Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 10, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | NEUROPATHIX, INC. | |
Entity Central Index Key | 0001615999 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Is Entity Emerging Growth? | true | |
Is Entity Small Business? | true | |
Entity Extended Transition Period? | false | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-55657 | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 75,252,189 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 14,450 | $ 121,455 |
Prepaid expenses | 250,000 | 9,000 |
Other receivables | 400 | 400 |
Total Current Assets | 264,850 | 130,855 |
NON-CURRENT ASSETS: | ||
Property and equipment, net | 63,299 | 75,401 |
Security deposits | 17,121 | 17,121 |
Total Non-Current Assets | 80,420 | 92,522 |
TOTAL ASSETS | 345,270 | 223,377 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 537,213 | 389,195 |
Payroll and related liabilities | 351,797 | 243,208 |
Loan payable | 771,456 | 620,000 |
Loan payable - related party | 42,092 | 42,092 |
Convertible notes payable, net of $249,244 debt discount | 147,756 | 0 |
Capital lease obligations | 7,757 | 7,533 |
Due to related party, net | 47,354 | 25,349 |
Derivative liabilities | 186,721 | 0 |
Total Current Liabilities | 2,092,146 | 1,327,377 |
LONG TERM LIABILITIES: | ||
Loan payable - long term | 32,744 | 0 |
Convertible notes payable - long term, net of $60,548 debt discount | 415,825 | 378,839 |
Convertible notes payable - long term, net of $98,943 debt discount - related party | 51,507 | 0 |
Capital lease obligation - long term | 21,974 | 27,764 |
Derivative liabilities - long term | 467,393 | 183,451 |
Total Long Term Liabilities | 989,443 | 590,054 |
TOTAL LIABILITIES | 3,081,589 | 1,917,431 |
Commitments and contingencies | 0 | 0 |
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized Series A preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000), Series B preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000) | 0 | 0 |
Common stock, $0.0001 par value, 200,000,000 authorized, 74,797,037 and 74,225,141 issued and outstanding, respectively | 7,480 | 7,422 |
Additional paid-in capital | 8,729,879 | 6,794,612 |
Accumulated deficit | (11,473,678) | (8,496,088) |
TOTAL STOCKHOLDERS' DEFICIT | (2,736,319) | (1,694,054) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 345,270 | 223,377 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized Series A preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000), Series B preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000) | 0 | 0 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized Series A preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000), Series B preferred stock, 75 shares designated, 75 issued and outstanding (Liquidation preference of $75,000) | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt discount Current | $ 249,244 | |
Debt discount non current | 60,548 | |
Debt discount - related party | $ 98,943 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 74,797,037 | 74,225,141 |
Common Stock, Shares, Outstanding | 74,797,037 | 74,225,141 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 75 | 75 |
Preferred Stock, Shares Issued | 75 | 75 |
Preferred Stock, Shares Outstanding | 75 | 75 |
Liquidation preference | $ 75,000 | $ 75,000 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 75 | 75 |
Preferred Stock, Shares Issued | 75 | 75 |
Preferred Stock, Shares Outstanding | 75 | 75 |
Liquidation preference | $ 75,000 | $ 75,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
NET REVENUES: | ||||
Grant Revenue | $ 0 | $ 23,968 | $ 0 | $ 126,027 |
TOTAL NET REVENUES | 0 | 23,968 | 0 | 126,027 |
OPERATING EXPENSES: | ||||
Research and development | 68,546 | 189,443 | 375,938 | 439,680 |
General and administrative | 737,123 | 601,567 | 2,303,537 | 1,511,334 |
TOTAL OPERATING EXPENSES | 805,669 | 791,010 | 2,679,475 | 1,951,014 |
LOSS FROM OPERATIONS | (805,669) | (767,042) | (2,679,475) | (1,824,987) |
OTHER INCOME (EXPENSE): | ||||
Interest expense, net | (151,845) | (17,794) | (766,212) | (49,754) |
Net gains and losses recognized on marketable security | 0 | (301,661) | 0 | (844,671) |
Change in fair value of derivative liabilities | 346,708 | 0 | 468,097 | 0 |
TOTAL OTHER INCOME (EXPENSE) | 194,863 | (319,455) | (298,115) | (894,425) |
NET LOSS BEFORE INCOME TAX | (610,806) | (1,086,497) | (2,977,590) | (2,719,412) |
Income tax expense | 0 | 0 | 0 | 0 |
NET LOSS | (610,806) | (1,086,497) | (2,977,590) | (2,719,412) |
Net loss attributable to noncontrolling interests | 0 | (1,953) | 0 | (6,828) |
Net loss attributable to Kannalife, Inc. | $ (610,806) | $ (1,084,544) | $ (2,977,590) | $ (2,712,584) |
Loss attributable to Kannalife, Inc. per common share - basic | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.04) |
Loss attributable to Kannalife, Inc. per common share - diluted | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.04) |
Weighted average common shares outstanding - basic | 74,258,962 | 70,934,271 | 74,241,419 | 70,218,141 |
Weighted average common shares outstanding - diluted | 74,258,962 | 70,934,271 | 74,241,419 | 70,218,141 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,977,590) | $ (2,719,412) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 12,102 | 1,430 |
Amortization of debt discount | 254,249 | 0 |
Stock based compensation | 1,488,615 | 275,878 |
Issuance of common stock for acquisition of intellectual property | 13,250 | 0 |
Non-cash interest expense | 430,070 | 0 |
Change in fair value of derivative liabilities | (468,097) | 0 |
Net gains and losses recognized on marketable security | 0 | 301,661 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 9,000 | 0 |
Other receivables | 0 | 90,392 |
Accounts payable and accrued expenses | 150,018 | 32,698 |
Payroll and related liabilities | 108,589 | 1,007 |
Due to related party, net | 22,005 | 16,334 |
NET CASH USED IN OPERATING ACTIVITIES | (807,789) | (2,000,012) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of marketable securities | 0 | 1,882,774 |
Purchase of equipment | 0 | (41,950) |
Purchase of other asset | 0 | (27,490) |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 0 | 1,813,334 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments toward capital lease obligations | (5,566) | 0 |
Proceeds from loan payable | 184,200 | 0 |
Proceeds from convertible notes payable, net of OID | 372,150 | 0 |
Proceeds from convertible notes payable - related party | 150,000 | 97 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 700,784 | 97 |
Net increase in cash | (107,005) | (186,581) |
Cash and cash equivalents, beginning of period | 121,455 | 307,131 |
Cash and cash equivalents, end of period | 14,450 | 120,550 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 2,905 | 0 |
Cash paid for taxes | 0 | 0 |
NON-CASH ACTIVITIES: | ||
Issuance of common stock for conversion of notes payable and accrued interest | 20,000 | 150,000 |
Issuance of common stock for services | 250,000 | 0 |
Issuance of common stock for remaining share of non-controlling interest | 0 | 12,584 |
Property and equipment financed through capital leases | 0 | 35,886 |
Debt discount upon the issuance of convertible note payable | 372,150 | 0 |
Debt discount upon the issuance of convertible note payable - related party | 150,000 | $ 0 |
Reduction of derivative liability | $ 12,860 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Series A Preferred Stock | Series B Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Beginning balance, Shares at Dec. 31, 2018 | 75 | 75 | 69,854,141 | ||||
Beginning balance, Amount at Dec. 31, 2018 | $ 6,985 | $ 6,381,755 | $ (5,052,051) | $ (5,756) | $ 1,330,933 | ||
Issuance of stock options for services | 5,878 | 5,878 | |||||
Issuance of common stock for services, Shares | 1,750,000 | ||||||
Issuance of common stock for services, Amount | $ 175 | 174,825 | 175,000 | ||||
Issuance of common stock to board members for services, Shares | 950,000 | ||||||
Issuance of common stock to board members for services, Amount | $ 95 | 94,905 | 95,000 | ||||
Issuance of common stock for conversion of notes payable and accrued interest, Shares | 1,500,000 | ||||||
Issuance of common stock for conversion of notes payable and accrued interest, Amount | $ 150 | 149,850 | 150,000 | ||||
Issuance of common stock for remaining share of non-controlling interest, Shares | 171,000 | ||||||
Issuance of common stock for remaining share of non-controlling interest, Amount | $ 17 | (12,601) | 12,584 | ||||
Net (loss) income | (2,712,584) | (6,828) | (2,719,412) | ||||
Ending balance, Shares at Sep. 30, 2019 | 75 | 75 | 74,225,141 | ||||
Ending balance, Amount at Sep. 30, 2019 | $ 7,422 | 6,794,612 | (7,764,635) | (962,601) | |||
Beginning balance, Shares at Jun. 30, 2019 | 75 | 75 | 69,854,141 | ||||
Beginning balance, Amount at Jun. 30, 2019 | $ 6,985 | 6,386,793 | (6,680,091) | (10,631) | (296,944) | ||
Issuance of stock options for services | 840 | 840 | |||||
Issuance of common stock for services, Shares | 1,750,000 | ||||||
Issuance of common stock for services, Amount | $ 175 | 174,825 | 175,000 | ||||
Issuance of common stock to board members for services, Shares | 950,000 | ||||||
Issuance of common stock to board members for services, Amount | $ 95 | 94,905 | 95,000 | ||||
Issuance of common stock for conversion of notes payable and accrued interest, Shares | 1,500,000 | ||||||
Issuance of common stock for conversion of notes payable and accrued interest, Amount | $ 150 | 149,850 | 150,000 | ||||
Issuance of common stock for remaining share of non-controlling interest, Shares | 171,000 | ||||||
Issuance of common stock for remaining share of non-controlling interest, Amount | $ 17 | (12,601) | 12,584 | ||||
Net (loss) income | (1,084,544) | (1,953) | (1,086,497) | ||||
Ending balance, Shares at Sep. 30, 2019 | 75 | 75 | 74,225,141 | ||||
Ending balance, Amount at Sep. 30, 2019 | $ 7,422 | 6,794,612 | (7,764,635) | (962,601) | |||
Beginning balance, Shares at Dec. 31, 2019 | 75 | 75 | 74,225,141 | ||||
Beginning balance, Amount at Dec. 31, 2019 | $ 7,422 | 6,794,612 | (8,496,088) | (1,694,054) | |||
Issuance of common stock for acquisition of intellectual property, Shares | 25,000 | ||||||
Issuance of common stock for acquisition of intellectual property, Amount | $ 3 | 13,247 | 13,250 | ||||
Stock Based Compensation | 1,488,615 | 1,488,615 | |||||
Issuance of common stock for services, Shares | 500,000 | ||||||
Issuance of common stock for services, Amount | $ 50 | 399,950 | 400,000 | ||||
Issuance of common stock for conversion of notes payable and accrued interest, Shares | 46,896 | ||||||
Issuance of common stock for conversion of notes payable and accrued interest, Amount | $ 5 | 20,595 | 20,600 | ||||
Reduction of derivative liability | 12,860 | 12,860 | |||||
Net (loss) income | (2,977,590) | (2,977,590) | |||||
Ending balance, Shares at Sep. 30, 2020 | 75 | 75 | 74,797,037 | ||||
Ending balance, Amount at Sep. 30, 2020 | $ 7,480 | 8,729,879 | (11,473,678) | (2,736,319) | |||
Beginning balance, Shares at Jun. 30, 2020 | 75 | 75 | 74,250,141 | ||||
Beginning balance, Amount at Jun. 30, 2020 | $ 7,425 | 7,989,878 | (10,862,872) | (2,865,569) | |||
Stock Based Compensation | 306,596 | 306,596 | |||||
Issuance of common stock for services, Shares | 500,000 | ||||||
Issuance of common stock for services, Amount | $ 50 | 399,950 | 400,000 | ||||
Issuance of common stock for conversion of notes payable and accrued interest, Shares | 46,896 | ||||||
Issuance of common stock for conversion of notes payable and accrued interest, Amount | $ 5 | 20,595 | 20,600 | ||||
Reduction of derivative liability | 12,860 | 12,860 | |||||
Net (loss) income | (610,806) | (610,806) | |||||
Ending balance, Shares at Sep. 30, 2020 | 75 | 75 | 74,797,037 | ||||
Ending balance, Amount at Sep. 30, 2020 | $ 7,480 | $ 8,729,879 | $ (11,473,678) | $ (2,736,319) |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Note 1 – Organization and Nature of Operations Neuropathix, Inc. (the “Company”) was incorporated under the laws of the state of Delaware on March 25, 2013 under the name TYG Solutions Corp. The Company consummated a share exchange transaction on July 25, 2018 with Kannalife Sciences, Inc. (“Kannalife”), a privately held Delaware corporation formed in 2010, the accounting acquirer. Upon completion of the share exchange transaction, Kannalife was treated as the surviving entity and accounting acquirer although the Company was the legal acquirer. Accordingly, the Company’s historical financial statements are those of Kannalife the surviving entity and accounting acquirer. All references that refer to (the “Company” or “we” or “us” or “our”) are Kannalife, unless otherwise differentiated. Kannalife is a phytomedical/pharmaceutical company that specializes in the research and development of synthetic molecules and therapeutic products derived from botanical sources, including the cannabis taxa. On November 9, 2018, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State that changed its name to Kannalife, Inc. Name Change – Neuropathix, Inc. On November 4, 2020, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State that changed its name to Neuropathix, Inc. The Company concurrently submitted a request to FINRA for approval of the name change as well as a ticker symbol change from “KLFE” to “NPTX.” The Company’s name change and ticker symbol change was reviewed and processed by FINRA and went effective November 6, 2020. Unaudited Interim Financial Information We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These condensed consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our balance sheets, operating results, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2020. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2020. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies The significant accounting policies used in the preparation of the condensed consolidated financial statements are as follows: Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Significant Risks and Uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raise capital. The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property. In December 2019, a novel strain of coronavirus, commonly known as COVID-19, surfaced. The spread of COVID-19 around the world in 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company is unable to determine if it will have a material impact to its operations. The Company’s operations as of September 30, 2020 have not been significantly affected, but may be affected in the future, by the ongoing outbreak of COVID-19 which was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s labor workforce, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company. Use of Estimates The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the periods. Actual results could differ from those estimates. Significant matters requiring the use of estimates and assumptions include, but are not necessarily limited to, establishing the fair value of marketable securities and periodically evaluating marketable securities for potential impairment, fair value of the Company’s stock, stock-based compensation, valuation of derivative liabilities and valuation allowance relating to the Company’s deferred tax assets. Management believes that its estimates and assumptions are reasonable, based on information that is available at the time they are made. Net Loss per Share Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing income for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares ("dilutive securities") that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 12,642,869 for the three and nine months ended September 30, 2020. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 4,113,729 for the three and nine months ended September 30, 2019. Research and Development In accordance with FASB ASC 730, Research and Development Stock Based Compensation The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation – Stock Compensation (“ASC 718”), prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense, which is included in the general and administrative expense in the consolidated financial statements based on the estimated grant date fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). Recently Issued Authoritative Guidance In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s consolidated financial statements. |
Going Concern and Management's
Going Concern and Management's Liquidity Plans | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management's Liquidity Plans | Note 3 – Going Concern and Management’s Liquidity Plans The Company’s condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in our accompanying condensed consolidated financial statements, the Company has had a net loss from operations of $2,679,475 and $1,824,987 for the nine months ended September 30, 2020 and 2019, respectively. The net cash used in operations were $807,789 and $2,000,012 for the nine months ended September 30, 2020 and 2019, respectively. Additionally, the Company had an accumulated deficit of $11,473,678 at September 30, 2020 and has not yet established an adequate ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. These factors raise substantial doubt about its ability to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management plans to raise additional capital through the sale of convertible debt securities offering. However, there are no assurances that such additional funding will be achieved or that management’s plans will be successful. The accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4 – Fair Value Measurements The Company follows FASB ASC 820, Fair Value Measurements and Disclosures 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. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts reported in the Company’s condensed consolidated financial statements for cash, accounts payable and accrued expenses approximate their fair value because of the immediate or short-term nature of these financial instruments. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. The following table presents liabilities that are measured and recognized at fair value as of September 30, 2020 and December 31, 2019, on a recurring basis: September 30, 2020 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities — — 654,114 $ 654,114 December 31, 2019 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities — — 183,451 $ 183,451 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at September 30, 2020 and December 31, 2019 consisted of the following: September 30, 2020 December 31, 2019 Accounts payable and accrued expenses $ 382,096 $ 309,231 Accrued interest 155,117 79,964 Totals $ 537,213 $ 389,195 |
Payroll and Related Liabilities
Payroll and Related Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Payroll and Related Liabilities | NOTE 6 – PAYROLL AND RELATED LIABILITIES Payroll and related liabilities at September 30, 2020 and December 31, 2019 consisted of the following: September 30, 2020 December 31, 2019 Payroll $ 119,291 $ — Payroll taxes 232,506 243,208 Totals $ 351,797 $ 243,208 As of the nine months period ended September 30, 2020 and the year ended December 31, 2019, the Company has accrued payroll and payroll taxes in connection with salaries paid and accrued to four officers of the Company. |
Loan Payable
Loan Payable | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Loan Payable | NOTE 7 – LOAN PAYABLE September 30, 2020 December 31, 2019 Loan payable at 8%, matures 12/31/2020 * {a} $ 720,000 $ 620,000 Loan payable at 1%, matures 4/23/2022 * 84,200 — Total 804,200 620,000 Less: short term loans 771,456 620,000 Total long-term loans $ 32,744 $ — {a} - On July 1, 2020, the Company extended the note to December 31, 2020 based on the same terms and conditions. On October 7, 2020, borrowed an additional $80,000 based on the same terms and conditions. * - unsecured note Total interest expense on notes payable, amounted to $13,753 and $12,230 for the three months ended September 30, 2020 and 2019, respectively. Total interest expense on notes payable, amounted to $38,352 and $36,690 for the nine months ended September 30, 2020 and 2019, respectively Accrued interest related to these notes was $111,732 and $73,381 as of September 30, 2020 and December 31, 2019, respectively. |
Loan Payable - Related Party
Loan Payable - Related Party | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Loan Payable - Related Party | NOTE 8 – LOAN PAYABLE – RELATED PARTY Prior to the share exchange agreement, the Company borrowed $25,822 and issued a promissory note with a maturity date of March 31, 2020 which was later extended to March 31, 2021. Additionally, the note holder advanced the Company $16,270 for working capital, for a total of $42,092 – also see Note 16. The loans represent working capital advances from shareholders, bear interest at 0.5%, and grant a security interest in the Company’s assets as collateral. In March 2018, this note was amended, and the original note holder assigned the note to Kettner Investments, LLC, a significant shareholder. The note is now non-interest bearing. Accrued interest related to this note is $226 as of September 30, 2020 and December 31, 2019, respectively. |
Capital Lease Obligations
Capital Lease Obligations | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Capital Lease Obligations | NOTE 9 – CAPITAL LEASE OBLIGATIONS In September 2019, the Company entered into a lease agreement with Thermo Fisher Scientific to acquire equipment with 48 monthly payments of $941, payable through September 1, 2023, with an effective interest rate of 12% per annum. The outstanding balance of this capital lease was $29,731, secured by equipment with carrying value of $53,601, as of September 30, 2020. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Convertible Notes Payable | NOTE 10 – CONVERTIBLE NOTES PAYABLE Prior to the Share Exchange, the Company issued a convertible note to an investor, face value of $500,000, in exchange for $500,000 in cash. The note is unsecured, bears interest at the rate of 3% per annum and matures on February 16, 2030. The note is convertible into common stock of the Company at $0.10 per share at any time at the option of the holder, subject to a 4.9% blocking provision which prohibits the holder from converting into common stock of the Company if such conversion results in the holder owning greater than 4.9% of the outstanding common stock of the Company after giving effect to such conversion. On September 26, 2019, the Company issued 1,500,000 shares of common stock for the conversion of $123,627 convertible notes payable and $26,373 of related accrued interest. The outstanding balance on this convertible note after the conversion was $376,373. In December 2019, the Company entered into a Securities Purchase Agreement with an investor pursuant to which the Company agreed to sell to the investor a $100,000 convertible note bearing interest at 8% per annum (the “Note”). The Note matures two years from the date of issuance. The Note is convertible at the option of the holder at any time into shares of the Company’s common stock at an effective conversion price of 75% of the average closing price of the Company’s common stock on the fifteen days prior to conversion. The Company may not prepay this Note within the first six months. If, after the first six months until the maturity of the Note the Company: (a) elects to repay the Note, it must do so at a premium of one hundred and twenty five percent (125%) of the face amount of the Note, together with all unpaid and accrued interest to the date of repayment. (b) elects to involuntarily exercise conversion of this Note to the Holder, the Company must provide written notice to the Holder along with an executed copy of the Company’s Notice of Conversion, specifying that the Note shall be converted into shares of the Company’s Common Stock based upon at an effective conversion price of 75% of the average closing price of the Company’s common stock on the fifteen days prior to conversion. The embedded conversion feature of this Note was deemed to require bifurcation and liability classification, at fair value. Pursuant to the Securities Purchase Agreement, the Company also sold warrants to the investors to purchase up to an aggregate of 100,000 shares of common stock. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the Note (see Note 12) resulting in full discount of the Note. On March 12, 2020, the Company entered into securities purchase agreements with two different accredited investors (each an “Investor”, and together the “Investors”) pursuant to which each Investor purchased an 8% unsecured convertible promissory note (each a “8% Note”, and together the “8% Notes”) from the Company. The terms and conditions of each of the 8% Notes are substantially the same. Each 8% Note has a principal amount of $105,000 less a $5,000 original issue discount for a purchase price of $100,000, with a maturity date of March 12, 2021. All principal amounts and the interest thereon are convertible into shares of the Company’s common stock at the option of each Investor, after six (6) months from the date of the 8% Notes. These 8% Notes have a variable conversion price and the Company recorded embedded derivative liabilities. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the 8% Note (see Note 12) resulting in full discount of the 8% Note. On September 24, 2020, the Company issued 46,896 shares of common stock for the conversion of $18,000 convertible notes payable and $2,000 of related accrued interest. The outstanding balance on these convertible notes after the conversion was $192,000. On June 8, 2020, the Company entered into a securities purchase agreement, dated as of June 2, 2020 (the “Purchase Agreement”), with an accredited investor pursuant to which the investor purchased a 12% unsecured convertible promissory note (the “12% Note”) from the Company. The 12% Note has a principal amount of $165,000 less a $9,000 original issue discount (“OID”) for a purchase price of $156,000, of which $52,000 was paid on June 8, 2020 less $3,100 in transaction fees (the “First Tranche”). The 12% Note matures 12 months from the effective date of each tranche. All principal amounts and the interest thereon are convertible into shares of the Company’s common stock at the option of the Investor, after six (6) months from the date of the 12% Note. All closings occurred following the satisfaction of customary closing conditions. The 12% Note is convertible at the option of the holder at any time into shares of the Company’s common stock at an effective conversion price of the lesser of (i) 68% multiplied by the lowest Trading Price (representing a discount rate of 32%) during the previous fifteen (15) trading day period ending on the latest complete trading day prior to the date of the 12% Note or (ii) the Variable Conversion Price. In connection with the Purchase Agreement and the 12% Note, the Company issued a common stock purchase warrant to purchase 36,666 shares of the Company’s common stock at $0.75 per share (the “Warrant”) which may be exercised by cashless exercise, exercisable for a period of three years. The 12% Note has a variable conversion price and the Company recorded embedded derivative liabilities. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the 12% Note (see Note 12) resulting in full discount of the 12% Note. On June 23, 2020, the Company entered into a securities purchase agreement, dated as of June 19, 2020, with an accredited investor pursuant to which the investor purchased a 12% convertible promissory note in the principal amount of $150,000, less $20,750 in transaction-related, broker, legal and due diligence expenses. The note matures on June 19, 2021. Principal payments on the note shall be made in six (6) installments, each in the amount of $25,000, starting on December 19, 2020, and continuing thereafter each thirty (30) days for five (5) months. Notwithstanding the foregoing, the final payment of principal and accrued and unpaid interest shall be due on the June 19, 2021. The investor is entitled to, at its option, convert all or any amount of the principal amount and any accrued but unpaid interest of the note into shares of the Company’s common stock, at any time upon an event of default, at a conversion price for each share of common stock equal to the lesser of (i) the lowest trading price during the previous five (5) trading day period ending on the latest complete trading day prior to the date of the note, or (ii) the Variable Conversion Price, subject to certain equitable adjustments. Furthermore, in connection with the securities purchase agreement and the note, the Company issued two common stock purchase warrants each to purchase 115,385 shares of the Company’s common stock at $1.30 per share which may be exercised by cashless exercise, exercisable for a period of five years. One of the warrants only becomes exercisable upon default of the note. During the third quarter of 2020, the anti-dilution clause was triggered and the exercise price was reset to $0.40 resulting in the number of warrants to be increased to 378,694. The note has a variable conversion price and the Company recorded embedded derivative liabilities. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the note (see Note 12) resulting in full discount of the note. Total interest expense on convertible notes payable, inclusive of amortization of debt discount of $92,466 and $0, amounted to $107,161 and $3,750 for the three months ended September 30, 2020 and 2019, respectively. Total interest expense on convertible notes payable, inclusive of amortization of debt discount of $195,616 and $0, amounted to $226,240 and $11,250 for the nine months ended September 30, 2020 and 2019, respectively. Total accrued interest on convertible notes payable, as of September 30, 2020 and December 31, 2019, was $31,421 and $200, respectively. |
Convertible Notes Payable - Rel
Convertible Notes Payable - Related Party | 9 Months Ended |
Sep. 30, 2020 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Convertible Notes Payable - Related Party | NOTE 11 – CONVERTIBLE NOTES PAYABLE – RELATED PARTY In January 2020, the Company sold an additional $100,000, to Kettner Investments, LLC, a significant shareholder, under the Note and sold warrants to purchase up to an aggregate of 100,000 shares of common stock under the Securities Purchase Agreement. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the Note (see Note 12) resulting in full discount of the Note. In February 2020, the Company sold an additional $50,000, to the CEO of MJNA, a significant shareholder, under the Note and sold warrants to purchase up to an aggregate of 50,000 shares of common stock under the Securities Purchase Agreement. The fair value of the derivative liability and warrants as of the date of issuance was in excess of the Note (see Note 12) resulting in full discount of the Note. Total interest expense on convertible notes payable – related party, inclusive of amortization of debt discount of $18,493 and $0, amounted to $21,493 and $0 for the three months ended September 30, 2020 and 2019, respectively. Total interest expense on convertible notes payable – related party, inclusive of amortization of debt discount of $51,507 and $0, amounted to $59,685 and $0 for the nine months ended September 30, 2020 and 2019, respectively. Total accrued interest on convertible notes payable – related party, as of September 30, 2020 and December 31, 2019, was $8,178 and $0, respectively. |
Derivative Liabilities
Derivative Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Derivative Liabilities | NOTE 12 – DERIVATIVE LIABILITIES The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. In addition, the Company issued warrants with variable conversion provisions. The conversion terms of the convertible notes and warrants are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date. Based on the various convertible notes described in Note 10 and 11, the fair value of applicable derivative liabilities on notes, warrants and change in fair value of derivative liability are as follows for the nine months ended September 30, 2020: Derivative Liability - Convertible Notes Derivative Liability - Warrants Total Balance as of December 31, 2019 $ 61,430 $ 122,021 $ 183,451 Additions during the period 597,841 353,779 951,620 Change in fair value (409,165 ) (58,932 ) (468,097 ) Change due to exercise / redemptions (12,860 ) — (12,860 ) Balance as of September 30, 2020 $ 237,246 $ 416,868 $ 654,114 The fair value of the derivative liability – convertible notes is estimated using a Monte Carlo pricing model with the following assumptions: Market value of common stock $0.58 - 1.80 Expected volatility 93.4% - 107.3% Expected term (in years) 0.48 – 1.59 Risk-free interest rate 0.12% - 0.18% The fair value of the derivative liability – warrants is estimated using a Monte Carlo pricing model with the following assumptions: Market value of common stock $0.58 - 1.10 Expected volatility 108.8% - 143.6% Expected term (in years) 2.48 - 4.97 Risk-free interest rate 0.23% - 0.36% |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 – COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time the Company may get involved in legal proceedings arising in the ordinary course of business. Other than as set forth in “Legal Proceedings” in Part II below, the Company believes there is no litigation pending that could have, individually or in the aggregate, a material adverse effect on its results of operations or financial condition. Occupancy Leases On April 1, 2014, the Company entered into a one year lease arrangement for office space, with the option to renew the lease annually. The lease has been renewed through April 2021. The monthly rent payment is $5,600 and the security deposit is $15,000. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 14 – STOCKHOLDERS’ DEFICIT Series A Preferred Stock Effective May 3, 2018, the Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series A Preferred Stock. Each share of the Series A Preferred Stock is entitled to a liquidation preference of $1,000 per share and is convertible into 1,000 shares of the Company’s common stock. The holders of a majority of the Series A Preferred Stock are entitled to elect up to four (4) directors to the Company’s board of directors and have preferential rights in regard to the election of Series A directors. In all other voting matters, the holders of Series A Preferred Stock are entitled to cast 1,000 votes per share. Series B Preferred Stock Effective May 3, 2018, the Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series B Preferred Stock. Each share of the Series B Preferred Stock is entitled to a liquidation preference of $1,000 per share and is convertible into 1,000 shares of the Company’s common stock. The holders of a majority of the Series B Preferred Stock are entitled to elect up to three (3) directors to the Company’s board of directors and have preferential rights in regard to the election of Series B directors. In all other voting matters, the holders of Series B Preferred Stock are entitled to cast 1,000 votes per share. Common Stock The Company is authorized to issue 200,000,000 shares of common stock, par value of $0.0001 per share. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company, subject to the rights of the preferred stockholders. On April 28, 2020, the Company executed an intellectual property rights purchase and transfer agreement whereby this agreement grants certain IP to the Company. In connection with the execution of this agreement, the Company issued 25,000 shares of the Company’s common stock at $0.53 a share to the research organization. On September 24, 2020, the Company issued 46,896 shares of common stock for the conversion of $18,000 convertible notes payable and $2,000 of related accrued interest. On September 25, 2020, the company issued 500,000 shares of the company’s common stock at $0.50 a share, which was a discount to the trading price of $0.80 a share, to a consultant for investor relation services. The discount was expensed at issuance and the rest of the expense will be amortized over the life of the agreement. As of September 30, 2020 and December 31, 2019, there were 74,797,037 and 74,225,141 shares of common stock issued and outstanding, respectively. Stock Options On September 1, 2017, the Company entered into an agreement for consulting services. As compensation the Company granted options to purchase 100,000 shares of common stock at a price of $2.00 per share and are exercisable for five years. The stock option vests in equal monthly installments of 24 months. These options were valued at $20,154 using a Black-Scholes options pricing model. On May 4, 2020, the Company granted options to purchase 6,050,000 shares of common stock at a price of $0.57 per share to certain directors and employees of the Company (including our named executive officers) and are exercisable for ten years. One quarter of these options vest on the grant day, and the remainder of the options vest equally over thirty six (36) months starting January 1, 2020. These options were valued at $3,152,050 using a Black-Scholes Options Pricing Model. On May 18, 2020, the Company granted options to purchase 75,000 shares of common stock at a price of $0.51 per share to a consultant and are exercisable for ten years. One quarter of these options vest on the grant day, and the remainder of the options vest equally over twelve (12) months. These options were valued at $35,295 using a Black-Scholes Options Pricing Model. On September 14, 2020, the Company granted options to purchase 250,000 shares of common stock at a price of $0.84 per share to a consultant and are exercisable for ten years. One quarter of these options vest on the grant day, and the remainder of the options vest equally over twelve (12) months. These options were valued at $192,975 using a Black-Scholes Options Pricing Model. On September 23, 2020, the Company granted options to purchase 200,000 shares of common stock at a price of $0.84 per share to a consultant, who is a related party, and are exercisable for ten years. One quarter of these options vest on the grant day, and the remainder of the options vest equally over twenty four (24) months. These options were valued at $141,840 using a Black-Scholes Options Pricing Model. The remaining expense outstanding through December 31, 2022 is $2,033,545. For the three months ended September 30, 2020 and 2019, the Company recorded $267,521 and $840, respectively, as stock based compensation which is included in the general and administrative expenses in the condensed consolidated statement of operations and $39,075 and $0 respectively, as research and development expense. For the nine months ended September 30, 2020 and 2019, the Company recorded $1,215,090 and $5,878, respectively, as stock based compensation which is included in the general and administrative expenses in the condensed consolidated statement of operations and $273,525 and $0 respectively, as research and development expense. The fair value of the options is estimated using a Black-Scholes Options Pricing Model with the following assumptions: Market value of common stock on issuance date $0.40 - 0.84 Exercise price $0.51 - 2.00 Expected volatility 100% - 138% Expected term (in years) 5 - 10 Risk-free interest rate 0.64% – 1.73 Expected dividend yields — On August 14, 2019, the Board authorized the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of our company and certain of its affiliates and to enable our company and certain of its affiliates to obtain and retain services of these individuals, which is essential to our long-term success. Our 2019 Plan allows for the grant of a variety of equity vehicles to provide flexibility in implementing equity awards, including incentive stock options, non-qualified stock options, restricted stock grants, unrestricted stock grants and restricted stock units. A total of 7,500,000 shares of common stock were authorized under the 2019 Plan, which was amended to 11,500,000 shares of common stock, for which as of September 30, 2020 a total of 6,050,000 are outstanding. The following is a summary of outstanding and exercisable options: Number of Shares Weighted Average Exercise Price Balance at December 31, 2019 100,000 $ 2.00 Issued 6,575,000 0.59 Expired — — Balance at September 30, 2020 6,675,000 $ 0.61 At September 30, 2020, 2,908,594 options for common stock were exercisable and the intrinsic value of these options was $1,460,334 and the weighted average remaining contractual life for options outstanding was 9.51 years. Warrants In December 2019, the Company entered into a Securities Purchase Agreement with an investor pursuant to which the Company agreed to sell the investor a $100,000 convertible note bearing interest at 8% per annum. The Company also sold warrants to the investors to purchase up to an aggregate of 100,000 shares of common stock, with an exercise term of three (3) years, at a per share purchase price of one hundred twenty five percent (125%) of the voluntary or involuntary conversion price of the Company’s 8% convertible note. The warrants were deemed as a derivative liability and was recorded as a debt discount at date of issuance. See Note 10. In January and February 2020, the Company entered into a Securities Purchase Agreement with investors pursuant to which the Company agreed to sell the investors a $100,000 and $50,000 convertible note bearing interest at 8% per annum, respectively. The Company also sold warrants to the investors to purchase up to an aggregate of 100,000 and 50,000 shares of common stock, respectively, with an exercise term of three (3) years, at a per share purchase price of one hundred twenty five percent (125%) of the voluntary or involuntary conversion price of the Company’s 8% convertible note. The warrants were deemed as a derivative liability and was recorded as a debt discount at date of issuance. See Note 10. On June 8, 2020, the Company entered into a Securities Purchase Agreement, dated as of June 2, 2020 (the “Purchase Agreement”) with an accredited investor pursuant to which the investor purchased a 12% unsecured convertible promissory note (the “12% Note”) from the Company. In connection with the Purchase Agreement and the 12% Note, the Company issued a common stock purchase warrant to purchase 36,666 shares of the Company’s common stock at $0.75 per share which may be exercised by cashless exercise, exercisable for a period of three years. The warrants were deemed as a derivative liability and was recorded as a debt discount at date of issuance. See Note 10. On June 23, 2020, the Company entered into a Securities Purchase Agreement, dated as of June 19, 2020 with an accredited investor pursuant to which the Investor purchased a 12% convertible promissory note from the Company. In connection with the securities purchase agreement and the note, the Company issued two common stock purchase warrants each to purchase 115,385 shares of the Company’s common stock at $1.30 per share which may be exercised by cashless exercise, exercisable for a period of five years. One of the warrants is to be issued only in the case of default on the note. During the third quarter of 2020, the anti-dilution clause was triggered and the exercise price was reset to $0.40 resulting in the number of warrants to be increased to 378,694. The warrants were deemed as a derivative liability and was recorded as a debt discount at date of issuance. See Note 10. The following is a summary of outstanding and exercisable warrants: Number of Shares Weighted Average Exercise Price Balance at December 31, 2019 100,000 $ 3.26 Issued 565,360 0.92 Expired — — Balance at September 30, 2020 665,360 $ 0.56 At September 30, 2020, 665,360 warrants for common stock were exercisable and the intrinsic value of these warrants was $130,233 and the weighted average remaining contractual life for warrants outstanding was 3.68 years. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 15 – RELATED PARTY TRANSACTIONS The Company’s Chief Executive Officer (“CEO”) shares the use of the leased office space for personal living quarters. The CEO reimburses the Company for 50% of the monthly rent, or $2,800 per month. As of September 30, 2020, the Company owes the CEO $47,354 for expenses the CEO incurred on behalf of the Company. See Notes 8, 11 and 14 for additional related party transactions. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16 – SUBSEQUENT EVENTS On October 7, 2020, borrowed an additional $80,000 from a note holder based on the same terms and conditions. See Note 7. On October 8, 2020, the company issued 350,000 shares of the company’s common stock at $0.48 a share, to a consultant for business development services. On October 13, 2020, the Company issued 64,421 shares of common stock for the conversion of $18,000 convertible notes payable and $2,000 of related accrued interest. On October 23, 2020, the Company issued 40,731 shares of common stock for the conversion of $10,000 convertible notes payable. Name Change – Neuropathix, Inc. On November 4, 2020, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State that changed its name to Neuropathix, Inc. The Company concurrently submitted a request to FINRA for approval of the name change as well as a ticker symbol change from “KLFE” to “NPTX.” The Company’s name change and ticker symbol change was reviewed and processed by FINRA and went effective November 6, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. |
Significant risks and uncertainties | Significant Risks and Uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, and the Company’s ability to raise capital. The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property. In December 2019, a novel strain of coronavirus, commonly known as COVID-19, surfaced. The spread of COVID-19 around the world in 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company is unable to determine if it will have a material impact to its operations. The Company’s operations as of September 30, 2020 have not been significantly affected, but may be affected in the future, by the ongoing outbreak of COVID-19 which was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s labor workforce, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the periods. Actual results could differ from those estimates. Significant matters requiring the use of estimates and assumptions include, but are not necessarily limited to, establishing the fair value of marketable securities and periodically evaluating marketable securities for potential impairment, fair value of the Company’s stock, stock-based compensation, valuation of derivative liabilities and valuation allowance relating to the Company’s deferred tax assets. Management believes that its estimates and assumptions are reasonable, based on information that is available at the time they are made. |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing income for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares ("dilutive securities") that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 12,642,869 for the three and nine months ended September 30, 2020. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 4,113,729 for the three and nine months ended September 30, 2019. |
Research and Development | Research and Development In accordance with FASB ASC 730, Research and Development Stock Based Compensation The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation – Stock Compensation (“ASC 718”), prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense, which is included in the general and administrative expense in the consolidated financial statements based on the estimated grant date fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). |
Recently Issued Authoritative Guidance | Recently Issued Authoritative Guidance In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s consolidated financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table presents liabilities that are measured and recognized at fair value as of September 30, 2020 and December 31, 2019, on a recurring basis: September 30, 2020 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities — — 654,114 $ 654,114 December 31, 2019 Level 1 Level 2 Level 3 Total Carrying Value Derivative liabilities — — 183,451 $ 183,451 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | Accounts payable and accrued expenses at September 30, 2020 and December 31, 2019 consisted of the following: September 30, 2020 December 31, 2019 Accounts payable and accrued expenses $ 382,096 $ 309,231 Accrued interest 155,117 79,964 Totals $ 537,213 $ 389,195 |
Payroll and Related Liabiliti_2
Payroll and Related Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule Of Payroll and Related Liabilities | Payroll and related liabilities at September 30, 2020 and December 31, 2019 consisted of the following: September 30, 2020 December 31, 2019 Payroll $ 119,291 $ — Payroll taxes 232,506 243,208 Totals $ 351,797 $ 243,208 |
Loan Payable (Tables)
Loan Payable (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Loan Payable Tables Abstract | |
Schedule of Loans Payable | September 30, 2020 December 31, 2019 Loan payable at 8%, matures 12/31/2020 * {a} $ 720,000 $ 620,000 Loan payable at 1%, matures 4/23/2022 * 84,200 — Total 804,200 620,000 Less: short term loans 771,456 620,000 Total long-term loans $ 32,744 $ — |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Schedule of Derivative Liabilities | Based on the various convertible notes described in Note 10 and 11, the fair value of applicable derivative liabilities on notes, warrants and change in fair value of derivative liability are as follows for the nine months ended September 30, 2020: Derivative Liability - Convertible Notes Derivative Liability - Warrants Total Balance as of December 31, 2019 $ 61,430 $ 122,021 $ 183,451 Additions during the period 597,841 353,779 951,620 Change in fair value (409,165 ) (58,932 ) (468,097 ) Change due to exercise / redemptions (12,860 ) — (12,860 ) Balance as of September 30, 2020 $ 237,246 $ 416,868 $ 654,114 |
Warrants | |
Schedule of share-based payment award, stock options, valuation assumptions | The fair value of the derivative liability – warrants is estimated using a Monte Carlo pricing model with the following assumptions: Market value of common stock $0.58 - 1.10 Expected volatility 108.8% - 143.6% Expected term (in years) 2.48 - 4.97 Risk-free interest rate 0.23% - 0.36% |
Convertible Notes | |
Schedule of share-based payment award, stock options, valuation assumptions | The fair value of the derivative liability – convertible notes is estimated using a Monte Carlo pricing model with the following assumptions: Market value of common stock $0.58 - 1.80 Expected volatility 93.4% - 107.3% Expected term (in years) 0.48 – 1.59 Risk-free interest rate 0.12% - 0.18% |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Schedule of outstanding and exercisable options | The following is a summary of outstanding and exercisable options: Number of Shares Weighted Average Exercise Price Balance at December 31, 2019 100,000 $ 2.00 Issued 6,575,000 0.59 Expired — — Balance at September 30, 2020 6,675,000 $ 0.61 |
Schedule of outstanding and exercisable warrants | The following is a summary of outstanding and exercisable warrants: Number of Shares Weighted Average Exercise Price Balance at December 31, 2019 100,000 $ 3.26 Issued 565,360 0.92 Expired — — Balance at September 30, 2020 665,360 $ 0.56 |
Option [Member] | |
Schedule of share-based payment award, stock options, valuation assumptions | The fair value of the options is estimated using a Black-Scholes Options Pricing Model with the following assumptions: Market value of common stock on issuance date $0.40 - 0.84 Exercise price $0.51 - 2.00 Expected volatility 100% - 138% Expected term (in years) 5 - 10 Risk-free interest rate 0.64% – 1.73 Expected dividend yields — |
Organization and Nature of Op_2
Organization and Nature of Operations (Details Narrative) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Date of Incorporation | Mar. 25, 2013 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Weighted average number of common stock, anti-dilutive | 12,642,869 | 4,113,729 | 12,642,869 | 4,113,729 |
Research and Development | $ 68,546 | $ 189,443 | $ 375,938 | $ 439,680 |
Going Concern and Management'_2
Going Concern and Management's Liquidity Plans (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net loss from operations | $ (805,669) | $ (767,042) | $ (2,679,475) | $ (1,824,987) | |
Net cash used in operating activities | (807,789) | $ (2,000,012) | |||
Accumulated deficit | $ (11,473,678) | $ (11,473,678) | $ (8,496,088) |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value, liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative liabilities | $ 654,114 | $ 183,451 |
Level 1 | ||
Derivative liabilities | 0 | 0 |
Level 2 | ||
Derivative liabilities | 0 | 0 |
Level 3 | ||
Derivative liabilities | 654,114 | 183,451 |
Total Carrying Value | ||
Derivative liabilities | $ 654,114 | $ 183,451 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 382,096 | $ 309,231 |
Accrued interest | 155,117 | 79,964 |
Totals | $ 537,213 | $ 389,195 |
Payroll and Related Liabiliti_3
Payroll and Related Liabilities - Schedule Of Accrued Payroll And Payroll Taxes (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued Payroll And Payroll Taxes - Schedule Of Accrued Payroll And Payroll Taxes | ||
Payroll | $ 119,291 | $ 0 |
Payroll taxes | 232,506 | 243,208 |
Totals | $ 351,797 | $ 243,208 |
Loan Payable - Disclosure of Lo
Loan Payable - Disclosure of Loans payable (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |
Total | $ 804,200 | $ 620,000 | |
Less: short term loans | 771,456 | 620,000 | |
Total long-term loans | 32,744 | 0 | |
Loan payable One [Member] | |||
Total | [1] | 720,000 | 620,000 |
Loan payable two [Member] | |||
Total | [2] | $ 84,200 | $ 0 |
[1] | On July 1, 2020, the Company extended the note to December 31, 2020 based on the same terms and conditions. On October 7, 2020, borrowed an additional $80,000 based on the same terms and conditions. | ||
[2] | unsecured note |
Loan Payable (Details Narrative
Loan Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||||
Accrued interest | $ 111,732 | $ 73,381 | |||
Interest expense | $ 13,753 | $ 12,230 | $ 38,352 | $ 36,690 |
Loan Payable - Related Party (D
Loan Payable - Related Party (Details Narrative) - USD ($) | 7 Months Ended | 9 Months Ended | |
Jul. 25, 2018 | Sep. 30, 2020 | Dec. 31, 2019 | |
Advanced from related party | $ 47,354 | $ 25,349 | |
Related Party Promissory Note | |||
Note payable, related party | $ 25,822 | ||
Maturity date | Mar. 31, 2020 | Mar. 31, 2021 | |
Interest rate | 0.05% | ||
Accrued interest, related party note | $ 226 | $ 226 | |
Advanced from related party | $ 16,270 | ||
Total debt | $ 42,092 |
Capital Lease Obligations (Deta
Capital Lease Obligations (Details Narrative) - USD ($) | 1 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2020 | |
Debt Disclosure [Abstract] | ||
Effective interest rate | 12.00% | |
Monthly payment | $ 941 | |
Capital Lease Obligations | $ 29,731 | |
Equipment with carrying value | $ 53,601 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | Jun. 08, 2020 | Sep. 24, 2020 | Jun. 23, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 12, 2020 | Sep. 26, 2019 | Jul. 24, 2015 |
Convertible debt | $ 376,373 | $ 376,373 | ||||||||||
Installments amount | $ 941 | |||||||||||
Common stock issued | 74,225,141 | 74,797,037 | 74,797,037 | |||||||||
Amortization of debt discount | $ 254,249 | $ 0 | ||||||||||
Securities Purchase Agreement [Member] | ||||||||||||
Number of warrants sold | 100,000 | |||||||||||
Proceeds from sale of warrants | $ 100,000 | |||||||||||
Interest rate | 8.00% | |||||||||||
Convertible Debt | ||||||||||||
Convertible debt | $ 192,000 | $ 105,000 | $ 500,000 | |||||||||
Maturity date | Mar. 12, 2021 | Feb. 16, 2030 | ||||||||||
Interest rate | 8.00% | 3.00% | ||||||||||
Convertible price per share | $ 0.10 | |||||||||||
Original issue discount | $ 5,000 | |||||||||||
Purchase price | $ 100,000 | |||||||||||
Common stock issued | 1,500,000 | |||||||||||
Debt conversion, converted instrument, amount | 18,000 | |||||||||||
Debt conversion, converted instrument, interest | $ 2,000 | |||||||||||
Debt conversion, converted instrument, shares issued | 46,896 | |||||||||||
Value of notes converted | $ 123,627 | |||||||||||
Accrued interest | $ 200 | $ 31,421 | 31,421 | $ 26,373 | ||||||||
Interest expense | 92,466 | $ 107,161 | 195,616 | 226,240 | ||||||||
Amortization of debt discount | $ 0 | $ 3,750 | $ 0 | $ 11,250 | ||||||||
Convertible Debt | Securities Purchase Agreement [Member] | ||||||||||||
Convertible debt | $ 165,000 | $ 150,000 | ||||||||||
Maturity date | Jun. 19, 2021 | |||||||||||
Interest rate | 12.00% | 12.00% | ||||||||||
Convertible price per share | $ 0.75 | $ 1.30 | ||||||||||
Original issue discount | $ 9,000 | |||||||||||
Purchase price | 156,000 | |||||||||||
Installments amount | $ 52,000 | $ 25,000 | ||||||||||
Common stock issued | 36,666 | 115,385 | ||||||||||
Transaction fees | $ 3,100 | $ 20,750 |
Convertible Notes Payable - R_2
Convertible Notes Payable - Related Party (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Feb. 29, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Amortization of debt discount | $ 254,249 | $ 0 | |||||
Convertible Notes Payable Related Party [Member] | |||||||
Interest expense | $ 18,493 | $ 21,493 | 51,507 | 59,685 | |||
Amortization of debt discount | 0 | $ 0 | 0 | $ 0 | |||
Accrued interest | $ 0 | $ 8,178 | $ 8,178 | ||||
Securities Purchase Agreement [Member] | |||||||
Number of warrants sold | 100,000 | ||||||
Proceeds from sale of warrants | $ 100,000 | ||||||
Securities Purchase Agreement [Member] | Kettner Investments | |||||||
Number of warrants sold | 100,000 | ||||||
Proceeds from sale of warrants | $ 100,000 | ||||||
Securities Purchase Agreement [Member] | Chief Executive Officer | |||||||
Number of warrants sold | 50,000 | ||||||
Proceeds from sale of warrants | $ 50,000 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Derivative Liabilities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Balance at beginning | $ 183,451 | |||
Additions during the period | 951,620 | |||
Change in fair value | $ (346,708) | $ 0 | (468,097) | $ 0 |
Change due to exercise / redemptions | (12,860) | |||
Balance at end | 654,114 | 654,114 | ||
Convertible Notes | ||||
Balance at beginning | 61,430 | |||
Additions during the period | 597,841 | |||
Change in fair value | (409,165) | |||
Change due to exercise / redemptions | (12,860) | |||
Balance at end | 237,246 | 237,246 | ||
Warrants | ||||
Balance at beginning | 122,021 | |||
Additions during the period | 353,779 | |||
Change in fair value | (58,932) | |||
Change due to exercise / redemptions | 0 | |||
Balance at end | $ 416,868 | $ 416,868 |
Derivative Liabilities - Assump
Derivative Liabilities - Assumptions - Convertible notes (Details) - Convertible Notes | 9 Months Ended |
Sep. 30, 2020$ / shares | |
Minimum [Member] | |
Market value of common stock | $ 0.58 |
Expected volatility | 93.40% |
Expected term (in years) | 5 months 23 days |
Risk-free interest rate | 0.12% |
Maximum [Member] | |
Market value of common stock | $ 1.80 |
Expected volatility | 107.30% |
Expected term (in years) | 1 year 7 months 2 days |
Risk-free interest rate | 0.18% |
Derivative Liabilities - Assu_2
Derivative Liabilities - Assumptions - Warrants (Details) - Warrants | 9 Months Ended |
Sep. 30, 2020$ / shares | |
Minimum [Member] | |
Market value of common stock | $ 0.58 |
Expected volatility | 108.80% |
Expected term (in years) | 2 years 5 months 23 days |
Risk-free interest rate | 0.23% |
Maximum [Member] | |
Market value of common stock | $ 1.10 |
Expected volatility | 143.60% |
Expected term (in years) | 4 years 11 months 19 days |
Risk-free interest rate | 0.36% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Apr. 01, 2014 |
Security Deposit | $ 17,121 | $ 17,121 | |
Office Space | |||
Monthly Rent | $ 5,600 | ||
Security Deposit | $ 15,000 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of share-based payment award, stock options, valuation assumptions (Details) - Option [Member] | 9 Months Ended |
Sep. 30, 2020$ / shares | |
Minimum [Member] | |
Market value of common stock on issuance date | $ 0.40 |
Exercise price | $ 0.51 |
Expected volatility | 100.00% |
Expected term (in years) | 5 years |
Risk-free interest rate | 0.64% |
Expected dividend yields | 0.00% |
Maximum [Member] | |
Market value of common stock on issuance date | $ 0.84 |
Exercise price | $ 2 |
Expected volatility | 138.00% |
Expected term (in years) | 10 years |
Risk-free interest rate | 1.73% |
Expected dividend yields | 0.00% |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of outstanding and exercisable Options (Details) - $ / shares | Sep. 01, 2017 | Sep. 30, 2020 |
Number of Options | ||
Number of Options Outstanding, Beginning | 100,000 | |
Number of Options Issued | 6,575,000 | |
Number of Options Expired | 0 | |
Number of Options Outstanding, Ending | 6,675,000 | |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price Outstanding, Beginning | $ 2 | |
Weighted Average Exercise Price Issued | $ 2 | 0.59 |
Weighted Average Exercise Price Expired | 0 | |
Weighted Average Exercise Price Outstanding, Ending | $ 0.61 |
Stockholders' Deficit - Summa_2
Stockholders' Deficit - Summary of outstanding and exercisable warrants (Details) - Warrants | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Number of Warrants | |
Number of Warrants Outstanding, Beginning | shares | 100,000 |
Number of Warrants Issued | shares | 565,360 |
Number of Warrants Expired | shares | 0 |
Number of Warrants Outstanding, Ending | shares | 665,360 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 3.26 |
Weighted Average Exercise Price Issued | $ / shares | 0.92 |
Weighted Average Exercise Price Expired | $ / shares | 0 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 0.56 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jun. 08, 2020 | May 14, 2020 | May 04, 2020 | Sep. 01, 2017 | Sep. 25, 2020 | Sep. 24, 2020 | Jun. 23, 2020 | May 23, 2020 | May 18, 2020 | Apr. 28, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 26, 2019 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||||
Common Stock Description | All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative, and therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company, subject to the rights of the preferred stockholders. | |||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||||||||
Common Stock, Shares, Issued | 74,225,141 | 74,797,037 | 74,797,037 | |||||||||||||||
Common Stock, Shares, Outstanding | 74,225,141 | 74,797,037 | 74,797,037 | |||||||||||||||
Options granted | 100,000 | |||||||||||||||||
Options granted, exercise price | $ 2 | $ 0.59 | ||||||||||||||||
Vesting period | 5 years | |||||||||||||||||
Value of option | $ 20,154 | |||||||||||||||||
Common stock authorized under plan | 7,500,000 | 7,500,000 | ||||||||||||||||
Share based compensation | $ 1,488,615 | $ 275,878 | ||||||||||||||||
Option exercisable | 2,908,594 | 2,908,594 | ||||||||||||||||
Intrinsic value of options | $ 1,460,334 | $ 1,460,334 | ||||||||||||||||
Weighted average remaining contractual life of option | 9 years 6 months 3 days | |||||||||||||||||
Warrant Exercisable | 665,360 | 665,360 | ||||||||||||||||
Intrinsic value of warrants | $ 130,233 | $ 130,233 | ||||||||||||||||
Weighted average remaining contractual life of warrants outstanding | 3 years 8 months 5 days | |||||||||||||||||
Stock issued for purchase of intellectual property | 25,000 | |||||||||||||||||
Share Price | $ 0.53 | |||||||||||||||||
General and Administrative Expense [Member] | ||||||||||||||||||
Share based compensation | 267,521 | $ 840 | $ 39,075 | 0 | ||||||||||||||
Research and Development Expense [Member] | ||||||||||||||||||
Share based compensation | $ 1,215,090 | $ 5,878 | $ 273,525 | $ 0 | ||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||
Number of warrants sold | 100,000 | |||||||||||||||||
Proceeds from sale of warrants | $ 100,000 | |||||||||||||||||
Interest rate | 8.00% | |||||||||||||||||
Warrant term | 3 years | |||||||||||||||||
Kettner Investments | Securities Purchase Agreement [Member] | ||||||||||||||||||
Number of warrants sold | 100,000 | |||||||||||||||||
Proceeds from sale of warrants | $ 100,000 | |||||||||||||||||
Interest rate | 8.00% | |||||||||||||||||
Warrant term | 3 years | |||||||||||||||||
Chief Executive Officer | Securities Purchase Agreement [Member] | ||||||||||||||||||
Number of warrants sold | 50,000 | |||||||||||||||||
Proceeds from sale of warrants | $ 50,000 | |||||||||||||||||
Interest rate | 8.00% | |||||||||||||||||
Warrant term | 3 years | |||||||||||||||||
Accredited Investor | Securities Purchase Agreement [Member] | ||||||||||||||||||
Number of warrants sold | 36,666 | 115,385 | ||||||||||||||||
Interest rate | 12.00% | 130.00% | ||||||||||||||||
Warrant term | 3 years | 3 years | ||||||||||||||||
Option [Member] | Directors and employees | ||||||||||||||||||
Options granted | 6,050,000 | |||||||||||||||||
Options granted, exercise price | $ 0.57 | |||||||||||||||||
Value of option | $ 3,152,050 | |||||||||||||||||
Option [Member] | Consultant | ||||||||||||||||||
Options granted | 250,000 | 200,000 | 75,000 | |||||||||||||||
Options granted, exercise price | $ 0.84 | $ 0.84 | $ 0.51 | |||||||||||||||
Value of option | $ 192,975 | $ 141,840 | $ 35,295 | |||||||||||||||
Convertible Debt | ||||||||||||||||||
Common Stock, Shares, Issued | 1,500,000 | |||||||||||||||||
Debt conversion, converted instrument, amount | $ 18,000 | |||||||||||||||||
Debt conversion, converted instrument, interest | $ 2,000 | |||||||||||||||||
Debt conversion, converted instrument, shares issued | 46,896 | |||||||||||||||||
Convertible Debt | Securities Purchase Agreement [Member] | ||||||||||||||||||
Common Stock, Shares, Issued | 36,666 | 115,385 | ||||||||||||||||
Consultant | ||||||||||||||||||
Shares issued for services | 500,000 | |||||||||||||||||
Shares issued price per share | $ 0.50 | |||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||
Preferred stock description | Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series A Preferred Stock. Each share of the Series A Preferred Stock is entitled to a liquidation preference of $1,000 per share, and is convertible into 1,000 shares of the Company’s common stock. The holders of a majority of the Series A Preferred Stock are entitled to elect up to four (4) directors to the Company’s board of directors, and have preferential rights in regard to the election of Series A directors. In all other voting matters, the holders of Series A Preferred Stock are entitled to cast 1,000 votes per share. | |||||||||||||||||
Preferred Stock, Shares Authorized | 75 | 75 | 75 | |||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||
Preferred stock description | Company’s Board of Directors authorized and designated 75 shares of the Company’s Preferred Stock as Series B Preferred Stock. Each share of the Series B Preferred Stock is entitled to a liquidation preference of $1,000 per share, and is convertible into 1,000 shares of the Company’s common stock. The holders of a majority of the Series B Preferred Stock are entitled to elect up to three (3) directors to the Company’s board of directors, and have preferential rights in regard to the election of Series B directors. In all other voting matters, the holders of Series B Preferred Stock are entitled to cast 1,000 votes per share. | |||||||||||||||||
Preferred Stock, Shares Authorized | 75 | 75 | 75 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Chief Executive Officer | |
Related party cost | $ 47,354 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Oct. 13, 2020 | Oct. 08, 2020 | Oct. 07, 2020 | Oct. 23, 2020 |
Debt conversion, converted instrument, amount | $ 18,000 | $ 10,000 | ||
Debt conversion, converted instrument, interest | $ 2,000 | |||
Debt conversion, converted instrument, shares issued | 64,421 | 40,731 | ||
Noteholder | ||||
Proceeds from related party debt | $ 80,000 | |||
Consultant | ||||
Shares issued to related party | 350,000 | |||
Shares issued price per share | $ 0.48 |