Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2018 | |
Document And Entity Information | |
Entity Registrant Name | CURE PHARMACEUTICAL HOLDING CORP. |
Entity Central Index Key | 1,643,301 |
Document Type | S1 |
Document Period End Date | Sep. 30, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Non-accelerated Filer |
Document Fiscal Year Focus | 2,018 |
Entity Emerging Growth Company | true |
Entity Small Business | true |
Entity Ex Transition Period | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | |||
Cash | $ 302,538 | $ 108,249 | $ 1,106,142 |
Accounts receivable | 6,590 | 4,364 | 7,049 |
Inventory | 92,673 | 44,996 | 81,285 |
Prepaid expenses and other assets | 860,114 | 586,888 | 223,879 |
Total current assets | 1,261,915 | 744,497 | 1,418,355 |
Property and equipment, net | 313,078 | 337,361 | 370,648 |
Intellectual property and patents, net | 1,033,923 | 900,472 | 894,510 |
Prepaid expenses | 332,790 | ||
Other assets | 92,334 | 117,555 | 151,579 |
Total assets | 3,034,040 | 2,099,885 | 2,835,092 |
Current liabilities: | |||
Accounts payable | 744,765 | 544,980 | 265,386 |
Accrued expenses | 385,895 | 129,978 | 26,305 |
Loan payable | 50,425 | 33,277 | |
Notes payable, net of unamortized discount | 886,000 | 800,000 | 50,000 |
Capital lease payable | 9,453 | ||
Convertible promissory notes, net of unamortized discount | 4,378,566 | 1,551,488 | |
Derivative liability | 806,379 | 90,738 | |
Deferred revenue | 404,517 | 361,462 | 173,618 |
Total current liabilities | 7,606,122 | 3,529,071 | 558,039 |
License fees | 560,000 | 560,000 | 560,000 |
Total liabilities | 8,166,122 | 4,089,071 | 1,118,039 |
Deficit: | |||
Common stock: $0.001 par value; authorized 75,000,000 shares; 25,795,871 and 23,901,252 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 25,796 | 23,902 | 23,337 |
Additional paid-in capital | 21,922,680 | 16,483,632 | 12,412,430 |
Stock payable | 869,125 | 324,995 | |
Accumulated deficit | (27,972,054) | (18,868,599) | (10,718,714) |
Total CURE Pharmaceutical Holding Corp stockholders’ deficit | (5,154,453) | (2,036,070) | 1,717,053 |
Noncontrolling interest in subsidiary | 22,371 | 46,884 | |
Total deficit | (5,132,082) | (1,989,186) | 1,717,053 |
Total liabilities and deficit | $ 3,034,040 | $ 2,099,885 | $ 2,835,092 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deficit: | |||
Common Stock, Par Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 | 75,000,000 |
Common Stock, Shares Issued | 25,795,871 | 23,901,252 | 23,336,673 |
Common Stock, Shares Outstanding | 25,795,871 | 23,901,252 | 23,336,673 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | ||||||
Net product sales | $ 67,851 | $ 59,345 | $ 286,591 | $ 118,915 | $ 148,886 | $ 73,347 |
Consulting research & development income | 20,000 | 63,192 | 4,448 | 9,696 | 3,356 | |
Shipping and other sales | 15,010 | 21,822 | 21,822 | 7,462 | ||
Total revenues | 87,851 | 74,355 | 349,783 | 145,185 | 180,404 | 84,165 |
Cost of goods sold | 41,958 | 59,427 | 171,032 | 134,575 | 180,629 | 153,330 |
Gross profit | 45,893 | 14,928 | 178,751 | 10,610 | (225) | (69,165) |
Research and development expenses | 291,624 | 239,663 | 1,094,993 | 664,931 | 1,427,341 | 753,369 |
Selling, general and administrative expenses | 2,444,219 | 1,290,565 | 5,496,489 | 5,888,062 | 5,914,541 | 3,103,710 |
Total costs and expenses | 2,735,843 | 1,530,228 | 6,591,482 | 6,552,993 | 7,341,882 | 3,857,079 |
Net loss from operations | (2,689,950) | (1,515,300) | (6,412,731) | (6,542,383) | (7,342,107) | (3,926,244) |
Other income (expense): | ||||||
Interest income | 1 | 6 | 6 | 436 | ||
Other income | 8,699 | 7,619 | 25,841 | 34,412 | 38,460 | |
Loss on disposal of PP&E | (12,351) | (2,311,805) | (607,906) | |||
Change in derivative liability | (624,429) | 218,138 | (418,042) | 175,593 | (58,522) | |
Other expense | (61,695) | (8,673) | (171,402) | (16,061) | (3,580) | (145,237) |
Interest expense | (1,433,153) | (511,503) | (2,133,412) | (600,709) | (1,582,184) | (121,572) |
Other income (expense) | (2,119,277) | (293,338) | (2,715,237) | (427,681) | (821,588) | (231,236) |
Net loss before income taxes | (4,809,227) | (1,808,638) | (9,127,968) | (6,970,064) | (8,163,695) | (4,157,480) |
Provision for income taxes | ||||||
Net loss | (4,809,227) | (1,808,638) | (9,127,968) | (6,970,064) | (8,149,885) | (4,157,480) |
Net loss attributed to noncontrolling interest | (9,935) | (24,513) | (13,810) | |||
Net loss attributed to CURE Pharmaceutical Holding Corp | $ (4,799,292) | $ (1,808,638) | $ (9,103,455) | $ (6,970,064) | $ 8,149,885 | $ 4,157,480 |
Net loss per share, basic and diluted | $ (0.20) | $ (0.08) | $ (0.37) | $ (0.30) | $ (0.34) | $ (0.46) |
Weighted average shares outstanding, basic and diluted | 24,403,901 | 23,794,730 | 24,635,143 | 23,567,317 | 23,649,432 | 9,097,973 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders’ Equity (Deficit) - USD ($) | Common Share Issuances [Member] | Additional Paid-In Capital | Stock Payable | Accumulated Deficit | Noncontrolling Interest | Total |
Beginning Balance, Amount at Dec. 31, 2015 | $ 6,629 | $ 2,721,102 | $ (6,561,234) | $ (3,833,503) | ||
Beginning Balance, Shares at Dec. 31, 2015 | 6,629,260 | |||||
Issuance of common stock for conversion of convertible promissory notes, Amount | $ 2,381 | 2,870,626 | 2,873,007 | |||
Issuance of common stock for conversion of convertible promissory notes, Shares | 2,380,740 | |||||
Recapitalization of the Company, Amount | $ 8,150 | (8,150) | ||||
Recapitalization of the Company, Shares | 8,150,210 | |||||
Issuance of common stock for conversion of convertible promissory notes, Amount | $ 6,107 | 6,100,356 | 6,106,463 | |||
Issuance of common stock for conversion of convertible promissory notes, Shares | 6,106,463 | |||||
Issuance of common stock for professional services, Amount | $ 70 | 69,930 | 70,000 | |||
Issuance of common stock for professional services, Shares | 70,000 | |||||
Warrants granted | 658,566 | 658,566 | ||||
Warrants granted for services | ||||||
Net loss | (4,157,480) | (4,157,480) | ||||
Ending Balance, Amount at Dec. 31, 2016 | $ 23,337 | 12,412,430 | (10,718,714) | 1,717,053 | ||
Ending Balance, Shares at Dec. 31, 2016 | 23,336,673 | |||||
Issuance of common stock for professional services, Amount | $ 565 | 2,204,435 | 2,205,000 | |||
Issuance of common stock for professional services, Shares | 564,579 | |||||
Warrants granted for commissions earned | 832,000 | 832,000 | ||||
Warrants granted for services | 349,057 | 349,057 | ||||
Common stock owed but not yet issued | (828) | 324,995 | 324,167 | |||
Loan discounts | 686,538 | 686,538 | ||||
Noncontrolling interest of Oak Therapeutics, Inc. | 46,884 | 46,884 | ||||
Net loss | (8,149,885) | (8,149,885) | ||||
Ending Balance, Amount at Dec. 31, 2017 | $ 23,902 | $ 16,483,632 | $ 324,995 | $ (18,868,599) | $ 46,884 | (1,989,186) |
Ending Balance, Shares at Dec. 31, 2017 | 23,901,252 | |||||
Warrants granted for services | ||||||
Net loss | 9,103,455 | |||||
Ending Balance, Amount at Sep. 30, 2018 | $ (5,132,082) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows from Operating Activities | ||||
Net loss | $ (9,127,968) | $ (6,970,064) | $ (8,149,885) | $ (4,157,480) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Amortization of stock based compensation prepaid expenses | 1,162,400 | 1,261,693 | 70,000 | |
Loss on disposal of PP&E | 12,351 | 2,311,805 | 607,906 | |
Loss from joint venture | 14,956 | 164,596 | 172,608 | |
Stock issued for services | 45,614 | 953,179 | ||
Stock issued for amending convertible promissory notes | 189,750 | 36,238 | ||
Equity incentive compensation | 560,800 | (742,109) | ||
Depreciation and amortization | 110,454 | 130,943 | (2,475) | (4,334) |
Amortization of loan discounts | 1,650,705 | 564,969 | (13,810) | |
Change in derivative liability | 418,042 | (175,593) | 58,522 | |
Warrants granted for commission expense | 1,154,750 | 12,351 | 3,323 | |
Warrants granted for services | 2,560,607 | 349,057 | ||
Change in other assets and liabilities: | ||||
Accounts receivable | (2,226) | (14,151) | 49,980 | |
Inventory | (47,677) | (7,908) | 2,685 | (5,142) |
Prepaid expenses and other assets | 165,317 | (588,508) | 36,289 | 110,180 |
Other assets | 25,221 | 24,169 | (104,091) | (185,757) |
Accounts payable | 249,785 | 199,209 | 38,282 | 50,996 |
Accrued expenses | 269,314 | 48,181 | 279,594 | (298,204) |
Deferred revenue | 43,055 | 68,088 | 102,882 | 16,635 |
Net cash used in operating activities | (3,132,664) | (2,871,058) | 187,844 | (41,901) |
Cash flows from investing activities | ||||
Cash from acquisition of company | 65,702 | |||
Advance of note receivable | (18,290) | |||
Purchase in intangible assets | (71,529) | (43,621) | (49,480) | (45,930) |
Payment to joint venture | (5,000) | (5,000) | (20,421) | |
Acquisition of property and equipment, net | (51,093) | (55,917) | (100,142) | (122,126) |
Net cash used in investing activities | (122,622) | (104,538) | (88,920) | (206,767) |
Cash flows from financing activities | ||||
Proceeds from convertible promissory notes | 3,600,000 | 2,105,000 | ||
Proceeds from promissory notes | 250,000 | |||
Proceeds from loan | 2,855,549 | 5,855,575 | ||
Loan repayments | (400,425) | (98,277) | (199,401) | (1,028,226) |
Capital lease payments | (9,453) | (9,453) | (11,362) | |
Net cash provided by financing activities | 3,449,575 | 1,997,270 | 2,646,695 | 4,815,987 |
Net increase (decrease) in cash and cash equivalents | 194,289 | (978,326) | (997,893) | 1,092,790 |
Cash and cash equivalents, beginning of period | 108,249 | 1,106,142 | 1,106,142 | 13,352 |
Cash and cash equivalents, end of period | 302,538 | 127,816 | 108,249 | 1,106,142 |
Supplemental cash flow information | ||||
Cash paid for interest | 67,085 | 11,800 | 36,249 | 93,001 |
Cash paid for income taxes | ||||
Non-cash financing activities: | ||||
Common stock related to prepaid expenses | 1,018,250 | 1,960,000 | 258,918 | |
Warrants granted for discount on convertible promissory notes | 1,546,028 | 676,746 | ||
Loan discount relating to note payable | 10,000 | 832,846 | ||
Stock issued for settlement of accounts payable | 50,000 | |||
Common stock to be issued for issuance of a promissory note | 144,000 | |||
Common stock to be issued for conversion of convertible note | 263,397 | |||
Common stock to be issued for patents | 97,000 | |||
Accrued interest converted to convertible promissory note | $ 10,000 | |||
Liabilities assumed from acquisition | 1,791 | |||
Convertible promissory notes and accrued interest converted to common stock | 8,979,470 | |||
Warrants granted as payment for accounts payable | $ 50,660 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | CURE Pharmaceutical Holding Corp. (the “Company”) was incorporated in the State of Nevada on May 15, 2014. The Company was formerly named Makkanotti Group Corp. which was formed to engage in the business of manufacturing food paper bags in Nicosia, Cyprus. On November 7, 2016, the board of directors and the majority stockholder of the then outstanding shares of the registrant’s common stock executed a written consent to change the registrant’s name to CURE Pharmaceutical Holdings Corp. from Makkanotti Group Corp. The Certificate of Amendment to Articles of Incorporation was filed with the State of Nevada on November 30, 2016. Our wholly owned subsidiary and operating business, CURE Pharmaceutical Corporation, located in Oxnard, California was originally incorporated in July 2011. The Company is a drug formulation and delivery technology company that researches and manufactures novel dosage forms to improve drug safety, efficacy and patient adherence. Our mission is to improve lives by redefining how medications are delivered and experienced. Our business strategy is to develop products using our proprietary technology, license the product rights to partners responsible for clinical development, regulatory approval, marketing and sales and retain exclusive manufacturing rights. We operate a 25,000 sqft cGMP manufacturing plant in Oxnard, CA. Our technology platform includes oral dissolving film (ODF) and transdermal formulations. We apply our technology to pharmaceutical drugs and dietary supplements. ODF products are about the size of a postage stamp and composed of excipients such as polymers, stabilizers, lipids and surfactants which are all generally recognized as safe. They can be designed to deliver active ingredients to the gastrointestinal tract (GI) when placed on the tongue and swallowed, or directly to the blood stream when placed under the tongue (sublingual) or on the inner lining of the cheek and lip (buccal). Our commercial strategy seeks to mitigate risk by pursuing a diversified model. 1. Dietary supplements. We manufacture select dietary supplements that complement our portfolio and align with our mission which are white labeled and distributed by third parties. Dietary supplements are regulated under the Dietary Supplement Health and Education Act of 1994 (DSHEA) under which supplements are effective by the FDA for Good Manufacturing Practices under 21 CFR Part 111 but do not require FDA approval. By developing, manufacturing and selling dietary supplements, we can generate modest short term revenue while improving our production capabilities and generating platform-wide intellectual property. 2. Pharmaceuticals. We partner with companies that are responsible for clinical development, regulatory approval, marketing and sales of the products. We provide the Chemistry, Manufacturing, and Controls (CMC) documentation required for regulatory submissions and in some instances, we may conduct preclinical and clinical testing. Deal terms may include upfront licensing fees, development costs, milestone payments, royalties and exclusive manufacturing rights. Within this category, we are further diversifying risk and return by pursuing both competitive differentiation of marketed drugs (product life cycle opportunities) and improved pharmacokinetics of investigational drugs. While we currently commercially manufacture dietary supplements in our facility, we are undertaking steps to scale up manufacturing of pharmaceutical drugs for clinical and commercial use. 3. Cannabinoids. We are researching and developing drugs in the cannabinoid family of molecules. The oral bioavailability of cannabinoids is very low due to extensive gut and liver metabolism. Consequently, potency and release times are unpredictable and inconsistent. Moreover, cannabinoids don’t readily dissolve in water which adds to dosing difficulties and discrepancies. In addition to improving bioavailability, CUREfilm technology enables the loading of combinations of cannabinoids and other plant extracts that, together, provide maximum therapeutic benefit. Development and manufacturing of cannabinoid drugs are regulated by the FDA and the Drug enforcement Agency (DEA). A research license filed with the DEA in January 2018 was determined to be submitted in error given our proposed activities. As such, we have applied for a Schedule 1 manufacturer license with the DEA which is under review. 4. Underserved patient populations. Consistent with our mission of improving the lives of all people in need, regardless of geography or economic status, we licensed our technology to our majority-owned subsidiary, Oak Therapeutics, for the development of novel drug formulations for patients in developing nations such as a rapidly dissolving film to treat tuberculosis. | CURE Pharmaceutical Holding Corp (the Company), formally known as Makkanotti Group Corp, was incorporated in the State of Nevada on May 15, 2014. The Company was originally formed to engage in the business of manufacturing food paper bags in Nicosia, Cyprus. On November 7, 2016, the Company changed its name to CURE Pharmaceutical Holding Corp. On November 7, 2016, the Company, in a reverse take-over transaction, acquired CURE Pharmaceutical Corporation (CURE Pharmaceutical), a specialty pharmaceutical and bioscience company based in California that specializes in drug delivery technologies, by executing a Share Exchange Agreement and Conversion Agreement (Exchange Agreement) by and among the Company and a holder of a majority of the issued and outstanding capital stock of the registrant prior to the closing (the Majority Stockholder), on the one hand, and CURE Pharmaceutical a California corporation, all of the shareholders of CURE Pharmaceuticals issued and outstanding share capital (the CURE Pharm Shareholders) and the holders of certain convertible promissory notes of CURE Pharmaceutical (CURE Pharm Noteholders), on the other hand. Hereinafter, this share exchange transaction is described as the Share Exchange. As a result of the Share Exchange, CURE Pharmaceutical became a wholly owned subsidiary of the Company, and the CURE Pharm Shareholders and CURE Pharm Noteholders became the controlling shareholders of the Company. For accounting purposes, CURE Pharmaceutical shall be the surviving entity. The transaction is accounted for using the reverse acquisition method of accounting. As a result of the recapitalization and change in control, CURE Pharmaceutical is the acquiring entity in accordance with ASC 805, Business Combinations. CURE Pharmaceutical Holding Corp is a specialty pharmaceutical and bioscience company with a focus in drug delivery technologies. CURE leverages novel drug delivery technologies to develop and commercialize new applications of proven therapeutics through Oral Thin Film (OTF) via our proprietary patented CUREFilm Technology as well as through transdermal applications. Our micro encapsulation of drug actives in our CUREFilm Technology allows for a higher volume of an active and if required, multiple actives to be produced on a single oral thin film strip. The Company is focused on partnering with pharmaceutical and biotech companies seeking to deliver drug actives utilizing and benefitting from our proprietary OTF and transdermal applications and when preferable to take our own products from clinical process to commercialization. We are focused on both the human and veterinary prescription, OTC and nutraceutical markets. CURE represents the complete solution for OTF drug delivery therapeutics from inception to finished product utilizing our CGMP/FDA registered manufacturing facility and processes. In July 2017, the Company, Therapix Biosciences Ltd. (Therapix), a specialty clinical-stage pharmaceutical company dedicated to the development of cannabinoid-based drugs headquartered in Israel, and Assuta Medical Centers, Ltd., a medical services center located in Israel, entered into a nonbinding memorandum of understanding to collaborate to advance, research, develop and commercialize potential therapeutic products in the fields of personalized medicine and cannabinoids. On October 27, 2017, the Company entered into a development agreement with Therapix where the Company will formulate and develop pharmaceutical products using Therapixs proprietary compounds while utilizing the Companys proprietary OTF technology. Consistent with our mission of improving the lives of all people in need, regardless of geography or economic status, we have made our technology available to a private company, Oak Therapeutics (Oak), that is developing novel drug formulations for patients in developing nations (Territory). On November 10, 2017, we received 269,000 shares of Oak as consideration for an exclusive license to our patents rights in the Territory, along with a royalty-free non-exclusive license to any improvements made by Oak. As a result of this transaction, we own approximately 63% of Oaks outstanding shares and have consolidated Oaks financial statements as of the fourth quarter 2017. Oak has completed a Phase I Small Business Innovative Research Contract (SBIR) from the National Institutes of Health to develop a formulation for 300mg of Isoniazid in a rapidly dissolving film as an anti-tuberculosis treatment option. Oak is currently in the application process for Phase II of the SBIR program to continue its research and development and focus on manufacturing scale up, clinical trials and commercialization. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principal of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of CURE Pharmaceutical Holding Corp (“CPHC”), its wholly-owned subsidiary, CURE Pharmaceutical Corporation (“CURE”) and its 63% majority owned subsidiary Oak Therapeutics, Inc. (“OAK”), collectively referred to as (“CURE”, “we”, “us”, “our” or the “Company” All significant inter-company balances and transactions have been eliminated in consolidation. The Company’s film strip product represents the principal operations of the Company. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2018, and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2018 and 2017, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in Form 10-K for the fiscal period ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2018. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of September 30, 2018 and December 31, 2017, the Company had no cash equivalents. At September 30, 2018 and December 31, 2017, the Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (“FDIC”) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. Investment in Associates An associate is an entity over which the Company has significant influence through a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies. The results of assets and liabilities of associates are incorporated in the condensed consolidated financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Company’s share of the net assets of the associate, less any impairment in the value of the investment. Losses of an associate in excess of the Company’s interest in that associate are not recognized. Additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included within the carrying amount of the investment. On January 8, 2016, the Company received 50% ownership in Cure Innovations, Inc (“CI”). CI was created in 2015 by IncuBrands Studio, Inc (“IncuBrands”). The Company and IncuBrands each own 50% of the common stock of CI. The Company and IncuBrands entered into a Joint Venture agreement in 2013 to distribute several OTF products utilizing IncuBrands marketing and contacts in various industries as well as utilize the Company’s technology and capabilities of manufacturing OTF’s. On December 6, 2016, the Company entered into a Joint Venture Agreement (“Joint Venture”) with Pace Wellness, Inc. (“Pace”) to jointly develop three Active Pharmaceutical Ingredients (“API”) within the nonprescription and/or Over-the-Counter (OTC) medicines specifically utilizing the Company’s patented and proprietary CUREFilm™ Technology. The three API’s to be jointly developed are Diphenhydramine HCL, Omeprazole and a third API to be determined at a later date (“Products”). Pace shall be the exclusive global distributor of the Products under the Solves Strips® branding or other private or branded labels. All benefits, advantages, and liabilities derived from, or incurred in respect of the Joint Venture shall be borne by the parties in proportion of their respective participating interests of 50/50 equal interest. As of September 30, 2018, the Company has only contributed $5,000 to the Joint Venture. The Company is looking to dissolve this Joint Venture due to Pace’s insolvency and we are no longer looking to develop these Products. Property and Equipment The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. Depreciation has been provided using the straight-line method on the following estimated useful lives: Manufacturing equipment 5-7 Years Computer and other equipment 3-7 Years Leasehold Improvements Lesser of useful life or the term of the lease Accounts Receivable Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. Impairment of Long-Lived Assets Long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of our long-lived asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset. Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value. There was no impairment on our long-lived assets during the three and nine month periods ended September 30, 2018 and 2017. Revenue Recognition We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue Recognition”. The Company adopted Topic 606 using a modified retrospective approach and will be applied prospectively in the Company’s financial statements from January 1, 2018 forward. Revenues under Topic 606 are required to be recognized either at a “point in time” or “ over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The adoption of Topic 606 did not have a material impact on the Company’s financial statements, at initial implementation nor will it have a material impact on an ongoing basis. We derive revenues from two primary sources: products and services. Product revenue includes the shipment of product according to the agreement with our customers. Services include research and development contracts for the development of OTF products utilizing our CureFilm™ Technology or our other proprietary technologies. Rarely, contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these services are sold on a standalone basis. The Company’s consulting research and development income include services for the development of OTF products utilizing our CureFilm™ Technology. Most of our development contracts have four phases. Revenue is recognized based on progress toward completion of the performance obligation in each phase. The method to measure progress toward completion requires judgment and is based on the nature of the products or services to be provided. The Company generally uses the input method to measure progress for its contracts because it best depicts the transfer of assets to the customer, which occurs as the Company incurs costs for the contracts. Under the cost-to-cost measure of progress, the progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue is recorded proportionally as costs are incurred. Costs to fulfill these obligations mainly include materials, labor, supplies and consultants. Deferred revenue is shown separately in the condensed consolidated balance sheets. At September 30, 2018 we had deferred revenue of $404,517. At December 31, 2017, we had deferred revenue of $361,462. Advertising Expense The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in general and administrative expense in the accompanying statements of operations. The Company recorded advertising costs of $45,775 and $144,598 for the three and nine month periods ended September 30, 2018, respectively. The Company recorded advertising costs of $8,567 and $13,062, for the three and nine month periods ended September 30, 2017, respectively. Research and Development Costs incurred in connection with the development of new products and processes are charged to research and development expenses as incurred. The Company recorded research and development expenses of $291,624 and $1,094,993 for the three and nine month periods ended September 30, 2018, respectively. The Company recorded research and development expenses of $239,663 and $664,931 for the three and nine month periods ended September 30, 2017, respectively. Income Taxes The Company utilizes FASB ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of the Company’s realization of the net operating loss carry forward prior to its expiration. Stock-Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. Convertible Debentures Beneficial Conversion Feature If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 ““Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. Derivative Liabilities ASC 815-40 (formerly SFAS No. 133 “Accounting for derivative instruments and hedging activities”), requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 (formerly EITF 00-19 “Accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock”) to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula and present value pricing. At September 30, 2018 and December 31, 2017, the Company adjusted its derivative liability to its fair value, and reflected the change in fair value, in its consolidated statement of operations and comprehensive loss. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. 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 prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis. Basic and diluted loss per share Basic loss per share is computed by dividing the net loss to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing the net loss for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares, which consist of stock options and warrants, have been excluded from the diluted loss per share calculation because their effect is anti-dilutive. September 30, 2018 Number of common stock shares issued and outstanding 25,795,871 Number of common stock shares from conversion of convertible notes 1,330,905 Number of common stock shares from exercise of warrants 3,804,751 Number of common stock shares from exercise of stock options 655,634 Total fully-diluted common stock shares 31,587,161 Going Concern The Company’s financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit at September 30, 2018 of $27,972,054. The Company had a working capital deficit of $6,344,207 as of September 30, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. The Company is continually analyzing its current costs and is attempting to make additional cost reductions where possible. We expect that we will continue to generate losses from operations throughout 2018. Historically, the Company has had operating losses and negative cash flows from operations which cast significant doubt upon the Company’s ability to continue as a going concern. The Company will need to raise capital in order to fund its operations. This need may be adversely impacted by uncertain market conditions and changes in the regulatory environment. To address its financing requirements, the Company intends to seek financing through debt and equity issuances to existing stockholders. Specifically, management has identified that a minimum of $4,000,000 of capital is needed over the next 12 months in order sustain operations. These capital needs take into account, among other things, management’s plans to advance intellectual property, maintenance of patents, upgrades for manufacturing and to hire personnel for business development. Management has outlined a plan to raise between $7,000,000 to $9,000,000 in capital over the next 12 months through the issuance of shares of the Company’s common stock to accredited investors. Management believes that the capital raised through these methods will be sufficient to sustain operations for the next 12 months. However, the outcome of these matters cannot be predicted with certainty at this time. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. Recently Issued Standards In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The purpose is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. This ASU is effective for the Company in the first quarter of 2018. Early adoption is not permitted except for limited provisions. The adoption of ASU 2016-01 did not have an impact on the Company’s condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842), requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard requires recognition of the income tax effects of vested or settled awards in the income statement and involves several other aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This new standard became effective for the Company on January 1, 2017. The adoption of this standard did not have a material impact on its financial position, results of operations or statements of cash flows upon adoption. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, to clarify certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted. The effective date and transition requirements for these amendments are annual reporting periods beginning after December 15, 2017, including interim reporting periods therein, and that would also permit public entities to elect to adopt the amendments as of the original effective date as applicable to reporting periods beginning after December 15, 2016. The new guidance allows for the amendment to be applied either retrospectively to each prior reporting period presented or retrospectively as a cumulative-effect adjustment as of the date of adoption. The adoption of ASU 2016-12 did not have an impact on the Company’s condensed consolidated financial statements. In August, 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (“ASU 2016-15”). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The adoption of ASU 2016-15 did not have an impact on the Company’s condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard will be effective for the Company on January 1, 2018; however, early adoption is permitted with prospective application to any business development transaction. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of this ASU are effective for the Company in the first quarter of 2018, with early adoption permitted. The adoption of ASU 2017-09 did not have an impact on the Company’s condensed consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-7, Compensation – Stock Compensation (Topic 718) )— Improvements to Nonemployee Share-Based Payment Accounting. This guidance supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The guidance permits early adoption and was adopted by the Company in the first quarter of fiscal year 2019. The adoption of this ASU did not have any impact on the Company’s condensed consolidated financial statements. There are various other updates recently issued, however, they are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. | Principles of consolidation and basis of presentation The consolidated financial statements include the accounts of CURE Pharmaceutical Holding Corp (CPHC), its wholly-owned subsidiary, CURE Pharmaceutical Corporation (CURE) and its majority owned subsidiary Oak Therapeutics, Inc. (OAK), collectively referred to as (CURE, we, us, our or the Company All significant inter-company balances and transactions have been eliminated in consolidation. The Companys film strip product represents the principal operations of the Company. Use of Estimates The preparation of the 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 expenses during the reporting period. Actual results could differ from those estimates. At December 31, 2017 and 2016 included in these estimates are assumptions about collection of accounts receivable, and useful life of fixed and intangible assets, tax valuation analysis, and warrant fair values. Cash and Cash Equivalents The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of December 31, 2017 and 2016 the Company had no cash equivalents. At December 31, 2017 and 2016, the Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. Investment in Associates An associate is an entity over which the Company has significant influence through a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or have joint control over those policies. The results of assets and liabilities of associates are incorporated in the consolidated financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Companys share of the net assets of the associate, less any impairment in the value of the investment. Losses of an associate in excess of the Companys interest in that associate are not recognized. Additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. Any excess of the cost of acquisition over the Companys share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included within the carrying amount of the investment. On January 8, 2016, the Company received 50% ownership in CURE Innovations, Inc (CI). CI was created in 2015 by IncuBrands Studio, Inc (IncuBrands). The Company and IncuBrands each own 50% of the common stock of CI. The Company and IncuBrands entered into a Joint Venture agreement in 2013 to distribute several OTF products utilizing IncuBrands marketing and contacts in various industries as well as utilize the Companys technology and capabilities of manufacturing OTFs. On December 6, 2016, the Company entered into a Joint Venture Agreement (Joint Venture) with Pace Wellness, Inc. (Pace) to jointly develop three Active Pharmaceutical Ingredients (API) within the nonprescription and/or Over-the-Counter (OTC) medicines specifically utilizing the Companys patented and proprietary CUREFilm Technology. The three APIs to be jointly developed are Diphenhydramine HCL, Omeprazole and a third API to be determined at a later date (Products). Pace shall be the exclusive global distributor of the Products under the Solves Strips® branding or other private or branded labels. All benefits, advantages, and liabilities derived from, or incurred in respect of the Joint Venture shall be borne by the parties in proportion of their respective participating interests of 50/50 equal interest. As of December 31, 2017, the Company has contributed $5,000 to the Joint Venture. On June 30, 2015, our subsidiary, Oak Therapeutics, Inc. (Oak), issued 25,000 shares of its common stock in exchange for $10,000 and 181,251 common stock shares of Pace Wellness, Inc. (Pace) at a value of $1.00 per share, which represents 1.8% interest in Pace. Oak has fully written off the investment as of the acquisition date, November 10, 2017. Acquisitions On November 10, 2017, we received 269,000 shares of Oak as consideration for an exclusive license to our patents rights in developing nations, along with a royalty-free non-exclusive license to any improvements made by Oak. As a result of this transaction, we own approximately 63% of Oaks outstanding shares and have consolidated Oaks financial statements as of the fourth quarter 2017. The following summarizes the consideration paid for Oak and the amounts of the assets and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date of the noncontrolling interest in Oak. As of November 10, 2017 Consideration License of CUREs intellectual property $ 139,000 Fair value of total consideration transferred $ 139,000 Recognized amounts of identifiable assets acquired and liabilities assumed Cash $ 65,702 Intangible asset 139,000 Accrued expenses (791 ) Loans from shareholder (4,217 ) Total identifiable net assets 199,694 Noncontrolling interest in Oak (60,694 ) CUREs interest in Oak $ 139,000 Unaudited pro forma results of operations for the year ended December 31, 2017, as if the Company and Oak had been combined as of the beginning of the period, follows. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated, or which may result in the future. December 31, 2017 Net revenues $ 363,434 Net loss (8,099,441 ) Net loss per share, basic and diluted $ (0.34 ) Property and Equipment The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. Depreciation has been provided using the straight-line method on the following estimated useful lives: Manufacturing equipment 5-7 Years Computer and other equipment 3-7 Years Leasehold Improvements Lesser of useful life or the Revenue Recognition The Company recognizes revenue in accordance with the FASB ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and/or service has been performed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. The Company believes that these criteria are satisfied upon shipment from our facility. Freight billed to customers is presented as revenues, and the related freight costs are presented as cost of goods sold. Deferred revenue is recognized when earned and all significant obligations have been satisfied. Accounts receivable Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and managements evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. Inventory Inventory is stated at the lower of cost or net realizable value. The Company determines the cost of its inventory, which includes amounts related to materials, direct labor, and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is first identified. Advertising Expense The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in general and administrative expense in the accompanying statements of operations. The Company recorded advertising costs of $13,062 and $12,000 for the years ended December 31, 2017 and 2016, respectively. Research and Development Costs incurred in connection with the development of new products and processes are charged to research and development expenses as incurred. The Company recorded research and development expenses of $1,427,341 and $753,369 for the year ended December 31, 2017 and 2016, respectively. Income Taxes The Company utilizes FASB ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is more likely-than-not that a deferred tax asset will not be realized. The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of the Companys realization of the net operating loss carry forward prior to its expiration. Stock-Based Compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. Convertible Debentures Beneficial Conversion Feature If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (BCF). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. Derivative Liabilities ASC 815-40 (formerly SFAS No. 133 Accounting for derivative instruments and hedging activities), requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 (formerly EITF 00-19 Accounting for derivative financial instruments indexed to, and potentially settled in, a companys own stock) to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula and present value pricing. At December 31, 2017 and 2016, the Company adjusted its derivative liability to its fair value, and reflected the change in fair value, in its consolidated statement of operations and comprehensive loss. Basic and diluted loss per share Basic loss per share is computed by dividing the net loss to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing the net loss for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares, which consist of stock options and warrants, have been excluded from the diluted loss per share calculation because their effect is anti-dilutive. December 31, 2017 Number of common stock shares issued and outstanding 23,901,252 Number of common stock shares from conversion of convertible notes 307,904 Number of common stock shares from exercise of warrants 360,000 Total fully-diluted common stock shares 24,569,156 Going Concern The Companys financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit at December 31, 2017 of $18,868,599. The Company had a working deficit of $2,784,574 as of December 31, 2017. These factors raise substantial doubt about the Companys ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. The Company is continually analyzing its current costs and is attempting to make additional cost reductions where possible. We expect that we will continue to generate losses from operations throughout 2018. Historically, the Company has had operating losses and negative cash flows from operations which cast significant doubt upon the Companys ability to continue as a going concern. The Company will need to raise capital in order to fund its operations. This need may be adversely impacted by uncertain market conditions and changes in the regulatory environment. To address its financing requirements, the Company intends to seek financing through debt and equity issuances to existing stockholders. Specifically, management has identified that a minimum of $4,000,000 of capital is needed over the next 12 months in order sustain operations. These capital needs take into account, among other things, managements plans to advance intellectual property, maintenance of patents, upgrades for manufacturing and to hire personnel for business development. Management has outlined a plan to raise between $8,000,000 to $10,000,000 in capital over the next 12 months through the issuance of shares of the Companys common stock to accredited investors. Management believes that the capital raised through these methods will be sufficient to sustain operations for the next 12 months. However, the outcome of these matters cannot be predicted with certainty at this time. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These factors raise substantial doubt about the Companys ability to continue as a going concern for one year from the issuance of the financial statements. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. 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 prices in active markets for identical assets or liabilities Level 2 quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has assets or liabilities valued at fair value on a recurring basis for the years ended December 31, 2017 and 2016. Long-lived Assets Long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of our long-lived asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset. Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value. As of December 31, 2017 and 2016, our qualitative analysis of long-lived assets did not indicate any impairment. Concentrations of Credit Risk In the normal course of business, the Company provided credit terms to its customers; however, collateral was not required. Accordingly, the Company performed credit evaluations of its customers and maintained allowances for possible losses which, when realized, were within the range of managements expectations. From time to time, a higher concentration of credit risk existed on outstanding accounts receivable for a select number of customers due to individual buying patterns. Cost of Sales Cost of sales includes the purchase cost of products sold and all costs associated with getting the products to our customers, including transportation costs. Shipping Costs Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in selling, general and administrative expenses. Related parties Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. All transactions with related parties shall be recorded at fair value of the goods or services exchanged. Recently Issued Standards In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The purpose is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. This ASU is effective for the Company in the first quarter of 2018. Early adoption is not permitted except for limited provisions. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations. In January 2016, the FASB issued an accounting standard update which requires, among other things, that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Under the standard, entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale as a component of other comprehensive income. For equity investments without readily determinable fair values the cost method of accounting is also eliminated, however subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment and plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This new standard does not change the guidance for classifying and measuring investments in debt securities and loans. The standard is effective for us on July 1, 2018 (the first quarter of our 2019 fiscal year). The Company is currently evaluating the anticipated impact of this standard on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02Leases (Topic 842), requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard requires recognition of the income tax effects of vested or settled awards in the income statement and involves several other aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This new standard became effective for the Company on January 1, 2017. The adoption of this standard did not have a material impact on its financial position, results of operations or statements of cash flows upon adoption. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients In August, 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (ASU 2016-15). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company does not anticipate a significant impact upon adoption. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard will be effective for the Company on January 1, 2018; however, early adoption is permitted with prospective application to any business development transaction. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, There are various other updates recently issued, however, they are not expected to a have a material impact on the Companys consolidated financial position, results of operations or cash flows. |
INVENTORY
INVENTORY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 3 - INVENTORY | Inventory consists of raw materials, packaging components, work-in-process and finished goods. The Company’s inventory is stated at the lower of cost (FIFO cost basis) or market. The carrying value of inventory consisted of the following at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Raw materials $ 69,748 $ 67,664 Packaging components 17,986 17,546 Work-in-process 49,049 829 136,783 86,039 Reserve for obsolescence (44,110 ) (41,043 ) Total inventory $ 92,673 $ 44,996 | Inventory consists of raw materials, packaging components, work-in-process and finished goods. The Companys inventory is stated at the lower of cost (FIFO cost basis) or net realizable value. The carrying value of inventory consisted of the following: December 31, 2017 December 31, 2016 Raw Materials $ 67,664 $ 68,047 Packaging Components 17,546 84,927 Work-In-Process 829 17,406 Finished Goods - - 86,039 170,380 Reserve for Obsolescence (41,043 ) (89,095 ) Total inventory $ 44,996 $ 81,285 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 3 – ACCOUNTS RECEIVABLE | Accounts receivable, net of allowances for sales returns and doubtful accounts, consisted of the following: December 31, 2017 December 31, 2016 Trade accounts receivable $ 4,364 $ 7,049 Less allowances - - Total accounts receivable, net $ 4,364 $ 7,049 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
Note 4 - PREPAID EXPENSES AND OTHER ASSETS | As of September 30, 2018 and December 31, 2017, prepaid expenses and other assets consisted of the following: September 30, 2018 December 31, 2017 Prepaid consulting services– stock-based compensation $ 1,018,467 $ 258,918 Prepaid consulting services 90,667 116,167 Prepaid clinical study - 110,538 Prepaid insurance 10,942 60,180 Other receivables 8,683 5,858 Prepaid inventory 15,945 12,182 Prepaid expenses 48,200 23,045 Prepaid expenses and other assets 1,192,904 586,888 Current portion of prepaid expenses and other assets (860,114 ) (586,888 ) Prepaid expenses and other assets less current portion $ 332,790 $ - | As of December 31, 2017 and December 31, 2016, prepaid expenses and other assets consisted of the following: December 31, 2017 December 31, 2016 Prepaid consulting services stock-based compensation $ 258,918 $ 150,168 Prepaid consulting services 116,167 - Prepaid clinical study 110,538 - Prepaid insurance 60,180 42,785 Other Receivables 5,858 10,948 Prepaid inventory 12,182 13,178 Prepaid expenses 23,045 6,800 Prepaid expenses and other assets $ 586,888 $ 223,879 |
PROPERTY AND EQUIPMENT AND INTA
PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 5 - PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS | As of September 30, 2018 and December 31, 2017, property and equipment and intangible assets consisted of the following: September 30, 2018 December 31, 2017 Manufacturing equipment $ 835,860 $ 797,513 Computer and other equipment 180,273 169,499 Leasehold improvements 44,638 42,666 Less accumulated depreciation (747,693 ) (672,317 ) Property and Equipment, net $ 313,078 $ 337,361 Depreciation expense for the three and nine month periods ended September 30, 2018 was $25,724 and $75,376, respectively. Depreciation expense for the three and nine months ended September 30, 2017 was $21,882 and $98,325, respectively, which includes depreciation of $2,160 and $6,480 for capitalized leased assets for the three and nine months ended September 30, 2017, respectively. September 30, 2018 December 31, 2017 Intellectual Property $ 814,582 $ 814,582 Patents 393,056 224,527 Less accumulated amortization (173,715 ) (138,637 ) Intangible assets, net $ 1,033,923 $ 900,472 The Company incurred $168,529 and $43,621 of legal patent costs that were capitalized during the nine months period ended September 30, 2018 and 2017, respectively. In addition, the Company purchased $97,000 of patents through the issuance of 120,000 common stock shares of the Company during the nine months period ended September 30, 2018 and no shares were issued for the purchase of patents for the nine months ended September 30, 2017. Amortization expense for the three and nine month periods ended September 30, 2018 was $12,226 and $35,078, respectively. Amortization expense for the three and nine month periods ended September 30, 2017 was $10,899 and $30,619, respectively. The estimated aggregate amortization expense over each of the next five years is as follows: 2018 $ 12,226 2019 47,305 2020 47,305 2021 47,305 2022 47,305 Thereafter 584,850 Total Amortization $ 786,296 | As of December 31, 2017 and 2016, property and equipment and intangible assets consisted of the following: December 31, 2017 December 31, 2016 Manufacturing equipment $ 797,513 $ 769,074 Computer and other equipment 169,499 116,747 Leasehold improvements 42,666 36,066 Less accumulated depreciation (672,317 ) (551,239 ) Property and Equipment, net $ 337,361 $ 370,648 Depreciation expense for the years ended December 31, 2017 and 2016 was $121,078 and $129,985 respectively, which includes depreciation of $8,640 for capitalized leased assets for the years ended December 31, 2017 and 2016. Accumulated depreciation for property held under capital leases were $37,177 and $28,537 as December 31, 2017 and 2016, respectively. December 31, 2017 December 31, 2016 Intellectual Property $ 814,582 $ 814,582 Patents 224,527 175,047 Less accumulated amortization (138,637 ) (95,119 ) Intangible assets, net $ 900,472 $ 894,510 The Company incurred $49,480 and $45,930 of legal patent costs that were capitalized during the years ended December 31, 2017 and 2016, respectively. The Company wrote off $58,522 of intangibles during the year ended December 31, 2016. Amortization expense for the years ended December 31, 2017 and 2016 was $43,518 and $42,663, respectively. The estimated aggregate amortization expense over each of the next five years is as follows: 2018 $ 43,518 2019 43,518 2020 43,518 2021 43,518 2022 43,518 Thereafter 513,785 Total Amortization $ 731,375 |
NOTE RECEIVABLE
NOTE RECEIVABLE | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 7 - NOTE RECEIVABLE | <font style="font: 10pt Times New Roman, Times, Serif">Note receivable consists of the following at December 31, 2017 and 2016:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The note receivable is a promissory note with a company bearing an interest rate of 8% per annum, principal and accrued and unpaid interest is payable on demand of the Company any time before November 11, 2016 or by November 11, 2016 if no demand is made prior to such date. This note has been written off in 2016.</font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">17,948</font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The note receivable is a promissory note with a company bearing an interest rate of 8% per annum, principal and accrued and unpaid interest is payable on demand of the Company any time before March 29, 2017 or by March 29, 2017 if no demand is made prior to such date. This note has been written off in 2016.</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,290</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">36,238</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Less allowances</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(36,238</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Current portion of note receivable</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Note receivable, less current portion</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> </table>" id="sjs-B4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 33.75pt"><font style="font: 10pt Times New Roman, Times, Serif">Note receivable consists of the following at December 31, 2017 and 2016:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The note receivable is a promissory note with a company bearing an interest rate of 8% per annum, principal and accrued and unpaid interest is payable on demand of the Company any time before November 11, 2016 or by November 11, 2016 if no demand is made prior to such date. This note has been written off in 2016.</font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">17,948</font></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The note receivable is a promissory note with a company bearing an interest rate of 8% per annum, principal and accrued and unpaid interest is payable on demand of the Company any time before March 29, 2017 or by March 29, 2017 if no demand is made prior to such date. This note has been written off in 2016.</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,290</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">36,238</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Less allowances</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(36,238</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Current portion of note receivable</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Note receivable, less current portion</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td> <td style="vertical-align: bottom; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> </table> |
LOAN PAYABLE
LOAN PAYABLE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 6 - LOAN PAYABLE | Loan payable consists of the following at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Notes to a company due August 29, 2018 and September 21, 2018, including interest at 7.55% and 7.05%, respectively per annum; unsecured; interest due monthly $ - $ 50,425 Current portion of loan payable - (50,425 ) Loan payable, less current portion $ - $ - Interest expense for the three and nine month periods ended September 30, 2018 was $187 and $1,482, respectively. Interest expense for the three and nine month periods ended September 30, 2017 was $281 and $1,946, respectively. | Loan payable consists of the following at December 31, 2017 and 2016: 2017 2016 Notes to a company due August 29, 2018 and September 21, 2018, including interest at 7.55% and 7.05%, respectively per annum; unsecured; interest due monthly $ 50,425 $ - Note to a company due September 29, 2017 including interest at 13,25% per annum; unsecured; interest due monthly - 33,277 $ 50,425 $ 33,277 Interest expense for the year ended December 31, 2017 and 2016 was $2,011 and $930, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 7 - NOTES PAYABLE | Notes payable consist of the following at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Note to a company amended on August 27, 2017 and due on or before one month from the amended date and the maturity date shall be extended for one month periods as long as the Company is not in default, interest shall accrue at 10% per annum, secured by the Company’s intellectual property $ 650,000 $ 650,000 Note to a company of $100,000 due January 31, 2018 including interest of $3,000 per month, unsecured, principal and interest due at maturity, principal and interest repaid on January 23, 2018 - 100,000 Note to an individual, non-interest bearing, unsecured and has no fixed terms of repayment 50,000 50,000 Note to an individual due October 22, 2018, interest payable at 6% per annum, unsecured, principal and accrued interest due at maturity. The Company issued 50,000 shares of its common stock on October 18, 2018 at a price per share of $2.88 as an equity kicker. 150,000 - Note to a company due December 15, 2018, interest payable at 5% per annum, unsecured, principal and accrued interest due at maturity. If this note is still outstanding as of the date of any bona fide sale of the Company’s preferred stock or common stock in excess of $4,000,000 in gross proceeds, in one transaction or a serious of related transactions, which offering definitively sets a price per share of common stock and results in a listing of the Company’s common stock on a national securities exchange 100,000 - 950,000 800,000 Unamortized discount (64,000 ) - Current portion of loan payable (886,000 ) (800,000 ) Loan payable, less current portion $ - $ - Interest expense for the three and nine month periods ended September 30, 2018 was $17,225 and $49,458, respectively. Interest expense for the three and nine months ended September 30, 2017 was $8,842. | Notes payable consist of the following at December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Note to a company amended on August 27, 2017 and due on or before one month from the amended date and the maturity date shall be extended for one month periods as long as the Company is not in default, interest shall accrue at 10% per annum, secured by the Companys intellectual property $ 650,000 $ - Note to a company of $100,000 due January 31, 2018 including interest of $3,000 per month, unsecured, principal and interest due at maturity, principal and interest repaid on January 23, 2018 100,000 - Note to an individual, non-interest bearing, unsecured and has no fixed terms of repayment 50,000 50,000 $ 800,000 $ 50,000 During the year ended December 31, 2017 and 2016, the Company incurred $10,000 and $0, respectively, amortization of discount. Interest expense for the year ended December 31, 2017 and 2016 was $30,226 and $0, respectively. |
CONVERTIBLE PROMISSORY NOTES
CONVERTIBLE PROMISSORY NOTES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 8 - CONVERTIBLE PROMISSORY NOTES | Convertible promissory notes consist of the following at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Convertible promissory notes totaling $1,400,000 due between December 31, 2018 and January 31, 2019, interest payable at 8% per annum; unsecured; principal and accrued interest convertible into common stock at the lower of $7.00 per share or the price per share of the latest closing of a debt or equity offering by the Company greater than $3,000,000; accrued interest due between August 31, 2018 and September 30, 2018 $ 1,400,000 $ 1,900,000 Convertible promissory notes totaling $2,025,000 due November 30, 2018, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning September 30, 2018, which has not yet been paid 2,025,000 - Convertible promissory note totaling $500,000 due April 30, 2019, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at a price per share (the “ Voluntary Conversion PPS “) equal to 75% of the average of the closing prices of the Company’s Common Stock on the OTC Market (or any other market on which the common stock of the Company is then listed for trading) over the thirty (30) consecutive trading days prior to the delivery of the notice of conversion by the Investor to the Company, or, if at the time of such conversion the shares of the Company’s Common Stock are not listed for trading, then the entire then outstanding Investment Amount shall be converted into that number of shares of the most senior class of shares of the Company existing at the time of such conversion, at a price per share equal to 75% of the fair market value of such Common Stock as shall be determined by the Board of Directors based on, among others, a valuation prepared by an independent third party and which shall have been submitted to the Company not more than 90 days prior to the date of such determination by the Board of Directors. In the event of the consummation by the Company, on or before the Maturity Date, of a transaction or series of related transactions in which the Company issues equity securities of the Company in consideration of at least US$4,000,000 (a “ Financing “), the then outstanding Investment Amount not previously converted hereunder shall be automatically converted, immediately prior to (but conditioned upon) the consummation of such Financing, into such number of shares (or a sub-class thereof) issued by the Company in the Financing, equal to the outstanding Investment Amount divided by a price per share equal to 75% of the lowest price per share paid to the Company in the Financing. In the event the Financing is not consummated by the Maturity Date, then the outstanding Investment Amount as of the Maturity Date not previously converted hereunder shall be automatically converted, on the Maturity Date, into such number of shares (or a sub-class thereof) issued by the Company in the Financing, equal to the outstanding Investment Amount divided by the Voluntary Conversion PPS 500,000 - Convertible promissory note totaling $500,000 due December 31, 2018, interest payable at 9% per annum; secured by all assets of the company; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning September 30, 2018 500,000 - Convertible promissory notes totaling $575,000 due June 27, 2019, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning December 31, 2018 575,000 - 5,000,000 1,900,000 Unamortized discount (621,434 ) (348,512 ) Current portion of convertible promissory notes 4,378,566 1,551,488 Convertible promissory notes, less current portion $ - $ - During the three and nine month period ended September 30, 2018, the Company incurred $427,327 and $1,286,420, respectively, amortization of discount. During the three and nine months ended September 30, 2017, the Company incurred $477,285 and $554,968, respectively, amortization of discount. Interest expense for the three and nine month periods ended September 30, 2018 was $90,856 and $233,009, respectively. Interest expense for the three and nine months ended September 30, 2017 was $23,617 and $26,922, respectively. | Convertible promissory notes consist of the following at December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Convertible promissory notes totaling $1,900,000 due between November 11, 2017 and May 8, 2018, interest payable at 8% per annum; unsecured; principal and accrued interest convertible into common stock at the lower of $7.00 per share or the price per share of the latest closing of a debt or equity offering by the Company greater than $3,000,000; accrued interest due between November 11, 2017 and May 8, 2018; convertible promissory notes totaling $1,300,000 were amended to extend the maturity date to March 31, 2018 $ 1,900,000 $ - 1,900,000 - Unamortized discount (348,512 ) - Convertible promissory notes $ 1,551,488 $ - During the year ended December 31, 2017 and 2016, the Company incurred $1,170,873 and $0, respectively, amortization of discount. Interest expense for the year ended December 31, 2017 and 2016 was $84,161 and $0, respectively. |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 9 - DERIVATIVE LIABILITY | The following table summarizes fair value measurements by level at September 30, 2018 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Derivative liability $ - $ - $ (806,379 ) $ (806,379 ) The following table summarizes fair value measurements by level at December 31, 2017 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Derivative liability $ - $ - $ (90,738 ) $ (90,738 ) The Company has issued convertible promissory notes during 2017 and 2018. The convertible notes require us to record the value of the conversion feature as a liability, at fair value, pursuant to ASC 815, including provisions in the notes that protect the holders from declines in the Company’s stock price, which is considered outside the control of the Company. The derivative liabilities are marked-to-market each reporting period and changes in fair value are recorded as a non-operating gain or loss in our statement of operations, until they are completely settled. The fair value of the conversion feature is determined each reporting period using the Black-Scholes option pricing model, and is affected by changes in inputs to that model including our stock price, expected stock price volatility, interest rates and expected term. The assumptions used in valuing the derivative liability during 2018 were as follows: September 30, 2018 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.94 % Expected stock price volatility 146.68 % Expected dividend payout - Expected option life (in years) 1 Expected forfeiture rate 0 % The following is a reconciliation of the derivative liability for 2018: September 30, 2018 Value at December 31, 2017 $ 90,738 Increase in value 418,042 Initial value at debt issuance 297,599 Value at September 30, 2018 $ 806,379 | The following table summarizes fair value measurements by level at December 31, 2017 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Derivative liability $ $ $ (90,738 ) $ (90,738 ) No financial assets or liabilities were measured on a recurring basis as of December 31, 2016. The Company has issued convertible promissory notes during 2017. The convertible notes require us to record the value of the conversion feature as a liability, at fair value, pursuant to ASC 815, including provisions in the notes that protect the holders from declines in the Companys stock price, which is considered outside the control of the Company. The derivative liabilities are marked-to-market each reporting period and changes in fair value are recorded as a non-operating gain or loss in our statement of operations, until they are completely settled. The fair value of the conversion feature is determined each reporting period using the Black-Scholes option pricing model, and is affected by changes in inputs to that model including our stock price, expected stock price volatility, interest rates and expected term. The assumptions used in valuing the derivative liability during 2017 were as follows: December 31, 2017 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.20 % Expected stock price volatility 75.43 % Expected dividend payout - Expected option life (in years) 1 Expected forfeiture rate 0 % The following is a reconciliation of the derivative liability for 2017: December 31, 2017 Value at December 31, 2016 $ - Initial value at the debt issuance 832,846 Decrease in value (742,108 ) Value at December 31, 2017 $ 90,738 |
STOCK BASED AWARDS
STOCK BASED AWARDS | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 10 - STOCK BASED AWARDS | On December 29, 2017 (“Effective Date”), the Company adopted the CURE Pharmaceutical Holding Corp. 2017 Equity Incentive Plan (the “Plan”), pursuant to which an aggregate of 5,000,000 shares of the common stock of the Company are available for grant. The Board of Directors have determined that it is in the best interests of the Company and its stockholders to provide an additional incentive for certain employees, including executive officers, and non-employee members of the Board of Directors of the Company by granting to them awards with respect to the common stock of the Company pursuant to the Plan. The Plan seeks to achieve this purpose by providing for awards in the form of Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards (“Awards”). The Plan will continue in effect until its termination by the Committee; provided, however, that all Awards must be granted, if at all, within ten (10) years from the Effective Date. On April 6, 2018, the Company awarded 371,250 Restricted Common Stock (“RCS”), 1,251,700 Nonstatutory Stock Options (“NSO”) and 932,750 Incentive Stock Options (“ISO”) to employees, including executive officers, non-employee members of the Board of Directors of the Company, members of the Advisory Board Committee and consultants at a $0.74 price per share. Vesting period for the awarded RCS, NSO and ISO’s range from immediate to quarterly over a 4 year period. For NSO’s and ISO awarded, the term to exercise their NSO or ISO is 10 years. Stock Options The Company’s stock option activity was as follows: Options Weighted Average Exercise Price Weighted Average Contractual Remaining Life Outstanding, December 31, 2017 - - - Granted 2,184,450 0.73 9.52 Exercised - - - Forfeited/Expired - - - Outstanding, September 30, 2018 2,184,450 0.73 9.52 Exercisable at September 30, 2018 655,634 0.74 9.52 Range of Exercise Price Number of Options Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $ 0.61-$0.74 2,184,450 9.52 0.73 655,634 0.74 2,184,450 9.52 0.73 655,634 0.74 The aggregate intrinsic value of options outstanding and exercisable at September 30, 2018 was $644. The aggregate grant date fair value of options granted during the nine months ended September 30, 2018 and year ended December 31, 2017 amounted to $1,299,862 and $0, respectively. Compensation expense related to stock options was $76,407 and $390,136 for the three and nine month periods ended September 30, 2018, respectively. No compensation expense related to stock options were incurred during the three and nine month periods ended September 30, 2017. As of September 30, 2018, the total unrecognized fair value compensation cost related to unvested stock options was $909,726, which is to be recognized over a remaining weighted average period of approximately 9.52years. The weighted-average fair value of options granted during the nine months ended September 30, 2018 and year ended December 31, 2017, and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes-Merton (“Black-Scholes”) option pricing model are as follows: September 30, 2018 December 31, 2017 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.94 % 0 % Expected stock price volatility 146.68 % 0 % Expected dividend payout - - Expected option life (in years) 10 - Expected forfeiture rate 0 % 0 % Restricted Stock The Company’s restricted stock activity was as follows: Compensation expense related to restricted shares was $23,125 and $170,663 for the three and nine month periods ended September 30, 2018, respectively. There was no compensation expense related to restricted shares for the three and nine month periods ended September 30, 2017. Information relating to non-vested restricted award shares is as follows: Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested, December 31, 2017 - - Granted 371,250 0.74 Vested (230,625 ) 0.74 Forfeited/Expired - - Non-vested, September 30, 2018 140,625 0.74 |
WARRANT AGREEMENTS
WARRANT AGREEMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 11 - WARRANT AGREEMENTS | On January 24, 2018, the Company issued an additional 55,000 warrants at a fair market value of $50,094 and with an exercise price of $1.00 per share in connection with issuance of $1,100,000 convertible promissory notes in 2017 and amended on January 24, 2018 to extend the maturity date to March 31, 2018. The Company considered if the amendment of the convertible promissory note was a debt modification or extinguishment based on the guidelines of ASC 470-50, and concluded that the amendments of the convertible promissory notes were debt modifications. The Company recorded the fair market value of the 55,000 warrants issued as a debt discount that has been fully amortized as of September 30, 2018. On April 15, 2018, the Company issued an additional 275,000 warrants at a fair market value of $87,828 and with an exercise price of $1.00 per share in connection with issuance of $1,100,000 convertible promissory notes in 2017, amended on January 24, 2018 to extend the maturity date to March 31, 2018 and a second amendment on April 15, 2018 to extend the maturity date to May 31, 2018. In addition, the Company extended the term of the warrant agreements for one additional year for each of the convertible promissory notes. The Company considered if the amendment of the convertible promissory note was a debt modification or extinguishment based on the guidelines of ASC 470-50, and concluded that the amendments of the convertible promissory notes were debt modifications. The Company recorded the fair market value of the 275,000 warrants issued as a debt discount that has been fully amortized as of September 30, 2018. On May 1, 2018, the Company issued 110,000 warrants at a fair market value of $27,479 and with an exercise price of $1.00 per share in connection with commission earned for the issuance of convertible promissory notes by the Company. On July 7, 2018, the Company issued 148,644 warrants at a fair market value of $48,249 and with an exercise price of $1.00 per share in connection with the conversion of a convertible promissory note issued by the Company. As per the warrant agreement dated May 15, 2018, the Company shall issue fifty percent (50%) of the Company’s common stock shares issued upon conversion of the convertible promissory note. The convertible promissory note is to be converted into 297,288 common stock shares of the Company and as a result, 148,644 warrants were issued. As of our filing of our Form 10-Q for the quarterly period ended September 30, 2018, the company has not yet issued these common stock shares and has recorded a stock payable. Warrants that vest at the end of a one-year period are amortized over the vesting period using the straight-line method. The Company’s warrant activity was as follows: Warrants Weighted Average Exercise Price Weighted Average Contractual Remaining Life Outstanding, December 31, 2017 4,752,107 2.90 4.98 Granted 588,644 1.00 2.76 Exercised - - - Forfeited/Expired - - - Outstanding, September 30, 2018 5,340,751 1.95 2.25 Exercisable at September 30, 2018 3,804,751 1.93 2.28 Range of Exercise Price Number of Warrants Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $ 1.00 – $7.00 5,340,751 2.25 $ 1.95 3,804,751 $ 1.93 5,340,751 2.25 $ 1.95 3,804,751 $ 1.93 The weighted-average fair value of warrants granted to during the nine months ended September 30, 2018 and year ended December 31, 2017, and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes-Merton (“Black-Scholes”) option pricing model are as follows: September 30, 2018 December 31, 2017 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.94 % 2.20 % Expected stock price volatility 146.68 % 75.43 % Expected dividend payout - - Expected option life (in years) 3 3 Expected forfeiture rate 0 % 0 % | On January 3, 2017, the Company issued 1,300,000 warrants in connection with commissions earned in relation to the Companys Private Label Exclusive Distribution and License agreement with Red Barn Pet Products, LLC. From May 11, 2017 to December 31, 2017, the Company issued 360,000 warrants in connection with the issuance of $1,800,000 convertible promissory notes. The warrants have an exercise price of the lower of $7.00 per share or the price per share in the Companys latest debt or equity financing greater than $3,000,000 and a term of 3 years. Warrants that vest at the end of a one-year period are amortized over the vesting period using the straight-line method. The Companys warrant activity was as follows: Warrants Weighted Average Exercise Price Weighted Average Contractual Remaining Life Outstanding, December 31, 2016 4,392,107 1.97 6.17 Granted 1,660,000 3.08 2.62 Exercised (1,300,000 ) (3.94 ) - Forfeited/Expired - - - Outstanding, December 31, 2017 4,752,107 2.90 4.98 Exercisable at December 31, 2017 3,101,026 3.40 3.93 The change in warrant value for the year ended December 31, 2017 and 2016 was $1,181,057 and $607,906, respectively. Range of Exercise Price Number of Warrants Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $1.00 - $7.00 4,752,107 4.98 $ 2.90 3,101,026 $ 3.40 4,752,107 4.98 $ 2.90 3,101,026 $ 3.40 The weighted-average fair value of warrants granted to during the year ended December 31, 2017 and year ended December 31, 2016, and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes-Merton (Black-Scholes) option pricing model are as follows: December 31, 2017 December 31, 2016 Significant assumptions (weighted-average): Risk-free interest rate at grant date 1.92 % 1.83 % Expected stock price volatility 84.43 % 84.42 % Expected dividend payout - - Expected option life (in years) 3 3 Expected forfeiture rate 0 % 0 % |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 12 - STOCKHOLDERS' EQUITY | Authorized Stock The Company has authorized to issue is 75,000,000 common shares with a par value of $0.001 per share. As of September 30, 2018 and December 31, 2017, there were 25,795,871 and 23,901,252 shares of the Company’s common stock issued and outstanding, respectively. Common Share Issuances On January 24, 2018, the Company issued 50,000 common stock shares at $1.48 per share for consulting services to be performed over a one year period. The total value of this issuance was $74,000 and as of September 30, 2018, $23,108 is included in prepaid expenses and other assets. On May 16, 2018, the Company issued 70,150 common stock shares at $0.65 per share for consulting services performed. The total value of this issuance was $45,614. On May 16, 2018, the Company issued 1,000,000 common stock shares at $0.97 per share for consulting services to be performed over a 30 month period. The total value of this issuance was $970,000 and as of September 30, 2018, $831,429 is included in prepaid expenses and other assets. On July 17, 2018, the Company issued 70,000 common stock shares at $1.85 per share for consulting services to be performed over a six month period. The total value of this issuance was $129,500. On July 17, 2018, the Company issued 69,444 common stock shares at $0.72 per share for the cancellation of two months rent and overages for property tax and general liability insurance. The total value of this issuance was $50,000. On July 17, 2018, the Company issued 250,000 common stock shares at $1.10 per share for strategic marketing and development advisory services to be performed over a six month period. The total value of this issuance was $275,000. On August 17, 2018, the Company issued a total of 115,000 common stock shares at $1.65 per share for compensation of extending the maturity dates of convertible promissory notes of three note holders. The total value of this issuance was $189,750. The Company considered if the amendment of the convertible promissory note was a debt modification or extinguishment based on the guidelines of ASC 470-50, and concluded that the amendments of the convertible promissory notes were debt modifications. The Company recorded the fair market value of the 115,000 common stock shares issued as a debt discount that has been fully amortized as of September 30, 2018. On September 4, 2018, the Company issued 90,000 common stock shares at $0.71 per share and 90,000 shares at $1.00 per share for media and advertising services to be performed over a six month period. The total value of these issuances was $153,900. On September 4, 2018, the Company issued 90,000 common stock shares at $3.24 per share for media and advertising services to be performed over a six month period. The total value of this issuance was $291,600. Stock Payable On April 2, 2018 (the “Effective Date”), the Company entered into a patent purchase agreement (“Agreement”) with an individual (“Assignor”) who is the owner of all rights, title and interest in and to certain Assigned Patents to purchase the rights to the Assigned Patents. As consideration for the assignment of the Assigned Patents and other rights under the Agreement, the Company shall issue to Assignor shares of its Common Stock (“Shares”) as follows, provided, that the maximum number of Shares issuable hereunder shall not exceed Two Hundred Thousand (200,000): (a) 50,000 Shares will be issued on the Effective Date; (b) 10,000 Shares will be issued for each Abandoned Application the prosecution of which is revived by the United States Patent and Trademark Office (“USPTO”); and (c) 50,000 Shares will be issued upon issuance by the USPTO of each patent that includes at least one specific claim in a patent application that recites subject matter to be defined by Assignee in its sole discretion (“Target Claim”). For the nine months period ended September 30, 2018, the Company owed 50,000 Shares at $0.69 price per share,20,000 Shares at $0.70 price per share and 50,000 shares at $0.97 price per share, for a total of 120,000 Shares. As the Company has not yet issued the 120,000 Shares as of September 30, 2018, the Company recorded a stock payable of $97,000, where $94,618 is included in intellectual property and patents as of September 30, 2018. On July 7, 2018, a convertible promissory note and accrued interest totaling $263,398 was converted into 297,288 shares of common stock of the Company at a price of $0.886 per share. As of our filing of our Form 10-Q for the quarterly period ended September 30, 2018, the company has not yet issued these common stock shares and has recorded a stock payable. On August 3, 2018, the Company entered into a Media Advertising Agreement (“Agreement”). Per the terms of the Agreement, the Company was to issue 30,000 common stock shares at $1.88 per share for providing media and advertising services over a six month period. The total value of these issuances was $56,400. As of our filing of our Form 10-Q for the quarterly period ended September 30, 2018, the company has not yet issued these common stock shares and has recorded a stock payable. On September 5, 2018, the Company issued an unsecured $150,000 Promissory Note (“Note”) with an individual. As part of the issuance of the Note, the Company is to issue 50,000 common stock shares as an equity kicker at a $2.88 price per share. As the Company did not issue the 50,000 common stock shares as of September 30, 2018, the Company recorded a stock payable of $144,000. As of September 30, 2018, the Company still has $308,328 worth of stock payable not yet issued that is from the year ended December 31, 2017 audited figures. | Authorized Stock The Company has authorized to issue is 75,000,000 common shares with a par value of $0.001 per share. As of December 31, 2017 and December 31, 2016, there were 23,901,252 and 23,336,673 shares of the Companys common stock issued and outstanding, respectively. Common Share Issuances On April 7, 2017, the Company issued 14,579 common stock shares at $6.86 per share for consulting services to be performed over a one year period. The total value of this issuance was $100,000 and as of December 31, 2017, $26,575 is included in prepaid expenses and other assets. On April 24, 2017, the Company issued 100,000 common stock shares at $7.00 per share for consulting services to be performed over a six month period. The total value of this issuance was $700,000. On May 18, 2017, the Company issued 300,000 common stock shares at $2.10 per share for consulting services to be performed over a one year period. The total value of this issuance was $630,000 and as of December 31, 2017, $39,699 is included in prepaid expenses and other assets. On August 21, 2017, the Company issued 100,000 common stock shares at $5.30 per share for consulting services to be performed over a four month period. The total value of this issuance was $530,000. On October 15, 2017, the Company issued 50,000 common stock shares at $4.90 per share for consulting services to be performed over a one year period. The total value of this issuance was $245,000 and as of December 31, 2017, $192,644 is included in prepaid expenses and other assets. Stock Payable On December 14, 2017, the Company issued a $100,000 convertible promissory note to a company due June 14, 2018. In connection with issuance of this convertible promissory note, the Company is to issue 150,000 common stock shares at $2.05 per share per the terms of the convertible promissory note. As of December 31, 2017, the Company has not yet issued these common stock shares and thus the Company recorded a stock payable for $307,500. On October 15, 2017, the Company entered into a Consulting Agreement (Agreement) with an individual (Consultant) to provide business development advisory services. In consideration for the Consultants services provided, the Company shall grant 100,000 common stock shares, where 50,000 common stock shares shall be issued on October 15, 2017 and the remaining 50,000 common stock shares shall be granted to the Consultant within 90 days of execution of the Agreement. The Company issued 50,000 common stock shares at $4.90 per share for consulting services to be performed over a one year period on October 15, 2017. As the Company did not issue the remaining 50,000 common stock shares before the year ended December 31, 2017, the Company recorded a stock payable of $16,667, which is included in consulting expenses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 13 - COMMITMENTS AND CONTINGENCIES | Litigation: From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The only significant matter of which the Company is aware of is discussed below. On May 22, 2017, Sandy Sierra Garate (“Applicant”), an employee of the Company, filed an application for benefits due to serious and willful misconduct of the employer pursuant to labor code section 4553 with the State of California Workers’ Compensation Appeals Board (WCAB Case No: ADJ 10686812) resulting in injury arising out of and in the course of the Applicant’s employment on August 5, 2016. The Applicant is requesting relief in this matter for a one half increase in all compensation recoverable in connection with the injury of August 5, 2016, for the allowance of costs and expenses in an amount to be determined and for such further relief as is deemed appropriate. The Company is currently unable to determine what additional expenses will be incurred in order to defend this matter. As such, the Company cannot determine whether there is a reasonable possibility that a loss will be incurred nor can it estimate the range of any such potential loss. Accordingly, the Company has not accrued an amount for any potential loss associated with this action. Operating leases The Company maintains its corporate offices and manufacturing facility at 1620 Beacon Place, Oxnard, CA 93033, which contains approximately 25,000 square feet. The Company is currently on a month-to-month lease. The Company also leased additional office and warehouse space at 1612 Fiske Place, Oxnard, CA 93033, which contains approximately 2,227 square feet. The Company was on a month-to-month lease and vacated this facility on August 6, 2018. Total rent expense for the three and nine month periods ended September 30, 2018 was $63,992 and $205,962, respectively. Total rent expense for the three and nine month periods ended September 30, 2017 was $73,415 and $219,230, respectively. | Litigation From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The only significant matter of which the Company is aware of is discussed below. On May 22, 2017, Sandy Sierra Garate (Applicant), an employee of the Company, filed an application for benefits due to serious and willful misconduct of the employer pursuant to labor code section 4553 with the State of California Workers Compensation Appeals Board (WCAB Case No: ADJ 10686812) resulting in injury arising out of and in the course of the Applicants employment on August 5, 2016. The Applicant is requesting relief in this matter for a one half increase in all compensation recoverable in connection with the injury of August 5, 2016, for the allowance of costs and expenses in an amount to be determined and for such further relief as is deemed appropriate. The Company is currently unable to determine what the additional expenses will be incurred in order to defend this matter. As such, the Company cannot determine whether there is a reasonable possibility that a loss will be incurred nor can it estimate the range of any such potential loss. Accordingly, the Company has not accrued an amount for any potential loss associated with this action. Operating leases The Company maintains its corporate offices and manufacturing facility at 1620 Beacon Place, Oxnard, CA 93033, which contains approximately 25,000 square feet. The Company is currently on a month-to-month lease, with a lease payment of $19,997 per month. The Company also leases additional office and warehouse space at 1610 and 1612 Fiske Place, Oxnard, CA 93033, which contains approximately 6,547 square feet. The Company is currently on a month-to-month lease, with a lease payment of $4,763 per month. The Company also leases additional research and development space at 2029 Becker Drive, Lawrence, KS 66047, which contains approximately 1,350 square feet. The Company is currently on a month-to-month lease, with a lease payment of $1,000 per month. Total rent expense for the years ended December 31, 2017 and 2016 was $294,646 and $286,539, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 15 - RELATED PARTY TRANSACTIONS | On various dates from October 31, 2014 to February 2, 2015, CURE Pharmaceutical issued convertible promissory notes to Ronick, Inc., (Ronick) totaling $89,000 that were due on February 25, 2016, but Ronick has agreed to extend the due date to August 31, 2016. Robert Davidson, our Chief Executive Officer and director, is a shareholder of Ronick. Interest is payable at 3% per annum and is secured by technology and patent rights. Principal and accrued interest is convertible into common stock at $4.00 per share. This conversion is subject to an adjustment if CURE Pharmaceutical sells stock or grants conversion rates at a lower price; however, Ronick has subsequently agreed to waive these conversion rights and will convert at $4.00 per share. As of October 6, 2016, Ronick has converted $35,260 of principal and unpaid accrued interest into 8,815 of common stock shares of CURE Pharmaceutical. As of October 6, 2016, Ronick converted $35,290 of principal and unpaid accrued interest into 8,822 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $100,150 of accrued payroll for Robert Davidson into a convertible promissory note. As of October 6, 2016, Robert Davidson has converted $38,415 of principal and unpaid accrued interest into 9,604 of common stock shares of CURE Pharmaceutical. On October 17, 2016, Robert Davidson transferred his convertible promissory note to Ronick. On that same date, Ronick converted $38,449 of principal and unpaid accrued interest into 9,612 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $94,312 of accrued payroll for Wayne Nasby, our Chief Operating Officer, into a convertible promissory note. As of October 6, 2016, Wayne Nasby has converted $48,241 of principal and unpaid accrued interest into 12,060 of common stock shares of the CURE Pharmaceutical. As of October 17, 2016, Wayne Nasby converted $48,284 of principal and unpaid accrued interest into 12,071 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $77,250 of accrued payroll for Edward Maliski, our President and Chief Science Officer, into a convertible promissory note. As of October 6, 2016, Edward Maliski has converted $39,514 of principal and unpaid accrued interest into 9,878 of common stock shares of CURE Pharmaceutical. As of October 17, 2016, Edward Maliski converted $39,549 of principal and unpaid accrued interest into 9,887 of common stock shares of CURE Pharmaceutical. On December 31, 2015, CURE Pharmaceutical converted $51,500 of accrued payroll for Jonathan Turman into a convertible promissory note. As of October 6, 2016, Jonathan Turman has converted $26,343 of principal and unpaid accrued interest into 6,586 of common stock shares of CURE Pharmaceutical. As of October 17, 2016, Jonathan Turman converted $26,366 of principal and unpaid accrued interest into 6,591 of common stock shares of CURE Pharmaceutical. At December 31, 2017, two of our executive officers, Robert Davidson and Mark Udell, had $7,931 and $13,716, respectively, due to them and are included in accounts payable. At December 31, 2016, one of our executive officers, Robert Davidson, had $10,992 due to him and is included in accounts payable. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
NOTE 16 - INCOME TAXES | The Company utilizes FASB ASC740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is more likely-than-not that a deferred tax asset will not be realized. The tax reform bill that Congress voted to approve December 20, 2017, also known as the Tax Cuts and Jobs Act, made sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and a move to a territorial system for corporations that have overseas earnings. The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%. The Company generated a deferred tax asset through net operating loss carry-forwards. Management of the Companys analysis indicates the net operating losses would be subject to significant limitations pursuant to Internal Revenue Code Section 382. The Company has not completed its IRC Section 382 Valuation, as required and the NOLs because of potential Change of Ownerships might limit the usage or render the NOLs completely worthless. Therefore, Management of the Company based upon Managements evaluation has recorded a Full Valuation Reserve (100%), since it is more likely than not that no benefit will be realized for the Deferred Tax Assets. Deferred income taxes arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or noncurrent depending on the periods in which the temporary differences are expected to reverse. The Company does not have any uncertain tax positions. The total deferred tax asset is calculated by multiplying a domestic (US) 21 percent marginal tax rate by the cumulative Net Operating Loss Carryforwards (NOL). The Company currently has net operating loss carryforwards of approximately $17,385,131, which expire through 2037. The deferred tax asset related to the NOL carryforwards Management has determined based on all the available information that a 100% Valuation reserve is required. The provision for incomes taxes for the years ending December 31 is as follows: 2017 2016 Current expense Federal $ - $ - State - - Deferred expense Federal $ - $ - State - - Total income tax expense $ - $ - Deferred income tax (liabilities) assets at December 31 are as follows: 2017 2016 Deferred income tax assets Net operating loss carryforward $ 5,585,508 $ 4,622,321 Deferred revenue 107,860 74,378 Allowance for doubtful accounts 1,306 15,524 Accrued expenses 11,346 8,699 Total deferred tax assets 5,706,020 4,720,922 Deferred income tax liabilities State income taxes (353,750 ) (329,222 ) Depreciation and amortization (16,065 ) (23,120 ) Valuation allowance (5,336,205 ) (4,368,580 ) Total deferred tax liabilities (5,706,020 ) (4,720,922 ) Deferred income tax, net $ - $ - |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes to Financial Statements | ||
NOTE 14 - SUBSEQUENT EVENTS | On October 9, 2018, the United States Patent and Trademark Office (“USPTO”) allowed for an oral thin film patent (U.S. Patent No. 10,092,611), which covers the processing and integration of bioactive cannabinoid molecules into oral thin film dosage forms, such as CUREfilm™. These molecules, such as cannabidiol (CBD), are obtained from the Company’s patented methods (U.S. Patent No. 9,044,390 and 9,186,386) of extraction and purification of cannabis plant material. This patent allowance by the USPTO and per the patent purchase agreement entered on April 2, 2018, the Company will issue 50,000 common stock shares at $2.81 price per share. As of the date of this filing, the Company has not yet issued these shares. On October 12, 2018, the Company sent a written 30-Day Notice of Default (“Notice”) to Altair International Corp (“Altair”), regarding the Exclusive License and Distribution Agreement (“Agreement”), dated August 10, 2016 (“Effective Date”), with Altair. The Notice was provided to Altair due to Altair failing to fulfill its obligations under the Agreement and has materially breached the Agreement. To maintain the rights granted under the Agreement, Altair was to make minimum orders in the amount of $1,500,000 of the collective Products, as defined in the Agreement, within the first 24 months following the Effective Date. As of October 26, 2018, Altair did not order any collective Products and has provided written confirmation that Altair has failed to fulfill its obligations under the Agreement and that the Notice will not be cured. As a result, the Agreement is terminated and license fees totaling $560,000 will be recognized as other income in the fourth quarter of 2018. On October 15, 2018, the Company entered into a Securities Purchase Agreement (the “ Securities Purchase Agreement Investor Investors Notes Common Stock On October 30, 2018, the Company issued 50,000 common stock shares at a $2.88 price per share to an individual as an equity kicker for issuing an unsecured promissory note dated September 5, 2018. As the Company did not issue the 50,000 common stock shares as of September 30, 2018, the Company recorded a stock payable of $144,000. On October 31, 2018, the Company amended four convertible promissory notes totaling $850,000 to extend the maturity dates to December 31, 2018. For extending the maturity date, the Company will issue a total of 115,000 common stock shares of the Company at $1.95 price per share. On October 31, 2018, the Company amended a promissory notes totaling $150,000 to extend the maturity date to December 31, 2018. For extending the maturity date, the Company will issue 30,000 common stock shares of the Company at $1.95 price per share. | In connection with a Consulting Agreement with an individual, the Company issued the remaining 50,000 common stock shares at $1.48 per share on January 24, 2018 for consulting services to be performed over a one year period. On January 30, 2018, the Company received in total $1,000,000 by issuing a convertible promissory note (Convertible Note) to an individual (Holder) that is due November 30, 2018 (Maturity Date). The Convertible Note shall accrue interest at 9% per annum, to be paid quarterly in cash on the last trading day of each fiscal quarter staring with June 30, 2018 and is unsecured. At any time after June 30, 2018 until the Maturity Date, the outstanding principal amount of this Note (the Principal Amount), plus all accrued but unpaid interest shall be convertible at the option of the Holder, in whole or in part, into shares of Common Stock, at any time and from time to time (the Optional Conversion), at a price per share equal to the average closing price of the Companys Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of the Notice of Conversion, (the Optional Conversion Price). If on or prior to the Maturity Date, the Company consummates its next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of Common Stock or preferred stock and enables the Company to list its Common Stock on a national securities exchange (Qualified Offering), the entire Principal Amount of this Note shall be automatically converted into shares of Common Stock (the Mandatory Conversion and together with the Optional Conversion, the Conversion) at a price per share equal to 75% of the price of the Qualified Offering (the Mandatory Conversion Price together with Optional Conversion Price, the Conversion Price). On February 20, 2018, (the Effective Date) the Company entered into a Consulting Agreement (Agreement) with an individual (Consultant) to perform strategic marketing and development services. The term of the Agreement is for one year from the Effective Date and the Company shall compensate the Consultants services by issuing 250,000 restricted common stock shares of the Company. As of the date of the Companys filing of its Form 10-K for the fiscal year ended December 31, 2017, the Company has not yet issued these restricted common stock shares. On February 23, 2018, (the Effective Date) the Company entered into a Consulting Agreement (Agreement) with Liviakis Financial Communications, Inc. (Consultant) to perform services in investors communication and public relations with existing and prospective shareholders, brokers, dealers and other investment professionals with respect to the Companys current and proposed activities. The term of the Agreement is for 30 months from the Effective Date and the Company shall compensate the Consultants services by issuing 1,000,000 restricted common stock shares of the Company. As of the date of the Companys filing of its Form 10-K for the fiscal year ended December 31, 2017, the Company has not yet issued these restricted common stock shares. The Company has previously adopted and maintains the CURE Pharmaceutical Holding Corp. 2017 Equity Incentive Plan (the Plan), pursuant to which an aggregate of 5,000,000 shares of the common stock of the Company remain available for grant as of the Companys filing of its Form 10-K for the fiscal year ended December 31, 2017. The Board of Directors have determined that it is in the best interests of the Company and its stockholders to provide an additional incentive for certain employees, including executive officers, and non-employee members of the Board of Directors of the Company by granting to them awards with respect to the common stock of the Company pursuant to the Plan. No awards have been granted as of the date of the Companys filing of its Form 10-K for the fiscal year ended December 31, 2017. On March 20, 2018, the Company entered into a Securities Purchase Agreement (the Purchase Agreement) with investors (the Investors) for the sale of up to $5,000,000 of convertible promissory notes (Convertible Notes) that are due November 30, 2018 (Maturity Date). The Convertible Notes shall accrue interest at 9% per annum, to be paid quarterly in cash on the last trading day of each fiscal quarter beginning on June 30, 2018 and are unsecured. At any time after June 30, 2018 until the Maturity Date, the outstanding principal amounts of these Notes (the Principal Amounts), plus all accrued but unpaid interest shall be convertible at the option of the Holders, in whole or in part, into shares of the Companys Common Stock, at any time and from time to time, at a price per share equal to the average closing price of the Companys Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of the notice of conversion, . If on or prior to the Maturity Date, the Company consummates its next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of Common Stock or preferred stock and enables the Company to list its Common Stock on a national securities exchange (Qualified Offering), the entire Principal Amounts of these Notes shall be automatically converted into shares of Common Stock at a price per share equal to 75% of the price of the Qualified Offering. The Investors in this offering also received warrants (the Warrants) for the option to purchase equal to 50% of the shares of Common Stock that the Investor is entitled to receive in connection with the conversion of the Investors Note. The Warrants price per share shall equal the lower of (a) $2.00 or (b) 125% of the price per share of the Qualified Offering. The Warrants will have a three year term and shall be exercisable in cash. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Summary Of Significant Accounting Policies Policies | ||
Principles of consolidation and basis of presentation | The condensed consolidated financial statements include the accounts of CURE Pharmaceutical Holding Corp (“CPHC”), its wholly-owned subsidiary, CURE Pharmaceutical Corporation (“CURE”) and its 63% majority owned subsidiary Oak Therapeutics, Inc. (“OAK”), collectively referred to as (“CURE”, “we”, “us”, “our” or the “Company” All significant inter-company balances and transactions have been eliminated in consolidation. The Company’s film strip product represents the principal operations of the Company. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2018, and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2018 and 2017, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in Form 10-K for the fiscal period ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2018. | The consolidated financial statements include the accounts of CURE Pharmaceutical Holding Corp (CPHC), its wholly-owned subsidiary, CURE Pharmaceutical Corporation (CURE) and its majority owned subsidiary Oak Therapeutics, Inc. (OAK), collectively referred to as (CURE, we, us, our or the Company All significant inter-company balances and transactions have been eliminated in consolidation. The Companys film strip product represents the principal operations of the Company. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. | The preparation of the 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 expenses during the reporting period. Actual results could differ from those estimates. At December 31, 2017 and 2016 included in these estimates are assumptions about collection of accounts receivable, and useful life of fixed and intangible assets, tax valuation analysis, and warrant fair values. |
Cash and Cash Equivalents | The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of September 30, 2018 and December 31, 2017, the Company had no cash equivalents. At September 30, 2018 and December 31, 2017, the Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (“FDIC”) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. | The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of December 31, 2017 and 2016 the Company had no cash equivalents. At December 31, 2017 and 2016, the Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. |
Investment in Associates | An associate is an entity over which the Company has significant influence through a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies. The results of assets and liabilities of associates are incorporated in the condensed consolidated financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Company’s share of the net assets of the associate, less any impairment in the value of the investment. Losses of an associate in excess of the Company’s interest in that associate are not recognized. Additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included within the carrying amount of the investment. On January 8, 2016, the Company received 50% ownership in Cure Innovations, Inc (“CI”). CI was created in 2015 by IncuBrands Studio, Inc (“IncuBrands”). The Company and IncuBrands each own 50% of the common stock of CI. The Company and IncuBrands entered into a Joint Venture agreement in 2013 to distribute several OTF products utilizing IncuBrands marketing and contacts in various industries as well as utilize the Company’s technology and capabilities of manufacturing OTF’s. On December 6, 2016, the Company entered into a Joint Venture Agreement (“Joint Venture”) with Pace Wellness, Inc. (“Pace”) to jointly develop three Active Pharmaceutical Ingredients (“API”) within the nonprescription and/or Over-the-Counter (OTC) medicines specifically utilizing the Company’s patented and proprietary CUREFilm™ Technology. The three API’s to be jointly developed are Diphenhydramine HCL, Omeprazole and a third API to be determined at a later date (“Products”). Pace shall be the exclusive global distributor of the Products under the Solves Strips® branding or other private or branded labels. All benefits, advantages, and liabilities derived from, or incurred in respect of the Joint Venture shall be borne by the parties in proportion of their respective participating interests of 50/50 equal interest. As of September 30, 2018, the Company has only contributed $5,000 to the Joint Venture. The Company is looking to dissolve this Joint Venture due to Pace’s insolvency and we are no longer looking to develop these Products. | An associate is an entity over which the Company has significant influence through a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or have joint control over those policies. The results of assets and liabilities of associates are incorporated in the consolidated financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Companys share of the net assets of the associate, less any impairment in the value of the investment. Losses of an associate in excess of the Companys interest in that associate are not recognized. Additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. Any excess of the cost of acquisition over the Companys share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included within the carrying amount of the investment. On January 8, 2016, the Company received 50% ownership in CURE Innovations, Inc (CI). CI was created in 2015 by IncuBrands Studio, Inc (IncuBrands). The Company and IncuBrands each own 50% of the common stock of CI. The Company and IncuBrands entered into a Joint Venture agreement in 2013 to distribute several OTF products utilizing IncuBrands marketing and contacts in various industries as well as utilize the Companys technology and capabilities of manufacturing OTFs. On December 6, 2016, the Company entered into a Joint Venture Agreement (Joint Venture) with Pace Wellness, Inc. (Pace) to jointly develop three Active Pharmaceutical Ingredients (API) within the nonprescription and/or Over-the-Counter (OTC) medicines specifically utilizing the Companys patented and proprietary CUREFilm Technology. The three APIs to be jointly developed are Diphenhydramine HCL, Omeprazole and a third API to be determined at a later date (Products). Pace shall be the exclusive global distributor of the Products under the Solves Strips® branding or other private or branded labels. All benefits, advantages, and liabilities derived from, or incurred in respect of the Joint Venture shall be borne by the parties in proportion of their respective participating interests of 50/50 equal interest. As of December 31, 2017, the Company has contributed $5,000 to the Joint Venture. On June 30, 2015, our subsidiary, Oak Therapeutics, Inc. (Oak), issued 25,000 shares of its common stock in exchange for $10,000 and 181,251 common stock shares of Pace Wellness, Inc. (Pace) at a value of $1.00 per share, which represents 1.8% interest in Pace. Oak has fully written off the investment as of the acquisition date, November 10, 2017. |
Acquisitions | On November 10, 2017, we received 269,000 shares of Oak as consideration for an exclusive license to our patents rights in developing nations, along with a royalty-free non-exclusive license to any improvements made by Oak. As a result of this transaction, we own approximately 63% of Oaks outstanding shares and have consolidated Oaks financial statements as of the fourth quarter 2017. The following summarizes the consideration paid for Oak and the amounts of the assets and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date of the noncontrolling interest in Oak. As of November 10, 2017 Consideration License of CUREs intellectual property $ 139,000 Fair value of total consideration transferred $ 139,000 Recognized amounts of identifiable assets acquired and liabilities assumed Cash $ 65,702 Intangible asset 139,000 Accrued expenses (791 ) Loans from shareholder (4,217 ) Total identifiable net assets 199,694 Noncontrolling interest in Oak (60,694 ) CUREs interest in Oak $ 139,000 Unaudited pro forma results of operations for the year ended December 31, 2017, as if the Company and Oak had been combined as of the beginning of the period, follows. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated, or which may result in the future. December 31, 2017 Net revenues $ 363,434 Net loss (8,099,441 ) Net loss per share, basic and diluted $ (0.34 ) | |
Property and Equipment | The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. Depreciation has been provided using the straight-line method on the following estimated useful lives: Manufacturing equipment 5-7 Years Computer and other equipment 3-7 Years Leasehold Improvements Lesser of useful life or the term of the lease | The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. Depreciation has been provided using the straight-line method on the following estimated useful lives: Manufacturing equipment 5-7 Years Computer and other equipment 3-7 Years Leasehold Improvements Lesser of useful life or the |
Accounts receivable | Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. | Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and managements evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. |
Impairment of Long-Lived Assets | Long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of our long-lived asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset. Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value. There was no impairment on our long-lived assets during the three and nine month periods ended September 30, 2018 and 2017. | Long-lived assets include equipment and intangible assets other than those with indefinite lives. We assess the carrying value of our long-lived asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset. Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value. As of December 31, 2017 and 2016, our qualitative analysis of long-lived assets did not indicate any impairment. |
Concentrations of Credit Risk | In the normal course of business, the Company provided credit terms to its customers; however, collateral was not required. Accordingly, the Company performed credit evaluations of its customers and maintained allowances for possible losses which, when realized, were within the range of managements expectations. From time to time, a higher concentration of credit risk existed on outstanding accounts receivable for a select number of customers due to individual buying patterns. | |
Revenue Recognition | We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue Recognition”. The Company adopted Topic 606 using a modified retrospective approach and will be applied prospectively in the Company’s financial statements from January 1, 2018 forward. Revenues under Topic 606 are required to be recognized either at a “point in time” or “ over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The adoption of Topic 606 did not have a material impact on the Company’s financial statements, at initial implementation nor will it have a material impact on an ongoing basis. We derive revenues from two primary sources: products and services. Product revenue includes the shipment of product according to the agreement with our customers. Services include research and development contracts for the development of OTF products utilizing our CureFilm™ Technology or our other proprietary technologies. Rarely, contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these services are sold on a standalone basis. The Company’s consulting research and development income include services for the development of OTF products utilizing our CureFilm™ Technology. Most of our development contracts have four phases. Revenue is recognized based on progress toward completion of the performance obligation in each phase. The method to measure progress toward completion requires judgment and is based on the nature of the products or services to be provided. The Company generally uses the input method to measure progress for its contracts because it best depicts the transfer of assets to the customer, which occurs as the Company incurs costs for the contracts. Under the cost-to-cost measure of progress, the progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue is recorded proportionally as costs are incurred. Costs to fulfill these obligations mainly include materials, labor, supplies and consultants. Deferred revenue is shown separately in the condensed consolidated balance sheets. At September 30, 2018 we had deferred revenue of $404,517. At December 31, 2017, we had deferred revenue of $361,462. | The Company recognizes revenue in accordance with the FASB ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and/or service has been performed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. The Company believes that these criteria are satisfied upon shipment from our facility. Freight billed to customers is presented as revenues, and the related freight costs are presented as cost of goods sold. Deferred revenue is recognized when earned and all significant obligations have been satisfied. |
Inventory | Inventory is stated at the lower of cost or net realizable value. The Company determines the cost of its inventory, which includes amounts related to materials, direct labor, and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is first identified. | |
Advertising Expense | The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in general and administrative expense in the accompanying statements of operations. The Company recorded advertising costs of $45,775 and $144,598 for the three and nine month periods ended September 30, 2018, respectively. The Company recorded advertising costs of $8,567 and $13,062, for the three and nine month periods ended September 30, 2017, respectively. | The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in general and administrative expense in the accompanying statements of operations. The Company recorded advertising costs of $13,062 and $12,000 for the years ended December 31, 2017 and 2016, respectively. |
Research and Development | Costs incurred in connection with the development of new products and processes are charged to research and development expenses as incurred. The Company recorded research and development expenses of $291,624 and $1,094,993 for the three and nine month periods ended September 30, 2018, respectively. The Company recorded research and development expenses of $239,663 and $664,931 for the three and nine month periods ended September 30, 2017, respectively. | Costs incurred in connection with the development of new products and processes are charged to research and development expenses as incurred. The Company recorded research and development expenses of $1,427,341 and $753,369 for the year ended December 31, 2017 and 2016, respectively. |
Income Taxes | The Company utilizes FASB ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of the Company’s realization of the net operating loss carry forward prior to its expiration. | The Company utilizes FASB ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is more likely-than-not that a deferred tax asset will not be realized. The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of the Companys realization of the net operating loss carry forward prior to its expiration. |
Stock-Based Compensation | Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. |
Convertible Debentures | Beneficial Conversion Feature If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 ““Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. Derivative Liabilities ASC 815-40 (formerly SFAS No. 133 “Accounting for derivative instruments and hedging activities”), requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 (formerly EITF 00-19 “Accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock”) to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula and present value pricing. At September 30, 2018 and December 31, 2017, the Company adjusted its derivative liability to its fair value, and reflected the change in fair value, in its consolidated statement of operations and comprehensive loss. | Beneficial Conversion Feature If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (BCF). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. Derivative Liabilities ASC 815-40 (formerly SFAS No. 133 Accounting for derivative instruments and hedging activities), requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and in accordance with ASC 815-40-15 (formerly EITF 00-19 Accounting for derivative financial instruments indexed to, and potentially settled in, a companys own stock) to determine whether they should be considered a derivative liability and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula and present value pricing. At December 31, 2017 and 2016, the Company adjusted its derivative liability to its fair value, and reflected the change in fair value, in its consolidated statement of operations and comprehensive loss. |
Fair Value Measurements | The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. 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 prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis. | The Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. 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 prices in active markets for identical assets or liabilities Level 2 quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has assets or liabilities valued at fair value on a recurring basis for the years ended December 31, 2017 and 2016. |
Basic and diluted loss per share | Basic loss per share is computed by dividing the net loss to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing the net loss for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares, which consist of stock options and warrants, have been excluded from the diluted loss per share calculation because their effect is anti-dilutive. September 30, 2018 Number of common stock shares issued and outstanding 25,795,871 Number of common stock shares from conversion of convertible notes 1,330,905 Number of common stock shares from exercise of warrants 3,804,751 Number of common stock shares from exercise of stock options 655,634 Total fully-diluted common stock shares 31,587,161 | Basic loss per share is computed by dividing the net loss to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed by dividing the net loss for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares, which consist of stock options and warrants, have been excluded from the diluted loss per share calculation because their effect is anti-dilutive. December 31, 2017 Number of common stock shares issued and outstanding 23,901,252 Number of common stock shares from conversion of convertible notes 307,904 Number of common stock shares from exercise of warrants 360,000 Total fully-diluted common stock shares 24,569,156 |
Going Concern | The Company’s financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit at September 30, 2018 of $27,972,054. The Company had a working capital deficit of $6,344,207 as of September 30, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. The Company is continually analyzing its current costs and is attempting to make additional cost reductions where possible. We expect that we will continue to generate losses from operations throughout 2018. Historically, the Company has had operating losses and negative cash flows from operations which cast significant doubt upon the Company’s ability to continue as a going concern. The Company will need to raise capital in order to fund its operations. This need may be adversely impacted by uncertain market conditions and changes in the regulatory environment. To address its financing requirements, the Company intends to seek financing through debt and equity issuances to existing stockholders. Specifically, management has identified that a minimum of $4,000,000 of capital is needed over the next 12 months in order sustain operations. These capital needs take into account, among other things, management’s plans to advance intellectual property, maintenance of patents, upgrades for manufacturing and to hire personnel for business development. Management has outlined a plan to raise between $7,000,000 to $9,000,000 in capital over the next 12 months through the issuance of shares of the Company’s common stock to accredited investors. Management believes that the capital raised through these methods will be sufficient to sustain operations for the next 12 months. However, the outcome of these matters cannot be predicted with certainty at this time. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. | The Companys financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit at December 31, 2017 of $18,868,599. The Company had a working deficit of $2,784,574 as of December 31, 2017. These factors raise substantial doubt about the Companys ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. The Company is continually analyzing its current costs and is attempting to make additional cost reductions where possible. We expect that we will continue to generate losses from operations throughout 2018. Historically, the Company has had operating losses and negative cash flows from operations which cast significant doubt upon the Companys ability to continue as a going concern. The Company will need to raise capital in order to fund its operations. This need may be adversely impacted by uncertain market conditions and changes in the regulatory environment. To address its financing requirements, the Company intends to seek financing through debt and equity issuances to existing stockholders. Specifically, management has identified that a minimum of $4,000,000 of capital is needed over the next 12 months in order sustain operations. These capital needs take into account, among other things, managements plans to advance intellectual property, maintenance of patents, upgrades for manufacturing and to hire personnel for business development. Management has outlined a plan to raise between $8,000,000 to $10,000,000 in capital over the next 12 months through the issuance of shares of the Companys common stock to accredited investors. Management believes that the capital raised through these methods will be sufficient to sustain operations for the next 12 months. However, the outcome of these matters cannot be predicted with certainty at this time. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These factors raise substantial doubt about the Companys ability to continue as a going concern for one year from the issuance of the financial statements. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. |
Recently Issued Standards | In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The purpose is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. This ASU is effective for the Company in the first quarter of 2018. Early adoption is not permitted except for limited provisions. The adoption of ASU 2016-01 did not have an impact on the Company’s condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02—Leases (Topic 842), requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard requires recognition of the income tax effects of vested or settled awards in the income statement and involves several other aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This new standard became effective for the Company on January 1, 2017. The adoption of this standard did not have a material impact on its financial position, results of operations or statements of cash flows upon adoption. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, to clarify certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted. The effective date and transition requirements for these amendments are annual reporting periods beginning after December 15, 2017, including interim reporting periods therein, and that would also permit public entities to elect to adopt the amendments as of the original effective date as applicable to reporting periods beginning after December 15, 2016. The new guidance allows for the amendment to be applied either retrospectively to each prior reporting period presented or retrospectively as a cumulative-effect adjustment as of the date of adoption. The adoption of ASU 2016-12 did not have an impact on the Company’s condensed consolidated financial statements. In August, 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (“ASU 2016-15”). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The adoption of ASU 2016-15 did not have an impact on the Company’s condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard will be effective for the Company on January 1, 2018; however, early adoption is permitted with prospective application to any business development transaction. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of this ASU are effective for the Company in the first quarter of 2018, with early adoption permitted. The adoption of ASU 2017-09 did not have an impact on the Company’s condensed consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-7, Compensation – Stock Compensation (Topic 718) )— Improvements to Nonemployee Share-Based Payment Accounting. This guidance supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The guidance permits early adoption and was adopted by the Company in the first quarter of fiscal year 2019. The adoption of this ASU did not have any impact on the Company’s condensed consolidated financial statements. There are various other updates recently issued, however, they are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. | In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The purpose is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. This ASU is effective for the Company in the first quarter of 2018. Early adoption is not permitted except for limited provisions. The Company does not expect the adoption of this amendment to have a material effect on its financial condition and results of operations. In January 2016, the FASB issued an accounting standard update which requires, among other things, that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Under the standard, entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale as a component of other comprehensive income. For equity investments without readily determinable fair values the cost method of accounting is also eliminated, however subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment and plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This new standard does not change the guidance for classifying and measuring investments in debt securities and loans. The standard is effective for us on July 1, 2018 (the first quarter of our 2019 fiscal year). The Company is currently evaluating the anticipated impact of this standard on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02Leases (Topic 842), requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard requires recognition of the income tax effects of vested or settled awards in the income statement and involves several other aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This new standard became effective for the Company on January 1, 2017. The adoption of this standard did not have a material impact on its financial position, results of operations or statements of cash flows upon adoption. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients In August, 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (ASU 2016-15). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company does not anticipate a significant impact upon adoption. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard will be effective for the Company on January 1, 2018; however, early adoption is permitted with prospective application to any business development transaction. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, There are various other updates recently issued, however, they are not expected to a have a material impact on the Companys consolidated financial position, results of operations or cash flows. |
Cost of Sales | Cost of sales includes the purchase cost of products sold and all costs associated with getting the products to our customers, including transportation costs. | |
Shipping Costs | Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in selling, general and administrative expenses. | |
Related parties | Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. All transactions with related parties shall be recorded at fair value of the goods or services exchanged. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Summary Of Significant Accounting Policies Tables | ||
Property and equipment | Manufacturing equipment 5-7 Years Computer and other equipment 3-7 Years Leasehold Improvements Lesser of useful life or the term of the lease | Manufacturing equipment 5-7 Years Computer and other equipment 3-7 Years Leasehold Improvements Lesser of useful life or the |
Basic and diluted loss per share | September 30, 2018 Number of common stock shares issued and outstanding 25,795,871 Number of common stock shares from conversion of convertible notes 1,330,905 Number of common stock shares from exercise of warrants 3,804,751 Number of common stock shares from exercise of stock options 655,634 Total fully-diluted common stock shares 31,587,161 | December 31, 2017 Number of common stock shares issued and outstanding 23,901,252 Number of common stock shares from conversion of convertible notes 307,904 Number of common stock shares from exercise of warrants 360,000 Total fully-diluted common stock shares 24,569,156 |
Business Acquisition, consideration | As of November 10, 2017 Consideration License of CUREs intellectual property $ 139,000 Fair value of total consideration transferred $ 139,000 | |
Business Acquisition, assets acquired and liabilities assumed | Recognized amounts of identifiable assets acquired and liabilities assumed Cash $ 65,702 Intangible asset 139,000 Accrued expenses (791 ) Loans from shareholder (4,217 ) Total identifiable net assets 199,694 Noncontrolling interest in Oak (60,694 ) CUREs interest in Oak $ 139,000 | |
Business Acquisition, Pro Forma Information | December 31, 2017 Net revenues $ 363,434 Net loss (8,099,441 ) Net loss per share, basic and diluted $ (0.34 ) |
ACCOUNTS RECEIVABLE (Table)
ACCOUNTS RECEIVABLE (Table) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable Table | |
Schedule of accounts receivable | Accounts receivable, net of allowances for sales returns and doubtful accounts, consisted of the following: December 31, 2017 December 31, 2016 Trade accounts receivable $ 4,364 $ 7,049 Less allowances - - Total accounts receivable, net $ 4,364 $ 7,049 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Inventory Tables | ||
Inventory Of Carrying Value | September 30, 2018 December 31, 2017 Raw materials $ 69,748 $ 67,664 Packaging components 17,986 17,546 Work-in-process 49,049 829 136,783 86,039 Reserve for obsolescence (44,110 ) (41,043 ) Total inventory $ 92,673 $ 44,996 | December 31, 2017 December 31, 2016 Raw Materials $ 67,664 $ 68,047 Packaging Components 17,546 84,927 Work-In-Process 829 17,406 Finished Goods - - 86,039 170,380 Reserve for Obsolescence (41,043 ) (89,095 ) Total inventory $ 44,996 $ 81,285 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Prepaid Expenses And Other Assets Tables | ||
Prepaid expenses and other assets | September 30, 2018 December 31, 2017 Prepaid consulting services– stock-based compensation $ 1,018,467 $ 258,918 Prepaid consulting services 90,667 116,167 Prepaid clinical study - 110,538 Prepaid insurance 10,942 60,180 Other receivables 8,683 5,858 Prepaid inventory 15,945 12,182 Prepaid expenses 48,200 23,045 Prepaid expenses and other assets 1,192,904 586,888 Current portion of prepaid expenses and other assets (860,114 ) (586,888 ) Prepaid expenses and other assets less current portion $ 332,790 $ - | December 31, 2017 December 31, 2016 Prepaid consulting services stock-based compensation $ 258,918 $ 150,168 Prepaid consulting services 116,167 - Prepaid clinical study 110,538 - Prepaid insurance 60,180 42,785 Other Receivables 5,858 10,948 Prepaid inventory 12,182 13,178 Prepaid expenses 23,045 6,800 Prepaid expenses and other assets $ 586,888 $ 223,879 |
PROPERTY AND EQUIPMENT AND IN_2
PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property And Equipment And Intangible Assets Tables | ||
Property and equipment and intangible assets | September 30, 2018 December 31, 2017 Manufacturing equipment $ 835,860 $ 797,513 Computer and other equipment 180,273 169,499 Leasehold improvements 44,638 42,666 Less accumulated depreciation (747,693 ) (672,317 ) Property and Equipment, net $ 313,078 $ 337,361 | December 31, 2017 December 31, 2016 Manufacturing equipment $ 797,513 $ 769,074 Computer and other equipment 169,499 116,747 Leasehold improvements 42,666 36,066 Less accumulated depreciation (672,317 ) (551,239 ) Property and Equipment, net $ 337,361 $ 370,648 |
Intangible assets, net | September 30, 2018 December 31, 2017 Intellectual Property $ 814,582 $ 814,582 Patents 393,056 224,527 Less accumulated amortization (173,715 ) (138,637 ) Intangible assets, net $ 1,033,923 $ 900,472 | December 31, 2017 December 31, 2016 Intellectual Property $ 814,582 $ 814,582 Patents 224,527 175,047 Less accumulated amortization (138,637 ) (95,119 ) Intangible assets, net $ 900,472 $ 894,510 |
Amortization expense | 2018 $ 12,226 2019 47,305 2020 47,305 2021 47,305 2022 47,305 Thereafter 584,850 Total Amortization $ 786,296 | 2018 $ 43,518 2019 43,518 2020 43,518 2021 43,518 2022 43,518 Thereafter 513,785 Total Amortization $ 731,375 |
NOTE RECEIVABLE (Tables)
NOTE RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Note Receivable Tables | |
Note receivable | 2017 2016 The note receivable is a promissory note with a company bearing an interest rate of 8% per annum, principal and accrued and unpaid interest is payable on demand of the Company any time before November 11, 2016 or by November 11, 2016 if no demand is made prior to such date. This note has been written off in 2016. $ - $ 17,948 The note receivable is a promissory note with a company bearing an interest rate of 8% per annum, principal and accrued and unpaid interest is payable on demand of the Company any time before March 29, 2017 or by March 29, 2017 if no demand is made prior to such date. This note has been written off in 2016. - 18,290 - 36,238 Less allowances - (36,238 Current portion of note receivable - - Note receivable, less current portion $ - $ - |
LOAN PAYABLE (Tables)
LOAN PAYABLE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Loan Payable Tables | ||
Loan Payable | September 30, 2018 December 31, 2017 Notes to a company due August 29, 2018 and September 21, 2018, including interest at 7.55% and 7.05%, respectively per annum; unsecured; interest due monthly $ - $ 50,425 Current portion of loan payable - (50,425 ) Loan payable, less current portion $ - $ - | 2017 2016 Notes to a company due August 29, 2018 and September 21, 2018, including interest at 7.55% and 7.05%, respectively per annum; unsecured; interest due monthly $ 50,425 $ - Note to a company due September 29, 2017 including interest at 13,25% per annum; unsecured; interest due monthly - 33,277 $ 50,425 $ 33,277 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Notes Payable Tables | ||
Notes Payable | September 30, 2018 December 31, 2017 Note to a company amended on August 27, 2017 and due on or before one month from the amended date and the maturity date shall be extended for one month periods as long as the Company is not in default, interest shall accrue at 10% per annum, secured by the Company’s intellectual property $ 650,000 $ 650,000 Note to a company of $100,000 due January 31, 2018 including interest of $3,000 per month, unsecured, principal and interest due at maturity, principal and interest repaid on January 23, 2018 - 100,000 Note to an individual, non-interest bearing, unsecured and has no fixed terms of repayment 50,000 50,000 Note to an individual due October 22, 2018, interest payable at 6% per annum, unsecured, principal and accrued interest due at maturity. The Company issued 50,000 shares of its common stock on October 18, 2018 at a price per share of $2.88 as an equity kicker. 150,000 - Note to a company due December 15, 2018, interest payable at 5% per annum, unsecured, principal and accrued interest due at maturity. If this note is still outstanding as of the date of any bona fide sale of the Company’s preferred stock or common stock in excess of $4,000,000 in gross proceeds, in one transaction or a serious of related transactions, which offering definitively sets a price per share of common stock and results in a listing of the Company’s common stock on a national securities exchange 100,000 - 950,000 800,000 Unamortized discount (64,000 ) - Current portion of loan payable (886,000 ) (800,000 ) Loan payable, less current portion $ - $ - | December 31, 2017 December 31, 2016 Note to a company amended on August 27, 2017 and due on or before one month from the amended date and the maturity date shall be extended for one month periods as long as the Company is not in default, interest shall accrue at 10% per annum, secured by the Companys intellectual property $ 650,000 $ - Note to a company of $100,000 due January 31, 2018 including interest of $3,000 per month, unsecured, principal and interest due at maturity, principal and interest repaid on January 23, 2018 100,000 - Note to an individual, non-interest bearing, unsecured and has no fixed terms of repayment 50,000 50,000 $ 800,000 $ 50,000 |
CONVERTIBLE PROMISSORY NOTES (T
CONVERTIBLE PROMISSORY NOTES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Convertible Promissory Notes Tables | ||
Convertible promissory notes | Convertible promissory notes consist of the following at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Convertible promissory notes totaling $1,400,000 due between December 31, 2018 and January 31, 2019, interest payable at 8% per annum; unsecured; principal and accrued interest convertible into common stock at the lower of $7.00 per share or the price per share of the latest closing of a debt or equity offering by the Company greater than $3,000,000; accrued interest due between August 31, 2018 and September 30, 2018 $ 1,400,000 $ 1,900,000 Convertible promissory notes totaling $2,025,000 due November 30, 2018, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning September 30, 2018, which has not yet been paid 2,025,000 - Convertible promissory note totaling $500,000 due April 30, 2019, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at a price per share (the “ Voluntary Conversion PPS “) equal to 75% of the average of the closing prices of the Company’s Common Stock on the OTC Market (or any other market on which the common stock of the Company is then listed for trading) over the thirty (30) consecutive trading days prior to the delivery of the notice of conversion by the Investor to the Company, or, if at the time of such conversion the shares of the Company’s Common Stock are not listed for trading, then the entire then outstanding Investment Amount shall be converted into that number of shares of the most senior class of shares of the Company existing at the time of such conversion, at a price per share equal to 75% of the fair market value of such Common Stock as shall be determined by the Board of Directors based on, among others, a valuation prepared by an independent third party and which shall have been submitted to the Company not more than 90 days prior to the date of such determination by the Board of Directors. In the event of the consummation by the Company, on or before the Maturity Date, of a transaction or series of related transactions in which the Company issues equity securities of the Company in consideration of at least US$4,000,000 (a “ Financing “), the then outstanding Investment Amount not previously converted hereunder shall be automatically converted, immediately prior to (but conditioned upon) the consummation of such Financing, into such number of shares (or a sub-class thereof) issued by the Company in the Financing, equal to the outstanding Investment Amount divided by a price per share equal to 75% of the lowest price per share paid to the Company in the Financing. In the event the Financing is not consummated by the Maturity Date, then the outstanding Investment Amount as of the Maturity Date not previously converted hereunder shall be automatically converted, on the Maturity Date, into such number of shares (or a sub-class thereof) issued by the Company in the Financing, equal to the outstanding Investment Amount divided by the Voluntary Conversion PPS 500,000 - Convertible promissory note totaling $500,000 due December 31, 2018, interest payable at 9% per annum; secured by all assets of the company; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning September 30, 2018 500,000 - Convertible promissory notes totaling $575,000 due June 27, 2019, interest payable at 9% per annum; unsecured; principal and accrued interest convertible into common stock at either the price per share equal to the average closing price of the Company’s Common Stock on the OTC Markets for the five consecutive trading days prior to the delivery of a Notice of Conversion (“Optional Conversion”) or price per share equal to 75% of the price of the Company’s next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of the Company’s Common Stock or preferred stock and enables the Company to list its common stock on a national securities exchange; accrued interest to be paid quarterly beginning December 31, 2018 575,000 - 5,000,000 1,900,000 Unamortized discount (621,434 ) (348,512 ) Current portion of convertible promissory notes 4,378,566 1,551,488 Convertible promissory notes, less current portion $ - $ - | December 31, 2017 December 31, 2016 Convertible promissory notes totaling $1,900,000 due between November 11, 2017 and May 8, 2018, interest payable at 8% per annum; unsecured; principal and accrued interest convertible into common stock at the lower of $7.00 per share or the price per share of the latest closing of a debt or equity offering by the Company greater than $3,000,000; accrued interest due between November 11, 2017 and May 8, 2018; convertible promissory notes totaling $1,300,000 were amended to extend the maturity date to March 31, 2018 $ 1,900,000 $ - 1,900,000 - Unamortized discount (348,512 ) - Convertible promissory notes $ 1,551,488 $ - |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Derivative Liability Tables | ||
Derivative liability | The following table summarizes fair value measurements by level at September 30, 2018 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Derivative liability $ - $ - $ (806,379 ) $ (806,379 ) The following table summarizes fair value measurements by level at December 31, 2017 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Derivative liability $ - $ - $ (90,738 ) $ (90,738 ) | Level I Level II Level III Total Derivative liability $ $ $ (90,738 ) $ (90,738 ) |
Derivative liability assumptions used | September 30, 2018 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.94 % Expected stock price volatility 146.68 % Expected dividend payout - Expected option life (in years) 1 Expected forfeiture rate 0 % | December 31, 2017 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.20 % Expected stock price volatility 75.43 % Expected dividend payout - Expected option life (in years) 1 Expected forfeiture rate 0 % |
Reconciliation of derivative liabilities | September 30, 2018 Value at December 31, 2017 $ 90,738 Increase in value 418,042 Initial value at debt issuance 297,599 Value at September 30, 2018 $ 806,379 | December 31, 2017 Value at December 31, 2016 $ - Initial value at the debt issuance 832,846 Decrease in value (742,108 ) Value at December 31, 2017 $ 90,738 |
STOCK BASED AWARDS (Tables)
STOCK BASED AWARDS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock Based Awards Tables Abstract | |
Stock option activity | The Company’s stock option activity was as follows: Options Weighted Average Exercise Price Weighted Average Contractual Remaining Life Outstanding, December 31, 2017 - - - Granted 2,184,450 0.73 9.52 Exercised - - - Forfeited/Expired - - - Outstanding, September 30, 2018 2,184,450 0.73 9.52 Exercisable at September 30, 2018 655,634 0.74 9.52 Range of Exercise Price Number of Options Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $ 0.61-$0.74 2,184,450 9.52 0.73 655,634 0.74 2,184,450 9.52 0.73 655,634 0.74 |
Weighted-average fair value of options granted | September 30, 2018 December 31, 2017 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.94 % 0 % Expected stock price volatility 146.68 % 0 % Expected dividend payout - - Expected option life (in years) 10 - Expected forfeiture rate 0 % 0 % |
Non-vested restricted award shares | Restricted Stock Shares Weighted Average Grant Date Fair Value Non-vested, December 31, 2017 - - Granted 371,250 0.74 Vested (230,625 ) 0.74 Forfeited/Expired - - Non-vested, September 30, 2018 140,625 0.74 |
WARRANT AGREEMENTS (Tables)
WARRANT AGREEMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Warrant Agreements Tables | ||
Company warrant activity | Warrants Weighted Average Exercise Price Weighted Average Contractual Remaining Life Outstanding, December 31, 2017 4,752,107 2.90 4.98 Granted 588,644 1.00 2.76 Exercised - - - Forfeited/Expired - - - Outstanding, September 30, 2018 5,340,751 1.95 2.25 Exercisable at September 30, 2018 3,804,751 1.93 2.28 | Warrants Weighted Average Exercise Price Weighted Average Contractual Remaining Life Outstanding, December 31, 2016 4,392,107 1.97 6.17 Granted 1,660,000 3.08 2.62 Exercised (1,300,000 ) (3.94 ) - Forfeited/Expired - - - Outstanding, December 31, 2017 4,752,107 2.90 4.98 Exercisable at December 31, 2017 3,101,026 3.40 3.93 Range of Exercise Price Number of Warrants Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $1.00 - $7.00 4,752,107 4.98 $ 2.90 3,101,026 $ 3.40 4,752,107 4.98 $ 2.90 3,101,026 $ 3.40 |
Weighted Average fair value of warrants granted | Range of Exercise Price Number of Warrants Weighted Average Remaining Contractual Life (years) Weighted Average Exercise Price Number of Warrants Exercisable Weighted Average Exercise Price $ 1.00 – $7.00 5,340,751 2.25 $ 1.95 3,804,751 $ 1.93 5,340,751 2.25 $ 1.95 3,804,751 $ 1.93 | December 31, 2017 December 31, 2016 Significant assumptions (weighted-average): Risk-free interest rate at grant date 1.92 % 1.83 % Expected stock price volatility 84.43 % 84.42 % Expected dividend payout - - Expected option life (in years) 3 3 Expected forfeiture rate 0 % 0 % |
Weighted-average significant assumptions of warrant | September 30, 2018 December 31, 2017 Significant assumptions (weighted-average): Risk-free interest rate at grant date 2.94 % 2.20 % Expected stock price volatility 146.68 % 75.43 % Expected dividend payout - - Expected option life (in years) 3 3 Expected forfeiture rate 0 % 0 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes Tables | |
Provision for Incomes Taxes | 2017 2016 Current expense Federal $ - $ - State - - Deferred expense Federal $ - $ - State - - Total income tax expense $ - $ - |
Deferred Income Tax (Liabilities) Assets | 2017 2016 Deferred income tax assets Net operating loss carryforward $ 5,585,508 $ 4,622,321 Deferred revenue 107,860 74,378 Allowance for doubtful accounts 1,306 15,524 Accrued expenses 11,346 8,699 Total deferred tax assets 5,706,020 4,720,922 Deferred income tax liabilities State income taxes (353,750 ) (329,222 ) Depreciation and amortization (16,065 ) (23,120 ) Valuation allowance (5,336,205 ) (4,368,580 ) Total deferred tax liabilities (5,706,020 ) (4,720,922 ) Deferred income tax, net $ - $ - |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Nov. 10, 2017 | |
Organization And Description Of Business | |||
State of Incorporation | Nevada | Nevada | |
Date of Incorporation | May 15, 2014 | May 15, 2014 | |
Shares received | 269,000 | 269,000 | |
Ownership percentage | 63.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Manufacturing Equipment [Member] | Minimum [Member] | ||
Estimated useful lives | 5 years | 5 years |
Manufacturing Equipment [Member] | Maximum [Member] | ||
Estimated useful lives | 7 years | 7 years |
Computer and other equipment [Member] | Minimum [Member] | ||
Estimated useful lives | 3 years | 3 years |
Computer and other equipment [Member] | Maximum [Member] | ||
Estimated useful lives | 7 years | 7 years |
Leasehold Improvements [Member] | ||
Estimated useful lives description | Lesser of useful life or the term of the lease | Lesser of useful life or the term of the lease |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | Nov. 10, 2017USD ($) |
Consideration | |
License of CUREs intellectual property | $ 139,000 |
Fair value of total consideration transferred | $ 139,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares | Sep. 30, 2018 | Dec. 31, 2017 |
Summary Of Significant Accounting Policies | ||
Number of common stock shares issued and outstanding | 25,795,871 | 23,901,252 |
Number of common stock shares from conversion of convertible notes | 1,330,905 | 307,904 |
Number of common stock shares from exercise of warrants | 3,804,751 | 360,000 |
Number of common stock shares from exercise of stock options | 655,634 | |
Total fully-diluted common stock shares | 31,587,161 | 24,569,156 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Nov. 10, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Recognized amounts of identifiable assets acquired and liabilities assumed | ||||||
Cash | $ 302,538 | $ 108,249 | $ 65,702 | $ 127,816 | $ 1,106,142 | $ 13,352 |
Intangible asset | 786,296 | 731,375 | 139,000 | |||
Accrued expenses | $ 385,895 | $ 129,978 | (791) | $ 26,305 | ||
Loans from shareholder | (4,217) | |||||
Total identifiable net assets | 199,694 | |||||
Noncontrolling interest in Oak | (60,694) | |||||
CURE’s interest in Oak | $ 139,000 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net revenues | $ 87,851 | $ 74,355 | $ 349,783 | $ 145,185 | $ 180,404 | $ 84,165 |
Net loss | $ 4,799,292 | $ 1,808,638 | $ 9,103,455 | $ 6,970,064 | $ (8,149,885) | $ (4,157,480) |
Net loss per share, basic and diluted | $ (0.20) | $ (0.08) | $ (0.37) | $ (0.30) | $ (0.34) | $ (0.46) |
Pro Forma [Member] | ||||||
Net revenues | $ 363,434 | |||||
Net loss | $ (8,099,441) | |||||
Net loss per share, basic and diluted | $ (0.34) |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 10, 2017 | Jan. 08, 2016 | |
FDIC insured limit | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 | |||||
Ownership interest | 63.00% | 50.00% | |||||||
Accumulated deficit | (27,972,054) | (27,972,054) | (18,868,599) | (10,718,714) | |||||
Working capital deficit | (6,344,207) | (6,344,207) | |||||||
Research and development expense | 291,624 | $ 239,663 | 1,094,993 | $ 664,931 | 1,427,341 | 753,369 | |||
Advertising costs | 45,775 | $ 8,567 | $ 144,598 | $ 13,062 | |||||
Description of joint venture contributions | <font style="font: 10pt Times New Roman, Times, Serif">All benefits, advantages, and liabilities derived from, or incurred in respect of the Joint Venture shall be borne by the parties in proportion of their respective participating interests of 50/50 equal interest.</font></p>" id="sjs-E9"><p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">All benefits, advantages, and liabilities derived from, or incurred in respect of the Joint Venture shall be borne by the parties in proportion of their respective participating interests of 50/50 equal interest.</font></p> | ||||||||
Joint venture contributions | 5,000 | ||||||||
Deferred revenue | 404,517 | $ 404,517 | $ 361,462 | $ 173,618 | |||||
Shares received | 269,000 | 269,000 | |||||||
Minimum [Member] | |||||||||
Working capital required | 4,000,000 | 4,000,000 | |||||||
Plan to raise capital through issuance of common stock | 7,000,000 | 7,000,000 | $ 8,000,000 | ||||||
Capital required through issuance of common stock | 7,000,000 | 7,000,000 | 8,000,000 | ||||||
Maximum [Member] | |||||||||
Plan to raise capital through issuance of common stock | 9,000,000 | 9,000,000 | 10,000,000 | ||||||
Capital required through issuance of common stock | $ 9,000,000 | $ 9,000,000 | $ 10,000,000 | ||||||
Cure Innovations Inc [Member] | |||||||||
Ownership interest | 50.00% | ||||||||
Oak Therapeutics, Inc. [Member] | |||||||||
Ownership interest | 63.00% | 63.00% | |||||||
Pace Wellness, Inc. [Member] | |||||||||
Ownership interest | 180.00% | ||||||||
Common stock shares issued | 181,251 | ||||||||
Common stock per share | $ 1 | ||||||||
Oak Therapeutics, Inc. [Member] | |||||||||
Amount received in exchange of common stock | $ 10,000 | ||||||||
Common stock shares issued | 25,000 | ||||||||
Joint Venture Agreement [Member] | Pace Wellness, Inc. [Member] | |||||||||
Investments in associates and joint ventures | $ 5,000 | $ 5,000 |
ACCOUNTS RECIVABLE (Details)
ACCOUNTS RECIVABLE (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Recivable Details | ||
Trade accounts receivable, gross | $ 4,364 | $ 7,049 |
Less allowances | ||
Trade accounts receivable, net | $ 4,364 | $ 7,049 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Details | |||
Raw Materials | $ 69,748 | $ 67,664 | $ 68,047 |
Packaging Components | 17,986 | 17,546 | 84,927 |
Work-In-Process | 49,049 | 829 | 17,406 |
Finished Goods | |||
Inventory, Gross | 136,783 | 86,039 | 170,380 |
Reserve for Obsolescence | (44,110) | (41,043) | (89,095) |
Total inventory | $ 92,673 | $ 44,996 | $ 81,285 |
PROPERTY AND EQUIPMENT AND IN_3
PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Less accumulated depreciation | $ (747,693) | $ (672,317) | $ (551,239) |
Property and Equipment, net | 313,078 | 337,361 | 370,648 |
Computer and other equipment [Member] | |||
Property and Equipment | 180,273 | 169,499 | 116,747 |
Leasehold Improvements [Member] | |||
Property and Equipment | 44,638 | 42,666 | 36,066 |
Manufacturing equipment [Member] | |||
Property and Equipment | $ 835,860 | $ 797,513 | $ 769,074 |
PROPERTY AND EQUIPMENT AND IN_4
PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS (Details 1) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Less accumulated amortization | $ (173,715) | $ (138,637) | $ (95,119) |
Intangible assets, net | 1,033,923 | 900,472 | 894,510 |
Intellectual Property [Member] | |||
Intellectual Property | 814,582 | 814,582 | 814,582 |
Patents [Member] | |||
Intellectual Property | $ 393,056 | $ 224,527 | $ 175,047 |
PROPERTY AND EQUIPMENT AND IN_5
PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS (Details 2) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Nov. 10, 2017 |
Property And Equipment And Intangible Assets Details 2 | |||
2,018 | $ 12,226 | $ 43,518 | |
2,019 | 47,305 | 43,518 | |
2,020 | 47,305 | 43,518 | |
2,021 | 47,305 | 43,518 | |
2,022 | 47,305 | 43,518 | |
Thereafter | 584,850 | 513,785 | |
Total Amortization | $ 786,296 | $ 731,375 | $ 139,000 |
PROPERTY AND EQUIPMENT AND IN_6
PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation expense | $ 25,724 | $ 21,882 | $ 75,376 | $ 98,325 | $ 121,078 | $ 129,985 |
Depreciation capitalized lease | 2,160 | 6,480 | ||||
Amortization expense | $ 12,226 | $ 10,899 | 35,078 | 30,619 | 43,518 | 42,663 |
Purchase of patents | $ 97,000 | |||||
Issuance of common stock, shares | 120,000 | 120,000 | ||||
Legal patent costs capitalized | $ 168,529 | $ 43,621 | ||||
Accumulated depreciation | 37,177 | 28,537 | ||||
Write off of intangibles | 58,522 | |||||
Patents [Member] | ||||||
Patent costs capitalized | 49,480 | 45,930 | ||||
Property and Equipment [Member] | ||||||
Depreciation expense | $ 8,640 | $ 8,640 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expenses And Other Assets Details | |||
Prepaid consulting services stock-based compensation | $ 1,018,467 | $ 258,918 | $ 150,168 |
Prepaid consulting services | 90,667 | 116,167 | |
Prepaid clinical study | 110,538 | ||
Prepaid insurance | 10,942 | 60,180 | 42,785 |
Other Receivables | 8,683 | 5,858 | 10,948 |
Prepaid inventory | 15,945 | 12,182 | 13,178 |
Prepaid expenses | 48,200 | 23,045 | 6,800 |
Prepaid expenses and other assets | 1,192,904 | 586,888 | 223,879 |
Current portion of prepaid expenses and other assets | (860,114) | (586,888) | |
Prepaid expenses and other assets less current portion | $ 332,790 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Notes receivable | $ 36,238 | |
Less allowances | (36,238) | |
Current portion of note receivable | ||
Note receivable, less current portion | ||
Promissory note 1 [Member] | ||
Notes receivable | 17,948 | |
Promissory note 2 [Member] | ||
Notes receivable | $ 18,290 |
NOTE RECEIVABLE (Details Narrat
NOTE RECEIVABLE (Details Narrative) | 12 Months Ended |
Dec. 31, 2017 | |
Promissory note 2 [Member] | |
Interest rate | 8.00% |
Interest payable due date | <font style="font: 10pt Times New Roman, Times, Serif">Accrued and unpaid interest is payable on demand of the Company any time before March 29, 2017 or by March 29, 2017 if no demand is made prior to such date.</font></p>" id="sjs-B5"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Accrued and unpaid interest is payable on demand of the Company any time before March 29, 2017 or by March 29, 2017 if no demand is made prior to such date.</font></p> |
Promissory note 1 [Member] | |
Interest rate | 8.00% |
Interest payable due date | <font style="font: 10pt Times New Roman, Times, Serif">Accrued and unpaid interest is payable on demand of the Company any time before November 11, 2016 or by November 11, 2016 if no demand is made prior to such date.</font></p>" id="sjs-B8"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Accrued and unpaid interest is payable on demand of the Company any time before November 11, 2016 or by November 11, 2016 if no demand is made prior to such date.</font></p> |
LOAN PAYABLE (Details)
LOAN PAYABLE (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Loan payable | $ 50,425 | $ 33,277 | |
Current portion of loan payable | (50,425) | ||
Loan payable, less current portion | |||
Loans Payable [Member] | |||
Loan payable | 50,425 | ||
Loans Payable 1 [Member] | |||
Loan payable | $ 33,277 |
LOAN PAYABLE (Details Narrative
LOAN PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest expense | $ 1,433,153 | $ 511,503 | $ 2,133,412 | $ 600,709 | $ 1,582,184 | $ 121,572 |
Loans Payable [Member] | ||||||
Interest expense | $ 187 | $ 281 | $ 1,482 | $ 1,946 | $ 2,011 | $ 930 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Notes payable | $ 950,000 | $ 800,000 | $ 50,000 |
Unamortized discount | (64,000) | ||
Current portion of loan payable | (886,000) | (800,000) | (50,000) |
Loan payable, less current portion | |||
Individual [Member] | |||
Notes payable | 50,000 | 50,000 | 50,000 |
Individual One [Member] | |||
Notes payable | 150,000 | ||
Company [Member] | |||
Notes payable | 650,000 | 650,000 | |
Company One [Member] | |||
Notes payable | 100,000 | ||
Company Two [Member] | |||
Notes payable | $ 100,000 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest expense | $ 1,433,153 | $ 511,503 | $ 2,133,412 | $ 600,709 | $ 1,582,184 | $ 121,572 |
NotePayable [Member] | ||||||
Interest expense | $ 17,225 | $ 8,842 | $ 49,458 | $ 8,842 | 30,226 | 0 |
Amortization of discount | 10,000 | 0 | ||||
Convertible promissory note [Member] | ||||||
Interest expense | $ 84,161 | $ 0 |
CONVERTIBLE PROMISSORY NOTES (D
CONVERTIBLE PROMISSORY NOTES (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Total Convertible promissory notes | $ 5,000,000 | $ 1,900,000 | |
Unamortized discount | (621,434) | 348,512 | |
Current portion of convertible promissory notes | 4,378,566 | 1,551,488 | |
Convertible promissory notes, less current portion | |||
Convertible promissory notes | 1,551,488 | ||
Convertible promissory note [Member] | |||
Total Convertible promissory notes | 1,400,000 | 1,900,000 | |
Convertible Promissory Notes One [Member] | |||
Total Convertible promissory notes | 2,025,000 | ||
Convertible Promissory Notes Two [Member] | |||
Total Convertible promissory notes | 500,000 | ||
Convertible Promissory Notes Three [Member] | |||
Total Convertible promissory notes | 500,000 | ||
Convertible Promissory Notes Four [Member] | |||
Total Convertible promissory notes | $ 575,000 |
CONVERTIBLE PROMISSORY NOTES _2
CONVERTIBLE PROMISSORY NOTES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amortization of discount | $ 427,327 | $ 477,285 | $ 1,286,420 | $ 554,968 | ||
Interest expense | $ 90,856 | $ 23,617 | $ 233,009 | $ 26,922 | $ 1,582,184 | $ 121,572 |
NotePayable [Member] | ||||||
Interest expense | 30,226 | 0 | ||||
Convertible promissory note [Member] | ||||||
Amortization of discount | 1,170,873 | 0 | ||||
Interest expense | $ 84,161 | $ 0 |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative liability | $ (806,379) | $ (90,738) | |
Fair Value, Inputs, Level 1 [Member] | |||
Derivative liability | |||
Fair Value, Inputs, Level 2 [Member] | |||
Derivative liability | |||
Fair Value, Inputs, Level 3 [Member] | |||
Derivative liability | $ (806,379) | $ (90,738) |
DERIVATIVE LIABILITY (Details 1
DERIVATIVE LIABILITY (Details 1) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Significant assumptions (weighted-average): | ||
Risk-free interest rate at grant date | 2.94% | 2.20% |
Expected stock price volatility | 146.68% | 75.43% |
Expected dividend payout | ||
Expected option life (in years) | 1 year | 1 year |
Expected forfeiture rate | 0.00% | 0.00% |
DERIVATIVE LIABILITY (Details 2
DERIVATIVE LIABILITY (Details 2) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Derivative Liability Tables | ||
Value at December 31, 2017 | $ 90,738 | |
Decrease in value | 418,042 | (742,108) |
Initial value at debt issuance | 297,599 | 832,846 |
Value at September 30, 2018 | $ 806,379 | $ 90,738 |
STOCK BASED AWARDS (Details)
STOCK BASED AWARDS (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Number of Shares | ||
Outstanding, Balance | 4,752,107 | |
Outstanding, Balance | 5,340,751 | 4,752,107 |
Exercisable, Balance | 3,804,751 | 3,101,026 |
Weighted Average Exercise Price | ||
Outstanding, Balance | $ 2.90 | |
Outstanding, Balance | 1.95 | $ 2.90 |
Outstanding, Balance | $ 1.93 | $ 3.40 |
Weighted Average Remaining Contractual Term | ||
Outstanding, September 30, 2018 | 2 years 2 months 30 days | 4 years 11 months 23 days |
Equity Option [Member] | ||
Number of Shares | ||
Outstanding, Balance | ||
Granted | 2,184,450 | |
Forfeited/Expired | ||
Exercised | ||
Outstanding, Balance | 2,184,450 | |
Exercisable, Balance | 655,634 | |
Weighted Average Exercise Price | ||
Outstanding, Balance | ||
Granted | 0.73 | |
Forfeited/Expired | ||
Exercised | ||
Outstanding, Balance | 0.73 | |
Outstanding, Balance | $ 0.74 | |
Weighted Average Remaining Contractual Term | ||
Granted | 9 years 6 months 7 days | |
Outstanding, September 30, 2018 | 9 years 6 months 7 days | |
Exercisable, September 30, 2018 | 9 years 6 months 7 days |
STOCK BASED AWARDS (Details 1)
STOCK BASED AWARDS (Details 1) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Number of Warrants | 5,340,751 | 4,752,107 |
Weighted Average Remaining Contractual Life (years) | 2 years 2 months 30 days | 4 years 11 months 23 days |
Weighted Average Exercise Price | $ 1.95 | $ 2.90 |
Number of Warrants Exercisable | 3,804,751 | 3,101,026 |
Weighted Average Exercise Price | $ 1.93 | $ 3.40 |
Equity Option [Member] | ||
Number of Warrants | 2,184,450 | |
Weighted Average Remaining Contractual Life (years) | 9 years 6 months 7 days | |
Weighted Average Exercise Price | $ 0.73 | |
Number of Warrants Exercisable | 655,634 | |
Weighted Average Exercise Price | $ 0.74 | |
0.61 - $0.74 | Equity Option [Member] | ||
Range of Exercise Price Lower Limit | 0.61 | |
Range of Exercise Price Upper Limited | $ 0.74 | |
Number of Warrants | 2,184,450 | |
Weighted Average Remaining Contractual Life (years) | 9 years 6 months 7 days | |
Weighted Average Exercise Price | $ 0.73 | |
Number of Warrants Exercisable | 655,634 | |
Weighted Average Exercise Price | $ 0.74 |
STOCK BASED AWARDS (Details 2)
STOCK BASED AWARDS (Details 2) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Significant assumptions (weighted-average): | ||
Risk-free interest rate at grant date | 2.94% | 2.20% |
Expected stock price volatility | 146.68% | 75.43% |
Expected dividend payout | ||
Expected option life (in years) | 1 year | 1 year |
Expected forfeiture rate | 0.00% | 0.00% |
Equity Option [Member] | ||
Significant assumptions (weighted-average): | ||
Risk-free interest rate at grant date | 2.94% | 0.00% |
Expected stock price volatility | 146.68% | 0.00% |
Expected dividend payout | ||
Expected option life (in years) | 10 years | |
Expected forfeiture rate | 0.00% | 0.00% |
STOCK BASED AWARDS (Details 3)
STOCK BASED AWARDS (Details 3) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Restricted Stock | |
Non-vested, December 31, 2017 | shares | |
Granted | shares | 371,250 |
Vested | shares | (230,625) |
Forfeited/Expired | shares | |
Non-vested, September 30, 2018 | shares | 140,625 |
Weighted Average Grant Date Fair Value | |
Non-vested, December 31, 2017 | $ / shares | |
Granted | $ / shares | 0.74 |
vested | $ / shares | 0.74 |
Forfeited/Expired | $ / shares | |
Non-vested, September 30, 2018 | $ / shares | $ 0.74 |
STOCK BASED AWARDS (Details Nar
STOCK BASED AWARDS (Details Narrative) - USD ($) | Apr. 06, 2018 | Dec. 29, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Fair value of options granted | $ 1,299,862 | $ 0 | |||
Weighted Average Remaining Contractual Life (years) | 2 years 2 months 30 days | 4 years 11 months 23 days | |||
Equity Incentive Plan [Member] | |||||
Common stock available for grant | 5,000,000 | ||||
Equity incentive plan, description | <font style="font: 10pt Times New Roman, Times, Serif">The Plan will continue in effect until its termination by the Committee; provided, however, that all Awards must be granted, if at all, within ten (10) years from the Effective Date</font></p>" id="sjs-C6"><p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Plan will continue in effect until its termination by the Committee; provided, however, that all Awards must be granted, if at all, within ten (10) years from the Effective Date</font></p> | ||||
Unvested Stock Option [Member] | |||||
Unrecognized fair value of compensation cost | $ 909,726 | $ 909,726 | |||
Weighted Average Remaining Contractual Life (years) | 9 years 6 months 7 days | ||||
Equity Option [Member] | |||||
Aggregate intrinsic value | 0 | $ 0 | |||
Compensation expense | $ 76,407 | $ 390,136 | |||
Weighted Average Remaining Contractual Life (years) | 9 years 6 months 7 days | ||||
Restricted Common Stock [Member] | |||||
Restricted shares of common stock | 371,250 | ||||
Shares/options issued, price per share | $ 0.74 | ||||
Awarded vesting period | 4 years | ||||
Nonstatutory Stock Options [Member] | |||||
Stock options awarded shares | 1,251,700 | ||||
Shares/options issued, price per share | $ 0.74 | ||||
Awarded vesting period | 4 years | ||||
Term of exercise period | 10 years | ||||
Incentive Stock Options [Member] | |||||
Stock options awarded shares | 932,750 | ||||
Shares/options issued, price per share | $ 0.74 | ||||
Awarded vesting period | 4 years | ||||
Term of exercise period | 10 years | ||||
Restricted Stock [Member] | |||||
Restricted shares of common stock | 23,125 | 170,663 | |||
Compensation expense | $ 147,538 | $ 147,538 |
WARRANT AGREEMENTS (Details)
WARRANT AGREEMENTS (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Warrants | ||
Outstanding, Balance | 4,752,107 | |
Outstanding, Balance | 5,340,751 | 4,752,107 |
Exercisable, Balance | 3,804,751 | 3,101,026 |
Weighted Average Exercise Price | ||
Outstanding, Balance | $ 2.90 | |
Outstanding, Balance | 1.95 | $ 2.90 |
Outstanding, Balance | $ 1.93 | $ 3.40 |
Outstanding Beginning balance | 2 years 2 months 30 days | 4 years 11 months 23 days |
Warrant [Member] | ||
Warrants | ||
Outstanding, Balance | 4,752,107 | 4,392,107 |
Granted | 588,644 | 1,660,000 |
Exercised | (1,300,000) | |
Forfeited/Expired | ||
Outstanding, Balance | 5,340,751 | 4,752,107 |
Exercisable, Balance | 3,804,751 | 3,101,026 |
Weighted Average Exercise Price | ||
Outstanding, Balance | $ 2.90 | $ 1.97 |
Granted | 1 | 3.08 |
Exercised | (3.94) | |
Forfeited/Expired | ||
Outstanding, Balance | 1.95 | 2.90 |
Outstanding, Balance | $ 1.93 | $ 3.40 |
Outstanding Beginning balance | 4 years 11 months 23 days | 6 years 2 months 1 day |
Granted | 3 years 2 months 30 days | 2 years 7 months 13 days |
Outstanding Ending balance | 2 years 8 months 26 days | 4 years 11 months 23 days |
Exercisable Ending balance | 2 years 9 months 3 days | 3 years 11 months 4 days |
WARRANT AGREEMENTS (Details 1)
WARRANT AGREEMENTS (Details 1) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Number of Warrants | 5,340,751 | 4,752,107 |
Weighted Average Remaining Contractual Life (years) | 2 years 2 months 30 days | 4 years 11 months 23 days |
Weighted Average Exercise Price | $ 1.95 | $ 2.90 |
Number of Warrants Exercisable | 3,804,751 | 3,101,026 |
Weighted Average Exercise Price | $ 1.93 | $ 3.40 |
$1.00 - $7.00 [Member] | ||
Range of Exercise Price Lower Limit | 1 | 1 |
Range of Exercise Price Upper Limited | $ 7 | $ 7 |
Number of Warrants | 5,340,751 | 4,752,107 |
Weighted Average Remaining Contractual Life (years) | 2 years 2 months 30 days | 4 years 11 months 23 days |
Weighted Average Exercise Price | $ 1.95 | $ 2.90 |
Number of Warrants Exercisable | 3,804,751 | 3,101,026 |
Weighted Average Exercise Price | $ 1.93 | $ 3.40 |
WARRANT AGREEMENTS (Details 2)
WARRANT AGREEMENTS (Details 2) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Significant assumptions (weighted-average): | |||
Risk-free interest rate at grant date | 2.94% | 2.20% | |
Expected stock price volatility | 146.68% | 75.43% | |
Expected dividend payout | |||
Expected option life (in years) | 1 year | 1 year | |
Expected forfeiture rate | 0.00% | 0.00% | |
Warrant [Member] | |||
Significant assumptions (weighted-average): | |||
Risk-free interest rate at grant date | 2.94% | 1.92% | 1.83% |
Expected stock price volatility | 146.68% | 84.43% | 84.42% |
Expected dividend payout | |||
Expected option life (in years) | 3 years | 3 years | 3 years |
Expected forfeiture rate | 0.00% | 0.00% | 0.00% |
WARRANT AGREEMENTS (Details Nar
WARRANT AGREEMENTS (Details Narrative) - USD ($) | Jul. 07, 2018 | Jan. 03, 2017 | Apr. 15, 2018 | Jan. 24, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair market value | $ 658,566 | ||||||||||
Debt discount | $ 427,327 | $ 477,285 | $ 1,286,420 | $ 554,968 | |||||||
Warrant [Member] | |||||||||||
Fair market value | $ 1,181,057 | $ 607,906 | |||||||||
License agreement [Member] | |||||||||||
Warrants issued | 1,300,000 | 360,000 | |||||||||
Issuance of convertible promissory notes | $ 1,800,000 | $ 1,800,000 | |||||||||
Warrant exercise price description | The warrants have an exercise price of the lower of $7.00 per share or the price per share in the Companys latest debt or equity financing greater than $3,000,000 and a term of 3 years. | ||||||||||
May 1, 2018 [Member] | |||||||||||
Warrants issued | 110,000 | ||||||||||
Warrant exercise price | $ 1 | $ 1 | |||||||||
Fair market value | $ 27,479 | ||||||||||
Warrant vested period | 1 year | ||||||||||
Warrant Agreement [Member] | |||||||||||
Warrants issued | 148,644 | ||||||||||
Warrant exercise price | $ 1 | ||||||||||
Fair market value | $ 48,249 | ||||||||||
Warrant agreement, description | the warrant agreement dated May 15, 2018, the Company shall issue fifty percent (50%) of the Companys common stock shares issued upon conversion of the convertible promissory note. | ||||||||||
Warrant Agreement [Member] | Convertible promissory note [Member] | |||||||||||
Warrants issued | 148,644 | ||||||||||
Issuance of convertible promissory notes | $ 297,288 | $ 297,288 | |||||||||
Amendment [Member] | |||||||||||
Warrants issued | 275,000 | 55,000 | |||||||||
Issuance of convertible promissory notes | $ 1,100,000 | $ 1,100,000 | |||||||||
Warrant exercise price | $ 1 | $ 1 | |||||||||
Fair market value | $ 87,828 | $ 50,094 | |||||||||
Maturity date | Mar. 31, 2018 | Mar. 31, 2018 | |||||||||
Amendment [Member] | Convertible promissory note [Member] | |||||||||||
Debt discount | 55,000 | ||||||||||
Amendment [Member] | Convertible Promissory Note 1 [Member] | |||||||||||
Debt discount | $ 275,000 | ||||||||||
Second Amendment [Member] | |||||||||||
Maturity date | May 31, 2018 | ||||||||||
Warrant term | 1 year |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Jul. 07, 2018 | Jan. 11, 2018 | Dec. 14, 2017 | Oct. 15, 2017 | Aug. 17, 2018 | May 16, 2018 | Feb. 20, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 05, 2018 | Sep. 04, 2018 | Aug. 03, 2018 | Jul. 17, 2018 | Jan. 24, 2018 | Dec. 31, 2017 | Aug. 21, 2017 | May 18, 2017 | Apr. 24, 2017 | Apr. 07, 2017 | Dec. 31, 2016 |
Common stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||
Common stock, shares authorized | 75,000,000 | 75,000,000 | 75,000,000 | 75,000,000 | ||||||||||||||||||
Common stock, shares issued | 25,795,871 | 25,795,871 | 23,901,252 | 23,336,673 | ||||||||||||||||||
Common Stock, Shares Outstanding | 25,795,871 | 25,795,871 | 23,901,252 | 23,336,673 | ||||||||||||||||||
Prepaid expenses and other assets | $ 860,114 | $ 860,114 | $ 586,888 | $ 223,879 | ||||||||||||||||||
Debt discount | $ 427,327 | $ 477,285 | $ 1,286,420 | $ 554,968 | ||||||||||||||||||
Restricted Stock [Member] | ||||||||||||||||||||||
Common stock, shares unissued | 90,000 | 90,000 | ||||||||||||||||||||
Common stock shares, vested | 230,625 | |||||||||||||||||||||
Consulting Agreement [Member] | ||||||||||||||||||||||
Common stock, shares issued | 50,000 | |||||||||||||||||||||
Prepaid expenses and other assets | $ 77,486 | $ 77,486 | ||||||||||||||||||||
Price per share | $ 4.90 | |||||||||||||||||||||
Consulting Agreement [Member] | Individual [Member] | ||||||||||||||||||||||
Common stock granted shares | 100,000 | |||||||||||||||||||||
Common stock shares issued description | <font style="font: 10pt Times New Roman, Times, Serif">The remaining 50,000 common stock shares shall be granted to the Consultant within 90 days of execution of the Agreement.</font></p>" id="sjs-E17"><p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The remaining 50,000 common stock shares shall be granted to the Consultant within 90 days of execution of the Agreement.</font></p> | |||||||||||||||||||||
Consulting Agreement [Member] | Restricted Stock [Member] | Individual [Member] | ||||||||||||||||||||||
Common stock, shares unissued | 250,000 | |||||||||||||||||||||
Stock payable | $ 275,000 | |||||||||||||||||||||
Common stock granted shares | 250,000 | |||||||||||||||||||||
Common stock shares, vested | 250,000 | |||||||||||||||||||||
Price per share | $ 1.10 | |||||||||||||||||||||
Media Advertising Agreement [Member] | ||||||||||||||||||||||
Prepaid expenses and other assets | 30,071 | 30,071 | ||||||||||||||||||||
Stock payable | $ 63,900 | $ 63,900 | ||||||||||||||||||||
Price per share | $ 0.71 | $ 0.71 | ||||||||||||||||||||
Common stock shares owed under agreement | 90,000 | 90,000 | ||||||||||||||||||||
Media Advertising Agreement [Member] | Restricted Stock [Member] | Individual [Member] | ||||||||||||||||||||||
Common stock granted shares | 90,000 | |||||||||||||||||||||
Common stock shares, vested | 90,000 | |||||||||||||||||||||
Patent Purchase Agreement [Member] | ||||||||||||||||||||||
Common stock, shares unissued | 120,000 | 120,000 | ||||||||||||||||||||
Stock payable | $ 97,000 | $ 97,000 | ||||||||||||||||||||
Common stock shares owed under agreement | 120,000 | 120,000 | ||||||||||||||||||||
Intellectual property and patents amount | $ 94,618 | $ 94,618 | ||||||||||||||||||||
Patent Purchase Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||
Business acquisition consideration transferred or transferable shares issued or issuable | 200,000 | |||||||||||||||||||||
Description for issuance of shares as consideration under agreement | <font style="font: 10pt Times New Roman, Times, Serif">(a) 50,000 Shares will be issued on the Effective Date; (b) 10,000 Shares will be issued for each Abandoned Application the prosecution of which is revived by the United States Patent and Trademark Office (“USPTO”); and (c) 50,000 Shares will be issued upon issuance by the USPTO of each patent that includes at least one specific claim in a patent application that recites subject matter to be defined by Assignee in its sole discretion (“Target Claim”).</font></p>" id="sjs-K39"><p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(a) 50,000 Shares will be issued on the Effective Date; (b) 10,000 Shares will be issued for each Abandoned Application the prosecution of which is revived by the United States Patent and Trademark Office (“USPTO”); and (c) 50,000 Shares will be issued upon issuance by the USPTO of each patent that includes at least one specific claim in a patent application that recites subject matter to be defined by Assignee in its sole discretion (“Target Claim”).</font></p> | |||||||||||||||||||||
Stock Purchase Agreement [Member] | ||||||||||||||||||||||
Common stock, shares unissued | 69,444 | 69,444 | ||||||||||||||||||||
Stock payable | $ 50,000 | $ 50,000 | ||||||||||||||||||||
Stock Purchase Agreement [Member] | Restricted Stock [Member] | ||||||||||||||||||||||
Common stock, shares unissued | 69,444 | 69,444 | ||||||||||||||||||||
Stock payable | $ 50,000 | $ 50,000 | ||||||||||||||||||||
Stock Purchase Agreement [Member] | Restricted Stock [Member] | Individual [Member] | ||||||||||||||||||||||
Common stock granted shares | 69,444 | |||||||||||||||||||||
Common stock shares, vested | 69,444 | |||||||||||||||||||||
Price per share | $ 0.72 | |||||||||||||||||||||
Advisory Consulting Agreementt [Member] | ||||||||||||||||||||||
Prepaid expenses and other assets | $ 7,780 | $ 7,780 | ||||||||||||||||||||
Advisory Consulting Agreementt [Member] | Restricted Stock [Member] | Individual [Member] | ||||||||||||||||||||||
Common stock, shares unissued | 70,000 | |||||||||||||||||||||
Stock payable | $ 129,000 | |||||||||||||||||||||
Common stock granted shares | 70,000 | |||||||||||||||||||||
Common stock shares, vested | 70,000 | |||||||||||||||||||||
Price per share | $ 1.85 | |||||||||||||||||||||
Consulting expenses [Member] | ||||||||||||||||||||||
Stock payable | 16,667 | |||||||||||||||||||||
Convertible promissory note [Member] | ||||||||||||||||||||||
Common stock, shares issued | 150,000 | |||||||||||||||||||||
Convertible promissory note due date | Jun. 14, 2018 | |||||||||||||||||||||
Price per share | $ 2.05 | |||||||||||||||||||||
Convertible promissory note issued | $ 100,000 | |||||||||||||||||||||
0.97 [Member] | Patent Purchase Agreement [Member] | ||||||||||||||||||||||
Price per share | $ 0.97 | $ 0.97 | ||||||||||||||||||||
Common stock shares owed under agreement | 50,000 | 50,000 | ||||||||||||||||||||
0.69 [Member] | Patent Purchase Agreement [Member] | ||||||||||||||||||||||
Price per share | $ 0.69 | $ 0.69 | ||||||||||||||||||||
Common stock shares owed under agreement | 50,000 | 50,000 | ||||||||||||||||||||
0.70 [Member] | Patent Purchase Agreement [Member] | ||||||||||||||||||||||
Price per share | $ 0.70 | $ 0.70 | ||||||||||||||||||||
Common stock shares owed under agreement | 20,000 | 20,000 | ||||||||||||||||||||
Common Share Issuances [Member] | ||||||||||||||||||||||
Common stock, shares issued | 50,000 | 115,000 | 70,150 | 69,444 | 50,000 | 100,000 | 300,000 | 100,000 | 14,579 | |||||||||||||
Prepaid expenses and other assets | $ 23,108 | $ 23,108 | ||||||||||||||||||||
Common stock issuances, value | $ 245,000 | $ 189,750 | $ 45,614 | $ 50,000 | $ 74,000 | $ 530,000 | $ 630,000 | $ 700,000 | $ 100,000 | |||||||||||||
Price per share | $ 4.90 | $ 1.65 | $ 0.65 | $ 0.72 | $ 1.48 | $ 5.30 | $ 2.10 | $ 7 | $ 6.86 | |||||||||||||
Debt discount | $ 115,000 | |||||||||||||||||||||
Common Share Issuances [Member] | Prepaid Expenses And Other Assets Two [Member] | ||||||||||||||||||||||
Prepaid expenses and other assets | 192,644 | |||||||||||||||||||||
Common Share Issuances [Member] | Prepaid Expenses And Other Assets One [Member] | ||||||||||||||||||||||
Prepaid expenses and other assets | 39,699 | |||||||||||||||||||||
Common Share Issuances [Member] | Prepaid Expenses And Other Assets [Member] | ||||||||||||||||||||||
Prepaid expenses and other assets | $ 26,575 | |||||||||||||||||||||
Common Share Issuances [Member] | Consulting Services [Member] | ||||||||||||||||||||||
Common stock, shares issued | 1,000,000 | 70,000 | ||||||||||||||||||||
Prepaid expenses and other assets | $ 831,429 | $ 831,429 | ||||||||||||||||||||
Common stock issuances, value | $ 970,000 | $ 129,500 | ||||||||||||||||||||
Price per share | $ 0.97 | $ 1.85 | ||||||||||||||||||||
Common Share Issuances [Member] | Media And Advertising Services [Member] | ||||||||||||||||||||||
Common stock, shares issued | 90,000 | |||||||||||||||||||||
Common stock issuances, value | $ 291,600 | |||||||||||||||||||||
Price per share | $ 3.24 | |||||||||||||||||||||
Common Share Issuances [Member] | Strategic Marketing And Development Advisory Services [Member] | ||||||||||||||||||||||
Common stock, shares issued | 250,000 | |||||||||||||||||||||
Common stock issuances, value | $ 275,000 | |||||||||||||||||||||
Price per share | $ 1.10 | |||||||||||||||||||||
Common Share Issuances [Member] | 1.00 [Member] | ||||||||||||||||||||||
Common stock, shares issued | 90,000 | |||||||||||||||||||||
Price per share | $ 1 | |||||||||||||||||||||
Common Share Issuances [Member] | 0.71 [Member] | ||||||||||||||||||||||
Common stock, shares issued | 90,000 | |||||||||||||||||||||
Common stock issuances, value | $ 153,900 | |||||||||||||||||||||
Price per share | $ 0.71 | |||||||||||||||||||||
Stock Payable | ||||||||||||||||||||||
Common stock, shares unissued | 50,000 | 50,000 | ||||||||||||||||||||
Promissory Note | $ 144,000 | $ 144,000 | ||||||||||||||||||||
Stock payable unissued amount | $ 308,328 | $ 308,328 | ||||||||||||||||||||
Stock Payable | Media Advertising Agreement [Member] | ||||||||||||||||||||||
Common stock, shares issued | 30,000 | |||||||||||||||||||||
Common stock issuances, value | $ 56,400 | |||||||||||||||||||||
Price per share | $ 1.88 | |||||||||||||||||||||
Stock Payable | Unsecured Promissory Note [Member] | ||||||||||||||||||||||
Common stock, shares issued | 50,000 | |||||||||||||||||||||
Price per share | $ 2.88 | |||||||||||||||||||||
Promissory Note | $ 150,000 | |||||||||||||||||||||
Convertible promissory note [Member] | ||||||||||||||||||||||
Converted share of common stock, amount | $ 263,398 | |||||||||||||||||||||
Converted share of common stock, shares | 297,288 | |||||||||||||||||||||
Conversion price | $ 0.886 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018USD ($)ft² | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)ft² | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) | |
Operating lease rent expense | $ 63,992 | $ 73,415 | $ 205,962 | $ 219,230 | $ 294,646 | $ 286,539 |
Offices And Manufacturing Facility [Member] | ||||||
Offices and manufacturing facility area | ft² | 25,000 | 25,000 | 25,000 | |||
Operating lease rent expense | $ 19,997 | |||||
Office And Warehouse Space [Member] | ||||||
Offices and manufacturing facility area | ft² | 2,227 | 2,227 | 6,547 | |||
Operating lease rent expense | $ 4,763 | |||||
Research And Development Space [Member] | ||||||
Offices and manufacturing facility area | ft² | 1,350 | |||||
Operating lease rent expense | $ 1,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Oct. 06, 2016 | Oct. 17, 2016 | Dec. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2016 | Dec. 31, 2015 |
Convertible promissory notes amount | $ 1,551,488 | $ 4,378,566 | ||||
Loan payable | ||||||
Robert Davidson [Member] | ||||||
Convertible promissory notes amount | $ 100,150 | |||||
Accounts payable | 7,931 | $ 10,992 | ||||
Converted principal and unpaid accrued interest, amount | $ 38,415 | $ 38,449 | ||||
Converted principal and unpaid accrued interest, shares | 9,604 | 9,612 | ||||
Jonathan Turman [Member] | ||||||
Convertible promissory notes amount | 51,500 | |||||
Converted principal and unpaid accrued interest, amount | $ 26,343 | $ 26,366 | ||||
Converted principal and unpaid accrued interest, shares | 6,586 | 6,591 | ||||
Wayne Nasby [Member] | ||||||
Convertible promissory notes amount | 94,312 | |||||
Converted principal and unpaid accrued interest, amount | $ 48,241 | $ 48,284 | ||||
Converted principal and unpaid accrued interest, shares | 12,060 | 12,071 | ||||
Edward Maliski [Member] | ||||||
Convertible promissory notes amount | $ 77,250 | |||||
Converted principal and unpaid accrued interest, amount | $ 39,514 | $ 39,549 | ||||
Converted principal and unpaid accrued interest, shares | 9,878 | 9,887 | ||||
Mark Udell [Member] | ||||||
Accounts payable | 13,716 | |||||
October 31, 2014 to February 2, 2015 [Member] | Ronick [Member] | Convertible Promissory Notes One [Member] | ||||||
Convertible promissory notes amount | $ 89,000 | |||||
Convertible promissory notes due date | Feb. 25, 2016 | |||||
Convertible promissory notes interest rate | 3.00% | |||||
Accrued interest convertible into common stock price per share | $ 4 | |||||
Converted principal and unpaid accrued interest, amount | $ 35,260 | |||||
Converted principal and unpaid accrued interest, shares | 8,815 | |||||
October 31, 2014 to February 2, 2015 [Member] | Ronick 1 [Member] | Convertible Promissory Notes One [Member] | ||||||
Converted principal and unpaid accrued interest, amount | $ 35,290 | |||||
Converted principal and unpaid accrued interest, shares | 8,822 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current expense | ||||||
Federal | ||||||
State | ||||||
Deferred expense | ||||||
Federal | ||||||
State | ||||||
Total income tax expense |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred income tax assets | ||
Net operating loss carryforward | $ 5,585,508 | $ 4,622,321 |
Deferred revenue | 107,860 | 74,378 |
Allowance for doubtful accounts | 1,306 | 15,524 |
Accrued expenses | 11,346 | 8,699 |
Total deferred tax assets | 5,706,020 | 4,720,922 |
Deferred income tax liabilities | ||
State income taxes | (353,750) | (329,222) |
Depreciation and amortization | (16,065) | (23,120) |
Valuation allowance | (5,336,205) | (4,368,580) |
Total deferred tax liabilities | (5,706,020) | (4,720,922) |
Deferred income tax, net |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Taxes Details Narrative | |
Net operating loss carryforwards | $ 17,385,131 |
Net operating loss carryforwards expiration date | Dec. 31, 2037 |
Valuation reserve allowance percentage | 100.00% |
Income tax description | <font style="font: 10pt Times New Roman, Times, Serif">The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%.</font></p>" id="sjs-B7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%.</font></p> |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Oct. 15, 2018 | Sep. 05, 2018 | Dec. 14, 2017 | Oct. 31, 2018 | Mar. 20, 2018 | Jan. 30, 2018 | Dec. 31, 2017 | Oct. 30, 2018 | Oct. 12, 2018 | Oct. 09, 2018 | Sep. 30, 2018 | Aug. 17, 2018 | Jul. 17, 2018 | May 16, 2018 | Feb. 23, 2018 | Feb. 20, 2018 | Jan. 24, 2018 | Oct. 15, 2017 | Aug. 21, 2017 | May 18, 2017 | Apr. 24, 2017 | Apr. 07, 2017 | Dec. 31, 2016 |
Common stock price | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||
Common stock shares issued | 23,901,252 | 25,795,871 | 23,336,673 | ||||||||||||||||||||
License fees | $ 560,000 | $ 560,000 | $ 560,000 | ||||||||||||||||||||
Stock payable | 324,995 | 869,125 | |||||||||||||||||||||
Convertible promissory notes | $ 1,551,488 | ||||||||||||||||||||||
Consulting Agreement [Member] | |||||||||||||||||||||||
Common stock shares issued | 50,000 | ||||||||||||||||||||||
Price per share | $ 4.90 | ||||||||||||||||||||||
Common Share Issuances [Member] | |||||||||||||||||||||||
Common stock shares issued | 115,000 | 69,444 | 70,150 | 50,000 | 50,000 | 100,000 | 300,000 | 100,000 | 14,579 | ||||||||||||||
Price per share | $ 1.65 | $ 0.72 | $ 0.65 | $ 1.48 | $ 4.90 | $ 5.30 | $ 2.10 | $ 7 | $ 6.86 | ||||||||||||||
Convertible promissory note [Member] | |||||||||||||||||||||||
Common stock shares issued | 150,000 | ||||||||||||||||||||||
Sale of convertible notes | $ 100,000 | ||||||||||||||||||||||
Convertible promissory note due date | Jun. 14, 2018 | ||||||||||||||||||||||
Price per share | $ 2.05 | ||||||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||||
Common stock shares granted | 5,000,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Consulting Agreement [Member] | |||||||||||||||||||||||
Common stock shares issued | 50,000 | ||||||||||||||||||||||
Price per share | $ 1.48 | ||||||||||||||||||||||
Subsequent Event [Member] | Consulting Agreement [Member] | Restricted Stock [Member] | |||||||||||||||||||||||
Common stock shares issued | 1,000,000 | 250,000 | |||||||||||||||||||||
Subsequent Event [Member] | Patent purchase agreement [Member] | |||||||||||||||||||||||
Common stock price | $ 2.81 | ||||||||||||||||||||||
Common stock shares issued | 50,000 | ||||||||||||||||||||||
Subsequent Event [Member] | License and Distribution Agreement [Member] | |||||||||||||||||||||||
Minimum rights granted under agreement | $ 1,500,000 | ||||||||||||||||||||||
License fees | $ 560,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||
Common stock price | $ 0.001 | ||||||||||||||||||||||
Sale of convertible notes | $ 2,000,000 | ||||||||||||||||||||||
Conditional gross proceeds from bona fide sale of capital stock to enable conversion feature | $ 4,000,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Investor [Member] | |||||||||||||||||||||||
Convertible promissory note due date | Nov. 30, 2018 | ||||||||||||||||||||||
Subsequent event description | <font style="font: 10pt Times New Roman, Times, Serif">If on or prior to the Maturity Date, the Company consummates its next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of Common Stock or preferred stock and enables the Company to list its Common Stock on a national securities exchange (Qualified Offering), the entire Principal Amounts of these Notes shall be automatically converted into shares of Common Stock at a price per share equal to 75% of the price of the Qualified Offering. The Investors in this offering also received warrants (the Warrants) for the option to purchase equal to 50% of the shares of Common Stock that the Investor is entitled to receive in connection with the conversion of the Investors Note. The Warrants price per share shall equal the lower of (a) $2.00 or (b) 125% of the price per share of the Qualified Offering. The Warrants will have a three year term and shall be exercisable in cash.</font></p>" id="sjs-F37"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">If on or prior to the Maturity Date, the Company consummates its next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of Common Stock or preferred stock and enables the Company to list its Common Stock on a national securities exchange (“Qualified Offering”), the entire Principal Amounts of these Notes shall be automatically converted into shares of Common Stock at a price per share equal to 75% of the price of the Qualified Offering. The Investors in this offering also received warrants (the “Warrants”) for the option to purchase equal to 50% of the shares of Common Stock that the Investor is entitled to receive in connection with the conversion of the Investor’s Note. The Warrants’ price per share shall equal the lower of (a) $2.00 or (b) 125% of the price per share of the Qualified Offering. The Warrants will have a three year term and shall be exercisable in cash.</font></p> | ||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Investor [Member] | Maximum [Member] | |||||||||||||||||||||||
Convertible promissory notes | $ 5,000,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Common Share Issuances [Member] | |||||||||||||||||||||||
Terms of conversion feature | <font style="font: 10pt Times New Roman, Times, Serif">Conversion price equal to $2.50 at the earlier</font></p>" id="sjs-B41"><p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Conversion price equal to $2.50 at the earlier</font></p> | ||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | On or before December 31, 2018 [Member] | |||||||||||||||||||||||
Notes issued in tranches closing amount | $ 1,250,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | On or before December 1, 2018 [Member] | |||||||||||||||||||||||
Notes issued in tranches closing amount | 250,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | On or before November 15, 2018 [Member] | |||||||||||||||||||||||
Notes issued in tranches closing amount | 250,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | October 15, 2018 [Member] | |||||||||||||||||||||||
Notes issued in tranches closing amount | $ 250,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Promissory Notes [Member] | |||||||||||||||||||||||
Common stock price | $ 1.95 | ||||||||||||||||||||||
Common stock shares issued | 30,000 | ||||||||||||||||||||||
Sale of convertible notes | $ 150,000 | ||||||||||||||||||||||
Maturity date | Dec. 31, 2018 | ||||||||||||||||||||||
Subsequent Event [Member] | Convertible promissory note [Member] | |||||||||||||||||||||||
Common stock price | $ 1.95 | ||||||||||||||||||||||
Common stock shares issued | 115,000 | ||||||||||||||||||||||
Sale of convertible notes | $ 850,000 | ||||||||||||||||||||||
Maturity date | Dec. 31, 2018 | ||||||||||||||||||||||
Convertible promissory note due date | Nov. 30, 2018 | ||||||||||||||||||||||
Subsequent event description | <font style="font: 10pt Times New Roman, Times, Serif">If on or prior to the Maturity Date, the Company consummates its next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of Common Stock or preferred stock and enables the Company to list its Common Stock on a national securities exchange (Qualified Offering), the entire Principal Amount of this Note shall be automatically converted into shares of Common Stock (the Mandatory Conversion and together with the Optional Conversion, the Conversion) at a price per share equal to 75% of the price of the Qualified Offering (the Mandatory Conversion Price together with Optional Conversion Price, the Conversion Price).</font></p>" id="sjs-G61"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">If on or prior to the Maturity Date, the Company consummates its next bona fide sale of its preferred stock or Common Stock in excess of $4,000,000 in gross proceeds, in one transaction or a series of related transactions, which offering definitively sets a price per share of Common Stock or preferred stock and enables the Company to list its Common Stock on a national securities exchange (“Qualified Offering”), the entire Principal Amount of this Note shall be automatically converted into shares of Common Stock (the “Mandatory Conversion” and together with the Optional Conversion, the “Conversion”) at a price per share equal to 75% of the price of the Qualified Offering (the “Mandatory Conversion Price” together with Optional Conversion Price, the “Conversion Price”).</font></p> | ||||||||||||||||||||||
Subsequent Event [Member] | Unsecured Promissory Note [Member] | |||||||||||||||||||||||
Common stock price | $ 2.88 | ||||||||||||||||||||||
Common stock shares issued | 50,000 | ||||||||||||||||||||||
Stock payable | $ 144,000 | ||||||||||||||||||||||
Common stock unissued shares | 50,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Convertible promissory note [Member] | |||||||||||||||||||||||
Proceeds from issuance of convertible promissory note | $ 1,000,000 | ||||||||||||||||||||||
Convertible Note accrued interest rate | 9.00% |