.00% | ||||||
Business acquisition, agreeement terms, reverse stock split, description | The Company completing a reverse stock split of its common stock such that approximately 8,000,000 shares will be outstanding immediately prior to closing the transaction with no convertible instruments other than as set forth herein. | ||||||
Business acquisition, debt, outstanding | $ 125,000 | ||||||
IDTEC, LLC [Member] | Asset purchase agreement [Member] | |||||||
Business acquisition, shares consideration | 12,000,000 | ||||||
Business acquisition, consideration, share price | $ 0.00001 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jul. 02, 2015 | Dec. 03, 2014 | Nov. 01, 2014 | Sep. 30, 2016 | May 31, 2011 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Mar. 08, 2017 | Jul. 01, 2015 |
Related party payables | $ 1,026,819 | ||||||||||
Rent expense, monthly | 49,200 | ||||||||||
Payables due to officers, shareholders and former management | $ 474,156 | 474,156 | |||||||||
Outstanding accounts payable conversion percentage into common stock | 50.00% | ||||||||||
Common stock conversion price | $ 0.09 | ||||||||||
Attorney fees and costs | $ 214,334 | ||||||||||
Legal fees in accounts payable, percentages | 50.00% | ||||||||||
Attorney fees and costs, percentages | 50.00% | ||||||||||
Convertible accounts payable, amount | $ 201,831 | 201,831 | |||||||||
Convertible accounts payable, shares | 2,242,565 | 2,242,565 | |||||||||
Converted amount | $ 8,204 | $ 0 | |||||||||
Amount converted common shares | 91,148 | 0 | |||||||||
Unissued common stock exceeded authorized shares | 100,000,000 | ||||||||||
Exercise price | $ 112,871 | ||||||||||
Debt amount | $ 31,662 | 31,662 | |||||||||
Debt amount after debt forgiveness | $ 31,662 | ||||||||||
Acquired shares | 32,248,932 | ||||||||||
Gain on related party debt conversion | 189,887 | $ 182,111 | |||||||||
Accrued interest | 7,119 | 5,539 | |||||||||
Note payable amount | 74,672 | 74,672 | |||||||||
Rent expense | 13,105 | $ 13,105 | |||||||||
Related party payables converted to capital | 8,113 | 8,204 | |||||||||
Stock subscriptions payable | $ 1,674 | 1,271 | |||||||||
Mr. Bennington [Member] | |||||||||||
Monthly Salary | $ 5,000 | ||||||||||
Lanphere Law Group [Member] | |||||||||||
Debt amount | $ 214,334 | ||||||||||
Debt amount after debt forgiveness | 106,335 | ||||||||||
Gain on related party debt conversion | $ 108,000 | ||||||||||
Outstanding accounts payable | $ 428,668 | ||||||||||
Due date | Dec. 2, 2015 | ||||||||||
Debt forgiven | $ 108,000 | ||||||||||
Acquired additional shares of common stock | 21,400,734 | ||||||||||
Related party payables converted to capital | $ 8,113 | $ 7,776 | |||||||||
Stock subscriptions payable | 1,674 | $ 1,271 | |||||||||
Lanphere Law Group [Member] | December 3 2014 [Member] | |||||||||||
Debt amount | $ 74,672 | ||||||||||
Accrued interest | $ 38,199 | ||||||||||
Lanphere Law Group [Member] | LeaseArrangement [Member] | |||||||||||
Rent expense, monthly | $ 4,100 | ||||||||||
Term of operating lease description | The term of this operating lease runs from July 1, 2015 to June 30, 2019. | ||||||||||
Mr. Braiker [Member] | |||||||||||
Accrued compensation description | In September 2016, before the expiration of Mr. Bennington’s contract, the Company appointed Ivan Braiker as its sole CEO, and Mr. Bennington subsequently took a role as a member of the Board of Directors at a monthly rate of $5,000. In connection with Mr. Braiker’shis appointment, Mr. Braiker entered into a letter agreement with usthe Company, under which he accrued a monthly retainer of $7,500, to be paid only if the Company successfully closed financing of at least $200,000 | ||||||||||
Accrued a monthly retainer amount | $ 7,500 | ||||||||||
Common stock option granted | 1,500,000 | ||||||||||
Exercise price per share | $ 0.0045 | ||||||||||
Fair value amount | $ 6,290 | ||||||||||
Mr. Braiker [Member] | Letter Agreement [Member] | |||||||||||
Monthly Salary | $ 15,000 | ||||||||||
Accrued compensation description | Effective with his resignation on December 31, 2017, the Company did not owe, accrue for or pay Mr. Braiker any further compensation as he was unable to secure financing of $200,000 for the Company as stipulated per the letter agreement | ||||||||||
Employment Agreement [Member] | Mr. Bennington [Member] | |||||||||||
Related party transaction, expiration date | Dec. 31, 2017 | ||||||||||
Annual accrual compensation description | Mr. Bennington agreed to drop his yearly compensation, and resulting yearly accrual, to $120,000 per year with no yearly increases as stipulated in years 2 through 5. | ||||||||||
Employment Agreement [Member] | Mr. Bennington [Member] | First Year [Member] | |||||||||||
Related party payables | $ 120,000 | ||||||||||
Employment Agreement [Member] | Mr. Bennington [Member] | Second Year [Member] | |||||||||||
Related party payables | 156,000 | ||||||||||
Employment Agreement [Member] | Mr. Bennington [Member] | Third Year [Member] | |||||||||||
Related party payables | 172,000 | ||||||||||
Employment Agreement [Member] | Mr. Bennington [Member] | Fourth Year [Member] | |||||||||||
Related party payables | 190,000 | ||||||||||
Employment Agreement [Member] | Mr. Bennington [Member] | Fifth Year [Member] | |||||||||||
Related party payables | $ 208,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Convertible Notes Payable | $ 201,831 | $ 201,831 |
Unamortized Discount | (28,564) | (5,920) |
Net Related Party Notes Payable | 726,837 | 697,770 |
Related Party Notes Payable [Member] | ||
Convertible Notes Payable | 91,000 | 91,000 |
Conventional Non-Convertible Notes Payable | 343,700 | 343,700 |
Notes Payable with Detached Free-standing Warrants | 315,894 | 271,144 |
Unamortized Discount | (23,757) | (8,074) |
Net Related Party Notes Payable | $ 726,837 | $ 697,770 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Convertible Notes Payable | $ 201,831 | $ 201,831 |
Net Non-Related Party Notes Payable | 170,010 | 163,654 |
Non-Related Party Notes Payable [Member] | ||
Convertible Notes Payable | 172,136 | 143,136 |
Conventional Non-Convertible Notes Payable | 21,438 | 21,438 |
Notes Payable with Detached Free-standing Warrants | 5,000 | 5,000 |
Unamortized Beneficial Conversion Feature | 28,564 | 5,920 |
Net Non-Related Party Notes Payable | $ 170,010 | $ 163,654 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Convertible Notes Payable | $ 201,831 | $ 201,831 | |
Unamortized Discount | $ 28,564 | 5,920 | |
Dividend yield | 0.00% | 0.00% | |
Expected life | 5 years | 5 years | |
Volatility | 144.00% | ||
Minimum [Member] | |||
Risk free interest rate | 2.31% | 2.65% | |
Volatility | 135.00% | ||
Maximum [Member] | |||
Risk free interest rate | 2.53% | 2.67% | |
Volatility | 138.00% | ||
Non-Convertible Notes Payable [Member] | |||
Convertible Notes Payable | $ 343,700 | 343,700 | |
Default interest rate | 10.00% | ||
Interest expense | $ 13,670 | $ 12,005 | |
Related Party Notes Payable [Member] | |||
Convertible Notes Payable | $ 91,000 | 91,000 | |
Default interest rate | 10.00% | ||
Interest expense | $ 20,805 | 19,188 | |
Unamortized Discount | $ 23,757 | 8,074 | |
Related Party Notes Payable [Member] | Minimum [Member] | |||
Note payable due date | Jan. 23, 2014 | ||
Interest rate | 7.00% | ||
Note payable conversion price per share | $ 0.0072 | ||
Related Party Notes Payable [Member] | Maximum [Member] | |||
Note payable due date | Apr. 8, 2015 | ||
Interest rate | 9.00% | ||
Note payable conversion price per share | $ 0.0800 | ||
Non-Related Party Notes Payable [Member] | |||
Beneficial conversion feature | $ 5,356 | $ 0 | |
Unamortized beneficial conversion feature | 28,564 | 5,920 | |
Debt in default | 137,136 | ||
Convertible Notes Payable | $ 172,136 | 143,136 | |
Default interest rate | 10.00% | ||
Non-Related Party Notes Payable [Member] | Minimum [Member] | |||
Note payable due date | Feb. 8, 2012 | ||
Interest rate | 5.00% | ||
Note payable conversion price per share | $ 0.0017 | ||
Non-Related Party Notes Payable [Member] | Maximum [Member] | |||
Note payable due date | May 23, 2019 | ||
Interest rate | 30.00% | ||
Note payable conversion price per share | $ 0.3235688 | ||
Non-Related Party Notes Payable [Member] | Non-Convertible Notes Payable [Member] | |||
Convertible Notes Payable | $ 21,438 | $ 21,438 | |
Default interest rate | 10.00% | ||
Number of detached free-standing warrants outstanding | 50,000 | 50,000 | |
Principal payable | $ 5,000 | $ 5,000 | |
Note payable due date | Sep. 11, 2014 | ||
Interest rate | 10.00% | ||
Exercise price | $ 0.019 | ||
Non-Related Party Notes Payable [Member] | Non-Convertible Notes Payable [Member] | Minimum [Member] | |||
Note payable due date | Jan. 31, 2013 | ||
Interest rate | 9.00% | ||
Non-Related Party Notes Payable [Member] | Non-Convertible Notes Payable [Member] | Maximum [Member] | |||
Note payable due date | Nov. 11, 2015 | ||
Interest rate | 18.00% | ||
Related Party Notes Payable One [Member] | Minimum [Member] | |||
Note payable due date | Aug. 5, 2015 | ||
Interest rate | 7.00% | ||
Exercise price | $ 0.0018664652 | ||
Risk free interest rate | 2.31% | ||
Volatility | 135.00% | ||
Related Party Notes Payable One [Member] | Maximum [Member] | |||
Note payable due date | Mar. 30, 2020 | ||
Interest rate | 10.00% | ||
Exercise price | $ 0.0160 | ||
Risk free interest rate | 2.53% | ||
Volatility | 138.00% | ||
Related Party Notes Payable One [Member] | Warrant [Member] | |||
Convertible Notes Payable | $ 315,894 | 271,144 | |
Default interest rate | 10.00% | ||
Fair value of warrants granted | $ 22,665 | $ 10,958 | |
Interest expense | 6,982 | $ 9,694 | |
Unamortized Discount | $ 23,757 | $ 8,074 | |
Number of detached free-standing warrants outstanding | 34,535,165 | 23,953,003 | |
Principal payable | $ 236,144 | ||
Dividend yield | 0.00% | ||
Expected life | 5 years |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
DERIVATIVE LIABILITY | |
Derivative liability, Balance at December 31, 2018 | |
Fair value of derivatives issued | 28,000 |
Fair market value adjustments | 800 |
Derivative liability, Balance at March 31, 2019 | $ 28,800 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Expected volatility rate | 144.00% | |
Expected life | 5 years | 5 years |
Fair market value adjustments | $ 800 | |
Convertible promissory note agreement [Member] | ||
Fair value of embeded derivative liability | 28,800 | |
Convertible promissory note agreement [Member] | March 1, 2019 [Member] | ||
Fair value of embeded derivative liability | 28,000 | |
Amount borrowed under debt instrument from unrelated party | $ 29,000 | |
Interest rate | 10.00% | |
Conversion price, description | convertible into the Company’s common shares at a variable conversion price based on a 50% discount of the market price at an undetermined future date | |
Expected volatility rate | 300.00% | |
Risk-free interest rate | 2.40% | |
Expected life | 1 year | |
Beneficial conversion feature recorded as discount | $ 28,000 | |
Beneficial conversion feature, interest amortization expense | 2,333 | |
Fair market value adjustments | $ 800 |
STOCK WARRANTS AND STOCK OPTI_3
STOCK WARRANTS AND STOCK OPTIONS (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Dividend yield | 0.00% | 0.00% |
Volatility | 144.00% | |
Expected life | 5 years | 5 years |
Minimum [Member] | ||
Volatility | 135.00% | |
Exercise Price | $ 0.00188664652 | $ 0.0042 |
Risk free interest rate | 2.31% | 2.65% |
Maximum [Member] | ||
Volatility | 138.00% | |
Exercise Price | $ 0.0114 | $ 0.0043 |
Risk free interest rate | 2.53% | 2.67% |
STOCK WARRANTS AND STOCK OPTI_4
STOCK WARRANTS AND STOCK OPTIONS (Details 1) - Warrant [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Outstanding at beginning of period | 24,003,003 | 16,120,611 |
Warrants Granted, shares | 10,582,162 | 2,882,392 |
Warrants Exercised | ||
Warrants Expired | ||
Outstanding at ending of periods | 34,585,165 | 19,003,003 |
Minimum [Member] | ||
Outstanding at beginning of period | $ 0.0042 | $ 0.0044 |
Warrants Granted | 0.0018664652 | 0.0042 |
Exercisable at end of period | 0.0018664652 | |
Exercisable at beginning of period | 0.0042 | |
Outstanding at end of period | 0.0018664652 | 0.0042 |
Maximum [Member] | ||
Outstanding at beginning of period | 0.0190 | 0.0190 |
Warrants Granted | 0.0062 | 0.0043 |
Exercisable at end of period | 0.0190 | |
Outstanding at end of period | 0.0190 | $ 0.0190 |
Exercisable at beginning of periods | $ 0.0190 | |
Weighted Average Remaining Contractual Life , Beginning balance | 3 years 5 months 12 days | 4 years 22 days |
Weighted Average Remaining Contractual Life, Warrants granted | 4 years 11 months 4 days | 4 years 10 months 28 days |
Weighted Average Remaining Contractual Life, Warrants exercised | ||
Weighted Average Remaining Contractual Life, Warrants expired | ||
Weighted Average Remaining Contractual Life, Ending balance | 3 years 8 months 23 days | 3 years 11 months 23 days |
Weighted Average Exercise Price Per Share, Beginning balance | $ 0.0058 | $ 0.0066 |
Weighted Average Exercise Price Per Share, Warrants granted | 0.0028 | 0.0042 |
Weighted Average Exercise Price Per Share, Warrants exercised | ||
Weighted Average Exercise Price Per Share, Warrants expired | ||
Weighted Average Exercise Price Per Share, Ending balance | $ 0.0049 | $ 0.0063 |
Aggregate Intrinsic Value, Beginning balance | ||
Aggregate Intrinsic Value, Warrants granted | $ 13,537 | 288 |
Aggregate Intrinsic Value, Warrants exercised | ||
Aggregate Intrinsic Value, Warrants expired | ||
Aggregate Intrinsic Value, Ending balance |
STOCK WARRANTS AND STOCK OPTI_5
STOCK WARRANTS AND STOCK OPTIONS (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock Options [Member] | ||
Option Granted | ||
Outstanding at beginning of period | 1,775,000 | 2,225,000 |
Options Exercised | ||
Options Cancelled | ||
Options Expired | ||
Outstanding at ending of period | 1,775,000 | 2,225,000 |
Exercisable beginning balance | 1,775,000 | |
Exercisable ending balance | 1,775,000 | |
Exercise Price Per Shares | ||
Exercise Price Per Shares option granted | ||
Exercise Price Per Shares options exercised | ||
Exercise Price Per Shares options cancelled | ||
Exercise Price Per Shares options expired | ||
Weighted Average Remaining Contractual Lifes | ||
Weighted Average Remaining Contractual Lifes beginning balance | 2 years 3 months 26 days | 3 years |
Weighted Average Remaining Contractual Lifes options granted | ||
Weighted Average Remaining Contractual Lifes options exercised | ||
Weighted Average Remaining Contractual Lifes options cancelled | ||
Weighted Average Remaining Contractual Lifes options expired | ||
Weighted Average Remaining Contractual Lifes ending balance | 2 years 26 days | 2 years 9 months 3 days |
Weighted Average Remaining Contractual Lifes exercisable beginning balance | 2 years 3 months 26 days | |
Weighted Average Remaining Contractual Lifes exercisable ending balance | 2 years 26 days | |
Weighted Average Exercise Price Per Shares | ||
Weighted Average Exercise Price Per Shares beginning balance | $ 0.0083 | $ 0.0204 |
Weighted Average Exercise Price Per Shares options granted | ||
Weighted Average Exercise Price Per Shares options exercised | ||
Weighted Average Exercise Price Per Shares options cancelled | ||
Weighted Average Exercise Price Per Shares options expired | ||
Weighted Average Exercise Price Per Shares ending balance | 0.0083 | 0.0204 |
Weighted Average Exercise Price Per Shares exercisable beginning balance | 0.0083 | |
Weighted Average Exercise Price Per Shares exercisable ending balance | 0.0083 | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value beginning balance | ||
Aggregate Intrinsic Value options granted | ||
Aggregate Intrinsic Value options exercised | ||
Aggregate Intrinsic Value options cancelled | ||
Aggregate Intrinsic Value options expired | ||
Aggregate Intrinsic Value ending balance | ||
Aggregate Intrinsic Value exercisable beginning balance | ||
Aggregate Intrinsic Value exercisable ending balance | ||
Minimum [Member] | ||
Exercise Price Per Shares beginning balance | 0.0045 | $ 0.0045 |
Exercise Price Per Shares ending balance | 0.0045 | 0.0045 |
Exercise Price Per Shares exercisable ending balance | 0.0045 | |
Exercise Price Per Shares exercisable beginning balance | 0.0045 | |
Maximum [Member] | ||
Exercise Price Per Shares beginning balance | 0.25 | 0.25 |
Exercise Price Per Shares ending balance | 0.25 | 0.25 |
Exercise Price Per Shares exercisable ending balance | 0.25 | |
Exercise Price Per Shares exercisable beginning balance | $ 0.25 |
STOCK WARRANTS AND STOCK OPTI_6
STOCK WARRANTS AND STOCK OPTIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related party payables converted to capital | $ 8,113 | $ 8,204 | ||
Stock subscriptions payable | $ 1,674 | $ 1,271 | ||
Stock subscription payable, shares conversion | 2,242,565 | 2,242,565 | ||
Michael A. Lanphere [Member] | ||||
Number of warrants outstanding | 21,400,745 | 10,818,583 | ||
Non employee stock warrantss [Member] | ||||
Warrants granted | 10,582,162 | 2,882,392 | ||
Number of warrants outstanding | 34,585,165 | 24,003,003 | ||
Non employee stock options [Member] | Michael A. Lanphere [Member] | ||||
Related party payables converted to capital | $ 8,113 | $ 7,776 | ||
Stock subscriptions payable | $ 1,674 | $ 1,271 | ||
Stock subscription payable, shares conversion | 243,273 | |||
Stock Options [Member] | ||||
Description for outstanding stock options | The first outstanding stock option is dated October 1, 2014 and has an option price on that day of $0.0062, with an option exercise price of $0.25. The second outstanding option is dated October 27, 2014 at an option price on that day of $0.0066 with an option exercise price of $0.007, and the third outstanding option is dated August 15, 2016 at an option price on that day of $0.0045 with an option exercise price of $0.0045. | |||
Outstanding at beginning of period | 1,775,000 | 1,775,000 | 2,225,000 | |
Expected lives | ||||
Warrants granted |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Feb. 25, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
COMMON STOCK (Details Narrative) | |||
Stock issued to related party, shares | 91,148 | ||
Stock issued to non- related party, shares | 35,454,547 | 8,204 | |
Converted related party payable | $ (3,003) | ||
Debt conversion price per share | $ 0.09 | ||
Proceeds from issuances of common stock - non-related parties | 39,000 | ||
Related party gain | $ 7,776 |
PREFERRED STOCK (Details Narrat
PREFERRED STOCK (Details Narrative) - $ / shares | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Preferred stock, shares issued | |||
Preferred stock, shares authorized | 22,000,000 | 22,000,000 | |
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | |
Series A Preferred Stock [Member] | |||
Preferred stock, shares issued | 1,388,575 | 1,388,575 | |
Preferred stock conversion description | Series A Convertible Preferred stock plus all declared but unpaid dividends on the Series A Convertible Preferred stock. A reorganization, or any other consolidation or merger of the Company with or into any other corporation, or any other sale of all or substantially all of the assets of the Company, shall not be deemed a liquidation, dissolution, or winding up of the Company. Shares of the Series A Convertible Preferred stock are convertible at a 35% discount rate to the average closing price per share of the Company’s common stock (either as listed on a national exchange or as quoted over-the-market) for the last fifteen (15) trading days immediately prior to conversion | ||
Preferred stock, shares authorized | 3,000,000 | 3,000,000 | |
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 06, 2006 | |
Rent expense | $ 13,105 | $ 13,105 | ||
Operating lease expiry year | June 2019 | |||
Accounts payable | $ 173,973 | $ 191,714 | ||
Orange County Valet and Security Patrol, Inc [Member] | ||||
Penalty for breach of contract | $ 11,164 | |||
Accounts payable | $ 28,786 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Dec. 12, 2019 | Aug. 08, 2019 | May 03, 2019 | Oct. 25, 2019 | Aug. 23, 2019 | Jul. 18, 2019 | Apr. 17, 2019 | Oct. 29, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Common stock, shares authorized | 800,000,000 | 800,000,000 | ||||||||
Common stock, shares issued | 152,205,625 | 109,409,930 | ||||||||
On October 25, 2019 [Member] | ||||||||||
Exercise price | $ 0.00792 | |||||||||
Shares acquire | 6,400,000 | |||||||||
Employment Agreement with Mr. Kevin Moore [Member] | ||||||||||
Services description | (i) 800,000 shares of our common stock per month until the IDTEC Transaction closes, (ii) thereafter, an annual base salary of $213,000, (iii) sales bonuses based on the Company’s sales, and (iv) incentive stock options under our 2019 Equity Compensation Plan to acquire 35,200,000 shares of our common stock, at an exercise price of $0.00792, which is equal to 110% of the fair market value of our common stock on October 25, 2019, with the stock options to vest in 36 equal monthly installments of 977,777 shares during the three-year term of the Moore Agreement | |||||||||
Equity Incentive Plan [Member] | ||||||||||
Common stock, shares authorized | 128,000,000 | |||||||||
Debt Conversion and Common Stock Purchase Plan (the ?Mishal? SPA) [Member] | ||||||||||
Common stock, shares issued | 13,134,420 | |||||||||
Purchase price of shares | $ 58,478 | |||||||||
Conversion price per share | $ 0.0043 | |||||||||
Ownership of common shares | 9.50% | |||||||||
Share Exchange Agreement (the ?Justus? SEA) [Member] | ||||||||||
Common stock, shares issued | 5,206,430 | |||||||||
Common stock price per share | $ 0.10 | |||||||||
Common Stock Purchase Agreement (the ?Bennington? SPA) [Member] | ||||||||||
Common stock, shares issued | 14,000,000 | |||||||||
Common stock price per share | $ 0.0425 | |||||||||
Accrued compensation | $ 595,000 | |||||||||
Convertible Preferred Stock Investment Agreement [Member] | ||||||||||
Raises fund descripton | The Company desires to raise between $1,000,000 and $2,000,000 from the sale of its 8% Series A-1 Convertible Preferred Stock and FCV intends to raise between $1,000,000 and $2,000,000 (net after offering expenses) in a special purchase vehicle (“SPV”) created by FCV to purchase the 8% Series A-1 Convertible Preferred Stock | |||||||||
Subsequent Event [Member] | First Capital Holdings, LLC [Member] | ||||||||||
Conversion price per share | $ 2 | |||||||||
Subsequent events description | Our common stock equal to 60% of our then outstanding common stock on a fully-diluted basis. | |||||||||
Reverse stock split common stock outstanding | 8,000,000 | |||||||||
Outstanding debt | $ 125,000 | |||||||||
Subsequent Event [Member] | Related Party Notes Payable [Member] | ||||||||||
Due from related party | $ 41,375 | $ 30,000 | ||||||||
Interest rate | 7.00% | 7.00% | ||||||||
Common Stock issued due to options exercise, Shares | 9,103,261 | 6,000,000 | ||||||||
Maturity date | Jul. 17, 2020 | May 30, 2019 | ||||||||
Subsequent Event [Member] | Company?s directors [Member] | ||||||||||
Exercise price | $ 0.00792 | |||||||||
Shares acquire | 800,000 | |||||||||
Subsequent Event [Member] | Chief Financial Officer [Member] | ||||||||||
Exercise price | $ 0.00792 | |||||||||
Shares acquire | 800,000 | |||||||||
Subsequent Event [Member] | Company?s officers and directors [Member] | ||||||||||
Exercise price | $ 0.00792 | |||||||||
Shares acquire | 800,000 | |||||||||
Subsequent Event [Member] | Series A-1 Preferred Stock Purchase Agreement (the ?SPA?) with SOBR SAFE, LLC [Member] | ||||||||||
Description | (i) the Company agreed to create a new series of convertible preferred stock entitled “Series A-1 Convertible Preferred Stock,” with Two Million (2,000,000) shares authorized and the following rights: (a) dividend rights of 8% per annum based on the original issuance price of $1 per share, (b) liquidation preference over the Company’s common stock, (c) conversion rights into shares of our common stock at $1 per share, (d) redemption rights such that the Company has the right, upon thirty (30) days written notice, at any time after one year from the date of issuance, to redeem the all or part of the Series A-1 Preferred Stock for 150% of the original issuance price, (e) no call rights by the Company, and (f) each share of Series A Convertible Preferred stock will vote on an “as converted” basis; and (ii) SOBR SAFE agreed to acquire One Million (1,000,000) shares of the Company’s Series A-1 Convertible Preferred Stock (the “Preferred Shares”), once created, in exchange for One Million Dollars ($1,000,000) (the “Purchase Price”) | |||||||||
Common stock representing | 52.00% | |||||||||
Subsequent Event [Member] | Employment Agreement with Mr. David Gandini [Member] | ||||||||||
Services description | (i) an annual base salary of $185,000, (ii) sales bonuses based on the Company’s sales, (iii) incentive stock options under our 2019 Equity Compensation Plan to acquire 24,000,000 shares of our common stock, at an exercise price of $0.00792, which is equal to 110% of the fair market value of our common stock on October 25, 2019, with the stock options to vest in 36 equal monthly installments of 666,666 shares during the three-year term of the Gandini Agreement, and (iv) an aggregate of 8,000,000 additional option shares (the “Pre-Vesting Option Shares”) to vest as follows: (i) 6,666,600 Pre-Vesting Option Shares representing the monthly vesting option shares for the ten months ended October 31, 2019 to vest on November 1, 2019; and (ii) the remaining 1,333,400 Pre-Vesting Option Shares representing the monthly vesting option shares for the two months ended December 31, 2019 shall vest on January 1, 2020. | |||||||||
Subsequent Event [Member] | Debt Conversion and Common Stock Purchase Plan (the ?Mishal? SPA) [Member] | ||||||||||
Common stock, shares issued | 21,400,745 | |||||||||
Purchase price of shares | $ 96,303 | |||||||||
Conversion price per share | $ 0.0045 | |||||||||
Subsequent Event [Member] | Share Exchange Agreement (the ?Justus? SEA) [Member] | ||||||||||
Common stock, shares issued | 8,679,320 | |||||||||
Common stock price per share | $ 0.10 | |||||||||
Subsequent Event [Member] | Non Related Party [Member] | ||||||||||
Due from related party | $ 31,000 | |||||||||
Interest rate | 10.00% |