Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 15, 2020 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | PeerLogix, Inc. | ||
Entity Central Index Key | 0001603494 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Interactive data current | Yes | ||
Entity File Number | 333-191175 | ||
Entity Incorporation State Code | NV | ||
Entity Public Float | $ 1,129,263 | ||
Entity Common Stock, Shares Outstanding | 67,744,953 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 26,377 | $ 14,086 |
Prepaid expenses and other current assets | 19,070 | 19,070 |
Total Current Assets | 45,447 | 33,156 |
Total Assets | 45,447 | 33,156 |
Current liabilities | ||
Accounts payable | 383,999 | 421,518 |
Accrued payroll and payroll related expenses | 407,437 | 371,069 |
Accured director's fee | 120,075 | 95,075 |
Accrued interest and other liabilities | 870,575 | 203,719 |
Demand loans payable | 15,000 | 15,000 |
Settlement payable | 0 | 41,857 |
Convertible notes payable - net of debt discount of $305,598 and $277,969, respectively | 1,800,352 | 1,432,081 |
Loans payable - officers | 0 | 9,941 |
Derivative liabilities | 2,773,654 | 935,274 |
Total current liabilities | 6,371,092 | 3,525,534 |
Total Liabilities | 6,371,092 | 3,525,534 |
Stockholders' deficit: | ||
Preferred stock, par value $0.001; 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2018 and 2017 | 0 | 0 |
Common stock, par value $0.001; 350,000,000 shares authorized; 54,018,285 and 46,122,368 shares issued and outstanding as of December 31, 2018 and 2017, respectively | 54,018 | 46,122 |
Additional paid in capital | 11,233,109 | 4,850,445 |
Subscriptions received | 287,575 | 0 |
Accumulated deficit | (17,900,347) | (8,388,945) |
Total stockholders' deficit | (6,325,645) | (3,492,378) |
Total liabilities and stockholders' deficit | $ 45,447 | $ 33,156 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Debt discount | $ 305,598 | $ 277,969 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, par value per share | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 350,000,000 | 350,000,000 |
Common Stock, shares issued | 54,018,285 | 46,122,368 |
Common Stock, shares outstanding | 54,018,285 | 46,122,368 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 57,973 | $ 1,096 |
Operating expenses: | ||
General and administrative | 4,823,936 | 1,981,944 |
Total operating expenses | 4,823,936 | 1,981,944 |
Loss from operations | (4,765,963) | (1,980,848) |
Other income (expense) | ||
Interest expense | (2,323,742) | (3,805,628) |
Change in fair value of derivative liabilities | (1,547,402) | 1,741,441 |
Loss on loan receivable | 0 | (37,500) |
Inducement expense | (734,273) | 0 |
Loss on settlement of debt | (140,022) | (913,562) |
Total other expense | (4,745,439) | (3,015,249) |
Net loss | $ (9,511,402) | $ (4,996,097) |
Net loss per common share - basic and diluted | $ (0.15) | $ (0.12) |
Weighted average common shares outstanding - basic and diluted | 63,490,608 | 42,366,866 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficiency) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Subscriptions Received | Accumulated Deficit [Member] | Total |
Beginning balance, shares at Dec. 31, 2016 | 26,860,825 | ||||
Beginning balance, value at Dec. 31, 2016 | $ 26,861 | $ 2,430,276 | $ (3,392,848) | $ (935,711) | |
Common stock issued in connection with notes payable, shares | 8,211,333 | ||||
Common stock issued in connection with notes payable, value | $ 8,211 | (2,239) | 5,972 | ||
Common stock issued in modification of convertible notes payable, related party, shares | 218,750 | ||||
Common stock issued in modification of convertible notes payable, related party, value | $ 219 | 12,906 | 13,125 | ||
Common stock issued in settlement of payables, shares | 878,710 | ||||
Common stock issued in settlement of payables, value | $ 878 | 82,601 | 83,479 | ||
Common stock issued for services, shares | 5,119,750 | ||||
Common stock issued for services, value | $ 5,120 | 429,147 | 434,267 | ||
Common stock issued as payment of accrued interest on convertible notes payable, shares | 4,833,000 | ||||
Common stock issued as payment of accrued interest on convertible notes payable, value | $ 4,833 | 414,347 | 419,180 | ||
Fair value of warrants issued in connection with convertible notes payable | 18,681 | 18,681 | |||
Warrants issued in connection with extension of convertible notes payable | 767,936 | 767,936 | |||
Reclassify beneficial conversion feature to derivative liability | (172,036) | (172,036) | |||
Reclassify derivative liability to equity upon payoff of convertible notes payable | 48,093 | 48,093 | |||
Modifications of investor warrants | 37,329 | 37,329 | |||
Fair value of warrants due to agent in connection with extension of convertible notes payable | 188,120 | 188,120 | |||
Stock based compensation | 595,284 | 595,284 | |||
Net loss | (4,996,097) | (4,996,097) | |||
Ending balance, shares at Dec. 31, 2017 | 46,122,368 | ||||
Ending balance, value at Dec. 31, 2017 | $ 46,122 | 4,850,445 | (8,388,945) | (3,492,378) | |
Common stock issued in connection with settlement agreement, shares | 800,000 | ||||
Common stock issued in connection with settlement agreement, value | $ 800 | 52,000 | 52,800 | ||
Common stock issued for accrued interest on convertible notes payable, shares | 666,000 | ||||
Common stock issued for accrued interest on convertible notes payable, value | $ 666 | 39,294 | 39,960 | ||
Common stock issued in exchange for warrants exercised, shares | 6,429,917 | ||||
Common stock issued in exchange for warrants exercised, value | $ 6,430 | 376,265 | 382,695 | ||
Inducement cost to exercise warrants | 734,273 | 734,273 | |||
Fair value of warrants issued in connection with convertible notes payable | 152,243 | 152,243 | |||
Fair value of warrants issued in connection with extension of convertible notes payable | 1,109,829 | 1,109,829 | |||
Fair value of warrants issued for services | 1,280,507 | 1,280,507 | |||
Reclassify derivative liability to equity upon payoff of convertible notes payable and accrued interest | 31,271 | 31,271 | |||
Proceeds received from exercise of warrants | 287,575 | 287,575 | |||
Stock based compensation | 2,606,982 | 2,606,982 | |||
Net loss | (9,511,402) | (9,511,402) | |||
Ending balance, shares at Dec. 31, 2018 | 54,018,285 | ||||
Ending balance, value at Dec. 31, 2018 | $ 54,018 | $ 11,233,109 | $ 287,575 | $ (17,900,347) | $ (6,325,645) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (9,511,402) | $ (4,996,097) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Stock based compensation | 2,606,982 | 1,024,431 |
Amortization of debt discounts | 703,544 | 1,766,925 |
Non cash interest | 111,606 | 1,442,654 |
Fair value of warrants issued in connection with warrant extensions | 1,109,829 | 0 |
Inducement expense | 734,273 | 0 |
Change in fair value of derivative liabilities | 1,547,402 | (1,741,441) |
Loss on loan receivable | 0 | 37,500 |
Loss on settlement of debt | 140,022 | 936,915 |
Fair value of warrants issued for services | 1,280,507 | 0 |
Modification of investor warrants | 0 | 37,329 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 0 | 15,323 |
Accounts payable | (37,520) | 143,504 |
Accrued payroll and related expenses | 36,368 | 149,231 |
Accrued director's fees | 25,000 | 55,000 |
Other accrued liabilities | 387,839 | 403,483 |
Settlement payable | (115,375) | 0 |
Net cash used In operating activities | (980,925) | (725,243) |
Cash Flows From Investing Activities: | ||
Loan to abandoned acquisition target | 0 | (37,500) |
Net cash used in investing activities | 0 | (37,500) |
Cash Flows From Financing Activities: | ||
Proceeds from convertible notes | 362,887 | 901,138 |
Proceeds from officer loans | 0 | 11,156 |
Proceeds from exercise of warrants | 670,270 | 0 |
Repayment of notes payable - related party | 0 | (50,018) |
Repayments of convertible notes payable | (30,000) | (106,000) |
Repayment of officer loans | (9,941) | (35,469) |
Net Cash Provided By Financing Activities | 993,216 | 720,807 |
Net change in cash | 12,291 | (41,936) |
Cash at beginning of year | 14,086 | 56,022 |
Cash at end of year | 26,377 | 14,086 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 0 | 15,670 |
Income tax paid | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Debt discount paid in form of common shares and warrants | 380,439 | 24,653 |
Debt discount recorded on convertible debt accounted for as derivative liabilities | 305,273 | 1,256,460 |
Repurchase of beneficial conversion feature due to reassessment of derivative liability | 0 | 172,036 |
Common stock issued in settlement of accrued interest | 39,960 | 419,180 |
Reclassification of derivative liability to equity | 31,271 | 48,093 |
Debt issuance cost paid in form of common stock and warrants | 0 | 188,120 |
Debt issuance cost accrued | 0 | 98,885 |
Common stock issued in connection with settlement of liabilities | $ 52,800 | $ 83,479 |
1. Organization and Operations
1. Organization and Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | NOTE 1 – ORGANIZATION AND OPERATIONS Peerlogix, Inc. (“Peerlogix” or the “Company”) was incorporated in Nevada on February 14, 2014. The Company is an advertising technology and data aggregation company. The Company provides software as a service (SAAS) platform, which enables the tracking and cataloguing of over-the-top viewership and listenership in order to determine consumer trends and preferences based upon media consumption. Its platform collects over-the-top data, including Internet Protocol (IP) addresses of the streaming and downloading parties (location), the name, media type and genre of media watched, listened or downloaded, and utilizes licensed and publicly available demographic and other databases to further filter the collected data to provide insights into consumer preferences to digital advertising firms, product and media companies, entertainment studios and others. |
2. Going Concern and Management
2. Going Concern and Management's Liquidity Plans | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management's Liquidity Plans | NOTE 2 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS The Company has generated minimal revenues since inception and continues to incur recurring losses from operations and has an accumulated deficit. Accordingly, the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred a net loss of approximately $9.5 million and net cash used in operations of approximately $981,000 for the year ended December 31, 2018. In addition, the Company has notes payable in default (see Note 6). These conditions indicate that there is substantial doubt about the Company's ability to continue as a going concern within one year from the issuance date of the consolidated financial statements. The Company's primary source of operating funds since inception has been cash proceeds from debt and equity financing. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. (See Note 11) The Company requires immediate capital to remain viable. The Company can give no assurance that such financing will be available on terms advantageous to the Company, or at all. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all of its operational activities. There can be no assurance that such a plan will be successful. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Accordingly, the accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. On November 1, 2019, the Company retained Bankers Capital International to explore strategic alternatives in order to maximize shareholder value. The Company has not set a formal timetable for this exploration, nor has it made any decisions related to the form or structure of strategic alternatives at this time. The Company can not make assurances that the process will result in a transaction. |
3. Summary of Significant Accou
3. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Peerlogix Technologies, Inc. and IP Squared Technologies Holdings, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from these estimates. The Company’s significant estimates and assumptions include the fair value of the Company’s equity instruments, convertible debt, derivative liabilities, stock-based compensation, and the valuation allowance relating to the Company’s deferred tax assets. Reclassifications Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. Revenue Recognition The Company recognizes revenue when delivery of the promised goods or services is transferred to its customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. Effective January 1, 2018, the Company adopted Accounting Standard Codification(“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The Company adopted the standard using the modified retrospective approach effective January 1, 2018. There was no significant impact from adoption of Topic 606. At the time of each transaction, management assesses whether the fee associated with the transaction is fixed or determinable and whether or not collection is reasonably assured. The assessment of whether the fee is fixed or determinable is based upon the payment terms of the transaction. Collectability is assessed based on a number of factors, including past transaction history with the client and the creditworthiness of the client. The Company generates revenue primarily by licensing our Over-the-Top audience dataset to platforms and channel partners. As such, the Company predominantly contracts with Data Management Platforms (DMPs) and Demand Side Platforms (DSPs) (collectively, “Demand Partners”) who license the Company’s solution to use in conjunction with other solutions offered to their advertiser clients, including brands and advertising agencies. When the Company contracts with a Demand Partner, it acts as an agent for a disclosed or undisclosed principal, which is the advertiser. The Company contracts with Demand Partners, including DMPs and DSPs representing advertisers, are generally in the form of a revenue share between the Demand Partner and the Company. Revenue payouts to the Company typically occur within sixty (60) days after the end of each calendar month, and the contracts typically have an initial term of a year. Due to the uncertainty of amount of revenue earned during the process, it is recognized upon payout and receipt of payment. Revenue through December 31, 2018 had been de minimis to the consolidated financial statements. The Company had three major customers including their affiliates which generated approximately 91% (60.0%, 16% and 15%) of its revenue in the year ended December 31, 2018. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2018 and 2017, the Company does not have any cash equivalents. Convertible Instruments The Company bifurcates conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Accounting for Warrants The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assessed the classification of its common stock purchase warrants as of the date of each equity offering and determined that such instruments met the criteria for equity classification, as the settlement terms indicate that the instruments are indexed to the entity’s underlying stock. Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. Derivative Liabilities In connection with the issuance of certain convertible promissory notes, the terms of the convertible notes included an embedded conversion feature which provided for the settlement of certain convertible promissory notes into shares of common stock at a rate which was determined to be variable with no floor. The Company determined that the conversion feature was an embedded derivative instrument pursuant to Accounting Standards Codification (“ASC”) 815 “Derivatives and Hedging” The accounting treatment of derivative financial instruments requires that the Company record the conversion option, if applicable, at their fair values as of the inception date of the agreements and at fair value as of each subsequent balance sheet date. Any change in fair value was recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The fair values of conversion options that are convertible at a variable conversion price are valued using a Black-Scholes Valuation Model and the assumptions used in the calculation would produce substantially the same results if valued through a lattice model. The Black-Scholes Valuation Model includes subjective input assumptions that can materially affect the fair value estimates. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the instrument granted. The principal assumptions used in applying the Black-Scholes model were as follows: Year Ended December 31, 2018 Risk-free interest rate 1.63% – 2.83% Contractual term 0.02 - 4.00 years Expected volatility 228.055%-265.65% Dividends 0.0% Year Ended December 31, 2017 Risk-free interest rate 0.52 – 2.20% Contractual term 0.02 - 4.00 years Expected volatility 200% - 353% Dividends 0.0% At any given time, certain of the Company’s embedded conversion features on debt and outstanding warrants may be treated as derivative liabilities for accounting purposes under ASC 815-40 due to insufficient authorized shares to settle these outstanding contracts. Pursuant to SEC staff guidance that permits a sequencing approach based on the use of ASC 815-15-25 which provides guidance for contracts that permit partial net share settlement. The sequencing approach may be applied in one of two ways: contracts may be evaluated based on (1) earliest issuance date or (2) latest maturity date. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the latest maturity date. Net Loss Per Share Basic loss per share was computed using the weighted average number of outstanding common shares. Diluted earnings per share, when presented, includes the effect of dilutive common stock equivalents from the assumed exercise of options, warrants, convertible preferred stock and convertible notes. Common stock equivalents are excluded in the computation of diluted earnings per share since their inclusion would be anti-dilutive. Total shares issuable upon the exercise of warrants, exercise of stock options and conversion of convertible promissory notes for the year ended December 31, 2018 and 2017 were as follows: December 31, 2018 2017 Warrants 59,028,170 36,305,369 Stock options 52,400,000 24,550,000 Convertible promissory notes and accrued interest 53,662,991 35,227,200 Total 165,091,161 96,082,569 For the year ended December 31, 2018 and 2017, 14,124,453 and 4,269,941 warrants were included in basic and diluted loss per share as their exercise price was determined to be nominal. Income Taxes Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. The Company follows a recognition threshold and measurement process for consolidated financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also prescribes direction on the recognition, classification, interest and penalties in interim periods, disclosure and transition. The Company classifies interest expense and any related penalties, if any, related to income tax uncertainties as a component of income tax expense. No interest or penalties have been recognized as of December 31, 2018 and 2017. Management has evaluated and concluded that there was no material uncertain tax positions requiring recognition in the Company’s financial statements for the years ended December 31, 2018 and 2017. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months of the reporting date. Research and development costs All research and development costs are charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred minimal research and development expenses for the years ended December 31, 2018 and 2017. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. The Company charged to operations $26,625 and $6,453 as advertising costs for the years ended December 31, 2018 and 2017, respectively. Stock based compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the statements of operations, as if such amounts were paid in cash. Fair Value of Financial Instruments The carrying amounts of cash and accounts payable approximate fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the warrant liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Principal Financial Officer determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s Principal Financial Officer. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: December 31, 2018 Fair Value Measurement Using Carrying Level 1 Level 2 Level 3 Total Derivative conversion features $ 2,773,654 $ – $ – $ 2,773,654 $ 2,773,654 December 31, 2017 Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative conversion features $ 935,274 $ – $ – $ 935,274 $ 935,274 The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2018: Fair Value Total Balance, January 1, 2017 $ – Reclassification of derivative liability from equity 172,036 Issuances, reassessments and settlements 2,552,772 Reclassify to equity upon note payoff (48,093 ) Change in fair value (1,741,441 ) Balance, December 31, 2017 935,274 Fair value of derivative at issuance date 322,251 Reclassify to equity upon note payoff (31,271 ) Change in fair value 1,547,402 Balance, December 31, 2018 $ 2,773,654 Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements are the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement. Recently Issued Accounting Guidance We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the consolidated financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed (see note 11). |
4. Loan Receivable
4. Loan Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
4. Loan Receivable | NOTE 4 – LOAN RECEIVABLE During February 2017, the Company loaned $37,500 to a potential merger candidate, for working capital purposes. In March 2017, the Company withdrew its plan of merger and recorded an allowance for loan losses of $37,500 due to the loan deemed uncollectible. |
5. Settlement Payable
5. Settlement Payable | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Settlement Payable | NOTE 5 – SETTLEMENT PAYABLE On April 8, 2016, the Company entered into a Securities Purchase Agreement (the “SPA”) with Attia Investments, LLC, a related party (the “Investor”). A shareholder of the Company who previously owned in-excess of 5% of the Company’s common stock is the managing member of Attia Investments, LLC. Under the Agreement, we issued and sold to the Investor, and the Investor purchased from us, Debentures in the principal amount of $87,500 for a purchase price of $70,000, bearing interest at a rate of 0% per annum, with an original maturity on October 8, 2016, further extended to April 8, 2017. Amendment On March 16, 2017, the Company entered into an amendment to the SPA. The SPA was modified as follows: ☐ The maturity date of the Debentures was extended to April 8, 2017; ☐ The default interest rate was set at 18%. As consideration for the amendment, the Company increased the principal amount on the Debentures from $65,000 to $86,875 and issued the Investor 218,750 shares of common stock with a fair value of $13,125. All remaining terms of the Debentures remained the same. In accordance with ASC 470, since the present value of the cash flows under the new debt instrument was at least ten percent different from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounted for the amendment to SPA as a debt extinguishment. Accordingly, the Company wrote off the remaining debt discount on the original Debentures of $17,312. The Company recorded a loss on extinguishment of debt of $52,312 on the amendment date. During the year ended December 31, 2017, the Company repaid $50,018 in principal and $2,982 in accrued interest on certain convertible notes to related parties. Upon repayment, derivative liabilities in the amount of $48,093 were reclassified to equity. The outstanding principal balance on the Debentures at December 31, 2017 was $41,857. The Debentures are secured by all assets of the Company. The Company was in default of the SPA, making the entire unpaid principal and interest due and payable. The Investor has initiated a claim against the Company for payment of a loan in default with a principal sum of $109,375. On April 27, 2018, the Company accepted a settlement offer totaling approximately $115,375 in cash and 800,000 shares of stock. As such, the Company has reclassified the note payable-related party to settlement payable and accrued the estimated fair value of the settlement of $164,875. In connection with the settlement, the Company recorded a loss on settlement of debt of $119,653 in current period operations. During year ended December 31, 2018, the Company issued 800,000 shares of its common stock and paid $115,375 towards the Attia Investments, LLC settlement. As of December 31, 2018, the outstanding balance was $0. |
6. Convertible Notes Payable
6. Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Notes Payable [Abstract] | |
Convertible Notes Payable | NOTE 6 – CONVERTIBLE NOTES PAYABLE Convertible notes payable are comprised of the following: 2018 2017 Offering 3 $ 825,500 $ 825,500 Offering 4 439,550 439,550 Offering 5 200,000 200,000 Offering 6 640,900 245,000 Total 2,105,950 1,710,050 Less: debt discount (325 ) (277,969 ) Net $ 2,105,625 $ 1,432,081 Offering 3, 4,5,6 (collectively referred to as “Offerings”): During the years ended December 31, 2018, 2017 and 2016, the Company sold $425,450, $1,110,000 and $600,500, respectively, of Units to investors. Each Unit was sold at a price of $10,000 per Unit and consisted of one (1) six (6) month, 18% convertible promissory note (36% on an annual basis) with a face value of $10,000 and four year warrants exercisable for an aggregate number of shares of common stock equal to 50% of the shares of common stock into which the Note is initially convertible, exercisable at a price of $0.10 per share. The Offerings Notes are due six months after the issuance of each note, as amended. Each of the Notes is convertible at an initial price equal to $0.06 per share. In addition, during the two month period commencing on each issuance of the Offering 3 Notes, as amended, the Notes will contain a look-back provision pursuant to which the Notes will be convertible at the lower of $0.06 or the lowest volume weighted average price of the Company’s common stock (the “VWAP”) during any 10 day period during such two (2) month period, provided however, in the event that the VWAP during any such ten (10) day period is less than $0.06, then the reset conversion price of the Notes shall be no lower than $0.03. The Notes also contain a reset provision to the same price as any future offering over the lifetime of the Notes in the event that the conversion or offering price of securities offered in such subsequent offering is less the Conversion Price of the Notes in this Offering. Notwithstanding the foregoing, in no event shall the Conversion Price be lower than $0.03 per share. The conversion feature of the Offerings Notes issued during 2016 was accounted for in the previous year initially as equity. The Company concluded the conversion feature of the Notes did not qualify as a derivative because there was no market mechanism for net settlement and they were not readily convertible to cash. The Company reassessed the conversion feature of the Offerings Notes issued during 2016 for derivative treatment during January 2017 and concluded its shares were readily convertible to cash based on the current trading volume of the Company’s stock. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The conversion feature was measured at fair value using a Black Scholes and Binomial model at the reassessment date and the period end. The conversion feature, when reassessed, gave rise to a derivative liability of $1,526,300. In accordance with ASC 815, $129,434 was charged to paid in-capital due to the fact a beneficial conversion feature was recorded on the original issue date. In addition the Company recorded a debt discount to the Notes of $90,153 relating to the fair value of the conversion option. The fair value of the conversion option on the date of issuance in excess of the face amount of the note was recorded to interest expense on the date of issuance. The conversion feature has been measured at fair value using a Black Scholes model at the assessment date and the period end. The conversion feature, when assessed, gave rise to a derivative liability of $322,250. In 2018, the Company recorded an aggregate debt discount to the Notes of $425,900 comprised of i) $322,250 relating to the fair value of the conversion option, which was recorded as a derivative liability ii) $63,013 of incurred issuance costs and iii) $152,243 allocated fair value of the issued warrants. The excess of derivative liability over net proceeds of the notes of $111,606 was charged to interest expense. The debt discounts are amortized ratably to interest expense over the term of the notes. The Company will have the ability to extend the Notes for an additional six (6) months (the “Extended Term”) and if so extended shall be referred to herein as the “Extended Notes”. The Extended Notes, upon maturity, will pay interest at a six (6) month rate of 18% (36% annualized) at the termination of the Extended Term. The Extended Notes, to the extent extended pursuant to their terms for the Extended Term, will carry an additional 50% warrant coverage (e.g. such warrant to be exercisable for an additional 50% of the number of shares into which the Extended Note is initially convertible (the “Extended Warrants”). The Extended Warrants shall be exercisable at a price equal to $0.10. The Extended Warrants will expire four (4) years from the Extended Term and shall contain customary anti-dilution rights (for stock splits, stock dividends and sales of substantially all the Company’s assets) and the shares underlying the Extended Warrants will contain registration rights. At December 31, 2018, the Company remeasured the fair value of the conversion feature of the issued and outstanding notes and accrued interest and determined the estimated fair value of the derivative liability of $2,773,654. The Company recorded a loss on change in fair value of derivative liabilities of $1,547,402 for the year ended December 31, 2018. During the year ended December 31, 2018, the Company issued an aggregate of 13,020,414 warrants to existing note holders at $0.10 per share for four years to extend the terms of maturing notes for six months. The fair value of the issued warrants, determined by the Black-Scholes model, of $1,109,829 was charged as a debt discount and amortized over the extended term up to the note’s initial net proceeds of $1,089,460 and the excess of $20,369 was charged as a loss on extinguishment of debt. During the year ended December 31, 2017, the Company issued warrants to acquire an aggregate of 11,883,331 shares of the Company’s common stock at $0.10 per share for four years in connection with the extension of the above described notes. The determined fair value at the date of issuance of $890,372 was charged as loss on extinguishment of debt. In addition, to the extent that any investor that acquires Units in these Offerings had previously acquired securities issued by the Company or its subsidiary in one of the two prior private offerings placed by the Placement Agent in 2015 (each a “Prior Offering”), which collectively raised gross proceeds of $1,510,000 (each an “Existing Investor”), the Company has agreed to provide additional consideration to each such Existing Investor as follows: (i) if the Existing Investor acquires Units in this Offering in an amount equal to fifty percent (50%) or greater than the amount the Existing Investor invested in a Prior Offering, such Existing Investor will receive (a) an additional 7.33 shares, as amended, (if the investor invested in the first Prior offering) or 9 shares, as amended, of the Company’s common stock (if the investor invested in the second Prior Offering) (each “Incentive Shares”); and (b) the exercise price of each of the warrants purchased by the Existing Investor will be reduced from $0.60 per share (if the investor invested in the first Prior Offering) or $0.72 per share (if the investor invested in the second Prior Offering) to $0.10 per share (the “Incentive Warrant Price Reduction”); and (ii) if the Existing Investor acquires Units in this Offering in an amount equal to less than fifty percent (50%) of the amount the Existing Investor invested in a Prior Offering, such Existing Investor will receive a pro-rata number of Incentive Shares and Incentive Warrant Price Reduction on only a pro-rata portion of the warrants acquired by the Existing Investor in the Prior Offering. During the year ended December 31, 2017, the Company issued investors who invested in prior offerings 8,211,333 shares of common stock and reduced the exercise price of 954,083 warrants as per the terms above. The incentive shares were recorded as a debt discount of $5,972 on the date of issuance based on the relative fair value of the shares. Upon modification, it is required to analyze the fair value of the instruments, before and after the modification, recognizing the increase as a charge to the statement of operations. The Company computed the fair value of the warrants directly preceding the modification and compared the fair value to that of the modified warrants with new terms. The Company recorded the increased value of the warrants of $37,329 to interest expense with an offsetting entry to additional paid in capital on the date of the modification. As part of the transactions, the Company incurred placement agent fees based on the aggregate gross proceeds raised during the year ended December 31, 2017, or $208,862, which were recorded as debt discount for debt issuance costs. In addition, during the year ended December 31, 2017, the Company issued the placement agent warrants an aggregate of 3,219,106 common shares and was obligated to issue an additional 1,333,467 warrants (See Note 11). The placement agent warrants have an exercise price of $0.001 per share, have a seven (7) year term and vest immediately. In 2018, the Company issued placement agents warrants in aggregate of 9,854,512 with the same terms as 2017 for past advisory services. The fair value of $1,280,507 was charged to 2017 operations. The Company was in default on convertible notes in the principle sum of $2,105,950 as of the date of this report. The convertible notes are secured by all assets of the Company. No defaults under the convertible notes have been called by any note holders. |
7. Loans Payable - Officers
7. Loans Payable - Officers | 12 Months Ended |
Dec. 31, 2018 | |
Loans Payable - Officers | |
Loans Payable - Officers | NOTE 7 – LOANS PAYABLE - OFFICERS During the current and prior periods, one of the Company’s officers made non-interest bearing loans to the Company in the form of cash and payments to vendors on behalf of the Company. The loans are due on demand and unsecured. As of December 31, 2018 and 2017, the Company is reflecting a liability of $0 and $9,941 respectively. The Company did not impute interest on the loan as it was deemed to be de minimis to the consolidated financial statements. |
8. Stockholders' Deficit
8. Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 8 – STOCKHOLDERS’ DEFICIT Common stock issued for services In August 2017, the Company entered into an agreement with a consulting firm to provide investor and public relations services. As compensation for the services, the Company was to pay the consultant $30,000 and issue 750,000 restricted common shares. The term of the agreement was for three months. During the three months ended September 30, 2017, the Company canceled the agreement without any payment or obligation. During the year ended December 31, 2017, the Company issued an aggregate of 4,300,000 restricted During the year ended December 31, 2017, the Company issued an aggregate of 819,750 restricted Common stock issued with convertible notes During the year ended December 31, 2017, the Company issued an aggregate of 8,211,333 restricted Common stock issued with convertible notes - related party During the year ended December 31, 2017, the Company issued an aggregate of 218,750 restricted During year ended December 31, 2018, the Company issued 800,000 shares of its common stock and paid $115,375 towards the Attia Investments, LLC debt settlement. As of December 31, 2018, the outstanding debt obligation to Attia was $0. Common stock issued in connection with settlement of vendor liabilities During the year ended December 31, 2017, the Company issued an aggregate of 878,710 restricted Common stock issued in payment of interest on convertible notes payable During the year ended December 31, 2017, the Company issued an aggregate of 4,833,000 restricted During the year ended December 31, 2018, the Company issued an aggregate of 666,000 restricted Common stock issued upon exercise of warrants During the year ended December 31, 2018, the Company issued an aggregate of 6,429,917 restricted common shares upon exercise of warrants with net proceeds of $382,695. Preferred Stock The Company is authorized to issue up to 10,000,000 shares of preferred stock, par value $0.001 per share. No shares of its preferred stock are issued or outstanding. 2018 Amended and Restated Equity Incentive Plan The Board of Directors and stockholders of the Company adopted the 2018 Amended and Restated Equity Incentive Plan in December 2018, which was amended and restated from 2016, which reserves a total of 70,000,000 shares of Common Stock for issuance under the 2018 Plan. If an incentive award granted under the 2018 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2018 Plan. Shares issued under the 2018 Plan through the settlement, assumption or substitution of outstanding awards or obligations to grant future awards as a condition of acquiring another entity are not expected to reduce the maximum number of shares available under the 2018 Plan. In addition, the number of shares of common stock subject to the 2018 Plan, any number of shares subject to any numerical limit in the 2018 Plan, and the number of shares and terms of any incentive award are expected to be adjusted in the event of any change in outstanding common stock by reason of any stock dividend, spin-off, split-up, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares or similar transaction. As of December 31, 2018, 50,000,000 shares remain available for future issuance under the 2018 Plan. Stock options issued for services During the year ended December 31, 2017, the Company granted its Chief Executive Officer an aggregate of 7,000,000 stock options with an exercise price of $0.11 for services rendered, having a total grant date fair value of approximately $409,000. See below cancellation on December 1, 2018. 1,000,000 options vested immediately and expire in 2027; 1,500,000 options vest in the event that the average volume weighted average price of the Company’s common stock over any 10 day period is greater than or equal to $0.25 and expire in 2027; 1,500,000 options vest in the event that the average volume weighted average price of the Company’s common stock over any 10 day period is greater than or equal to $0.50 and expire in 2027; 1,500,000 options vest in the event that the average volume weighted average price of the Company’s common stock over any 10 day period is greater than or equal to $0.75 and expire in 2027; and 1,500,000 options vest in the event that the average volume weighted average price of the Company’s common stock over any 10 day period is greater than or equal to $1.00 and expire in 2027. 1,000,000 of the options contain only service conditions and will be expensed on a straight-line basis over the service period of the agreement. The remaining options contain market conditions and are being expensed over the derived service period as computed by a Geometric Brownian pricing model. Stock compensation expense of $70,779 and $63,574 in 2018 and 2017, respectively, was recorded prior to cancellation. During the year ended December 31, 2017, the Company granted its Chairman of the Board an aggregate of 5,250,000 stock options with an exercise price of $0.07 for services rendered, having a total grant date fair value of approximately $128,525. See below cancellation on December 1, 2018. 1,750,000 options vested immediately and expire in 2027; 1,750,000 options vest in the event that the average volume weighted average price of the Company’s common stock over any 10 day period is greater than or equal to $0.20 and expire in 2027; 1,750,000 options vest in the event that the average volume weighted average price of the Company’s common stock over any 10 day period is greater than or equal to $0.40 and expire in 2027; 1,750,000 of the options contain only service conditions and will be expensed on a straight-line basis over the service period of the agreement. The remaining options contain market conditions and are being expensed over the derived service period as computed by a Geometric Brownian pricing model. Stock compensation expense of $118,330 and $163,784 in 2018 and 2017, respectively, was recorded prior to cancellation. On December 1, 2018, the Company cancelled an aggregate of 22,150,000 previously granted options to members of the Company’s Board of Directors, including options previously granted to the CEO and Chairman. Concurrently, the Company granted its Chairman of the Board, Chief Executive Officer and Board member 10,000,000, 20,000,000 and 20,000,000 (an aggregate of 50,000,000) stock options with an exercise price of $0.09 for services rendered. The Company considered the concurrent cancellation and issuance of the 2018 options as a modification under the guidance of ASC 718, Compensation – Stock Compensation The Company uses the Black-Scholes model to determine the fair value of awards granted that contain typical service conditions that affect vesting. The Company uses the Monte Carlo or Geometric Brownian model to determine the fair value of awards granted that contain complex features such as market conditions because the Company believes the method accounts for multiple embedded features and contingencies in a superior manner than a simple Black Scholes model. In other words, simple models such as Black-Scholes may not be appropriate in many situations given complex features and differing terms. In applying the Black-Scholes, Monte Carlo or Geometric Brownian option pricing models to options granted, the Company used the following assumptions: For the Year Ended December 31, 2018 For the Year Ended December 31, 2017 Risk free interest rate 2.842% 1.83-1.92% Dividend yield 0.00% 0.00% Expected volatility 237.76% 70.00-298.88% Expected life in years 5.5 10 Forfeiture rate 0.00 0.00% Since the Company had limited trading history in 2017, volatility was determined by averaging volatilities of comparable companies in addition to its historical trading history. The Company determined in 2018 that it did have sufficient data to estimate the volatility using only the Company’s own historical stock prices as compared to comparable companies. The Company uses the simplified method to calculate expected term of share options and similar instruments issued to employees as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The contractual term is used as the expected term for share options and similar instruments issued to non-employees and for options valued using the Monte Carlo or Geometric Brownian model. The following is a summary of the Company’s stock option activity during the two years ended December 31, 2018: Number of Weighted Weighted Outstanding-January 1, 2017 12,300,000 $ 0.11 5.94 Granted 12,250,000 0.09 10.00 Exercised – – – Forfeited/Cancelled – – – Outstanding – December 31, 2017 24,550,000 $ 0.10 7.03 Granted 50,000,000 0.09 10.00 Exercised – – – Forfeited/Cancelled (22,150,000 ) 0.10 8.39 Outstanding – December 31, 2018 52,400,000 $ 0.09 9.72 Exercisable – December 31, 2018 2,100,000 $ 0.09 5.11 At December 31, 2018, the aggregate intrinsic value of options outstanding and exercisable was $3,000. Stock-based compensation for stock options has been recorded in the consolidated statements of operations and totaled $2,606,982 and $450,413, for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, stock-based compensation of $1,814,263 remains unamortized and is expected to be amortized over the weighted average remaining period of 4 months. Warrants The Company used the Black-Scholes model to determine the fair value of warrants granted during the years ended December 31, 2018 and 2017. In applying the Black-Scholes option pricing model to warrants granted, the Company used the following assumptions: Year Ended Year Ended Risk free interest rate 1.93 – 2.96% 1.10 – 2.14% Dividend yield 0.00% 0.00% Expected volatility 170.30-279.23% 65.32 –316.98% Contractual term (years) 4-7 3.1 - 5 The following is a summary of the Company’s warrant activity during the two years ended December 31, 2018: Number of Weighted Weighted Outstanding - January 1, 2017 8,956,677 $ 0.20 3.65 Granted 27,348,692 0.09 4.11 Exercised – – – Forfeited/Cancelled – – – Outstanding – December 31, 2017 36,305,369 $ 0.11 3.74 Granted 29,242,717 0.08 4.01 Exercised (6,429,917 ) 0.10 – Forfeited/Cancelled – – – Outstanding and Exercisable – December 31, 2018 59,118,169 $ 0.10 3.76 At December 31, 2018, the aggregate intrinsic value of warrants outstanding and exercisable was $1,286,626. The following is additional information with respect to the Company's warrants as of December 31, 2018: Number of Exercise Weighted Average Currently 14,074,453 $ 0.001 6.34 14,074,453 50,000 $ 0.01 1.18 50,000 1,000,000 $ 0.06 3.28 1,000,000 37,981,756 $ 0.10 2.92 37,981,756 1,000,000 $ 0.12 3.28 1,000,000 1,000,000 $ 0.18 3.28 1,000,000 2,818,625 $ 0.25 3.75 2,818,625 418,333 $ 0.60 1.35 418,333 775,002 $ 0.72 1.62 775,002 59,118,169 59,118,169 In April 2017, in exchange for services rendered by a third party, the Company issued 1,000,000, 1,000,000 and 1,000,000 warrants to purchase shares of the Company’s common stock with exercise prices of $0.06 per share, $0.12 and $0.18 per share, respectively that vested immediately. The fair value on the grant date of the warrants was $112,717 was charged to operations as services. During the year ended December 31, 2017, the Company issued an aggregate of 9,246,257 warrants to purchase the Company’s common stock at $0.10 per share, expiring four years from issuance, in connection with the issuance of convertible notes payable. In addition, the Company issued 3,219,106 warrants to purchase the Company’s common stock at $0.001 per share, expiring seven years from issuance for placement agent services. During the year ended December 31, 2017, the Company issued an aggregate of 11,883,329 warrants to purchase the Company’s common stock at $0.10 per share, expiring four years from issuance, in connection with the six month extension of previously issued convertible notes payable. The fair value on the grant date of the warrants was $767,936 was charged to operations as loss on extinguishment of debt. During the year ended December 31, 2018, the Company issued an aggregate of 3,549,166 warrants to purchase the Company’s common stock at $0.10 per share, expiring four years from issuance, in connection with the issuance of convertible notes payable. In addition, the Company issued 9,854,512 warrants to purchase the Company’s common stock at $0.001 per share, expiring seven years from issuance for placement agent services valued at $1,280,507. During the year ended December 31, 2018, the Company issued an aggregate of 2,818,625 warrants to purchase the Company’s common stock at $0.25 per share, expiring four years from issuance, in connection with the exercise of warrants (see below). During the year ended December 31, 2018, the Company issued an aggregate of 13,020,414 warrants to purchase the Company’s common stock at $0.10 per share, expiring four years from issuance, in connection with the six month extension of previously issued convertible notes payable. The fair value on the grant date of the warrants was $1,109,829 was charged as a debt discount up to the initial proceeds of the related notes and excess to operations as loss on extinguishment of debt. During the year ended December 31, 2018, the Company reduced previously issued warrants exercisable at $0.10 per share to $0.06 per share as an inducement to exercise. In addition, as part of the exercise of the warrant, the holder would receive one Series B warrant (exercisable at $0.25 per share, expiring four years from issuance -see above) for every four warrants exercised. As of December 31, 2018, the Company issued 6,429,917 shares of common stock for warrant exercises with net proceeds of $382,695. The Company accounted for the transaction under inducement accounting and accounted for the price reduction of $0.04 per share and the fair value of the Series B warrants as inducement expense in the amount of $734,273. In addition, the Company has received net proceeds of $287,575 for the exercise of 4,844,583 additional warrants of which the shares were not issued until after December 31, 2018. |
9. Commitments and Contingencie
9. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 – COMMITMENTS AND CONTINGENCIES Litigations, Claims and Assessments The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such matters other than described above that are deemed material to the consolidated financial statements as of December 31, 2018 and 2017. Employment Agreements On February 21, 2017, the Company entered into an employment agreement with an individual, pursuant to which, commencing March 6, 2017, the individual will serve as the Interim Chief Executive Officer of the Company and, commencing 90 days thereafter, shall serve as Chief Executive Officer of the Company through March 5, 2019, subject to extension as provided in the employment agreement, and be appointed to the Board of Directors. The agreement calls for an annual salary of $250,000 per annum and a bonus in the amount of 10% of all incremental gross revenue generated by the Company, which bonus shall be determined and be payable quarterly. In addition, pursuant to the employment agreement, the Company granted to the individual certain stock options (See Note 9). On March 6, 2017, William Gorfein resigned as the Company’s Chief Executive Officer and was named the Company’s Chief Strategy Officer and Principal Financial Officer. No changes were made to Mr. Gorfein’s existing employment agreement. On November 26, 2019, Walter Ray Colwell resigned as Chief Executive Officer (“CEO”) of PeerLogix, Inc. (the “Company”). No changes were made to the Company’s management after Mr. Colwell’s resignation. Payroll Tax Liabilities As of December 31, 2018, and through the date of this report, the Company has not filed certain federal and state income and payroll tax returns nor has it paid the payroll tax amounts and related interest and penalties relating to such returns. Payroll tax amounts due as of December 31, 2018, were $19,127 and penalties and interest are estimated to be $10,924 and $10,118 as of December 31, 2018 and 2017, respectively which have been included in other accrued liabilities at December 31, 2018 and 2017 in the accompanying consolidated Balance Sheets. Placement Agent and Finders Agreements In 2016 and 2017, the Company entered into a Financial Advisory and Investment Banking Agreements with WestPark Capital, Inc. (“WestPark”) (the “WestPark Advisory Agreements”). Pursuant to the WestPark Advisory Agreement, WestPark shall act as the Company’s financial advisor and placement agent in connection with a best efforts private placement (the “Financing”) of the Company’s debt and/or equity securities (the “Securities”). The Company, upon each closing of the Financing will pay consideration to WestPark, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the Financing from the sale of Securities placed by WestPark and warrants in the amount of 10% of the aggregate gross proceeds. The Company will also pay all WestPark legal fees and expenses as well as a 3% non-accountable expense allowance of the aggregate gross proceeds raised in the Financing. The Placement Agent Warrants will have: (a) a nominal exercise price of $0.001 per share, (b) a seven year term, and (c) a cashless exercise provision. The shares underlying the Placement Agent Warrants will have standard piggyback registration rights. During the year ended December 31, 2017, in addition to the cash fees, the Company issued 1,319,750 shares and 3,219,106 warrants to acquire the Company’s common stock at $0.001 per share for seven years as placement agent fees as per the terms of the WestPark Advisory Agreements. In addition, as of December 31, 2017, the Company is obligated to issue an additional 1,333,467 warrants for placement agent fees with an exercise price of $0.001, expiring seven years from issuance date. In 2018, the Company issued placement agents warrants in aggregate of 9,854,512 with the same terms as 2017 for past advisory services. The fair value of $1,280,507 was charged to current year operations. |
10. Income Taxes
10. Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10 – INCOME TAXES The tax effects of temporary differences that give rise to deferred tax assets as of December 31, 2018 and 2017 are presented below: The income tax provision (benefit) consists of the following: 2018 2017 Federal Current $ – $ – Deferred (691,673 ) (94,974 ) State and local Current – – Deferred (310,405 ) (42,630 ) Change in valuation allowance (1,002,078 ) 137,604 Income tax provision (benefit) $ – $ – The reconciliation between the statutory federal income tax rate and the Company’s effective rate for the years ended December 31, 2018 and 2017 is as follows: 2018 2017 U.S. Federal statutory rate (21.0% ) (34.0% ) State tax, net of federal tax benefit (9.4 ) (9.4 ) Federal tax rate change 0.0 10.9 Stock based compensation 13.5 8.9 Non-deductible interest expense 16.3 27.9 Other permanent differences 5.8 (7.0 ) Change in valuation allowance (5.2 ) 2.7 Income tax provision (Benefit) 0.0% 0.0% As of December 31, 2018 and 2017 the deferred tax assets consisted of the following: 2018 2017 Deferred Tax Assets: Net operating loss carryovers $ 809,873 $ 1,269,504 Total deferred tax asset 809,873 1,269,504 Valuation allowance (809,873 ) (1,269,504 ) Net Deferred Tax Asset, net of valuation allowance $ – $ – The Company is required to file its income tax returns in the U.S. federal jurisdiction and the state of New York and such returns are subject to examination by tax authorities. Tax returns for the years ended December 31, 2016, 2017 and 2018 remain open to Internal Revenue Service and State audits. The Company has not filed its federal and state tax returns for the years ended December 31, 2018, 2017, 2016, 2015, 2014, 2013 and 2012. The Net operating losses (“NOLs”) for these years will not be available to reduce future taxable income until the returns are filed. Assuming these returns are filed, as of December 31, 2018, the Company had approximately $3.8 million of federal and state net operating losses that may be available to offset future taxable income. The net operating loss carryforwards will begin to expire in 2035 unless utilized. In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s U.S. net operating carryovers may be subject to an annual limitation in the event of a change of control as defined the regulations. A Section 382 analysis has not been prepared and the Company’s NOLs could be subject to limitation. The Company assesses the likelihood that deferred tax assets will be realized. To the extent that realization is not likely, a valuation allowance is established. Based upon the Company’s losses since inception, management believes that it is more likely than not that the future benefits of its deferred tax assets will not be realized and has therefore established a full valuation allowance. Management will be taking on a project to file delinquent federal and state tax returns in the upcoming reporting periods and updated values will be disclosed in the following reporting periods. On December 22, 2017, new legislation was signed into law, informally titled the Tax Cuts and Jobs Act, which included, among other things, a provision to reduce the federal corporate income tax rate to 21%. Under ASC 740, Accounting for Income Taxes, the enactment of the Tax Act also requires companies, to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. There is no further change to its assertion on maintaining a full valuation allowance against its U.S. deferred tax assets. The Company’s gross deferred tax assets have been revalued from 34% to 21% with a corresponding offset to the valuation allowance and any potential other taxes arising due to the Tax Act will result in reductions to its net operating loss carryforward and valuation allowance. Deferred tax assets of approximately $1,800,000 have been revalued to approximately $1,200,000 with a corresponding decrease to the Company’s valuation allowance. Therefore, there was no net impact on the Company’s financial statements for the year ended December 31, 2018. |
11. Subsequent Events
11. Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 – SUBSEQUENT EVENTS Increase in Authorized Shares On April 16, 2019, our board of directors approved, and the company effectuated an amendment to Article THIRD of our Certificate of Incorporation to increase the number of authorized shares of our common stock from 100,000,000 shares to 350,000,000 shares. The number of shares of authorized preferred stock remains unchanged at 10,000,000. Financing Subsequent to year end, the Company entered into convertible notes worth an aggregate of $331,668 with eleven investors. The note maturities range from six months to one year and carry interest rates ranging from 12.5% to 18%. The conversion feature embedded in the convertible note is accounted for as a derivative liability with adjustments to the fair value of the liability charged to the income statement. In connection with the convertible notes, the Company issued an aggregate of 7,625,000 warrants exercisable at $0.10 per share. Interest Conversion In first quarter 2019, the Company issued an aggregate of 1,419,900 shares of common stock to 10 investors for partial conversion of interest on outstanding convertible notes of $85,194 at the conversion price of $0.06 per share stated in the note agreement. Settlement Agreement with Investor The Company and Attia entered into a settlement agreement on April 16, 2018 that required the Company to pay cash, issue 800,000 unregistered shares of common stock and to timely file a registration statement to register the 800,000 shares. On July 7, 2020 the Company issued 2,250,000 unregistered shares of common stock, with a value of $0.03 per share based on the price per share on the date of issuance, in lieu of filing a registration statement as stated in the settlement agreement, thus satisfying the original requirement to register the shares. . As of July 7, 2020, the company has fully satisfied the 2018 settlement agreement and has no further obligation to Attia. Departure of Chief Executive Officer On November 26, 2019, Walter Ray Colwell tendered his resignation as Chief Executive Officer (“CEO”) of PeerLogix, Inc. (the “Company”). Mr. Colwell’s employment agreement was terminated, however Mr. Colwell retained his options. The Company’s Principal Financial Officer, William Gorfein, assumed the role of CEO upon Mr. Colwell’s departure. Salary Conversion In first quarter 2019, the Company issued 4,012,185 shares of common stock in exchange for the forgiveness and dismissal of $361,097 of accrued and unpaid salary and board fees owed to one of the Company’s directors. The shares had a fair value of $0.09 per share on the date of grant. Stock option Cancellation and Issuance On July 9, 2020, the Company cancelled 30,000,000 stock options with an original grant date of December 1, 2018 and an exercise price of $0.09 per share issued to two directors of the Company. On the same day, the Company granted to the same two directors 50,000,000 stock options with exercise price of $0.05 per share with a ten-year term. Fifty percent of the options vest immediately, twenty five percent in six months from grant date and twenty five percent in one year from grant date. The cancellation and issuance of the stock options will be treated as an option modification. The old options will be valued on the day before the cancellation and will be compared to the value of the new options with the corresponding difference recorded in the income statement. Warrant repricing and exercise agreement In 2019, the Company entered into a warrant repricing and exercise agreement with certain warrant holders of the Company. Pursuant to the agreement the Company offered existing warrant holders the opportunity to exercise all or a portion of their existing warrants into amended warrants with a revised exercise price of $0.06 per share. Simultaneously with execution of the warrant and repricing and exercise agreement the holders of the amended warrants agreed to exercise a portion of those warrants. As added consideration the Company issued an aggregate of 1,211,146 Series B warrants to the above warrant holders. Paycheck Protection Program The COVID-19 Aid, Relief and Economic Security Act (CARES Act) was signed into law on March 27, 2020 and provided for, among other things, the Payroll Protection Program (PPP). The CARES Act temporarily added the PPP Loan program to the U.S. Small Business Administration’s (SBA) 7(a) Loan Program and provides for the forgiveness of up to the full amount of qualifying loan plus accrued interest guaranteed under the program. The Company applied for and received on April 23, 2020, through a bank, $35,800 under this program. The loan provides for an annual interest rate of 1% and a term of two years from the date the proceeds were received. Payments of principal and interest are deferred for the first six months of the loan period. |
3. Summary of Significant Acc_2
3. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Peerlogix Technologies, Inc. and IP Squared Technologies Holdings, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from these estimates. The Company’s significant estimates and assumptions include the fair value of the Company’s equity instruments, convertible debt, derivative liabilities, stock-based compensation, and the valuation allowance relating to the Company’s deferred tax assets. |
Reclassifications | Reclassifications Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when delivery of the promised goods or services is transferred to its customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. Effective January 1, 2018, the Company adopted Accounting Standard Codification(“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. The updated guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. The Company adopted the standard using the modified retrospective approach effective January 1, 2018. There was no significant impact from adoption of Topic 606. At the time of each transaction, management assesses whether the fee associated with the transaction is fixed or determinable and whether or not collection is reasonably assured. The assessment of whether the fee is fixed or determinable is based upon the payment terms of the transaction. Collectability is assessed based on a number of factors, including past transaction history with the client and the creditworthiness of the client. The Company generates revenue primarily by licensing our Over-the-Top audience dataset to platforms and channel partners. As such, the Company predominantly contracts with Data Management Platforms (DMPs) and Demand Side Platforms (DSPs) (collectively, “Demand Partners”) who license the Company’s solution to use in conjunction with other solutions offered to their advertiser clients, including brands and advertising agencies. When the Company contracts with a Demand Partner, it acts as an agent for a disclosed or undisclosed principal, which is the advertiser. The Company contracts with Demand Partners, including DMPs and DSPs representing advertisers, are generally in the form of a revenue share between the Demand Partner and the Company. Revenue payouts to the Company typically occur within sixty (60) days after the end of each calendar month, and the contracts typically have an initial term of a year. Due to the uncertainty of amount of revenue earned during the process, it is recognized upon payout and receipt of payment. Revenue through December 31, 2018 had been de minimis to the consolidated financial statements. The Company had three major customers including their affiliates which generated approximately 91% (60.0%, 16% and 15%) of its revenue in the year ended December 31, 2018. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2018 and 2017, the Company does not have any cash equivalents. |
Convertible Instruments | Convertible Instruments The Company bifurcates conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. |
Accounting for Warrants | Accounting for Warrants The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assessed the classification of its common stock purchase warrants as of the date of each equity offering and determined that such instruments met the criteria for equity classification, as the settlement terms indicate that the instruments are indexed to the entity’s underlying stock. |
Concentration of Credit Rick | Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. |
Derivative Liabilities | Derivative Liabilities In connection with the issuance of certain convertible promissory notes, the terms of the convertible notes included an embedded conversion feature which provided for the settlement of certain convertible promissory notes into shares of common stock at a rate which was determined to be variable with no floor. The Company determined that the conversion feature was an embedded derivative instrument pursuant to Accounting Standards Codification (“ASC”) 815 “Derivatives and Hedging” The accounting treatment of derivative financial instruments requires that the Company record the conversion option, if applicable, at their fair values as of the inception date of the agreements and at fair value as of each subsequent balance sheet date. Any change in fair value was recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The fair values of conversion options that are convertible at a variable conversion price are valued using a Black-Scholes Valuation Model and the assumptions used in the calculation would produce substantially the same results if valued through a lattice model. The Black-Scholes Valuation Model includes subjective input assumptions that can materially affect the fair value estimates. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the instrument granted. The principal assumptions used in applying the Black-Scholes model were as follows: Year Ended December 31, 2018 Risk-free interest rate 1.63% – 2.83% Contractual term 0.02 - 4.00 years Expected volatility 228.055%-265.65% Dividends 0.0% Year Ended December 31, 2017 Risk-free interest rate 0.52 – 2.20% Contractual term 0.02 - 4.00 years Expected volatility 200% - 353% Dividends 0.0% At any given time, certain of the Company’s embedded conversion features on debt and outstanding warrants may be treated as derivative liabilities for accounting purposes under ASC 815-40 due to insufficient authorized shares to settle these outstanding contracts. Pursuant to SEC staff guidance that permits a sequencing approach based on the use of ASC 815-15-25 which provides guidance for contracts that permit partial net share settlement. The sequencing approach may be applied in one of two ways: contracts may be evaluated based on (1) earliest issuance date or (2) latest maturity date. Pursuant to the sequencing approach, the Company evaluates its contracts based upon the latest maturity date. |
Net Loss Per Share | Net Loss Per Share Basic loss per share was computed using the weighted average number of outstanding common shares. Diluted earnings per share, when presented, includes the effect of dilutive common stock equivalents from the assumed exercise of options, warrants, convertible preferred stock and convertible notes. Common stock equivalents are excluded in the computation of diluted earnings per share since their inclusion would be anti-dilutive. Total shares issuable upon the exercise of warrants, exercise of stock options and conversion of convertible promissory notes for the year ended December 31, 2018 and 2017 were as follows: December 31, 2018 2017 Warrants 59,028,170 36,305,369 Stock options 52,400,000 24,550,000 Convertible promissory notes and accrued interest 53,662,991 35,227,200 Total 165,091,161 96,082,569 For the year ended December 31, 2018 and 2017, 14,124,453 and 4,269,941 warrants were included in basic and diluted loss per share as their exercise price was determined to be nominal. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. The Company follows a recognition threshold and measurement process for consolidated financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also prescribes direction on the recognition, classification, interest and penalties in interim periods, disclosure and transition. The Company classifies interest expense and any related penalties, if any, related to income tax uncertainties as a component of income tax expense. No interest or penalties have been recognized as of December 31, 2018 and 2017. Management has evaluated and concluded that there was no material uncertain tax positions requiring recognition in the Company’s financial statements for the years ended December 31, 2018 and 2017. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months of the reporting date. |
Research and development costs | Research and development costs All research and development costs are charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred minimal research and development expenses for the years ended December 31, 2018 and 2017. |
Advertising | Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. The Company charged to operations $26,625 and $6,453 as advertising costs for the years ended December 31, 2018 and 2017, respectively. |
Stock based compensation | Stock based compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the statements of operations, as if such amounts were paid in cash. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and accounts payable approximate fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the warrant liabilities. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s Principal Financial Officer determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s Principal Financial Officer. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: December 31, 2018 Fair Value Measurement Using Carrying Level 1 Level 2 Level 3 Total Derivative conversion features $ 2,773,654 $ – $ – $ 2,773,654 $ 2,773,654 December 31, 2017 Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative conversion features $ 935,274 $ – $ – $ 935,274 $ 935,274 The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2018: Fair Value Total Balance, January 1, 2017 $ – Reclassification of derivative liability from equity 172,036 Issuances, reassessments and settlements 2,552,772 Reclassify to equity upon note payoff (48,093 ) Change in fair value (1,741,441 ) Balance, December 31, 2017 935,274 Fair value of derivative at issuance date 322,251 Reclassify to equity upon note payoff (31,271 ) Change in fair value 1,547,402 Balance, December 31, 2018 $ 2,773,654 Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements are the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. |
Subsequent Events | Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the consolidated financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed (see note 11). |
3. Summary of Significant Acc_3
3. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Assumptions | The principal assumptions used in applying the Black-Scholes model were as follows: Year Ended December 31, 2018 Risk-free interest rate 1.63% – 2.83% Contractual term 0.02 - 4.00 years Expected volatility 228.055%-265.65% Dividends 0.0% Year Ended December 31, 2017 Risk-free interest rate 0.52 – 2.20% Contractual term 0.02 - 4.00 years Expected volatility 200% - 353% Dividends 0.0% |
Common shares issuable upon exercise of other equity | Total shares issuable upon the exercise of warrants, exercise of stock options and conversion of convertible promissory notes for the year ended December 31, 2018 and 2017 were as follows: December 31, 2018 2017 Warrants 59,028,170 36,305,369 Stock options 52,400,000 24,550,000 Convertible promissory notes and accrued interest 53,662,991 35,227,200 Total 165,091,161 96,082,569 |
Schedule of fair value of assets and liabilities on recurring basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: December 31, 2018 Fair Value Measurement Using Carrying Level 1 Level 2 Level 3 Total Derivative conversion features $ 2,773,654 $ – $ – $ 2,773,654 $ 2,773,654 December 31, 2017 Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative conversion features $ 935,274 $ – $ – $ 935,274 $ 935,274 |
Schedule of unobservable inputs | The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2018: Fair Value Total Balance, January 1, 2017 $ – Reclassification of derivative liability from equity 172,036 Issuances, reassessments and settlements 2,552,772 Reclassify to equity upon note payoff (48,093 ) Change in fair value (1,741,441 ) Balance, December 31, 2017 935,274 Fair value of derivative at issuance date 322,251 Reclassify to equity upon note payoff (31,271 ) Change in fair value 1,547,402 Balance, December 31, 2018 $ 2,773,654 |
6. Convertible Notes Payable (T
6. Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Convertible Notes Payable [Abstract] | |
Schedule of convertible debt | Convertible notes payable are comprised of the following: 2018 2017 Offering 3 $ 825,500 $ 825,500 Offering 4 439,550 439,550 Offering 5 200,000 200,000 Offering 6 640,900 245,000 Total 2,105,950 1,710,050 Less: debt discount (325 ) (277,969 ) Net $ 2,105,625 $ 1,432,081 |
8. Stockholders' Deficit (Table
8. Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options [Member] | |
Assumptions | In applying the Black-Scholes, Monte Carlo or Geometric Brownian option pricing models to options granted, the Company used the following assumptions: For the Year Ended December 31, 2018 For the Year Ended December 31, 2017 Risk free interest rate 2.842% 1.83-1.92% Dividend yield 0.00% 0.00% Expected volatility 237.76% 70.00-298.88% Expected life in years 5.5 10 Forfeiture rate 0.00 0.00% |
Schedule of stock option activity | The following is a summary of the Company’s stock option activity during the two years ended December 31, 2018: Number of Weighted Weighted Outstanding-January 1, 2017 12,300,000 $ 0.11 5.94 Granted 12,250,000 0.09 10.00 Exercised – – – Forfeited/Cancelled – – – Outstanding – December 31, 2017 24,550,000 $ 0.10 7.03 Granted 50,000,000 0.09 10.00 Exercised – – – Forfeited/Cancelled (22,150,000 ) 0.10 8.39 Outstanding – December 31, 2018 52,400,000 $ 0.09 9.72 Exercisable – December 31, 2018 2,100,000 $ 0.09 5.11 |
Warrants [Member] | |
Assumptions | In applying the Black-Scholes option pricing model to warrants granted, the Company used the following assumptions: Year Ended Year Ended Risk free interest rate 1.93 – 2.96% 1.10 – 2.14% Dividend yield 0.00% 0.00% Expected volatility 170.30-279.23% 65.32 –316.98% Contractual term (years) 4-7 3.1 - 5 |
Schedule of Warrants, Activity | The following is a summary of the Company’s warrant activity during the two years ended December 31, 2018: Number of Weighted Weighted Outstanding - January 1, 2017 8,956,677 $ 0.20 3.65 Granted 27,348,692 0.09 4.11 Exercised – – – Forfeited/Cancelled – – – Outstanding – December 31, 2017 36,305,369 $ 0.11 3.74 Granted 29,242,717 0.08 4.01 Exercised (6,429,917 ) 0.10 – Forfeited/Cancelled – – – Outstanding and Exercisable – December 31, 2018 59,118,169 $ 0.10 3.76 |
Schedule of Exerciseable and Outstanding Warrants | The following is additional information with respect to the Company's warrants as of December 31, 2018: Number of Exercise Weighted Average Currently 14,074,453 $ 0.001 6.34 14,074,453 50,000 $ 0.01 1.18 50,000 1,000,000 $ 0.06 3.28 1,000,000 37,981,756 $ 0.10 2.92 37,981,756 1,000,000 $ 0.12 3.28 1,000,000 1,000,000 $ 0.18 3.28 1,000,000 2,818,625 $ 0.25 3.75 2,818,625 418,333 $ 0.60 1.35 418,333 775,002 $ 0.72 1.62 775,002 59,118,169 59,118,169 |
10. Income Taxes (Tables)
10. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income tax provision | The income tax provision (benefit) consists of the following: 2018 2017 Federal Current $ – $ – Deferred (691,673 ) (94,974 ) State and local Current – – Deferred (310,405 ) (42,630 ) Change in valuation allowance (1,002,078 ) 137,604 Income tax provision (benefit) $ – $ – |
Reconciliation of income tax rate | The reconciliation between the statutory federal income tax rate and the Company’s effective rate for the years ended December 31, 2018 and 2017 is as follows: 2018 2017 U.S. Federal statutory rate (21.0% ) (34.0% ) State tax, net of federal tax benefit (9.4 ) (9.4 ) Federal tax rate change 0.0 10.9 Stock based compensation 13.5 8.9 Non-deductible interest expense 16.3 27.9 Other permanent differences 5.8 (7.0 ) Change in valuation allowance (5.2 ) 2.7 Income tax provision (Benefit) 0.0% 0.0% |
Deferred tax assets | As of December 31, 2018 and 2017 the deferred tax assets consisted of the following: 2018 2017 Deferred Tax Assets: Net operating loss carryovers $ 809,873 $ 1,269,504 Total deferred tax asset 809,873 1,269,504 Valuation allowance (809,873 ) (1,269,504 ) Net Deferred Tax Asset, net of valuation allowance $ – $ – |
2. Going Concern and Manageme_2
2. Going Concern and Management Liquidation Plans (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss | $ (9,511,402) | $ (4,996,097) |
Net cash used in operations | $ (980,925) | $ (725,243) |
3. Summary of Significant Acc_4
3. Summary of Significant Accounting Policies (Details - Assumptions) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Dividends | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free interest rate | 1.63% | 0.52% |
Contractual term | 7 days | 7 days |
Expected volatility | 228.055% | 200.00% |
Maximum [Member] | ||
Risk-free interest rate | 2.83% | 2.20% |
Contractual term | 4 years | 4 years |
Expected volatility | 265.65% | 353.00% |
3. Summary of Significant Acc_5
3. Summary of Significant Accounting Policies (Details - Share equivalents) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total shares issuable upon exercise | 165,091,161 | 96,082,569 |
Warrants | ||
Total shares issuable upon exercise | 59,028,170 | 36,305,369 |
Stock Option [Member] | ||
Total shares issuable upon exercise | 52,400,000 | 24,550,000 |
Convertible Notes Payable [Member] | ||
Total shares issuable upon exercise | 53,662,991 | 35,227,200 |
3. Summary of Significant Acc_6
3. Summary of Significant Accounting Policies (Details - fair value) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative conversion features | $ 2,773,654 | $ 935,274 |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative conversion features | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Derivative conversion features | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative conversion features | $ 2,773,654 | $ 935,274 |
3. Summary of Significant Acc_7
3. Summary of Significant Accounting Policies (Details - Level 3) - Fair Value, Inputs, Level 3 [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivatives, beginning balance | $ 935,274 | $ 0 |
Reclassification of derivative liability from equity | 172,036 | |
Issuances, reassessments and settlements | 2,552,772 | |
Fair value of derivative at issuance date | 322,251 | |
Reclassify to equity upon note payoff | (31,271) | (48,093) |
Change in fair value | 1,547,402 | (1,741,441) |
Derivatives, ending balance | $ 2,773,654 | $ 935,274 |
3. Summary of Significant Acc_8
3. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive shares outstanding | 4,269,941 | 14,124,453 |
Cash equivalents | $ 0 | $ 0 |
Advertising expenses | 26,625 | 6,453 |
Interest or penalties | $ 0 | $ 0 |
Three Major Customers [Member] | ||
Concentration risk, percentage | 91.00% |
4. Loan Receivable (Details Nar
4. Loan Receivable (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | ||
Payment for acquisition | $ 37,500 | |
Allowance for loan loss | $ 0 | $ (37,500) |
5. Settlement Payable (Details
5. Settlement Payable (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Unamortized discount | $ 305,598 | $ 277,969 | |
Loss on extinguishment of debt | (140,022) | (936,915) | |
Attia Investments, LLC [Member] | |||
Repayment of notes payable | 115,375 | ||
Notes payable | $ 0 | ||
Stock issued for debt, shares | 800,000 | ||
Securities Purchase Agreement [Member] | |||
Repayment of notes payable | 115,375 | ||
Unamortized discount | $ 18,000 | ||
Debt face value | $ 87,500 | ||
Purchase price | $ 70,000 | ||
Debt stated interest rate | 0.00% | ||
Stock issued for debt, shares | 800,000 | ||
Loss on extinguishment of debt | $ 119,653 | ||
Debt default amount | 109,375 | ||
Amendment [Member] | |||
Derivative liability | 48,093 | ||
Unamortized discount | 17,312 | ||
Notes payable | 41,857 | ||
Debt face value | $ 86,875 | ||
Debt stated interest rate | 18.00% | ||
Stock issued for debt, shares | 218,750 | ||
Stock issued for debt, value | $ 13,125 | ||
Loss on extinguishment of debt | 52,312 | ||
Principal [Member] | |||
Repayment of notes payable | 50,018 | ||
Accrued Interest [Member] | |||
Repayment of notes payable | $ 2,982 |
6. Convertible Notes Payable (D
6. Convertible Notes Payable (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Total convertible notes payable | $ 2,105,950 | $ 1,710,050 |
Less: debt discount | (305,598) | (277,969) |
Convertible notes payable, net | 1,800,352 | 1,432,081 |
Offering 3 [Member] | ||
Total convertible notes payable | 825,500 | 825,500 |
Offering 4 [Member] | ||
Total convertible notes payable | 439,550 | 439,550 |
Offering 5 [Member] | ||
Total convertible notes payable | 200,000 | 200,000 |
Offering 6 [Member] | ||
Total convertible notes payable | $ 640,900 | $ 245,000 |
6. Convertible Notes Payable _2
6. Convertible Notes Payable (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Proceeds from offerings | $ 362,887 | $ 901,138 | |
Loss on change in fair value of derivative liabilities | (1,547,402) | 1,741,441 | |
Debt discount | 1,109,829 | ||
Fair value adjustment of warrants | 0 | 37,329 | |
Loss on extinguishment of debt | (140,022) | (936,915) | |
Interest expenses | 2,323,742 | 3,805,628 | |
Proceeds from notes | 1,089,460 | ||
Offerings [Member] | |||
Proceeds from offerings | 425,450 | 1,110,000 | $ 600,500 |
Derivative liability | 322,250 | 1,526,300 | |
Beneficial conversion feature | 2,773,654 | ||
Debt discount | $ 425,900 | $ 90,153 | |
Stock issued new, shares | 8,211,333 | ||
Fair value adjustment of warrants | $ 152,243 | ||
Warrants issued | 13,020,414 | 11,883,331 | |
Loss on extinguishment of debt | $ (890,372) | $ 890,372 | |
Debt issuance costs | 63,013 | ||
Interest expenses | 111,606 | ||
Investor [Member] | |||
Debt discount | $ 5,972 | ||
Stock issued new, shares | 8,211,333 | ||
Placement Agent [Member] | |||
Debt discount | $ 208,862 | ||
Stock issued new, shares | 3,219,106 | ||
Warrants issued | 1,333,467 | ||
Debt default | $ 2,105,950 |
7. Loans Payable - Officer (Det
7. Loans Payable - Officer (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Loans Payable - Officers | ||
Loans payable - officers | $ 0 | $ 9,941 |
8. Stockholders' Deficit (Detai
8. Stockholders' Deficit (Details - Assumptions Options) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Dividend yield | 0.00% | 0.00% |
Stock Options [Member] | ||
Risk free interest rate, minimum | 1.83% | |
Risk-free interest rate, maximum | 1.92% | |
Risk-free interest rate | 2.84% | |
Dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 70.00% | |
Expected volatility, maximum | 298.88% | |
Expected volatility | 237.76% | |
Expected life in years/Contractual term | 5.5 years | 10 years |
Forfeiture rate | 0.00% | 0.00% |
Warrants [Member] | ||
Risk free interest rate, minimum | 1.93% | 1.10% |
Risk-free interest rate, maximum | 2.96% | 2.14% |
Dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 170.30% | 65.32% |
Expected volatility, maximum | 279.23% | 316.98% |
Expected life in years/Contractual term | 4-7 years | 3.1-5 years |
8. Stockholders' Deficit (Det_2
8. Stockholders' Deficit (Details - Option activity) - Stock Options [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Options | |||
Options outstanding, beginning balance | 24,550,000 | 12,300,000 | |
Options exercised | 0 | 0 | |
Options forfeited/cancelled | (22,150,000) | 0 | |
Options outstanding, ending balance | 52,400,000 | 24,550,000 | 12,300,000 |
Options exercisable | 2,100,000 | ||
Weighted Average Exercise Price | |||
Options outstanding, beginning balance | $ 0.10 | $ 0.11 | |
Options granted | 0.09 | 0.09 | |
Options exercised | |||
Options forfeited/cancelled | 0.10 | ||
Options outstanding, ending balance | 0.09 | $ 0.10 | $ 0.11 |
Options exercisable | $ 0.09 | ||
Weighted Average Remaining Contractual Life | |||
Options outstanding | 9 years 8 months 19 days | 7 years 11 days | 5 years 11 months 8 days |
Options granted | 10 years | 10 years | |
Options Forfeited/Cancelled | 8 years 4 months 20 days | ||
Options exercisable | 5 years 1 month 9 days |
8. Stockholders' Deficit (Det_3
8. Stockholders' Deficit (Details - Warrant activity) - Warrants [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Warrants | |||
Warrants outstanding, beginning balance | 36,305,369 | 8,956,677 | |
Warrants granted | 29,242,717 | 27,348,692 | |
Warrants exercised | (6,429,917) | 0 | |
Warrants forfeited/cancelled | 0 | 0 | |
Warrants outstanding, ending balance | 59,118,169 | 36,305,369 | 8,956,677 |
Weighted Average Exercise Price | |||
Weighted average exercise price, warrants outstanding beginning balance | $ 0.11 | $ 0.20 | |
Weighted average exercise price, warrants granted | 0.08 | 0.09 | |
Weighted average exercise price, warrants exercised | 0.10 | ||
Weighted average exercise price, warrants outstanding ending balance | 0.10 | $ 0.11 | $ 0.20 |
Weighted average exercise price, warrants exercisable | $ 0.10 | ||
Weighted Average Remaining Contractual Life | |||
Weighted average remaining contractual life, warrants outstanding | 3 years 9 months 3 days | 3 years 8 months 26 days | 3 years 7 months 24 days |
Weighted average remaining contractual life, warrants granted | 4 years 4 days | 4 years 1 month 9 days |
8. Stockholders' Deficit (Det_4
8. Stockholders' Deficit (Details - Exerciseable And Oustanding) - Warrants [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Warrants | 59,118,169 | 36,305,369 | 8,956,677 |
Exercise Price ($) | $ 0.10 | $ 0.11 | $ 0.20 |
Weighted Average Remaining Life (Years) | 3 years 9 months 3 days | 3 years 8 months 26 days | 3 years 7 months 24 days |
Currently exercisable | 59,118,169 | ||
Exercise price $0.001 [Member] | |||
Number of Warrants | 14,074,453 | ||
Exercise Price ($) | $ 0.001 | ||
Weighted Average Remaining Life (Years) | 6 years 4 months 2 days | ||
Currently exercisable | 14,074,453 | ||
Exercise price $0.01 [Member] | |||
Number of Warrants | 50,000 | ||
Exercise Price ($) | $ 0.01 | ||
Weighted Average Remaining Life (Years) | 1 year 2 months 5 days | ||
Currently exercisable | 50,000 | ||
Exercise price $0.06 [Member] | |||
Number of Warrants | 1,000,000 | ||
Exercise Price ($) | $ 0.06 | ||
Weighted Average Remaining Life (Years) | 3 years 3 months 11 days | ||
Currently exercisable | 1,000,000 | ||
Exercise price $0.10 [Member] | |||
Number of Warrants | 37,981,756 | ||
Exercise Price ($) | $ 0.1 | ||
Weighted Average Remaining Life (Years) | 2 years 11 months 1 day | ||
Currently exercisable | 37,981,756 | ||
Exercise price $0.12 [Member] | |||
Number of Warrants | 1,000,000 | ||
Exercise Price ($) | $ 0.12 | ||
Weighted Average Remaining Life (Years) | 3 years 3 months 11 days | ||
Currently exercisable | 1,000,000 | ||
Exercise price $0.18 [Member] | |||
Number of Warrants | 1,000,000 | ||
Exercise Price ($) | $ 0.18 | ||
Weighted Average Remaining Life (Years) | 3 years 3 months 11 days | ||
Currently exercisable | 1,000,000 | ||
Exercise price $0.25 [Member] | |||
Number of Warrants | 2,818,625 | ||
Exercise Price ($) | $ 0.25 | ||
Weighted Average Remaining Life (Years) | 3 years 9 months | ||
Currently exercisable | 2,818,625 | ||
Exercise price $0.60 [Member] | |||
Number of Warrants | 418,333 | ||
Exercise Price ($) | $ 0.6 | ||
Weighted Average Remaining Life (Years) | 1 year 4 months 6 days | ||
Currently exercisable | 418,333 | ||
Exercise price $0.72 [Member] | |||
Number of Warrants | 775,002 | ||
Exercise Price ($) | $ 0.72 | ||
Weighted Average Remaining Life (Years) | 1 year 7 months 13 days | ||
Currently exercisable | 775,002 |
8. Stockholders_ Deficit (Detai
8. Stockholders’ Deficit (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Common stock issued in settlement of payables, value | $ 83,479 | ||
Gain on settlement of debt | $ (140,022) | (936,915) | |
Common stock issued as payment of accrued interest on convertible notes payable, value | 419,180 | ||
Fair value of warrants issued | $ 1,280,507 | $ 0 | |
Previously Issued Warrants [Member] | |||
Stock issued new, shares | 6,429,917 | ||
Proceeds from sale of stock | $ 382,695 | ||
Settlement of Accrued Interest [Member] | |||
Common stock issued as payment of accrued interest on convertible notes payable, shares | 666,000 | 4,833,000 | |
Common stock issued as payment of accrued interest on convertible notes payable, value | $ 39,294 | $ 289,980 | |
2018 Plan | |||
Shares available for future issuance under plan | 70,000,000 | ||
Consultant [Member] | |||
Restricted common stock issued for services, shares | 6,429,917 | 30,000 | |
Restricted common stock issued for services, value | $ 382,695 | $ 750,000 | |
Consultant2Member | |||
Restricted common stock issued for services, shares | 4,300,000 | ||
Restricted common stock issued for services, value | $ 304,830 | ||
Share-based compensation | $ 304,830 | ||
Consultant3Member | |||
Restricted common stock issued for services, shares | 819,750 | ||
Restricted common stock issued for services, value | $ 126,287 | ||
Related Party Investor [Member] | Private Placement [Member] | |||
Restricted common stock issued for services, shares | 218,750 | ||
Investors [Member] | Private Placement [Member] | |||
Restricted common stock issued for services, shares | 8,211,333 | ||
Investments, LLC [Member] | |||
Common stock issued in settlement of payables, shares | 800,000 | ||
Vendors [Member] | |||
Common stock issued in settlement of payables, shares | $ 878,710 | ||
Common stock issued in settlement of payables, value | 83,479 | ||
Gain on settlement of debt | 29,122 | ||
Chief Executive Officer [Member] | |||
Share-based compensation | $ 70,779 | $ 63,574 | |
Options granted | 20,000,000 | 7,000,000 | |
Fair value of options issued | $ 409,000 | ||
Options vested | 1,000,000 | ||
Chairman [Member] | |||
Share-based compensation | $ 118,330 | $ 163,784 | |
Options granted | 10,000,000 | 5,250,000 | |
Fair value of options issued | $ 128,525 | ||
Options vested | 1,750,000 | ||
Cancellation of options, shares | 22,150,000 | ||
Cancellation of options, value | $ 3,933,550 | ||
Board Of Directors [Member] | |||
Options granted | 20,000,000 | ||
Placement Agent [Member] | |||
Stock issued new, shares | 3,219,106 | ||
Warrants issued, shares | 9,854,512 | ||
Warrant exercise price | $ 0.001 | ||
Fair value of warrants issued | $ 1,280,507 | ||
Stock Options [Member] | |||
Share-based compensation | 2,606,982 | $ 450,413 | |
Aggregate intrinsic value options outstanding | 3,000 | ||
Aggregate intrinsic value options exercisable | 3,000 | ||
Unamortized stock based compensation | $ 1,814,263 | ||
Weighted average amortization period | 4 years | ||
Warrants [Member] | |||
Aggregate intrinsic value of warrants outstanding | $ 1,286,626 | ||
Warrant exercise price | $ 0.10 | $ 0.11 | $ 0.20 |
Warrants [Member] | Services [Member] | |||
Warrants issued, shares | 1,000,000 | ||
Warrant exercise price | $ 0.06 | ||
Warrants [Member] | Services3Member | |||
Warrants issued, shares | 1,000,000 | ||
Warrant exercise price | $ 0.18 | ||
Warrants [Member] | Services2Member | |||
Warrants issued, shares | 1,000,000 | ||
Warrant exercise price | $ 0.12 | ||
Warrants [Member] | Convertible Notes Payable [Member] | |||
Warrants issued, shares | 9,246,257 | ||
Warrants [Member] | Placement Agent Services [Member] | |||
Warrants issued, shares | 3,219,106 | ||
Warrant exercise price | $ 0.001 | ||
Warrants [Member] | Previously Issued Notes [Member] | |||
Warrants issued, shares | 11,883,329 | ||
Warrant exercise price | $ 0.10 | ||
Fair value of warrants issued | $ 767,936 | ||
Warrants [Member] | Convertible Notes Payable [Member] | |||
Warrants issued, shares | 3,549,166 | ||
Warrant exercise price | $ 0.10 | ||
Warrants [Member] | Convertible Notes Payable [Member] | |||
Warrants issued, shares | 13,020,414 | ||
Warrant exercise price | $ 0.10 | ||
Fair value of warrants issued | $ 1,109,829 | ||
Warrants [Member] | |||
Warrants issued, shares | 2,818,625 | ||
Warrant exercise price | $ 0.25 | ||
Series B warrants [Member] | |||
Fair value of warrants issued | $ 734,273 | ||
Proceeds from options exercised | $ 287,575 |
9. Commitments and Contingenc_2
9. Commitments and Contingencies (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Penalties and interest | $ 10,924 | $ 10,118 |
Payroll tax liability | $ 19,127 |
10. Income Taxes (Details - Inc
10. Income Taxes (Details - Income tax provision) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Federal | ||
Current | $ 0 | $ 0 |
Deferred | (691,673) | (94,974) |
State and local | ||
Current | 0 | 0 |
Deferred | (310,405) | (42,630) |
Change in valuation allowance | (1,002,078) | 137,604 |
Income tax provision (benefit) | $ 0 | $ 0 |
10. Income Taxes (Details - Rec
10. Income Taxes (Details - Reconcilation percent) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal statutory rate | (21.00%) | (34.00%) |
State tax benefit, net of federal tax | (9.40%) | (9.40%) |
Federal tax rate change | 0.00% | 10.90% |
Stock based compensation | 13.50% | 8.90% |
Non-deductible interest expense | 16.30% | 27.90% |
Other permanent differences | 5.80% | (7.00%) |
Change in valuation allowance | (5.20%) | 2.70% |
Income tax provision (Benefit) | 0.00% | 0.00% |
10. Income Taxes (Details - Def
10. Income Taxes (Details - Deferred tax assets) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryover | $ 809,873 | $ 1,269,504 |
Total deferred tax asset | 809,873 | 1,269,504 |
Valuation allowance | (809,873) | (1,269,504) |
Net deferred tax asset, net of valuation allowance | $ 0 | $ 0 |
10. Income Taxes (Details Narra
10. Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Operating loss carryforwards | $ 3,800,000 |
Operating loss beginning expiration date | Dec. 31, 2035 |