Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | nFusz, Inc. | |
Entity Central Index Key | 1,566,610 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 118,262,345 | |
Trading Symbol | FUSZ | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 28,906 | $ 16,762 |
Accounts receivable | 6,000 | 8,468 |
Prepaid expenses | 26,551 | 10,871 |
Total current assets | 61,457 | 36,101 |
Property and equipment, net | 35,976 | 52,066 |
Other assets | 8,780 | 16,036 |
Total assets | 106,213 | 104,203 |
Current liabilities: | ||
Accounts payable and accrued expenses | 597,320 | 431,650 |
Accrued interest (including $97,732 and $118,451 payable to related parties) | 216,722 | 118,137 |
Accrued officers' salary | 475,654 | 200,028 |
Notes payable, net of discount of $51,442 and $48,942, respectively | 183,558 | 177,358 |
Notes payable - related party | 1,964,985 | 1,964,985 |
Convertible note payable, net of discount of $114,302 and $0, respectively | 786,466 | 680,268 |
Total current liabilities | 4,224,705 | 3,572,426 |
Notes Payable Series A Preferred, net of discount of $10,670 | 335,830 | |
Stockholders' deficit | ||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized, none issued or outstanding | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 112,735,353 and 94,661,566 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 11,274 | 9,465 |
Additional paid in capital | 21,657,298 | 17,815,732 |
Stock subscription | (20) | (20,020) |
Accumulated deficit | (26,122,874) | (21,273,400) |
Total stockholders' deficit | (4,454,322) | (3,468,223) |
Total liabilities and stockholders’ deficit | $ 106,213 | $ 104,203 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued interest, related parties | $ 97,732 | $ 118,451 |
Notes payable, discount | 51,442 | 48,942 |
Notes payable related party, discount noncurrent | $ 10,670 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 112,735,353 | 94,661,566 |
Common stock, shares outstanding | 112,735,353 | 94,661,566 |
Convertible Notes Payable [Member] | ||
Notes payable, discount | $ 114,302 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net Sales | ||||
Research and development | 109,350 | 67,350 | 291,190 | 189,166 |
General and administrative | 1,082,131 | 851,815 | 3,052,161 | 2,408,753 |
Loss from operations | (1,191,481) | (919,165) | (3,343,351) | (2,597,919) |
Other Income | 21,920 | 16,243 | 21,921 | 47,836 |
Debt Extinguishment | (424,331) | (977,201) | ||
Interest expense (including $59,434 and $59,434 to related parties for nine month and $176,364 and $182,411 to related parties for three months) | (205,038) | (83,791) | (375,862) | (244,140) |
Interest expense - amortization of debt discount | (81,959) | (101,324) | (174,981) | (281,176) |
Net loss | $ (1,880,889) | $ (1,088,037) | $ (4,849,474) | $ (3,075,399) |
Loss per share - basic and diluted | $ (0.02) | $ (0.01) | $ (0.05) | $ (0.04) |
Weighted average number of common shares outstanding - basic and diluted | 108,542,493 | 84,601,383 | 102,376,462 | 71,626,094 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Interest expense, related parties | $ 176,364 | $ 182,411 | $ 59,434 | $ 59,434 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholders Deficit (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Stock Subscription [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 9,465 | $ 17,815,732 | $ (20,020) | $ (21,273,400) | $ (3,468,223) |
Balance, shares at Dec. 31, 2016 | 94,661,566 | ||||
Fair value vested options | 278,422 | 278,422 | |||
Proceeds from sale of common stock | $ 653 | 449,347 | 20,000 | 470,000 | |
Proceeds from sale of common stock, shares | 6,525,000 | ||||
Shares of common stock issued upon conversion of debt | $ 103 | 181,742 | 181,845 | ||
Shares of common stock issued upon conversion of debt, shares | 1,026,195 | ||||
Shares of common stock issued upon conversion Preferred Series A | $ 237 | 263,639 | 263,876 | ||
Shares of common stock issued upon conversion Preferred Series A, shares | 2,368,824 | ||||
Fair value of warrants issued to extinguish debt and accounts payable | 870,656 | 870,656 | |||
Shares of common stock issued to settle accounts payable | $ 40 | 55,960 | 56,000 | ||
Shares of common stock issued to settle accounts payable, shares | 400,000 | ||||
Fair value of common shares, warrants and beneficial conversion feature of issued convertible note | $ 5 | 196,948 | 196,953 | ||
Fair value of common shares, warrants and beneficial conversion feature of issued convertible note, shares | 50,000 | ||||
Common shares issued for services | $ 771 | 1,544,852 | 1,545,623 | ||
Common shares issued for services, shares | 7,703,768 | ||||
Net loss | (4,849,474) | (4,849,474) | |||
Balance at Sep. 30, 2017 | $ 11,274 | $ 21,657,298 | $ (20) | $ (26,122,874) | $ (4,454,322) |
Balance, shares at Sep. 30, 2017 | 112,735,353 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities: | ||
Net loss | $ (4,849,474) | $ (3,075,399) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 1,824,045 | 1,145,053 |
Debt extinguishment | 977,201 | |
Amortization of debt discount and debt issuance costs | 174,981 | 281,146 |
Conversion of series A Preferred | 118,698 | |
Depreciation and amortization | 16,090 | 16,467 |
Effect of changes in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 569,881 | 371,141 |
Accounts receivable | 2,468 | (3,406) |
Other assets | 7,256 | (15,255) |
Prepaid expenses and other current assets | (15,680) | (39,949) |
Net cash used in operating activities | (1,174,534) | (1,320,202) |
Investing Activities: | ||
Purchase of property and equipment | (2,494) | |
Other | ||
Net cash used in investing activities | (2,494) | |
Financing Activities: | ||
Proceeds from series A preferred stock | 555,000 | |
Proceeds from sale of common stock | 470,000 | 1,464,850 |
Proceeds from note payable | 300,000 | |
Proceeds from notes payable - related parties | 82,446 | |
Redemption of series A preferred | (138,322) | |
Repurchases of common stock | (166,226) | |
Net cash provided by financing activities | 1,186,678 | 1,381,070 |
Net change in cash | 12,144 | 58,374 |
Cash - beginning of period | 16,762 | 103,019 |
Cash - end of period | 28,906 | 161,393 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 171,375 | 11,250 |
Cash paid for income taxes | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Fair value of warrants issued to extend debt | 860,600 | |
Conversion of series A Preferred to common stock | 263,876 | |
Fair value of common shares, warrants and beneficial conversion feature of issued convertible note | 196,953 | |
Conversion of note payable to common stock | 181,845 | |
Common stock issued to settle accounts payable | 56,000 | |
Conversion of notes payable to convertible notes payable | 600,000 | |
Conversion of notes payable to related parties to convertible notes payable | 332,446 | |
Conversion of accrued payroll to related party note | 121,875 | |
Conversion of accrued interest on notes payable to convertible notes payable | 66,463 | |
Conversion of accrued interest on notes payable to related parties to convertible notes payable | $ 10,421 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | 1. DESCRIPTION OF BUSINESS Organization Cutaia Media Group, LLC (“CMG”) was a limited liability company formed on December 12, 2012 under the laws of the State of Nevada. On May 19, 2014, bBooth, Inc. was incorporated under the laws of the State of Nevada. On May 19, 2014, CMG was merged into bBooth, Inc. and bBooth, Inc. changed its name to bBooth (USA), Inc. The operations of CMG and bBooth (USA), Inc. are collectively referred to as “bBoothUSA”. On October 16, 2014, bBoothUSA completed a Share Exchange Agreement with Global System Designs, Inc. (“GSD”) which was accounted for as a reverse merger transaction. In connection with the closing of the Share Exchange Agreement, GSD management was replaced by bBoothUSA management, and GSD changed its name to bBooth, Inc. Effective April 21, 2017, the registrant (referred to as “we,” “our,” or the “Company”) changed our corporate name from bBooth, Inc. to nFüsz, Inc. The name change was effected through a parent/subsidiary short-form merger of nFüsz, Inc., our wholly-owned Nevada subsidiary, formed solely for the purpose of the name change, with and into us. We were the surviving entity. To effectuate the merger, we filed Articles of Merger with the Secretary of State of the State of Nevada on April 4, 2017 and a Certificate of Correction with the Secretary of State of the State of Nevada on April 17, 2017. The merger became effective on April 21, 2017. Our board of directors approved the merger, which resulted in the name change on that date. In accordance with Section 92A.180 of the Nevada Revised Statutes, stockholder approval of the merger was not required. On the effective date of the merger, our name was changed to “nFüsz, Inc.” and our Articles of Incorporation, as amended (the “Articles”), were further amended to reflect our new legal name. With the exception of the name change, there were no other changes to our Articles. Nature of Business The Company has developed proprietary interactive video technology which serves as the basis for certain products and services that it licenses under the brand name “Notifi”. Its NotifiCRM, NotifiADS, NotifiLINKS, and NotifiWEB products are cloud-based, SaaS, CRM, sales lead generation, advertising and social engagement software, accessible on mobile and desktop platforms, for sales-based organizations, consumer brands, marketing and advertising agencies, and artists and social influencers seeking greater levels of viewer engagement, and higher sales conversion rates. The Company’s NotifiCRM platform is enterprise scalable and incorporates unique, proprietary, push-to-screen, interactive audio/video messaging and interactive on-screen “virtual salesperson” communications technology. The Company’s NotifiLIVE service is a proprietary broadcast video platform allowing viewers to interact with broadcast video content by clicking on links embedded in people, objects, graphics or sponsors’ signage displayed on the screen. Viewers can experience NotifiLIVE interactive content and capabilities on most devices available in the market today without the need to download special software or proprietary video players. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2016 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. Principles of Consolidation The condensed consolidated financial statements include the accounts of nFusz, Inc. and its wholly owned subsidiary Songstagram, Inc. (“Songstagram”). All intercompany transactions have been eliminated in consolidation. Going Concern We have incurred operating losses since inception and have negative cash flows from operations. We had a stockholders’ deficit of $4,454,322 as of September 30, 2017, incurred a net loss of $4,849,474 and utilized $1,174,534 of cash during the period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2016 consolidated financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Significant estimates include accruals for potential liabilities, assumptions used in determining the fair value of share based payments, and realization of deferred tax assets. Amounts could materially change in the future. Share Based Payment The Company issues stock options, common stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with FASB ASC 718 “Compensation – Stock Compensation.” Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The Company accounts for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “ .” a b The Company values stock compensation based on the market price on the measurement date. As described above, for employees this is the date of grant, and for non-employees, this is the date of performance completion. The Company values stock options and warrants using the Black-Scholes option pricing model. Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options. No dilutive potential common shares were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of September 30, 2017, the Company had a total of 22,030,953 options and 24,461,413 warrants outstanding, which were excluded from the computation of net loss per share because they are anti-dilutive. As of September 30, 2016, the Company had total of 11,593,333 options and 16,449,734 warrants which were excluded from the computation of net loss per share because they are anti-dilutive. Recent Accounting Pronouncements On May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Company’s financial statements and disclosures. In March 2016, the FASB issued the ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this ASU require, among other things, that all income tax effects of awards be recognized in the income statement when the awards vest or are settled. The ASU also allows for an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and allows for a policy election to account for forfeitures as they occur. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any entity in any interim or annual period. The Company is currently evaluating the expected impact that the standard could have on its financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of September 30, 2017 and December 31, 2016. September 30, 2017 December 31, 2016 (Unaudited) Furniture and fixtures $ 56,890 $ 56,890 Office equipment 50,669 50,669 107,559 107,559 Less: accumulated depreciation (71,583 ) (55,493 ) $ 35,976 $ 52,066 Depreciation expense amounted to $16,090 and $16,467 for nine months ended September 30, 2017 and 2016, respectively. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | 4. NOTES PAYABLE The Company has the following notes payable as of September 30, 2017 and December 31, 2016: Note Note Date Maturity Date Interest Rate Original Borrowing Balance at September 30, 2017 Balance at December 31, 2016 (Unaudited) Note payable (a) March 21, 2015 March 20, 2018 12 % $ 125,000 $ 125,000 $ 125,000 Note payable (b) December 15, 2016 September 15, 2017 5 % $ 101,300 - 101,300 Note payable (c) September 26, 2016 September 15, 2017 5 % $ 110,000 110,000 - Total notes payable 235,000 226,300 Debt discount (51,442 ) (48,942 ) Total notes payable, net of debt discount $ 183,558 $ 177,358 (a) On March 21, 2015, the Company entered into an agreement with DelMorgan Group LLC (“DelMorgan”), pursuant to which DelMorgan agreed to act as the Company’s exclusive financial advisor. In connection with the agreement, the Company paid DelMorgan $125,000, which was advanced by a third-party lender in exchange for an unsecured note payable issued by the Company bearing interest at the rate of 12% per annum payable monthly beginning on April 20, 2015. Effective March 20, 2017, for no additional consideration the Company entered into an extension agreement with DelMorgan to extend the maturity date of the Note to March 20, 2018. All other terms of the Note remain unchanged. (b) On December 16, 2016 the Company issued a note payable amounting to $101,300 in exchange for cash of $80,000, original issue discount of $8,800 and guaranteed interest of $12,500. The note was unsecured, bore interest rate of 5% per annum and matured in May 2017. In addition, the Company also granted the noteholder a three-year warrant to acquire 176,000 shares of the Company’s common stock with an exercise price of $0.25 per share, and 240,000 shares of the Company’s common stock. As a result, the Company recorded a debt discount totaling $53,659 to account for the origin original issue discount of $8,800, guaranteed interest of $12,500, relative fair value of the warrants of $10,759 and fair value of the common shares of $21,600. The debt discount was amortized over the term of the note. As of December 31, 2016, outstanding balance of the note amounted to $101,300 and unamortized debt discount of $48,942. On June 7, 2017, the Company and the noteholder agreed to settle the entire note payable in exchange for the initial issuance of 462,000 shares of its Common Stock (the “Shares”) with a fair value of $110,880 at the date of the agreement. In the event the noteholder does not realize sufficient proceeds through sales of the Shares, in accordance with the terms set forth herein, to equal $92,400, after deduction of reasonable sale transaction-related expenses, the Company agrees to issue additional shares to make up the deficiency or to pay such deficiency in cash, at the Company’s option. The Parties agree that this “Make Whole” provision shall expire and be of no further force and effect on the date the sum of net proceeds realized from the sale of the initial issuance of 462,000 shares is equal to or great than $92,400; or any deficiency is paid in cash by the Company at its option; or June 7, 2018, whichever occurs first. The noteholder agrees not to sell more than 10 percent (10%) of the total weekly volume of FUSZ common shares traded in the United States domestic over-the-counter stock market in any one week. The noteholder agrees, that upon request of the Company, to provide trading records to the Company reflecting all sales of the Shares, within 1 (one) business days following such request. As a result of this conversion, the Company recognized a loss on extinguishment of $9,580 to account the difference between the fair value of the share issued and the note converted. As a result of this agreement, during the period ended September 30, 2017, the Company amortized the remaining debt discount of $48,942 and settled the entire note payable of $101,300 in exchange for 1,026,195 shares of common stock with a fair value of $181,845. The Company recognized a loss of $80,545 to account the difference between the fair value of the common shares issued and the balance of the note payable. (c) Effective September 26, 2017, we entered into the Purchase Agreement, dated September 15, 2017, with Kodiak Capital Group, LLC (“Kodiak”). Under the Purchase Agreement, the Company may from time to time, in our discretion, sell shares of our common stock to Kodiak for aggregate gross proceeds of up to $2,000,000. Unless terminated earlier, Kodiak’s purchase commitment will automatically terminate on the earlier of the date on which Kodiak shall have purchased our shares pursuant to the Purchase Agreement for an aggregate purchase price of $2,000,000, or September 15, 2019. We have no obligation to sell any shares under the Purchase Agreement. As provided in the Purchase Agreement, we may require Kodiak to purchase shares of common stock from time to time by delivering a put notice (“Put Notice”) to Kodiak specifying the total number of shares to be purchased (such number of shares multiplied by the Purchase Price described below, equals the “Investment Amount”); provided there must be a minimum of ten trading days between delivery of each Put Notice. We may determine the Investment Amount provided that such amount may not be less than $25,000. Our ability to issue Put Notices to Kodiak and require Kodiak to purchase our common stock is not contingent on the trading volume of our common stock. Kodiak will have no obligation to purchase shares under the applicable Purchase Agreement to the extent that such purchase would cause Kodiak to own more than 9.99% of our then-issued and outstanding common stock (the “Beneficial Ownership Limitation”). For each share of our common stock purchased under the Purchase Agreement, Kodiak will pay a Purchase Price equal to 80% of the Market Price. The Market Price is defined as the volume weighted average price (the “VWAP”) on the principal trading platform for the Common Stock, as reported by OTC Markets Group, Inc. (“OTC Markets”), for the five consecutive trading days immediately preceding the closing request date (each, a “Closing Request Date”) associated with the applicable Put Notice (the “Valuation Period”). Kodiak’s obligation to purchase shares is subject to customary closing conditions, including without limitation a requirement that this registration statement remain effective registering the resale by Kodiak of the shares to be issued under the Purchase Agreement (the “Registration Statement”). As a result of this agreement, on September 26, 2017, the Company issued a note payable to Kodiak Capital Group, LLC amounting to $110,000 in exchange for cash of $100,000 and an original issue discount of $10,000. The note is unsecured, matures on March 26, 2018 and bears interest rate of 5% per annum. In addition, the Company also granted Kodiak a five year, fully vested warrants to purchase 1,000,000 shares of common stock at $0.15 per share. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.08 per share, life of 5 years; risk free interest rate of 1.87%; volatility of 229%, and dividend yield of 0%. As a result, the Company recorded a debt discount of $52,605 to account for the original issue discount of the note of $10,000 and the relative fair value of the warrants of $42,605. The debt discount is being amortized over the term of the note. In case of a default, the note may also be converted to shares of common stock at a conversion price of $0.25 per share or 70% of the lowest trading price during the ten-trading-day period prior to the conversion date, whichever is lower. As the conversion of the note is subject to a default contingency, pursuant to current accounting guidelines, the Company will only account the beneficial conversion feature, if any, once the default contingency has been met or satisfied. During the period ended September 30, 2017, the Company amortized $1,163 of the recorded debt discount. As of September 30, 2017, outstanding balance of the note amounted to $110,000 and unamortized debt discount of $51,442. As part of the agreement with Kodiak, the Company also agreed to issue a promissory note amounting to $100,000 and warrants to purchase a total of 1,000,000 shares of common stock at $0.20 per share and addition warrants to purchase 4,000,000 shares of common stock at $0.25 per share once the Company’s Registration Statement with the Securities and Exchange Commission becomes effective. As the issuance of the note payable is subject to a contingency, the Company will record the note payable once the contingency has been met or satisfied. Total interest expense for notes payable for the nine months ended September 30, 2017 and 2016 was $7,560 and $7,500 respectively. Total interest expense for notes payable for the three months ended September 30, 2017 and 2016 was $3,810 and $3,750, respectively. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | 5. NOTES PAYABLE – RELATED PARTIES The Company has the following related parties notes payable as of September 30, 2017 and December 31, 2016: Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at September 30, 2017 Balance at December 31, 2016 (Unaudited) Note 1 Year 2015 August 8, 2018 12.0 % $ 1,203,242 $ 1,198,883 $ 1,198,883 Note 2 December 1, 2015 August 8, 2018 12.0 % 189,000 189,000 189,000 Note 3 December 1, 2015 April 1, 2017 12.0 % 111,901 111,901 111,901 Note 4 August 4, 2016 December 4, 2018 12.0 % 343,326 343,326 343,326 Note 5 August 4, 2016 December 4, 2018 12.0 % 121,875 121,875 121,875 Total notes payable – related parties, net $ 1,964,985 $ 1,964,985 ● Note 1 - On various dates during the year ended December 31, 2015, Rory J. Cutaia, the Company’s majority shareholder and Chief Executive Officer, loaned the Company total principal amounts of $1,203,242. The loans were unsecured and all are due on demand, bearing interest at 12% per annum. On December 1, 2015, the Company entered into a Secured Convertible Note agreement with Mr. Cutaia whereby all outstanding principal and accrued interest owed to Mr. Cutaia from previous loans amounting to an aggregate total of $1,248,883 and due on demand, was consolidated under a note payable agreement, bearing interest at 12% per annum, and converted from due on demand to due in full on April 1, 2017. In consideration for Mr. Cutaia’s agreement to consolidate the loans and extend the maturity date, the Company granted Mr. Cutaia a senior security interest in substantially all current and future assets of the Company. Per the terms of the agreement, at Mr. Cutaia’s discretion, he may convert up to $374,665 of outstanding principal, plus accrued interest thereon, into shares of common stock at a conversion rate of $0.07 per share. On May 4, 2017, the Company entered into an extension agreement with Mr. Cutaia to extend the maturity date of the $1,198,883 Secured Note due on April 1, 2017 to August 1, 2018. In consideration for extending the Note, the Company issued Mr. Cutaia 1,755,192 warrants at a price of $0.355. All other terms of the Note remain unchanged. The Company determined that the extension of the note’s maturity resulted in a debt extinguishment for accounting purposes since the fair value of the warrants granted was more than 10% of the recorded value of the original convertible note. As a result, Company recorded the fair value of the new note which approximates the original carrying value $1,198,883 and expensed the entire fair value of the warrants granted of $517,291 as part of loss on debt extinguishment. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.36 per share, life of 3 years; risk free interest rate of 1.51%; volatility of 157%, and dividend yield of 0%. As of September 30, 2017, and December 31, 2016, the principal amount of the notes payable was $1,198,883, respectively. ● Note 2 -On December 1, 2015, the Company entered into an Unsecured Convertible Note with Mr. Cutaia, CEO, in the amount of $189,000, bearing interest at 12% per annum, representing a portion of Mr. Cutaia’s accrued salary for 2015. The note extends the payment terms from on-demand to due in full on April 1, 2017. The outstanding principal and accrued interest may be converted at Mr. Cutaia’s discretion into shares of common stock at a conversion rate of $0.07. On May 4, 2017, for no additional consideration, the Company entered into an extension agreement with Mr. Cutaia to extend the maturity date of the $189,000 Unsecured Note due on April 1, 2017 to August 1, 2018. All other terms of the Note remain unchanged. ● Note 3 - On December 1, 2015, the Company entered into an Unsecured Note agreement with a consulting firm owned by Michael Psomas, a former member of the Company’s Board of Directors, in the amount of $111,901 representing unpaid fees earned for consulting services previously rendered but unpaid as of November 30, 2015. The outstanding amounts bear interest at 12% per annum, and are due in full on April 1, 2017, and is currently past due. ● Note 4 - On April 4, 2016, the Company issued a secured convertible note to Mr. Cutaia, CEO, in the amount of $343,326, which represents $93,326 that the CEO advanced to the Company during the period from December 2015 through March 2016, and the conversion of $250,000 other pre-existing notes. This note bears interest at the rate of 12% per annum, compounded annually and matures on August 4, 2017. The note is also convertible up to 30% of the principal balance into shares of the Company’s common stock at $0.07 per share. In addition, the Company also issued 2,452,325 share purchase warrants, exercisable at $0.07 per share until April 4, 2019, which warrants represent 50% of the amount of such note. On August 4, 2017, the Company entered into an extension agreement with Mr. Cutaia to extend the maturity date of the $343,326 Note due on August 4, 2017 to December 4, 2018. In consideration for extending the Note, the Company issued Mr. Cutaia 1,329,157 warrants at a price of $0.15. All other terms of the Note remain unchanged. The Company determined that the extension of the note’s maturity resulted in a debt extinguishment for accounting purposes since the fair value of the warrants granted was more than 10% of the recorded value of the original convertible note. As a result, Company recorded the fair value of the new note which approximates the original carrying value $343,326 and expensed the entire fair value of the warrants granted of $172,456 as part of loss on debt extinguishment. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.15 per share, life of 1.5 years; risk free interest rate of 1.36%; volatility of 230%, and dividend yield of 0%. As of September 30, 2017, and December 31, 2016, the principal amount of the notes payable was $343,326. ● Note 5 -On April 4, 2016, the Company issued an unsecured convertible note payable to Mr., Cutaia, CEO, in the amount of $121,875, which represents the amount of the accrued but unpaid salary owed to the CEO for the period from December 2015 through March 2016. The note bears interest at the rate of 12% per annum, compounded annually and matures on August 4, 2017. The note is also convertible into shares of the Company’s common stock at $0.07 per share, which approximated the trading price or the Company’s common stock on the date of the agreement. On August 4, 2017, for no additional consideration, the Company entered into an extension agreement with Mr. Cutaia to extend the maturity date of the $121,875 Unsecured Note due on August 4, 2017 to December 4, 2018. All other terms of the Note remain unchanged. Total interest expense for notes payable to related parties for the nine months ended September 30, 2017 and 2016 was $176,364 and $182,411, respectively. Total interest expense for notes payable to related parties for the three months ended September 30, 2017 and 2016 was $59,434 and $59,434, respectively. |
Convertible Note Payable
Convertible Note Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | 6. CONVERTIBLE NOTE PAYABLE The Company has the following notes payable as of September 30, 2017 and December 31, 2016: Note Note Date Maturity Date Interest Rate Original Borrowing Balance at September 30, 2017 Balance at December 31, 2016 (Unaudited) Note payable (a) Various August 4, 2018 12 % $ 600,000 $ 680,268 $ 680,268 Note payable (b) June 19, 2017 February 19, 2018 5 % $ 110,250 110,250 - Note payable (c) August 21, 2017 March 21, 2018 5 % $ 110,250 110,250 - Total notes payable 900,768 680,268 Debt discount (114,302 ) - Total notes payable, net of debt discount $ 786,466 $ 680,268 (a) The Company entered into a series of unsecured loan agreement with Oceanside Strategies, Inc. (“Oceanside”) a third party-lender, in the aggregate principal amount of $600,000 through December 31, 2015. The loans bear interest at rates ranging from 5% to 12% per annum and were due on demand. On April 3, 2016, the Company issued an unsecured convertible note payable to Oceanside in the amount of $680,268 (this amount includes $600,000 principal amount and $80,268 accrued and unpaid interest). This note superseded and replaced all previous notes and current liabilities due to Oceanside for sums Oceanside loaned to the Company in 2014 and 2015. This note bears interest at the rate of 12% per annum, compounded annually. In consideration for Oceanside’s agreement to convert the prior notes from current demand notes and extend the maturity date to December 4, 2016, the Company granted Oceanside the right to convert up to 30% of the amount of such note into shares of the Company’s common stock at $0.07 per share and issued 2,429,530 share purchase warrants, exercisable at $0.07 per share until April 4, 2019. Effective December 30, 2016, the Company entered into an extension agreement with Oceanside to extend the maturity date of the Note to August 4, 2017. All other terms of the Note remain unchanged. In consideration for Oceanside’s agreement to extend the maturity date to August 4, 2017, the Company issued Oceanside 2,429,530 share purchase warrants, exercisable at $0.08 per share until December 29, 2019. Effective August 4, 2017, the Company entered into an extension agreement with Oceanside to extend the maturity date of the Note to August 4, 2018. All other terms of the Note remain unchanged. In consideration for Oceanside’s agreement to extend the maturity date to August 4, 2018, the Company issued Oceanside 1,316,800 share purchase warrants, exercisable at $0.15 per share until August 3, 2022. As a result, Company expensed the entire fair value of the warrants granted of $170,853 as part of loss on debt extinguishment. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.15 per share, life of 3 years; risk free interest rate of 1.36%; volatility of 230%, and dividend yield of 0%. (b) On June 19, 2017, the Company issued an unsecured convertible note to Lucas Holdings in the amount of $105,000 in exchange for 50,000 shares of common stock and a three-year warrant to acquire 330,000 shares of the Company’s common stock with an exercise price of $0.30 per share. The “Maturity Date” is February 18, 2018. A one-time interest charge of five percent (5%) (“Interest Rate”) is to be applied on the Issuance Date to the original principal amount. In addition, there is a 5% Original Issue Discount. The note is convertible to common shares at a conversion price of $0.25 per share. Upon issuance of the note, the Company accounted for an original issue discount of $10,000 which consisted of (i) the 5% original issue discount of $5,000, and (ii) the fixed interest of 5% which aggregated $5,250. The original issue discount of $10,250 has been added to the note balance and will be accreted to interest expense over the life of the note, resulting in a net amount due the holder of $110,250 at maturity. In addition, the (iii) the fair value of the 50,000 common shares of $12,500 issued to the holder, (iv) the relative fair value of the warrants of $40,180, and (v) a beneficial conversion feature of $47,320 were considered as additional valuation discount and will be amortized as interest expense over the life of the note. The aggregate fair value of the original issue discount and the equity securities issued upon inception of the note of $110,250 has been recorded as a valuation discount. As of September 30, 2017, $46,350 of this amount was amortized as interest expense, resulting in an unamortized balance of $63,900 at September 30, 2017. (c) On August 28, 2017, the Company issued an unsecured convertible note to Lucas Holdings in the amount of $105,000. The “Maturity Date” is March 28, 2018. A one-time interest charge of five percent (5%) (“Interest Rate”) is to be applied on the Issuance Date to the original principal amount. In addition, there is a 5% Original Issue Discount. The note is convertible to common shares at a conversion price of $0.10 per share. Upon issuance of the note, the Company recorded a debt discount of $64,600 which consisted of (i) the 5% original issue discount of $5,000, (ii) the fixed interest of 5% which aggregated $5,250 and (iii) a beneficial conversion feature of $54,350 and will be amortized as interest expense over the life of the note. As of September 30, 2017, $14, 198 of this amount was amortized as interest expense, resulting in an unamortized balance of $50,402 at September 30, 2017. Total interest expense for convertible notes payable for the nine months ended September 30, 2017 and 2016 was $61,056 and $58,576, respectively. Total interest expense for convertible notes payable for the three months ended September 30, 2017 and 2016 was $20,576 and $20,576, respectively. |
Convertible Series A Preferred
Convertible Series A Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Convertible Series A Preferred Stock | 7. CONVERTIBLE SERIES A PREFERRED STOCK Effective February 14, 2017, the Company entered into a Securities Purchase Agreement, (the “Purchase Agreement”), by and between an otherwise unaffiliated, accredited investor (the “Purchaser”) and the Company in connection with our issuance and sale to the Purchaser of shares of Series A Preferred Stock under the terms and conditions as set forth in the Purchase Agreement (the “Sale”). In connection with the Sale, our Board of Directors (our “Board”) authorized and approved a series of preferred stock to be known as “Series A Convertible Preferred Stock”, for which 1,050,000 shares, $0.0001 par value per share, were authorized and a Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred Stock, (the “Certificate”), was filed with the Office of the Secretary of State of the State of Nevada (the “State”) to effectuate the authorization. Pursuant to the Purchase Agreement, the purchase of shares of our Series A Preferred Stock may occur in several tranches (each, a “Tranche”; and, collectively, the “Tranches”). The first Tranche of $300,000 ($315,000 in stated value, represented by 315,000 shares of our Series A Preferred Stock) closed simultaneously with the execution of the Purchase Agreement on February 14, 2017 (the “First Closing”), and each additional Tranche shall close at such times and on such financial terms as may be agreed to by the Purchaser and us. The Series A PS has the following rights and privileges: ● Senior rights in terms preference as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company; ● Accrues dividends at a rate of 5% per annum; ● Mandatorily redeemable at an installment basis starting August 13, 2017 in the amount of $63,000 plus accrued interest. The Company has the option to redeem the Series A shares in cash or in shares of common stock based upon the Company’s 5-day Volume Weighted Average Price (“VWAP”). Pursuant to the terms of the Purchase Agreement, the shares of our Series A Preferred Stock issued in the First Closing are to be redeemed by us in five (5) equal weekly payments (each, a “Redemption Payment”), commencing in approximately 180 days from the First Closing. All but one of the Redemption Payments may be made by us in cash or in shares of our common stock, at our option. The Holder shall have the option to demand payment of one Installment Redemption Payment in shares of Common Stock Redemption Payments made using shares of our common stock will be valued based upon a VWAP formula, tied to the then-current quoted price of shares of our common stock, described with greater particularity in the Purchase Agreement. The Company considered the guidance of ASC 480-10, Distinguishing Liabilities From Equity to determine the appropriate treatment of the Series A shares. Pursuant to ASC 480-10, the Company determined that the Series A shares is an obligation to be settled, at the option of the Company, in cash or in variable number of shares with a fixed monetary value that should be recorded as a liability under ASC 480-10. On July 28, 2017, the Company amended the Certificate of Designations to include the mandatory redemption dates. On January 8 th On September 1, 2017, the Company amended the Certificate of Designations. Solely in respect to the 189,000 Preferred Shares that were issued on February 13, 2017 and outstanding as of August 28, 2017, the Company shall redeem $31,500 of the outstanding amount of such Preferred Shares an any accrued but unpaid dividends thereon on the first business day of each week for six consecutive weeks. Solely in respect to the 52,500 Preferred Shares that were issued on July 7, 2007 and outstanding as of the date of the second amendment, beginning the earlier of the effectiveness of a Registration Statement and January 8, 2018, the Company shall redeem $26,500 of the outstanding amount of such Preferred Shares an any accrued but unpaid dividends thereon on the first business day of each week for two consecutive weeks. Beginning the earlier of the effectiveness of a Registration Statement and February 28, 2018, the Company will begin redeeming the 131,250 preferred shares issued on September 1, 2017. The Company shall redeem $26,250 of Preferred Shares an any accrued but unpaid dividends thereon on the first business day of each week for five consecutive weeks. During the period ended September 30, 2017, the Company issued 630,000 shares of Series A Preferred Stock in exchange for cash of $555,000, net of original issue discount and legal fees totaling $75,000. As a result, the Company recorded a liability of $630,000 and a debt discount of $75,000. The debt discount is being amortized to interest expense over the redemption period of the Series A Preferred Stock. During the period ended September 30, 2017, the Company also redeemed 283,500 shares of Series A Preferred stock with a value of $283,500 in exchange for 2,368,824 shares of common stock with a fair value of $263,876 and cash payment of $138,322. As a result of these redemptions, the Company recognize interest expense of $118,698 to account the difference between the fair value of common shares issued and cash payment totaling $402,198 and recorded value of the Series A Preferred stock of $283,500. As of September 30, 2017, the Company has 346,500 Preferred Series A Shares outstanding amounting to $346,500 and unamortized discount of $10,670 or a net balance of $335,830. |
Equity Transactions
Equity Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Equity Transactions | 8. EQUITY TRANSACTIONS The Company’s common stock activity for the nine months ended September 30, 2017 is as follows: Common Stock Shares Issued for Services Shares Issued to Settle Accounts Payable Shares Issued from Stock Subscription Shares Issued from Conversion of Preferred Stock Shares Issued from Conversion of Note Payable Shares Issued as Part of Convertible Note Payable Stock Options Effective October 16, 2014, the Company adopted the 2014 Stock Option Plan (the “Plan”) under the administration of the board of directors to retain the services of valued key employees and consultants of the Company. At its discretion, the Company grants share option awards to certain employees and non-employees, as defined by ASC 718, Compensation—Stock Compensation, under the 204 Stock Option Plan (the “Plan”) and accounts for its share-based compensation in accordance with ASC 718. A summary of option activity for the nine months ended September 30, 2017 is presented below. Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value Outstanding at December 31, 2016 10,530,953 $ 0.33 4.03 Granted 11,500,000 0.17 Exercised - - Forfeited or expired - - Outstanding at September 30, 2017 22,030,953 $ 0.27 1.95 $ 4,876 Vested and expected to vest at September 30, 2017 11,318,406 $ 0.32 $ 4,876 Exercisable at September 30, 2017 7,089,286 $ 0.43 $ 4,876 For the nine months ended September 30, 2017, the Company approved and granted 5,100,000 non-qualified stock options to employees and 2,000,000 to a Director with an aggregate fair value of approximately $683,000 Each exercisable into one share of our common stock and vest 100% in three years from the grant date. For the nine months ended September 30, 2017, the Company approved and granted 4,400,000 non-qualified stock options to consultants with an aggregate fair value of $969,481. Each exercisable into one share of our common stock. A total of 4,000,000 options vest based on consultant achieving quantifiable milestones while the remaining 400,000, options vest over 3 years. As of September 30, 2017, the Company determined that the probability of the consultants achieving these milestones was probable. As a result, the Company recorded compensation expense of $57,087 to account the estimated 880,924 options that vest. The Company also recognized $221,335 in share-based compensation expense for the nine months ended September 30, 2017 based upon the vesting of these options. As of September 30, 2017, total unrecognized stock-based compensation expense was approximately $961,000, which is expected to be recognized as an operating expense through August 2020. The fair value of each share option award on the date of grant is estimated using the Black-Scholes method based on the following weighted-average assumptions: 3 Months Ended September 30, 9 Months Ended September 30, 2017 2016 2017 2016 Risk-free interest rate 1.77% - 1.89 % 1.22 - 1.24 1.22% - 1.93 % 1.22% - 1.65 % Average expected term (years) 5 years 5 years 5 years 5 years Expected volatility 157.09 % 100.18 – 101.25 153.07 – 160 % 100.18 – 101.25 Expected dividend yield - - - - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based upon the Company’s current dividend rate and future expectations Warrants The Company has the following warrants outstanding as of September 30, 2017 all of which are exercisable: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value Outstanding at December 31, 2016 18,455,264 $ 0.19 1.72 Granted 6,006,149 0.20 Exercised - - Forfeited or expired - - Outstanding at September 30, 2017 24,461,413 $ 0.19 2.00 $ 146,107 Vested and exercisable at September 30, 2017 24,461,413 $ 0.19 $ 146,107 For the nine months ended September 30, 2017, the Company granted the following warrants: a. warrants to purchase 1,755,192 shares of common stock to an officer of the Company pursuant to an extension of a note payable (see Note 5); b. warrants to purchase 330,000 shares of common stock pursuant to the issuance of a convertible note payable (see Note 6); c. warrants to purchase 1,329,157 shares of common stock to an officer of the Company pursuant to an extension of a note payable (see Note 5); d. warrants to purchase 1,316,800 shares of common stock pursuant to extension of a convertible note payable (see Note 6); e. warrants to purchase 275,000 shares of common stock in full settlement and release of a disputed, unasserted claim with a fair value of $10,056 which was recorded as part of loss on debt extinguishment; and f. warrants to purchase 1,000,000 shares of common stock pursuant to the issuance of a note payable (see Note 4). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Litigation We had one litigation, filed on September 19, 2016. The action was captioned as Multicore Technologies, an Indian Corporation, plaintiff, v. Rocky Wright, an individual, bBooth, Inc., a Nevada corporation, and Blabeey, Inc, a Nevada corporation, defendants. The action is pending in the United States District Court for the Central District of California under Case No.: 2:16-cv-7026 DSF (AJWx). The First Amended Complaint was filed on January 27, 2017, alleging breach of Implied-in-fact Contract and Quantum Meruit relating to services Multicore allegedly performed on behalf of bBooth in connection with various web and mobile applications. Multicore was seeking damages of approximately $157,000 plus interest and cost of suit. We filed an Answer denying Multicore’s claims on March 13, 2017. On September 15, 2017, the Multicore Action was dismissed by plaintiff as against us in exchange for our guarantee of two payments to be made by another defendant in the action totaling $5,000, for which we have a right of off-set against any sums we may owe such party for services currently being rendered to us by such party. We know of no other material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or any of our subsidiaries or has a material interest adverse to our company or any of our subsidiaries. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. SUBSEQUENT EVENTS In October 2017, the Company redeemed a total of 48,043 shares of Series A Preferred stock with a carrying value of approximately $48,000 in exchange for 493,182 shares of common stock with fair value of $54,000. As a result, the Company will record interest expense of $6,000 to account the difference between the carrying value of the redeemed Series A Preferred stock and the fair value of the common shares issued. On October 25, 2017, the Company issued a total of 100,000 shares to charitable organizations, with a fair value of $9,000. On November 3, 2017, the Company issued 4,657,143 common shares for a net proceed of $326,000. Subsequent to September 30, 2017, the Company issued 400,000 non-qualified stock options with an exercise price of $0.25 to employees for services to be rendered. The options vest annually in equal installments over three years on each of the employee’s anniversary dates with an estimated fair value of $29,086. On October 13, 2017, the Company filed an S-1 for the offer and resale by Kodiak Capital Group, LLC, of up to 25,000,000 shares of common stock. As a condition of the filing, the Company received $100,000 in exchange for a $110,000 note payable and 1,000,000 warrants with an exercise price of $.20. The aggregate fair value of the original issue discount and the Warrants issued was $45,349 and was recorded as a valuation discount. On November 13, 2017, the S-1 Registration became effective. Subsequent to September 30, 2017, 276,667 shares of common stock that were subject to vesting schedules and previously accounted for were issued. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC. The condensed consolidated balance sheet as of December 31, 2016 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of nFusz, Inc. and its wholly owned subsidiary Songstagram, Inc. (“Songstagram”). All intercompany transactions have been eliminated in consolidation. |
Going Concern | Going Concern We have incurred operating losses since inception and have negative cash flows from operations. We had a stockholders’ deficit of $4,454,322 as of September 30, 2017, incurred a net loss of $4,849,474 and utilized $1,174,534 of cash during the period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2016 consolidated financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. Our continuation as a going concern is dependent on our ability to obtain additional financing until we can generate sufficient cash flows from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Significant estimates include accruals for potential liabilities, assumptions used in determining the fair value of share based payments, and realization of deferred tax assets. Amounts could materially change in the future. |
Share Based Payment | Share Based Payment The Company issues stock options, common stock, and equity interests as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with FASB ASC 718 “Compensation – Stock Compensation.” Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The Company accounts for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “ .” a b The Company values stock compensation based on the market price on the measurement date. As described above, for employees this is the date of grant, and for non-employees, this is the date of performance completion. The Company values stock options and warrants using the Black-Scholes option pricing model. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options. No dilutive potential common shares were included in the computation of diluted net loss per share because their impact was anti-dilutive. As of September 30, 2017, the Company had a total of 22,030,953 options and 24,461,413 warrants outstanding, which were excluded from the computation of net loss per share because they are anti-dilutive. As of September 30, 2016, the Company had total of 11,593,333 options and 16,449,734 warrants which were excluded from the computation of net loss per share because they are anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Company’s financial statements and disclosures. In March 2016, the FASB issued the ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this ASU require, among other things, that all income tax effects of awards be recognized in the income statement when the awards vest or are settled. The ASU also allows for an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and allows for a policy election to account for forfeitures as they occur. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any entity in any interim or annual period. The Company is currently evaluating the expected impact that the standard could have on its financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of September 30, 2017 and December 31, 2016. September 30, 2017 December 31, 2016 (Unaudited) Furniture and fixtures $ 56,890 $ 56,890 Office equipment 50,669 50,669 107,559 107,559 Less: accumulated depreciation (71,583 ) (55,493 ) $ 35,976 $ 52,066 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | The Company has the following notes payable as of September 30, 2017 and December 31, 2016: Note Note Date Maturity Date Interest Rate Original Borrowing Balance at September 30, 2017 Balance at December 31, 2016 (Unaudited) Note payable (a) March 21, 2015 March 20, 2018 12 % $ 125,000 $ 125,000 $ 125,000 Note payable (b) December 15, 2016 September 15, 2017 5 % $ 101,300 - 101,300 Note payable (c) September 26, 2016 September 15, 2017 5 % $ 110,000 110,000 - Total notes payable 235,000 226,300 Debt discount (51,442 ) (48,942 ) Total notes payable, net of debt discount $ 183,558 $ 177,358 (a) On March 21, 2015, the Company entered into an agreement with DelMorgan Group LLC (“DelMorgan”), pursuant to which DelMorgan agreed to act as the Company’s exclusive financial advisor. In connection with the agreement, the Company paid DelMorgan $125,000, which was advanced by a third-party lender in exchange for an unsecured note payable issued by the Company bearing interest at the rate of 12% per annum payable monthly beginning on April 20, 2015. Effective March 20, 2017, for no additional consideration the Company entered into an extension agreement with DelMorgan to extend the maturity date of the Note to March 20, 2018. All other terms of the Note remain unchanged. (b) On December 16, 2016 the Company issued a note payable amounting to $101,300 in exchange for cash of $80,000, original issue discount of $8,800 and guaranteed interest of $12,500. The note was unsecured, bore interest rate of 5% per annum and matured in May 2017. In addition, the Company also granted the noteholder a three-year warrant to acquire 176,000 shares of the Company’s common stock with an exercise price of $0.25 per share, and 240,000 shares of the Company’s common stock. As a result, the Company recorded a debt discount totaling $53,659 to account for the origin original issue discount of $8,800, guaranteed interest of $12,500, relative fair value of the warrants of $10,759 and fair value of the common shares of $21,600. The debt discount was amortized over the term of the note. As of December 31, 2016, outstanding balance of the note amounted to $101,300 and unamortized debt discount of $48,942. On June 7, 2017, the Company and the noteholder agreed to settle the entire note payable in exchange for the initial issuance of 462,000 shares of its Common Stock (the “Shares”) with a fair value of $110,880 at the date of the agreement. In the event the noteholder does not realize sufficient proceeds through sales of the Shares, in accordance with the terms set forth herein, to equal $92,400, after deduction of reasonable sale transaction-related expenses, the Company agrees to issue additional shares to make up the deficiency or to pay such deficiency in cash, at the Company’s option. The Parties agree that this “Make Whole” provision shall expire and be of no further force and effect on the date the sum of net proceeds realized from the sale of the initial issuance of 462,000 shares is equal to or great than $92,400; or any deficiency is paid in cash by the Company at its option; or June 7, 2018, whichever occurs first. The noteholder agrees not to sell more than 10 percent (10%) of the total weekly volume of FUSZ common shares traded in the United States domestic over-the-counter stock market in any one week. The noteholder agrees, that upon request of the Company, to provide trading records to the Company reflecting all sales of the Shares, within 1 (one) business days following such request. As a result of this conversion, the Company recognized a loss on extinguishment of $9,580 to account the difference between the fair value of the share issued and the note converted. As a result of this agreement, during the period ended September 30, 2017, the Company amortized the remaining debt discount of $48,942 and settled the entire note payable of $101,300 in exchange for 1,026,195 shares of common stock with a fair value of $181,845. The Company recognized a loss of $80,545 to account the difference between the fair value of the common shares issued and the balance of the note payable. (c) Effective September 26, 2017, we entered into the Purchase Agreement, dated September 15, 2017, with Kodiak Capital Group, LLC (“Kodiak”). Under the Purchase Agreement, the Company may from time to time, in our discretion, sell shares of our common stock to Kodiak for aggregate gross proceeds of up to $2,000,000. Unless terminated earlier, Kodiak’s purchase commitment will automatically terminate on the earlier of the date on which Kodiak shall have purchased our shares pursuant to the Purchase Agreement for an aggregate purchase price of $2,000,000, or September 15, 2019. We have no obligation to sell any shares under the Purchase Agreement. As provided in the Purchase Agreement, we may require Kodiak to purchase shares of common stock from time to time by delivering a put notice (“Put Notice”) to Kodiak specifying the total number of shares to be purchased (such number of shares multiplied by the Purchase Price described below, equals the “Investment Amount”); provided there must be a minimum of ten trading days between delivery of each Put Notice. We may determine the Investment Amount provided that such amount may not be less than $25,000. Our ability to issue Put Notices to Kodiak and require Kodiak to purchase our common stock is not contingent on the trading volume of our common stock. Kodiak will have no obligation to purchase shares under the applicable Purchase Agreement to the extent that such purchase would cause Kodiak to own more than 9.99% of our then-issued and outstanding common stock (the “Beneficial Ownership Limitation”). For each share of our common stock purchased under the Purchase Agreement, Kodiak will pay a Purchase Price equal to 80% of the Market Price. The Market Price is defined as the volume weighted average price (the “VWAP”) on the principal trading platform for the Common Stock, as reported by OTC Markets Group, Inc. (“OTC Markets”), for the five consecutive trading days immediately preceding the closing request date (each, a “Closing Request Date”) associated with the applicable Put Notice (the “Valuation Period”). Kodiak’s obligation to purchase shares is subject to customary closing conditions, including without limitation a requirement that this registration statement remain effective registering the resale by Kodiak of the shares to be issued under the Purchase Agreement (the “Registration Statement”). As a result of this agreement, on September 26, 2017, the Company issued a note payable to Kodiak Capital Group, LLC amounting to $110,000 in exchange for cash of $100,000 and an original issue discount of $10,000. The note is unsecured, matures on March 26, 2018 and bears interest rate of 5% per annum. In addition, the Company also granted Kodiak a five year, fully vested warrants to purchase 1,000,000 shares of common stock at $0.15 per share. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.08 per share, life of 5 years; risk free interest rate of 1.87%; volatility of 229%, and dividend yield of 0%. As a result, the Company recorded a debt discount of $52,605 to account for the original issue discount of the note of $10,000 and the relative fair value of the warrants of $42,605. The debt discount is being amortized over the term of the note. In case of a default, the note may also be converted to shares of common stock at a conversion price of $0.25 per share or 70% of the lowest trading price during the ten-trading-day period prior to the conversion date, whichever is lower. As the conversion of the note is subject to a default contingency, pursuant to current accounting guidelines, the Company will only account the beneficial conversion feature, if any, once the default contingency has been met or satisfied. During the period ended September 30, 2017, the Company amortized $1,163 of the recorded debt discount. As of September 30, 2017, outstanding balance of the note amounted to $110,000 and unamortized debt discount of $51,442. As part of the agreement with Kodiak, the Company also agreed to issue a promissory note amounting to $100,000 and warrants to purchase a total of 1,000,000 shares of common stock at $0.20 per share and addition warrants to purchase 4,000,000 shares of common stock at $0.25 per share once the Company’s Registration Statement with the Securities and Exchange Commission becomes effective. As the issuance of the note payable is subject to a contingency, the Company will record the note payable once the contingency has been met or satisfied. |
Notes Payable - Related Parti21
Notes Payable - Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable to Related Parties | The Company has the following related parties notes payable as of September 30, 2017 and December 31, 2016: Note Issuance Date Maturity Date Interest Rate Original Borrowing Balance at September 30, 2017 Balance at December 31, 2016 (Unaudited) Note 1 Year 2015 August 8, 2018 12.0 % $ 1,203,242 $ 1,198,883 $ 1,198,883 Note 2 December 1, 2015 August 8, 2018 12.0 % 189,000 189,000 189,000 Note 3 December 1, 2015 April 1, 2017 12.0 % 111,901 111,901 111,901 Note 4 August 4, 2016 December 4, 2018 12.0 % 343,326 343,326 343,326 Note 5 August 4, 2016 December 4, 2018 12.0 % 121,875 121,875 121,875 Total notes payable – related parties, net $ 1,964,985 $ 1,964,985 |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | The Company has the following notes payable as of September 30, 2017 and December 31, 2016: Note Note Date Maturity Date Interest Rate Original Borrowing Balance at September 30, 2017 Balance at December 31, 2016 (Unaudited) Note payable (a) Various August 4, 2018 12 % $ 600,000 $ 680,268 $ 680,268 Note payable (b) June 19, 2017 February 19, 2018 5 % $ 110,250 110,250 - Note payable (c) August 21, 2017 March 21, 2018 5 % $ 110,250 110,250 - Total notes payable 900,768 680,268 Debt discount (114,302 ) - Total notes payable, net of debt discount $ 786,466 $ 680,268 (a) The Company entered into a series of unsecured loan agreement with Oceanside Strategies, Inc. (“Oceanside”) a third party-lender, in the aggregate principal amount of $600,000 through December 31, 2015. The loans bear interest at rates ranging from 5% to 12% per annum and were due on demand. On April 3, 2016, the Company issued an unsecured convertible note payable to Oceanside in the amount of $680,268 (this amount includes $600,000 principal amount and $80,268 accrued and unpaid interest). This note superseded and replaced all previous notes and current liabilities due to Oceanside for sums Oceanside loaned to the Company in 2014 and 2015. This note bears interest at the rate of 12% per annum, compounded annually. In consideration for Oceanside’s agreement to convert the prior notes from current demand notes and extend the maturity date to December 4, 2016, the Company granted Oceanside the right to convert up to 30% of the amount of such note into shares of the Company’s common stock at $0.07 per share and issued 2,429,530 share purchase warrants, exercisable at $0.07 per share until April 4, 2019. Effective December 30, 2016, the Company entered into an extension agreement with Oceanside to extend the maturity date of the Note to August 4, 2017. All other terms of the Note remain unchanged. In consideration for Oceanside’s agreement to extend the maturity date to August 4, 2017, the Company issued Oceanside 2,429,530 share purchase warrants, exercisable at $0.08 per share until December 29, 2019. Effective August 4, 2017, the Company entered into an extension agreement with Oceanside to extend the maturity date of the Note to August 4, 2018. All other terms of the Note remain unchanged. In consideration for Oceanside’s agreement to extend the maturity date to August 4, 2018, the Company issued Oceanside 1,316,800 share purchase warrants, exercisable at $0.15 per share until August 3, 2022. As a result, Company expensed the entire fair value of the warrants granted of $170,853 as part of loss on debt extinguishment. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.15 per share, life of 3 years; risk free interest rate of 1.36%; volatility of 230%, and dividend yield of 0%. (b) On June 19, 2017, the Company issued an unsecured convertible note to Lucas Holdings in the amount of $105,000 in exchange for 50,000 shares of common stock and a three-year warrant to acquire 330,000 shares of the Company’s common stock with an exercise price of $0.30 per share. The “Maturity Date” is February 18, 2018. A one-time interest charge of five percent (5%) (“Interest Rate”) is to be applied on the Issuance Date to the original principal amount. In addition, there is a 5% Original Issue Discount. The note is convertible to common shares at a conversion price of $0.25 per share. Upon issuance of the note, the Company accounted for an original issue discount of $10,000 which consisted of (i) the 5% original issue discount of $5,000, and (ii) the fixed interest of 5% which aggregated $5,250. The original issue discount of $10,250 has been added to the note balance and will be accreted to interest expense over the life of the note, resulting in a net amount due the holder of $110,250 at maturity. In addition, the (iii) the fair value of the 50,000 common shares of $12,500 issued to the holder, (iv) the relative fair value of the warrants of $40,180, and (v) a beneficial conversion feature of $47,320 were considered as additional valuation discount and will be amortized as interest expense over the life of the note. The aggregate fair value of the original issue discount and the equity securities issued upon inception of the note of $110,250 has been recorded as a valuation discount. As of September 30, 2017, $46,350 of this amount was amortized as interest expense, resulting in an unamortized balance of $63,900 at September 30, 2017. (c) On August 28, 2017, the Company issued an unsecured convertible note to Lucas Holdings in the amount of $105,000. The “Maturity Date” is March 28, 2018. A one-time interest charge of five percent (5%) (“Interest Rate”) is to be applied on the Issuance Date to the original principal amount. In addition, there is a 5% Original Issue Discount. The note is convertible to common shares at a conversion price of $0.10 per share. Upon issuance of the note, the Company recorded a debt discount of $64,600 which consisted of (i) the 5% original issue discount of $5,000, (ii) the fixed interest of 5% which aggregated $5,250 and (iii) a beneficial conversion feature of $54,350 and will be amortized as interest expense over the life of the note. As of September 30, 2017, $14, 198 of this amount was amortized as interest expense, resulting in an unamortized balance of $50,402 at September 30, 2017. Total interest expense for convertible notes payable for the nine months ended September 30, 2017 and 2016 was $61,056 and $58,576, respectively. Total interest expense for convertible notes payable for the three months ended September 30, 2017 and 2016 was $20,576 and $20,576, respectively. |
Equity Transactions (Tables)
Equity Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Option Activity | A summary of option activity for the nine months ended September 30, 2017 is presented below. Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value Outstanding at December 31, 2016 10,530,953 $ 0.33 4.03 Granted 11,500,000 0.17 Exercised - - Forfeited or expired - - Outstanding at September 30, 2017 22,030,953 $ 0.27 1.95 $ 4,876 Vested and expected to vest at September 30, 2017 11,318,406 $ 0.32 $ 4,876 Exercisable at September 30, 2017 7,089,286 $ 0.43 $ 4,876 |
Schedule of Fair Value Assumptions Using Black-Scholes Method | The fair value of each share option award on the date of grant is estimated using the Black-Scholes method based on the following weighted-average assumptions: 3 Months Ended September 30, 9 Months Ended September 30, 2017 2016 2017 2016 Risk-free interest rate 1.77% - 1.89 % 1.22 - 1.24 1.22% - 1.93 % 1.22% - 1.65 % Average expected term (years) 5 years 5 years 5 years 5 years Expected volatility 157.09 % 100.18 – 101.25 153.07 – 160 % 100.18 – 101.25 Expected dividend yield - - - - |
Schedule of Warrants Outstanding | The Company has the following warrants outstanding as of September 30, 2017 all of which are exercisable: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value Outstanding at December 31, 2016 18,455,264 $ 0.19 1.72 Granted 6,006,149 0.20 Exercised - - Forfeited or expired - - Outstanding at September 30, 2017 24,461,413 $ 0.19 2.00 $ 146,107 Vested and exercisable at September 30, 2017 24,461,413 $ 0.19 $ 146,107 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Stockholders' deficit | $ 4,454,322 | $ 4,454,322 | $ 3,468,223 | ||
Net loss | $ 1,880,889 | $ 1,088,037 | 4,849,474 | $ 3,075,399 | |
Utilized cash | $ 1,174,534 | $ 1,320,202 | |||
Outstanding Options [Member] | |||||
Antidilutive securities | 22,030,953 | 11,593,333 | |||
Outstanding Warrants [Member] | |||||
Antidilutive securities | 24,461,413 | 16,449,734 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 16,090 | $ 16,467 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 107,559 | $ 107,559 |
Less: accumulated depreciation | (71,583) | (55,493) |
Property and equipment, net | 35,976 | 52,066 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 56,890 | 56,890 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 50,669 | $ 50,669 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Interest expense for notes payable | $ 81,959 | $ 101,324 | $ 174,981 | $ 281,176 |
Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense for notes payable | $ 3,810 | $ 3,750 | $ 7,560 | $ 7,500 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Dec. 16, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | ||
Total notes payable, net of debt discount | $ 235,000 | $ 226,300 | |||
Debt discount | (51,442) | (48,942) | |||
Total note payable | $ 183,558 | 177,358 | |||
Note Payable 1 [Member] | |||||
Note date | [1] | Mar. 21, 2015 | |||
Maturity date | [1] | Mar. 20, 2018 | |||
Interest rate | [1] | 12.00% | |||
Original borrowing | [1] | $ 125,000 | |||
Total notes payable, net of debt discount | [1] | $ 125,000 | 125,000 | ||
Note Payable 2 [Member] | |||||
Note date | [2] | Dec. 15, 2016 | |||
Maturity date | May 31, 2017 | Jun. 15, 2017 | [2] | ||
Interest rate | [2] | 5.00% | |||
Original borrowing | [2] | $ 101,300 | |||
Total notes payable, net of debt discount | [2] | 101,300 | |||
Note Payable 3 [Member] | |||||
Note date | [3] | Sep. 26, 2016 | |||
Maturity date | [3] | Sep. 15, 2017 | |||
Interest rate | [3] | 5.00% | |||
Original borrowing | [3] | $ 110,000 | |||
Total notes payable, net of debt discount | [3] | $ 110,000 | |||
[1] | On March 21, 2015, the Company entered into an agreement with DelMorgan Group LLC (“DelMorgan”), pursuant to which DelMorgan agreed to act as the Company’s exclusive financial advisor. In connection with the agreement, the Company paid DelMorgan $125,000, which was advanced by a third-party lender in exchange for an unsecured note payable issued by the Company bearing interest at the rate of 12% per annum payable monthly beginning on April 20, 2015.Effective March 20, 2017, for no additional consideration the Company entered into an extension agreement with DelMorgan to extend the maturity date of the Note to March 20, 2018. All other terms of the Note remain unchanged. | ||||
[2] | On December 16, 2016 the Company issued a note payable amounting to $101,300 in exchange for cash of $80,000, original issue discount of $8,800 and guaranteed interest of $12,500. The note was unsecured, bore interest rate of 5% per annum and matured in May 2017. In addition, the Company also granted the noteholder a three-year warrant to acquire 176,000 shares of the Company’s common stock with an exercise price of $0.25 per share, and 240,000 shares of the Company’s common stock. As a result, the Company recorded a debt discount totaling $53,659 to account for the origin original issue discount of $8,800, guaranteed interest of $12,500, relative fair value of the warrants of $10,759 and fair value of the common shares of $21,600. The debt discount was amortized over the term of the note. As of December 31, 2016, outstanding balance of the note amounted to $101,300 and unamortized debt discount of $48,942.On June 7, 2017, the Company and the noteholder agreed to settle the entire note payable in exchange for the initial issuance of 462,000 shares of its Common Stock (the “Shares”) with a fair value of $110,880 at the date of the agreement. In the event the noteholder does not realize sufficient proceeds through sales of the Shares, in accordance with the terms set forth herein, to equal $92,400, after deduction of reasonable sale transaction-related expenses, the Company agrees to issue additional shares to make up the deficiency or to pay such deficiency in cash, at the Company’s option. The Parties agree that this “Make Whole” provision shall expire and be of no further force and effect on the date the sum of net proceeds realized from the sale of the initial issuance of 462,000 shares is equal to or great than $92,400; or any deficiency is paid in cash by the Company at its option; or June 7, 2018, whichever occurs first. The noteholder agrees not to sell more than 10 percent (10%) of the total weekly volume of FUSZ common shares traded in the United States domestic over-the-counter stock market in any one week. The noteholder agrees, that upon request of the Company, to provide trading records to the Company reflecting all sales of the Shares, within 1 (one) business days following such request. As a result of this conversion, the Company recognized a loss on extinguishment of $9,580 to account the difference between the fair value of the share issued and the note converted.As a result of this agreement, during the period ended September 30, 2017, the Company amortized the remaining debt discount of $48,942 and settled the entire note payable of $101,300 in exchange for 1,026,195 shares of common stock with a fair value of $181,845. The Company recognized a loss of $80,545 to account the difference between the fair value of the common shares issued and the balance of the note payable. | ||||
[3] | Effective September 26, 2017, we entered into the Purchase Agreement, dated September 15, 2017, with Kodiak Capital Group, LLC (“Kodiak”). Under the Purchase Agreement, the Company may from time to time, in our discretion, sell shares of our common stock to Kodiak for aggregate gross proceeds of up to $2,000,000. Unless terminated earlier, Kodiak’s purchase commitment will automatically terminate on the earlier of the date on which Kodiak shall have purchased our shares pursuant to the Purchase Agreement for an aggregate purchase price of $2,000,000, or September 15, 2019. We have no obligation to sell any shares under the Purchase Agreement.As provided in the Purchase Agreement, we may require Kodiak to purchase shares of common stock from time to time by delivering a put notice (“Put Notice”) to Kodiak specifying the total number of shares to be purchased (such number of shares multiplied by the Purchase Price described below, equals the “Investment Amount”); provided there must be a minimum of ten trading days between delivery of each Put Notice. We may determine the Investment Amount provided that such amount may not be less than $25,000. Our ability to issue Put Notices to Kodiak and require Kodiak to purchase our common stock is not contingent on the trading volume of our common stock. Kodiak will have no obligation to purchase shares under the applicable Purchase Agreement to the extent that such purchase would cause Kodiak to own more than 9.99% of our then-issued and outstanding common stock (the “Beneficial Ownership Limitation”).For each share of our common stock purchased under the Purchase Agreement, Kodiak will pay a Purchase Price equal to 80% of the Market Price. The Market Price is defined as the volume weighted average price (the “VWAP”) on the principal trading platform for the Common Stock, as reported by OTC Markets Group, Inc. (“OTC Markets”), for the five consecutive trading days immediately preceding the closing request date (each, a “Closing Request Date”) associated with the applicable Put Notice (the “Valuation Period”). Kodiak’s obligation to purchase shares is subject to customary closing conditions, including without limitation a requirement that this registration statement remain effective registering the resale by Kodiak of the shares to be issued under the Purchase Agreement (the “Registration Statement”).As a result of this agreement, on September 26, 2017, the Company issued a note payable to Kodiak Capital Group, LLC amounting to $110,000 in exchange for cash of $100,000 and an original issue discount of $10,000. The note is unsecured, matures on March 26, 2018 and bears interest rate of 5% per annum. In addition, the Company also granted Kodiak a five year, fully vested warrants to purchase 1,000,000 shares of common stock at $0.15 per share. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.08 per share, life of 5 years; risk free interest rate of 1.87%; volatility of 229%, and dividend yield of 0%. As a result, the Company recorded a debt discount of $52,605 to account for the original issue discount of the note of $10,000 and the relative fair value of the warrants of $42,605. The debt discount is being amortized over the term of the note.In case of a default, the note may also be converted to shares of common stock at a conversion price of $0.25 per share or 70% of the lowest trading price during the ten-trading-day period prior to the conversion date, whichever is lower. As the conversion of the note is subject to a default contingency, pursuant to current accounting guidelines, the Company will only account the beneficial conversion feature, if any, once the default contingency has been met or satisfied.During the period ended September 30, 2017, the Company amortized $1,163 of the recorded debt discount. As of September 30, 2017, outstanding balance of the note amounted to $110,000 and unamortized debt discount of $51,442.As part of the agreement with Kodiak, the Company also agreed to issue a promissory note amounting to $100,000 and warrants to purchase a total of 1,000,000 shares of common stock at $0.20 per share and addition warrants to purchase 4,000,000 shares of common stock at $0.25 per share once the Company’s Registration Statement with the Securities and Exchange Commission becomes effective. As the issuance of the note payable is subject to a contingency, the Company will record the note payable once the contingency has been met or satisfied. |
Notes Payable - Schedule of N29
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Sep. 26, 2017 | Aug. 04, 2017 | Jun. 07, 2017 | May 04, 2017 | Dec. 16, 2016 | Mar. 21, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Unamortized debt discount | $ 51,442 | $ 51,442 | $ 48,942 | ||||||||||
Notes payable | 235,000 | 235,000 | 226,300 | ||||||||||
Number of common stock issued value | 470,000 | ||||||||||||
Proceeds from sale of common stock | 470,000 | $ 1,464,850 | |||||||||||
Loss on extinguishment | (424,331) | (977,201) | |||||||||||
Stock price | $ 0.15 | $ 0.36 | |||||||||||
Warrant life of year | 1 year 6 months | 3 years | |||||||||||
Warrants risk free interest | 1.36% | 1.51% | |||||||||||
Warrants expected volatility | 230.00% | 157.00% | |||||||||||
Warrants dividend yield | 0.00% | 0.00% | |||||||||||
Purchase Agreement [Member] | Kodiak Capital Group, LLC [Member] | |||||||||||||
Interest rate | 5.00% | ||||||||||||
Maturity date | Mar. 26, 2018 | ||||||||||||
Notes payable issued | $ 110,000 | 100,000 | 100,000 | ||||||||||
Exchange for cash | 100,000 | ||||||||||||
Unamortized debt discount | $ 10,000 | $ 52,605 | $ 52,605 | ||||||||||
Warrant term | 5 years | ||||||||||||
Number of warrant purchase shares | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
Warrant exercise price | $ 0.15 | ||||||||||||
Fair value of warrants | $ 42,605 | ||||||||||||
Proceeds from sale of common stock | $ 2,000,000 | ||||||||||||
Purchase price of shares | $ 2,000,000 | ||||||||||||
Ownership percentage | 9.99% | ||||||||||||
Purchase price percentage | 80.00% | ||||||||||||
Stock price | $ 0.08 | ||||||||||||
Warrant life of year | 5 years | ||||||||||||
Warrants risk free interest | 1.87% | ||||||||||||
Warrants expected volatility | 229.00% | ||||||||||||
Warrants dividend yield | 0.00% | ||||||||||||
Conversion price per share | $ 0.25 | $ 0.25 | |||||||||||
Shares issued price per share | $ 0.20 | $ 0.20 | |||||||||||
Purchase Agreement [Member] | Kodiak Capital Group, LLC [Member] | Maximum [Member] | |||||||||||||
Investment amount | $ 25,000 | ||||||||||||
Common Stock [Member] | |||||||||||||
Number of common shares issued to note holder | 6,525,000 | ||||||||||||
Number of common stock issued value | $ 653 | ||||||||||||
Note Holder [Member] | |||||||||||||
Number of common shares issued to note holder | 462,000 | ||||||||||||
Number of common stock issued value | $ 110,880 | ||||||||||||
Proceeds from sale of common stock | $ 92,400 | ||||||||||||
Trading of common shares, description | The noteholder agrees not to sell more than 10 percent (10%) of the total weekly volume of FUSZ common shares traded in the United States domestic over-the-counter stock market in any one week. | ||||||||||||
Loss on extinguishment | $ 9,580 | ||||||||||||
Note 2 [Member] | |||||||||||||
Interest rate | 5.00% | 12.00% | 12.00% | ||||||||||
Maturity date | Aug. 8, 2018 | ||||||||||||
Notes payable issued | $ 101,300 | ||||||||||||
Exchange for cash | 80,000 | ||||||||||||
Unamortized debt discount | 8,800 | ||||||||||||
Accrued interest | $ 12,500 | ||||||||||||
Note Payable 2 [Member] | |||||||||||||
Interest rate | [1] | 5.00% | 5.00% | ||||||||||
Maturity date | May 31, 2017 | Jun. 15, 2017 | [1] | ||||||||||
Notes payable | [1] | 101,300 | |||||||||||
Note Payable 2 [Member] | Note Holder [Member] | |||||||||||||
Unamortized debt discount | 53,659 | 53,659 | 48,942 | ||||||||||
Accrued interest | 12,500 | 12,500 | |||||||||||
Warrant term | 3 years | ||||||||||||
Number of warrant purchase shares | 176,000 | ||||||||||||
Warrant exercise price | $ 0.25 | ||||||||||||
Fair value of warrants | 10,759 | ||||||||||||
Fair value of common stock | $ 21,600 | $ 21,600 | |||||||||||
Notes payable | 101,300 | ||||||||||||
Number of common shares issued to note holder | 1,026,195 | ||||||||||||
Number of common stock issued value | $ 181,845 | ||||||||||||
Loss on extinguishment | $ 80,545 | ||||||||||||
Note Payable 2 [Member] | Note Holder [Member] | Common Stock [Member] | |||||||||||||
Number of warrant purchase shares | 240,000 | ||||||||||||
Note Payable 3 [Member] | |||||||||||||
Interest rate | [2] | 5.00% | 5.00% | ||||||||||
Maturity date | [2] | Sep. 15, 2017 | |||||||||||
Notes payable | [2] | $ 110,000 | $ 110,000 | ||||||||||
Note Payable 3 [Member] | Kodiak Capital Group, LLC [Member] | |||||||||||||
Unamortized debt discount | $ 51,442 | $ 51,442 | |||||||||||
Number of warrant purchase shares | 4,000,000 | 4,000,000 | |||||||||||
Notes payable | $ 110,000 | $ 110,000 | |||||||||||
Amortization of debt discount | $ 1,163 | ||||||||||||
Shares issued price per share | $ 0.25 | $ 0.25 | |||||||||||
DelMorgan Group LLC [Member] | |||||||||||||
Payment advanced by related party | $ 125,000 | ||||||||||||
Interest rate | 12.00% | ||||||||||||
Maturity date | Mar. 20, 2018 | ||||||||||||
[1] | On December 16, 2016 the Company issued a note payable amounting to $101,300 in exchange for cash of $80,000, original issue discount of $8,800 and guaranteed interest of $12,500. The note was unsecured, bore interest rate of 5% per annum and matured in May 2017. In addition, the Company also granted the noteholder a three-year warrant to acquire 176,000 shares of the Company’s common stock with an exercise price of $0.25 per share, and 240,000 shares of the Company’s common stock. As a result, the Company recorded a debt discount totaling $53,659 to account for the origin original issue discount of $8,800, guaranteed interest of $12,500, relative fair value of the warrants of $10,759 and fair value of the common shares of $21,600. The debt discount was amortized over the term of the note. As of December 31, 2016, outstanding balance of the note amounted to $101,300 and unamortized debt discount of $48,942.On June 7, 2017, the Company and the noteholder agreed to settle the entire note payable in exchange for the initial issuance of 462,000 shares of its Common Stock (the “Shares”) with a fair value of $110,880 at the date of the agreement. In the event the noteholder does not realize sufficient proceeds through sales of the Shares, in accordance with the terms set forth herein, to equal $92,400, after deduction of reasonable sale transaction-related expenses, the Company agrees to issue additional shares to make up the deficiency or to pay such deficiency in cash, at the Company’s option. The Parties agree that this “Make Whole” provision shall expire and be of no further force and effect on the date the sum of net proceeds realized from the sale of the initial issuance of 462,000 shares is equal to or great than $92,400; or any deficiency is paid in cash by the Company at its option; or June 7, 2018, whichever occurs first. The noteholder agrees not to sell more than 10 percent (10%) of the total weekly volume of FUSZ common shares traded in the United States domestic over-the-counter stock market in any one week. The noteholder agrees, that upon request of the Company, to provide trading records to the Company reflecting all sales of the Shares, within 1 (one) business days following such request. As a result of this conversion, the Company recognized a loss on extinguishment of $9,580 to account the difference between the fair value of the share issued and the note converted.As a result of this agreement, during the period ended September 30, 2017, the Company amortized the remaining debt discount of $48,942 and settled the entire note payable of $101,300 in exchange for 1,026,195 shares of common stock with a fair value of $181,845. The Company recognized a loss of $80,545 to account the difference between the fair value of the common shares issued and the balance of the note payable. | ||||||||||||
[2] | Effective September 26, 2017, we entered into the Purchase Agreement, dated September 15, 2017, with Kodiak Capital Group, LLC (“Kodiak”). Under the Purchase Agreement, the Company may from time to time, in our discretion, sell shares of our common stock to Kodiak for aggregate gross proceeds of up to $2,000,000. Unless terminated earlier, Kodiak’s purchase commitment will automatically terminate on the earlier of the date on which Kodiak shall have purchased our shares pursuant to the Purchase Agreement for an aggregate purchase price of $2,000,000, or September 15, 2019. We have no obligation to sell any shares under the Purchase Agreement.As provided in the Purchase Agreement, we may require Kodiak to purchase shares of common stock from time to time by delivering a put notice (“Put Notice”) to Kodiak specifying the total number of shares to be purchased (such number of shares multiplied by the Purchase Price described below, equals the “Investment Amount”); provided there must be a minimum of ten trading days between delivery of each Put Notice. We may determine the Investment Amount provided that such amount may not be less than $25,000. Our ability to issue Put Notices to Kodiak and require Kodiak to purchase our common stock is not contingent on the trading volume of our common stock. Kodiak will have no obligation to purchase shares under the applicable Purchase Agreement to the extent that such purchase would cause Kodiak to own more than 9.99% of our then-issued and outstanding common stock (the “Beneficial Ownership Limitation”).For each share of our common stock purchased under the Purchase Agreement, Kodiak will pay a Purchase Price equal to 80% of the Market Price. The Market Price is defined as the volume weighted average price (the “VWAP”) on the principal trading platform for the Common Stock, as reported by OTC Markets Group, Inc. (“OTC Markets”), for the five consecutive trading days immediately preceding the closing request date (each, a “Closing Request Date”) associated with the applicable Put Notice (the “Valuation Period”). Kodiak’s obligation to purchase shares is subject to customary closing conditions, including without limitation a requirement that this registration statement remain effective registering the resale by Kodiak of the shares to be issued under the Purchase Agreement (the “Registration Statement”).As a result of this agreement, on September 26, 2017, the Company issued a note payable to Kodiak Capital Group, LLC amounting to $110,000 in exchange for cash of $100,000 and an original issue discount of $10,000. The note is unsecured, matures on March 26, 2018 and bears interest rate of 5% per annum. In addition, the Company also granted Kodiak a five year, fully vested warrants to purchase 1,000,000 shares of common stock at $0.15 per share. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.08 per share, life of 5 years; risk free interest rate of 1.87%; volatility of 229%, and dividend yield of 0%. As a result, the Company recorded a debt discount of $52,605 to account for the original issue discount of the note of $10,000 and the relative fair value of the warrants of $42,605. The debt discount is being amortized over the term of the note.In case of a default, the note may also be converted to shares of common stock at a conversion price of $0.25 per share or 70% of the lowest trading price during the ten-trading-day period prior to the conversion date, whichever is lower. As the conversion of the note is subject to a default contingency, pursuant to current accounting guidelines, the Company will only account the beneficial conversion feature, if any, once the default contingency has been met or satisfied.During the period ended September 30, 2017, the Company amortized $1,163 of the recorded debt discount. As of September 30, 2017, outstanding balance of the note amounted to $110,000 and unamortized debt discount of $51,442.As part of the agreement with Kodiak, the Company also agreed to issue a promissory note amounting to $100,000 and warrants to purchase a total of 1,000,000 shares of common stock at $0.20 per share and addition warrants to purchase 4,000,000 shares of common stock at $0.25 per share once the Company’s Registration Statement with the Securities and Exchange Commission becomes effective. As the issuance of the note payable is subject to a contingency, the Company will record the note payable once the contingency has been met or satisfied. |
Notes Payable - Related Parti30
Notes Payable - Related Parties (Details Narrative) - USD ($) | Aug. 04, 2017 | May 04, 2017 | Apr. 04, 2016 | Apr. 04, 2016 | Dec. 01, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair value of common shares issued | $ 181,845 | |||||||||||
Stock price | $ 0.15 | $ 0.36 | ||||||||||
Warrant life of year | 1 year 6 months | 3 years | ||||||||||
Warrants risk free interest | 1.36% | 1.51% | ||||||||||
Warrants expected volatility | 230.00% | 157.00% | ||||||||||
Warrants dividend yield | 0.00% | 0.00% | ||||||||||
Principal amount of notes payable | $ 183,558 | 183,558 | $ 177,358 | |||||||||
Additional borrowing | 300,000 | |||||||||||
Loss on extinguishment | (424,331) | (977,201) | ||||||||||
Interest expense for notes payable | 81,959 | 101,324 | 174,981 | 281,176 | ||||||||
Unsecured Convertible Note Payable [Member] | ||||||||||||
Notes payable - related parties, outstanding principal | $ 121,875 | |||||||||||
Maturity date description | August 4, 2017 to December 4, 2018 | |||||||||||
Unsecured Note Agreement [Member] | ||||||||||||
Principal amount of notes payable | 343,326 | 343,326 | 343,326 | |||||||||
Rory Cutaia [Member] | ||||||||||||
Notes payable - related parties, outstanding principal | $ 1,203,242 | |||||||||||
Interest rate | 12.00% | |||||||||||
Rory Cutaia [Member] | Secured Convertible Note Agreement [Member] | ||||||||||||
Notes payable - related parties, outstanding principal | $ 1,248,883 | |||||||||||
Interest rate | 12.00% | |||||||||||
Maturity date | Apr. 1, 2017 | |||||||||||
Fair value of common shares issued | $ 374,665 | |||||||||||
Debt conversion price per share | $ 0.07 | |||||||||||
Rory Cutaia [Member] | Extension Agreement [Member] | ||||||||||||
Notes payable - related parties, outstanding principal | $ 1,198,883 | |||||||||||
Interest rate | 10.00% | |||||||||||
Maturity date description | April 1, 2017 to August 1, 2018 | |||||||||||
Number of warrant purchase shares | 1,755,192 | |||||||||||
Warrant exercise price | $ 0.355 | |||||||||||
Fair value of warrants | $ 517,291 | |||||||||||
Principal amount of notes payable | 1,198,883 | 1,198,883 | $ 1,198,883 | |||||||||
Rory Cutaia [Member] | Extension Agreement [Member] | Secured Note [Member] | ||||||||||||
Notes payable - related parties, outstanding principal | 1,198,883 | |||||||||||
CEO [Member] | ||||||||||||
Notes payable - related parties, outstanding principal | $ 189,000 | |||||||||||
Interest rate | 12.00% | |||||||||||
Debt conversion price per share | $ 0.07 | |||||||||||
Interest expense for notes payable | $ 59,434 | $ 59,434 | $ 176,364 | $ 182,411 | ||||||||
CEO [Member] | Secured Convertible Note [Member] | ||||||||||||
Interest rate | 12.00% | 12.00% | ||||||||||
Maturity date | Aug. 4, 2017 | |||||||||||
Fair value of common shares issued | $ 250,000 | |||||||||||
Debt conversion price per share | $ 0.07 | $ 0.07 | ||||||||||
Number of warrant purchase shares | 2,452,325 | 2,452,325 | ||||||||||
Warrant exercise price | $ 0.07 | $ 0.07 | ||||||||||
Secured convertible note issued | $ 343,326 | |||||||||||
Additional borrowing | $ 93,326 | |||||||||||
Debt conversion percentage of amount | 30.00% | |||||||||||
Warrant percentage | 50.00% | |||||||||||
CEO [Member] | Unsecured Convertible Note Payable [Member] | ||||||||||||
Interest rate | 12.00% | 12.00% | ||||||||||
Maturity date | Aug. 4, 2017 | |||||||||||
Debt conversion price per share | $ 0.07 | $ 0.07 | ||||||||||
Unsecured convertible note payable | $ 121,875 | |||||||||||
Deferred salary description | unpaid salary owed to the CEO for the period from December 2015 through March 2016 | |||||||||||
CEO [Member] | Extension Agreement [Member] | Unsecured Note [Member] | ||||||||||||
Notes payable - related parties, outstanding principal | $ 189,000 | |||||||||||
Maturity date description | April 1, 2017 to August 1, 2018 | |||||||||||
CEO [Member] | Unsecured Note Agreement [Member] | ||||||||||||
Notes payable - related parties, outstanding principal | $ 343,326 | |||||||||||
Maturity date | Apr. 1, 2017 | |||||||||||
Maturity date description | August 4, 2017 to December 4, 2018 | |||||||||||
Warrant exercise price | $ 0.15 | |||||||||||
Secured convertible note issued | $ 343,326 | |||||||||||
Warrant percentage | 10.00% | |||||||||||
Number of warrants issued | 1,329,157 | |||||||||||
Loss on extinguishment | $ 172,456 | |||||||||||
Michael Psomas [Member] | Unsecured Note Agreement [Member] | ||||||||||||
Interest rate | 12.00% | |||||||||||
Maturity date | Apr. 1, 2017 | |||||||||||
Unpaid fees earned | $ 111,901 |
Notes Payable - Related Parti31
Notes Payable - Related Parties - Schedule of Notes Payable to Related Parties (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 16, 2016 | |
Notes payable - related parties, net | $ 335,830 | ||
Mr. Cutaia [Member] | |||
Notes payable - related parties, net | $ 1,964,985 | 1,964,985 | |
Note1 [Member] | |||
Issuance Date | Dec. 31, 2015 | ||
Maturity Date | Aug. 8, 2018 | ||
Interest Rate | 12.00% | ||
Original Borrowing | $ 1,203,242 | ||
Notes payable - related parties, net | $ 1,198,883 | 1,198,883 | |
Note 2 [Member] | |||
Issuance Date | Dec. 1, 2015 | ||
Maturity Date | Aug. 8, 2018 | ||
Interest Rate | 12.00% | 5.00% | |
Original Borrowing | $ 189,000 | ||
Notes payable - related parties, net | $ 189,000 | 189,000 | |
Note 3 [Member] | |||
Issuance Date | Dec. 1, 2015 | ||
Maturity Date | Apr. 1, 2017 | ||
Interest Rate | 12.00% | ||
Original Borrowing | $ 111,901 | ||
Notes payable - related parties, net | $ 111,901 | 111,901 | |
Note 4 [Member] | |||
Issuance Date | Aug. 4, 2016 | ||
Maturity Date | Dec. 4, 2018 | ||
Interest Rate | 12.00% | ||
Original Borrowing | $ 343,326 | ||
Notes payable - related parties, net | $ 343,326 | 343,326 | |
Note 5 [Member] | |||
Issuance Date | Aug. 4, 2016 | ||
Maturity Date | Dec. 4, 2018 | ||
Interest Rate | 12.00% | ||
Original Borrowing | $ 121,875 | ||
Notes payable - related parties, net | $ 121,875 | $ 121,875 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 16, 2016 | |||
Debt discount | $ (51,442) | $ (48,942) | |||
Note1 [Member] | |||||
Note date | Dec. 31, 2015 | ||||
Maturity date | Aug. 8, 2018 | ||||
Interest rate | 12.00% | ||||
Original borrowing | $ 1,203,242 | ||||
Note 2 [Member] | |||||
Note date | Dec. 1, 2015 | ||||
Maturity date | Aug. 8, 2018 | ||||
Interest rate | 12.00% | 5.00% | |||
Original borrowing | $ 189,000 | ||||
Note 3 [Member] | |||||
Note date | Dec. 1, 2015 | ||||
Maturity date | Apr. 1, 2017 | ||||
Interest rate | 12.00% | ||||
Original borrowing | $ 111,901 | ||||
Convertible Notes Payable [Member] | |||||
Total notes payable | 900,768 | 680,268 | |||
Debt discount | (114,302) | ||||
Total notes payable, net of debt discount | $ 789,466 | 680,268 | |||
Convertible Notes Payable [Member] | Note1 [Member] | |||||
Note date description | Various | ||||
Maturity date | [1] | Aug. 4, 2018 | |||
Interest rate | [1] | 12.00% | |||
Original borrowing | [1] | $ 600,000 | |||
Total notes payable | [1] | $ 680,268 | 680,268 | ||
Convertible Notes Payable [Member] | Note 2 [Member] | |||||
Note date | [2] | Jun. 19, 2017 | |||
Maturity date | [2] | Feb. 19, 2018 | |||
Interest rate | [2] | 5.00% | |||
Original borrowing | [2] | $ 110,250 | |||
Total notes payable | [2] | $ 110,250 | |||
Convertible Notes Payable [Member] | Note 3 [Member] | |||||
Note date | [3] | Aug. 21, 2017 | |||
Maturity date | [3] | Mar. 21, 2018 | |||
Interest rate | [3] | 5.00% | |||
Original borrowing | [3] | $ 110,250 | |||
Total notes payable | $ 110,250 | [3] | |||
[1] | The Company entered into a series of unsecured loan agreement with Oceanside Strategies, Inc. (“Oceanside”) a third party-lender, in the aggregate principal amount of $600,000 through December 31, 2015. The loans bear interest at rates ranging from 5% to 12% per annum and were due on demand.On April 3, 2016, the Company issued an unsecured convertible note payable to Oceanside in the amount of $680,268 (this amount includes $600,000 principal amount and $80,268 accrued and unpaid interest). This note superseded and replaced all previous notes and current liabilities due to Oceanside for sums Oceanside loaned to the Company in 2014 and 2015. This note bears interest at the rate of 12% per annum, compounded annually. In consideration for Oceanside’s agreement to convert the prior notes from current demand notes and extend the maturity date to December 4, 2016, the Company granted Oceanside the right to convert up to 30% of the amount of such note into shares of the Company’s common stock at $0.07 per share and issued 2,429,530 share purchase warrants, exercisable at $0.07 per share until April 4, 2019. Effective December 30, 2016, the Company entered into an extension agreement with Oceanside to extend the maturity date of the Note to August 4, 2017. All other terms of the Note remain unchanged. In consideration for Oceanside’s agreement to extend the maturity date to August 4, 2017, the Company issued Oceanside 2,429,530 share purchase warrants, exercisable at $0.08 per share until December 29, 2019.Effective August 4, 2017, the Company entered into an extension agreement with Oceanside to extend the maturity date of the Note to August 4, 2018. All other terms of the Note remain unchanged. In consideration for Oceanside’s agreement to extend the maturity date to August 4, 2018, the Company issued Oceanside 1,316,800 share purchase warrants, exercisable at $0.15 per share until August 3, 2022. As a result, Company expensed the entire fair value of the warrants granted of $170,853 as part of loss on debt extinguishment. The fair value of the warrants at grant date was determined using the Black-Scholes Option Pricing model with the following assumptions: stock price of $0.15 per share, life of 3 years; risk free interest rate of 1.36%; volatility of 230%, and dividend yield of 0%. | ||||
[2] | On June 19, 2017, the Company issued an unsecured convertible note to Lucas Holdings in the amount of $105,000 in exchange for 50,000 shares of common stock and a three-year warrant to acquire 330,000 shares of the Company's common stock with an exercise price of $0.30 per share. The "Maturity Date" is February 18, 2018. A one-time interest charge of five percent (5%) ("Interest Rate") is to be applied on the Issuance Date to the original principal amount. In addition, there is a 5% Original Issue Discount. The note is convertible to common shares at a conversion price of $0.25 per share. Upon issuance of the note, the Company accounted for an original issue discount of $10,000 which consisted of (i) the 5% original issue discount of $5,000, and (ii) the fixed interest of 5% which aggregated $5,250. The original issue discount of $10,250 has been added to the note balance and will be accreted to interest expense over the life of the note, resulting in a net amount due the holder of $110,250 at maturity. In addition, the (iii) the fair value of the 50,000 common shares of $12,500 issued to the holder, (iv) the relative fair value of the warrants of $40,180, and (v) a beneficial conversion feature of $47,320 were considered as additional valuation discount and will be amortized as interest expense over the life of the note. The aggregate fair value of the original issue discount and the equity securities issued upon inception of the note of $110,250 has been recorded as a valuation discount. As of September 30, 2017, $46,350 of this amount was amortized as interest expense, resulting in an unamortized balance of $63,900 at September 30, 2017. | ||||
[3] | On August 28, 2017, the Company issued an unsecured convertible note to Lucas Holdings in the amount of $105,000. The “Maturity Date” is March 28, 2018. A one-time interest charge of five percent (5%) (“Interest Rate”) is to be applied on the Issuance Date to the original principal amount. In addition, there is a 5% Original Issue Discount. The note is convertible to common shares at a conversion price of $0.10 per share. Upon issuance of the note, the Company recorded a debt discount of $64,600 which consisted of (i) the 5% original issue discount of $5,000, (ii) the fixed interest of 5% which aggregated $5,250 and (iii) a beneficial conversion feature of $54,350 and will be amortized as interest expense over the life of the note. As of September 30, 2017, $14, 198 of this amount was amortized as interest expense, resulting in an unamortized balance of $50,402 at September 30, 2017. Total interest expense for convertible notes payable for the nine months ended September 30, 2017 and 2016 was $61,056 and $58,576, respectively. Total interest expense for convertible notes payable for the three months ended September 30, 2017 and 2016 was $20,576 and $20,576, respectively. |
Convertible Notes Payable - S33
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($) | Aug. 28, 2017 | Aug. 04, 2017 | Jun. 19, 2017 | May 04, 2017 | Dec. 30, 2016 | Apr. 03, 2016 | Apr. 03, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2015 |
Loss on extinguishment | $ (424,331) | $ (977,201) | ||||||||||
Stock price | $ 0.15 | $ 0.36 | ||||||||||
Warrant life of year | 1 year 6 months | 3 years | ||||||||||
Warrants risk free interest | 1.36% | 1.51% | ||||||||||
Warrants expected volatility | 230.00% | 157.00% | ||||||||||
Warrants dividend yield | 0.00% | 0.00% | ||||||||||
Interest expense | 205,038 | 83,791 | 375,862 | 244,140 | ||||||||
Number of shares issued during period, value | 470,000 | |||||||||||
Convertible Note Payable [Member] | ||||||||||||
Interest expense | 20,576 | $ 20,576 | 61,056 | $ 58,576 | ||||||||
Oceanside Strategies, Inc [Member] | Unsecured Loan Note Agreement [Member] | ||||||||||||
Outstanding balance of debt | $ 600,000 | $ 600,000 | $ 600,000 | |||||||||
Interest rate | 12.00% | 12.00% | ||||||||||
Debt instrument, periodic payment | $ 680,268 | |||||||||||
Accrued and unpaid interest | $ 80,268 | $ 80,268 | ||||||||||
Maturity date | Dec. 4, 2016 | |||||||||||
Number of common stock price per share | $ 0.07 | $ 0.07 | ||||||||||
Number of warrant purchase shares | 2,429,530 | 2,429,530 | ||||||||||
Warrants expiration date | Apr. 4, 2019 | |||||||||||
Warrant exercise price per share | $ 0.07 | $ 0.07 | ||||||||||
Oceanside Strategies, Inc [Member] | Unsecured Loan Note Agreement [Member] | Minimum [Member] | ||||||||||||
Interest rate | 5.00% | |||||||||||
Oceanside Strategies, Inc [Member] | Unsecured Loan Note Agreement [Member] | Maximum [Member] | ||||||||||||
Interest rate | 12.00% | |||||||||||
Debt conversion percentage of amount | 30.00% | |||||||||||
Oceanside Strategies, Inc [Member] | Extension Agreement [Member] | ||||||||||||
Maturity date | Aug. 4, 2018 | |||||||||||
Number of warrant purchase shares | 1,316,800 | 2,429,530 | ||||||||||
Warrants expiration date | Aug. 4, 2018 | |||||||||||
Warrant exercise price per share | $ 0.15 | $ 0.08 | ||||||||||
Loss on extinguishment | $ 170,853 | |||||||||||
Stock price | $ 0.15 | |||||||||||
Warrant life of year | 3 years | |||||||||||
Warrants risk free interest | 1.36% | |||||||||||
Warrants expected volatility | 230.00% | |||||||||||
Warrants dividend yield | 0.00% | |||||||||||
Lucas Holdings [Member] | ||||||||||||
Outstanding balance of debt | $ 105,000 | |||||||||||
Interest rate | 5.00% | |||||||||||
Maturity date | Feb. 18, 2018 | |||||||||||
Number of warrant purchase shares | 330,000 | |||||||||||
Warrant exercise price per share | $ 0.30 | |||||||||||
Original issue discount | $ 10,000 | 110,250 | ||||||||||
Warrants dividend yield | 25.00% | |||||||||||
Number of common stock shares exchange | 50,000 | |||||||||||
Warrant term | 3 years | |||||||||||
Amortized interest expense | 46,350 | |||||||||||
Unamortized balance | 63,900 | 63,900 | ||||||||||
Lucas Holdings [Member] | Unsecured Convertible Note Payable [Member] | ||||||||||||
Outstanding balance of debt | $ 105,000 | |||||||||||
Interest rate | 5.00% | |||||||||||
Maturity date | Mar. 28, 2018 | |||||||||||
Original issue discount | $ 5,000 | |||||||||||
Beneficial conversion feature | 54,350 | |||||||||||
Amortized interest expense | 14,198 | |||||||||||
Unamortized balance | $ 64,600 | $ 50,402 | $ 50,402 | |||||||||
Debt conversion price per share | $ 0.10 | |||||||||||
Lucas Holdings [Member] | 5% Percentage Original Issue Discount [Member] | ||||||||||||
Original issue discount | $ 5,000 | |||||||||||
Lucas Holdings [Member] | 5% Percentage Fixed Interest Rate [Member] | ||||||||||||
Outstanding balance of debt | $ 5,250 | $ 5,250 | ||||||||||
Interest rate | 5.00% | 5.00% | ||||||||||
Interest expense | $ 110,250 | |||||||||||
Number of shares issued during period | 50,000 | |||||||||||
Number of shares issued during period, value | $ 12,500 | |||||||||||
Fair value of warrants | 40,180 | |||||||||||
Beneficial conversion feature | $ 47,320 |
Convertible Series A Preferre34
Convertible Series A Preferred Stock (Details Narrative) - USD ($) | Feb. 14, 2017 | Jan. 08, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 02, 2017 | Aug. 28, 2017 | Jul. 28, 2017 | Feb. 13, 2017 | Dec. 31, 2016 | Sep. 02, 2007 | Jul. 07, 2007 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | 15,000,000 | ||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Preferred stock fair value | |||||||||||||
Number of shares issued during period, value | $ 470,000 | ||||||||||||
Conversion of stock, shares converted | 283,500 | ||||||||||||
Interest expense | $ 205,038 | $ 83,791 | $ 375,862 | $ 244,140 | |||||||||
Preferred stock, shares outstanding | |||||||||||||
Unamortized debt discount | $ (51,442) | $ (51,442) | $ (48,942) | ||||||||||
Notes Payable Series A Preferred | 335,830 | 335,830 | |||||||||||
Preferred Stock [Member] | |||||||||||||
Preferred stock redemption amount | $ 52,500 | $ 31,500 | $ 26,250 | $ 26,250 | |||||||||
Preferred stock, redemption shares | 131,250 | 131,250 | |||||||||||
Preferred stock, redemption date | Jan. 28, 2018 | Jan. 8, 2018 | |||||||||||
Preferred stock fair value | $ 189,000 | $ 52,500 | |||||||||||
Series A Preferred Stock [Member] | |||||||||||||
Preferred stock redemption amount | $ 283,500 | $ 283,500 | |||||||||||
Preferred stock, redemption shares | 283,500 | 283,500 | |||||||||||
Number of shares issued during period | 630,000 | ||||||||||||
Number of shares issued during period, value | $ 555,000 | ||||||||||||
Legal fees | 75,000 | ||||||||||||
Liabilities | $ 630,000 | 630,000 | |||||||||||
Debt Discount | $ 75,000 | ||||||||||||
Conversion of stock, shares converted | 2,368,824 | ||||||||||||
Conversion of stock, amount | $ 263,876 | ||||||||||||
Cash payment | 138,322 | ||||||||||||
Interest expense | 118,698 | ||||||||||||
Fair value of common stock cash payment | $ 402,198 | ||||||||||||
Preferred stock, shares outstanding | 346,500 | 346,500 | |||||||||||
Preferred stock, shares outstanding value | $ 346,500 | $ 346,500 | |||||||||||
Unamortized debt discount | 10,670 | 10,670 | |||||||||||
Notes Payable Series A Preferred | 335,830 | $ 335,830 | |||||||||||
Securities Purchase Agreement [Member] | Accredited Investor [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||
Preferred stock, shares authorized | 1,050,000 | ||||||||||||
Preferred stock, par value | $ 0.0001 | ||||||||||||
Number of shares sold, value | $ 315,000 | ||||||||||||
Number of shares sold | 315,000 | ||||||||||||
Preferred stock accrued dividend rate | 5.00% | ||||||||||||
Preferred stock redemption description | Mandatorily redeemable at an installment basis starting August 13, 2017 in the amount of $63,000 plus accrued interest. | ||||||||||||
Preferred stock redemption amount | $ 63,000 | $ 63,000 | |||||||||||
Securities Purchase Agreement [Member] | Accredited Investor [Member] | Series A Convertible Preferred Stock [Member] | Tranche One [Member] | |||||||||||||
Number of shares sold, value | $ 300,000 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Share based compensation - shares issued for vendor services, shares | 7,703,768 | ||||
Share based compensation - shares issued for vendor services | $ 1,545,623 | ||||
Fair value of shares issued | |||||
Loss on extinguishment of debt | $ (424,331) | $ (977,201) | |||
Subscription receivable | $ 20,000 | ||||
Conversion of Preferred stock, shares converted | 283,500 | ||||
Fair value of common shares issued | $ 181,845 | ||||
Number of non-qualified stock options granted | 11,500,000 | ||||
Aggregate fair value of options granted | $ 683,000 | ||||
Percentage of options vested from the date of grant | 100.00% | ||||
Share based compensation, recognized | $ 1,824,045 | $ 1,145,053 | |||
Share based compensation amount | 221,335 | ||||
Unrecognized stock-based compensation expense | $ 961,000 | 961,000 | |||
Conversion of Note Payable [Member] | |||||
Fair value of common shares issued | $ 181,845 | ||||
Number of common shares issued to note holder | 1,026,195 | ||||
Convertible Note Payable [Member] | |||||
Fair value of shares issued | $ 12,500 | ||||
Number of common shares issued to note holder | 50,000 | ||||
Common Stock [Member] | |||||
Conversion of Preferred stock, shares converted | 2,368,824 | ||||
Fair value of common shares issued | $ 103 | ||||
Number of common shares issued to note holder | 1,026,195 | ||||
Warrants 1 [Member] | Note Payable [Member] | |||||
Warrants to purchase shares of common stock | 1,755,192 | 1,755,192 | |||
Warrants 2 [Member] | Convertible Note Payable [Member] | |||||
Warrants to purchase shares of common stock | 330,000 | 330,000 | |||
Warrants 3 [Member] | Note Payable [Member] | |||||
Warrants to purchase shares of common stock | 1,329,157 | 1,329,157 | |||
Warrants 4 [Member] | Convertible Note Payable [Member] | |||||
Warrants to purchase shares of common stock | 1,316,800 | 1,316,800 | |||
Warrants 5 [Member] | |||||
Loss on extinguishment of debt | $ 10,056 | ||||
Warrants to purchase shares of common stock | 275,000 | 275,000 | |||
Warrants 6 [Member] | Note Payable [Member] | |||||
Warrants to purchase shares of common stock | 1,000,000 | 1,000,000 | |||
Vendor [Member] | Accounts Payable [Member] | |||||
Share based compensation - shares issued for vendor services, shares | 400,000 | ||||
Share based compensation - shares issued for vendor services | $ 30,000 | ||||
Fair value of shares issued | 56,000 | ||||
Loss on extinguishment of debt | $ 26,000 | ||||
Investors [Member] | |||||
Number of common shares issued | 6,525,000 | ||||
Number of common stock shares issued, value | $ 470,000 | ||||
Employees [Member] | |||||
Number of non-qualified stock options granted | 5,100,000 | ||||
Director [Member] | |||||
Number of non-qualified stock options granted | 2,000,000 | ||||
Consultants [Member] | |||||
Number of non-qualified stock options granted | 44,000,000 | ||||
Aggregate fair value of options granted | $ 969,481 | ||||
Number of options granted achieving quantifiable milestones | 4,000,000 | ||||
Stock options award vesting period | 3 years | ||||
Share based compensation, recognized | $ 57,087 | ||||
Share-based payment award, vesting, number | 880,924 | ||||
Officers [Member] | |||||
Share based compensation - shares issued for vendor services, shares | 4,250,000 | ||||
Share based compensation - shares issued for vendor services | $ 740,000 |
Equity Transactions - Schedule
Equity Transactions - Schedule of Option Activity (Details) | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Equity [Abstract] | |
Number of options outstanding beginning balance | shares | 10,530,953 |
Number of options granted | shares | 11,500,000 |
Number of options exercised | shares | |
Number of options forfeited or expired | shares | |
Number of options outstanding ending balance | shares | 22,030,953 |
Number of options vested and expected to vest | shares | 11,318,406 |
Number of options exercisable | shares | 7,089,286 |
Weighted average exercise price outstanding beginning balance | $ 0.33 |
Weighted average exercise price granted | 0.17 |
Weighted average exercise price exercised | |
Weighted average exercise price forfeited or expired | |
Weighted average exercise price outstanding ending balance | 0.27 |
Weighted average exercise price vested and expected to vest | 0.32 |
Weighted average exercise price exercisable | $ 0.43 |
Weighted average remaining contractual term outstanding | 4 years 11 days |
Weighted average remaining contractual term outstanding | 1 year 11 months 12 days |
Aggregate intrinsic value outstanding beginning balance | $ | |
Aggregate intrinsic value granted | |
Aggregate intrinsic value forfeited | |
Aggregate intrinsic value exercised | $ | |
Aggregate intrinsic value outstanding ending balance | $ | 4,876 |
Aggregate intrinsic value vested and expected to vest | $ | 4,876 |
Aggregate intrinsic value exercisable | $ | $ 4,876 |
Equity Transactions - Schedul37
Equity Transactions - Schedule of Fair Value Assumptions Using Black-Scholes Method (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Average expected term (years) | 5 years | 5 years | 5 years | 5 years |
Expected volatility | 157.09% | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum [Member] | ||||
Risk-free interest rate | 1.77% | 1.22% | 1.22% | 1.22% |
Expected volatility | 100.18% | 153.07% | 100.18% | |
Maximum [Member] | ||||
Risk-free interest rate | 1.89% | 1.24% | 1.93% | 1.65% |
Expected volatility | 101.25% | 160.00% | 101.25% |
Equity Transactions - Schedul38
Equity Transactions - Schedule of Warrants Outstanding (Details) | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Equity Transactions - Schedule Of Warrants Outstanding Details | |
Number of warrant outstanding beginning balance | shares | 18,455,264 |
Number of warrant granted | shares | 6,006,149 |
Number of warrant exercised | shares | |
Number of warrant forfeited or expired | shares | |
Number of warrant outstanding ending balance | shares | 24,461,413 |
Number of warrant vested and expected to vest | shares | 24,461,413 |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 0.19 |
Weighted average exercise price granted | $ / shares | 0.20 |
Weighted average exercise price exercised | $ / shares | |
Weighted average exercise price forfeited or expired | $ / shares | |
Weighted average exercise price outstanding ending balance | $ / shares | 0.19 |
Weighted average exercise price vested and expected to vest | $ / shares | $ 0.19 |
Weighted average remaining contractual life outstanding | 1 year 8 months 19 days |
Weighted average remaining contractual life outstanding | 2 years |
Aggregate intrinsic value outstanding balance | $ | $ 146,107 |
Aggregate intrinsic value vested and expected to vest | $ | $ 146,107 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - Multicore Technologies [Member] - USD ($) | Sep. 15, 2017 | Sep. 30, 2017 |
Litigation settlement, amount | $ 157,000 | |
Loss contingency, actions taken by defendant | Multicore Action was dismissed by plaintiff as against us in exchange for our guarantee of two payments to be made by another defendant in the action totaling $5,000, for which we have a right of off-set against any sums we may owe such party for services currently being rendered to us by such party. | |
Loss contingency by defendant, amount | $ 5,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Nov. 03, 2017 | Oct. 30, 2017 | Oct. 25, 2017 | Oct. 13, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Number of shares issued during period, value | $ 470,000 | |||||||
Interest expense | $ 205,038 | $ 83,791 | $ 375,862 | $ 244,140 | ||||
Subsequent Event [Member] | ||||||||
Number of shares issued during period | 4,657,143 | 493,182 | ||||||
Number of shares issued during period, value | $ 326,000 | $ 54,000 | ||||||
Interest expense | $ 6,000 | |||||||
Number of common stock subject to vesting issued | 276,667 | |||||||
Subsequent Event [Member] | Non-Qualified Stock Options [Member] | ||||||||
Number of non-qualified stock options issued | 400,000 | |||||||
Stock options exercise price | $ 0.25 | |||||||
Stock options award vesting period | 3 years | |||||||
Fair value vested amount | $ 29,086 | |||||||
Subsequent Event [Member] | Charitable Organizations [Member] | ||||||||
Number of shares issued during period | 100,000 | |||||||
Number of shares issued during period, value | $ 9,000 | |||||||
Subsequent Event [Member] | Kodiak Capital Group, LLC [Member] | ||||||||
Original issue discount | $ 100,000 | |||||||
Note payable principal amount | $ 110,000 | |||||||
Number of warrants issued for exchange | 1,000,000 | |||||||
Warrant exercise price | $ .20 | |||||||
Number of warrants issued during period | 45,349 | |||||||
Subsequent Event [Member] | Kodiak Capital Group, LLC [Member] | Maximum [Member] | ||||||||
Number of shares issued during period | 25,000,000 | |||||||
Subsequent Event [Member] | Series A Convertible Preferred Stock [Member] | ||||||||
Preferred stock, redemption shares | 48,043 | |||||||
Preferred stock, redemption amount | $ 48,000 |