Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 14, 2019 | |
Details | ||
Registrant CIK | 0001456212 | |
Fiscal Year End | --12-31 | |
Registrant Name | BLACKRIDGE TECHNOLOGY INTERNATIONAL, INC. | |
SEC Form | 10-Q | |
Period End date | Sep. 30, 2019 | |
Tax Identification Number (TIN) | 20-1282850 | |
Number of common stock shares outstanding | 100,209,188 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Interactive Data Current | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | true | |
Ex Transition Period | false | |
Entity Incorporation, State or Country Code | NV | |
Entity File Number | 000-53661 | |
Entity Address, Address Line One | 5390 Kietzke Lane | |
Entity Address, Address Line Two | Suite 104 | |
Entity Address, City or Town | Reno | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89511 | |
City Area Code | (855) | |
Local Phone Number | 807-8776 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 276,167 | $ 4,693,950 |
Accounts receivable | 269,511 | 102,292 |
Inventory | 95,013 | 56,003 |
Prepaid expenses | 220,345 | 122,713 |
Total Current Assets | 861,036 | 4,974,958 |
Property and equipment, net | 134,694 | 78,821 |
Intangible assets, net | 10,369,326 | 8,920,360 |
Total Assets | 11,365,056 | 13,974,139 |
Current Liabilities | ||
Accounts payable and accrued expenses | 3,940,261 | 2,089,322 |
Accounts payable and accrued expenses - related party | 367,011 | 9,690 |
Accrued interest | 739,298 | 714,187 |
Accrued interest - related party | 208,708 | 177,419 |
Wages payable | 1,946,241 | 1,928,639 |
Deferred revenue | 31,434 | 3,535 |
Short-term notes payable | 45,232 | 45,232 |
Current portion of long term debt | 66,655 | 366,657 |
Convertible notes, short term, net of discounts | 17,226,807 | 3,248,746 |
Convertible notes, long term, net of discounts, current portion | 107,327 | 39,726 |
Convertible notes, short term - related party | 758,172 | 183,172 |
Total current liabilities | 25,437,146 | 8,806,325 |
Total Liabilities | 25,437,146 | 8,806,325 |
Stockholders' deficit: | ||
Common Stock | 99,868 | 96,873 |
Additional paid-in capital | 76,242,582 | 72,114,707 |
Accumulated deficit | (90,418,131) | (67,047,343) |
Total Stockholders' (Deficit) Equity | (14,072,090) | 5,167,814 |
Total Liabilities and Stockholders' (Deficit) Equity | 11,365,056 | 13,974,139 |
Preferred Class A | ||
Stockholders' deficit: | ||
Preferred Stock | 3,577 | 3,577 |
Total Stockholders' (Deficit) Equity | 3,577 | 3,577 |
Preferred Class B | ||
Stockholders' deficit: | ||
Preferred Stock | 14 | 0 |
Total Stockholders' (Deficit) Equity | $ 14 | $ 0 |
Consolidated Balance Sheets - P
Consolidated Balance Sheets - Parenthetical - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 99,868,418 | 96,872,725 |
Common Stock, Shares, Outstanding | 99,868,418 | 96,872,725 |
Preferred Class A | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 48,000,000 | 48,000,000 |
Preferred Stock, Shares Issued | 3,577,370 | 3,577,370 |
Preferred Stock, Shares Outstanding | 3,577,370 | 3,577,370 |
Preferred Class B | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 |
Preferred Stock, Shares Issued | 14,000 | 0 |
Preferred Stock, Shares Outstanding | 14,000 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Details | ||||
Revenue | $ 108,811 | $ 74,102 | $ 297,611 | $ 144,116 |
Cost of Goods Sold | 0 | 8,543 | 819 | 8,593 |
Gross Profit | 108,811 | 65,559 | 296,792 | 135,523 |
Operating expenses: | ||||
Engineering | 1,853 | 48,775 | 81,208 | 84,119 |
Sales and Marketing | 15,303 | 5,620 | 143,192 | 5,774 |
General and Administrative | 3,572,044 | 3,824,520 | 10,790,247 | 10,254,826 |
Total Operating Expenses | 3,589,200 | 3,878,915 | 11,014,647 | 10,344,719 |
Gain (Loss) from Operations | (3,480,389) | (3,813,356) | (10,717,855) | (10,209,196) |
Other Income (Expense) | ||||
Loss on extinguishment | 309,013 | (511,086) | 309,013 | (606,890) |
Interest Income | 0 | 0 | 0 | 0 |
Interest (Expense) | (4,574,131) | (610,167) | (12,930,657) | (909,611) |
Interest (Expense) - related party | (15,370) | (33,758) | (31,289) | (115,722) |
Total Other Income (Expense) | (4,280,488) | (1,155,011) | (12,652,933) | (11,841,419) |
Net Loss Before Income Taxes | (7,760,877) | (4,968,367) | (23,370,788) | (632,223) |
Income tax | 0 | 0 | 0 | 0 |
Net Loss | $ (7,760,877) | $ (4,968,367) | $ (23,370,788) | $ (11,841,419) |
Basic and Diluted loss per share | $ (0.08) | $ (0.06) | $ (0.24) | $ (0.15) |
Basic and diluted weighted-average common shares outstanding | 98,259,658 | 83,479,985 | 97,388,301 | 80,888,116 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings | Total | Subscriptions Payable | Preferred Class A | Preferred Class B |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2017 | $ 77,063 | $ 51,384,027 | $ (49,896,376) | $ 1,568,354 | $ 3,640 | $ 0 | |
Shares, Outstanding, Beginning Balance at Dec. 31, 2017 | 77,063,171 | 3,639,783 | |||||
Issuance of Options in conjunction with contracts | $ 0 | 85,921 | 0 | 85,921 | $ 0 | 0 | |
Common stock issued in conjunction with debt agreements | 0 | ||||||
Issuance of restricted stock for wages, value | $ 78 | 24,922 | 0 | 25,000 | 0 | 0 | |
Issuance of restricted stock for wages, shares | 78,125 | ||||||
Preferred stock converted to common stock, value | $ 536 | (491) | 0 | 0 | $ (45) | 0 | |
Preferred stock converted to common stock, shares | 535,565 | (45,173) | |||||
Issuance of stock in conjunction with contracts, value | $ 5,719 | 407,951 | 0 | 413,670 | $ 0 | 0 | |
Issuance of stock in conjunction with contracts, shares | 5,719,304 | ||||||
Issuance of stock for debt conversion, value | $ 4,776 | 1,189,134 | 0 | 1,193,910 | 0 | 0 | |
Issuance of stock for debt conversion, shares | 4,775,638 | ||||||
Issuance of stock for wages payable | $ 2,936 | 1,024,600 | 0 | 1,027,536 | 0 | 0 | |
Issuance of stock for wages payable, Shares | 2,935,818 | ||||||
Beneficial conversion feature on convertible debt | $ 0 | 5,726,678 | 0 | 5,726,678 | 0 | 0 | |
Issuance of warrants in conjunction with debt | 0 | 6,250,898 | 0 | 6,250,898 | 0 | 0 | |
Proceeds from BlackRidge Research equity sales | 0 | ||||||
Share-based Payment Arrangement, Noncash Expense | 0 | 708,684 | 0 | 708,684 | 0 | 0 | |
Net Income (Loss) | 0 | 0 | (11,841,419) | (11,841,419) | 0 | 0 | |
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2018 | $ 91,108 | 66,802,323 | (61,737,795) | 5,159,231 | $ 0 | $ 3,595 | $ 0 |
Shares, Outstanding, Ending Balance at Sep. 30, 2018 | 91,107,621 | 3,594,610 | 0 | ||||
Stockholders' Equity Attributable to Parent, Beginning Balance at Jun. 30, 2018 | $ 83,396 | 58,027,102 | (56,769,428) | 1,344,665 | 0 | $ 3,595 | $ 0 |
Shares, Outstanding, Beginning Balance at Jun. 30, 2018 | 83,396,165 | 3,594,610 | |||||
Issuance of Options in conjunction with contracts | $ 0 | 85,921 | 0 | 85,921 | 0 | $ 0 | 0 |
Issuance of stock for debt conversion, value | $ 4,776 | 1,189,134 | 0 | 1,193,910 | 0 | 0 | 0 |
Issuance of stock for debt conversion, shares | 4,775,638 | ||||||
Issuance of stock for wages payable | $ 2,936 | 1,024,600 | 0 | 1,027,536 | 0 | 0 | 0 |
Issuance of stock for wages payable, Shares | 2,935,818 | ||||||
Beneficial conversion feature on convertible debt | $ 0 | 2,859,566 | 0 | 2,859,566 | 0 | 0 | |
Issuance of warrants in conjunction with debt | 0 | 3,115,441 | 0 | 3,115,441 | 0 | 0 | |
Share-based Payment Arrangement, Noncash Expense | 0 | 500,560 | 0 | 500,560 | 0 | 0 | |
Net Income (Loss) | 0 | 0 | (4,968,367) | (4,968,367) | 0 | 0 | 0 |
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2018 | $ 91,108 | 66,802,323 | (61,737,795) | 5,159,231 | 0 | $ 3,595 | $ 0 |
Shares, Outstanding, Ending Balance at Sep. 30, 2018 | 91,107,621 | 3,594,610 | 0 | ||||
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2018 | $ 96,873 | 72,114,707 | (67,047,343) | 5,167,814 | $ 3,577 | $ 0 | |
Shares, Outstanding, Beginning Balance at Dec. 31, 2018 | 96,872,725 | 3,577,370 | |||||
Proceeds from subscriptions payable | 350,000 | ||||||
Issuance of common stock for advances, value | $ 425 | (425) | 0 | 0 | $ 0 | 0 | |
Issuance of common stock for advances, shares | 425,000 | ||||||
Issuance of Options in conjunction with contracts | $ 0 | 29,270 | 0 | 29,270 | 0 | 0 | |
Issuance of options for wages payable | 0 | 469,906 | 0 | 469,906 | 0 | 0 | |
Issuance of options for payables | 0 | 7,551 | 0 | 7,551 | 0 | 0 | |
Common stock issued in conjunction with debt agreements | $ 1,538 | 244,328 | 0 | 245,866 | 0 | 0 | |
Issuance of stock in conjunction with debt agreements, Shares | 1,538,258 | ||||||
Issuance of restricted stock for wages, value | $ 792 | 178,642 | 0 | 179,434 | 0 | 0 | |
Issuance of restricted stock for wages, shares | 792,435 | ||||||
Issuance of preferred stock, value | $ 0 | 349,986 | 0 | 350,000 | 0 | $ 14 | |
Issuance of preferred stock, shares | 14,000 | ||||||
Issuance of stock in conjunction with contracts, value | $ 240 | 57,360 | 0 | 57,600 | 0 | $ 0 | |
Issuance of stock in conjunction with contracts, shares | 240,000 | ||||||
Issuance of warrants in conjunction with debt | $ 0 | 100,049 | 0 | 100,049 | 0 | 0 | |
Proceeds from BlackRidge Research equity sales | 0 | 1,983,755 | 0 | 1,983,755 | 0 | 0 | |
Share-based Payment Arrangement, Noncash Expense | 0 | 707,453 | 0 | 707,453 | 0 | 0 | |
Net Income (Loss) | 0 | 0 | (23,370,788) | (23,370,788) | 0 | 0 | |
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2019 | $ 99,868 | 76,242,582 | (90,418,131) | (14,072,090) | 0 | $ 3,577 | $ 14 |
Shares, Outstanding, Ending Balance at Sep. 30, 2019 | 99,868,418 | 3,577,370 | 14,000 | ||||
Stockholders' Equity Attributable to Parent, Beginning Balance at Jun. 30, 2019 | $ 97,298 | 74,049,275 | (82,657,254) | (8,173,309) | 333,795 | $ 3,577 | $ 0 |
Shares, Outstanding, Beginning Balance at Jun. 30, 2019 | 97,297,725 | 3,577,370 | |||||
Issuance of Options in conjunction with contracts | $ 0 | 16,088 | 0 | 16,088 | 0 | $ 0 | 0 |
Issuance of options for wages payable | 0 | 469,906 | 0 | 469,906 | 0 | 0 | 0 |
Issuance of options for payables | 0 | 7,551 | 0 | 7,551 | 0 | 0 | 0 |
Common stock issued in conjunction with debt agreements | $ 1,538 | 244,328 | 0 | 245,866 | 0 | 0 | 0 |
Issuance of stock in conjunction with debt agreements, Shares | 1,538,258 | ||||||
Issuance of restricted stock for wages, value | $ 792 | 178,642 | 0 | 179,434 | 0 | 0 | 0 |
Issuance of restricted stock for wages, shares | 792,435 | ||||||
Issuance of preferred stock, value | $ 0 | 349,986 | 0 | 0 | (350,000) | 0 | $ 14 |
Issuance of preferred stock, shares | 14,000 | ||||||
Issuance of stock in conjunction with contracts, value | $ 240 | 57,360 | 0 | 57,600 | 0 | 0 | $ 0 |
Issuance of stock in conjunction with contracts, shares | 240,000 | ||||||
Issuance of warrants in conjunction with debt | $ 0 | 100,049 | 0 | 100,049 | 0 | 0 | 0 |
Proceeds from BlackRidge Research equity sales | 0 | 500,000 | 0 | 516,205 | 16,205 | 0 | 0 |
Share-based Payment Arrangement, Noncash Expense | 0 | 269,397 | 0 | 269,397 | 0 | 0 | 0 |
Net Income (Loss) | 0 | 0 | (7,760,877) | (7,760,877) | 0 | 0 | |
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2019 | $ 99,868 | $ 76,242,582 | $ (90,418,131) | $ (14,072,090) | $ 0 | $ 3,577 | $ 14 |
Shares, Outstanding, Ending Balance at Sep. 30, 2019 | 99,868,418 | 3,577,370 | 14,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Net Cash Provided by (Used in) Operating Activities | ||
Net Income (Loss) | $ (23,370,788) | $ (11,841,419) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | ||
Depreciation and amortization | 365,718 | 348,712 |
Amortization of debt discounts | 11,559,076 | 520,022 |
Common stock and warrants issued in conjunction with contracts | 60,000 | 413,670 |
Share-based Payment Arrangement, Noncash Expense | 707,453 | 708,684 |
Warrants issued in conjunction with contracts | 29,270 | 85,921 |
Loss on extinguishment | (309,013) | 606,890 |
Changes in operating assets and liabilities: | ||
Increase (Decrease) in Receivables | (167,219) | 48,859 |
Increase (Decrease) in Inventories | (39,010) | (15,595) |
Increase (Decrease) in Prepaid Expense | (97,632) | 237,493 |
Increase (Decrease) in Accounts Payable | 1,868,439 | (42,330) |
Increase (Decrease) in Accounts Payable, Related Parties | 357,321 | (11,411) |
Increase (Decrease) in Interest Payable, Net | 1,357,612 | 380,104 |
Increase Decrease in accrued interest - related party | 31,289 | 115,722 |
Increase (Decrease) in Deferred Revenue | 27,899 | (3,822) |
Increase (Decrease) in Accrued Salaries | 963,606 | 736,108 |
Net Cash Used in Operating Activities | (6,655,979) | (7,712,392) |
Net Cash Provided by (Used in) Investing Activities | ||
Capitalized patent costs | (18,898) | 0 |
Purchases of property and equipment | (79,386) | 0 |
Purchases of intangible assets | (1,772,273) | (1,683,431) |
Net Cash Provided by (Used in) Investing Activities | (1,870,557) | (1,683,431) |
Net Cash Provided by (Used in) Financing Activities | ||
Proceeds from sale of preferred stock | 350,000 | 0 |
Proceeds from BlackRidge Research equity sales | 1,983,755 | 0 |
Proceeds from short term notes - related party | 600,000 | 732,000 |
Proceeds from issuance of short term convertible notes | 1,500,000 | 10,832,000 |
Proceeds from subscriptions payable | 350,000 | |
Proceeds from advances - related party | 0 | 75,000 |
Repayments of short term debt | (25,000) | (5,000) |
Repayments on long term debt | (300,002) | (300,001) |
Net Cash Provided by (Used in) Financing Activities | 4,108,753 | 11,333,999 |
Cash and Cash Equivalents, Period Increase (Decrease) | (4,417,783) | 1,938,176 |
Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 4,693,950 | 421,869 |
Cash and Cash Equivalents, at Carrying Value, Ending Balance | 276,167 | 2,360,045 |
Non-Cash Investing and Financing Activities | ||
Wages payable included in capitalized intangible assets | 0 | 23,338 |
Preferred stock converted to common stock | 0 | 536 |
Common stock issued in conjunction with debt agreements | 245,866 | 0 |
Warrants issued in conjunction with debt agreements | 100,049 | 5,644,008 |
Common stock issued for wages payable | 198,108 | 0 |
Options issued for wages payable | 707,453 | 0 |
Conversion of debt and interest | 0 | 1,193,910 |
Beneficial conversion features | 0 | 5,726,678 |
Supplemental Cash Flow Information | ||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 13,969 | 9,485 |
Income Taxes Paid, Net | $ 0 | $ 0 |
NOTE 1 - ORGANIZATION AND SUMMA
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization – On September 6, 2016, the Company entered into an agreement and plan of reorganization with BlackRidge Technology International, Inc., a Delaware corporation, and Grote Merger Co., a Delaware corporation providing for the Company’s acquisition of BlackRidge in exchange for a controlling number of shares of the Company’s preferred and common stock pursuant to the merger of Grote Merger Co. with and into BlackRidge, with BlackRidge continuing as the surviving corporation. The transaction contemplated in the agreement closed on February 22, 2017. On July 2, 2017, the Company filed a Certificate to Accompany Restated Articles or Amended and Restated Articles with the Secretary of State of Nevada to, among other things, change the Company’s name to BlackRidge Technology International, Inc. On October 13, 2017, the Company formed a new business subsidiary called BlackRidge Secure Services, Inc. to work with partners on Secure Supervisory Control and Data Acquisition Systems (“SCADA”) infrastructure and to design and deliver secure systems using BlackRidge Technology products for use by the utilities industry. On June 2, 2019, the Company formed a new business subsidiary named BlackRidge Research, Inc. to perform research and development for future products and patents. Principles of Consolidation BlackRidge Technology International, Inc. BlackRidge Technology Holding, Inc. BlackRidge Technology, Inc. BlackRidge Technology Government, Inc. BlackRidge Secure Services, Inc. BlackRidge Research, Inc. All intercompany balances have been eliminated in consolidation. Interim Financial Statements Use of Estimates - Concentrations - Significant customers are those which represent more than 10% of the Company’s revenue for each period presented, or the Company’s accounts receivable balance as of each respective balance sheet date. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total net accounts receivable are as follows: Revenue Accounts Receivable Nine Months Ended September 30, September 30, Customers 2019 2018 2019 2018 Customer A 64 % 77 % 41 % 7 % Customer B 11 % 17 % 15 % 77 % Customer C 2 % 7 % 8 % 16 % Customer D 23 % - % 36 % - % Revenue Three Months Ended September 30, Customers 2019 2018 Customer A 33 % 1 % Customer B 4 % 70 % Customer C 2 % 29 % Customer D 62 % - % Inventory As of September 30, 2019 As of December 31, 2018 Inventory $ 430,668 $ 391,658 Less: allowance for obsolescence (335,655) (335,655) $ 95,013 $ 56,003 Adoption of ASC Topic 606, “ Revenue from Contracts with Customers ” - FASB ASC 606 The effect of applying ASC 606 did not result in an opening balance adjustment to retained earnings or any other balance sheet accounts because the Company: (1) identified similar performance obligations under ASC 606 as compared with deliverables and separate units of account previously identified; (2) determined the transaction price to be consistent; and (3) concluded that revenue is recorded at the same point in time, upon performance under both ASC 605 and ASC 606. The adoption of ASC 606 did not require significant changes in our internal controls and procedures over financial reporting and disclosures. However, we made enhancements to existing internal controls and procedures to ensure compliance with the new guidance. Revenue Recognition - We may enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we typically estimate standalone selling price by using the expected cost plus a margin approach. We typically establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change. For performance obligations where control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided. Revenue related to fixed-price contracts for application development and systems integration services, consulting or other technology services is recognized as the service is performed using the output method, under which the total value of revenue is recognized based on each contract’s deliverable(s) as they are completed and when value is transferred to a customer. Revenue related to fixed-price application maintenance, testing and business process services is recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered, in accordance with the practical expedient in ASC 606-10-55-18. Our revenue consists of product and service revenue. Product revenue primarily consists of sales of our BlackRidge products. Service revenue relates to sales technical support services, and other services Disaggregation of Revenue Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Product $ 90,966 $ - $ 159,719 $ 4,804 Technical support and other 17,845 74,102 137,892 139,312 Total $ 108,811 $ 74,102 $ 297,611 $ 144,116 Recently Issued Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU eliminates, amends, and adds disclosure requirements for fair value measurements. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Consolidated Financial Statements and related disclosures. In January 2017, the FASB issued ASU 2017-04 “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which amends and simplifies the accounting standard for goodwill impairment. The new standard removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The new standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. We are currently assessing the implication of our adoption as well as the potential impact that the standard will have on our consolidated financial statements. |
NOTE 2 - GOING CONCERN
NOTE 2 - GOING CONCERN | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 2 - GOING CONCERN | NOTE 2 –GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, during the nine months ended and as of September 30, 2019, the Company incurred a net loss of $23,370,788, had a working capital deficit of $24,576,110, and cash used in operations of $6,655,979. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through investment capital. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
NOTE 3 - INTANGIBLE ASSETS
NOTE 3 - INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 3 - INTANGIBLE ASSETS | NOTE 3 – INTANGIBLE ASSETS During the nine months ended September 30, 2019 and 2018, the Company capitalized $1,772,273 and $1,683,431, respectively, towards the development of software, intellectual property, and patent expenses. The Company amortizes these costs over their related useful lives (approximately 7 to 20 years), using a straight-line basis. Fair value is determined through various valuation techniques, including market and income approaches as considered necessary. The Company reviews capitalized assets periodically for impairment any time there is a significant change that could lead to impairment, but not less than annually. The Company recorded amortization of $342,205 and $342,107 during the nine months ended September 30, 2019 and 2018, respectively. The Company recorded amortization of $115,228 and $88,153 during the three months ended September 30, 2019 and 2018, respectively. Intangible assets consisted of the following at September 30, 2019 and December 31, 2018: As of September 30, 2019 As of December 31, 2018 Estimated Useful Life Patent Costs 561,744 542,846 15 years Software Licenses 58,260 58,260 7 years Software Development Costs 11,980,333 10,208,061 5 years Less: accumulated amortization (2,231,011) (1,888,807) $ 10,369,326 $ 8,920,360 Based upon currently launched products, the Company anticipates amortization expense of approximately $500,000 during each of the next five years. |
NOTE 4 - NOTES PAYABLE
NOTE 4 - NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 4 - NOTES PAYABLE | NOTE 4 – NOTES PAYABLE Short term notes At September 30, 2019 and December 31, 2018, the Company had outstanding short-term debt totaling $45,232. These notes bear interest at the rates of between 10% and 12% annually and have maturity dates ranging from January 1, 2012 through December 31, 2014. As these notes have exceeded their initial maturity dates, they are subject to the default interest rate of 15% per annum. The following table summarizes the Company’s short-term notes payable for the nine months ended September 30, 2019 and the year ended December 31, 2018: September 30, 2019 December 31, 2018 Beginning Balance $ 45,232 $ 50,232 Repayments - (5,000) Ending Balance $ 45,232 $ 45,232 Short term notes – related party On January 31, 2018, the Company’s Chief Technology Officer and significant shareholder invested $500,000 via a one year note bearing interest at 8% annually. In conjunction with this note, the Company issued 5 year detachable warrants to purchase 1,562,500 shares of the Company’s common stock at $0.50 per share. These warrants were valued at $172,542 using the Black-Scholes pricing model and were recorded as a discount to the note. The note carries a default rate of 18% for any principal not paid by the maturity date. On September 30, 2018, the note along with interest of $29,712 was converted into 2,118,849 shares of the Company’s common stock at a rate of $0.25 per share. Additionally, as part of the conversion, additional warrants to purchase 437,500 shares of common stock were issued and all warrants related to this note were repriced to reflect an exercise price of $0.25 per share. The value of these additional warrants and the lowered conversion totaled $58,250 which the Company recorded as a loss on extinguishment of debt. Long term notes On November 2, 2016, the Company entered into settlement agreements with two holders of convertible debt and other payables in which the Company agreed to issue new long-term debt agreements as settlement of amounts due. Pursuant to these agreements, the Company issued two non-interest bearing $600,000 notes payable in 36 equal monthly installments of $16,667 beginning on January 1, 2017 and maturing on December 1, 2019. The following table summarizes the Company’s long-term notes payable for the nine months ended September 30, 2019 and the year ended December 31, 2018: September 30, 2019 December 31, 2018 Beginning Balance $ 366,657 $ 766,658 Repayments (300,002) (400,001) Ending Balance $ 66,655 $ 366,657 Short Term Portion of Long Term Debt $ 66,655 $ 366,657 Long Term Debt $ - $ - |
NOTE 5 - CONVERTIBLE NOTES
NOTE 5 - CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 5 - CONVERTIBLE NOTES | NOTE 5 – CONVERTIBLE NOTES Short term convertible notes On January 31, 2018, the Company issued a $100,000 convertible note bearing interest at 8% per annum. The note matured on January 31, 2019 and is convertible into the Company’s Series B Preferred Stock (“Preferred Stock”) at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 312,500 shares of the Company’s common stock at an exercise price of $0.32 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $88,219 based on the intrinsic per share value of the conversion feature, and the warrants at $46,991 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $68,021 and $31,969, respectively. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for this note in the amount of $19,219, which is included in accrued interest on the Company’s consolidated balance sheets. The Company is currently in the process of extending this note. On February 23, 2018, the Company issued a $1,000,000 convertible note bearing interest at 9% per annum. The note matured on February 28, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 3,125,000 shares of the Company’s common stock at an exercise price of $0.32 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $417,757 based on the intrinsic per share value of the conversion feature, and the warrants at $540,553 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $417,757 and $350,882, respectively. On July 25, 2019, the Company extended the maturity date of the note as well as all accrued interest in the amount of $1,152,466. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for this note in the amount of $19,039, which is included in accrued interest on the Company’s consolidated balance sheets. The extended note matures on July 25, 2020 and carries a default rate of 15% for the principle balance remaining unpaid by the maturity date. On February 27, 2018, the Company issued a $1,000,000 convertible note bearing interest at 9% per annum. The note matured on February 28, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 3,125,000 shares of the Company’s common stock at an exercise price of $0.32 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $444,923 based on the intrinsic per share value of the conversion feature, and the warrants at $541,244 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $444,923 and $351,173, respectively. On July 25, 2019, the Company extended the maturity date of the note and accrued interest in the amount of $1,150,822. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for this note in the amount of $19,012, which is included in accrued interest on the Company’s consolidated balance sheets. The extended note matures on July 25, 2020 and carries a default rate of 15% for the principle balance remaining unpaid by the maturity date. On April 18, 2018, the Company issued a $2,000,000 convertible note bearing interest at 9% per annum. The note matured on April 18, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 6,250,000 shares of the Company’s common stock at an exercise price of $0.32 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $1,510,980 based on the intrinsic per share value of the conversion feature, and the warrants at $1,073,331 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $1,301,510 and $698,480, respectively. On July 25, 2019, Company extended the maturity date of the note and accrued interest in the amount of $2,260,548. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for this note in the amount of $37,346, which is included in accrued interest on the Company’s consolidated balance sheets. The extended note matures on July 25, 2020 and carries a default rate of 15% for the principle balance remaining unpaid by the maturity date. On May 4, 2018, the Company issued an aggregate $1,500,000 in convertible notes bearing interest at 9% per annum. These notes matured on May 31, 2019 and are convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 4,687,500 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $1,133,680 based on the intrinsic per share value of the conversion feature, and the warrants at $806,050 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $975,685 and $524,305, respectively. On July 25, 2019, Company extended the maturity date of the note and accrued interest in the amount of $1,678,890. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for this note in the amount of $27,736, which is included in accrued interest on the Company’s consolidated balance sheets. The extended note matures on July 25, 2020 and carries a default rate of 15% for the principle balance remaining unpaid by the maturity date. On May 9, 2018, the Company issued a $1,028,274 convertible note bearing interest at 9% per annum as replacement for a $1,000,000 note plus accrued interest of $28,274 (see long term convertible notes section of this note). The note matured on May 31, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 3,213,356 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $835,295 based on the intrinsic per share value of the conversion feature, and the warrants at $538,207 using the Black-Scholes pricing model. The Company has allocated the note proceeds based relative on fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $674,972 and $353,292, respectively. On July 25, 2019, Company extended the maturity date of the note and accrued interest in the amount of $1,151,611. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for this note in the amount of $19,025, which is included in accrued interest on the Company’s consolidated balance sheets. The extended note matures on July 25, 2020 and carries a default rate of 15% for the principle balance remaining unpaid by the maturity date On July 5, 2018, the Company issued an aggregate $2,000,000 in convertible notes bearing interest at 9% per annum. These notes mature on July 5, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholders were also granted detachable 5 year warrants to purchase an aggregate of 8,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the notes to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $1,307,658 based on the intrinsic per share value of the conversion feature, and the warrants at $1,354,741 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $1,192,302 and $807,658, respectively On July 25, 2019, Company extended the maturity dates of the notes and accrued interest in an aggregate amount of $2,196,438. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for these notes in the amount of $36,286, which is included in accrued interest on the Company’s consolidated balance sheets. The extended notes mature on July 25, 2020 and carry a default rate of 15% for the principle balance remaining unpaid by the maturity date. On July 10, 2018, the Company issued a $32,000 convertible note bearing interest at 9% per annum. This note matures on July 31, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 128,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $15,005 based on the intrinsic per share value of the conversion feature, and the warrants at $21,711 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $15,005 and $12,935, respectively. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for these notes in the amount of $3,958, which is included in accrued interest on the Company’s consolidated balance sheets. On July 13, 2018, the Company issued a $200,000 in convertible notes bearing interest at 9% per annum. This note matures on July 31, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 800,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $68,266 based on the intrinsic per share value of the conversion feature, and the warrants at $135,474 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $68,266 and $80,766, respectively. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for these notes in the amount of $24,493, which is included in accrued interest on the Company’s consolidated balance sheets. On September 17, 2018, the Company issued an aggregate $3,000,000 in convertible notes bearing interest at 9% per annum. The notes mature on September 17, 2019 and are convertible into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholders were also granted detachable 7 year warrants to purchase an aggregate of 12,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the notes to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $2,921,170 based on the intrinsic per share value of the conversion feature, and the warrants at $1,617,415 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $1,949,132 and $1,050,858, respectively. Additionally, as further inducement to write this this note, the Company agreed to grant all of the investor’s existing notes as well as several other existing noteholders with relationships to the investor the same terms on their existing debt that this debt carries. These new terms were required to write the notes, therefore, the Company has accounted them as a discount on this note, the value of which is included in the beneficial conversion value. On September 17, 2019, Company extended the maturity dates of the notes and accrued interest in an aggregate amount of $3,270,000. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets. The Company had accrued interest for these notes in the amount of $11,288, which is included in accrued interest on the Company’s consolidated balance sheets. The extended notes mature on September 17, 2020 and carry a default rate of 15% for the principle balance remaining unpaid by the maturity date. On December 4, 2018, the Company issued an aggregate $3,000,000 in convertible notes bearing interest at 9% per annum. The notes mature on December 4, 2019 and are convertible into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholders were also granted detachable 7 year warrants to purchase an aggregate of 12,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. As additional consideration for this note, the Company issued an aggregate 4,006,250 shares of the Company’s common stock. The Company has determined the notes to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $2,248,088 based on the intrinsic per share value of the conversion feature, the warrants at $1,589,454 using the Black-Scholes pricing model, and the stock at $1,346,000. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature, warrants, and stock as a discount to the debt in the amount of $1,516,302, $803,369 and $680,319, respectively. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $300,806. The Company had accrued interest for these notes in the amount of $221,918, which is included in accrued interest on the Company’s consolidated balance sheets. On December 19, 2018, the Company issued an aggregate $3,000,000 in convertible notes bearing interest at 9% per annum. The notes mature on December 19, 2019 and are convertible into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholders were also granted detachable 7 year warrants to purchase an aggregate of 12,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the notes to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $555,512 based on the intrinsic per share value of the conversion feature, and the warrants at $1,581,347 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $555,512 and $1,035,512, respectively. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $2,541,434. The Company had accrued interest for these notes in the amount of $210,822, which is included in accrued interest on the Company’s consolidated balance sheets. On August 14, 2019, the Company issued a convertible note in the amount of $350,000. The note bears an interest rate of 9% per annum, and is convertible into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 1,400,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company valued the warrants at $75,334 using the Black-Scholes pricing model. Additionally, as further inducement to write this this note, the Company agreed to grant the noteholder an additional 754,258 shares of the Company’s common stock valued at $181,022. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the warrants and common stock as a discount to the debt in the amount of $43,484 and $104,489, respectively. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $216,843. The Company had accrued interest for this note in the amount of $4,142, which is included in accrued interest on the Company’s consolidated balance sheets. The note matures on August 14, 2020 and carries a default rate of 15% for the principle balance remaining unpaid by the maturity date. On August 29, 2019, the Company issued an aggregate $784,000 in convertible notes. The notes bear an interest rate of 6% per annum and is initially convertible into the Company’s Common Stock at a price of $0.35 per share at the holder’s request. The notes were issued at an initial discount of $84,000. Additionally, an aggregate 784,000 shares of the Company’s common stock valued at $172,480 were issued as further inducement for the notes. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the common stock as a discount to the debt in the amount of $141,377. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $504,516. The Company had accrued interest for this note in the amount of $4,253, which is included in accrued interest on the Company’s consolidated balance sheets. The note matures on August 29, 2020 and carries a default rate of 24% for the principle balance remaining unpaid by the maturity date. On September 11, 2019, the Company issued a convertible note in the amount of $282,500. The note bears an interest rate of 10% per annum and is initially convertible, at the holder’s request, into the Company’s common stock at a $0.25 per share. The note was issued at an initial discount of $12,500. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $251,594. The Company had accrued interest for this note in the amount of $1,548, which is included in accrued interest on the Company’s consolidated balance sheets. The note matures on September 11, 2020 and carries a default rate of 24% for the principle balance remaining unpaid by the maturity date. On September 26, 2019, the Company issued a convertible note in the amount of $85,000. The note bears an interest rate of 10% per annum and is initially convertible, at the holder’s request, into the Company’s common stock at a $0.25 per share. The note was issued at an initial discount of $10,000. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 170,000 shares of the Company’s common stock at an exercise price of $0.50 per share. The Company valued the warrants at $9,210 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the warrants and as a discount to the debt in the amount of $8,309. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $66,794. The Company had accrued interest for this note in the amount of $116, which is included in accrued interest on the Company’s consolidated balance sheets. The note matures on September 26, 2020 and carries a default rate of 15% for the principle balance remaining unpaid by the maturity date. On September 27, 2019, the Company issued a convertible note in the amount of $240,000. The note bears an interest rate of 10% per annum, and is convertible into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The note was issued at an initial discount of $22,750. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 600,000 shares of the Company’s common stock at an exercise price of $0.20 per share. The Company valued the warrants at $60,401 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the warrants and as a discount to the debt in the amount of $48,256. At September 30, 2019, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $152,045. The Company had accrued interest for this note in the amount of $263, which is included in accrued interest on the Company’s consolidated balance sheets. The note matures on September 27, 2020 and carries a default rate of 24% for the principle balance remaining unpaid by the maturity date. Short term convertible notes – related party On October 31, 2013, the Company agreed to convert balances owed to the Company’s corporate counsel in the amount of $183,172 into a 42 month convertible note bearing interest at 12% annually and convertible into 203,525 shares of convertible preferred stock at the rate of $0.90 per share. At September 30, 2019, $158,172 of the principal balance was still outstanding, and the Company had accrued interest for this note in the amount of $191,870 which is included in accrued interest – related party on the Company’s consolidated balance sheets. The note carries a default rate of 18% for any principal not paid by the maturity date. On November 30, 2015, John Hayes, the Company’s Chief Technology Officer, Director and significant shareholder invested $101,000 via a one year convertible note bearing interest at 12% annually and convertible into 112,223 shares of Series A convertible preferred stock at the rate of $0.90 per share. On September 1, 2017, $237,000 owed to John Hayes was added to the note. On September 30, 2018, the note along with interest of $89,366 was converted into 1,709,466 shares of the Company’s common stock at a rate of $0.25 per share. Additionally, as further inducement to convert the note, the Company issued the note holder 5 year warrants to purchase 1,352,000 shares of the Company’s common stock. The Company recognized a loss on extinguishment of debt of $384,200 related to the decrease in conversion price and warrants granted. On July 6, 2018, the Company issued a $200,000 convertible note bearing interest at 9% per annum to John Hayes, the Company’s Chief Technology Officer, Director and significant shareholder. This note matures on July 31, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 800,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $130,766 based on the intrinsic per share value of the conversion feature, and the warrants at $135,474 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $119,224 and $80,766, respectively. On September 30, 2018, the note along with interest of $4,192 was converted into 816,767 shares of the Company’s common stock at a rate of $0.25 per share. The Company recognized a loss on extinguishment of debt of $43,750 related to the decrease in conversion price. On July 10, 2018, the Company issued a $32,000 in convertible notes bearing interest at 9% per annum to J Allen Kosowsky, a Director and related party. This note matures on July 31, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 128,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $15,005 based on the intrinsic per share value of the conversion feature, and the warrants at $21,711 using the Black-Scholes pricing model. The Company has allocated the note proceeds based relative on fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $15,005 and $12,935, respectively. On September 30, 2018, the note along with interest of $639 was converted into 130,556 shares of the Company’s common stock at a rate of $0.25 per share. The Company recognized a loss on extinguishment of debt of $8,960 related to the decrease in conversion price. On April 26, 2019, the Company issued a $200,000 convertible note bearing interest at 7% per annum to John Hayes, the Company’s Chief Technology Officer, Director and significant shareholder. This note matures on March 31, 2020 and is convertible into the Company’s common stock at a price of $0.25 per share at the holder’s request. At September 30, 2019, $200,000 of the principal balance was still outstanding, and the Company had accrued interest for this note in the amount of $6,022, which is included in accrued interest – related party on the Company’s consolidated balance sheets. The note carries a default interest rate of 15% for any principal remaining unpaid by the maturity date. On May 3, 2019, the Company issued a $100,000 convertible note bearing interest at 7% per annum to John Hayes, the Company’s Chief Technology Officer, Director and significant shareholder. This note matures on March 31, 2020 and is convertible into the Company’s common stock at a price of $0.25 per share at the holder’s request. At September 30, 2019, $100,000 of the principal balance was still outstanding, and the Company had accrued interest for this note in the amount of $5,216, which is included in accrued interest – related party on the Company’s consolidated balance sheets. The note carries a default interest rate of 15% for any principal remaining unpaid by the maturity date. On May 15, 2019, the Company issued a $300,000 convertible note bearing interest at 7% per annum to John Hayes, the Company’s Chief Technology Officer, Director and significant shareholder. This note matures on March 31, 2020 and is convertible into the Company’s common stock at a price of $0.25 per share at the holder’s request. At September 30, 2019, $300,000 of the principal balance was still outstanding, and the Company had accrued interest for this note in the amount of $5,600, which is included in accrued interest – related party on the Company’s consolidated balance sheets. The note carries a default interest rate of 15% for any principal remaining unpaid by the maturity date. Long term convertible notes On December 21, 2017, the Company issued a $150,000 convertible note bearing interest at 8% per annum. The note matures on December 21, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The Company has determined the note to contain a beneficial conversion feature valued at $69,935 based on the intrinsic per share value of the conversion feature. This beneficial conversion feature is recorded as a discount to the debt agreement. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 468,750 shares of the company’s common stock at an exercise price of $0.32 per share. The warrants were valued at $69,935 using the Black-Scholes pricing model and were recorded as a discount to the note. At September 30, 2019 the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at $107,327. The Company had accrued interest for this note in the amount of $21,304, which is included in accrued interest on the Company’s consolidated balance sheets. On December 22, 2017, the Company issued a $1,000,000 convertible note bearing interest at 8% per annum. The note matures on December 22, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The Company has determined the note to contain a beneficial conversion feature valued at $466,230 based on the intrinsic per share value of the conversion feature. This beneficial conversion feature is recorded as a discount to the debt agreement. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 3,125,000 shares of the company’s common stock at an exercise price of $0.32 per share. The warrants were valued at $466,230 using the Black-Scholes pricing model and were recorded as a discount to the note. On May 9, 2018, this note along with $28,274 was renegotiated into a new short term convertible note and the warrants associated with the original note were cancelled. The newly negotiated note included an additional warrant benefit valued at $95,804 which was recorded as a loss on extinguishment of debt. Convertible debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at the conversion prices and terms discussed above. The Company has determined that any embedded conversion options do not possess a beneficial conversion feature, and therefore has not separately accounted for their value. The following table summarizes the Company’s convertible notes payable for the nine months ended September 30, 2019 and the year ended December 31, 2018: September 30, 2019 December 31, 2018 Beginning Balance, net of discounts $ 3,471,644 $ 601,576 Proceeds from issuance of convertible notes, net of issuance Discounts - 1,903,438 New convertible notes net of discounts 1,754,085 - Repayments (25,000) - Restructuring of debt 1,332,501 (112,017) Conversion of notes payable into common stock - (570,000) Amortization of discounts 11,559,076 1,648,647 Ending Balance, net of discounts $ 18,092,306 $ 3,471,644 Convertible notes, short term $ 20,934,275 $ 17,86 |
NOTE 6 - COMMITMENTS AND CONTIN
NOTE 6 - COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 6 - COMMITMENTS AND CONTINGENCIES | NOTE 6 – COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases approximately 7,579 square feet of office space under a 62 month operating lease which expires in April 2023. The amounts reflected in the table below are for the aggregate future minimum lease payments under the non-cancelable facility operating leases. Under lease agreements that contain escalating rent provisions, lease expense is recorded on a straight-line basis over the lease term. The Company also leased office space under a 23 month operating lease which expired in August 2019. The amounts reflected in the table below are for the aggregate future minimum lease payments under the non-cancelable facility operating leases. Under lease agreements that contain escalating rent provisions, lease expense is recorded on a straight-line basis over the lease term. The Company also leases approximately 202 square feet of office space under a 12 month operating lease which originally expired in 2016. The lease was renewed to May 2019, and is renewable at the Company’s option annually at a flat monthly amount of $400. The amounts reflected in the table below are for the aggregate future minimum lease payments under the non-cancelable facility operating leases. Rent expense was $150,666 and $155,474 for the nine months ended September 30, 2019 and 2018, respectively As of September 30, 2019, future minimum lease payments are as follows: Year Ending December 31, 2019 (three months) $ 38,924 2020 227,541 2021 232,628 2022 237,731 2023 and thereafter 18,569 Total minimum lease payments $ 755,393 On August 1, 2017, the Company entered into a 36 month lease of computer equipment. The lease carries a monthly payment of $2,871 with the option to purchase the equipment at its fair market value at the end of the lease. Restricted Stock Commitments The Company has committed to settling a significant portion of its current accounts payable balances through the future issuance of restricted stock units. While the terms of these agreements have not yet been formalized with employees and outside contractors, they could have a potentially dilutive effect to current shareholders. |
NOTE 7 - RELATED PARTY TRANSACT
NOTE 7 - RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 7 - RELATED PARTY TRANSACTIONS | NOTE 7 - RELATED PARTY TRANSACTIONS During the three and nine months ended September 30, 2019, the Company incurred interest expense on notes to related parties in the aggregate amount of $11,370 and $31,289, respectively (see Note 4 – Short term notes – related party & Note 5 – Convertible Notes). Accounts payable related party At September 30, 2019 and December 31, 2018, the Company had a balance in related party accounts payable of $367,011 and $9,690, respectively, which consisted of the following: September 30, December 31, Party Name: Relationship: Nature of transactions: 2019 2018 John Bluher Chief Financial Officer Expense reimbursement $ 11,037 $ 4,465 Robert Graham Chairman and CEO Expense reimbursement 10,688 - John Hayes Chief Technology Officer Advances 300,000 - John Hayes Chief Technology Officer Expense reimbursement 45,286 5,225 $ 367,011 $ 9,690 Related Party Notes During the nine months ended September 30, 2019 and the year ended December 31, 2018, the Company issued notes and converted notes to related parties, see Note 5 – Notes Payable, and Note 6 – Convertible Notes for full disclosure. Equity issuances On May 1, 2019, the Company received $50,000 in proceeds for the issuance of Series B preferred stock at the unadjusted rate of $25 per share from J Allen Kosowsky, a director and related party. |
NOTE 8 - STOCKHOLDERS' EQUITY
NOTE 8 - STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 8 - STOCKHOLDERS' EQUITY | NOTE 8 - STOCK HOLDERSÂ’ EQUITY The Company is authorized to issue 500 million shares of common stock, par value $0.001 per share, and 50 million shares of preferred stock, par value $0.001 per share of which 48 million has been designated Series A Preferred Stock and 2 million designated as Series B Preferred Stock. Each share of the CompanyÂ’s Series A Preferred Stock was originally convertible into 10 shares of common stock, subject to adjustment, has voting rights equal to its common stock equivalent, 7% cumulative dividend rights, and has liquidation rights that entitle the holder to the receipt of net assets of the Company on a pro-rata basis. On September 14, 2019, the Company designated its convertible Series B Preferred Stock, par value $0.001, with each share of Series B Preferred Stock convertible into 100 shares of common stock. The Series B Preferred Stock votes with common stock on an as converted basis as a single class, 8% cumulative dividend rights, and liquidation rights that entitle the holder to the receipt of net assets of the Company on a pro-rata basis. The Company had 99,868,418 and 96,872,725 shares of common stock issued and outstanding as of September 30, 2019 and December 31, 2018, respectively, 3,577,370 Series A preferred shares issued and outstanding as of September 30, 2019 and December 31, 2018, and 14,000 and none shares of Series B Preferred Stock issued and outstanding as of September 30, 2019 and December 31, 2018. The Company did not declare any dividends during the nine months ended September 30, 2019 During the nine months ended September 30, 2019, the Company received an aggregate $350,000 in proceeds for the issuance of Series B preferred stock at the unadjusted rate of $25 per share. During the nine months ended September 30, 2019, the Company received an aggregate $1,983,755 in proceeds from the sale of 40,000 shares $50 per share of preferred stock in BlackRidge Research Inc. These shares are convertible into 2,000,000 shares of common stock in Blackridge Research Inc. or convertible into shares of common stock of the Company at the rate 200 common shares per preferred share. In conjunction with these sales, the company issued 4,000,000 warrants to purchase shares of common stock of the Company at a price of $0.25 per share. The Company valued the warrants at $189,594 using the Black Scholes pricing model. |
NOTE 9 - SHARE BASED COMPENSATI
NOTE 9 - SHARE BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 9 - SHARE BASED COMPENSATION | NOTE 9 – SHARE BASED COMPENSATION During the nine months ended September 30, 2019, the Company issued 3,031,000 5-year options to purchase common stock to employees and directors under the 2017 Stock Incentive Plan. Additionally, the Company issued 18,500,000 5-year options to managers and executives of the Company outside of the 2017 Stock Incentive Plan. The options were valued at $1,291,080 using the Black-Scholes pricing model. As of September 30, 2019, the total unrecognized expense for unvested share based compensation is $2,314,696. The 2017 Stock Incentive Plan allows for a maximum 25,000,000 shares to be issued, of which 5,314,152 shares remain available for issuance as of September 30, 2019. The Company recognized stock option expenses during the three and nine months ended September 30, 2019 and 2018 of $269,397 and $707,453 and $500,560 and $708,684, respectively. The fair values at the commitment date for the options were based upon the following management assumptions as of September 30, 2019: Commitment Date Expected dividends 0 % Expected term 5 years Risk free rate 1.42 - 2.49 % Volatility 47.64 – 48.46 % The activity of options granted to during the year ended December 31, 2018 and nine months ended September 30, 2019 is as follows: Employee and Director Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Life Weighted Average Grant Date Fair Value Balance – December 31, 2017 6,962,560 $ 0.60 4.65 years $ 0.28 Granted 10,390,741 0.33 5 years 0.16 Exercised - Expired (57,827) Forfeited (349,048) Ending Balance – December 31, 2018 16,946,426 0.43 4.32 years 0.20 Granted 21,531,000 0.25 5 years 0.06 Exercised - Expired (63,839) Forfeited (227,738) Ending Balance –September 30, 2019 38,185,848 $ 0.33 4.33 years $ 0.12 Exercisable options 10,392,791 $ 0.43 3.63 years $ 0.20 The Company’s outstanding employee options at September 30, 2019 are as follows: Options Outstanding Option Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.25 - $0.60 38,185,848 4.33 $ 0.33 10,392,791 $ 0.43 $ - The weighted average fair value per option issued during the nine months ended September 30, 2019 was $0.06. |
NOTE 10 - WARRANTS
NOTE 10 - WARRANTS | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 10 - WARRANTS | NOTE 10 – WARRANTS During the nine months ended September 30, 2019, the Company issued 6,324,258 warrants to purchase common stock at a price of $0.25 per share. The warrants vest ratably over a twelve month period. The Company valued the new warrants at $375,561 using the Black Scholes pricing model, $16,088 and $29,270 of which is included in selling, general and administrative expense on the Company’s statement of profit and loss for the three and nine months ended September 30, 2019, respectively. The fair values at the commitment date for the warrants were based upon the following management assumptions as of September 30, 2019: Commitment Date Expected dividends 0 % Expected term 5 - 7 years Risk free rate 1.51 - 2.62 % Volatility 47.64 – 48.46 % The activity of warrants granted to during the nine months ended September 30, 2019 and the year ended December 31, 2018 is as follows: Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Life Weighted Average Grant Date Fair Value Balance – December 31, 2017 43,068,636 $ 0.45 4.69 years $ 0.08 Granted 73,755,856 0.26 6.68 years 0.14 Exercised - Expired - Forfeited (7,087,500) Ending Balance – December 31, 2018 109,736,992 0.32 5.46 years 0.13 Granted 6,324,258 0.26 6.26 years 0.06 Exercised - Expired - Forfeited - Ending Balance – September 30, 2019 116,061,250 $ 0.32 4.78 years $ 0.13 Exercisable warrants 116,061,250 $ 0.32 4.78 years $ 0.13 The Company’s outstanding warrants at September 30, 2019 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.01 - $0.70 116,061,250 4.78 $ 0.32 116,061,250 $ 0.32 $ 1,328,095 |
NOTE 11 - EARNINGS (LOSS) PER S
NOTE 11 - EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 11 - EARNINGS (LOSS) PER SHARE | NOTE 11 – EARNINGS (LOSS) PER SHARE Net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Since the Company reflected a net loss for the three and nine months ended September 30, 2019 and 2018, respectively, the effect of considering any common stock equivalents, if exercisable, would have been anti-dilutive. Therefore, a separate computation of diluted earnings (loss) per share is not presented. The Company has the following common stock equivalents as of September 30, 2019 and December 31, 2018: As of June 30, 2019 As of December 31, 2018 Warrants (exercise price $0.01 - $0.70/share) 116,061,250 109,736,992 Options (exercise price $0.25 - $0.66/share) 45,438,773 20,436,601 Preferred Stock (exchange ratio 16.69 – 17.11) 61,137,484 59,691,998 Preferred Stock in BlackRidge Research (exchange ratio 200) 8,000,000 - Convertible Debt 84,918,245 - 315,555,752 189,865,591 |
NOTE 12 - SUBSEQUENT EVENTS
NOTE 12 - SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
NOTE 12 - SUBSEQUENT EVENTS | NOTE 12 - SUBSEQUENT EVENTS We have evaluated all events that occurred after the balance sheet date through the date when our financial statements were issued to determine if they must be reported. Management has determined that other than those listed below, there were no additional reportable subsequent events to be disclosed. Change in Director Effective October 11, 2019, Brent Bunger resigned his position as a director for the Company. The resignation was not due to any disagreement or conflict with management or the Company. Notes Payable On October 9, 2019, the Company issued a $103,000 convertible note bearing interest at 8% per annum. The note matures on October 9, 2020 and is initially convertible into the Company's common stock at a price of $0.23 per share at the holder's request. On October 30, 2019, the Company issued a $122,000 convertible note bearing interest at 10% per annum. The note matures on July 30, 2020 and is convertible into the Company's common stock at a the lower of (i) the lowest closing price during the preceding twenty trading days or (ii) 60% of the lowest traded price during the preceding twenty trading days at the holder's request. On October 31, 2019, the Company issued a $75,000 convertible note bearing interest at 10% per annum. The note matures on October 31, 2022 and is convertible into the Company's common stock at a the lower of (i) $0.25 per share or (ii) 65% of the lowest traded price during the preceding twenty trading days at the holder's request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 200,000 shares of the company's common stock at an exercise price of $0.25 per share. On November 11, 2019, the Company issued a $101,000 convertible note bearing interest at 10% per annum. The note matures on November 11, 2020 and is initially convertible into the Company's common stock at a price of $0.23 per share at the holder's request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 505,000 shares of the company's common stock at an exercise price of $0.20 per share. Equity Issuance On November 1, 2012 the Company converted 17,239 shares of Series A preferred stock into 340,770 shares of common stock after receiving a conversion exercise from a preferred stockholder. |
NOTE 1 - ORGANIZATION AND SUM_2
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Principles of Consolidation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
Principles of Consolidation | Principles of Consolidation BlackRidge Technology International, Inc. BlackRidge Technology Holding, Inc. BlackRidge Technology, Inc. BlackRidge Technology Government, Inc. BlackRidge Secure Services, Inc. BlackRidge Research, Inc. All intercompany balances have been eliminated in consolidation. |
NOTE 1 - ORGANIZATION AND SUM_3
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
Use of Estimates | Use of Estimates - |
NOTE 1 - ORGANIZATION AND SUM_4
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentrations (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
Concentrations | Concentrations - Significant customers are those which represent more than 10% of the CompanyÂ’s revenue for each period presented, or the CompanyÂ’s accounts receivable balance as of each respective balance sheet date. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total net accounts receivable are as follows: Revenue Accounts Receivable Nine Months Ended September 30, September 30, Customers 2019 2018 2019 2018 Customer A 64 % 77 % 41 % 7 % Customer B 11 % 17 % 15 % 77 % Customer C 2 % 7 % 8 % 16 % Customer D 23 % - % 36 % - % Revenue Three Months Ended September 30, Customers 2019 2018 Customer A 33 % 1 % Customer B 4 % 70 % Customer C 2 % 29 % Customer D 62 % - % |
NOTE 1 - ORGANIZATION AND SUM_5
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Inventory (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
Inventory | Inventory As of September 30, 2019 As of December 31, 2018 Inventory $ 430,668 $ 391,658 Less: allowance for obsolescence (335,655) (335,655) $ 95,013 $ 56,003 |
NOTE 1 - ORGANIZATION AND SUM_6
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
Revenue Recognition | Revenue Recognition - We may enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we typically estimate standalone selling price by using the expected cost plus a margin approach. We typically establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change. For performance obligations where control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the deliverables to be provided. Revenue related to fixed-price contracts for application development and systems integration services, consulting or other technology services is recognized as the service is performed using the output method, under which the total value of revenue is recognized based on each contractÂ’s deliverable(s) as they are completed and when value is transferred to a customer. Revenue related to fixed-price application maintenance, testing and business process services is recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered, in accordance with the practical expedient in ASC 606-10-55-18. Our revenue consists of product and service revenue. Product revenue primarily consists of sales of our BlackRidge products. Service revenue relates to sales technical support services, and other services |
NOTE 1 - ORGANIZATION AND SUM_7
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Disaggregation of Revenue (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
Disaggregation of Revenue | Disaggregation of Revenue Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Product $ 90,966 $ - $ 159,719 $ 4,804 Technical support and other 17,845 74,102 137,892 139,312 Total $ 108,811 $ 74,102 $ 297,611 $ 144,116 |
NOTE 1 - ORGANIZATION AND SUM_8
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Recently Issued Accounting Standards (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU eliminates, amends, and adds disclosure requirements for fair value measurements. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Although we are still evaluating the impact of this new standard, we do not believe that the adoption will materially impact our Consolidated Financial Statements and related disclosures. In January 2017, the FASB issued ASU 2017-04 “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which amends and simplifies the accounting standard for goodwill impairment. The new standard removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The new standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. We are currently assessing the implication of our adoption as well as the potential impact that the standard will have on our consolidated financial statements. |
NOTE 1 - ORGANIZATION AND SUM_9
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentrations: Schedules of Concentration of Risk, by Risk Factor (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedules of Concentration of Risk, by Risk Factor | Revenue Accounts Receivable Nine Months Ended September 30, September 30, Customers 2019 2018 2019 2018 Customer A 64 % 77 % 41 % 7 % Customer B 11 % 17 % 15 % 77 % Customer C 2 % 7 % 8 % 16 % Customer D 23 % - % 36 % - % Revenue Three Months Ended September 30, Customers 2019 2018 Customer A 33 % 1 % Customer B 4 % 70 % Customer C 2 % 29 % Customer D 62 % - % |
NOTE 1 - ORGANIZATION AND SU_10
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Inventory: Schedule of Inventory, Current (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Inventory, Current | As of September 30, 2019 As of December 31, 2018 Inventory $ 430,668 $ 391,658 Less: allowance for obsolescence (335,655) (335,655) $ 95,013 $ 56,003 |
NOTE 1 - ORGANIZATION AND SU_11
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Disaggregation of Revenue: Revenue Disaggregated by Major Product and Service Lines (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Revenue Disaggregated by Major Product and Service Lines | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Product $ 90,966 $ - $ 159,719 $ 4,804 Technical support and other 17,845 74,102 137,892 139,312 Total $ 108,811 $ 74,102 $ 297,611 $ 144,116 |
NOTE 3 - INTANGIBLE ASSETS_ Sch
NOTE 3 - INTANGIBLE ASSETS: Schedule of Finite-Lived Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Finite-Lived Intangible Assets | As of September 30, 2019 As of December 31, 2018 Estimated Useful Life Patent Costs 561,744 542,846 15 years Software Licenses 58,260 58,260 7 years Software Development Costs 11,980,333 10,208,061 5 years Less: accumulated amortization (2,231,011) (1,888,807) $ 10,369,326 $ 8,920,360 |
NOTE 4 - NOTES PAYABLE_ Schedul
NOTE 4 - NOTES PAYABLE: Schedule of Short-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Short-term Debt | September 30, 2019 December 31, 2018 Beginning Balance $ 45,232 $ 50,232 Repayments - (5,000) Ending Balance $ 45,232 $ 45,232 |
NOTE 4 - NOTES PAYABLE_ Sched_2
NOTE 4 - NOTES PAYABLE: Schedule of Long-term Debt Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Long-term Debt Instruments | September 30, 2019 December 31, 2018 Beginning Balance $ 366,657 $ 766,658 Repayments (300,002) (400,001) Ending Balance $ 66,655 $ 366,657 Short Term Portion of Long Term Debt $ 66,655 $ 366,657 Long Term Debt $ - $ - |
NOTE 5 - CONVERTIBLE NOTES_ Sch
NOTE 5 - CONVERTIBLE NOTES: Schedule of Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Convertible Notes Payable | September 30, 2019 December 31, 2018 Beginning Balance, net of discounts $ 3,471,644 $ 601,576 Proceeds from issuance of convertible notes, net of issuance Discounts - 1,903,438 New convertible notes net of discounts 1,754,085 - Repayments (25,000) - Restructuring of debt 1,332,501 (112,017) Conversion of notes payable into common stock - (570,000) Amortization of discounts 11,559,076 1,648,647 Ending Balance, net of discounts $ 18,092,306 $ 3,471,644 Convertible notes, short term $ 20,934,275 $ 17,860,274 Convertible notes, short term – related party $ 758,172 $ 183,172 Convertible notes, long term $ 150,000 $ 150,000 Debt discounts $ 3,750,141 $ 14,721,802 Note(s) Date Maturity Date Interest Principal 1/31/2018* 1/31/2019 8% $ 100,000 7/10/2018* 7/10/2019 9% 32,000 7/13/2018* 7/13/2019 9% 200,000 12/4/2018 12/4/2019 9% 3,000,000 12/19/2018 12/19/2019 9% 3,000,000 7/25/2019 7/25/2020 9% 9,590,775 8/14/2019 8/14/2020 9% 350,000 8/29/2019 8/29/2020 6% 784,000 9/11/2019 9/11/2020 10% 282,500 9/17/2019 9/17/2020 9% 3,270,000 9/26/2019 9/26/2020 10% 85,000 9/27/2019 9/27/2020 10% 240,000 $ 20,934,275 |
NOTE 6 - COMMITMENTS AND CONT_2
NOTE 6 - COMMITMENTS AND CONTINGENCIES: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | Year Ending December 31, 2019 (three months) $ 38,924 2020 227,541 2021 232,628 2022 237,731 2023 and thereafter 18,569 Total minimum lease payments $ 755,393 |
NOTE 7 - RELATED PARTY TRANSA_2
NOTE 7 - RELATED PARTY TRANSACTIONS: Schedule of Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounts Payable - Related Party | |
Schedule of Related Party Transactions | September 30, December 31, Party Name: Relationship: Nature of transactions: 2019 2018 John Bluher Chief Financial Officer Expense reimbursement $ 11,037 $ 4,465 Robert Graham Chairman and CEO Expense reimbursement 10,688 - John Hayes Chief Technology Officer Advances 300,000 - John Hayes Chief Technology Officer Expense reimbursement 45,286 5,225 $ 367,011 $ 9,690 |
NOTE 9 - SHARE BASED COMPENSA_2
NOTE 9 - SHARE BASED COMPENSATION: Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date | Commitment Date Expected dividends 0 % Expected term 5 years Risk free rate 1.42 - 2.49 % Volatility 47.64 – 48.46 % |
NOTE 9 - SHARE BASED COMPENSA_3
NOTE 9 - SHARE BASED COMPENSATION: Share-based Compensation, Activity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Share-based Compensation, Activity | Employee and Director Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Life Weighted Average Grant Date Fair Value Balance – December 31, 2017 6,962,560 $ 0.60 4.65 years $ 0.28 Granted 10,390,741 0.33 5 years 0.16 Exercised - Expired (57,827) Forfeited (349,048) Ending Balance – December 31, 2018 16,946,426 0.43 4.32 years 0.20 Granted 21,531,000 0.25 5 years 0.06 Exercised - Expired (63,839) Forfeited (227,738) Ending Balance –September 30, 2019 38,185,848 $ 0.33 4.33 years $ 0.12 Exercisable options 10,392,791 $ 0.43 3.63 years $ 0.20 The Company’s outstanding employee options at September 30, 2019 are as follows: Options Outstanding Option Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.25 - $0.60 38,185,848 4.33 $ 0.33 10,392,791 $ 0.43 $ - |
NOTE 10 - WARRANTS_ Schedule of
NOTE 10 - WARRANTS: Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date | Commitment Date Expected dividends 0 % Expected term 5 years Risk free rate 1.42 - 2.49 % Volatility 47.64 – 48.46 % |
Warrant | |
Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date | Commitment Date Expected dividends 0 % Expected term 5 - 7 years Risk free rate 1.51 - 2.62 % Volatility 47.64 – 48.46 % |
NOTE 10 - WARRANTS_ Schedule _2
NOTE 10 - WARRANTS: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Life Weighted Average Grant Date Fair Value Balance – December 31, 2017 43,068,636 $ 0.45 4.69 years $ 0.08 Granted 73,755,856 0.26 6.68 years 0.14 Exercised - Expired - Forfeited (7,087,500) Ending Balance – December 31, 2018 109,736,992 0.32 5.46 years 0.13 Granted 6,324,258 0.26 6.26 years 0.06 Exercised - Expired - Forfeited - Ending Balance – September 30, 2019 116,061,250 $ 0.32 4.78 years $ 0.13 Exercisable warrants 116,061,250 $ 0.32 4.78 years $ 0.13 The Company’s outstanding warrants at September 30, 2019 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.01 - $0.70 116,061,250 4.78 $ 0.32 116,061,250 $ 0.32 $ 1,328,095 |
NOTE 11 - EARNINGS (LOSS) PER_2
NOTE 11 - EARNINGS (LOSS) PER SHARE: Schedule of Common Stock Equivalents (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Schedule of Common Stock Equivalents | As of June 30, 2019 As of December 31, 2018 Warrants (exercise price $0.01 - $0.70/share) 116,061,250 109,736,992 Options (exercise price $0.25 - $0.66/share) 45,438,773 20,436,601 Preferred Stock (exchange ratio 16.69 – 17.11) 61,137,484 59,691,998 Preferred Stock in BlackRidge Research (exchange ratio 200) 8,000,000 - Convertible Debt 84,918,245 - 315,555,752 189,865,591 |
NOTE 1 - ORGANIZATION AND SU_12
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentrations (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Details | ||
Cash, FDIC Insured Amount | $ 4,110,236 | $ 0 |
NOTE 1 - ORGANIZATION AND SU_13
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Concentrations: Schedules of Concentration of Risk, by Risk Factor (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Customer A | Revenue | ||||
Concentration Risk, Percentage | 33.00% | 1.00% | 64.00% | 77.00% |
Customer A | Accounts Receivable | ||||
Concentration Risk, Percentage | 41.00% | 7.00% | ||
Customer B | Revenue | ||||
Concentration Risk, Percentage | 4.00% | 70.00% | 11.00% | 17.00% |
Customer B | Accounts Receivable | ||||
Concentration Risk, Percentage | 15.00% | 77.00% | ||
Customer C | Revenue | ||||
Concentration Risk, Percentage | 2.00% | 29.00% | 2.00% | 7.00% |
Customer C | Accounts Receivable | ||||
Concentration Risk, Percentage | 8.00% | 16.00% | ||
Customer D | Revenue | ||||
Concentration Risk, Percentage | 62.00% | 23.00% | ||
Customer D | Accounts Receivable | ||||
Concentration Risk, Percentage | 36.00% |
NOTE 1 - ORGANIZATION AND SU_14
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Inventory: Schedule of Inventory, Current (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Details | ||
Inventory, Gross | $ 430,668 | $ 391,658 |
Allowance for obsolescence | (335,655) | (335,655) |
Inventory | $ 95,013 | $ 56,003 |
NOTE 1 - ORGANIZATION AND SU_15
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Disaggregation of Revenue: Revenue Disaggregated by Major Product and Service Lines (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | $ 108,811 | $ 74,102 | $ 297,611 | $ 144,116 |
Product | ||||
Revenue | 90,966 | 0 | 159,719 | 4,804 |
Technical support and other | ||||
Revenue | $ 17,845 | $ 74,102 | $ 137,892 | $ 139,312 |
NOTE 2 - GOING CONCERN (Details
NOTE 2 - GOING CONCERN (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Details | ||||
Net Income (Loss) | $ 7,760,877 | $ 4,968,367 | $ 23,370,788 | $ 11,841,419 |
Working Capital Deficit | 24,576,110 | |||
Net Cash Used in Operating Activities | $ 6,655,979 | $ 7,712,392 |
NOTE 3 - INTANGIBLE ASSETS (Det
NOTE 3 - INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Capitalized Intangible Assets | $ 1,772,273 | $ 1,683,431 | ||
Depreciation and amortization | 365,718 | 348,712 | ||
Intangible Assets | ||||
Depreciation and amortization | $ 115,228 | $ 88,153 | $ 342,205 | $ 342,107 |
NOTE 3 - INTANGIBLE ASSETS_ S_2
NOTE 3 - INTANGIBLE ASSETS: Schedule of Finite-Lived Intangible Assets (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Intangible assets, net | $ 10,369,326 | $ 8,920,360 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ (2,231,011) | (1,888,807) |
Patents | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Intangible assets, net | $ 561,744 | 542,846 |
Software Licenses | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Intangible assets, net | $ 58,260 | 58,260 |
Software Development | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Intangible assets, net | $ 11,980,333 | $ 10,208,061 |
NOTE 4 - NOTES PAYABLE_ Sched_3
NOTE 4 - NOTES PAYABLE: Schedule of Short-term Debt (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Short-term notes payable | $ 45,232 | $ 45,232 | $ 50,232 | |
Short Term Notes Payable | ||||
Repayments | $ 0 | $ (5,000) |
NOTE 4 - NOTES PAYABLE_ Sched_4
NOTE 4 - NOTES PAYABLE: Schedule of Long-term Debt Instruments (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Long-term Debt | $ 66,655 | $ 366,657 | $ 766,658 | |
Current portion of long term debt | 66,655 | 366,657 | ||
Notes Payable, Noncurrent | 0 | $ 0 | ||
Long Term Notes Payable | ||||
Repayments | $ (300,002) | $ (400,001) |
NOTE 5 - CONVERTIBLE NOTES_ S_2
NOTE 5 - CONVERTIBLE NOTES: Schedule of Convertible Notes Payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Convertible Debt | $ 18,092,306 | $ 3,471,644 | $ 601,576 |
Proceeds from Issuance of Convertible Preferred Stock | 0 | 1,903,438 | |
New Convertible Notes | 1,754,085 | ||
Repayments of Convertible Debt | (25,000) | 0 | |
Restructuring of Debt | 1,332,501 | (112,017) | |
Conversion of notes payable into common stock | 0 | (570,000) | |
Amortization of discounts | 11,559,076 | 1,648,647 | |
Convertible notes, short term | 20,934,275 | 17,860,274 | |
Convertible notes, short term - related party | 758,172 | 183,172 | |
Convertible notes, long term | 150,000 | 150,000 | |
Debt discounts | 3,750,141 | $ 14,721,802 | |
Short Term Convertible Debt Note 1/31/2018 | |||
Convertible notes, short term | 100,000 | ||
Short Term Convertible Debt Note 7/10/18 | |||
Convertible notes, short term | 32,000 | ||
Short Term Convertible Debt Note 7/13/18 | |||
Convertible notes, short term | 200,000 | ||
Short Term Convertible Debt Note 12/4/18 | |||
Convertible notes, short term | 3,000,000 | ||
Short Term Convertible Debt Note 12/19/18 | |||
Convertible notes, short term | 3,000,000 | ||
Short Term Convertible Debt Note 7/25/2019 | |||
Convertible notes, short term | 9,590,775 | ||
Short Term Convertible Debt Note 8/14/2019 | |||
Convertible notes, short term | 350,000 | ||
Short Term Convertible Debt Note 8/29/2019 | |||
Convertible notes, short term | 784,000 | ||
Short Term Convertible Debt Note 9/11/2019 | |||
Convertible notes, short term | 282,500 | ||
Short Term Convertible Debt Note 9/17/2019 | |||
Convertible notes, short term | 3,270,000 | ||
Short Term Convertible Debt Note 9/26/2019 | |||
Convertible notes, short term | 85,000 | ||
Short Term Convertible Debt Note 9/27/2019 | |||
Convertible notes, short term | $ 240,000 |
NOTE 6 - COMMITMENTS AND CONT_3
NOTE 6 - COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Details | ||
Operating Leases, Rent Expense | $ 150,666 | $ 155,474 |
Payments to Acquire Equipment on Lease | $ 2,871 |
NOTE 6 - COMMITMENTS AND CONT_4
NOTE 6 - COMMITMENTS AND CONTINGENCIES: Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Sep. 30, 2019USD ($) |
Details | |
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 38,924 |
Operating Leases, Future Minimum Payments, Due in Two Years | 227,541 |
Operating Leases, Future Minimum Payments, Due in Three Years | 232,628 |
Operating Leases, Future Minimum Payments, Due in Four Years | 237,731 |
Operating Leases, Future Minimum Payments, Due Thereafter | 18,569 |
Operating Leases, Future Minimum Payments Due | $ 755,393 |
NOTE 7 - RELATED PARTY TRANSA_3
NOTE 7 - RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Change in Accrued Interest - Related Party | $ 11,370 | $ 31,289 | |
Proceeds from sale of preferred stock | 350,000 | $ 0 | |
Preferred Class B | |||
Proceeds from sale of preferred stock | $ 50,000 |
NOTE 7 - RELATED PARTY TRANSA_4
NOTE 7 - RELATED PARTY TRANSACTIONS: Schedule of Related Party Transactions (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts Payable, Related Parties, Current | $ 367,011 | $ 9,690 |
John Bluher | Expense Reimbursement - Related Party | ||
Accounts Payable, Related Parties, Current | 11,037 | 4,465 |
Robert Graham | Expense Reimbursement - Related Party | ||
Accounts Payable, Related Parties, Current | 10,688 | |
John Hayes | Expense Reimbursement - Related Party | ||
Accounts Payable, Related Parties, Current | 45,286 | $ 5,225 |
John Hayes | Advances - Related Party | ||
Accounts Payable, Related Parties, Current | $ 300,000 |
NOTE 8 - STOCKHOLDERS' EQUITY (
NOTE 8 - STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | 500,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | 50,000,000 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Stock, Shares, Issued | 99,868,418 | 99,868,418 | 96,872,725 | |
Common Stock, Shares, Outstanding | 99,868,418 | 99,868,418 | 96,872,725 | |
Proceeds from subscriptions payable | $ 350,000 | |||
Proceeds from BlackRidge Research equity sales | $ 516,205 | 1,983,755 | $ 0 | |
Convertible notes, short term | 20,934,275 | 20,934,275 | $ 17,860,274 | |
Short Term Convertible Debt Note 5/4/18 | ||||
Convertible notes, short term | $ 2,000 | $ 2,000 | ||
Preferred Class A | ||||
Preferred Stock, Shares Authorized | 48,000,000 | 48,000,000 | 48,000,000 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred Stock, Shares Issued | 3,577,370 | 3,577,370 | 3,577,370 | |
Preferred Stock, Shares Outstanding | 3,577,370 | 3,577,370 | 3,577,370 | |
Proceeds from BlackRidge Research equity sales | $ 0 | $ 0 | ||
Preferred Class B | ||||
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 | 2,000,000 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred Stock, Shares Issued | 14,000 | 14,000 | 0 | |
Preferred Stock, Shares Outstanding | 14,000 | 14,000 | 0 | |
Proceeds from BlackRidge Research equity sales | $ 0 | $ 0 |
NOTE 9 - SHARE BASED COMPENSA_4
NOTE 9 - SHARE BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Details | ||||
Shares Granted, Value, Share-based Payment Arrangement, after Forfeiture | $ 1,291,080 | |||
Unrecognized Expense for Unvested Share-based Compensation | $ 2,314,696 | 2,314,696 | ||
Share-based Payment Arrangement, Noncash Expense | $ 269,397 | $ 500,560 | $ 707,453 | $ 708,684 |
NOTE 9 - SHARE BASED COMPENSA_5
NOTE 9 - SHARE BASED COMPENSATION: Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.42% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 47.64% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.49% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 48.46% |
NOTE 9 - SHARE BASED COMPENSA_6
NOTE 9 - SHARE BASED COMPENSATION: Share-based Compensation, Activity (Details) - USD ($) | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 6,962,560 | 38,185,848 | 16,946,426 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.60 | $ 0.33 | $ 0.43 | |
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Remaining Contractual Term | 4 years 7 months 24 days | 4 years 3 months 29 days | 4 years 3 months 25 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $ 0.28 | $ 0.12 | $ 0.20 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 21,531,000 | 10,390,741 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.25 | $ 0.33 | ||
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range, Options Granted In Period, Weighted Average Remaining Contractual Term | 5 years | 5 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.06 | $ 0.16 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (63,839) | (57,827) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (227,738) | (349,048) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 10,392,791 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.43 | |||
Share-based Payment Arrangement, Option, Exercise Price Range, Exercisable, Weighted Average Remaining Contractual Term | 3 years 7 months 17 days | |||
Weighted Average Grant Date Fair Value - Exercisable Options | $ 0.20 | |||
Employee | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 38,185,848 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.33 | |||
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Remaining Contractual Term | 4 years 3 months 29 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 10,392,791 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.43 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 |
NOTE 10 - WARRANTS_ Schedule _3
NOTE 10 - WARRANTS: Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.42% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 47.64% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.49% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 48.46% |
Warrant | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.51% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 47.64% |
Warrant | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 7 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.62% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 48.46% |
NOTE 10 - WARRANTS_ Schedule _4
NOTE 10 - WARRANTS: Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - USD ($) | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 6,962,560 | 38,185,848 | 6,962,560 | 16,946,426 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.60 | $ 0.33 | $ 0.60 | $ 0.43 | |
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Remaining Contractual Term | 4 years 7 months 24 days | 4 years 3 months 29 days | 4 years 3 months 25 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $ 0.28 | $ 0.12 | $ 0.20 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 21,531,000 | 10,390,741 | |||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.25 | $ 0.33 | |||
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range, Options Granted In Period, Weighted Average Remaining Contractual Term | 5 years | 5 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.06 | $ 0.16 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (227,738) | (349,048) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 10,392,791 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.43 | ||||
Share-based Payment Arrangement, Option, Exercise Price Range, Exercisable, Weighted Average Remaining Contractual Term | 3 years 7 months 17 days | ||||
Weighted Average Grant Date Fair Value - Exercisable Options | $ 0.20 | ||||
Warrant | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 43,068,636 | 116,061,250 | 43,068,636 | 109,736,992 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.45 | $ 0.32 | $ 0.45 | $ 0.32 | |
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Remaining Contractual Term | 4 years 9 months 11 days | 5 years 5 months 16 days | 4 years 8 months 8 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $ 0.13 | $ 0.13 | $ 0.08 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 6,324,258 | 73,755,856 | |||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.26 | $ 0.26 | |||
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range, Options Granted In Period, Weighted Average Remaining Contractual Term | 6 years 3 months 4 days | 6 years 8 months 5 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.06 | $ 0.14 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 0 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | 0 | (7,087,500) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 116,061,250 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.32 | ||||
Share-based Payment Arrangement, Option, Exercise Price Range, Exercisable, Weighted Average Remaining Contractual Term | 4 years 9 months 11 days | ||||
Weighted Average Grant Date Fair Value - Exercisable Options | $ 0.13 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 1,328,095 |
NOTE 11 - EARNINGS (LOSS) PER_3
NOTE 11 - EARNINGS (LOSS) PER SHARE: Schedule of Common Stock Equivalents (Details) - shares | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 38,185,848 | 16,946,426 | 6,962,560 |
Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 116,061,250 | 109,736,992 | 43,068,636 |
Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 45,438,773 | 20,436,601 | |
Preferred Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 61,137,484 | 59,691,998 | |
Preferred Stock in BlackRidge Research | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 8,000,000 | ||
Convertible Debt | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 84,918,245 | ||
Total | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 315,555,752 | 189,865,591 |