JERRICK MEDIA HOLDINGS, INC., S-1 filed on 10/24/2018
Securities Registration Statement
v3.10.0.1
Document and Entity Information
6 Months Ended
Jun. 30, 2018
Document and Entity Information [Abstract]  
Entity Registrant Name Jerrick Media Holdings, Inc.
Entity Central Index Key 0001357671
Trading Symbol JMDA
Amendment Flag false
Document Type S-1
Document Period End Date Jun. 30, 2018
Entity Filer Category Non-accelerated Filer
Entity Small Business true
Entity Emerging Growth Company false
v3.10.0.1
Condensed Consolidated Balance Sheet - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Current Assets      
Cash $ 22,422 $ 111,051 $ 174,494
Prepaid expenses 86,274 10,000
Accounts receivable 9,170 1,325
Total Current Assets 117,866 112,376 184,494
Property and equipment, net 52,063 48,056 71,829
Security deposit 16,836 17,000 38,445
Minority investment in business   83,333
Total Assets 186,765 177,432 378,101
Current Liabilities      
Accounts payable and accrued liabilities 2,094,658 1,462,106 1,387,068
Demand loan 60,366 10,366 10,366
Current portion of Convertible Notes - related party, net of debt discount 30,916
Convertible notes payable, Outstanding Principal, Total 59,500 96,500 268,823
Current portion of capital lease payable 4,732 4,732 3,524
Note payable - related party, net of debt discount 1,305,907 1,249,000 1,365,325
Note payable, net of debt discount and issuance costs 791,467 689,500 15,579
Line of credit - related party 130,000 130,000
Line of credit 44,996 235,141
Current portion of deferred rent 1,800  
Total Current Liabilities 4,479,346 3,687,200 3,285,826
Non-current Liabilities:      
Deferred rent 7,757  
Capital lease payables 1,208
Convertible Notes - related party, net of debt discount 1,571,792 1,345,246
Convertible Notes, net of debt discount and issuance costs 4,042,808 2,512,293
Total Non-current Liabilities 5,622,357 3,857,539 1,208
Total Liabilities 10,101,703 7,544,739 3,287,034
Commitments and contingencies  
Stockholders' Deficit      
Common stock par value $0.001: 300,000,000 shares authorized; 40,524,432 and 39,520,682 issued and outstanding as of June 30, 2018 and December 31,2017 respectively 40,525 39,521 33,895
Additional paid in capital 16,343,480 14,387,247 10,075,941
Accumulated deficit (26,279,975) (21,775,107) (13,018,811)
Less: Treasury stock, 220,000 and 220,000 shares, respectively (19,007) (19,007)
Total stockholders' deficit (9,914,938) (7,367,307) (2,908,933)
Total Liabilities and Stockholders' Deficit 186,765 177,432 378,101
Series A Preferred stock      
Stockholders' Deficit      
Preferred stock value 31 31 33
Total stockholders' deficit   31 33
Series B Preferred stock      
Stockholders' Deficit      
Preferred stock value 8 8 8
Total stockholders' deficit   8 8
Series D Preferred stock      
Stockholders' Deficit      
Preferred stock value 1
Total stockholders' deficit   $ 1
v3.10.0.1
Condensed Consolidated Balance Sheet (Parenthetical) - $ / shares
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Common stock, par value $ 0.001 $ 0.001 $ 0.001
Common stock, shares authorized 300,000,000 300,000,000 300,000,000
Common stock, shares issued 40,524,432 39,520,682 33,894,592
Common stock, shares outstanding 40,524,432 39,520,682 33,894,592
Treasury stock, shares 220,000 220,000 0
Series A Preferred stock      
Preferred stock, par value $ 0.001 $ 0.001 $ 0.001
Preferred stock, shares designated   100,000 100,000
Preferred stock, shares issued 31,581 31,581 33,314
Preferred stock, shares outstanding 31,581 31,581 33,314
Series B Preferred stock      
Preferred stock, par value $ 0.001 $ 0.001 $ 0.001
Preferred stock, shares designated   20,000 20,000
Preferred stock, shares issued 8,063 8,063 8,063
Preferred stock, shares outstanding 8,063 8,063 8,063
Series D Preferred stock      
Preferred stock, par value $ 0.001 $ 0.001 $ 0.001
Preferred stock, shares designated   2,100,000 2,100,000
Preferred stock, shares issued 0 0 914
Preferred stock, shares outstanding 0 0 914
v3.10.0.1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Income Statement [Abstract]            
Net revenue $ 24,023 $ 52,259 $ 40,272 $ 94,101 $ 95,653 $ 223,927
Cost of revenue         43,321
Gross margin         95,653 180,606
Operating expenses            
Compensation 451,041 709,298 1,102,829 1,255,408 1,480,082 1,134,170
Consulting fees 350,804 37,565 446,603 177,570 1,216,189 1,350,917
Share based payments         1,262,377 332,711
General and administrative 787,881 253,015 1,380,120 636,753 1,699,333 1,054,564
Total operating expenses 1,589,726 999,878 2,929,552 2,069,731 5,657,981 3,872,362
Loss from operations (1,565,703) (947,619) (2,889,280) (1,975,630) (5,562,328) (3,691,756)
Other income (expenses)            
Interest expense (341,071) (87,318) (609,196) (144,705) (477,005) (3,474,529)
Accretion of debt discount and issuance cost (415,045) (431,720) (589,933) (724,900) (1,828,027) (235,622)
Change In derivative liability         (64,346)
Settlement of vendor liabilities 1,875 (110,674) 167,905
Loss on extinguishment of debt (89,419) (431,786) (906,531)
Gain on settlement of debt   13,452 2,079  
Impairment of minority investment         (83,333)
Gain on the sale of assets         10,000
Other income (expenses), net (845,535) (519,038) (1,615,588) (980,279) (3,189,258) (3,700,151)
Loss before income tax provision (2,411,238) (1,466,657) (4,504,868) (2,955,909) (8,751,586) (7,391,907)
Income tax provision
Net loss (2,411,238) (1,466,657) (4,504,868) (2,955,909) (8,751,586) (7,391,907)
Deemed dividend 65,823 67,888 129,858 131,867 297,323 247,128
Net loss attributable to common shareholders $ (2,477,061) $ (1,534,545) $ (4,634,726) $ (3,087,776) $ (9,048,909) $ (7,639,035)
Per-share data            
Basic and diluted loss per share $ (0.06) $ (0.04) $ (0.12) $ (0.08) $ (0.23) $ (0.24)
Weighted average number of common shares outstanding 40,524,432 38,014,509 40,230,654 37,247,125 38,601,987 32,046,149
v3.10.0.1
Consolidated Statement of Stockholders' Equity - USD ($)
Total
Series A Preferred Stock
Series B Preferred Stock
Series D Preferred Stock
Common Stock
Treasury stock
Additional Paid In Capital
Accumulated Deficit
Beginning balance at Dec. 31, 2015 $ (360,464) $ 33 $ 7 $ 28,500   $ 5,319,835 $ (5,708,839)
Beginning balance, shares at Dec. 31, 2015   33,314 7,000 28,500,000      
Net proceeds from issuance of common stock and warrants 344,248 $ 667   343,581
Net proceeds from issuance of common stock and warrants, shares   666,666      
Issuance of common stock for cashless exercise of warrants $ 393   (393)
Issuance of common stock for cashless exercise of warrants, shares   392,764      
Conversion of series D preferred stock to common stock $ (1) $ 1,099   (1,098)
Conversion of series D preferred stock to common stock, shares   (1,099) 1,098,933      
Conversion of interest to series B preferred stock 108,844 $ 1   108,843
Conversion of interest to series B preferred stock, shares   1,063      
Conversion of common stock to Series D preferred stock 2 $ 2  
Conversion of common stock to Series D preferred stock, shares   2,013      
Common stock issued commissions and placement agreement 322 $ 322  
Common stock issued commissions and placement agreement, shares   322,015      
Issuance of common stock for cash 2,626 $ 2,626  
Issuance of common stock for cash, shares   2,626,308      
Recapitalization 288 $ 288  
Recapitalization, shares   287,896      
Liquidated damages on preferred stock and warrants 3,329,993   3,329,993
Stock warrants issued with convertible notes 255,203   255,203
Stock warrants issued with promissory note 41,633   41,633
Stock based compensation 484,692   484,692
Stock warrants issued with note payable - related party 193,652       193,652  
Dividends 81,935             81,935
Net loss for the year ended (7,391,907)   (7,391,907)
Ending balance at Dec. 31, 2016 (2,908,933) $ 33 $ 8 $ 1 $ 33,895   10,075,941 (13,023,521)
Ending balance, shares at Dec. 31, 2016   33,314 8,063 914 33,894,582      
Conversion of series A to common stock 4,710 $ (2) $ 1,146   3,566
Conversion of series A to common stock, shares   (1,733) 1,146,307      
Conversion of series D to common stock $ (1) $ 266   (265)
Conversion of series D to common stock, shares   (914) 266,325      
Common stock issued to settle vendor liabilities 185,827 $ 1,179   184,648
Common stock issued to settle vendor liabilities, shares         1,179,107      
Stock based compensation 1,248,379 $ 789   1,247,590
Stock based compensation, shares         788,395      
Stock warrants issued with note payable 2,487,904   2,487,904
Common stock issued for services 307,427 $ 1,868   305,559
Common stock issued for services, shares   1,867,633      
Common stock issued with note payable 82,682 $ 378 82,304
Common stock issued with note payable, shares   378,333      
Purchase of treasury stock (19,007)         $ (19,007)    
Purchase of treasury stock, shares           (220,000)    
Dividends (4,710)       (4,710)
Net loss for the year ended (8,751,586)   (8,751,586)
Ending balance at Dec. 31, 2017 (7,367,307) $ 31 $ 8 $ 39,521 $ (19,007) $ 14,387,247 $ (21,775,107)
Ending balance, shares at Dec. 31, 2017   31,581 8,063 39,520,682 (220,000)    
Net loss for the year ended (4,504,868)              
Ending balance at Jun. 30, 2018 $ (9,914,938)              
v3.10.0.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss $ (4,504,868) $ (2,955,909) $ (8,751,586) $ (7,391,907)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation 21,439 18,704 38,435 42,634
Accretion of debt issuance costs     303,799
Accretion of debt discount and issuance cost 589,933 128,900 1,524,228 235,622
Share-based compensation 285,821 596,000 1,262,377 463,503
Loss on settlement of vendor liabilities (1,875) 627,619 (167,905)
Gain on settlement of debt (13,452) 110,674 (2,079)
Impairment of minority investment     83,333
Change in fair value of derivative liability     64,346
Loss on extinguishment of debt 431,786 906,531
Changes in operating assets and liabilities:        
Prepaid expenses (18,864) 10,000 10,000 (10,000)
Inventory    
Accounts receivable (7,845) (1,325)
Security deposit 164 21,445 (21,445)
Accounts payable and accrued expenses 900,595 77,642 855,849 834,487
Deferred rent 707    
Accrued liquidating damages     3,329,993
Net Cash Used In Operating Activities (2,316,459) (1,386,370) (3,852,552) (2,517,113)
CASH FLOWS FROM INVESTING ACTIVITIES:        
Cash paid for property and equipment (16,446) (14,662) (43,957)
Net Cash Used In Investing Activities (16,446) (14,662) (43,957)
CASH FLOWS FROM FINANCING ACTIVITIES:        
Repayment of loans     (107,887)
Net proceeds from issuance of notes 658,500 1,041,585 1,441,585 146,000
Repayment of notes (85,675) (100,000)
Net proceeds from issuance of preferred stock     344,250
Proceeds from issuance of demand loan 50,000 10,366
Proceeds from issuance of convertible note 1,525,154 71,500 2,201,500 550,000
Repayment of convertible notes (76,798) (477,777) (50,000)
Proceeds from issuance of convertible notes - related party 299,852 50,000 655,000
Proceeds from issuance of note payable - related party 245,000 185,000 529,000 1,446,500
Repayment of note payable - related party (160,000) (120,000) (145,000) (1,500)
Proceeds from issuance of line of credit     39,195
Proceeds from issuance of line of credit - related party 130,000 130,000
Repayment of line of credit (44,996) (41,706) (199,574) (24,007)
Cash paid for debt issuance costs (166,761) (99,226) (211,956) (55,982)
Purchase of treasury stock     (19,007)
Net Cash Provided By Financing Activities 2,244,276 1,217,153 3,803,771 2,296,935
Net Change in Cash (88,629) (169,217) (63,443) (264,135)
Cash - Beginning of Year 111,051 174,494 174,494 438,629
Cash - End of Year 22,422 5,277 111,051 174,494
Cash Paid During the Year for:        
Income taxes
Interest 64,892 3,534 3,534 5,738
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:        
Settlement of vendor liabilities 3,750 353,732 353,732
Beneficial conversion feature on convertible notes 38,413    
Deemed dividends 127,795 131,867 297,323 247,128
Warrants issued with debt 1,085,221 620,714 490,488
Issuance of common stock for prepaid services 116,300    
Conversion of note payable and interest into convertible notes 341,442 765,656
Warrants issued with amendment to notes payable $ 135,596    
Conversion of interest     108,843
Debt discount on convertible note     1,006,753 24,425
Debt discount on related party note payable     198,702 218,800
Debt discount on note payable     483,745
Accrued dividends     217,985 177,234
Liquidated damages     3,329,993
Derivative liability ceases to exist     383,993
Conversion of note payable - related party and interest into convertible notes - related party     $ 801,026
v3.10.0.1
Organization and Operations
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Organization and Operations [Abstract]    
Organization and Operations

Note 1 – Organization and Operations

 

Jerrick Media Holdings, Inc. (“we,” “us,” the “Company,” or “Jerrick Media” or “Jerrick”) (formerly Great Plains Holdings, Inc. or “GTPH”) was incorporated under the laws of the state of Nevada on December 30, 1999 under the name LILM, Inc. The Company changed its name on December 3, 2013 to Great Plains Holdings, Inc. as part of its plan to diversify its business through the acquisition and operation of commercial real estate, including, but not limited to, self-storage facilities, apartment buildings, 55+ senior manufactured home communities, and other income producing properties. Historically, the Company has principally engaged in the manufacture and marketing of the LiL Marc, a plastic boys’ toilet-training device, which we discontinued as of December 31, 2014.

 

On February 5, 2016 (the “Closing Date”), GTPH, GPH Merger Sub, Inc., a Nevada corporation and wholly-owned subsidiary of GTPH (“Merger Sub”), and Jerrick Ventures, Inc., a privately-held Nevada corporation headquartered in New Jersey (“Jerrick”), entered into an Agreement and Plan of Merger (the “Agreement”) pursuant to which the Merger Sub was merged with and into Jerrick, with Jerrick surviving as a wholly-owned subsidiary of GTPH (the “Merger”). GTPH acquired, through a reverse triangular merger, all of the outstanding capital stock of Jerrick in exchange for issuing Jerrick’s shareholders (the “Jerrick Shareholders”), pro-rata, a total of 28,500,000 shares of GTPH’s common stock. GTPH assumed 33,415 shares of Jerrick’s Series A Convertible Preferred Stock (the “Jerrick Series A Preferred”) and 8,064 shares of Series B Convertible Preferred Stock (the “Jerrick Series B Preferred”).

   

In connection with the Merger, on the Closing Date, GTPH and Kent Campbell entered into a Spin-Off Agreement (the “Spin-Off Agreement”), pursuant to which Mr. Campbell purchased from GTPH (i) all of GTPH’s interest in Ashland Holdings, LLC, a Florida limited liability company, and (ii) all of GTPH’s interest in Lil Marc, Inc., a Utah corporation, in exchange for the cancellation of 781,818 shares of GTPH’s Common Stock held by Mr. Campbell. In addition, Mr. Campbell assumed all debts, obligations and liabilities of GTPH, including any existing prior to the Merger, pursuant to the terms and conditions of the Spin-Off Agreement.

 

Upon closing of the Merger on February 5, 2016, the Company changed its business plan to that of Jerrick Media.

 

Effective February 28, 2016, GTPH entered into an Agreement and Plan of Merger (the “Statutory Merger Agreement”) with Jerrick, pursuant to which GTPH became the parent company of Jerrick Ventures, LLC, a wholly-owned operating subsidiary of Jerrick (the “Statutory Merger”) and GTPH changed its name to Jerrick Media Holdings, Inc. to better reflect its new business strategy.

 

Jerrick Media is a technology company focused on the development of digital communities, marketing branded digital content, and e-commerce opportunities. Jerrick’s content distribution platform, Vocal, delivers a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting all forms of rich media content. Through Jerrick’s proprietary algorithm dynamics, Vocal enhances the visibility of content and maximizes viewership, providing advertisers access to target markets that most closely match their interests.

Note 1 - Organization and Operations

 

Jerrick Media Holdings, Inc. (“we,” “us,” the “Company,” or “Jerrick Media” or “Jerrick”) (formerly Great Plains Holdings, Inc. or “GTPH”) was incorporated under the laws of the state of Nevada on December 30, 1999 under the name LILM, Inc. The Company changed its name on December 3, 2013 to Great Plains Holdings, Inc. as part of its plan to diversify its business through the acquisition and operation of commercial real estate, including, but not limited to, self-storage facilities, apartment buildings, 55+ senior manufactured home communities, and other income producing properties. Historically, the Company has principally engaged in the manufacture and marketing of the LiL Marc, a plastic boys’ toilet-training device, which we discontinued as of December 31, 2014.

 

On February 5, 2016 (the “Closing Date”), GTPH, GPH Merger Sub, Inc., a Nevada corporation and wholly-owned subsidiary of GTPH (“Merger Sub”), and Jerrick Ventures, Inc., a privately-held Nevada corporation headquartered in New Jersey (“Jerrick”), entered into an Agreement and Plan of Merger (the “Agreement”) pursuant to which the Merger Sub was merged with and into Jerrick, with Jerrick surviving as a wholly-owned subsidiary of GTPH (the “Merger”). GTPH acquired, through a reverse triangular merger, all of the outstanding capital stock of Jerrick in exchange for issuing Jerrick’s shareholders (the “Jerrick Shareholders”), pro-rata, a total of 28,500,000 shares of GTPH’s common stock. GTPH assumed 33,415 shares of Jerrick’s Series A Convertible Preferred Stock (the “Jerrick Series A Preferred”) and 8,064 shares of Series B Convertible Preferred Stock (the “Jerrick Series B Preferred”).

   

In connection with the Merger, on the Closing Date, GTPH and Kent Campbell entered into a Spin-Off Agreement (the “Spin-Off Agreement”), pursuant to which Mr. Campbell purchased from GTPH (i) all of GTPH’s interest in Ashland Holdings, LLC, a Florida limited liability company, and (ii) all of GTPH’s interest in Lil Marc, Inc., a Utah corporation, in exchange for the cancellation of 781,818 shares of GTPH’s Common Stock held by Mr. Campbell. In addition, Mr. Campbell assumed all debts, obligations and liabilities of GTPH, including any existing prior to the Merger, pursuant to the terms and conditions of the Spin-Off Agreement.

 

Upon closing of the Merger on February 5, 2016, the Company changed its business plan to that of Jerrick Media.

 

Effective February 28, 2016, GTPH entered into an Agreement and Plan of Merger (the “Statutory Merger Agreement”) with Jerrick, pursuant to which GTPH became the parent company of Jerrick Ventures, LLC, a wholly-owned operating subsidiary of Jerrick (the “Statutory Merger”) and GTPH changed its name to Jerrick Media Holdings, Inc. to better reflect its new business strategy.

 

Jerrick Media is a technology company focused on the development of digital communities, marketing branded digital content, and e-commerce opportunities. Jerrick’s content distribution platform, Vocal, delivers a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting all forms of rich media content. Through Jerrick’s proprietary algorithm dynamics, Vocal enhances the visibility of content and maximizes viewership, providing advertisers access to target markets that most closely match their interests.

v3.10.0.1
Significant and Critical Accounting Policies and Practices
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Significant and Critical Accounting Policies and Practices [Abstract]    
Significant and Critical Accounting Policies and Practices

Note 2 – Significant and Critical Accounting Policies and Practices

 

Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

 

Basis of Presentation - Unaudited Interim Financial Information

 

The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2017.

 

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with US 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:

   

(i)Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
  
(ii)Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
  
(iii)  Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.  
  
(iv)Estimates and assumptions used in valuation of equity instruments: Management estimates expected term of share options and similar instruments, expected volatility of the Company’s common shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk free rate(s) to value share options and similar instruments.

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

 

Actual results could differ from those estimates.

 

Principles of consolidation

 

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

 

As of June 30, 2018, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate State or other jurisdiction of
incorporation or organization
 Company interest 
       
Jerrick Ventures LLC The State of Delaware  100%
Jerrick Australia Pty Ltd Australia  100% 

 

All inter-company balances and transactions have been eliminated.

 

Jerrick Australia Pty Ltd does not have any operations.

  

Fair Value of Financial Instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
   
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
   
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued liabilities and accrued liquidating damages approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

 

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

 

Property and Equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

 

  Estimated Useful
Life
(Years)
 
    
Computer equipment and software  3 
Furniture and fixture  5 
Leasehold improvement  5 

 

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

 

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

  

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Derivative Liability

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.  The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the year ended December 31, 2017 on a retrospective basis.

 

Revenue Recognition

 

The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method which would require a cumulative effect adjustment for initially applying the new revenue standard as an adjustment to the opening balance of retained earnings and the comparative information would not require to be restated and continue to be reported under the accounting standards in effect for those periods.

 

Based on the Company’s analysis the Company did not identify a cumulative effect adjustment for initially applying the new revenue standards. During the six months ended June 30, 2018 the Company recorded revenue from the following sources: products at auction, sponsored content and affiliate sites.

 

The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the delivery of the Company's services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps:

 

1)Identify the contract with a customer

 

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer.

 

2)Identify the performance obligations in the contract

 

Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.

 

3)Determine the transaction price

 

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company's contracts as of June 30, 2018 contained a significant financing component. Determining the transaction price requires significant judgment, which is discussed by revenue category in further detail below.

 

4)Allocate the transaction price to performance obligations in the contract

 

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised in a series of distinct services that forms part of a single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

 

5)Recognize revenue when or as the Company satisfies a performance obligation

 

The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer.

 

Product revenue

 

Revenue from multiple-element arrangements is allocated among separate elements based on their estimated sales prices, provided the elements have value on a stand-alone basis.

 

Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments granted to employees in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award. 

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a five-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. 

 

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is benchmarked against similar companies in a similar industry over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate.  

 

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the Company’s actual forfeiture rate is materially different from its estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period.

 

The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period.

 

Income Taxes

 

Income taxes are provided in accordance with ASC No. 740, “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. 

 

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the six months ended June 30, 2018 and 2017 presented in these consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at June 30, 2018 and 2017:

 

  June 30,
2018
  June 30,
2017
 
Series A Preferred stock  23,135,935   21,654,614 
Series B Preferred stock  4,697,906   4,431,987 
Options  17,649,990   17,549,990 
Warrants  62,016,795   22,805,981 
Convertible notes - related party  10,027,507   250,000 
Convertible notes  28,015,838   2,929,127 
Totals  145,543,971   69,621,699 

 

Reclassifications

 

Interest expense has been allocated to accretion of debt discount and issuance cost to conform to current period presentation.

 

Recently Adopted Accounting Guidance

 

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. The provisions of this guidance are to be applied using a retrospective approach which requires application of the guidance for all periods presented. The Company has adopted the methodologies prescribed by ASU 2016-18, the adoption of ASU 2016-18 did not have a material effect on its financial position or results of operations. 

 

In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This standard is required to be adopted in the first quarter of 2018. The Company has adopted the methodologies prescribed by ASU 2017-09, the adoption of ASU 2017-09 did not have a material effect on its financial position or results of operations. 

 

In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company early adopted the ASU 2017-11 in the year ending December 31, 2017. 

 

Adoption of ASU 2017-11

 

As noted above, in connection with the securities purchase agreement and debt transactions during the year ended December 31, 2017, the Company issued warrants and convertible notes, to purchase common stock with an exercise price of $0.20 and a five-year term. Upon issuance of the warrants and convertible notes, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants and convertible notes that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants and convertible notes as a derivative liability. The Company changed its method of accounting for the convertible notes and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis. Accordingly, the Company recorded the warrant derivative and conversion option derivative liabilities to additional paid in capital upon issuance.

 

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the six months ended June 30, 2017 are presented below:

 

Consolidated Statement of Operations Six Months Ended June 30, 2017 
  Previously 
Reported
  Revisions  Revised 
Reported
 
Accretion of debt discount and issuance cost $(951,484) $226,584  $(724,900)
             
Derivative expense (254,470) 254,470  - 
             
Change in fair value of derivative liabilities 584,011  (584,011) - 
             
Net loss $(2,852,952) $102,957  $(2,955,909)
             
Net loss per ordinary share:            
Basic and diluted loss per share $(0.08) $(0.00) $(0.08)

 

Recent Accounting Guidance Not Yet Adopted

 

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under ASU 2016-02, lessees will be required to recognize, for all leases of 12 months or more, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature of an entity’s leasing activities. This ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach. The Company is in the process of evaluating the effect of the new guidance on its condensed consolidated financial statements and disclosures.

 

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is currently evaluating the impact of the new standard.

  

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements.

Note 2 - Significant and Critical Accounting Policies and Practices

 

Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

 

Basis of Presentation

 

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). 

 

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with US 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:

   

(i) Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
   
(ii) Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
   
(iii)   Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.  
   
(iv) Estimates and assumptions used in valuation of equity instruments: Management estimates expected term of share options and similar instruments, expected volatility of the Company’s common shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk free rate(s) to value share options and similar instruments.

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

 

Actual results could differ from those estimates.

 

Principles of consolidation

 

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

 

As of December 31, 2017, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate   State or other jurisdiction of
incorporation or organization
  Company interest  
           
Jerrick Ventures LLC   The State of Delaware   100 %

 

All inter-company balances and transactions have been eliminated.

 

On May 12, 2017, the Company assigned the right, title and interest to all of the membership interests of certain of it’s inactive business subsidiaries, with the exception of Jerrick Ventures LLC, to the Company’s Chief Executive Officer, Jeremy Frommer, in consideration for Mr. Frommer’s assumption of all liabilities of such subsidiaries, if any, with such assignment and assumption effected entirely in the interest of corporate efficiency. The Board reviewed the transaction and believes it to be fair in all respects, deeming it to advance the Company’s business interests by allowing the Company to divest non-producing and non-operating subsidiaries at no cost to the Company. All of the Company’s operations have been, and will continue to be, run through its operating subsidiary, Jerrick Ventures LLC.

 

Fair Value of Financial Instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1   Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
Level 2   Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
Level 3   Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued liabilities and accrued liquidating damages approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

   

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

 

Property and Equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

 

    Estimated Useful
Life
(Years)
 
       
Computer equipment and software   3  
Furniture and fixture   5  

 

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

 

Investments - Cost Method, Equity Method and Joint Venture

 

In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock.

 

On January 2, 2013, the Company purchased a minority interest in a business for proceeds of $83,333. The interest is accounted for under the cost method. The Company tests the carrying value annually for impairment. The company recorded an impairment of minority investment of $83,333.

 

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Derivative Liability

 

The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity.

   

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. 

 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.  The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis.

 

The Company utilizes an option pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

 

Revenue Recognition

 

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes gross revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. During the year ended the recorded revenue from the following sources products at auction, sponsored content and affiliate sites.

 

Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments granted to employees in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a five year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. 

 

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is benchmarked against similar companies in a similar industry over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate.  

 

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the Company’s actual forfeiture rate is materially different from its estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period.

 

The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period.

  

Income Taxes

 

Income taxes are provided in accordance with ASC No. 740, “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. 

 

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the year ended December 31, 2017 and 2016 presented in these consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at December 31, 2017:

 

    December 31,
2017
 
Series A Preferred stock     19,256,707  
Series B Preferred stock     4,092,893  
Options     17,749,990  
Warrants     46,193,779  
Convertible notes - related party     7,080,128  
Convertible notes     17,749,990  
Totals     112,123,487  

 

Reclassifications

 

Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities.

 

Recently Adopted Accounting Guidance

 

In April 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation” (topic 718). The FASB issued this update to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The updated guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption of the update is permitted. The adoption of ASU 2016-09 will not have a material effect on its financial position or results of operations or cash flows.

  

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing” (topic 606). In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross verses Net)” (topic 606). These amendments provide additional clarification and implementation guidance on the previously issued ASU 2014-09, “Revenue from Contracts with Customers”. The amendments in ASU 2016-10 provide clarifying guidance on materiality of performance obligations; evaluating distinct performance obligations; treatment of shipping and handling costs; and determining whether an entity’s promise to grant a license provides a customer with either a right to use an entity’s intellectual property or a right to access an entity’s intellectual property. The amendments in ASU 2016-08 clarify how an entity should identify the specified good or service for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. The adoption of ASU 2016-10 and ASU 2016-08 is to coincide with an entity’s adoption of ASU 2014-09, which we intend to adopt for interim and annual reporting periods beginning after December 15, 2017. The adoption of ASU 2016-10 will not have a material effect on its financial position or results of operations or cash flows.

 

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition and is effective during the same period as ASU 2014-09. The adoption of ASU 2016-12 won’t have a material effect on its financial position or results of operations or cash flows.

 

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The adoption of ASU 2016-15 won’t have a material effect on its financial position or results of operations or cash flows.

 

In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company early adopted the ASU 2017-11 in the year ending December 31, 2017.

 

Recent Accounting Guidance Not Yet Adopted

 

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under ASU 2016-02, lessees will be required to recognize, for all leases of 12 months or more, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature of an entity’s leasing activities. This ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach. The Company is in the process of evaluating the effect of the new guidance on its consolidated financial statements and disclosures.

 

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is currently evaluating the impact of the new standard.

 

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. The provisions of this guidance are to be applied using a retrospective approach which requires application of the guidance for all periods presented. The Company is currently evaluating the impact of the new standard.

 

In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This standard is required to be adopted in the first quarter of 2018. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements.

v3.10.0.1
Going Concern
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Going Concern [Abstract]    
Going Concern

Note 3 – Going Concern

 

The Company’s condensed consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. 

 

As reflected in the condensed consolidated financial statements, the Company had an accumulated deficit at June 30, 2018, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

 

The Company is attempting to further implement its business plan and generate sufficient revenues; however, its cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds by way of a public or private offering of its debt or equity securities, there can be no assurance to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and its ability to raise additional funds by way of a public or private offering.

 

The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 – Going Concern

 

The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the consolidated financial statements, the Company had an accumulated deficit at December 31, 2017, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company is attempting to further implement its business plan and generate sufficient revenues; however, its cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds by way of a public or private offering of its debt or equity securities, there can be no assurance to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and its ability to raise additional funds by way of a public or private offering.

 

The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

v3.10.0.1
Property and Equipment
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Property and Equipment [Abstract]    
Property and Equipment

Note 4 – Property and Equipment

 

Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following:

 

  

June 30,

2018

  December 31,
2017
 
Computer Equipment $234,315  $234,315 
Furniture and Fixtures  61,803   61,803 
Leasehold Improvements  25,445   - 
   321,563   296,118 
Less: Accumulated Depreciation  (269,500)  (248,062)
  $52,063  $48,056 

Depreciation expense was $10,423 and $9,404 for the three months ended June 30, 2018 and 2017, respectively. Depreciation expense was $21,440 and $18,704 for the six months ended June 30, 2018 and 2017, respectively.

Note 4 – Property and Equipment

 

Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following:

 

  

December 31,

2017

  

December 31,

2016

 
Computer Equipment $234,315  $219,653 
Furniture and Fixtures  61,803   61,803 
   296,118   281,456 
Less: Accumulated Depreciation  (248,062)  (209,627)
  $48,056  $71,829 

 

Depreciation expense was $38,435 and $42,634 for the year ended December 31, 2017 and 2016, respectively.

v3.10.0.1
Line of Credit
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Line of Credit/Notes Payable/Convertible Note Payable [Abstract]    
Line of Credit

Note 5 – Line of Credit

 

Line of credit as of June 30, 2018 and December 31, 2017 is as follows:

 

  Outstanding Balances as of 
  

June 30,

2018

  

December 31,

2017

 
Revolving Note       -   44,996 
  $-  $44,996 

 

On March 19, 2009, Astoria Surgical Supplies North LLC signed a revolving note (the “Revolving Note”) at PNC Bank (the “Bank”). The outstanding balance of this Revolving Note is limited to $200,000 and expired March 19, 2010. The outstanding balance accrues interest at a variable rate. The interest rate is subject to change based on changes in an independent index which is the highest Prime Rate as published in the “Money Rates” section of the Wall Street Journal. The Company had been in payment default since March 19, 2010; however, on May 3, 2017, the Company agreed to pay back the line of credit by December 1, 2017. On March 23, 2018 the Company sent the final payment for the Revolving note and the Revolving Note was fully satisfied.

 

The balance outstanding on the Revolving Note at June 30, 2018 and December 31, 2017 was $0 and $44,996, respectively.

Note 5 – Line of Credit

 

Line of credit as of December 31, 2017 and 2016 is as follows:

 

  Outstanding Balances as of 
  

December 31,

2017

  

December 31,

2016

 
Revolving Note  44,996   203,988 
Factoring Agreement  -   31,153 
  $44,996  $235,141 

  

On March 19, 2009, Astoria Surgical Supplies North LLC signed a revolving note (the “Revolving Note”) at PNC Bank (the “Bank”). The outstanding balance of this Note is limited to $200,000 and expired March 19, 2010. The outstanding balance accrues interest at a variable rate. The interest rate is subject to change based on changes in an independent index which is the highest Prime Rate as published in the “Money Rates” section of the Wall Street Journal. Interest is payable monthly and the rate as of December 31, 2017 and 2016 was 3.75% and 3.75%, respectively. The Company had been in payment default since March 19, 2010; however, on May 3, 2017, the Company agreed to pay back the line of credit by December 1, 2017. As of the date of this filing the Revolving Note has been paid off.

 

The balance outstanding on the Revolving Note at December 31, 2017 and 2016 was $44,996 and $203,988, respectively.

 

On October 4, 2016, the Company signed a revenue based factoring agreement (the “Factoring Agreement”) with Imperial Advance, LLC. The company received proceeds of $40,000 and agreed to pay $52,400 of future receivables. The note issued in connection with the Factoring Agreement is secured by an officer of the Company. On August 21, 2017, the Company and Imperial Advance, LLC entered into a Settlement Agreement pursuant to which the Company agreed to pay Imperial Advance, LLC $9,368 by August 23, 2017. The company recorded a gain on settlement of debt of $2,079.

 

The balance outstanding on the revenue based factoring agreement at December 31, 2017 and 2016 was $0 and $31,153, respectively.

v3.10.0.1
Notes Payable
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Line of Credit/Notes Payable/Convertible Note Payable [Abstract]    
Notes Payable

Note 6 – Notes Payable

 

Notes payable as of June 30, 2018 and December 31, 2017 is as follows:

 

  Outstanding Principal as of       Warrants 
  June 30,
2018
  December 31,
2017
  Interest Rate  Maturity Date Quantity  Exercise
Price
 
The February 2017 Offering $364,325  $400,000   12% September 1, 2017  2,450,000  $0.20 
The June 2017 Loan Agreement  -   50,000   12% September 1, 2017  35,000  0.20 
The First November 2017 Loan Agreement  -   100,000   15% January 12, 2018  -  - 
The Second November 2017 Loan Agreement  -   50,000   15% January 13, 2018  -  - 
The Third November 2017 Loan Agreement  -   100,000   15% January 13, 2018  -  - 
May 2018 Offering  608,500   -   13% March 2019  1,825,500  - 
   972,825   700,000               
Less: Debt Discount  (180,950)  (10,500)              
Less: Debt Issuance Costs  (408)  -               
  $791,467  $689,500               

 

Private Placement Offerings:

 

The February 2017 Offering

 

From February 24, 2017 through March 17, 2017, the Company conducted multiple closings of a private placement offering (the “February 2017 Offering”) of the Company’s securities by entering into subscription agreements (the “Subscription Agreements”) with accredited investors (the “Accredited Investors”) for aggregate gross proceeds of $916,585 for which the Accredited Investors received $975,511 in principal value of secured promissory notes with an original issue discount of six percent (6%) (the “February 2017 Offering Notes”) and warrants to purchase the Company’s common stock (the “February 2017 Offering Warrants”). 

 

The February 2017 Offering Notes are convertible into shares of the Company’s common stock at the time of Company’s next round of financing (the “Subsequent Offering”) at a price equal to eighty-five percent (85%) of the price per share offered in the Subsequent Offering (the “Conversion Price”). The February 2017 Offering Warrants have a five-year term. Investors received the February 2017 Offering Warrants in the following amounts: (i) Investors purchasing $150,000 or more of the Offering received a February 2017 Offering Warrant equal to one hundred thirty percent (130%) of the dollar amount invested in the Offering; (ii) investors purchasing at least $100,000 but less than $150,000 of the February 2017 Offering received a February 2017 Offering Warrant equal to one hundred percent (100%) of the dollar amount invested in the Offering; and (iii) investors purchasing less than $100,000 of the Offering received to a February 2017 Offering Warrant equal to seventy percent (70%) of the dollar amount invested in the Offering. The Warrants entitle the holder to purchase shares of the Company’s common stock at $0.20 per share (the “Exercise Price”).

 

The Conversion Price and the Exercise Price are subject to adjustments for issuances of (i) the Company’s common stock, (ii) any equity linked instruments or (iii) securities convertible into the Company’s common stock, at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustments shall result in the Conversion Price or Exercise Price being reduced to such lower purchase price, as described in the February 2017 Offering Notes and the February 2017 Offering Warrants.

  

Pursuant to the Subscription Agreements, the February 2017 Offering Notes matured on September 1, 2017 (the “February 2017 Offering Maturity Date”). Prior to the February 2017 Offering Maturity Date, investors representing $575,511 in principal value converted their February 2017 Offering Notes into two year, 15% secured convertible promissory notes offered by the Company (the “August 2017 Convertible Note Offering”). The remaining investors representing an aggregate $400,000 in principal of the February 2017 Offering Notes agreed to forbear their right to declare an event of default until December 15, 2017 during which time they retain the right to convert their principal and any accrued but unpaid interest into the August 2017 Convertible Note Offering. In consideration of the forbearance for which the investors will receive a warrant to purchase up to fifteen percent (15%) of the shares of common stock underlying the warrant acquired with the purchase of the February 2017 Offering Notes at a purchase price of $0.20 per share, and the interest on their note would be increased to eighteen percent (18%) from September 1, 2017 through December 15, 2017 or the conversion date, whichever is sooner. During the six months ended June 30, 2018 the Company has repaid $26,500 in principal and $26,375 in interest.

 

The June 2017 Loan Agreement

 

On June 12, 2017, the Company entered into a loan agreement (the “June 2017 Loan Agreement”) with an individual (the “June 2017 Lender”), the June 2017 Lender issued the Company a promissory note of $50,000 (the “June 2017 Note”). Pursuant to the June 2017 Loan Agreement, the June 2017 Note bears interest at a rate of 10% per annum. As additional consideration for entering in the June 2017 Loan Agreement, the Company issued the June 2017 Lender a five-year warrant to purchase 35,000 shares of the Company’s common stock with an exercise price of $0.20 per share. The maturity date of the June 2017 Note was September 1, 2017 (the “June 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the June 2017 Note were due. During the six months ended June 30, 2018 the Company has repaid $50,000 in principal and the debtor has forgiven the interest of $4,424 this was recorded as a gain on forgiveness of debt.

 

The First November 2017 Loan Agreement

 

On November 28, 2017, the Company entered into a loan agreement (the “First November 2017 Loan Agreement”) with an individual (the “First November 2017 Lender”), the First November 2017 Lender issued the Company a promissory note of $100,000 (the “First November 2017 Note”). Pursuant to the First November 2017 Loan Agreement, the First November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $5,000) shall be payable in cash or convertible into shares of the Company’s restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $10,000) shall be paid in the form of the Company’s restricted common stock at a rate of $0.20 per share (equivalent to 50,000 shares of the Company’s common stock ). The maturity date of the First November 2017 Note was January 12, 2018 (the “First November 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First November 2017 Note are due. On January 12, 2018, the First November 2017 Note and accrued but unpaid interest was converted into the Company’s August 2017 Convertible Note Offering.

 

The Second November 2017 Loan Agreement

 

On November 29, 2017, the Company entered into a loan agreement (the “Second November 2017 Loan Agreement”) with an individual (the “Second November 2017 Lender”), the Second November 2017 Lender issued the Company a promissory note of $50,000 (the “Second November 2017 Note”). Pursuant to the Second November 2017 Loan Agreement, the Second November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $2,500) shall be payable in cash or convertible into shares of the Company’s restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $5,000) shall be paid in the form of the Company’s restricted common stock at a rate of $0.20 per share (equivalent to 25,000 shares of the Company’s common stock ). The maturity date of the Second November 2017 Note was January 13, 2018 (the “Second November 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second November 2017 Note are due. On January 12, 2018, the Second November 2017 Note and accrued but unpaid interest was converted into the Company’s August 2017 Convertible Note Offering.

 

The Third November 2017 Loan Agreement

 

On November 29, 2017, the Company entered into a loan agreement (the “Third November 2017 Loan Agreement”) with an individual (the “Third November 2017 Lender”), the Third November 2017 Lender issued the Company a promissory note of $100,000 (the “Third November 2017 Note”). Pursuant to the Third November 2017 Loan Agreement, the Third November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $5,000) shall be payable in cash or convertible into shares of the Company’s restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $10,000) shall be paid in the form of the Company’s restricted common stock at a rate of $0.20 per share (equivalent to 50,000 shares of the Company’s common stock). The maturity date of the Third November 2017 Note was January 13, 2018 (the “Third November 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Third November 2017 Note are due. On January 12, 2018, the Third November 2017 Note and accrued but unpaid interest was converted into the Company’s August 2017 Convertible Note Offering.

 

On March 14, 2018, the Company entered into a loan agreement (the “March 2018 Loan Agreement”) with an individual (the “March 2018 Lender”), the March 2018 Lender issued the Company a promissory note of $50,000 (the “March 2018 Note”). Pursuant to the March 2018 Loan Agreement, the March 2018 Note bears interest at a rate of 12% per annum. As additional consideration for entering in the March 2018 Loan Agreement, the Company issued the March 2018 Lender a five-year warrant to purchase 100,000 shares of the Company’s common stock with an exercise price of $0.20 per share. The maturity date of the March 2018 Note was March 29, 2018 (the “March 2018 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the March 2018 Note were due. On March 29, 2018, the March 2018 Note and accrued but unpaid interest was converted into the Company’s March 2018 Convertible Note Offering.

 

The May 2018 Offering

 

During the months of May and June 2018, the Company conducted multiple closings with accredited investors (the “May 2018 Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $608,500.

 

The May 2018 Offering consisted of a maximum of $1,200,000 of units of the Company’s securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (i) a 13% promissory note (each, a ” May 2018 Offering Note” and, together, the “May 2018 Offering Notes”), and (ii) a four-year warrant (“May 2018 Offering Warrant”) to purchase the number of shares of the Company’s common stock equal to three times the principal amount in dollars invested by such investor in each May 2018 Offering Note (the “May 2018 Warrant Shares”) at an exercise price of $0.20 per share (the “May Offering Warrant Exercise Price”), subject to adjustment upon the terms thereof. The May 2018 Offering Notes mature on the nine-month anniversary of their issuance dates.

 

The Company recorded a $215,032 debt discount relating to 1,825,500 May 2018 Offering Warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

The May Offering Warrant Exercise Price of the May 2018 Offering Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing May 2018 Offering Warrant Exercise Price. Such adjustment shall result in the May 2018 Offering Warrant Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

Note 6 – Notes Payable

 

Notes payable as of December 31, 2017 and 2016 is as follows:

 

  Outstanding Principal as of       Warrants 
  December 31,
2017
  December 31,
2016
  Interest Rate  Maturity Date Quantity  Exercise
Price
 
October 25, 2016  -   25,000   9% July 1, 2017  50,000  $0.30 
February 22, 2017  400,000   -   12% September 1, 2017  2,450,000  $0.20 
June 12, 2017  50,000   -   12% September 1, 2017  35,000  $0.20 
November 28, 2017  100,000   -   15% January 12, 2018  -   - 
November 29, 2017  50,000   -   15% January 13, 2018  -   - 
November 29, 2017  100,000   -   15% January 13, 2018  -   - 
   700,000   25,000               
Less: Debt Discount  (10,500)  (9,421)              
Less: Debt Issuance Costs  -   -               
  $689,500  $15,579               

   

Private Placement Offering:

 

From February 24, 2017 through March 17, 2017, the Company conducted multiple closings of a private placement offering (the “February 2017 Offering”) of the Company’s securities by entering into subscription agreements (the “Subscription Agreements”) with accredited investors (the “Accredited Investors”) for aggregate gross proceeds of $916,585 for which the Accredited Investors received $975,511 in principal value of secured promissory notes with an original issue discount of six percent (6%) (the “February 2017 Offering Notes”) and warrants to purchase the Company’s common stock (the “February 2017 Offering Warrants”). 

 

The February 2017 Offering Notes are convertible into shares of the Company’s common stock at the time of Company’s next round of financing (the “Subsequent Offering”) at a price equal to eighty-five percent (85%) of the price per share offered in the Subsequent Offering (the “Conversion Price”). The February 2017 Offering Warrants have a five-year term. Investors received the February 2017 Offering Warrants in the following amounts: (i) Investors purchasing $150,000 or more of the Offering received a February 2017 Offering Warrant equal to one hundred thirty percent (130%) of the dollar amount invested in the Offering; (ii) investors purchasing at least $100,000 but less than $150,000 of the February 2017 Offering received a February 2017 Offering Warrant equal to one hundred percent (100%) of the dollar amount invested in the Offering; and (iii) investors purchasing less than $100,000 of the Offering received to a February 2017 Offering Warrant equal to seventy percent (70%) of the dollar amount invested in the Offering. The Warrants entitle the holder to purchase shares of the Company’s common stock at $0.20 per share (the “Exercise Price”).

 

The Conversion Price and the Exercise Price are subject to adjustments for issuances of (i) the Company’s common stock, (ii) any equity linked instruments or (iii) securities convertible into the Company’s common stock, at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustments shall result in the Conversion Price or Exercise Price being reduced to such lower purchase price, as described in the February 2017 Offering Notes and the February 2017 Offering Warrants.

 

Pursuant to the Subscription Agreements, the February 2017 Offering Notes matured on September 1, 2017 (the “February 2017 Offering Maturity Date”). Prior to the February 2017 Offering Maturity Date, investors representing $575,511 in principal value converted their February 2017 Offering Notes into two year, 15% secured convertible promissory notes offered by the Company (the “August 2017 Convertible Note Offering”). The remaining investors representing an aggregate $400,000 in principal of the February 2017 Offering Notes agreed to forbear their right to declare an event of default until December 15, 2017 during which time they retain the right to convert their principal and any accrued but unpaid interest into the August 2017 Convertible Note Offering. In consideration of the forbearance for which the investors will receive a warrant to purchase up to fifteen percent (15%) of the shares of common stock underlying the warrant acquired with the purchase of the February 2017 Offering Notes at a purchase price of $0.20 per share, and the interest on their note would be increased to eighteen percent (18%) from September 1, 2017 through December 15, 2017 or the conversion date, whichever is sooner.

 

On June 12, 2017, the Company entered into a loan agreement (the “June 2017 Loan Agreement”) with an individual (the “June 2017 Lender”), the June 2017 Lender issued the Company a promissory note of $50,000 (the “June 2017 Note”). Pursuant to the June 2017 Loan Agreement, the June 2017 Note bears interest at a rate of 10% per annum. As additional consideration for entering in the June 2017 Loan Agreement, the Company issued the June 2017 Lender a five-year warrant to purchase 35,000 shares of the Company’s common stock with an exercise price of $0.20 per share. The maturity date of the June 2017 Note was September 1, 2017 (the “June 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the June 2017 Note were due. As of the date of the filing the note is in default.

 

On July 21, 2017, the Company entered into a loan agreement (the “July 2017 Loan Agreement”) with an individual (the “July 2017 Lender”), the July 2017 Lender issued the Company a promissory note of $100,000 (the “July 2017 Note”). Pursuant to the July 2017 Loan Agreement, the July 2017 Note bears interest at a rate of 10% per annum. As additional consideration for entering in the July 2017 Loan Agreement, the Company issued the July 2017 Lender a five-year warrant to purchase 100,000 shares of the Company’s common stock with an exercise price of $0.20 per share. The maturity date of the July 2017 Note was April 21, 2017 (the “July 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the July 2017 Note were due. On September 28, 2017, the July 2017 Note and accrued but unpaid interest was converted into the Company’s August 2017 Convertible Note Offering.

 

On August 18, 2017, the Company entered into a loan agreement (the “August 2017 Loan Agreement”) with an individual (the “August 2017 Lender”), the August 2017 the Company issued the Lender a promissory note of $50,000 (the “August 2017 Note”). Pursuant to the August 2017 Loan Agreement, the August 2017 Note bears interest at a rate of 15% per annum. The maturity date of the August 2017 Note was October 2, 2017 at which time all outstanding principal, accrued and unpaid interest and other amounts due under the August 2017 Note were due. During September 2017, the August 2017 Note and accrued but unpaid interest was converted into the Company’s August Convertible Note Offering. 

 

On November 28, 2017, the Company entered into a loan agreement (the “First November 2017 Loan Agreement”) with an individual (the “First November 2017 Lender”), the First November 2017 Lender issued the Company a promissory note of $100,000 (the “First November 2017 Note”). Pursuant to the First November 2017 Loan Agreement, the First November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $5,000) shall be payable in cash or convertible into shares of the Company’s restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $10,000) shall be paid in the form of the Company’s restricted common stock at a rate of $0.20 per share (equivalent to 50,000 shares of the Company’s common stock issued at $0.20 per share). The maturity date of the First November 2017 Note was January 12, 2018 (the “First November 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First November 2017 Note are due.

 

On November 29, 2017, the Company entered into a loan agreement (the “Second November 2017 Loan Agreement”) with an individual (the “Second November 2017 Lender”), the Second November 2017 Lender issued the Company a promissory note of $50,000 (the “Second November 2017 Note”). Pursuant to the Second November 2017 Loan Agreement, the Second November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $2,500) shall be payable in cash or convertible into shares of the Company’s restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $5,000) shall be paid in the form of the Company’s restricted common stock at a rate of $0.20 per share (equivalent to 25,000 shares of the Company’s common stock issued at $0.20 per share). The maturity date of the Second November 2017 Note was January 13, 2018 (the “Second November 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second November 2017 Note are due.

 

On November 29, 2017, the Company entered into a loan agreement (the “Third November 2017 Loan Agreement”) with an individual (the “Third November 2017 Lender”), the Third November 2017 Lender issued the Company a promissory note of $100,000 (the “Third November 2017 Note”). Pursuant to the Third November 2017 Loan Agreement, the Third November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $5,000) shall be payable in cash or convertible into shares of the Company’s restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $10,000) shall be paid in the form of the Company’s restricted common stock at a rate of $0.20 per share (equivalent to 50,000 shares of the Company’s common stock issued at $0.20 per share). The maturity date of the Third November 2017 Note was January 13, 2018 (the “Third November 2017 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Third November 2017 Note are due.

v3.10.0.1
Convertible Note Payable
6 Months Ended 12 Months Ended
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Line of Credit/Notes Payable/Convertible Note Payable [Abstract]    
Convertible Note Payable

Note 7 – Convertible Note Payable

 

Convertible notes payable as of June 30, 2018 and December 31, 2017 is as follows: 

 

  Outstanding Principal as of          Warrants 
  June 30,
2018
  December 31, 
2017
  Interest
Rate
  Conversion
Price
  Maturity Date Quantity  Exercise
Price
 
The November 2016 Convertible Note Offering $25,000  $25,000   10%  0.30  November 1, 2017  400,000  $0.30 
The June 2017 Convertible Note Offering  -   71,500   12%  Not Applicable  September 1, 2017  114,700   0.20 
The August 2017 Convertible Note Offering  2,943,884   2,943,884   15%  0.20(*) August – November 2019  14,716,419   0.20 
The First December 2017 Note  100,000   100,000   15%  0.20(*) December 21, 2019  500,000   0.20 
The February 2018 Convertible Note Offering  1,015,674   -   15%  0.20(*) January – February 2020  5,078,375   0.20 

The January 2018

Note

  68,761   -       0.20 (*) January 12, 2020   343,806    0.20 
The February 2018 Note  35,452   -   18%  0.20(*) February 8, 2020  81,500   0.20 
The March 2018 Convertible Note Offering  961,367   -   14%  0.20(*) March – April 2020  4,806,833   0.20 
   5,150,138   3,140,384                   
Less: Debt Discount  (828,627)  (452,022)                  
Less: Debt Issuance Costs  (219,204)  (79,569)                  
   4,102,307   2,608,793                   
Less: Current Debt  (59,499)  (96,500)                  
Total Long-Term Debt $4,042,808  $2,512,293                   

 

(*) As subject to adjustment as further outlined in the notes

 

The November 2016 Convertible Note Offering

 

During the months of November and December 2016, the Company issued convertible notes to third party lenders totaling $400,000 (the “November 2016 Convertible Note Offering”). These notes accrue interest at a rate of 10% per annum and mature with interest and principal both due between November 1, 2017 through December 29, 2017. The notes and accrued interest are convertible at a conversion price as defined therein. In addition, in connection with the notes the Company issued five-year warrants to purchase an aggregate of 400,000 shares of Company common stock at a purchase price of $0.30 per share. The investors converted $375,000 of principal and $30,719 of interest into the August 2017 Convertible Note Offering. 

 

The June 2017 Convertible Note Offering

 

During the month of June 2017 the Company issued convertible notes to third party lenders totaling $71,500. The notes accrue interest at 12% per annum and mature with interest and principal both due on September 1, 2017. The notes and accrued interest may be converted into a subsequent offering at a 15% discount to the offering price are convertible at a conversion price as defined therein. In addition, the Company issued warrants to purchase 67,550 shares of Company common stock. The warrants entitle the holders to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. As of December 31, 2017, the Company was currently in default on $71,500 in principal due on the notes.  On February 8, 2018, the Company repurchased these notes and is no longer in default.

 

The August 2017 Convertible Note Offering

 

From August through November of 2017, the Company conducted multiple closings of a private placement offering to accredited investors (the “August 2017 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $1,585,000. In addition, $1,217,177 of the Company’s short-term debt along with accrued but unpaid interest of $40,146 was converted into the August 2017 Convertible Note Offering. The conversions resulted in the issuance of 6,791,419 warrants with a fair value of $583,681 and an original issue discount of $101,561. These were recorded as a loss on extinguishment of debt.

 

The August 2017 Convertible Note Offering consisted of a maximum of $6,000,000 of units of the Company’s securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “August 2017 Offering Note” and together the “August 2017 Offering Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“August 2017 Offering Conversion Shares”) at a conversion price of $0.20 per share (the “August 2017 Note Conversion Price”), and (b) a five-year warrant (each a “August 2017 Offering Warrant and together the “August 2017 Offering Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the August 2017 Offering Notes can be converted into (“August 2017 Offering Warrant Shares”) at an exercise price of $0.20 per share (“August 2017 Offering Warrant Exercise Price”). The August 2017 Offering Notes mature on the second (2nd) anniversary of their issuance dates.

 

The August 2017 Note Conversion Price and the August 2017 Offering Warrant Exercise Price are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing August 2017 Note Conversion Price or August 2017 Offering Warrant Exercise Price. Such adjustment shall result in the August 2017 Note Conversion Price and August 2017 Offering Warrant Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The Company recorded a $472,675 debt discount relating to 7,925,000 August 2017 Offering Warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

In connection with the August 2017 Convertible Note Offering, the Company paid a placement agent a cash fee of $90,508 to for services rendered in connection therewith on a “best-efforts” basis, which was recorded as issuance cost and is being accreted over the life of the note to accretion of debt discount and issuance cost. 

 

The First December 2017 Note

 

On December 27, 2017, the Company issued a convertible note to a third-party lender totaling $100,000 (the “First December 2017 Note”). The First December 2017 Note accrues interest at 15% per annum and matures with interest and principal both due on December 27, 2019. In addition, the Company issued a warrant to purchase 500,000 shares of Company common stock. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. The Company recorded a $35,525 debt discount relating to the warrants issued to the investor based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note The First December 2017 Note and accrued interest is convertible at a conversion price of $0.20 per share, subject to adjustment. The First December 2017 Note is secured by a second priority lien on the assets of the Company.

  

The February 2018 Convertible Note Offering

 

During the six months ended June 30, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “February 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $725,000. In addition, $250,000 of the Company’s short-term debt along with accrued but unpaid interest of $40,675 was converted into the February 2018 Offering. The conversions resulted in the issuance of 1,453,375 warrants with a fair value of $181,139. These were recorded as a loss on extinguishment of debt.

 

The February 2018 Convertible Note Offering consisted of a maximum of $750,000 of units of the Company’s securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “February 2018 Convertible Note” and together the “February 2018 Convertible Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“February 2018 Conversion Shares”) at a conversion price of $0.20 per share (the “February 2018 Note Conversion Price”), and (b) a five-year warrant (each a “February 2018 Offering Warrant and together the “February 2018 Offering Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the February 2018 Convertible Notes can be converted into (“February 2018 Warrant Shares”) at an exercise price of $0.20 per share (“February 2018 Warrant Exercise Price”). The February 2018 Offering Notes mature on the second (2nd) anniversary of their issuance dates. The February 2018 Offering Notes are secured by a second priority security interest in the Company’s assets up to $1,000,000.

 

The February 2018 Note Conversion Price and the February 2018 Offering Warrant Exercise Price are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The conversion feature of the February 2018 Convertible Note Offering provides for an effective conversion price that is below market value on the date of issuance. Such feature is normally characterized as a beneficial conversion feature (“BCF”). When the Company records a BCF the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The Company recorded a BCF and related debt discount of $37,350, the discount is being accreted over the life of the first Debenture to accretion of debt discount and issuance cost.

 

The Company recorded a $316,875 debt discount relating to 3,625,000 February 2018 Offering Warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

In connection with the February 2018 Convertible Note Offering, the Company retained a placement agent (the “Placement Agent”), to carry out the Offering on a “best-efforts” basis. For services in its capacity as Placement Agent, the Company has paid the Placement Agent a cash fee of $94,250 and issued to the Placement Agent shares of the Company’s common stock equal to ten percent (13%) of the Conversion Shares underlying the February 2018 Convertible Notes or 362,500 shares that had a fair value of $74,881, which was recorded as issuance cost and is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

The January 2018 Note

 

On January 12, 2018, the Company issued a convertible note to a third-party lender totaling $68,761 to settle an outstanding vendor liabilities (the “January 2018 Note”). The January 2018 Note accrues interest at 15% per annum and matures with interest and principal both due on January 12, 2020. The conversions resulted in the issuance of 343,806 warrants with a fair value of $42,850. These were recorded as a loss on extinguishment of debt. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. The January 2018 Note and accrued interest is convertible at a conversion price of $0.20 per share, subject to adjustment. The January 2018 Note is secured by a second priority lien on the assets of the Company.

 

The February 2018 Note

 

On February 8, 2018, the Company issued a convertible note to a third-party lender totaling $40,750 (the “February 2018 Note”). The February 2018 Note accrues interest at 18% per annum and matures with interest and principal both due on February 8, 2020. In addition, the Company issued a warrant to purchase 81,500 shares of Company common stock. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. The Company recorded a $7,963 debt discount relating to the warrants issued to the investor based on the relative fair value of each equity instrument on the dates of issuance and an original issue discount of $5,298. The debt discount is being accreted over the life of the note. The February 2018 Note and accrued interest is convertible at a conversion price of $0.20 per share, subject to adjustment. The February 2018 Note is secured by a second priority lien on the assets of the Company. During the six months ended the company has repaid $5,298 in principal.

 

The March 2018 Convertible Note Offering

 

During the six months ended June 30, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “March 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $770,000. In addition, $50,000 of the Company’s short-term debt, $767 accrued but unpaid interest and $140,600 of the Company’s vendor liabilities was converted into the March 2018 Convertible Note Offering. The conversions resulted in the issuance of 956,833 warrants with a fair value of $84,087. These were recorded as a loss on extinguishment of debt.

 

The March 2018 Convertible Note Offering consisted of a maximum of $900,000, with an over-allotment option of an additional $300,000 of units of the Company’s securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (a) a 14% Convertible Secured Promissory Note (each a “Note” and together the “Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $0.20 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $0.20 per share (“Exercise Price”). The Notes mature on the second (2nd) anniversary of their issuance dates.

 

The Conversion Price of the Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The Company recorded a $254,788 debt discount relating to 4,806,833 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

Note 7 – Convertible Note Payable

 

Convertible notes payable as of December 31, 2017 and 2016 is as follows: 

 

  Outstanding Principal as of          Warrants 
  December 31, 2017  December 31, 2016  Interest
Rate
  Conversion
Price
  Maturity Date Quantity  Exercise
Price
 
November – December, 2016  25,000   400,000   10%  0.30  November 1, 2017  400,000   0.30 
December 27, 2016  -   100,000   10%  0.30  December 27, 2017  100,000   0.30 
June, 2017  71,500   -   12%  Not Applicable  September 1, 2017  114,700   0.20 
July, 2017  -   -   8.5%  0.20(*) April 11, 2018  350,000   0.20 
August – November 2017  2,943,884   -   15%  0.20(*) August – November 2019  14,716,419   0.20 
December 21, 2017  100,000                       
   3,140,384   500,000                   
Less: Debt Discount  (452,022)  (184,398)                  
Less: Debt Issuance Costs  (79,569)  (46,779)                  
   2,672,574   268,823                   
Less: Current Debt  (96,500)  (268,823)                  
Total Long-Term Debt $2,512,293  $-                   

  

(*) As subject to adjustment as further outlined in the notes

 

During the months of November and December 2016, the Company issued convertible notes to third party lenders totaling $400,000. These notes accrue interest at a rate of 10% per annum and mature with interest and principal both due on November 1, 2017 through December 29, 2017. The notes and accrued interest are convertible at a conversion price as defined therein. In addition, in connection with the notes the Company issued five-year warrants to purchase an aggregate of 400,000 shares of Company common stock at a purchase price of $0.30 per share. The investors converted $375,000 of principal and $30,719 of interest into the August 2017 Convertible Note Offering. 

 

On December 27, 2016, the Company issued a convertible note to a third party lender totaling $100,000 (the “December 2016 Note”). The December 2016 Note accrues interest at 10% per annum and matures with interest and principal both due on December 27, 2017. In addition, the Company issued a warrant to purchase 100,000 shares of Company common stock. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.40 per share for a period of five years from the issue date. The December 2016 Note and accrued interest is convertible at a conversion price of $0.30 per share, subject to adjustment. On August 31, 2017 the investor converted $100,000 of principal and $6,767 of interest into the August 2017 Convertible Note Offering. 

 

During the month of June 2017 the Company issued convertible notes to third party lenders totaling $71,500. The notes accrue interest at 12% per annum and mature with interest and principal both due on September 1, 2017. The notes and accrued interest may be converted into a subsequent offering at a 15% discount to the offering price are convertible at a conversion price as defined therein. In addition, the Company issued warrants to purchase 67,550 shares of Company common stock. The warrants entitle the holders to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. As of December 31, 2018, the Company was currently in default on $71,500 in principal due on the notes.  On February 8, 2018, the Company repurchased these notes and is no longer in default.

 

The July 2017 Convertible Offering

 

During the month of July 2017, the Company entered into Securities Purchase Agreements and conducted closings of a private placement offering (the “July 2017 Convertible Note Offering”) of the Company’s securities for aggregate gross proceeds of $445,000. In aggregate, the Company entered into Securities Purchase Agreements with three accredited investors for (i) the issuance and sale of 8.5% Convertible Redeemable Debentures, containing a ten percent (10%) original issuance discount, due April 18, 2018 (the “Debentures”) and (ii) the issuance and sale of five-year Common Stock Purchase Warrants to purchase up to 778,750 shares of the Company’s common stock, par value $0.001 per share. The Warrants were immediately exercisable upon issuance at an exercise price of $0.20 per share, subject to adjustment, and expire five years from the date of issuance. The accredited investors also received a total of 245,000 shares of the Company’s common stock as inducement for participating in the July 2017 Convertible Note Offering (the “Consideration Shares”).

 

During September 8, 2017 through September 13, 2017, the Company redeemed the 8.5% Convertible Redeemable Debentures by paying the three accredited investors an aggregate $606,812 representing 117.5% of the principal along with interest. Pursuant to such redemption, the Debentures are no longer in full force and effect.

 

The Company also repurchased 220,000 consideration shares of one of the accredited investors for $19,007, cancelling the accredited investor’s Consideration Shares.

 

Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Black Scholes model at the issuance date and the period end. The conversion feature of The July 2017 Convertible Offering issued during the year ended December 31, 2017, gave rise to a derivative liability of $332,942 which was recorded as a debt discount. The debt discount is charged to accretion of debt discount and issuance cost ratably over the term of the convertible note.

 

The Company recorded an $78,823 debt discount relating to 778,750 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

The August 2017 Convertible Note Offering

 

During the year ended December 31, 2017, the Company conducted multiple closings of a private placement offering to accredited investors (the “August 2017 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $1,585,000. In addition, $1,217,177 of the Company’s short term debt along with accrued but unpaid interest of $40,146 was converted into the August Offering. The conversions resulted in the issuance of 6,791,419 warrants with a fair value of $583,681 and an original issue discount of $101,561. These were recorded as a loss on extinguishment of debt.

 

The August Offering consisted of a maximum of $6,000,000 of units of the Company’s securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “Note” and together the “Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $0.20 per share (the “Conversion Price”), and (b) a five-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $0.20 per share (“Exercise Price”). The Notes mature on the second (2nd) anniversary of their issuance dates.

 

The Conversion Price of the Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The Company recorded a $472,675 debt discount relating to 7,925,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

In connection with the Offering, the Company paid a placement agent a cash fee of $90,508 to carry out the Offering on a “best-efforts” basis, which was recorded as issuance cost and is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

On December 27, 2017, the Company issued a convertible note to a third party lender totaling $100,000 (the “First December 2017 Note”). The First December 2017 Note accrues interest at 15% per annum and matures with interest and principal both due on December 27, 2019. In addition, the Company issued a warrant to purchase 500,000 shares of Company common stock. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. The Company recorded a $35,525 debt discount relating to the warrants issued to the investor based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note The First December 2017 Note and accrued interest is convertible at a conversion price of $0.20 per share, subject to adjustment. The First December 2017 Note is secured by a second priority lien on the assets of the Company.

v3.10.0.1
Related Party Loans
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Related Party Loans [Abstract]    
Related Party Loans

Note 8 – Related Party Loans

 

Convertible notes

 

Convertible notes payable – related party as of June 30, 2018 and December 31, 2017 is as follows:

 

  Outstanding Principal as of       Warrants 
  June 30,
2018
  December 31,
2017
  Interest
Rate
  Maturity Date Quantity  Exercise
Price
 
The August 2017 Convertible Note Offering $1,416,026  $1,416,026   15% August – October 2019  4,589,466  $0.20 
The Second December 2017 Note 100,000   100,000   15% 

December 21,

2019

  500,000   0.20 
The February 2018 Convertible Note Offering 25,000   -   15% January – February 2020  125,000   0.20 
The Second February 2018 Note 35,452   -   20% 

September 30,

2018

  81,500   0.20 
The March 2018 Convertible Note Offering 239,400   -   14% March 2020  1,197,000   0.20 
  1,815,878   1,516,026               
Less: Debt Discount (208,525)  (170,780)              
Less: Debt Issuance Costs (4,645)  -               
  1,602,708   1,345,246               
Less: Current Debt (30,916)  -               
Total Long-Term Debt $1,571,792  $1,345,246               

 

The August 2017 Convertible Note Offering 

 

During the year ended December 31, 2017, the Company conducted multiple closings of a private placement offering to accredited investors (the “The August 2017 Convertible Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $505,000. In addition, $645,000 of the Company’s short-term debt along with accrued but unpaid interest of $206,026 was converted into the August 2017 Convertible Offering. The conversions resulted in the issuance of 4,555,129 warrants with a fair value of $440,157 and the increase of principal of $60,000. These resulted in a loss on extinguishment of debt of $500,157.

 

The Company offered, through a placement agent, $6,000,000 of units of its securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “Note” and together the “Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $0.20 per share (the “Conversion Price”), and (b) a five-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $0.20 per share (“Exercise Price”). The Notes mature on the second (2nd) anniversary of their issuance dates. 

 

The Conversion Price of the Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

  

The Company recorded a $160,700 debt discount relating to 2,525,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

The Second December 2017 Note

 

On December 21, 2017, the Company issued a convertible note to a third-party lender totaling $100,000 (the “Second December 2017 Note”). The Second December 2017 Note accrues interest at 15% per annum and matures with interest and principal both due on December 27, 2019. In addition, the Company issued a warrant to purchase 500,000 shares of Company common stock. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. The Company recorded a $36,722 debt discount relating to the warrants issued to the investor based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note The Second December 2017 Note and accrued interest is convertible at a conversion price of $0.20 per share, subject to adjustment. The Second December 2017 Note is secured as a second priority lien on the assets of the Company.

 

The February 2018 Convertible Note Offering

 

During the six months ended June 30, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “February 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $25,000.

 

The February 2018 Convertible Note Offering consisted of a maximum of $750,000 of units of the Company’s securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “Note” and together the “Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $0.20 per share (the “Conversion Price”), and (b) a five-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $0.20 per share (“Exercise Price”). The Notes mature on the second (2nd) anniversary of their issuance dates. The Notes are secured by a second priority security interest in the Company’s assets up to $1,000,000.

  

The Conversion Price of the Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

 

The conversion feature of the February 2018 Convertible Note Offering provides for an effective conversion price that is below market value on the date of issuance. Such feature is normally characterized as a beneficial conversion feature (“BCF”). When the Company records a BCF the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The Company recorded a BCF and related debt discount of $1,063, the discount is being accreted over the life of the first Debenture to accretion of debt discount and issuance cost.

 

The Company recorded a $11,054 debt discount relating to 125,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

In connection with the Offering, the Company retained the Placement Agent, to carry out the Offering on a “best-efforts” basis. For services in its capacity as Placement Agent, the Company has paid the Placement Agent a cash fee of $3,250 and issued to the Placement Agent shares of the Company’s common stock equal to ten percent (10%) of the Conversion Shares underlying the Notes or 12,500 shares that had a fair value of $2,606, which was recorded as issuance cost and is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

The Second February 2018 Note

 

On February 8, 2018, the Company issued a convertible note to a third-party lender totaling $40,750 (the “Second February 2018 Note”). The Second February 2018 Note accrues interest at 18% per annum and matures with interest and principal both due on September 30, 2018. In addition, the Company issued a warrant to purchase 81,500 shares of Company common stock. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. The Company recorded a $7,963 debt discount relating to the warrants issued to the investor based on the relative fair value of each equity instrument on the dates of issuance and an original issue discount of $5,298. The debt discount is being accreted over the life of the note The Second February 2018 Note and accrued interest is convertible at a conversion price of $0.20 per share, subject to adjustment. The Second February 2018 Note is secured as a second priority lien on the assets of the Company. During the six months ended the company has repaid $5,298 in principal.

 

The March 2018 Convertible Note Offering

 

During the six months ended June 30, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “March 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $239,400.

 

The March 2018 Convertible Note Offering consisted of a maximum of $900,000, with an over-allotment option of an additional $300,000, of units of the Company’s securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (a) a 14% Convertible Secured Promissory Note (each a “Note” and together the “Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $0.20 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $0.20 per share (“Exercise Price”). The Notes mature on the second (2nd) anniversary of their issuance dates.

 

The Conversion Price of the Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

  

The Company recorded a $84,854 debt discount relating to 1,197,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

Notes payable

 

Notes payable – related party as of June 30, 2018 and December 31, 2017 is as follows:

 

  Outstanding Principal as of       Warrants 
  June 30,
2018
  December 31,
2017
  Interest
Rate
  Maturity Date Quantity  Exercise
Price
 
The May 2016 Rosen Loan Agreement $1,000,000  $1,000,000   13% November 26, 2017  1,000,000  $0.40 
The September 2017 Rosen Loan Agreement 224,000  224,000   18% September 24, 2017  125,000   0.20 
The November 2017 Schiller Loan Agreement -  25,000   15% December 31, 2017  -   - 
The May 2018 Schiller Loan Agreement 100,000  -   13% February 2, 2019  300,000   0.20 
The June 2018 Frommer Loan Agreement 10,000  -   6% August 17, 2018  30,000   0.20 
  1,334,000  1,249,000               
Less: Current Debt (28,093)  -               
  $1,305,907  $1,249,000               

 

The May 2016 Rosen Loan Agreement

 

On May 26, 2016, the Company entered into a loan agreement (the “May 2016 Rosen Loan Agreement”) with Arthur Rosen, an individual (“Rosen”), pursuant to which on May 26, 2016 (the “Closing Date”), Rosen provided the Company a secured term loan of $1,000,000 (the “May 2016 Rosen Loan”). In connection with the May 2016 Rosen Loan Agreement, on May 26, 2016, the Company and Rosen entered into a security agreement (the “Rosen Security Agreement”), pursuant to which the Company granted to Rosen a senior security interest in substantially all of the Company’s assets as security for repayment of the May 2016 Rosen Loan. Pursuant to the May 2016 Rosen Loan Agreement, the May 2016 Rosen Loan bears interest at a rate of 12.5% per annum, compounded annually and payable on the maturity date of May 26, 2017 (the “May 2016 Rosen Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the May 2016 Rosen Loan are due. The Company entered into an amendment to the May 2016 Rosen Loan extending the May 2016 Rosen Maturity Date to November 26, 2017. As additional consideration for entering in the May 2016 Rosen Loan Agreement, the Company issued Rosen a five-year warrant to purchase 1,000,000 shares of the Company’s common stock at a purchase price of $0.40 per share (the “May 2016 Rosen Warrant”). The May 2016 Rosen Warrant contains anti-dilution provisions as further described therein. On September 7, 2017 (the “Conversion Date”), Rosen converted all accrued but unpaid interest on the May 2016 Rosen Loan from May 26, 2016 through September 6, 2017 in the amount of $150,128 (the “May 2016 Rosen Loan Interest”) into the Company’s August Convertible Note Offering, after which May 2016 Rosen Loan Interest was deemed paid in full through the Conversion Date. 

 

The September 2017 Rosen Loan Agreement

 

On September 8, 2017, the Company entered into a loan agreement (the “September 2017 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $224,000 (the “September 2017 Rosen Note”). The September 2017 Rosen Note is secured by an officer of the Company. As additional consideration for entering in the September 2017 Rosen Note Loan Agreement, the Company issued Rosen a five-year warrant to purchase 25,000 shares of the Company’s common stock at a purchase price of $0.20 per share. On November 13, 2017, in consideration for extending the Promissory Note, Rosen was issued a warrant to purchase 100,000 shares of the Company’s Common Stock exercisable within five (5) years and with an exercise price of $0.20 per share. On February 20, 2018 the company entered into a Forbearance agreement whereas the Company issued Rosen a five-year warrant to purchase 448,000 shares of the Company’s common stock at a purchase price of $0.20 per share. The warrants had a fair value of $65,378 which was recorded to Loss on extinguishment of debt. The new Maturity Date is September 8, 2018.

 

The November 2017 Schiller Loan Agreement

 

On November 20, 2017, the Company entered into a loan agreement (the “November 2017 Schiller Loan Agreement”) Schiller, a member of the Board, whereby the Company issued Schiller a promissory note of $25,000 (the “November 2017 Schiller Note”). Pursuant to the November 2017 Schiller Loan Agreement, the November 2017 Schiller Note bears interest at a rate of 15% per annum. During the six months ended June 30, 2018 the Company repaid $25,000 in principal and $637 in interest.

 

The January 2018 Rosen Loan Agreement

 

On January 16, 2018, the Company entered into a loan agreement (the “January 2018 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $60,000 (the “January 2018 Rosen Note”). The January 2018 Rosen Note is secured by an officer of the Company whereas upon default an officer of the company owes default shares to the lender equal to the amount of principal outstanding divided by 0.20. Pursuant to the January 2018 Rosen Loan Agreement, the January 2018 Rosen Note bears interest at a rate of 6% per annum and payable on the maturity date of January 31, 2018 (the “January 2018 Rosen Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the May 2016 Rosen Loan are due. During the six months ended the company has repaid $60,000 in principal and $200 in interest.

 

The January 2018 Gordon Loan Agreement

 

On January 16, 2018, the Company entered into a loan agreement (the “January 2018 Gordon Loan Agreement”) with Gordon, whereby the Company issued Gordon a promissory note of $40,000 (the “January 2018 Gordon Note”). The January 2018 Gordon Note is secured by an officer of the Company whereas upon default an officer of the company owes default shares to the lender equal to the amount of principal outstanding divided by 0.20. Pursuant to the January 2018 Gordon Loan Agreement, the January 2018 Gordon Note bears interest at a rate of 6% per annum and payable on the maturity date of January 31, 2018 (the “January 2018 Gordon Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the January 2018 Gordon Loan are due. During the six months ended the company have repaid $40,000 in principal and $105 in interest.

 

The First March 2018 Rosen Loan Agreement

 

On March 4, 2018, the Company entered into a loan agreement (the “First March 2018 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $10,000 (the “First March 2018 Rosen Note”). As additional consideration for entering in the First March 2018 Rosen Note Loan Agreement, the Company issued Rosen a five-year warrant to purchase 10,000 shares of the Company’s common stock at a purchase price of $0.20 per share. Pursuant to the First March 2018 Rosen Loan Agreement, the First March 2018 Rosen Note bears interest at a rate of 12% per annum and payable on the maturity date of March 19, 2018 (the “First March 2018 Rosen Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First March 2018 Rosen Loan was due. During the six months ended the company have repaid $10,000 in principal and $260 in interest.

 

The Second March 2018 Rosen Loan Agreement

 

On March 9, 2018, the Company entered into a loan agreement (the “Second March 2018 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $15,000 (the “Second March 2018 Rosen Note”). As additional consideration for entering in the Second March 2018 Rosen Note Loan Agreement, the Company issued Rosen a five-year warrant to purchase 15,000 shares of the Company’s common stock at a purchase price of $0.20 per share. Pursuant to the Second March 2018 Rosen Loan Agreement, the Second March 2018 Rosen Note bears interest at a rate of 12% per annum and payable on the maturity date of March 24, 2018 (the “Second March 2018 Rosen Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second March 2018 Rosen Loan was due. During the six months ended the company have repaid $15,000 in principal and $365 in interest.

 

The Third March 2018 Rosen Loan Agreement

 

On March 13, 2018, the Company entered into a loan agreement (the “Third March 2018 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $10,000 (the “Third March 2018 Rosen Note”). As additional consideration for entering in the Third March 2018 Rosen Note Loan Agreement, the Company issued Rosen a five-year warrant to purchase 10,000 shares of the Company’s common stock at a purchase price of $0.20 per share. Pursuant to the Third March 2018 Rosen Loan Agreement, the Third March 2018 Rosen Note bears interest at a rate of 12% per annum and payable on the maturity date of March 28, 2018 (the “Third March 2018 Rosen Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Third March 2018 Rosen Loan was due. During the six months ended the company have repaid $10,000 in principal and $230 in interest.

 

The May 2018 Schiller Loan Agreement

 

On May 2, 2018, the Company entered into a loan agreement (the “May 2018 Schiller Loan Agreement”) Schiller, a member of the Board, whereby the Company issued Schiller a promissory note of $100,000 (the “May 2018 Schiller Note”). As additional consideration for entering in the May 2018 Schiller Note Loan Agreement, the Company issued Schiller a four-year warrant to purchase 300,000 shares of the Company’s common stock at a purchase price of $0.20 per share. Pursuant to the May 2018 Schiller Loan Agreement, the May 2018 Schiller Note bears interest at a rate of 13% per annum and payable on the maturity date of February 02, 2019 (the “May 2018 Schiller Maturity Date”) at which time all outstanding principal, accrued and unpaid interest are due under the May 2018 Schiller Loan.

  

The June 2018 Frommer Loan Agreement

 

On June 29, 2018, the Company entered into a loan agreement (the “June 2018 Frommer Loan Agreement”) Frommer, an officer of the company, whereby the Company issued Frommer a promissory note of $10,000 (the “June 2018 Frommer Note”). As additional consideration for entering in the June 2018 Frommer Note Loan Agreement, the Company issued Frommer a four-year warrant to purchase 30,000 shares of the Company’s common stock at a purchase price of $0.20 per share. Pursuant to the June 2018 Frommer Loan Agreement, the June 2018 Frommer Note bears interest at a rate of 6% per annum and payable on the maturity date of August 17, 2018 (the “June 2018 Frommer Maturity Date”) at which time all outstanding principal, accrued and unpaid interest are due under the June 2018 Frommer Loan.

 

Line of credit – related party

 

On May 9, 2017, the Company entered into a Revolving Line of Credit (the “LOC”) with Grawin, LLC, an LLC controlled by Arthur Rosen, a related party. The LOC was established for a period of twelve months, with a maturity date of May 2018, in which the Company can borrow principal up to $130,000. The LOC bears interest at a rate of 18%.  On June 8, 2018 the Revolving Line of Credit’s maturity date was extended to June 1, 2019.

 

As of June 30, 2018, the total outstanding balance of line of credit - related party was $130,000.

Note 8 – Related Party Loan

 

Convertible notes

 

Convertible notes payable – related party as of December 31, 2017 and 2016 is as follows:

 

  Outstanding Principal as of       Warrants 
  December 31, 2017  December 31,
2016
  Interest Rate  Maturity Date Quantity  Exercise
Price
 
August – October 2017  1,416,026      -   15% August – October 2019  4,589,466   0.20 
December 21, 2018  100,000       15% December 21, 2019  500,000   0.20 
   1,516,026   -               
Less: Debt Discount  (170,780)  -               
   1,345,246   -               
Less: Current Debt  -   -               
Total Long-Term Debt $1,345,246  $                  -               

 

On April 25, 2017, the Company issued convertible notes to Arthur Rosen, a lender, totaling $25,000 (the “April Rosen Notes”). The April Rosen Notes accrue interest at 12% per annum and mature with interest and principal both due on September 1, 2017. In addition, in connection with the April Rosen Notes, the Company issued a five-year warrant to purchase 17,500 shares of Company common stock at a purchase price of $0.20 per share. On September 7, 2017, the April Rosen Notes and accrued interest was converted into the August 2017 Convertible Note Offering.

  

On April 25, 2017, the Company issued a convertible note to Chris Gordon, a lender totaling $25,000 (the “April Gordon Notes”). The April Gordon Notes accrue interest at 12% per annum and matures with interest and principal both due on September 1, 2017. In addition, the Company issued a five-year warrant to purchase 17,500 shares of Company common stock at a purchase price of $0.20 per share. The April Gordon Notes and accrued interest were converted into the August 2017 Convertible Note Offering.

 

The August 2017 Convertible Note Offering – Related Party 

 

During the year ended December 31, 2017, the Company conducted multiple closings of a private placement offering to accredited investors (the “The August 2017 Convertible Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $505,000. In addition, $645,000 of the Company’s short term debt along with accrued but unpaid interest of $206,026 was converted into the August 2017 Convertible Offering. The conversions resulted in the issuance of 4,555,129 warrants with a fair value of $440,157 and the increase of principal of $60,000. These resulted in a loss on extinguishment of debt of $500,157.

 

The Company offered, through a placement agent, $6,000,000 of units of its securities (each, a “Unit” and collectively, the “Units”), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “Note” and together the “Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a conversion price of $0.20 per share (the “Conversion Price”), and (b) a five-year warrant ( each a “Warrant and together the “Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $0.20 per share (“Exercise Price”). The Notes mature on the second (2nd) anniversary of their issuance dates.

 

The Conversion Price of the Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

  

The Company recorded a $160,700 debt discount relating to 2,525,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

On December 21, 2017, the Company issued a convertible note to a third party lender totaling $100,000 (the “Second December 2017 Note”). The Second December 2017 Note accrues interest at 15% per annum and matures with interest and principal both due on December 27, 2019. In addition, the Company issued a warrant to purchase 500,000 shares of Company common stock. The warrant entitles the holder to purchase the Company’s common stock at a purchase price of $0.20 per share for a period of five years from the issue date. The Company recorded a $36,722 debt discount relating to the warrants issued to the investor based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note The Second December 2017 Note and accrued interest is convertible at a conversion price of $0.20 per share, subject to adjustment. The Second December 2017 Note is secured as a second priority lien on the assets of the Company. 

 

Notes payable

  

Notes payable – related party as of December 31, 2017 and 2016 is as follows:

 

  Outstanding Principal as of       Warrants 
  December 31, 2017  December 31, 2016  Interest
Rate
  Maturity Date Quantity  Exercise
Price
 
May 26, 2016  1,000,000   1,000,000   13% November 26, 2017  1,000,000   0.40 
September 12, 2016  -   100,000   12% November 22, 2017  17,500   0.20 
September 20, 2016  -   10,000   10% March 20, 2017  235,000   0.40 
October 13, 2016  -   50,000   12% November 22, 2017  50,000   0.40 
October 24, 2016  -   15,000   9% January 1, 2018  30,000   0.30 
October 31, 2016  -   10,000   10% November 10, 2016  10,000   0.30 
November 22, 2016  -   225,000   10% November 22, 2017  750,000   0.30 
December 21, 2016  -   50,000   10% November 22, 2017  166,666   0.30 
September 8, 2017  224,000   -   1% September 24, 2017  

125,000

   0.20 
November 20, 2017  25,000   -   15% December 31, 2017  -   - 
   1,249,000   1,460,000               
Less: Debt Discount  (-)   (94,675)              
  $1,249,000  $1,365,325               

 

On May 26, 2016, the Company entered into a loan agreement (the “May 2016 Rosen Loan Agreement”) with Arthur Rosen, an individual (“Rosen”), pursuant to which on May 26, 2016 (the “Closing Date”), Rosen provided the Company a secured term loan of $1,000,000 (the “May 2016 Rosen Loan”). In connection with the May 2016 Rosen Loan Agreement, on May 26, 2016, the Company and Rosen entered into a security agreement (the “Rosen Security Agreement”), pursuant to which the Company granted to Rosen a senior security interest in substantially all of the Company’s assets as security for repayment of the May 2016 Rosen Loan. Pursuant to the May 2016 Rosen Loan Agreement, the May 2016 Rosen Loan bears interest at a rate of 12.5% per annum, compounded annually and payable on the maturity date of May 26, 2017 (the “May 2016 Rosen Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the May 2016 Rosen Loan are due. The Company entered into an amendment to the May 2016 Rosen Loan extending the May 2016 Rosen Maturity Date to November 26, 2017. As additional consideration for entering in the May 2016 Rosen Loan Agreement, the Company issued Rosen a five-year warrant to purchase 1,000,000 shares of the Company’s common stock at a purchase price of $0.40 per share (the “May 2016 Rosen Warrant”). The May 2016 Rosen Warrant contains anti-dilution provisions as further described therein. On September 7, 2017 (the “Conversion Date”), Rosen converted all accrued but unpaid interest on the May 26 Rosen Loan from May 26, 2016 through September 6, 2017 in the amount of $150,128 (the “May 26 Rosen Loan Interest”) into the Company’s August Convertible Note Offering, after which May 26 Rosen Loan Interest was deemed paid in full through the Conversion Date.

 

On September 12, 2016, the Company entered into a loan agreement (the “September 2016 Rosen Loan Agreement”) with Rosen, pursuant to which on September 12, 2016 (the “Closing Date”), the Company issued Rosen a promissory note of $100,000 (the “September 2016 Rosen Note”). Pursuant to the September 2016 Rosen Loan Agreement, the September 2016 Rosen Note bears interest at a rate of 12% per annum. As additional consideration for entering in the September 2016 Rosen Loan Agreement, the Company issued Rosen a five-year warrant to purchase 150,000 shares of the Company’s common stock at a purchase price of $0.40 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

  

On October 13, 2016, the Company entered into a loan agreement (the “October 2016 Gordon Loan Agreement”) with Chris Gordon, an individual (the “Gordon”), pursuant to which on October 13, 2016 (the “Closing Date”), the Company issued a promissory note of $50,000 to Gordon (the “October 2016 Gordon Note”). Pursuant to the October 2016 Gordon Loan Agreement, the October 2016 Gordon Note bears interest at a rate of 12% per annum. As additional consideration for entering in the October 2016 Gordon Loan Agreement, the Company issued Gordon a five-year warrant to purchase 50,000 shares of the Company’s common stock at a purchase price of $0.40 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On October 24, 2016, the Company entered into a loan agreement (the “October 2016 Schiller Loan Agreement”) with Leonard Schiller, a Board Member (the “Schiller”), pursuant to which on October 24, 2016 (the “Closing Date”), the Company issued Schiller a promissory note of $15,000 (the “October 2016 Schiller Note”). Pursuant to the October 2016 Schiller Loan Agreement, the October 2016 Schiller Note bears interest at a rate of 9% per annum. As additional consideration for entering in the October 2016 Schiller Loan Agreement, the Company issued Schiller a 5-year warrant to purchase 30,000 shares of the Company’s common stock at a purchase price of $0.30 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On October 31, 2016, the Company entered into a loan agreement (the “October 2016 Rosen Loan Agreement”) with Rosen, pursuant to which on October 31, 2016 (the “Closing Date”), Company issued Rosen a promissory note of $10,000 (the “October 2016 Rosen Note”). Pursuant to the October 2016 Rosen Loan Agreement, the October 2016 Rosen Note bears interest at a rate of 10% per annum. As additional consideration for entering in the October 2016 Rosen Loan Agreement, the Company issued Rosen a five-year warrant to purchase 10,000 shares of the Company’s common stock at a purchase price of $0.30 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On December 21, 2016, the Company entered into a loan agreement (the “December 2016 Gordon Loan Agreement”) with Gordon, pursuant to which on December 21, 2016 (the “Closing Date”), the Company issued Gordon a promissory note of $275,000 (the “December 2016 Gordon Note”). Pursuant to the December 2016 Gordon Loan Agreement, the December 2016 Gordon Note bears interest at a rate of 10% per annum. As additional consideration for entering in the December 2016 Gordon Loan Agreement, the Company issued Gordon a five-year warrant to purchase 166,666 shares of the Company’s common stock at a purchase price of $0.40 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

  

On January 25, 2017, the Company entered into a loan agreement (the “January 2017 Rosen Loan Agreement”) with Rosen pursuant to which on January 25, 2017 (the “Closing Date”), the Company issued Rosen a promissory note of $50,000 (the “January 2017 Rosen Note”). The January 2017 Rosen Note is secured by an officer of the Company. Pursuant to the January 2017 Rosen Loan Agreement, the January 2017 Rosen Note bears interest at a rate of 10% per annum. As additional consideration for entering in the January 2017 Rosen Loan Agreement, the Company issued Rosen a five-year warrant to purchase 50,000 shares of the Company’s common stock at a purchase price of $0.30 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On January 26, 2017, the Company entered into a loan agreement (the “January 2017 Gordon Loan Agreement”) with Gordon pursuant to which on January 26, 2017 (the “Closing Date”), the Company issued Gordon a promissory note of $50,000 (the “January 2017 Gordon Note”). The January 2017 Gordon Note is secured by an officer of the Company. Pursuant to the January 2017 Gordon Loan Agreement, the January 2017 Gordon Note bears interest at a rate of 10% per annum. As additional consideration for entering in the January 2017 Gordon Loan Agreement, the Company issued Gordon a five-year warrant to purchase 50,000 shares of the Company’s common stock at a purchase price of $0.30 per share. During the year ended December 31, 2017 the principal and interest of this note were repaid.

 

On February 7, 2017, the Company entered into a loan agreement (the “February 2017 Schiller Loan Agreement”) with Schiller, a member of the Board, pursuant to which on October 24, 2016 (the “Closing Date”), the Company issued Schiller a promissory note of $10,000 (the “February 2017 Schiller Note”). The February 2017 Schiller Note is secured by an officer of the Company. Pursuant to the February 2017 Schiller Loan Agreement, the February 2017 Schiller Note bears interest at a rate of 10% per annum. As additional consideration for entering in the February 2017 Schiller Note Loan Agreement, the Company issued Schiller a five-year warrant to purchase 10,000 shares of the Company’s common stock at a purchase price of $0.30 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On April 12, 2017, the Company entered into a loan agreement (the “April 2017 Schiller Loan Agreement”) with Schiller, a member of the Board, whereby the Company issued Schiller a promissory note of $10,000 (the “April 2017 Schiller Note”). The April 2017 Schiller Note is secured by an officer of the Company. Pursuant to the April 2017 Schiller Loan Agreement, the April 2017 Schiller Note bears interest at a rate of 10% per annum. As additional consideration for entering in the April 2017 Schiller Loan Agreement, the Company issued Schiller a five-year warrant to purchase 10,000 shares of the Company’s common stock at a purchase price of $0.30 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On April 12, 2017, the Company entered into a loan agreement (the “April 2017 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $10,000 (the “April 2017 Rosen Note”). The April 2017 Rosen Note is secured by an officer of the Company. Pursuant to the April 2017 Rosen Loan Agreement, the April 2017 Rosen Note bears interest at a rate of 10% per annum. As additional consideration for entering in the April 2017 Rosen Loan Agreement, the Company issued Rosen a five-year warrant to purchase 10,000 shares of the Company’s common stock at a purchase price of $0.30 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On May 4, 2017, the Company entered into a loan agreement (the “May 2017 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $15,000 (the “May 2017 Rosen Note”). The May 2017 Rosen Note is secured by an officer of the Company. Pursuant to the May 2017 Rosen Note Loan Agreement, the May 2017 Rosen Note bears interest at a rate of 12% per annum. As additional consideration for entering in the May 2017 Rosen Note Loan Agreement, the Company issued Rosen a five-year warrant to purchase 10,500 shares of the Company’s common stock at a purchase price of $0.30 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

  

On May 11, 2017, the Company entered into a loan agreement (the “May 2017 Schiller Loan Agreement”) with Schiller, a member of the Board, whereby the Company issued Schiller a promissory note of $20,000 (the “May 2017 Schiller Note”). Pursuant to the May 2017 Schiller Loan Agreement, the May 2017 Schiller Note bears interest at a rate of 10% per annum. As additional consideration for entering in the May 2017 Schiller Note Loan Agreement, the Company issued Schiller a five-year warrant to purchase 20,000 shares of the Company’s common stock at a purchase price of $0.20 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

  

On June 26, 2017, the Company entered into a loan agreement (the “June 2017 Schiller Loan Agreement”) Schiller, a member of the Board, whereby the Company issued Schiller a promissory note of $30,000 (the “June 2017 Schiller Note”). Pursuant to the June 2017 Schiller Loan Agreement, the June 2017 Schiller Note bears interest at a rate of 10% per annum. As additional consideration for entering in the June 2017 Schiller Loan Agreement, the Company issued Schiller a five-year warrant to purchase 22,500 shares of the Company’s common stock at a purchase price of $0.20 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On July 6, 2017, the Company entered into a loan agreement (the “July 2017 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $25,000 (the “July 2017 Rosen Note”). The July 2017 Rosen Note is secured by an officer of the Company. Pursuant to the July 2017 Rosen Note Loan Agreement, the July 2017 Rosen Note bears interest at a rate of 10% per annum. As additional consideration for entering in the July 2017 Rosen Note Loan Agreement, the Company issued Rosen a five-year warrant to purchase 18,750 shares of the Company’s common stock at a purchase price of $0.20 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On July 6, 2017, the Company entered into a loan agreement (the “July 2017 Gordon Loan Agreement”) with Gordon, whereby the Company issued Gordon a promissory note of $25,000 (the “July 2017 Gordon Note”). The July 2017 Gordon Note is secured by an officer of the Company. Pursuant to the July 2017 Gordon Note Loan Agreement, the July 2017 Gordon Note bears interest at a rate of 10% per annum. As additional consideration for entering in the July 2017 Gordon Note Loan Agreement, the Company issued Gordon a five-year warrant to purchase 18,750 shares of the Company’s common stock at a purchase price of $0.20 per share. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On August 24, 2017, the Company entered into a loan agreement (the “August 2017 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $20,000 (the “August 2017 Rosen Note”). The August 2017 Rosen Note is secured by an officer of the Company. Pursuant to the August 2017 Rosen Note Loan Agreement, the August 2017 Rosen Note bears interest at a rate of 12% per annum. During the year ended December 31, 2017 the principal and interest of this note were converted into the August 2017 Convertible Note Offering.

 

On September 8, 2017, the Company entered into a loan agreement (the “September 2017 Rosen Loan Agreement”) with Rosen, whereby the Company issued Rosen a promissory note of $224,000 (the “September 2017 Rosen Note”). The September 2017 Rosen Note is secured by an officer of the Company. As additional consideration for entering in the September 2017 Rosen Note Loan Agreement, the Company issued Rosen a five-year warrant to purchase 25,000 shares of the Company’s common stock at a purchase price of $0.20 per share. On November 13, 2017, in consideration for extending the Promissory Note, Rosen was issued a warrant to purchase 100,000 shares of the Company’s Common Stock exercisable within five (5) years and with an exercise price of $0.20 per share.

 

On November 20, 2017, the Company entered into a loan agreement (the “November 2017 Schiller Loan Agreement”) Schiller, a member of the Board, whereby the Company issued Schiller a promissory note of $25,000 (the “November 2017 Schiller Note”). Pursuant to the November 2017 Schiller Loan Agreement, the November 2017 Schiller Note bears interest at a rate of 15% per annum.

  

On November 20, 2017, the Company entered into a loan agreement (the “November 2017 Rosen Agreement”) whereby the Company issued Rosen a promissory note of $25,000 (the “November 2017 Rosen Note”). Pursuant to the November 2017 Rosen Loan Agreement, the November 2017 Rosen Note bears interest at a rate of 15% per annum. During the year ended December 31, 2017 the principal and interest of this note were repaid. 

 

Line of credit – related party

 

On May 9, 2017, the Company entered into a Revolving Line of Credit (the “LOC”) with Grawin, LLC, an LLC controlled by Arthur Rosen, a related party. The LOC is was established for a period of twelve months in which the Company can borrow principal up to $130,000. The LOC bears interest at a rate of 18%.

 

As of December 31, 2017, the total outstanding balance of line of credit - related party was $130,000.

v3.10.0.1
Capital Leases Payable
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Capital Leases Payable [Abstract]    
Capital Leases Payable

Note 9 – Capital Leases Payable

 

Capital lease obligation consisted of the following:

 

   June 30,
2018
  December 31,
2017
 
        
(i)Capital lease obligation to a financing company for a term of five (5) years, collateralized by equipment, with interest at 10.0% per annum, with principal and interest due and payable in monthly installments of $383.10 $4,732  $4,732 
          
 Less current maturities  (4,732)  (4,732)
          
 Capital lease obligation, net of current maturities  -   - 
          
 TOTAL CAPITAL LEASE OBLIGATION $4,732  $4,732 

 

The capital leases mature as follows:

 

2018: $4,732  $4,732

Note 9 – Capital Leases Payable

 

Capital lease obligation consisted of the following:

 

   December 31,
2017
  December 31,
2016
 
        
(i)Capital lease obligation to a financing company for a term of five (5) years, collateralized by equipment, with interest at 10.0% per annum, with principal and interest due and payable in monthly installments of $383.10 $4,732  $4,732 
          
 Less current maturities  (4,732)  (3,524)
          
 Capital lease obligation, net of current maturities  -   1,208 
          
 TOTAL CAPITAL LEASE OBLIGATION $4,732  $4,732 

 

The capital leases mature as follows:

 

2017: $-  $3,524 
2018:  4,732  $1,208
v3.10.0.1
Derivative Liabilities
12 Months Ended
Dec. 31, 2017
Derivative Liabilities [Abstract]  
Derivative Liabilities

Note 10 – Derivative Liabilities

 

The Company has identified derivative instruments arising from embedded conversion features in the Company’s convertible notes payable at December 31, 2017. The Company had no financial assets measured at fair value on a recurring basis as of December 31, 2017.

  

The following summarizes the Black-Scholes assumptions used to estimate the fair value of the derivative liability at the date of issuance and for the convertible notes during the year ended December 31, 2017.

 

  Low  High 
Annual dividend rate  0%  0%
Expected life  0.58   0.75 
Risk-free interest rate  1.11%  1.16%
Expected volatility  90.71%  93.55%

 

Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note with a similar term on the date of the grant.

 

Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.

 

Volatility: The Company calculates the expected volatility of the stock price based on the corresponding volatility of the Company’s peer group stock price for a period consistent with the expected term.

 

Expected term: The Company’s remaining term is based on the remaining contractual maturity of the convertible notes.

 

The following are the changes in the derivative liabilities during the year ended December 31, 2017.

 

  Year Ended
December 31, 2017
 
  Level 1  Level 2  Level 3 
Derivative liabilities as January 1, 2017 $       -  $      -  $- 
Addition  -   -   332,942 
Conversion  -   -     
Extinguishment Expense          (397,288)
Gain on changes in fair value  -   -   64,346 
Derivative liabilities as December 31, 2017 $-  $-  $- 
 
v3.10.0.1
Stockholders' Deficit
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Stockholders' Deficit [Abstract]    
Stockholders' Deficit

Note 10 – Stockholders’ Deficit

 

Shares Authorized

 

Upon incorporation, the total number of shares of all classes of stock which the Company is authorized to issue is Three Hundred Twenty Million (320,000,000) shares of which Three Hundred Million (300,000,000) shares shall be Common Stock, par value $0.001 per share and Twenty Million (20,000,000) shall be Preferred Stock, par value $0.001 per share. The designations, rights, and preferences of such preferred stock are to be determined by the Board of Directors.

 

Preferred Stock

  

Series A Cumulative Convertible Preferred Stock

 

On February 13, 2015, 100,000 shares of preferred stock were designated as Series A Cumulative Convertible Preferred Stock (“Series A”). Each share of Series A shall have a stated value equal to $100 (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the “Series A Stated Value”).

 

The holders of the Series A shall be entitled to receive preferential dividends at the rate of 6% per share per annum on the Series A Stated Value, but before any dividend or other distribution will be paid or declared and set apart for payment on any shares of any Junior Stock, as defined. Such dividends shall compound annually and be fully cumulative, and shall accumulate from the date of original issuance of the Series A and shall be payable quarterly, in arrears, commencing on the first day of the calendar quarter following the date on which the Series A is issued. Upon the occurrence of an Event of Default (as defined below) and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series A Stated Value. At the Company’s option, such dividend payments may be made in (i) cash (ii) additional shares of Series A valued at the Series A Stated Value thereof, in an amount equal to 150% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series A, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series A Preferred.

 

The dividends on the Series A shall be cumulative whether or not declared so that, if at any time full cumulative dividends at the rate aforesaid on all shares of the Series A then outstanding from the date from and after which dividends thereon are cumulative to the end of the annual dividend period next preceding such time shall not have been paid or declared and set apart for payment, or if the full dividend on all such outstanding Series A for the then current dividend period shall not have been paid or declared and set apart for payment, the amount of the deficiency shall be paid or declared and set apart for payment before any sum shall be set apart for or applied by the Corporation or a subsidiary of the Corporation to the purchase, redemption or other acquisition of the Series A or any shares of any other class of stock ranking on a parity with the Series A and before any dividend or other distribution shall be paid or declared and set apart for payment on any Junior Stock and before any sum shall be set aside for or applied to the purchase, redemption or other acquisition of any Junior Stock.

 

Holder of Series A shall have the right at any time after the issuance, to convert such shares, accrued but unpaid declared dividends on the Series A and any other sum owed by the Corporation arising from the Series A into fully paid and non-assessable shares of Common Stock (the “Conversion Shares”) of the Corporation determined in accordance with the applicable conversion price (the “Conversion Price”). 

 

The number of Conversion Shares issuable upon conversion shall equal (i) the sum of (A) the Series A Stated Value being converted and/or (B) at the Holder’s election, accrued and unpaid dividends or any other component of the Conversion Amount, divided by (ii) the Conversion Price. The Conversion Price of the Series A shall be $0.25, subject to adjustment.

 

During the year ended December 31, 2016 the conversion price was adjusted to $0.164

 

The Corporation and the Holder may not convert that amount of the Conversion Amount on a Conversion Date in amounts that would result in the Holder having a beneficial ownership of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this provision is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty-one (61) days’ prior written notice to the Corporation.

 

The holders of our Series A do vote together with the holders of our Common Stock on an as converted basis on each matter submitted to a vote of holders of Common Stock. The number of votes that may be cast by a holder of Series A shall be equal to the number of shares of Common Stock issuable upon conversion of such Holder’s Series A on the record date for determining those stockholders entitled to vote on the matter. In addition, the affirmative vote of the holders of a majority of our outstanding Series A is required to for the following actions:

 

(a) amending the Corporation’s certificate of incorporation or by-laws if such amendment would adversely affect the Series A

 

(b) purchasing any of the Corporation’s securities other than required redemptions of Series A and repurchase under restricted stock and option agreements authorizing the Corporation’s employees;

 

(c) effecting a Liquidation Event;

 

(d) declaring or paying any dividends other than in respect of the Series A; and

 

(e) issuing any additional securities having rights senior to or on parity with the Series A.

 

As of June 30, 2018, the company has undeclared Series A dividends of $636,772.

 

Series B Cumulative Convertible Preferred Stock

 

On December 21, 2015, 20,000 shares of preferred stock were designated as Series B Cumulative Convertible Preferred Stock (“Series B”). Each share of Series B shall have a stated value equal to $100.00 (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the “Series B Stated Value”).

 

The holders of outstanding shares of Series B shall be entitled to receive preferential dividends at the rate of 6% per share per annum on the Series B Stated Value, but before any dividend or other distribution will be paid or declared and set apart for payment on any shares of any Junior Stock as defined. Such dividends shall compound annually and be fully cumulative, and shall accumulate from the date of original issuance of the Series B, and shall be payable quarterly, in arrears, commencing on the first day of the calendar quarter following the date on which the Series B is issued. Upon the occurrence of an Event of Default as defined below and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series B Stated Value. At the Corporation’s option, such dividend payments may be made in (i) cash (ii) additional shares of Series B valued at the Series B Stated Value thereof, in an amount equal to 100% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series B, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series B Preferred.

 

The dividends on the Series B shall be cumulative whether or not declared so that, if at any time full cumulative dividends at the rate aforesaid on all shares of the Series B then outstanding from the date from and after which dividends thereon are cumulative to the end of the annual dividend period next preceding such time shall not have been paid or declared and set apart for payment, or if the full dividend on all such outstanding Series B for the then current dividend period shall not have been paid or declared and set apart for payment, the amount of the deficiency shall be paid or declared and set apart for payment before any sum shall be set apart for or applied by the Corporation or a subsidiary of the Corporation to the purchase, redemption or other acquisition of the Series B or any shares of any other class of stock ranking on a parity with the Series B and before any dividend or other distribution shall be paid or declared and set apart for payment on any Junior Stock and before any sum shall be set aside for or applied to the purchase, redemption or other acquisition of any Junior Stock.

 

Holders of shares of Series B shall have the right at any time commencing after the issuance to convert such shares, accrued but unpaid declared dividends on the Series B into fully paid and non-assessable shares of Common Stock (the “Conversion Shares”) of the Corporation determined in accordance with the applicable conversion price (the “Conversion Price”). All declared or accrued but unpaid dividends may be converted at the election of the Holder together with or independent of the conversion of the Series B Stated Value of the Series B. 

 

The number of Conversion Shares issuable upon conversion of the Conversion Amount shall equal (i) the sum of (A) the Series B Stated Value being converted and/or (B) at the Holder’s election, accrued and unpaid dividends or any other component of the Conversion Amount, divided by (ii) the Conversion Price. The Conversion Price of the Series B shall be $0.30, subject to adjustment.

 

During the year ended December 31, 2016 the conversion price was adjusted to $0.197

 

The Corporation and the Holder may not convert that amount of the Conversion Amount on a Conversion Date in amounts that would result in the Holder having a beneficial ownership of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this proviso is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty one (61) days’ prior written notice to the Corporation.

 

The holders of our Series B do vote together with the holders of our Common Stock on an as converted basis on each matter submitted to a vote of holders of Common Stock. The number of votes that may be cast by a holder of Series B shall be equal to the number of shares of Common Stock issuable upon conversion of such Holder’s Series B on the record date for determining those stockholders entitled to vote on the matter. In addition, the affirmative vote of the holders of a majority of our outstanding Series B is required to for the following actions:

 

(a) amending the Corporation’s certificate of incorporation or by-laws if such amendment would adversely affect the Series B

 

(b) purchasing any of the Corporation’s securities other than required redemptions of Series B and repurchase under restricted stock and option agreements authorizing the Corporation’s employees;

 

(c) effecting a Liquidation Event;

 

(d) declaring or paying any dividends other than in respect of the Company’s Series A or Series B; and

 

(e) issuing any additional securities having rights senior to the Series B. 

 

As of June 30, 2018, the company has undeclared Series B dividends of $118,289.

 

Common Stock

 

On January 31, 2018, the Company issued 18,750 shares of its restricted common stock to settle outstanding vendor liabilities of $3,750. In connection with this transaction the Company also recorded a gain on settlement of vendor liabilities of $375. 

 

During the six months ended June 30, 2018, the Company issued 610,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $116,300. These shares were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the six months ended June 30, 2018 the Company recorded $48,889 to share based payments.

 

Stock Options

 

The Company applied fair value accounting for all share-based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. 

 

At June 30, 2018 and 2017, the aggregate intrinsic value of options outstanding and exercisable was $0 and $0, respectively. 

 

Stock-based compensation for stock options has been recorded in the consolidated statements of operations and totaled $232,129 and $463,619, for the six months ended June 30, 2018 and 2017, respectively.

 

The Company did not issue any new options during the six months ended June 30, 2018.

 

Warrants

 

The Company applied fair value accounting for all share-based payments awards. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model.

 

The assumptions used for warrants granted during the six months ended June 30, 2018 are as follows:

 

  June 30,
2018
 
Exercise price $0.20 
Expected dividends  0%
Expected volatility  92.14%-100.56% 
Risk free interest rate  1.64%-2.69% 
Expected life of warrant  4 - 5 years 

 

Warrant Activities

 

The following is a summary of the Company’s warrant activity:

 

  Warrants  Weighted
Average
Exercise
Price
 
       
Outstanding – December 31, 2017  46,193,779  $0.24 
Granted  15,873,016   0.20 
Exercised  (50,000)  0.40 
Forfeited/Cancelled  -   - 
Outstanding and Exercisable – June 30, 2018  62,016,795  $0.24 

   

Warrants Outstanding  Warrants Exercisable 
Exercise price  Number
Outstanding
  Weighted Average
Remaining Contractual Life
(in years)
  Weighted
Average
Exercise Price
  Number
Exercisable
  Weighted
Average
Exercise Price
 
$0.20   62,016,795   3.66   0.24   62,016,795   0.24 

  

During the six months ended June 30, 2018, a total of 2,425,500 warrants were issued with promissory notes (See Note 6 above). The warrants have a grant date fair value of $420,456 using a Black-Scholes option-pricing model and the above assumptions.

 

During the six months ended June 30, 2018, a total of 10,481,016 warrants were issued with convertible notes (See Note 7 above). The warrants have a grant date fair value of $1,284,683 using a Black-Scholes option-pricing model and the above assumptions.

 

During the six months ended June 30, 2018, a total of 1,563,000 warrants were issued with notes payable – related party (See Note 8 above). The warrants have a grant date fair value of $307,808 using a Black-Scholes option-pricing model and the above assumptions.

 

During the six months ended June 30, 2018, a total of 1,403,500 warrants were issued with convertible notes payable – related party (See Note 8 above). The warrants have a grant date fair value of $162,834 using a Black-Scholes option-pricing model and the above assumptions.

Note 11 - Stockholders’ Deficit

 

Shares Authorized

 

Upon incorporation, the total number of shares of all classes of stock which the Company is authorized to issue is Three Hundred Twenty Million (320,000,000) shares of which Three Hundred Million (300,000,000) shares shall be Common Stock, par value $0.001 per share and Twenty Million (20,000,000) shall be Preferred Stock, par value $0.001 per share. The designations, rights, and preferences of such preferred stock are to be determined by the Board of Directors.

 

Preferred Stock

 

Series A Cumulative Convertible Preferred Stock

 

On February 13, 2015, 100,000 shares of preferred stock were designated as Series A Cumulative Convertible Preferred Stock (“Series A”). Each share of Series A shall have a stated value equal to $100 (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the “Series A Stated Value”).

 

During the year ended December 31, 2015, the Company sold 24,400 shares of Series A for proceeds of $2,450,000. In addition, $800,000 in convertible notes and $91,400 in accrued interest were converted into 8,914 shares of the Company’s Series A.

  

During the year ended December 31, 2017, the Company converted 1,733 shares of Series A for 1,146,307 shares of common stock. 

 

The holders of the Series A shall be entitled to receive preferential dividends at the rate of 6% per share per annum on the Series A Stated Value, but before any dividend or other distribution will be paid or declared and set apart for payment on any shares of any Junior Stock, as defined. Such dividends shall compound annually and be fully cumulative, and shall accumulate from the date of original issuance of the Series A and shall be payable quarterly, in arrears, commencing on the first day of the calendar quarter following the date on which the Series A is issued. Upon the occurrence of an Event of Default (as defined below) and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series A Stated Value. At the Company’s option, such dividend payments may be made in (i) cash (ii) additional shares of Series A valued at the Series A Stated Value thereof, in an amount equal to 150% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series A, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series A Preferred.

 

The dividends on the Series A shall be cumulative whether or not declared so that, if at any time full cumulative dividends at the rate aforesaid on all shares of the Series A then outstanding from the date from and after which dividends thereon are cumulative to the end of the annual dividend period next preceding such time shall not have been paid or declared and set apart for payment, or if the full dividend on all such outstanding Series A for the then current dividend period shall not have been paid or declared and set apart for payment, the amount of the deficiency shall be paid or declared and set apart for payment before any sum shall be set apart for or applied by the Corporation or a subsidiary of the Corporation to the purchase, redemption or other acquisition of the Series A or any shares of any other class of stock ranking on a parity with the Series A and before any dividend or other distribution shall be paid or declared and set apart for payment on any Junior Stock and before any sum shall be set aside for or applied to the purchase, redemption or other acquisition of any Junior Stock.

 

Holder of Series A shall have the right at any time after the issuance, to convert such shares, accrued but unpaid declared dividends on the Series A and any other sum owed by the Corporation arising from the Series A into fully paid and non-assessable shares of Common Stock (the “Conversion Shares”) of the Corporation determined in accordance with the applicable conversion price (the “Conversion Price”). 

 

The number of Conversion Shares issuable upon conversion shall equal (i) the sum of (A) the Series A Stated Value being converted and/or (B) at the Holder’s election, accrued and unpaid dividends or any other component of the Conversion Amount, divided by (ii) the Conversion Price. The Conversion Price of the Series A shall be $0.25, subject to adjustment.

 

During the year ended December 31, 2016 the conversion price was adjusted to $0.164

 

The Corporation and the Holder may not convert that amount of the Conversion Amount on a Conversion Date in amounts that would result in the Holder having a beneficial ownership of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this provision is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty-one (61) days’ prior written notice to the Corporation.

 

The holders of our Series A do vote together with the holders of our Common Stock on an as converted basis on each matter submitted to a vote of holders of Common Stock. The number of votes that may be cast by a holder of Series A shall be equal to the number of shares of Common Stock issuable upon conversion of such Holder’s Series A on the record date for determining those stockholders entitled to vote on the matter. In addition, the affirmative vote of the holders of a majority of our outstanding Series A is required to for the following actions:

 

(a) amending the Corporation’s certificate of incorporation or by-laws if such amendment would adversely affect the Series A

 

(b) purchasing any of the Corporation’s securities other than required redemptions of Series A and repurchase under restricted stock and option agreements authorizing the Corporation’s employees;

 

(c) effecting a Liquidation Event;

 

(d) declaring or paying any dividends other than in respect of the Series A; and

 

(e) issuing any additional securities having rights senior to or on parity with the Series A.

 

During the year ended December 31, 2016, the Company accrued $3,318,353 for liquidating damages on the Series A and $309,665 on the warrants associated with the Series A.

 

During the year ended December 31, 2017, the Company accrued $0 for liquidating damages on the Series A and $0 on the warrants associated with the Series A.

 

Series B Cumulative Convertible Preferred Stock

 

On December 21, 2015, 20,000 shares of preferred stock were designated as Series B Cumulative Convertible Preferred Stock (“Series B”). Each share of Series B shall have a stated value equal to $100.00 (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the “Series B Stated Value”).

 

During the year ended December 31, 2015, the Company sold 7,000 shares of Series B for proceeds of $700,000.

 

The holders of outstanding shares of Series B shall be entitled to receive preferential dividends at the rate of 6% per share per annum on the Series B Stated Value, but before any dividend or other distribution will be paid or declared and set apart for payment on any shares of any Junior Stock as defined. Such dividends shall compound annually and be fully cumulative, and shall accumulate from the date of original issuance of the Series B, and shall be payable quarterly, in arrears, commencing on the first day of the calendar quarter following the date on which the Series B is issued. Upon the occurrence of an Event of Default as defined below and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series B Stated Value. At the Corporation’s option, such dividend payments may be made in (i) cash (ii) additional shares of Series B valued at the Series B Stated Value thereof, in an amount equal to 100% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series B, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series B Preferred.

 

The dividends on the Series B shall be cumulative whether or not declared so that, if at any time full cumulative dividends at the rate aforesaid on all shares of the Series B then outstanding from the date from and after which dividends thereon are cumulative to the end of the annual dividend period next preceding such time shall not have been paid or declared and set apart for payment, or if the full dividend on all such outstanding Series B for the then current dividend period shall not have been paid or declared and set apart for payment, the amount of the deficiency shall be paid or declared and set apart for payment before any sum shall be set apart for or applied by the Corporation or a subsidiary of the Corporation to the purchase, redemption or other acquisition of the Series B or any shares of any other class of stock ranking on a parity with the Series B and before any dividend or other distribution shall be paid or declared and set apart for payment on any Junior Stock and before any sum shall be set aside for or applied to the purchase, redemption or other acquisition of any Junior Stock.

 

Holders of shares of Series B shall have the right at any time commencing after the issuance to convert such shares, accrued but unpaid declared dividends on the Series B into fully paid and non-assessable shares of Common Stock (the “Conversion Shares”) of the Corporation determined in accordance with the applicable conversion price (the “Conversion Price”). All declared or accrued but unpaid dividends may be converted at the election of the Holder together with or independent of the conversion of the Series B Stated Value of the Series B. 

   

The number of Conversion Shares issuable upon conversion of the Conversion Amount shall equal (i) the sum of (A) the Series B Stated Value being converted and/or (B) at the Holder’s election, accrued and unpaid dividends or any other component of the Conversion Amount, divided by (ii) the Conversion Price. The Conversion Price of the Series B shall be $0.30, subject to adjustment.

 

During the year ended December 31, 2016 the conversion price was adjusted to $0.197

 

The Corporation and the Holder may not convert that amount of the Conversion Amount on a Conversion Date in amounts that would result in the Holder having a beneficial ownership of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this proviso is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty one (61) days’ prior written notice to the Corporation.

 

The holders of our Series B do vote together with the holders of our Common Stock on an as converted basis on each matter submitted to a vote of holders of Common Stock. The number of votes that may be cast by a holder of Series B shall be equal to the number of shares of Common Stock issuable upon conversion of such Holder’s Series B on the record date for determining those stockholders entitled to vote on the matter. In addition, the affirmative vote of the holders of a majority of our outstanding Series B is required to for the following actions:

 

(a) amending the Corporation’s certificate of incorporation or by-laws if such amendment would adversely affect the Series B

 

(b) purchasing any of the Corporation’s securities other than required redemptions of Series B and repurchase under restricted stock and option agreements authorizing the Corporation’s employees;

 

(c) effecting a Liquidation Event;

 

(d) declaring or paying any dividends other than in respect of the Company’s Series A or Series B; and

 

(e) issuing any additional securities having rights senior to the Series B. 

 

During the year ended December 31, 2016, the Company accrued $667,313 for liquidating damages on the Series B and $51,159 on the warrants associated with the Series B.

 

During the year ended December 31, 2016, the Company issued 1,063 shares of Series B upon conversion of interest totaling $108,844.

 

During the year ended December 31, 2017, the Company accrued $0 for liquidating damages on the Series B and $0 on the warrants associated with the Series B.

 

During the year ended December 31, 2017, the Company issued 0 shares of Series B upon conversion of interest totaling $0.

 

Series D Convertible Preferred Stock

 

On January 29, 2016, 2,100,000 shares of preferred stock were designated as Series D Convertible Preferred Stock (“Series D”). Each share of Series A shall have a stated value equal to $100.00 (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the “Series D Stated Value”).

 

Holders of shares of Series D shall have the right at any time commencing after the issuance to convert such shares into fully paid and non-assessable shares of Common Stock (the “Conversion Shares”) of the Corporation determined in accordance with the applicable conversion price (the “Conversion Price”).

 

The number of Conversion Shares issuable upon conversion of the Conversion Amount shall equal (i) the sum of (A) the Series D Stated Value being converted and/or (B) at the Holder’s election, accrued and unpaid dividends or any other component of the Conversion Amount, divided by (ii) the Conversion Price. The Conversion Price of the Series D is $0.25, subject to adjustment.   

 

The Company and the Holder may not convert that amount of the Conversion Amount on a Conversion Date in amounts that would result in the Holder having a beneficial ownership of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this proviso is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty one (61) days’ prior written notice to the Corporation.

 

The holders of Series D Preferred shall not be entitled to a vote on matters submitted to a vote of the stockholders of the Company. Also, as long as any shares of Series D Preferred are outstanding, the Company shall not, without the affirmative vote of all of the Holders of the then outstanding shares of the Series D Preferred,

 

(a) alter or change adversely the powers, preferences or rights given to the Series D Preferred or alter or amend this Certificate of Designation,

 

(b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the Holders,

 

(c) increase the number of authorized shares of Series D Preferred, or

 

(d) enter into any agreement with respect to any of the foregoing.

 

On August 31, 2016, a holder of Series D converted 1,099 shares of Series A into 1,098,933 shares of the Company’s common stock.

 

During the year ended December 31, 2017, the Company converted 914 shares of Series D for 266,325 shares of common stock. 

  

Common Stock

 

On February 1, 2016, the Company issued 268,333 shares of its restricted common stock to its Placement Agent. Such shares were issued pursuant to a Placement Agent Agreement with the Company and services rendered in connection with a private placement of the Company’s securities.

 

On February 6, 2016, the Company entered into Stock Purchase Agreements (the “Purchase Agreements”) with three investors providing for the issuance and sale of an aggregate of 2,626,308 shares of the Company’s common stock, par value $0.001 per share, for an aggregate purchase price of $2,626.

 

On August 17, 2016, the Company entered into a subscription agreement (the “Subscription Agreement”) with an accredited investor for the sale of 666,666 shares of the Company’s Common Stock (the “Shares”) and warrants to purchase 333,333 shares of the Company’s Common Stock (the “Warrant”) for a purchase price of $250,000. The Warrant is exercisable at any time after the date of issuance and has a five year term. The Warrant is exercisable at price of $0.40 per share.

 

During the year ended December 31, 2016, the Company issued 392,764 common shares for cashless exercise of warrants.

 

On January 30, 2017, the Company issued 947,440 shares of its restricted common stock to settle outstanding vendor liabilities of $353,732. In connection with this transaction the company also recorded a gain on settlement of vendor liabilities of $167,905. 

 

On February 7, 2017, the Company issued 1,767,633 shares of its restricted common stock to consultants in exchange for services at a fair value of $293,427.

 

On February 1, 2017, the Company issued 800,000 shares of its restricted common stock to its placement agent. Such shares were issued pursuant to a Placement Agent Agreement with the Company and services rendered in connection with a private placement of the Company’s securities.

 

On February 13, 2017, the Company issued 133,333 shares of its restricted common stock to its placement agent. Such shares were issued pursuant to a Placement Agent Agreement with the Company and services rendered in connection with a private placement of the Company’s securities. 

  

Treasury Stock

 

 As discussed in Note 7, upon amendment of the July 2017 Convertible Note, the Company repurchased the 220,000 shares for an aggregate purchase price of $19,007 which is presented as Treasury Stock on the consolidated balance sheets.

 

Stock Options

 

The Company applied fair value accounting for all share based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. 

 

The assumptions used for options granted during the year ended December 31, 2017 and December 31, 2016 are as follows:

 

  

December 31,

2017

  

December 31,

2016

 
Exercise price  0.16-0.75   0.25-0.40 
Expected dividends  0%   0% 
Expected volatility  86.62% - 92.14%   73.44%-90.05% 
Risk free interest rate  1.74% - 2.10%   1%-1.39% 
Expected life of option  5 years   4.68-5 years 

 

The following is a summary of the Company’s stock option activity:

 

  Options  Weighted
Average
Exercise
Price
  

Weighted

Average

Remaining
Contractual
Life

(in years)

 
Balance – December 31, 2015 – outstanding and exercisable  500,000   0.25   4.93 
Granted  1,750,000   0.36   5.0 
Exercised  -   -   - 
Cancelled/Modified  -   -   - 
Balance – December 31, 2016 – outstanding  2,250,000   0.34   4.38 
Balance – December 31, 2016 – exercisable  2,200,000   0.30   4.38 
             
Outstanding options held by related party – December 31, 2016  2,250,000   0.34   4.38 
Exercisable options held by related party – December 31, 2016  2,200,000   0.30   4.38 
             
Balance – December 31, 2016  2,250,000  $0.34   4.38 
Granted  15,499,990  $0.43   5.00 
Exercised  -   -   - 
Cancelled/Modified  (100,000) $0.40   - 
Balance – December 31, 2017 – outstanding  17,649,990  $0.42   4.27 
Balance – December 31, 2017 – exercisable  8,983,322  $0.27   4.15 
            
Outstanding options held by related party – December 31, 2017  17,429,990  $0.42   4.65 
Exercisable options held by related party – December 31, 2017  8,843,322  $0.27   4.15 

  

At December 31, 2017, the aggregate intrinsic value of options outstanding and exercisable was $3,500 and $ 3,500, respectively.

 

Stock-based compensation for stock options has been recorded in the consolidated statements of operations and totaled $1,092,970 and $231,035, for the year ended December 31, 2017 and 2016, respectively.

 

The following is a summary of the Company’s stock options granted during the year ended December 31, 2017:

 

Options  Value  Purpose for Grant
 15,499,990  $1,172,022  Service Rendered

   

Warrants

 

The Company applied fair value accounting for all share based payments awards. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model.

 

The assumptions used for warrants granted during the year ended December 31, 2017 are as follows:

 

  December 31,
2017
  December 31,
2016
 
Exercise price  $0.20-0.30  $0.40
Expected dividends  0%  0%
Expected volatility  96.76%-102.21%   73.44-91.54% 
Risk free interest rate  1.63%-2.26%   1.13%-1.39% 
Expected life of warrant  5 years   5 years 

 

Warrant Activities

 

The following is a summary of the Company’s warrant activity:

 

  Warrants  Weighted Average
Exercise
Price
 
       
Outstanding and Exercisable – December 31, 2015  10,750,000   0.35 
Granted  4,791,666   0.40 
Exercised  -   - 
Forfeited/Cancelled  -   - 
Outstanding – December 31, 2016  15,541,666  $0.36 
Granted  30,652,113   0.20 
Exercised  -   - 
Forfeited/Cancelled  -   - 
Outstanding and Exercisable – December 31, 2017  46,193,779  $0.25 

  

Warrants Outstanding  Warrants Exercisable 
Exercise price  Number Outstanding  Weighted Average
Remaining Contractual Life
(in years)
  Weighted
Average
Exercise Price
  Number
Exercisable
  Weighted Average
Exercise Price
 
$0.20– 0.40    46,193,779   4   0.25   46,193,779   0.25 

  

During the year ended December 31, 2017, a total of 5,811,360 warrants were issued with promissory notes (See Note 6 above). In addition, the placement agent was granted a total of 487,755 warrants to purchase common stock. The warrants have a grant date fair value of $1,189,235 using a Black-Scholes option-pricing model and the above assumptions.

 

During the year ended December 31, 2017, a total of 16,597,719 warrants were issued with convertible notes (See Note 7 above). In addition, the placement agent was granted a total of 12,150 warrants to purchase common stock. The warrants have a grant date fair value of $1,472,161 using a Black-Scholes option-pricing model and the above assumptions.

 

During the year ended December 31, 2017, a total of 345,500 warrants were issued with notes payable – related party (See Note 8 above). The warrants have a grant date fair value of $38,109 using a Black-Scholes option-pricing model and the above assumptions.

 

During the year ended December 31, 2017, a total of 7,115,129 warrants were issued with convertible notes payable – related party (See Note 8 above). The warrants have a grant date fair value of $680,037 using a Black-Scholes option-pricing model and the above assumptions. 

  

Stock Incentive Plan

 

On December 9, 2015, Jerrick adopted the 2015 Stock Incentive and Award Plan (the “Plan”) which will provide for the issuance of up to 18,000,000 shares of the Company’s Common Stock.

 

The purpose of the Plan is to provide additional incentive to those officers, employees, consultants and non-employee directors of the Company and its parents, subsidiaries and affiliates whose contributions are essential to the growth and success of the Company’s business.

 

Eligible recipients of option awards are employees, officers, consultants or directors (including non-employee directors) of the Company or of any parent, subsidiary or affiliate of the Company. Upon recommendation from the Compensation Committee, the board has the authority to grant to any eligible recipient any options, restricted stock or other awards valued in whole or in part by reference to, or otherwise based on, our Common Stock.

 

The provisions of each option granted need not be the same with respect to each option recipient. Option recipients shall enter into award agreements with us, in such form as the board shall determine.

 

The Plan shall be administered by the Compensation Committee consisting of two or more independent, non-employee and outside directors. In the absence of such a Committee, the Board of the Company shall administer the Plan.

 

Each Option shall contain the following material terms:

 

 (i)the purchase price of each share of Common Stock with respect to Incentive Options shall be determined by the Committee at the time of grant, shall not be less than 100% of the Fair Market Value (defined as the closing price on the final trading day immediately prior to the grant on the principal exchange or quotation system on which the Common Stock is listed or quoted, as applicable) of the Common Stock of the Jerrick,  provided  that if the recipient of the Option owns more than ten percent (10%) of the total combined voting power of the Jerrick, the exercise price shall be at least 110% of the Fair Market Value;
   
 (ii)The purchase price of each share of Common Stock purchasable under a Non-qualified Option shall be at least 100% of the Fair Market Value of such share of Common Stock on the date the Non-qualified Option is granted,  unless  the Committee, in its sole and absolute discretion, determines to set the purchase price of such Non-qualified Option below Fair Market Value.
   
 (iii)the term of each Option shall be fixed by the Committee,  provided  that such Option shall not be exercisable more than five (5) years after the date such Option is granted, and  provided further  that with respect to an Incentive Option, if the recipient owns more than ten percent (10%) of the total combined voting power of the Jerrick, the Incentive Option shall not be exercisable more than five (5) years after the date such Incentive Option is granted;
   
 (iv)subject to acceleration in the event of a Change of Control of the Jerrick (as further described in the Plan), the period during which the Options vest shall be designated by the Committee or, in the absence of any Option vesting periods designated by the Committee at the time of grant, shall vest and become exercisable in equal amounts on each fiscal quarter of the Jerrick through the four (4) year anniversary of the date on which the Option was granted;

 

 (v)no Option is transferable, and each is exercisable only by the recipient of such Option except in the event of the death of the recipient; and
   
 (vi)with respect to Incentive Options, the aggregate Fair Market Value of Common Stock exercisable for the first time during any calendar year shall not exceed $100,000.

 

Each award of Restricted Stock is subject to the following material terms:

 

 (i)no rights to an award of Restricted Stock are granted to the intended recipient of Restricted Stock unless and until the grant of Restricted Stock is accepted within the period prescribed by the Compensation Committee;
   
 (ii)Restricted Stock shall not be delivered until they are free of any restrictions specified by the Compensation Committee at the time of grant;
   
 (iii)recipients of Restricted Stock have the rights of a stockholder of the Jerrick as of the date of the grant of the Restricted Stock;
   
 (iv)shares of Restricted Stock are forfeitable until the terms of the Restricted Stock grant have been satisfied or the employment with the Company is terminated; and
   
 (v)the Restricted Stock is not transferable until the date on which the Compensation Committee has specified such restrictions have lapsed.
v3.10.0.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 11 – Commitments and Contingencies

 

Lease Agreements

 

On May 5, 2018, the Company signed a 5-year lease for approximately 2,300 square feet of office space at 2050 Center Avenue suite 640, Fort lee, New Jersey 07024. Commencement date of the lease is June 1, 2018. Total amount due under this lease is $411,150.

 

The annual minimum lease payments under non-cancellable operating leases, that have an initial or remaining term in excess of one year at June 30, 2018 are due as follows:

 

2018 $35,972 
2019  74,204 
2020  78,146 
2021  82,207 
2022  87,851 
2023  37,775 
Total minimum lease payments $396,155 

  

Rent expense for the three and six months ended June 30, 2018 was $88,875 and $69,022, respectively, and was $155,661 and $77,856, respectively, for the three and six months ended June 30, 2017.

v3.10.0.1
Income Taxes
12 Months Ended
Dec. 31, 2017
Income Taxes [Abstract]  
Income Taxes

Note 13 - Income Taxes

  

Components of deferred tax assets are as follows:

 

  December 31, 2017  December 31,
2016
 
Net deferred tax assets – Non-current:      
       
Expected income tax benefit from NOL carry-forwards $7,600,000  $3,100,000 
Less valuation allowance  (7,600,000)  (3,100,000)
Deferred tax assets, net of valuation allowance $-  $- 

 

Income Tax Provision in the Consolidated Statements of Operations

 

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

 

  For the Year Ended
December 31, 2017
  For the Year Ended
December 31, 2016
 
       
Federal statutory income tax rate  21.0%  34.0%
         
Change in valuation allowance on net operating loss carry-forwards  (21.0)%  (34.0)%
         
Effective income tax rate  0.0%  0.0%

  

Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets of the Company will not be fully realizable for the year ended December 31, 2017 and 2016. Accordingly, management had applied a full valuation allowance against net deferred tax assets as of December 31, 2017 and 2016.

 

As of December 31, 2017, the Company had approximately $7.6 million of federal net operating loss carryforwards available to reduce future taxable income which will begin to expire in 2033 for both federal and state purposes.

 

On December 22, 2017, the Tax Cuts and Jobs Act pf 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code of 1986, as amended (the “Code”). The Act reduces the federal corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017. ASC 470 requires the Company to remeasure the existing net deferred tax asset in the period of enactment. The Act also provides for immediate expensing of 100% or the costs of qualified property that is incurred and placed in service during the period from September 27, 2017 to December 31, 2022. Beginning January 1, 2023, the immediate expensing provision is phased down by 20% per year until it is completely phased out as of January 1, 2027. Additionally, effective January 1, 2018, the Act imposes possible limitations on the deductibility of interest expense. As a result of the provisions of the Act, the Company’s deduction for interest expense could be limited in future years. The effects of other provisions of the Act are not expected to have a material impact on the Company’s financial statements.

 

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to provide guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that begins in the reporting period that includes the Act’s enactment date and ends when an entity has obtained, prepared and analyzed the information that was needed in order to complete the accounting requirements under ASC 720. However, in no circumstance should the measurement period extend beyond one year from the enactment date. In accordance with SAB 118, a company must reflect in its financial statements the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. SAB 118 provides that to the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.

 

The Company does not reflect a deferred tax asset in its financial statements but includes that calculation and valuation in its footnotes. We are still analyzing the impact of certain provisions of the Act and refining our calculations. The Company will disclose any change in the estimates as it refines the accounting for the impact of the Act.

v3.10.0.1
Revision of Prior Year Financial Statements
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Revision of Prior Year Financial Statements [Abstract]    
Revision of Prior Year Financial Statements

Note 12 – Revision of Prior Year Financial Statements:

 

The Company’s correction of accrued dividends were a result of the following:

 

 Management was accruing dividends as a liability, despite the fact the Board of Directors had not formally declared the dividends payable. This results in accrued dividends being removed from the liabilities section of the balance sheet,

 

 Management was not compounding the dividends annually,

 

 Management was not presenting the accrued dividends on the consolidated statement of operations, ultimately being included in the loss per share.

 

In accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements the Company has determined that the impact of adjustments relating to the correction of this accounting error are not material to previously issued consolidated financial statements. Accordingly, these changes are disclosed herein and will be disclosed prospectively.

 

As a result of the aforementioned correction of accounting errors, the relevant financial statements have been revised as follows:

 

Effects on respective financial statements are as noted below:

 

  December 31, 2017 
  As Previously Reported  Adjustment  As Revised 
Balance Sheet            
Current Liabilities            
Accrued dividends $472,444  $(472,444) $- 
Total Current Liabilities  4,159,644   (472,444)  3,687,200 
Total Liabilities $8,017,183  $(472,444) $7,544,739 
             
Stockholders’ Equity            
Total Stockholders’ Equity  7,839,751   (472,444)  7,367,307 

 

  For the six months ended June 30, 2017 
  As Previously Reported  Adjustments  As Revised 
Statement of Operations         
Deemed dividend $-    $131,867  $131,867 
Net loss attributable to common stockholders $2,955,909  $131,867  $3,087,776 
Basic and diluted loss per share $(0.08) $-     (0.08)
             
Statements of Cash Flows            
Supplementary Disclosure of Non-Cash Investing And Financing Activities            
Deemed dividend $101,385  $30,482  $131,867

Note 12 - Revision of Prior Year Financial Statements:

 

The Company’s correction of accrued dividends were a result of the following:

 

 Management was accruing dividends as a liability, despite the fact the Board of Directors had not formally declared the dividends payable. This results in accrued dividends being removed from the liabilities section of the balance sheet,

 

 Management was not compounding the dividends annually,

 

 Management was not presenting the accrued dividends on the consolidated statement of operations, ultimately being included in the loss per share.

 

In accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements the Company has determined that the impact of adjustments relating to the correction of this accounting error are not material to previously issued consolidated financial statements. Accordingly, these changes are disclosed herein and will be disclosed prospectively.

 

As a result of the aforementioned correction of accounting errors, the relevant financial statements have been revised as follows:

 

Effects on respective financial statements are as noted below:

 

  December 31, 2017 
  As Previously Reported  Adjustment  As Revised 
Balance Sheet         
Current Liabilities         
Accrued dividends $472,444  $(472,444) $- 
Total Current Liabilities  4,159,644   (472,444)  3,687,200 
Total Liabilities $8,017,183  $(472,444) $7,544,739 
             
Stockholders’ Equity            
Total Stockholders’ Equity  7,839,751   (472,444)  7,367,307 

 

  For the year ended December 31, 2017 
  As Previously Reported  Adjustments  As Revised 
Statement of Operations         
Deemed dividend $-  $297,323  $131,867 
Net loss attributable to common stockholders $8,751,586  $297,323  $9,079,872 
Basic and diluted loss per share $(0.23) $-   (0.23)
             
Statements of Cash Flows            
Supplementary Disclosure of Non-Cash Investing And Financing Activities            
Deemed dividend $217,985  $79,338  $297,323 

 

  December 31, 2016 
  As Previously Reported  Adjustment  As Revised 
Balance Sheet         
Current Liabilities         
Accrued dividends $259,170  $(259,170) $- 
Total Current Liabilities  3,544,996   (259,170)  3,285,826 
Total Liabilities $3,546,204  $(259,170) $3,287,034 
             
Stockholders’ Equity            
Total Stockholders’ Equity  3,168,103   (259,170)  2,908,933 

  

 For the year ended December 31, 2016 
  As Previously Reported  Adjustments  As Revised 
Statement of Operations         
Deemed dividend $-  $247,128  $247,128 
Net loss attributable to common stockholders $(7,391,907) $247,128  $(7,639,035)
Basic and diluted loss per share $(0.23) $(0.01)  (0.24)
             
Statements of Cash Flows            
Supplementary Disclosure of Non-Cash Investing And Financing Activities            
Deemed dividend $177,234  $69,894  $247,128 
v3.10.0.1
Subsequent Events
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Subsequent Events [Abstract]    
Subsequent Events

Note 13 – Subsequent Events

 

Subsequent to June 30, 2018, the Company received gross proceeds of $100,000 from the issuance of notes payable. As additional consideration for entering in the debentures, the Company issued the investors 4-year warrant to purchase 300,000 shares of the Company’s common stock at a purchase price of $0.20 per share.

  

Subsequent to June 30, 2018, the Company received gross proceeds from related parties of $25,000 of the issuance of notes payable. As additional consideration for entering in the convertible debentures, the Company issued the investors 4-year warrant to purchase 75,000 shares of the Company’s common stock at a purchase price of $0.20 per share.

Note 14 - Subsequent Events

 

Subsequent to December 31, 2017, the Company received gross proceeds of $1,780,750 of the issuance of convertible notes. In addition, $300,000 of the Company’s short term debt along with accrued but unpaid interest of $41,442 was converted into convertible debentures. As additional consideration for entering in the convertible debentures, the Company issued the investors 5-year warrant to purchase 10,488,708 shares of the Company’s common stock at a purchase price of $0.20 per share.

  

Subsequent to December 31, 2017, the Company received gross proceeds of $50,000 of the issuance of notes payable. As additional consideration for entering in the debentures, the Company issued the investors 5-year warrant to purchase 100,000 shares of the Company’s common stock at a purchase price of $0.20 per share.

  

Subsequent to December 31, 2017, the Company received gross proceeds from related parties of $40,750 of the issuance of convertible notes. As additional consideration for entering in the convertible debentures, the Company issued the investors 5-year warrant to purchase 81,500 shares of the Company’s common stock at a purchase price of $0.20 per share.

  

Subsequent to December 31, 2017, the Company received gross proceeds from related parties of $135,000 of the issuance of notes payable. As additional consideration for entering in the convertible debentures, the Company issued the investors 5-year warrant to purchase 35,000 shares of the Company’s common stock at a purchase price of $0.20 per share.

 

Subsequent to December 31, 2017, the Company issued 375,000 shares of its restricted common stock to its Placement Agent. Such shares were issued pursuant to a Placement Agent Agreement with the Company and services rendered in connection with a private placement of the Company’s securities.

 

Subsequent to December 31, 2017, the Company issued 628,750 shares of its common stock to consultants in exchange for services.

v3.10.0.1
Significant and Critical Accounting Policies and Practices (Policies)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Significant and Critical Accounting Policies and Practices [Abstract]    
Basis of Presentation - Unaudited Interim Financial Information

Basis of Presentation - Unaudited Interim Financial Information

 

The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2017.

Basis of Presentation

 

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). 

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with US 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:

   

(i)Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
  
(ii)Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
  
(iii)  Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.  
  
(iv)Estimates and assumptions used in valuation of equity instruments: Management estimates expected term of share options and similar instruments, expected volatility of the Company’s common shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk free rate(s) to value share options and similar instruments.

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

 

Actual results could differ from those estimates.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with US 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:

   

(i)Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
  
(ii)Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
  
(iii)  Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.  
  
(iv)Estimates and assumptions used in valuation of equity instruments: Management estimates expected term of share options and similar instruments, expected volatility of the Company’s common shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk free rate(s) to value share options and similar instruments.

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

 

Actual results could differ from those estimates.

Principles of consolidation

Principles of consolidation

 

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

 

As of June 30, 2018, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate State or other jurisdiction of
incorporation or organization
 Company interest 
       
Jerrick Ventures LLC The State of Delaware  100%
Jerrick Australia Pty Ltd Australia  100% 

 

All inter-company balances and transactions have been eliminated.

 

Jerrick Australia Pty Ltd does not have any operations.

Principles of consolidation

 

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

 

As of December 31, 2017, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate State or other jurisdiction of
incorporation or organization
 Company interest 
      
Jerrick Ventures LLC The State of Delaware 100%

 

All inter-company balances and transactions have been eliminated.

 

On May 12, 2017, the Company assigned the right, title and interest to all of the membership interests of certain of it’s inactive business subsidiaries, with the exception of Jerrick Ventures LLC, to the Company’s Chief Executive Officer, Jeremy Frommer, in consideration for Mr. Frommer’s assumption of all liabilities of such subsidiaries, if any, with such assignment and assumption effected entirely in the interest of corporate efficiency. The Board reviewed the transaction and believes it to be fair in all respects, deeming it to advance the Company’s business interests by allowing the Company to divest non-producing and non-operating subsidiaries at no cost to the Company. All of the Company’s operations have been, and will continue to be, run through its operating subsidiary, Jerrick Ventures LLC.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
   
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
   
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued liabilities and accrued liquidating damages approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

Fair Value of Financial Instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
   
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
   
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued liabilities and accrued liquidating damages approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

Cash Equivalents

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.

Property and Equipment

Property and Equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

 

  Estimated Useful
Life
(Years)
 
    
Computer equipment and software  3 
Furniture and fixture  5 
Leasehold improvement  5 

 

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

Property and Equipment

 

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

 

  Estimated Useful
Life
(Years)
 
    
Computer equipment and software 3 
Furniture and fixture 5 

 

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

Investments - Cost Method, Equity Method and Joint Venture  

Investments - Cost Method, Equity Method and Joint Venture

 

In accordance with sub-topic 323-10 of the FASB ASC (“Sub-topic 323-10”), the Company accounts for investments in common stock of an investee for which the Company has significant influence in the operating or financial policies even though the Company holds 50% or less of the common stock or in-substance common stock.

 

On January 2, 2013, the Company purchased a minority interest in a business for proceeds of $83,333. The interest is accounted for under the cost method. The Company tests the carrying value annually for impairment. The company recorded an impairment of minority investment of $83,333.

Commitments and Contingencies

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

  

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Derivative Liability

Derivative Liability

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.  The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the year ended December 31, 2017 on a retrospective basis.

Derivative Liability

 

The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity.

   

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. 

 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.  The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis.

 

The Company utilizes an option pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

Revenue Recognition

Revenue Recognition

 

The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method which would require a cumulative effect adjustment for initially applying the new revenue standard as an adjustment to the opening balance of retained earnings and the comparative information would not require to be restated and continue to be reported under the accounting standards in effect for those periods.

 

Based on the Company’s analysis the Company did not identify a cumulative effect adjustment for initially applying the new revenue standards. During the six months ended June 30, 2018 the Company recorded revenue from the following sources: products at auction, sponsored content and affiliate sites.

 

The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the delivery of the Company's services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps:

 

1)Identify the contract with a customer

 

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer.

 

2)Identify the performance obligations in the contract

 

Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation.

 

3)Determine the transaction price

 

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company's contracts as of June 30, 2018 contained a significant financing component. Determining the transaction price requires significant judgment, which is discussed by revenue category in further detail below.

  

4)Allocate the transaction price to performance obligations in the contract

 

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised in a series of distinct services that forms part of a single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

 

5)Recognize revenue when or as the Company satisfies a performance obligation

 

The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer.

 

Product revenue

 

Revenue from multiple-element arrangements is allocated among separate elements based on their estimated sales prices, provided the elements have value on a stand-alone basis.

Revenue Recognition

 

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes gross revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. During the year ended the recorded revenue from the following sources products at auction, sponsored content and affiliate sites.

Stock-Based Compensation

Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments granted to employees in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award. 

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a five-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. 

 

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is benchmarked against similar companies in a similar industry over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate.  

 

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the Company’s actual forfeiture rate is materially different from its estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period.

 

The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period.

Stock-Based Compensation

 

The Company recognizes compensation expense for all equity–based payments granted to employees in accordance with ASC 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a five year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date. 

 

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is benchmarked against similar companies in a similar industry over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate.  

 

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the Company’s actual forfeiture rate is materially different from its estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period.

 

The Company accounts for share–based payments granted to non–employees in accordance with ASC 505-40, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The fair value of the equity instruments is re-measured each reporting period over the requisite service period.

Income Taxes

Income Taxes

 

Income taxes are provided in accordance with ASC No. 740, “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. 

Income Taxes

 

Income taxes are provided in accordance with ASC No. 740, “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. 

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. 

Loss Per Share

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the six months ended June 30, 2018 and 2017 presented in these consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at June 30, 2018 and 2017:

 

  June 30,
2018
  June 30,
2017
 
Series A Preferred stock  23,135,935   21,654,614 
Series B Preferred stock  4,697,906   4,431,987 
Options  17,649,990   17,549,990 
Warrants  62,016,795   22,805,981 
Convertible notes - related party  10,027,507   250,000 
Convertible notes  28,015,838   2,929,127 
Totals  145,543,971   69,621,699 

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the year ended December 31, 2017 and 2016 presented in these consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at December 31, 2017:

 

    December 31,
2017
 
Series A Preferred stock     19,256,707  
Series B Preferred stock     4,092,893  
Options     17,749,990  
Warrants     46,193,779  
Convertible notes - related party     7,080,128  
Convertible notes     17,749,990  
Totals     112,123,487
Reclassifications

Reclassifications

 

Interest expense has been allocated to accretion of debt discount and issuance cost to conform to current period presentation.

Reclassifications

 

Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities.

Recently Adopted Accounting Guidance

Recently Adopted Accounting Guidance

 

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. The provisions of this guidance are to be applied using a retrospective approach which requires application of the guidance for all periods presented. The Company has adopted the methodologies prescribed by ASU 2016-18, the adoption of ASU 2016-18 did not have a material effect on its financial position or results of operations. 

 

In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This standard is required to be adopted in the first quarter of 2018. The Company has adopted the methodologies prescribed by ASU 2017-09, the adoption of ASU 2017-09 did not have a material effect on its financial position or results of operations. 

 

In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company early adopted the ASU 2017-11 in the year ending December 31, 2017. 

 

Adoption of ASU 2017-11

 

As noted above, in connection with the securities purchase agreement and debt transactions during the year ended December 31, 2017, the Company issued warrants and convertible notes, to purchase common stock with an exercise price of $0.20 and a five-year term. Upon issuance of the warrants and convertible notes, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants and convertible notes that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants and convertible notes as a derivative liability. The Company changed its method of accounting for the convertible notes and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis. Accordingly, the Company recorded the warrant derivative and conversion option derivative liabilities to additional paid in capital upon issuance.

 

Tabular summaries of the revisions and the corresponding effects on the statement of earnings for the six months ended June 30, 2017 are presented below:

 

Consolidated Statement of Operations Six Months Ended June 30, 2017 
  Previously 
Reported
  Revisions  Revised 
Reported
 
Accretion of debt discount and issuance cost $(951,484) $226,584  $(724,900)
             
Derivative expense (254,470) 254,470  - 
             
Change in fair value of derivative liabilities 584,011  (584,011) - 
             
Net loss $(2,852,952) $102,957  $(2,955,909)
             
Net loss per ordinary share:            
Basic and diluted loss per share $(0.08) $(0.00) $(0.08)

Recently Adopted Accounting Guidance

 

In April 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation” (topic 718). The FASB issued this update to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The updated guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption of the update is permitted. The adoption of ASU 2016-09 will not have a material effect on its financial position or results of operations or cash flows.

  

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing” (topic 606). In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross verses Net)” (topic 606). These amendments provide additional clarification and implementation guidance on the previously issued ASU 2014-09, “Revenue from Contracts with Customers”. The amendments in ASU 2016-10 provide clarifying guidance on materiality of performance obligations; evaluating distinct performance obligations; treatment of shipping and handling costs; and determining whether an entity’s promise to grant a license provides a customer with either a right to use an entity’s intellectual property or a right to access an entity’s intellectual property. The amendments in ASU 2016-08 clarify how an entity should identify the specified good or service for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. The adoption of ASU 2016-10 and ASU 2016-08 is to coincide with an entity’s adoption of ASU 2014-09, which we intend to adopt for interim and annual reporting periods beginning after December 15, 2017. The adoption of ASU 2016-10 will not have a material effect on its financial position or results of operations or cash flows.

 

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition and is effective during the same period as ASU 2014-09. The adoption of ASU 2016-12 won’t have a material effect on its financial position or results of operations or cash flows.

 

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The adoption of ASU 2016-15 won’t have a material effect on its financial position or results of operations or cash flows.

 

In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company early adopted the ASU 2017-11 in the year ending December 31, 2017.

Recent Accounting Guidance Not Yet Adopted

Recent Accounting Guidance Not Yet Adopted

 

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under ASU 2016-02, lessees will be required to recognize, for all leases of 12 months or more, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature of an entity’s leasing activities. This ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach. The Company is in the process of evaluating the effect of the new guidance on its condensed consolidated financial statements and disclosures.

 

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is currently evaluating the impact of the new standard.

  

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements.

Recent Accounting Guidance Not Yet Adopted

 

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under ASU 2016-02, lessees will be required to recognize, for all leases of 12 months or more, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature of an entity’s leasing activities. This ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach. The Company is in the process of evaluating the effect of the new guidance on its consolidated financial statements and disclosures.

 

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is currently evaluating the impact of the new standard.

 

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)”, requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years, and interim reporting periods therein, beginning after December 15, 2017 with early adoption permitted. The provisions of this guidance are to be applied using a retrospective approach which requires application of the guidance for all periods presented. The Company is currently evaluating the impact of the new standard.

 

In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This standard is required to be adopted in the first quarter of 2018. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements.

v3.10.0.1
Significant and Critical Accounting Policies and Practices (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Significant and Critical Accounting Policies and Practices [Abstract]    
Schedule of consolidated subsidiaries and/or entities
Name of combined affiliate State or other jurisdiction of
incorporation or organization
 Company interest 
       
Jerrick Ventures LLC The State of Delaware  100%
Jerrick Australia Pty Ltd Australia  100% 
Name of combined affiliate State or other jurisdiction of
incorporation or organization
 Company interest 
      
Jerrick Ventures LLC The State of Delaware 100%
Schedule of property and equipment estimated useful life
  Estimated Useful
Life
(Years)
 
    
Computer equipment and software  3 
Furniture and fixture  5 
Leasehold improvement  5 
  Estimated Useful
Life
(Years)
 
    
Computer equipment and software 3 
Furniture and fixture 5 
Schedule of common stock equivalents
  June 30,
2018
  June 30,
2017
 
Series A Preferred stock  23,135,935   21,654,614 
Series B Preferred stock  4,697,906   4,431,987 
Options  17,649,990   17,549,990 
Warrants  62,016,795   22,805,981 
Convertible notes - related party  10,027,507   250,000 
Convertible notes  28,015,838   2,929,127 
Totals  145,543,971   69,621,699 
    December 31,
2017
 
Series A Preferred stock     19,256,707  
Series B Preferred stock     4,092,893  
Options     17,749,990  
Warrants     46,193,779  
Convertible notes - related party     7,080,128  
Convertible notes     17,749,990  
Totals     112,123,487
Summaries of the revisions and the corresponding effects on the consolidated statement of operations
Consolidated Statement of Operations Six Months Ended June 30, 2017 
  Previously 
Reported
  Revisions  Revised 
Reported
 
Accretion of debt discount and issuance cost $(951,484) $226,584  $(724,900)
             
Derivative expense (254,470) 254,470  - 
             
Change in fair value of derivative liabilities 584,011  (584,011) - 
             
Net loss $(2,852,952) $102,957  $(2,955,909)
             
Net loss per ordinary share:            
Basic and diluted loss per share $(0.08) $(0.00) $(0.08)
 
v3.10.0.1
Property and Equipment (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Property and Equipment [Abstract]    
Schedule of property and equipment
  

June 30,

2018

  December 31,
2017
 
Computer Equipment $234,315  $234,315 
Furniture and Fixtures  61,803   61,803 
Leasehold Improvements  25,445   - 
   321,563   296,118 
Less: Accumulated Depreciation  (269,500)  (248,062)
  $52,063  $48,056 
  

December 31,

2017

  

December 31,

2016

 
Computer Equipment $234,315  $219,653 
Furniture and Fixtures  61,803   61,803 
   296,118   281,456 
Less: Accumulated Depreciation  (248,062)  (209,627)
  $48,056  $71,829 
v3.10.0.1
Line of Credit (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Line of Credit/Notes Payable/Convertible Note Payable [Abstract]    
Schedule of line of credit
  Outstanding Balances as of 
  

June 30,

2018

  

December 31,

2017

 
Revolving Note       -   44,996 
  $-  $44,996
  Outstanding Balances as of 
  

December 31,

2017

  

December 31,

2016

 
Revolving Note  44,996   203,988 
Factoring Agreement  -   31,153 
  $44,996  $235,141
v3.10.0.1
Notes Payable (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Line of Credit/Notes Payable/Convertible Note Payable [Abstract]    
Schedule of notes payable
  Outstanding Principal as of       Warrants 
  June 30,
2018
  December 31,
2017
  Interest Rate  Maturity Date Quantity  Exercise
Price
 
The February 2017 Offering $364,325  $400,000   12% September 1, 2017  2,450,000  $0.20 
The June 2017 Loan Agreement  -   50,000   12% September 1, 2017  35,000  0.20 
The First November 2017 Loan Agreement  -   100,000   15% January 12, 2018  -  - 
The Second November 2017 Loan Agreement  -   50,000   15% January 13, 2018  -  - 
The Third November 2017 Loan Agreement  -   100,000   15% January 13, 2018  -  - 
May 2018 Offering  608,500   -   13% March 2019  1,825,500  - 
   972,825   700,000               
Less: Debt Discount  (180,950)  (10,500)              
Less: Debt Issuance Costs  (408)  -               
  $791,467  $689,500               
  Outstanding Principal as of       Warrants 
  December 31,
2017
  December 31,
2016
  Interest Rate  Maturity Date Quantity  Exercise
Price
 
October 25, 2016  -   25,000   9% July 1, 2017  50,000  $0.30 
February 22, 2017  400,000   -   12% September 1, 2017  2,450,000  $0.20 
June 12, 2017  50,000   -   12% September 1, 2017  35,000  $0.20 
November 28, 2017  100,000   -   15% January 12, 2018  -   - 
November 29, 2017  50,000   -   15% January 13, 2018  -   - 
November 29, 2017  100,000   -   15% January 13, 2018  -   - 
   700,000   25,000               
Less: Debt Discount  (10,500)  (9,421)              
Less: Debt Issuance Costs  -   -               
  $689,500  $15,579               
v3.10.0.1
Convertible Note Payable (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Line of Credit/Notes Payable/Convertible Note Payable [Abstract]    
Schedule of convertible notes payable
  Outstanding Principal as of          Warrants 
  June 30,
2018
  December 31, 
2017
  Interest
Rate
  Conversion
Price
  Maturity Date Quantity  Exercise
Price
 
The November 2016 Convertible Note Offering $25,000  $25,000   10%  0.30  November 1, 2017  400,000  $0.30 
The June 2017 Convertible Note Offering  -   71,500   12%  Not Applicable  September 1, 2017  114,700   0.20 
The August 2017 Convertible Note Offering  2,943,884   2,943,884   15%  0.20(*) August – November 2019  14,716,419   0.20 
The First December 2017 Note  100,000   100,000   15%  0.20(*) December 21, 2019  500,000   0.20 
The February 2018 Convertible Note Offering  1,015,674   -   15%  0.20(*) January – February 2020  5,078,375   0.20 

The January 2018

Note

  68,761   -       0.20 (*) January 12, 2020   343,806    0.20 
The February 2018 Note  35,452   -   18%  0.20(*) February 8, 2020  81,500   0.20 
The March 2018 Convertible Note Offering  961,367   -   14%  0.20(*) March – April 2020  4,806,833   0.20 
   5,150,138   3,140,384                   
Less: Debt Discount  (828,627)  (452,022)                  
Less: Debt Issuance Costs  (219,204)  (79,569)                  
   4,102,307   2,608,793                   
Less: Current Debt  (59,499)  (96,500)                  
Total Long-Term Debt $4,042,808  $2,512,293                   

 

(*) As subject to adjustment as further outlined in the notes

  Outstanding Principal as of          Warrants 
  December 31, 2017  December 31, 2016  Interest
Rate
  Conversion
Price
  Maturity Date Quantity  Exercise
Price
 
November – December, 2016  25,000   400,000   10%  0.30  November 1, 2017  400,000   0.30 
December 27, 2016  -   100,000   10%  0.30  December 27, 2017  100,000   0.30 
June, 2017  71,500   -   12%  Not Applicable  September 1, 2017  114,700   0.20 
July, 2017  -   -   8.5%  0.20(*) April 11, 2018  350,000   0.20 
August – November 2017  2,943,884   -   15%  0.20(*) August – November 2019  14,716,419   0.20 
December 21, 2017  100,000                       
   3,140,384   500,000                   
Less: Debt Discount  (452,022)  (184,398)                  
Less: Debt Issuance Costs  (79,569)  (46,779)                  
   2,672,574   268,823                   
Less: Current Debt  (96,500)  (268,823)                  
Total Long-Term Debt $2,512,293  $-                   

  

(*) As subject to adjustment as further outlined in the notes

v3.10.0.1
Related Party Loans (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Related Party Loans [Abstract]    
Schedule of convertible notes payable - related party
  Outstanding Principal as of       Warrants 
  June 30,
2018
  December 31,
2017
  Interest
Rate
  Maturity Date Quantity  Exercise
Price
 
The August 2017 Convertible Note Offering $1,416,026  $1,416,026   15% August – October 2019  4,589,466  $0.20 
The Second December 2017 Note 100,000   100,000   15% 

December 21,

2019

  500,000   0.20 
The February 2018 Convertible Note Offering 25,000   -   15% January – February 2020  125,000   0.20 
The Second February 2018 Note 35,452   -   20% 

September 30,

2018

  81,500   0.20 
The March 2018 Convertible Note Offering 239,400   -   14% March 2020  1,197,000   0.20 
  1,815,878   1,516,026               
Less: Debt Discount (208,525)  (170,780)              
Less: Debt Issuance Costs (4,645)  -               
  1,602,708   1,345,246               
Less: Current Debt (30,916)  -               
Total Long-Term Debt $1,571,792  $1,345,246               

  Outstanding Principal as of       Warrants 
  December 31, 2017  December 31,
2016
  Interest Rate  Maturity Date Quantity  Exercise
Price
 
August – October 2017  1,416,026      -   15% August – October 2019  4,589,466   0.20 
December 21, 2018  100,000       15% December 21, 2019  500,000   0.20 
   1,516,026   -               
Less: Debt Discount  (170,780)  -               
   1,345,246   -               
Less: Current Debt  -   -               
Total Long-Term Debt $1,345,246  $                  -               
 
Schedule of notes payable - related party
  Outstanding Principal as of       Warrants 
  June 30,
2018
  December 31,
2017
  Interest
Rate
  Maturity Date Quantity  Exercise
Price
 
The May 2016 Rosen Loan Agreement $1,000,000  $1,000,000   13% November 26, 2017  1,000,000  $0.40 
The September 2017 Rosen Loan Agreement 224,000  224,000   18% September 24, 2017  125,000   0.20 
The November 2017 Schiller Loan Agreement -  25,000   15% December 31, 2017  -   - 
The May 2018 Schiller Loan Agreement 100,000  -   13% February 2, 2019  300,000   0.20 
The June 2018 Frommer Loan Agreement 10,000  -   6% August 17, 2018  30,000   0.20 
  1,334,000  1,249,000               
Less: Current Debt (28,093)  -               
  $1,305,907  $1,249,000               
  Outstanding Principal as of       Warrants 
  December 31, 2017  December 31, 2016  Interest
Rate
  Maturity Date Quantity  Exercise
Price
 
May 26, 2016  1,000,000   1,000,000   13% November 26, 2017  1,000,000   0.40 
September 12, 2016  -   100,000   12% November 22, 2017  17,500   0.20 
September 20, 2016  -   10,000   10% March 20, 2017  235,000   0.40 
October 13, 2016  -   50,000   12% November 22, 2017  50,000   0.40 
October 24, 2016  -   15,000   9% January 1, 2018  30,000   0.30 
October 31, 2016  -   10,000   10% November 10, 2016  10,000   0.30 
November 22, 2016  -   225,000   10% November 22, 2017  750,000   0.30 
December 21, 2016  -   50,000   10% November 22, 2017  166,666   0.30 
September 8, 2017  224,000   -   1% September 24, 2017  

125,000

   0.20 
November 20, 2017  25,000   -   15% December 31, 2017  -   - 
   1,249,000   1,460,000               
Less: Debt Discount  (-)   (94,675)              
  $1,249,000  $1,365,325   
v3.10.0.1
Capital Leases Payable (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Capital Leases Payable [Abstract]    
Summary of capital lease obligation
   June 30,
2018
  December 31,
2017
 
        
(i)Capital lease obligation to a financing company for a term of five (5) years, collateralized by equipment, with interest at 10.0% per annum, with principal and interest due and payable in monthly installments of $383.10 $4,732  $4,732 
          
 Less current maturities  (4,732)  (4,732)
          
 Capital lease obligation, net of current maturities  -   - 
          
 TOTAL CAPITAL LEASE OBLIGATION $4,732  $4,732
   December 31,
2017
  December 31,
2016
 
        
(i)Capital lease obligation to a financing company for a term of five (5) years, collateralized by equipment, with interest at 10.0% per annum, with principal and interest due and payable in monthly installments of $383.10 $4,732  $4,732 
          
 Less current maturities  (4,732)  (3,524)
          
 Capital lease obligation, net of current maturities  -   1,208 
          
 TOTAL CAPITAL LEASE OBLIGATION $4,732  $4,732
Summary of capital leases maturity
2018: $4,732  $4,732
2017: $-  $3,524 
2018:  4,732  $1,208
v3.10.0.1
Derivative Liabilities (Tables)
12 Months Ended
Dec. 31, 2017
Derivative Liabilities [Abstract]  
Schedule of fair value of the derivative liability
  Low  High 
Annual dividend rate  0%  0%
Expected life  0.58   0.75 
Risk-free interest rate  1.11%  1.16%
Expected volatility  90.71%  93.55%
Schedule of changes in derivative liabilities
  Year Ended
December 31, 2017
 
  Level 1  Level 2  Level 3 
Derivative liabilities as January 1, 2017 $       -  $      -  $- 
Addition  -   -   332,942 
Conversion  -   -     
Extinguishment Expense          (397,288)
Gain on changes in fair value  -   -   64,346 
Derivative liabilities as December 31, 2017 $-  $-  $- 
v3.10.0.1
Stockholders' Deficit (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Stock Option [Member]    
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]    
Summary of assumptions used for options and warrants granted  
  

December 31,

2017

  

December 31,

2016

 
Exercise price  0.16-0.75   0.25-0.40 
Expected dividends  0%   0% 
Expected volatility  86.62% - 92.14%   73.44%-90.05% 
Risk free interest rate  1.74% - 2.10%   1%-1.39% 
Expected life of option  5 years   4.68-5 years
Summary of stock option and warrant activity  
  Options  Weighted
Average
Exercise
Price
  

Weighted

Average

Remaining
Contractual
Life

(in years)

 
Balance – December 31, 2015 – outstanding and exercisable  500,000   0.25   4.93 
Granted  1,750,000   0.36   5.0 
Exercised  -   -   - 
Cancelled/Modified  -   -   - 
Balance – December 31, 2016 – outstanding  2,250,000   0.34   4.38 
Balance – December 31, 2016 – exercisable  2,200,000   0.30   4.38 
             
Outstanding options held by related party – December 31, 2016  2,250,000   0.34   4.38 
Exercisable options held by related party – December 31, 2016  2,200,000   0.30   4.38 
             
Balance – December 31, 2016  2,250,000  $0.34   4.38 
Granted  15,499,990  $0.43   5.00 
Exercised  -   -   - 
Cancelled/Modified  (100,000) $0.40   - 
Balance – December 31, 2017 – outstanding  17,649,990  $0.42   4.27 
Balance – December 31, 2017 – exercisable  8,983,322  $0.27   4.15 
            
Outstanding options held by related party – December 31, 2017  17,429,990  $0.42   4.65 
Exercisable options held by related party – December 31, 2017  8,843,322  $0.27   4.15
Summary of stock options granted  
Options  Value  Purpose for Grant
 15,499,990  $1,172,022  Service Rendered
Warrants [Member]    
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]    
Summary of assumptions used for options and warrants granted
  June 30,
2018
 
Exercise price $0.20 
Expected dividends  0%
Expected volatility  92.14%-100.56% 
Risk free interest rate  1.64%-2.69% 
Expected life of warrant  4 - 5 years 
  December 31,
2017
  December 31,
2016
 
Exercise price  $0.20-0.30  $0.40
Expected dividends  0%  0%
Expected volatility  96.76%-102.21%   73.44-91.54% 
Risk free interest rate  1.63%-2.26%   1.13%-1.39% 
Expected life of warrant  5 years   5 years
Summary of stock option and warrant activity
  Warrants  Weighted
Average
Exercise
Price
 
       
Outstanding – December 31, 2017  46,193,779  $0.24 
Granted  15,873,016   0.20 
Exercised  (50,000)  0.40 
Forfeited/Cancelled  -   - 
Outstanding and Exercisable – June 30, 2018  62,016,795  $0.24
  Warrants  Weighted Average
Exercise
Price
 
       
Outstanding and Exercisable – December 31, 2015  10,750,000   0.35 
Granted  4,791,666   0.40 
Exercised  -   - 
Forfeited/Cancelled  -   - 
Outstanding – December 31, 2016  15,541,666  $0.36 
Granted  30,652,113   0.20 
Exercised  -   - 
Forfeited/Cancelled  -   - 
Outstanding and Exercisable – December 31, 2017  46,193,779  $0.25
Summary of changes in warrants outstanding
Warrants Outstanding  Warrants Exercisable 
Exercise price  Number
Outstanding
  Weighted Average
Remaining Contractual Life
(in years)
  Weighted
Average
Exercise Price
  Number
Exercisable
  Weighted
Average
Exercise Price
 
$0.20   62,016,795   3.66   0.24   62,016,795   0.24
Warrants Outstanding  Warrants Exercisable 
Exercise price  Number Outstanding  Weighted Average
Remaining Contractual Life
(in years)
  Weighted
Average
Exercise Price
  Number
Exercisable
  Weighted Average
Exercise Price
 
$0.20– 0.40    46,193,779   4   0.25   46,193,779   0.25
v3.10.0.1
Commitments and Contingencies (Tables)
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Schedule of annual minimum lease payments under non-cancellable operating leases
2018 $35,972 
2019  74,204 
2020  78,146 
2021  82,207 
2022  87,851 
2023  37,775 
Total minimum lease payments $396,155
v3.10.0.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2017
Income Taxes [Abstract]  
Components of deferred tax assets

  December 31, 2017  December 31,
2016
 
Net deferred tax assets – Non-current:      
       
Expected income tax benefit from NOL carry-forwards $7,600,000  $3,100,000 
Less valuation allowance  (7,600,000)  (3,100,000)
Deferred tax assets, net of valuation allowance $-  $-
Schedule of reconciliation of the federal statutory income tax rate
  For the Year Ended
December 31, 2017
  For the Year Ended
December 31, 2016
 
       
Federal statutory income tax rate  21.0%  34.0%
         
Change in valuation allowance on net operating loss carry-forwards  (21.0)%  (34.0)%
         
Effective income tax rate  0.0%  0.0%
v3.10.0.1
Revision of Prior Year Financial Statements (Tables)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Revision of Prior Year Financial Statements [Abstract]    
Schedule of correction of accounting errors, the relevant annual financial statements
  December 31, 2017 
  As Previously Reported  Adjustment  As Revised 
Balance Sheet            
Current Liabilities            
Accrued dividends $472,444  $(472,444) $- 
Total Current Liabilities  4,159,644   (472,444)  3,687,200 
Total Liabilities $8,017,183  $(472,444) $7,544,739 
             
Stockholders’ Equity            
Total Stockholders’ Equity  7,839,751   (472,444)  7,367,307 

 

  For the six months ended June 30, 2017 
  As Previously Reported  Adjustments  As Revised 
Statement of Operations         
Deemed dividend $-    $131,867  $131,867 
Net loss attributable to common stockholders $2,955,909  $131,867  $3,087,776 
Basic and diluted loss per share $(0.08) $-     (0.08)
             
Statements of Cash Flows            
Supplementary Disclosure of Non-Cash Investing And Financing Activities            
Deemed dividend $101,385  $30,482  $131,867

 

  December 31, 2017 
  As Previously Reported  Adjustment  As Revised 
Balance Sheet         
Current Liabilities         
Accrued dividends $472,444  $(472,444) $- 
Total Current Liabilities  4,159,644   (472,444)  3,687,200 
Total Liabilities $8,017,183  $(472,444) $7,544,739 
             
Stockholders’ Equity            
Total Stockholders’ Equity  7,839,751   (472,444)  7,367,307 

 

  For the year ended December 31, 2017 
  As Previously Reported  Adjustments  As Revised 
Statement of Operations         
Deemed dividend $-  $297,323  $131,867 
Net loss attributable to common stockholders $8,751,586  $297,323  $9,079,872 
Basic and diluted loss per share $(0.23) $-   (0.23)
             
Statements of Cash Flows            
Supplementary Disclosure of Non-Cash Investing And Financing Activities            
Deemed dividend $217,985  $79,338  $297,323 

  

 

  December 31, 2016 
  As Previously Reported  Adjustment  As Revised 
Balance Sheet         
Current Liabilities         
Accrued dividends $259,170  $(259,170) $- 
Total Current Liabilities  3,544,996   (259,170)  3,285,826 
Total Liabilities $3,546,204  $(259,170) $3,287,034 
             
Stockholders’ Equity            
Total Stockholders’ Equity  3,168,103   (259,170)  2,908,933 

  

 For the year ended December 31, 2016 
  As Previously Reported  Adjustments  As Revised 
Statement of Operations         
Deemed dividend $-  $247,128  $247,128 
Net loss attributable to common stockholders $(7,391,907) $247,128  $(7,639,035)
Basic and diluted loss per share $(0.23) $(0.01)  (0.24)
             
Statements of Cash Flows            
Supplementary Disclosure of Non-Cash Investing And Financing Activities            
Deemed dividend $177,234  $69,894  $247,128 

 

v3.10.0.1
Organization and Operations (Details) - shares
12 Months Ended
Feb. 05, 2016
Dec. 31, 2016
Kent Campbell [Member]    
Organization and Operations (Textual)    
Issuance of common shares for cash 28,500,000  
Cancelled of common stock 781,818  
Series A Convertible Preferred Stock [Member]    
Organization and Operations (Textual)    
Issuance of common shares for cash  
Series B Convertible Preferred Stock [Member]    
Organization and Operations (Textual)    
Issuance of common shares for cash  
Jerrick Ventures, Inc. [Member] | Series A Convertible Preferred Stock [Member]    
Organization and Operations (Textual)    
Issuance of common shares for cash 33,415  
Jerrick Ventures, Inc. [Member] | Series B Convertible Preferred Stock [Member]    
Organization and Operations (Textual)    
Issuance of common shares for cash 8,064  
v3.10.0.1
Significant and Critical Accounting Policies and Practices (Details)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Jerrick Ventures LLC [Member]    
Name of combined affiliate Jerrick Ventures LLC Jerrick Ventures LLC
State or other jurisdiction of incorporation or organization The State of Delaware The State of Delaware
Company interest 100.00% 100.00%
Jerrick Australia Pty Ltd [Member]    
Name of combined affiliate Jerrick Australia Pty Ltd  
State or other jurisdiction of incorporation or organization Australia  
Company interest 100.00%  
v3.10.0.1
Significant and Critical Accounting Policies and Practices (Details 1)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Computer equipment and software [Member]    
Property and Equipment, Estimated Useful Life (Years) 3 years 3 years
Furniture and fixture [Member]    
Property and Equipment, Estimated Useful Life (Years) 5 years 5 years
Leasehold improvement [Member]    
Property and Equipment, Estimated Useful Life (Years) 5 years  
v3.10.0.1
Significant and Critical Accounting Policies and Practices (Details 2) - shares
6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Loss Per Share [Line Items]      
Common stock equivalents, total 145,543,971 69,621,699 112,123,487
Series A Preferred Stock [Member]      
Loss Per Share [Line Items]      
Common stock equivalents, total 23,135,935 21,654,614 19,256,707
Series B Preferred stock [Member]      
Loss Per Share [Line Items]      
Common stock equivalents, total 4,697,906 4,431,987 4,092,893
Convertible notes [Member]      
Loss Per Share [Line Items]      
Common stock equivalents, total 28,015,838 2,929,127 17,749,990
Convertible notes - related party [Member]      
Loss Per Share [Line Items]      
Common stock equivalents, total 10,027,507 250,000 7,080,128
Options [Member]      
Loss Per Share [Line Items]      
Common stock equivalents, total 17,649,990 17,549,990 17,749,990
Warrants [Member]      
Loss Per Share [Line Items]      
Common stock equivalents, total 62,016,795 22,805,981 46,193,779
v3.10.0.1
Significant and Critical Accounting Policies and Practices (Details 3) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Accretion of debt discount and issuance cost $ (415,045) $ (431,720) $ (589,933) $ (724,900) $ (1,828,027) $ (235,622)
Derivative expense          
Change in fair value of derivative liabilities          
Net loss $ (2,411,238) $ (1,466,657) $ (4,504,868) $ (2,955,909) $ (8,751,586) $ (7,391,907)
Net loss per ordinary share:            
Basic and diluted loss per share $ (0.06) $ (0.04) $ (0.12) $ (0.08) $ (0.23) $ (0.24)
Previously Reported [Member]            
Accretion of debt discount and issuance cost       $ (951,484)    
Derivative expense       (254,470)    
Change in fair value of derivative liabilities       584,011    
Net loss       $ (2,852,952)    
Net loss per ordinary share:            
Basic and diluted loss per share       $ (0.08) (0.23) (0.01)
Revisions [Member]            
Accretion of debt discount and issuance cost       $ 226,584    
Derivative expense       254,470    
Change in fair value of derivative liabilities       (584,011)    
Net loss       $ 102,957    
Net loss per ordinary share:            
Basic and diluted loss per share       $ (0.00) $ (0.23)
v3.10.0.1
Significant and Critical Accounting Policies and Practices (Details Textual) - USD ($)
12 Months Ended
Jan. 02, 2013
Dec. 31, 2017
Dec. 31, 2016
Significant and Critical Accounting Policies and Practices (Textual)      
Investments minority interest $ 83,333    
Description of investments cost method equity method and joint venture   The Company holds 50% or less of the common stock or in-substance common stock.  
Impairment of minority investment   $ 83,333
Securities purchase agreement [Member]      
Significant and Critical Accounting Policies and Practices (Textual)      
Stock options exercisable term   5 years  
Stock options to purchase of common stock exercise price per share   $ 0.20  
v3.10.0.1
Property and Equipment (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 321,563 $ 296,118 $ 281,456
Less: Accumulated Depreciation (269,500) (248,062) (209,627)
Property and equipment, net 52,063 48,056 71,829
Computer Equipment [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 234,315 234,315 219,653
Furniture and Fixtures [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 61,803 61,803 $ 61,803
Leasehold Improvements [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 25,445  
v3.10.0.1
Property and Equipment (Details Textual) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Property and Equipment (Textual)            
Depreciation expense $ 10,423 $ 9,404 $ 21,439 $ 18,704 $ 38,435 $ 42,634
v3.10.0.1
Line of Credit (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Line of Credit Facility [Line Items]      
Line of credit outstanding balances $ 44,996 $ 235,141
Revolving Note [Member]      
Line of Credit Facility [Line Items]      
Line of credit outstanding balances 44,996 203,988
Factoring Agreement [Member]      
Line of Credit Facility [Line Items]      
Line of credit outstanding balances   $ 31,153
v3.10.0.1
Line of Credit (Details Textual) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Oct. 04, 2016
Aug. 21, 2017
Mar. 19, 2009
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Line of Credit (Textual)                  
Line of credit monthly interest rate during period               3.75% 3.75%
Line of credit           $ 44,996 $ 235,141
Line of credit balance outstanding on revenue factoring agreement               0 31,153
Company received proceeds from imperial advance, LLC $ 40,000             39,195
Agrees to pay for future receivable $ 52,400 $ 9,368       44,996 $ 41,706 199,574 24,007
Gain on settlement of debt       13,452 $ (110,674) 2,079
Revolving Note [Member]                  
Line of Credit (Textual)                  
Line of credit maximum outstanding balance     $ 200,000            
Line of credit facility, expiration date     Mar. 19, 2010            
Line of credit           $ 44,996 $ 203,988
v3.10.0.1
Notes Payable (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Note payable, Outstanding Principal, Balance $ 972,825 $ 700,000 $ 25,000
Less: Debt Discount (180,950) (10,500) (9,421)
Less: Debt Issuance Costs (408)
Notes Payable 791,467 689,500 15,579
October 25, 2016 [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Note payable, Outstanding Principal, Balance   25,000
Interest Rate   9.00%  
Maturity Date   Jul. 01, 2017  
Warrants, Quantity   50,000  
Warrants, Exercise Price   $ 0.30  
Notes Payable   25,000
The February 2017 Offering [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Note payable, Outstanding Principal, Balance $ 364,325 $ 400,000
Interest Rate 12.00% 12.00%  
Maturity Date Sep. 01, 2017 Sep. 01, 2017  
Warrants, Quantity 2,450,000 2,450,000  
Warrants, Exercise Price $ 0.20 $ 0.20  
Notes Payable $ 364,325 $ 400,000
The June 2017 Loan Agreement [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Note payable, Outstanding Principal, Balance $ 50,000
Interest Rate 12.00% 12.00%  
Maturity Date Sep. 01, 2017 Sep. 01, 2017  
Warrants, Quantity 35,000 35,000  
Warrants, Exercise Price $ 0.2 $ 0.20  
Notes Payable $ 50,000
The First November 2017 Loan Agreement [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Note payable, Outstanding Principal, Balance $ 100,000
Interest Rate 15.00% 15.00%  
Maturity Date Jan. 12, 2018 Jan. 12, 2018  
Warrants, Quantity  
Warrants, Exercise Price  
Notes Payable $ 100,000
The Second November 2017 Loan Agreement [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Note payable, Outstanding Principal, Balance $ 50,000
Interest Rate 15.00% 15.00%  
Maturity Date Jan. 13, 2018 Jan. 13, 2018  
Warrants, Quantity  
Warrants, Exercise Price  
Notes Payable $ 50,000
The Third November 2017 Loan Agreement [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Note payable, Outstanding Principal, Balance $ 100,000
Interest Rate 15.00% 15.00%  
Maturity Date Jan. 13, 2018 Jan. 13, 2018  
Warrants, Quantity  
Warrants, Exercise Price  
Notes Payable $ 100,000
May 2018 Offering [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Note payable, Outstanding Principal, Balance $ 608,500    
Interest Rate 13.00%    
Maturity Date Mar. 31, 2019    
Warrants, Quantity 1,825,500    
Warrants, Exercise Price    
Notes Payable $ 608,500    
v3.10.0.1
Notes Payable (Details Textual) - USD ($)
1 Months Ended 6 Months Ended 12 Months Ended
Mar. 14, 2018
Aug. 18, 2017
Jun. 12, 2017
Feb. 28, 2017
May 31, 2018
Nov. 29, 2017
Nov. 28, 2017
Jul. 21, 2017
Mar. 17, 2017
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Aug. 17, 2016
Notes Payable (Textual)                          
Promissory note                     $ 60,000    
Debt discount                   $ (180,950) $ (10,500) $ (9,421)  
Subscription Agreements [Member]                          
Notes Payable (Textual)                          
Warrant exercisable price, per share                         $ 0.40
Eight Investor [Member]                          
Notes Payable (Textual)                          
Warrants purchase of common stock                   300,000 100,000    
Warrant exercisable price, per share                   $ 0.20 $ 0.20    
Warrant term                   4 years 5 years    
Private Placement Offering [Member] | Subscription Agreements [Member]                          
Notes Payable (Textual)                          
Interest rate                 6.00%        
Aggregate principal amount                 $ 975,511        
Aggregate gross proceeds of common stock                 $ 916,585        
June 2017 Loan Agreement [Member]                          
Notes Payable (Textual)                          
Promissory note   $ 50,000 $ 50,000         $ 100,000          
Maturity date   Oct. 02, 2017 Jun. 30, 2017         Jul. 31, 2017          
Interest rate   15.00% 10.00%         10.00%          
Warrants purchase of common stock     35,000         100,000          
Warrant exercisable price, per share     $ 0.20         $ 0.20          
Warrant term     5 years         5 years          
Repayment of principal                   $ 50,000      
Gain on forgiveness of debt                   4,424      
August 2017 Convertible Note Offering [Member]                          
Notes Payable (Textual)                          
Promissory note                     $ 1,585,000    
Interest rate       15.00%                  
Aggregate gross proceeds of common stock       $ 400,000                  
February 2017 Offering Note [Member]                          
Notes Payable (Textual)                          
Maturity date                     Sep. 01, 2017    
Interest rate       15.00%                  
Warrant exercisable price, per share       $ 0.20                  
Aggregate principal amount       $ 575,511                  
Notes conversion, description       The remaining investors representing an aggregate $400,000 in principal of the February 2017 Offering Notes agreed to forbear their right to declare an event of default until December 15, 2017 during which time they retain the right to convert their principal and any accrued but unpaid interest into the August 2017 Convertible Note Offering. In consideration of the forbearance for which the investors will receive a warrant to purchase up to fifteen percent (15%) of the shares of common stock underlying the warrant acquired with the purchase of the February 2017 Offering Notes at a purchase price of $0.20 per share, and the interest on their note would be increased to eighteen percent (18%) from September 1, 2017 through December 15, 2017 or the conversion date, whichever is sooner.                  
Interest paid                   26,500      
Repayment of principal                   $ 26,375      
February 2017 Offering Note [Member] | Private Placement Offering [Member] | Subscription Agreements [Member]                          
Notes Payable (Textual)                          
Warrant exercisable price, per share                   $ 0.20 $ 0.20    
Notes conversion, description                   The February 2017 Offering Notes are convertible into shares of the Company's common stock at the time of Company's next round of financing (the ''Subsequent Offering'') at a price equal to eighty-five percent (85%) of the price per share offered in the Subsequent Offering (the ''Conversion Price''). The February 2017 Offering Warrants have a five-year term. Investors received the February 2017 Offering Warrants in the following amounts: (i) Investors purchasing $150,000 or more of the Offering received a February 2017 Offering Warrant equal to one hundred thirty percent (130%) of the dollar amount invested in the Offering; (ii) investors purchasing at least $100,000 but less than $150,000 of the February 2017 Offering received a February 2017 Offering Warrant equal to one hundred percent (100%) of the dollar amount invested in the Offering; and (iii) investors purchasing less than $100,000 of the Offering received to a February 2017 Offering Warrant equal to seventy percent (70%) of the dollar amount invested in the Offering. The February 2017 Offering Notes are convertible into shares of the Company's common stock at the time of Company's next round of financing (the "Subsequent Offering") at a price equal to eighty-five percent (85%) of the price per share offered in the Subsequent Offering (the "Conversion Price"). The February 2017 Offering Warrants have a five-year term. Investors received the February 2017 Offering Warrants in the following amounts: (i) Investors purchasing $150,000 or more of the Offering received a February 2017 Offering Warrant equal to one hundred thirty percent (130%) of the dollar amount invested in the Offering; (ii) investors purchasing at least $100,000 but less than $150,000 of the February 2017 Offering received a February 2017 Offering Warrant equal to one hundred percent (100%) of the dollar amount invested in the Offering; and (iii) investors purchasing less than $100,000 of the Offering received to a February 2017 Offering Warrant equal to seventy percent (70%) of the dollar amount invested in the Offering.    
First November 2017 Loan Agreement [Member]                          
Notes Payable (Textual)                          
Promissory note             $ 100,000            
Notes conversion, description             The First November 2017 Loan Agreement, the First November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $5,000) shall be payable in cash or convertible into shares of the Company's restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $10,000) shall be paid in the form of the Company's restricted common stock at a rate of $0.20 per share (equivalent to 50,000 shares of the Company's common stock issued at $0.20 per share). The maturity date of the First November 2017 Note was January 12, 2018 (the "First November 2017 Maturity Date") at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First November 2017 Note are due.            
Second November 2017 Loan Agreement [Member]                          
Notes Payable (Textual)                          
Promissory note           $ 50,000              
Notes conversion, description           The Second November 2017 Loan Agreement, the Second November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $2,500) shall be payable in cash or convertible into shares of the Company's restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $5,000) shall be paid in the form of the Company's restricted common stock at a rate of $0.20 per share (equivalent to 25,000 shares of the Company's common stock issued at $0.20 per share). The maturity date of the Second November 2017 Note was January 13, 2018 (the "Second November 2017 Maturity Date") at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second November 2017 Note are due.              
Third November 2017 Loan Agreement [Member]                          
Notes Payable (Textual)                          
Promissory note           $ 100,000              
Notes conversion, description           The Third November 2017 Loan Agreement, the Third November 2017 Note has interest of fifteen percent (15%), (i) five percent (5%) (i.e. $5,000) shall be payable in cash or convertible into shares of the Company's restricted common stock at a rate of $0.20 per share, at the option of the Lender, at the Maturity Date; (ii) ten percent (10%) (i.e. $10,000) shall be paid in the form of the Company's restricted common stock at a rate of $0.20 per share (equivalent to 50,000 shares of the Company's common stock issued at $0.20 per share). The maturity date of the Third November 2017 Note was January 13, 2018 (the "Third November 2017 Maturity Date") at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Third November 2017 Note are due.              
March 2018 Loan Agreement [Member]                          
Notes Payable (Textual)                          
Promissory note $ 50,000                        
Maturity date Mar. 29, 2018                        
Interest rate 12.00%                        
Warrants purchase of common stock 100,000                        
Warrant exercisable price, per share $ 0.20                        
Warrant term 5 years                        
May 2018 Offering [Member] | Subscription Agreements [Member]                          
Notes Payable (Textual)                          
Interest rate         13.00%                
Warrants purchase of common stock                   1,825,500      
Warrant exercisable price, per share         $ 0.20                
Aggregate principal amount         $ 1,200,000                
Aggregate gross proceeds of common stock         $ 608,500         $ 608,500      
Notes conversion, description         The Company's securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (i) a 13% promissory note (each, a " May 2018 Offering Note" and, together, the "May 2018 Offering Notes"), and (ii) a four-year warrant ("May 2018 Offering Warrant") to purchase the number of shares of the Company's common stock equal to three times the principal amount in dollars invested by such investor in each May 2018 Offering Note (the "May 2018 Warrant Shares") at an exercise price of $0.20 per share (the "May Offering Warrant Exercise Price"), subject to adjustment upon the terms thereof.                
Debt discount                   $ 215,032      
v3.10.0.1
Convertible Note Payable (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 5,150,138 $ 3,140,384 $ 500,000
Less: Debt Discount (828,627) (452,022) (184,398)
Less: Debt Issuance Costs (219,204) (79,569) (46,779)
Debt unamortized discount premium and debt issuance costs net 4,102,307 2,608,793 268,823
Convertible notes payable, Outstanding Principal, Total 59,500 96,500 268,823
Total Long-Term Debt 4,042,808 2,512,293
The November 2016 Convertible Note Offering [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 25,000 $ 25,000 400,000
Interest Rate 10.00% 10.00%  
Conversion Price $ 0.30 $ 0.30  
Maturity Date Nov. 01, 2017 Nov. 01, 2017  
Warrants, Quantity 400,000 400,000  
Warrants, Exercise Price $ 0.30 $ 0.30  
The June, 2017 Convertible Note Offering [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 71,500
Interest Rate 12.00% 12.00%  
Conversion Price    
Maturity Date Sep. 01, 2017 Sep. 01, 2017  
Warrants, Quantity 114,700 114,700  
Warrants, Exercise Price $ 0.20 $ 0.20  
The August Convertible Note Offering [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 2,943,884 $ 2,943,884
Interest Rate 15.00% 15.00%  
Conversion Price [1] $ 0.20 $ 0.20  
Warrants, Quantity 14,716,419 14,716,419  
Warrants, Exercise Price $ 0.20 $ 0.20  
The August Convertible Note Offering [Member] | Minimum [Member]      
Short-term Debt [Line Items]      
Maturity Date Aug. 31, 2019 Aug. 31, 2019  
The August Convertible Note Offering [Member] | Maximum [Member]      
Short-term Debt [Line Items]      
Maturity Date Nov. 30, 2019 Nov. 30, 2019  
The First December 2017 Note [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 100,000 $ 100,000  
Interest Rate 15.00%    
Conversion Price [1] $ 0.20    
Maturity Date Dec. 21, 2019    
Warrants, Quantity 500,000    
Warrants, Exercise Price $ 0.20    
The February 2018 Convertible Note Offering [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 1,015,674  
Interest Rate 15.00%    
Conversion Price [1] $ 0.20    
Warrants, Quantity 5,078,375    
Warrants, Exercise Price $ 0.20    
The February 2018 Convertible Note Offering [Member] | Minimum [Member]      
Short-term Debt [Line Items]      
Maturity Date Jan. 31, 2020    
The February 2018 Convertible Note Offering [Member] | Maximum [Member]      
Short-term Debt [Line Items]      
Maturity Date Feb. 29, 2020    
The January 2018 Note [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 68,761  
Conversion Price [1] $ 0.20    
Maturity Date Jan. 12, 2020    
Warrants, Quantity 343,806    
Warrants, Exercise Price $ 0.20    
The February 2018 Note [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 35,452  
Interest Rate 18.00%    
Conversion Price [1] $ 0.20    
Maturity Date Feb. 08, 2020    
Warrants, Quantity 81,500    
Warrants, Exercise Price $ 0.20    
The March 2018 Convertible Note Offering [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal $ 961,367  
Interest Rate 14.00%    
Conversion Price [1] $ 0.20    
Warrants, Quantity 4,806,833    
Warrants, Exercise Price $ 0.20    
The March 2018 Convertible Note Offering [Member] | Minimum [Member]      
Short-term Debt [Line Items]      
Maturity Date Mar. 31, 2020    
The March 2018 Convertible Note Offering [Member] | Maximum [Member]      
Short-term Debt [Line Items]      
Maturity Date Apr. 30, 2020    
December 27, 2016 [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal   100,000
Interest Rate   10.00%  
Conversion Price   $ 0.30  
Maturity Date   Dec. 27, 2017  
Warrants, Quantity   100,000  
Warrants, Exercise Price   $ 0.30  
July, 2017 [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal  
Interest Rate   8.50%  
Conversion Price [1]   $ 0.20  
Maturity Date   Apr. 11, 2018  
Warrants, Quantity   350,000  
Warrants, Exercise Price   $ 0.20  
December 21, 2017 [Member]      
Short-term Debt [Line Items]      
Convertible notes payable, Outstanding Principal   $ 100,000
[1] As subject to adjustment as further outlined in the notes
v3.10.0.1
Convertible Note Payable (Details Textual) - USD ($)
1 Months Ended 4 Months Ended 6 Months Ended 12 Months Ended
Feb. 08, 2018
Jan. 12, 2018
Sep. 13, 2017
Aug. 31, 2017
Jun. 30, 2017
Dec. 27, 2017
Jul. 31, 2017
Dec. 27, 2016
Nov. 30, 2016
Nov. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Feb. 28, 2017
Convertible Note Payable (Textual)                              
Convertible notes payable outstanding balance                     $ (5,150,138)   $ (3,140,384) $ (500,000)  
Debt discount                     (828,627)   (452,022) (184,398)  
Debt issuance costs                     (408)    
Proceeds from issuance of convertible notes                     299,852 $ 50,000 655,000  
Interest amount of convertible notes                         $ 206,026    
Consideration shares, number of shares repurchased                         220,000    
Consideration shares, repurchase amount                         $ 19,007    
Increase in derivative liability                         64,346  
Conversion feature of debt instrument                         583,681    
Placement agent fees                     $ 90,508   90,508    
Convertible redeemable debentures, percentage     8.50%                        
Secured debt                         645,000    
Aggregate principal amount                         $ 60,000    
Three Investor [Member]                              
Convertible Note Payable (Textual)                              
Warrant term                     4 years   5 years    
Debt discount                         $ 78,823    
Warrants issued                         778,750    
Warrants, Exercise Price                     $ 0.20   $ 0.20    
Principal amount of convertible notes     $ 606,812                        
Convertible Note to Third Party Lender [Member]                              
Convertible Note Payable (Textual)                              
Convertible note         $ 71,500     $ 100,000 $ 400,000     $ 71,500   $ 400,000  
Note accrues interest rate         12.00%     10.00% 10.00%     12.00%   10.00%  
Maturity date         Sep. 01, 2017     Dec. 27, 2017 Nov. 01, 2017     Sep. 01, 2017   Dec. 29, 2017  
Conversion price per share               $ 0.30              
Warrant term         5 years     5 years       5 years   5 years  
Debt issuance costs                   $ 101,561          
Warrants issued         67,550     100,000 400,000 6,791,419   67,550 6,791,419 400,000  
Warrants, Exercise Price         $ 0.20     $ 0.40       $ 0.20 $ 0.20 $ 0.30  
Principal amount of convertible notes       $ 100,000                 $ 375,000 $ 375,000  
Interest amount of convertible notes       $ 6,767           $ 40,146     $ 30,719 $ 30,719  
Conversion feature of debt instrument                   583,681          
Secured debt                   $ 1,217,177          
Convertible secured promissory note, description                   The August 2017 Convertible Note Offering consisted of a maximum of $6,000,000 of units of the Company's securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a "August 2017 Offering Note" and together the "August 2017 Offering Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("August 2017 Offering Conversion Shares") at a conversion price of $0.20 per share (the "August 2017 Note Conversion Price"), and (b) a five-year warrant (each a "August 2017 Offering Warrant and together the "August 2017 Offering Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the August 2017 Offering Notes can be converted into ("August 2017 Offering Warrant Shares") at an exercise price of $0.20 per share ("August 2017 Offering Warrant Exercise Price"). The August 2017 Offering Notes mature on the second (2nd) anniversary of their issuance dates.          
Aggregate principal amount                   $ 1,585,000          
Offering discount percentage         15.00%             15.00% 15.00%    
Current default principal amount         $ 71,500             $ 71,500      
July 2017 Convertible Offering [Member]                              
Convertible Note Payable (Textual)                              
Note accrues interest rate             8.50%                
Maturity date             Apr. 18, 2018                
Warrant term             5 years                
Warrants issued             245,000                
Proceeds from issuance of convertible notes             $ 445,000                
Warrants issued to purchase shares             778,750                
Warrants, Exercise Price             $ 0.20                
Convertible redeemable debentures redemption, description     The Company redeemed the <u style="font: 13.33px/normal 'times new roman', times, serif; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; widows: 1; -webkit-text-stroke-width: 0px;">8.5% Convertible Redeemable </u>Debentures by paying the three accredited investors an aggregate $606,812 representing 117.5% of the principal along with interest.       (i) the issuance and sale of 8.5% Convertible Redeemable Debentures, containing a ten percent (10%) original issuance discount, due April 18, 2018 (the "Debentures") and (ii) the issuance and sale of five-year Common Stock Purchase Warrants to purchase up to 778,750 shares of the Company's common stock, par value $0.001 per share.                
Derivative liability                         $ 332,942    
August 2017 Convertible Note Offering [Member]                              
Convertible Note Payable (Textual)                              
Note accrues interest rate                             15.00%
Debt discount                         $ 472,675    
Warrants issued                         4,555,129    
Interest amount of convertible notes                         $ 40,146    
Fair value derivative liability                         440,157    
Secured debt                         $ 1,217,177    
Convertible secured promissory note, description       The August Offering consisted of a maximum of $6,000,000 of units of the Company's securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a "Note" and together the "Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("Conversion Shares") at a conversion price of $0.20 per share (the "Conversion Price"), and (b) a five-year warrant (each a "Warrant and together the "Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into ("Warrant Shares") at an exercise price of $0.20 per share ("Exercise Price"). The Notes mature on the second (2nd) anniversary of their issuance dates.                 The Company offered, through a placement agent, $6,000,000 of units of its securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a "Note" and together the "Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("Conversion Shares") at a conversion price of $0.20 per share (the "Conversion Price"), and (b) a five-year warrant ( each a "Warrant and together the "Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into ("Warrant Shares") at an exercise price of $0.20 per share ("Exercise Price").    
Aggregate principal amount                         $ 1,585,000    
August 2017 Convertible Note Offering [Member] | Warrants [Member]                              
Convertible Note Payable (Textual)                              
Debt discount                     $ 472,675   472,675    
Debt issuance costs                         $ 101,561    
Warrants issued                     7,925,000        
August 2017 Convertible Note Offering [Member] | Three Investor [Member]                              
Convertible Note Payable (Textual)                              
Warrants issued                         2,525,000    
Warrants issued to purchase shares                         7,925,000    
First December 2017 Note [Member]                              
Convertible Note Payable (Textual)                              
Convertible note           $ 100,000                  
Note accrues interest rate           15.00%                  
Maturity date           Dec. 27, 2019                  
Conversion price per share           $ 0.20                  
Warrant term           5 years                  
Debt discount           $ 35,525                  
Warrants issued to purchase shares           500,000                  
Warrants, Exercise Price           $ 0.20                  
February 2018 Convertible Note Offering [Member]                              
Convertible Note Payable (Textual)                              
Convertible note $ 40,750                            
Note accrues interest rate 18.00%                            
Maturity date Feb. 08, 2020                            
Conversion price per share $ 0.20                            
Warrant term 5 years                            
Debt discount $ 7,963                            
Warrants issued 81,500                   1,453,375        
Warrants, Exercise Price $ 0.20                            
Interest amount of convertible notes                     $ 40,675        
Convertible redeemable debentures redemption, description                     A maximum of $750,000 of units of the Company's securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a "February 2018 Convertible Note" and together the "February 2018 Convertible Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("February 2018 Conversion Shares") at a conversion price of $0.20 per share (the "February 2018 Note Conversion Price"), and (b) a five-year warrant (each a "February 2018 Offering Warrant and together the "February 2018 Offering Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the February 2018 Convertible Notes can be converted into ("February 2018 Warrant Shares") at an exercise price of $0.20 per share ("February 2018 Warrant Exercise Price"). The February 2018 Offering Notes mature on the second (2nd) anniversary of their issuance dates. The February 2018 Offering Notes are secured by a second priority security interest in the Company's assets up to $1,000,000.        
Conversion feature of debt instrument $ 5,298                   $ 37,350        
Placement agent fees                     $ 94,250        
Convertible redeemable debentures, percentage                     13.00%        
Fair value derivative liability                     $ 181,139        
Secured debt                     $ 250,000        
Convertible secured promissory note, description                     The Notes are secured by a second priority security interest in the Company's assets up to $1,000,000.        
Aggregate principal amount                     $ 725,000        
Repayment of principal                     $ 5,298        
Conversion shares                     362,500        
Conversion shares fair value                     $ 74,881        
February 2018 Convertible Note Offering [Member] | Warrants [Member]                              
Convertible Note Payable (Textual)                              
Debt discount                     $ 316,875        
Warrants issued                     3,625,000        
January 2018 Note [Member]                              
Convertible Note Payable (Textual)                              
Convertible note   $ 68,761                          
Note accrues interest rate   15.00%                          
Maturity date   Jan. 12, 2020                          
Conversion price per share   $ 0.20                          
Warrant term   5 years                          
Warrants issued   343,806                          
Convertible redeemable debentures redemption, description   The Company issued a convertible note to a third-party lender totaling $68,761 to settle an outstanding vendor liabilities (the "January 2018 Note"). The January 2018 Note accrues interest at 15% per annum and matures with interest and principal both due on January 12, 2020. The conversions resulted in the issuance of 343,806 warrants with a fair value of $42,850. These were recorded as a loss on extinguishment of debt. The warrant entitles the holder to purchase the Company's common stock at a purchase price of $0.20 per share for a period of five years from the issue date. The January 2018 Note and accrued interest is convertible at a conversion price of $0.20 per share, subject to adjustment.                          
Fair value derivative liability   $ 42,850                          
March 2018 Convertible Note Offering [Member]                              
Convertible Note Payable (Textual)                              
Warrants issued                     956,833        
Interest amount of convertible notes                     $ 767        
Fair value derivative liability                     84,087        
Secured debt                     $ 50,000        
Convertible secured promissory note, description                     A maximum of $900,000, with an over-allotment option of an additional $300,000 of units of the Company's securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (a) a 14% Convertible Secured Promissory Note (each a "Note" and together the "Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("Conversion Shares") at a conversion price of $0.20 per share (the "Conversion Price"), and (b) a four-year warrant (each a "Warrant and together the "Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into ("Warrant Shares") at an exercise price of $0.20 per share ("Exercise Price"). The Notes mature on the second (2nd) anniversary of their issuance dates.        
Aggregate principal amount                     $ 770,000        
Unpaid interest                     140,600        
March 2018 Convertible Note Offering [Member] | Warrants [Member]                              
Convertible Note Payable (Textual)                              
Debt discount                     $ 254,788        
Warrants issued                     4,806,833        
v3.10.0.1
Related Party Loans (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Dec. 21, 2017
Dec. 31, 2016
Related Party Transaction [Line Items]        
Convertible notes payable - related parties, gross $ 1,815,878 $ 1,516,026  
Less: Debt Discount (208,525) (170,780)  
Less: Debt Issuance Costs (4,645)    
Convertible notes unamortized discount premium and debt issuance cost 1,602,708 1,345,246  
Less: Current Debt (30,916)  
Total Long-Term Debt 1,571,792 1,345,246  
The August 2017 Convertible Note Offering [Member]        
Related Party Transaction [Line Items]        
Convertible notes payable - related parties, gross $ 1,416,026 1,416,026    
Interest Rate 15.00%      
Maturity Date, description August - October 2019      
Warrants, Quantity 4,589,466      
Warrants, Exercise Price $ 0.20      
The Second December 2017 Note [Member]        
Related Party Transaction [Line Items]        
Convertible notes payable - related parties, gross $ 100,000 100,000    
Interest Rate 15.00%   15.00%  
Maturity Date, description December 21, 2019      
Warrants, Quantity 500,000      
Warrants, Exercise Price $ 0.20      
The February 2018 Convertible Note Offering [Member]        
Related Party Transaction [Line Items]        
Convertible notes payable - related parties, gross $ 25,000    
Interest Rate 15.00%      
Maturity Date, description January - February 2020      
Warrants, Quantity 125,000      
Warrants, Exercise Price $ 0.20      
The Second February 2018 Note [Member]        
Related Party Transaction [Line Items]        
Convertible notes payable - related parties, gross $ 35,452    
Interest Rate 20.00%      
Maturity Date, description September 30, 2018      
Warrants, Quantity 81,500      
Warrants, Exercise Price $ 0.20      
The March 2018 Convertible Note Offering [Member]        
Related Party Transaction [Line Items]        
Convertible notes payable - related parties, gross $ 239,400    
Interest Rate 14.00%      
Maturity Date, description March 2020      
Warrants, Quantity 1,197,000      
Warrants, Exercise Price $ 0.20      
August - October 2017 [Member]        
Related Party Transaction [Line Items]        
Convertible notes payable - related parties, gross   $ 1,416,026  
Interest Rate   15.00%    
Maturity Date, description   August - October 2019.    
Warrants, Quantity   4,589,466    
Warrants, Exercise Price   $ 0.20    
December 21, 2018 [Member]        
Related Party Transaction [Line Items]        
Convertible notes payable - related parties, gross   $ 100,000    
Interest Rate   15.00%    
Maturity Date, description   December 21, 2019    
Warrants, Quantity   500,000    
Warrants, Exercise Price   $ 0.20    
v3.10.0.1
Related Party Loans (Details 1) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Related Party Transaction [Line Items]      
Notes payable - related party, gross $ 1,334,000 $ 1,249,000 $ 1,460,000
Less: Current Debt (28,093) (94,675)
Notes payable - related party, net 1,305,907 1,249,000 1,365,325
The May 2016 Rosen Loan Agreement [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, net $ 1,000,000 1,000,000  
Interest Rate 13.00%    
Maturity Date Nov. 26, 2017    
Warrants, Quantity 1,000,000    
Warrants, Exercise Price $ 0.40    
The September 2017 Rosen Loan Agreement [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, net $ 224,000 224,000  
Interest Rate 18.00%    
Maturity Date Sep. 24, 2017    
Warrants, Quantity 125,000    
Warrants, Exercise Price $ 0.20    
The November 2017 Schiller Loan Agreement [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, net 25,000  
Interest Rate 15.00%    
Maturity Date Dec. 31, 2017    
Warrants, Quantity    
Warrants, Exercise Price    
The May 2018 Schiller Loan Agreement [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, net $ 100,000  
Interest Rate 13.00%    
Maturity Date Feb. 02, 2019    
Warrants, Quantity 300,000    
Warrants, Exercise Price $ 0.20    
The June 2018 Frommer Loan Agreement [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, net $ 10,000  
Interest Rate 6.00%    
Maturity Date Aug. 17, 2018    
Warrants, Quantity 30,000    
Warrants, Exercise Price $ 0.20    
May 26, 2016 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   $ 1,000,000 1,000,000
Interest Rate   13.00%  
Maturity Date   Nov. 26, 2017  
Warrants, Quantity   1,000,000  
Warrants, Exercise Price   $ 0.40  
September 12, 2016 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   100,000
Interest Rate   12.00%  
Maturity Date   Nov. 22, 2017  
Warrants, Quantity   17,500  
Warrants, Exercise Price   $ 0.20  
September 20, 2016 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   10,000
Interest Rate   10.00%  
Maturity Date   Mar. 20, 2017  
Warrants, Quantity   235,000  
Warrants, Exercise Price   $ 0.40  
October 13, 2016 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   50,000
Interest Rate   12.00%  
Maturity Date   Nov. 22, 2017  
Warrants, Quantity   50,000  
Warrants, Exercise Price   $ 0.40  
October 24, 2016 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   15,000
Interest Rate   9.00%  
Maturity Date   Jan. 01, 2018  
Warrants, Quantity   30,000  
Warrants, Exercise Price   $ 0.30  
October 31, 2016 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   10,000
Interest Rate   10.00%  
Maturity Date   Nov. 10, 2016  
Warrants, Quantity   10,000  
Warrants, Exercise Price   $ 0.30  
November 22, 2016 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   225,000
Interest Rate   10.00%  
Maturity Date   Nov. 22, 2017  
Warrants, Quantity   750,000  
Warrants, Exercise Price   $ 0.30  
December 21, 2016 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   50,000
Interest Rate   10.00%  
Maturity Date   Nov. 22, 2017  
Warrants, Quantity   166,666  
Warrants, Exercise Price   $ 0.30  
September 8, 2017 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   $ 224,000
Interest Rate   1.00%  
Maturity Date   Sep. 24, 2017  
Warrants, Quantity   125,000  
Warrants, Exercise Price   $ 0.20  
November 20, 2017 [Member]      
Related Party Transaction [Line Items]      
Notes payable - related party, gross   $ 25,000
Interest Rate   15.00%  
Maturity Date   Dec. 31, 2017  
Warrants, Quantity    
Warrants, Exercise Price    
v3.10.0.1
Related Party Loans (Details Textual) - USD ($)
1 Months Ended 6 Months Ended 12 Months Ended
May 02, 2018
Mar. 13, 2018
Mar. 09, 2018
Mar. 04, 2018
Feb. 20, 2018
Feb. 08, 2018
Jan. 29, 2018
Nov. 13, 2017
Sep. 08, 2017
Sep. 07, 2017
Aug. 31, 2017
Jul. 06, 2017
Jun. 26, 2017
May 11, 2017
May 09, 2017
May 04, 2017
Apr. 25, 2017
Apr. 12, 2017
Feb. 07, 2017
Dec. 21, 2016
Oct. 31, 2016
Oct. 13, 2016
Sep. 12, 2016
Jan. 16, 2018
Dec. 21, 2017
Jan. 26, 2017
Jan. 25, 2017
Oct. 24, 2016
May 26, 2016
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Nov. 20, 2017
Aug. 24, 2017
Feb. 28, 2017
Related Party Loans (Textual)                                                                        
Convertible Notes - related party, net of debt discount                                                           $ 30,916        
Net of debt discount                                                           (208,525)   (170,780)      
Secured debt                                                               645,000        
Debt Instrument, Unamortized Discount, Current                                                           (828,627)   (452,022) (184,398)      
Related party notes payable                                                           1,305,907   1,249,000 1,365,325      
Debt discount                                                                 94,675      
Line of credit borrow principal                             $ 130,000                                          
Line of credit interest rate, description                             The LOC bears interest at a rate of 18%.                                          
Aggregate principal amount                                                               60,000        
Line of credit - related party                                                           130,000   130,000      
Unpaid interest                                                               206,026        
BCF and related debt discount                                                               583,681        
Note payable, Outstanding Principal, Balance                                                           972,825   700,000 25,000      
Notes payable related party                                                           1,334,000   1,249,000 1,460,000      
Loss on extinguishment of debt                                                               500,157        
Units of securities                                                                 288      
Repaid principal                                                           85,675 $ 100,000      
LOC bears interest rate                                                               3.75% 3.75%      
May 2016 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Maturity date, description                                                         Payable on the maturity date of May 26, 2017 (the "May 2016 Rosen Maturity Date") at which time all outstanding principal, accrued and unpaid interest and other amounts due under the May 2016 Rosen Loan are due.              
Secured debt                                                         $ 1,000,000              
Warrants issued to purchase shares                                                         1,000,000              
Note accrues interest rate                                                         12.50%              
Interest and principal both due date                                                         May 26, 2017              
Warrant term                                                         5 years              
Warrants, exercise price                                                         $ 0.40              
Unpaid interest                   $ 150,128                                                    
September 2016 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                             $ 100,000                          
Warrants issued to purchase shares                 25,000                           150,000                          
Note accrues interest rate                                             12.00%                          
Interest and principal both due date                 Sep. 24, 2017                                                      
Warrant term                 5 years                           5 years                          
Warrants, exercise price                 $ 0.20                           $ 0.40                          
October 2016 Gordon Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                           $ 50,000                            
Warrants issued to purchase shares                                           50,000                            
Note accrues interest rate                                           12.00%                            
Interest and principal both due date                                           Nov. 22, 2017                            
Warrants, exercise price                                           $ 0.40                            
October 2016 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                         $ 10,000                              
Warrants issued to purchase shares                                         10,000                              
Note accrues interest rate                                         10.00%                              
Interest and principal both due date                                         Nov. 10, 2016                              
Warrant term                                         5 years                              
Warrants, exercise price                                         $ 0.30                              
October 2016 Schiller Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                                       $ 30,000                
Warrants issued to purchase shares                                                       15,000                
Note accrues interest rate                                                       9.00%                
Interest and principal both due date                                                       Jan. 01, 2018                
Warrants, exercise price                                                       $ 0.30                
December 2016 Gordon Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                       $ 275,000                                
Warrants issued to purchase shares                                       166,666                                
Note accrues interest rate                                       10.00%                                
Interest and principal both due date                                       Nov. 22, 2017                                
Warrant term                                       5 years                                
Warrants, exercise price                                       $ 0.40                                
January 2017 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                                     $ 50,000                  
Warrants issued to purchase shares                                                     50,000                  
Note accrues interest rate                                                     10.00%                  
Interest and principal both due date                                                     Jan. 01, 2018                  
Warrant term                                                     5 years                  
Warrants, exercise price                                                     $ 0.30                  
January 2017 Gordon Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                                   $ 50,000                    
Warrants issued to purchase shares                                                   50,000                    
Note accrues interest rate                                                   10.00%                    
Warrant term                                                   5 years                    
Warrants, exercise price                                                   $ 0.30                    
February 2017 Schiller Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                     $ 10,000                                  
Warrants issued to purchase shares                                     10,000                                  
Note accrues interest rate                                     10.00%                                  
Warrant term                                     5 years                                  
Warrants, exercise price                                     $ 0.30                                  
April 2017 Schiller Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                   $ 10,000                                    
Warrants issued to purchase shares                                   10,000                                    
Note accrues interest rate                                   10.00%                                    
Interest and principal both due date                                   Jan. 21, 2018                                    
Warrant term                                   5 years                                    
Warrants, exercise price                                   $ 0.30                                    
April 2017 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                                   $ 10,000                                    
Warrants issued to purchase shares                                   10,000                                    
Note accrues interest rate                                   10.00%                                    
Interest and principal both due date                                   Jan. 21, 2018                                    
Warrant term                                   5 years                                    
Warrants, exercise price                                   $ 0.30                                    
May 2017 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                               $ 15,000                                        
Warrants issued to purchase shares                               10,500                                        
Note accrues interest rate                               12.00%                                        
Interest and principal both due date                               Sep. 01, 2017                                        
Warrant term                               5 years                                        
Warrants, exercise price                               $ 0.30                                        
May 2017 Schiller Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                           $ 20,000                                            
Warrants issued to purchase shares                           20,000                                            
Note accrues interest rate                           10.00%                                            
Interest and principal both due date                           Sep. 30, 2017                                            
Warrant term                           5 years                                            
Warrants, exercise price                           $ 0.20                                            
June 2017 Schiller Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Secured debt                         $ 30,000                                              
Warrants issued to purchase shares                         22,500                                              
Note accrues interest rate                         10.00%                                              
Interest and principal both due date                         Jan. 21, 2018                                              
Warrant term                         5 years                                              
Warrants, exercise price                         $ 0.20                                              
July 2017 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Note accrues interest rate                       10.00%                                                
Interest and principal both due date                       Jul. 21, 2017                                                
Warrant term                       5 years                                                
July 2017 Gordon Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Warrants issued to purchase shares                       18,750                                                
Interest and principal both due date                       Jul. 21, 2017                                                
Warrant term                       5 years                                                
Warrants, exercise price                       $ 0.20                                                
August 2017 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Note accrues interest rate                                                                     12.00%  
September 2017 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Net of debt discount                                                               $ 0        
Warrants issued to purchase shares         448,000     100,000 25,000                                                      
Interest and principal both due date         Sep. 08, 2018                                                              
Warrant term         5 years     5 years 5 years                                                      
Warrants, exercise price         $ 0.20     $ 0.20 $ 0.20                                                      
Loss on extinguishment of debt         $ 65,378                                                              
November 2017 Schiller Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Note accrues interest rate                                                                   15.00%    
Repaid principal                                                           25,000            
Repaid of interest                                                           637            
November 2017 Rosen Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Note accrues interest rate                                                                   15.00%    
March 2018 Convertible Note Offering [Member] | Over-Allotment Option [Member]                                                                        
Related Party Loans (Textual)                                                                        
Fair value of warrants                                                           $ 900,000            
Maturity date, description                                                           The Notes mature on the second (2nd) anniversary of their issuance dates.            
Convertible secured promissory note, description                                                           The Company's securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (a) a 14% Convertible Secured Promissory Note (each a "Note" and together the "Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("Conversion Shares") at a conversion price of $0.20 per share (the "Conversion Price"), and (b) a four-year warrant (each a "Warrant and together the "Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into ("Warrant Shares") at an exercise price of $0.20 per share ("Exercise Price").            
Units of securities                                                           $ 300,000            
January 2018 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Note accrues interest rate                                               6.00%                        
Interest and principal both due date                                               Jan. 31, 2018                        
Convertible secured promissory note, description                                               The January 2018 Rosen Note is secured by an officer of the Company whereas upon default an officer of the company owes default shares to the lender equal to the amount of principal outstanding divided by 0.20.                        
Repaid principal                                                           60,000            
Repaid of interest                                                           200            
January 2018 Gordon Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Note accrues interest rate                                               6.00%                        
Interest and principal both due date                                               Jan. 31, 2018                        
Convertible secured promissory note, description                                               The January 2018 Gordon Note is secured by an officer of the Company whereas upon default an officer of the company owes default shares to the lender equal to the amount of principal outstanding divided by 0.20.                        
Repaid principal                                                           40,000            
Repaid of interest                                                           105            
First March 2018 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Warrants issued to purchase shares       10,000                                                                
Note accrues interest rate       12.00%                                                                
Interest and principal both due date       Mar. 19, 2018                                                                
Warrant term       5 years                                                                
Warrants, exercise price       $ 0.20                                                                
Repaid principal                                                           10,000            
Repaid of interest                                                           260            
Second March 2018 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Warrants issued to purchase shares     15,000                                                                  
Note accrues interest rate     12.00%                                                                  
Interest and principal both due date     Mar. 24, 2018                                                                  
Warrant term     5 years                                                                  
Warrants, exercise price     $ 0.20                                                                  
Repaid principal                                                           15,000            
Repaid of interest                                                           365            
Third March 2018 Rosen Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Warrants issued to purchase shares   10,000                                                                    
Note accrues interest rate   12.00%                                                                    
Interest and principal both due date   Mar. 28, 2018                                                                    
Warrant term   5 years                                                                    
Warrants, exercise price   $ 0.20                                                                    
Repaid principal                                                           10,000            
Repaid of interest                                                           230            
May 2018 Schiller Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Warrants issued to purchase shares 300,000                                                                      
Note accrues interest rate 13.00%                                                                      
Warrant term 4 years                                                                      
Warrants, exercise price $ 0.20                                                                      
June 2018 Frommer Loan Agreement [Member]                                                                        
Related Party Loans (Textual)                                                                        
Warrants issued to purchase shares             30,000                                                          
Note accrues interest rate             6.00%                                                          
Interest and principal both due date             Aug. 17, 2018                                                          
Warrant term             4 years                                                          
Warrants, exercise price             $ 0.20                                                          
Line of Credit [Member]                                                                        
Related Party Loans (Textual)                                                                        
Revolving line of credit                             $ 130,000                                          
LOC bears interest rate                             18.00%                                          
Total outstanding balance of line of credit - related party                                                           $ 130,000            
Revolving Line of Credit's maturity date                                                           Jun. 01, 2019            
April Rosen Note [Member]                                                                        
Related Party Loans (Textual)                                                                        
Convertible note                                 $ 25,000                                      
Issuance of warrants                                 17,500                                      
Note accrues interest rate                                 12.00%                                      
Interest and principal both due date                                 Sep. 01, 2017                                      
Warrant term                                 5 years                                      
Warrants, exercise price                                 $ 0.20                                      
April Gordon Notes [Member]                                                                        
Related Party Loans (Textual)                                                                        
Convertible note                                 $ 25,000                                      
Issuance of warrants                                 17,500                                      
Note accrues interest rate                                 12.00%                                      
Interest and principal both due date                                 Sep. 01, 2017                                      
Warrant term                                 5 years                                      
Warrants, exercise price                                 $ 0.20                                      
August 2017 Convertible Note Offering [Member]                                                                        
Related Party Loans (Textual)                                                                        
Issuance of warrants                                                               4,555,129        
Secured debt                                                               $ 1,217,177        
Note accrues interest rate                                                                       15.00%
Debt Instrument, Unamortized Discount, Current                                                               472,675        
Aggregate principal amount                                                               1,585,000        
Unpaid interest                                                               40,146        
Fair value derivative liability                                                               $ 440,157        
Convertible secured promissory note, description                     The August Offering consisted of a maximum of $6,000,000 of units of the Company's securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a "Note" and together the "Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("Conversion Shares") at a conversion price of $0.20 per share (the "Conversion Price"), and (b) a five-year warrant (each a "Warrant and together the "Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into ("Warrant Shares") at an exercise price of $0.20 per share ("Exercise Price"). The Notes mature on the second (2nd) anniversary of their issuance dates.                                         The Company offered, through a placement agent, $6,000,000 of units of its securities (each, a "Unit" and collectively, the "Units"), with each Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a "Note" and together the "Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("Conversion Shares") at a conversion price of $0.20 per share (the "Conversion Price"), and (b) a five-year warrant ( each a "Warrant and together the "Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into ("Warrant Shares") at an exercise price of $0.20 per share ("Exercise Price").        
Second December 2017 Note [Member]                                                                        
Related Party Loans (Textual)                                                                        
Convertible note                                                 $ 100,000                      
Maturity date, description                                                           December 21, 2019            
Warrants issued to purchase shares                                                 500,000                      
Note accrues interest rate                                                 15.00%         15.00%            
Interest and principal both due date                                                 Dec. 27, 2019                      
Conversion price per share                                                 $ 0.20                      
Warrant term                                                 5 years                      
Debt Instrument, Unamortized Discount, Current                                                 $ 36,722                      
Warrants, exercise price                                                 $ 0.20                      
February 2018 Convertible Note Offering [Member]                                                                        
Related Party Loans (Textual)                                                                        
Notes conversion, description                                                           The Placement Agent shares of the Company's common stock equal to ten percent (10%) of the Conversion Shares underlying the Notes or 12,500 shares that had a fair value of $2,606, which was recorded as issuance cost and is being accreted over the life of the note to accretion of debt discount and issuance cost.            
Convertible note           $ 40,750                                                            
Issuance of warrants           81,500                                               1,453,375            
Secured debt                                                           $ 250,000            
Note accrues interest rate           18.00%                                                            
Interest and principal both due date           Feb. 08, 2020                                                            
Conversion price per share           $ 0.20                                                            
Warrant term           5 years                                                            
Debt Instrument, Unamortized Discount, Current           $ 7,963                                                            
Warrants, exercise price           $ 0.20                                                            
Aggregate principal amount                                                           725,000            
Unpaid interest                                                           40,675            
Fair value derivative liability                                                           181,139            
BCF and related debt discount           $ 5,298                                               $ 37,350            
Convertible secured promissory note, description                                                           The Notes are secured by a second priority security interest in the Company's assets up to $1,000,000.            
Placement agent cash fee                                                           $ 3,250            
Repayment of principal                                                           $ 5,298            
Investor [Member]                                                                        
Related Party Loans (Textual)                                                                        
Issuance of warrants                                                               778,750        
Warrant term                                                           4 years   5 years        
Debt Instrument, Unamortized Discount, Current                                                               $ 78,823        
Warrants, exercise price                                                           $ 0.20   $ 0.20        
Investor [Member] | August 2017 Convertible Note Offering [Member]                                                                        
Related Party Loans (Textual)                                                                        
Gross proceeds of private placement offering                                                               $ 505,000        
Short term debt                                                               645,000        
Fair value of warrants                                                               $ 440,157        
Issuance of warrants                                                               4,555,129        
Increase of principal amount                                                               $ 60,000        
Maturity date, description                                                               The Notes mature on the second (2nd) anniversary of their issuance dates.        
Warrants issued to purchase shares                                                               2,525,000        
Conversion price per share                                                               $ 0.20        
Warrant term                                                               5 years        
Warrants, exercise price                                                               $ 0.20        
Debt discount                                                               $ 160,700        
Unpaid interest                                                               $ 206,026        
Convertible secured promissory note, description                                                               Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a "Note" and together the "Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("Conversion Shares") at a conversion price of $0.20 per share (the "Conversion Price"), and (b) a five-year warrant ( each a "Warrant and together the "Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into ("Warrant Shares") at an exercise price of $0.20 per share ("Exercise Price").        
Loss on extinguishment of debt                                                               $ 500,157        
Units of securities                                                               $ 6,000,000        
Investor [Member] | March 2018 Convertible Note Offering [Member]                                                                        
Related Party Loans (Textual)                                                                        
Gross proceeds of private placement offering                                                           $ 239,400            
Issuance of warrants                                                           1,197,000            
Debt discount                                                           $ 84,854            
Investor [Member] | August 2017 Convertible Note Offering [Member]                                                                        
Related Party Loans (Textual)                                                                        
Issuance of warrants                                                               2,525,000        
Warrants issued to purchase shares                                                               7,925,000        
Debt discount                                                               $ 160,700        
Third Party Lender [Member] | Second February 2018 Note [Member]                                                                        
Related Party Loans (Textual)                                                                        
Gross proceeds of private placement offering                                                           $ 25,000            
Convertible note           $ 40,750                                                            
Issuance of warrants                                                           125,000            
Warrants issued to purchase shares           81,500                                                            
Note accrues interest rate           18.00%                                                            
Interest and principal both due date           Sep. 30, 2018                                                            
Conversion price per share           $ 0.20                                               $ 0.20            
Warrant term           5 years                                               5 years            
Warrants, exercise price           $ 0.20                                               $ 0.20            
Debt discount           $ 7,963                                               $ 11,054            
BCF and related debt discount                                                           $ 1,063            
Convertible secured promissory note, description                                                           Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a "Note" and together the "Notes"), convertible into shares of the Company's common stock, par value $.001 per share ("Conversion Shares") at a conversion price of $0.20 per share (the "Conversion Price"), and (b) a five-year warrant (each a "Warrant and together the "Warrants") to purchase common stock equal to one hundred percent (100%) of the shares into which the Notes can be converted into ("Warrant Shares") at an exercise price of $0.20 per share ("Exercise Price").            
Units of securities                                                           $ 750,000            
Original issue discount           $ 5,298                                                            
Repayment of principal                                                           $ 5,298            
Third Party Lender [Member] | Second December 2017 Note [Member]                                                                        
Related Party Loans (Textual)                                                                        
Convertible note                                                 $ 100,000                      
Warrants issued to purchase shares                                                 500,000                      
Note accrues interest rate                                                 15.00%                      
Interest and principal both due date                                                 Dec. 27, 2019                      
Conversion price per share                                                 $ 0.20                      
Warrant term                                                 5 years                      
Warrants, exercise price                                                 $ 0.20                      
Debt discount                                                 $ 36,722                      
v3.10.0.1
Capital Leases Payable (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Capital Leases Payable [Abstract]      
Capital lease obligation to a financing company for a term of five (5) years, collateralized by equipment, with interest at 10.0% per annum, with principal and interest due and payable in monthly installments of $383.10 $ 4,732 $ 4,732 $ 4,732
Less current maturities (4,732) (4,732) (3,524)
Capital lease obligation, net of current maturities 1,208
TOTAL CAPITAL LEASE OBLIGATION $ 4,732 $ 4,732 $ 4,732
v3.10.0.1
Capital Leases Payable (Details 1) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Capital Leases Payable [Abstract]      
2017:   $ 3,524
2018: $ 4,732 $ 4,732 $ 1,208
v3.10.0.1
Capital Leases Payable (Details Textual) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Capital Leases Payable (Textual)    
Capital leases due amount $ 383.10 $ 383.10
Capital leases interest per annum 10.00% 10.00%
Capital lease obligation term 5 years 5 years
v3.10.0.1
Derivative Liabilities (Details)
12 Months Ended
Dec. 31, 2017
Schedule of fair value of the derivative liability and warrant liability [Line Items]  
Annual dividend rate 0.00%
Low [Member] | Derivative Liabilities [Member]  
Schedule of fair value of the derivative liability and warrant liability [Line Items]  
Annual dividend rate 0.00%
Expected life 6 months 29 days
Risk-free interest rate 1.11%
Expected volatility 90.71%
High [Member] | Derivative Liabilities [Member]  
Schedule of fair value of the derivative liability and warrant liability [Line Items]  
Annual dividend rate 0.00%
Expected life 9 months
Risk-free interest rate 1.16%
Expected volatility 93.55%
v3.10.0.1
Derivative Liabilities (Details 1)
12 Months Ended
Dec. 31, 2017
USD ($)
Level 1 [Member]  
Schedule of changes in derivative liabilities (Line Items)  
Derivative liabilities as January 1, 2017
Addition
Conversion
Extinguishment Expense
Gain on changes in fair value
Derivative liabilities as December 31, 2017
Level 2 [Member]  
Schedule of changes in derivative liabilities (Line Items)  
Derivative liabilities as January 1, 2017
Addition
Conversion
Extinguishment Expense
Gain on changes in fair value
Derivative liabilities as December 31, 2017
Level 3 [Member]  
Schedule of changes in derivative liabilities (Line Items)  
Derivative liabilities as January 1, 2017
Addition 332,942
Conversion
Extinguishment Expense (397,288)
Gain on changes in fair value 64,346
Derivative liabilities as December 31, 2017
v3.10.0.1
Derivative Liabilities (Details Textual)
12 Months Ended
Dec. 31, 2017
Derivative Liabilities (Textual)  
Dividend yield 0.00%
v3.10.0.1
Stockholders' Deficit (Details) - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Expected dividends   0.00%  
Warrant [Member]      
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Exercise price $ 0.20   $ 0.40
Expected dividends 0.00% 0.00% 0.00%
Expected volatility, minimum 92.14% 96.76% 73.44%
Expected volatility, maximum 100.56% 102.21% 91.54%
Risk free interest rate, minimum 1.64% 1.63% 1.13%
Risk free interest rate, maximum 2.69% 2.26% 1.39%
Expected life of option   5 years 5 years
Minimum [Member] | Warrant [Member]      
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Exercise price   $ 0.20  
Expected life of option 4 years    
Maximum [Member] | Warrant [Member]      
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Exercise price   $ 0.30  
Expected life of option 5 years    
Stock Options [Member]      
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Expected dividends   0.00% 0.00%
Expected volatility, minimum   86.62% 73.44%
Expected volatility, maximum   92.14% 90.05%
Risk free interest rate, minimum   1.74% 1.00%
Risk free interest rate, maximum   2.10% 1.39%
Expected life of option   5 years  
Stock Options [Member] | Minimum [Member]      
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Exercise price   $ 0.16 $ 0.25
Expected life of option     4 years 8 months 5 days
Stock Options [Member] | Maximum [Member]      
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Exercise price   $ 0.75 $ 0.40
Expected life of option     5 years
v3.10.0.1
Stockholders' Deficit (Details 1) - Stock Option [Member] - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Options/Warrant, Outstanding 46,193,779 2,250,000 500,000
Options, Granted 15,873,016 15,499,990 1,750,000
Options, Exercised (50,000)
Options, Cancelled/Modified (100,000)
Options/Warrant, Outstanding 62,016,795 46,193,779 2,250,000
Options, Exercisable   8,983,322 2,200,000
Outstanding options held by related party   17,429,990 2,250,000
Exercisable options held by related party   8,843,322 2,200,000
Weighted Average Exercise Price, Outstanding $ 0.24 $ 0.34 $ 0.25
Weighted Average Exercise Price, Granted 0.20 0.43 0.36
Weighted Average Exercise Price, Exercised 0.40
Weighted Average Exercise Price Cancelled/Modified 0.40
Weighted Average Exercise Price, Outstanding $ 0.24 0.24 0.34
Weighted Average Exercise Price, Exercisable   0.27 0.30
Weighted Average Exercise Price Outstanding options held by related party   0.42 0.34
Weighted Average Exercise Price Exercisable options held by related party   $ 0.27 $ 0.30
Weighted Average Remaining Contractual Life (in years), Outstanding   4 years 4 months 17 days 4 years 11 months 4 days
Weighted Average Remaining Contractual Life (in years), Granted   5 years 5 years
Weighted Average Remaining Contractual Life (in years), Outstanding   4 years 3 months 8 days 4 years 4 months 17 days
Weighted Average Remaining Contractual Life (in years), Exercisable   4 years 1 month 24 days 4 years 4 months 17 days
Weighted Average Remaining Contractual Life (in years), Outstanding options held by related party   4 years 7 months 24 days 4 years 4 months 17 days
Weighted Average Remaining Contractual Life (in years), Exercisable options held by related party   4 years 1 month 24 days 4 years 4 months 17 days
v3.10.0.1
Stockholders' Deficit (Details 2)
12 Months Ended
Dec. 31, 2017
USD ($)
shares
Stockholders' Deficit [Abstract]  
Options | shares 15,499,990
Value | $ $ 1,172,022
Purpose for Grant Service Rendered
v3.10.0.1
Stockholders' Deficit (Details 3) - Warrants [Member] - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]      
Options/Warrant, Outstanding 46,193,779 15,541,666 10,750,000
Warrants, Granted 15,873,016 30,652,113 4,791,666
Warrants, Exercised (50,000)
Warrants, Forfeited/Cancelled
Options/Warrant, Outstanding 62,016,795 46,193,779 15,541,666
Warrants, Exercisable 62,016,795 46,193,779  
Weighted Average Exercise Price, Outstanding $ 0.24 $ 0.36 $ 0.35
Weighted Average Exercise Price, Granted 0.20 0.20 0.40
Weighted Average Exercise Price, Exercised 0.40
Weighted Average Exercise Price, Forfeited/Cancelled
Weighted Average Exercise Price, Outstanding 0.24 0.24 $ 0.36
Weighted Average Exercise Price, Exercisable $ 0.24 $ 0.25  
v3.10.0.1
Stockholders' Deficit (Details 4) - Warrants [Member] - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]        
Warrants Outstanding, Exercise price $ 0.20      
Warrants Outstanding, Exercise price, Minimum   $ 0.20    
Warrants Outstanding, Exercise price, Maximum   $ 0.40    
Warrants Outstanding, Number Outstanding 62,016,795 46,193,779 15,541,666 10,750,000
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) 3 years 7 months 28 days 5 years    
Warrants Outstanding, Weighted Average Exercise Price $ 0.24 $ 0.24 $ 0.36 $ 0.35
Warrants Exercisable , Number Exercisable 62,016,795 46,193,779    
Warrants Exercisable, Weighted Average Exercise Price $ 0.24 $ 0.25    
v3.10.0.1
Stockholders' Deficit (Details Textual) - USD ($)
1 Months Ended 6 Months Ended 12 Months Ended
Feb. 07, 2017
Feb. 06, 2016
Dec. 09, 2015
Feb. 13, 2015
Jan. 31, 2018
Feb. 01, 2017
Jan. 30, 2017
Aug. 31, 2016
Aug. 17, 2016
Feb. 01, 2016
Jan. 29, 2016
Dec. 21, 2015
Feb. 13, 2015
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Stockholders' Deficit (Textual)                                    
Capital stock authorized                           320,000,000        
Common stock, shares authorized                           300,000,000   300,000,000 300,000,000  
Common stock, par value                           $ 0.001   $ 0.001 $ 0.001  
Common stock, shares issued                           40,524,432   39,520,682 33,894,592  
Common stock, shares outstanding                           40,524,432   39,520,682 33,894,592  
Gain on settlement of vendor liabilities                           $ (1,875) $ 627,619 $ (167,905)  
Accrued interest                               $ 206,026    
Aggregate repurchased shares                               220,000    
Aggregate repurchased shares amount                               $ 19,007    
Preferred stock, description                               Upon incorporation, the total number of shares of all classes of stock which the Company is authorized to issue is Three Hundred Twenty Million (320,000,000) shares of which Three Hundred Million (300,000,000) shares shall be Common Stock, par value $0.001 per share and Twenty Million (20,000,000) shall be Preferred Stock, par value $0.001 per share. The designations, rights, and preferences of such preferred stock are to be determined by the Board of Directors.    
Stock issued to consultants for services, value                               $ 307,427    
Conversion of common stock               1,098,933               914    
Placement Agent [Member]                                    
Stockholders' Deficit (Textual)                                    
Restricted stock issued during period           800,000                        
Promissory Notes [Member]                                    
Stockholders' Deficit (Textual)                                    
Warrants issued                               5,811,360    
Warrants grant date fair value                               $ 1,189,235    
Promissory Notes [Member] | Placement Agent [Member]                                    
Stockholders' Deficit (Textual)                                    
Warrants to purchase shares of common stock                               487,755    
Convertible Notes Payable [Member]                                    
Stockholders' Deficit (Textual)                                    
Warrants issued                               16,597,719    
Warrants grant date fair value                               $ 1,472,161    
Convertible Notes Payable [Member] | Placement Agent [Member]                                    
Stockholders' Deficit (Textual)                                    
Warrants to purchase shares of common stock                               12,150    
Notes Payable Related Party [Member]                                    
Stockholders' Deficit (Textual)                                    
Warrants issued                               345,500    
Warrants grant date fair value                               $ 38,109    
Convertible Notes Payable Related Party [Member]                                    
Stockholders' Deficit (Textual)                                    
Warrants issued                               7,115,129    
Warrants grant date fair value                               $ 680,037    
Common Stock [Member]                                    
Stockholders' Deficit (Textual)                                    
Common stock, par value   $ 0.001                                
Number of shares sold                                 666,666  
Shares awarded to employees                               788,395    
Restricted stock issued during period 1,767,633     133,333     947,440     268,333                
Restricted stock issued fair value $ 293,427                                  
Sale of shares of common stock   2,626,308                                
Sale of stock value   $ 2,626                                
Conversion of interest to series B preferred stock, shares                                  
Issuance of common stock for cashless exercise of warrants, shares                                 392,764  
Issuance of common stock                                 322,015  
Common stock service rendered                               1,867,633    
Settlement of vendor liabilities             $ 353,732                      
Gain on settlement of vendor liabilities             $ 167,905                      
Stock issued to consultants for services, value                               $ 1,868    
Common Stock [Member] | Consultants [Member]                                    
Stockholders' Deficit (Textual)                                    
Common stock service rendered                           610,000        
Share based payments                           $ 48,889        
Stock issued to consultants for services, value                           $ 116,300        
Common Stock [Member] | Vendor [Member]                                    
Stockholders' Deficit (Textual)                                    
Restricted stock issued during period         18,750                          
Restricted stock issued fair value         $ 3,750                          
Gain on settlement of vendor liabilities         $ 375                          
Common Stock [Member] | Promissory Notes [Member]                                    
Stockholders' Deficit (Textual)                                    
Debt Conversion, Converted Instrument, Warrants or Options Issued                           2,425,500        
Warrants associated value                           $ 420,456        
Warrants [Member] | Convertible Notes Payable [Member]                                    
Stockholders' Deficit (Textual)                                    
Debt Conversion, Converted Instrument, Warrants or Options Issued                           10,481,016        
Warrants associated value                           $ 1,284,683        
Warrants [Member] | Notes Payable Related Party [Member]                                    
Stockholders' Deficit (Textual)                                    
Debt Conversion, Converted Instrument, Warrants or Options Issued                           1,563,000        
Warrants associated value                           $ 307,808        
Warrants [Member] | Convertible Notes Payable Related Party [Member]                                    
Stockholders' Deficit (Textual)                                    
Debt Conversion, Converted Instrument, Warrants or Options Issued                           1,403,500        
Warrants associated value                           $ 162,834        
Stock Options [Member]                                    
Stockholders' Deficit (Textual)                                    
Aggregate intrinsic value of options outstanding                           0 0 3,500    
Aggregate intrinsic value of options exercisable                               3,500    
Stock-based compensation for stock options                               $ 1,092,970 $ 231,035  
Share based payments                           $ 232,129 $ 463,619      
Stock Incentive Award Plan [Member]                                    
Stockholders' Deficit (Textual)                                    
Issuance of common stock     18,000,000                              
Preferred Stock [Member]                                    
Stockholders' Deficit (Textual)                                    
Preferred stock, shares authorized                               320,000,000 320,000,000  
Preferred stock, par value                           $ 0.001   $ 0.001    
Preferred stock, shares issued                           20,000,000        
Subscription Agreement [Member]                                    
Stockholders' Deficit (Textual)                                    
Sale of shares of common stock                 666,666                  
Warrants to purchase shares of common stock                 333,333                  
Warrant exercisable term                 5 years                  
Warrant exercisable price per share                 $ 0.40                  
Warrants grant date fair value                 $ 250,000                  
Series A Preferred Stock [Member]                                    
Stockholders' Deficit (Textual)                                    
Preferred stock, shares authorized                               100,000 100,000  
Preferred stock, par value                           $ 0.001   $ 0.001 $ 0.001  
Preferred stock, shares issued                           31,581   31,581 33,314  
Preferred stock, shares outstanding                           31,581   31,581 33,314  
Number of shares sold                                  
Convertible notes                                   $ 800,000
Convertible preferred stock, Shares       100,000                       1,733   8,914
Accrued for liquidating damages                               $ 0 $ 3,318,353  
Warrants associated value                               $ 0 $ 309,665  
Conversion price                               $ 0.25 $ 0.164  
Dividend rate                               6.00%    
Dividend, description                               Upon the occurrence of an Event of Default (as defined below) and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series A Stated Value. At the Company's option, such dividend payments may be made in (i) cash (ii) additional shares of Series A valued at the Series A Stated Value thereof, in an amount equal to 150% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series A, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series A Preferred.    
Beneficial ownership by holder and affiliates                               4.99%    
Conversion of interest to series B preferred stock, shares                                  
Issuance of common stock for cashless exercise of warrants, shares                                  
Issuance of common stock                                  
Common stock service rendered                                  
Sale of preferred stock shares                                   24,400
Proceeds of preferred stock                                   $ 2,450,000
Accrued interest                                   $ 91,400
Stock issued to consultants for services, value                                  
Series A Preferred Stock [Member] | Common Stock [Member]                                    
Stockholders' Deficit (Textual)                                    
Convertible preferred stock, Shares                               1,146,307    
Series B Preferred Stock [Member]                                    
Stockholders' Deficit (Textual)                                    
Preferred stock, shares authorized                               20,000 20,000  
Series B Preferred stock issued with warrants, shares                                   7,000
Preferred stock, par value                           $ 0.001   $ 0.001 $ 0.001  
Preferred stock, shares issued                           8,063   8,063 8,063  
Preferred stock, shares outstanding                           8,063   8,063 8,063  
Number of shares sold                                  
Convertible preferred stock, Shares                       20,000            
Proceeds from the issuance of stock                                   $ 700,000
Accrued for liquidating damages                               $ 0 $ 667,313  
Warrants associated value                               $ 0 $ 51,159  
Conversion price                               $ 0.30 $ 0.197  
Dividend rate                               6.00%    
Dividend, description                               Upon the occurrence of an Event of Default as defined below and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series B Stated Value. At the Corporation's option, such dividend payments may be made in (i) cash (ii) additional shares of Series B valued at the Series B Stated Value thereof, in an amount equal to 100% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series B, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series B Preferred.    
Beneficial ownership by holder and affiliates                               4.99%    
Conversion of interest to series B preferred stock, shares                                 1,063  
Conversion of interest to series B preferred stock                               $ 0 $ 1,063  
Issuance of common stock for cashless exercise of warrants, shares                                  
Issuance of common stock                                  
Common stock service rendered                                  
Stock issued to consultants for services, value                                  
Series D Convertible Preferred Stock [Member]                                    
Stockholders' Deficit (Textual)                                    
Preferred stock, par value                     $ 100              
Convertible preferred stock, Shares               1,099     2,100,000              
Conversion price                               $ 0.25    
Beneficial ownership by holder and affiliates                               4.99%    
Conversion of common stock to Series D preferred stock, shares                               266,325    
Series A Cumulative Convertible Preferred Stock [Member]                                    
Stockholders' Deficit (Textual)                                    
Conversion of common stock, description                           (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this provision is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty-one (61) days' prior written notice to the Corporation.        
Convertible preferred stock, Shares                         100,000          
Conversion price                           $ 0.25     $ 0.164  
Dividend rate                           6.00%        
Dividend, description                           Upon the occurrence of an Event of Default (as defined below) and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series A Stated Value. At the Company's option, such dividend payments may be made in (i) cash (ii) additional shares of Series A valued at the Series A Stated Value thereof, in an amount equal to 150% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series A, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series A Preferred.        
Shares of Series A stated value                         $ 100          
Accrued dividends                           $ 636,772        
Series B Cumulative Convertible Preferred Stock [Member]                                    
Stockholders' Deficit (Textual)                                    
Conversion of common stock, description                           (i) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates on such Conversion Date, and (ii) the number of Conversion Shares issuable upon the conversion of the Conversion Amount with respect to which the determination of this proviso is being made on such Conversion Date, which would result in the aggregate beneficial ownership by the Holder and its Affiliates of more than 4.99% of the outstanding shares of Common Stock of the Corporation. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to successive exercises which would result in the aggregate issuance of more than 4.99%. The Holder may allocate which of the equity of the Corporation deemed beneficially owned by the Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%. The Holder may waive the conversion limitation described in this Section in whole or in part, upon and effective after sixty one (61) days' prior written notice to the Corporation.        
Convertible preferred stock, Shares                       20,000            
Conversion price                           $ 0.30     $ 0.197  
Dividend rate                           6.00%        
Dividend, description                           Upon the occurrence of an Event of Default as defined below and while such Event of Default is outstanding, such dividend rate shall be increased to 15% per annum on the Series B Stated Value. At the Corporation's option, such dividend payments may be made in (i) cash (ii) additional shares of Series B valued at the Series B Stated Value thereof, in an amount equal to 100% of the cash dividend otherwise payable or (iii) a combination of cash and additional shares of Series B, provided there is not an existing current Event of Default on the date on which a dividend payment is payable, in which event the Holder entitled to receive such dividend may elect to receive such dividends in cash or additional shares of Series B Preferred.        
Shares of Series A stated value                       $ 100            
Accrued dividends                           $ 118,289        
v3.10.0.1
Commitments and Contingencies (Details)
Jun. 30, 2018
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2018 $ 35,972
2019 74,204
2020 78,146
2021 82,207
2022 87,851
2023 37,775
Total minimum lease payments $ 396,155
v3.10.0.1
Commitments and Contingencies (Details Textual)
3 Months Ended 6 Months Ended
May 05, 2018
USD ($)
ft²
Jun. 30, 2018
USD ($)
Jun. 30, 2017
USD ($)
Jun. 30, 2018
USD ($)
Jun. 30, 2017
USD ($)
Commitments and Contingencies (Textual)          
Lease term 5 years        
Area of office space | ft² 2,300        
Rent expense   $ 88,875 $ 155,661 $ 69,022 $ 77,856
Lease term, description The Company signed a 5-year lease for approximately 2,300 square feet of office space at 2050 Center Avenue suite 640, Fort lee, New Jersey 07024. Commencement date of the lease is June 1, 2018. Total amount due under this lease is $411,150.        
Total amount due $ 411,150        
v3.10.0.1
Income Taxes (Details) - USD ($)
Dec. 31, 2017
Dec. 31, 2016
Net deferred tax assets - Non-current:    
Expected income tax benefit from NOL carry-forwards $ 7,600,000 $ 3,100,000
Less valuation allowance (7,600,000) (3,100,000)
Deferred tax assets, net of valuation allowance
v3.10.0.1
Income Taxes (Details 1)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Income Taxes [Abstract]    
Federal statutory income tax rate 21.00% 34.00%
Change in valuation allowance on net operating loss carry-forwards (21.00%) (34.00%)
Effective income tax rate 0.00% 0.00%
v3.10.0.1
Income Taxes (Details Textual) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Income Taxes (Textual)    
Federal net operating loss carryforwards $ 7.6  
Federal net operating loss expire date Dec. 31, 2033  
Federal income tax rate 21.00% 34.00%
During period provides immediate expensing, description The Act also provides for immediate expensing of 100% or the costs of qualified property that is incurred and placed in service during the period from September 27, 2017 to December 31, 2022. Beginning January 1, 2023, the immediate expensing provision is phased down by 20% per year until it is completely phased out as of January 1, 2027.  
Minimum [Member]    
Income Taxes (Textual)    
Federal income tax rate 21.00%  
Maximum [Member]    
Income Taxes (Textual)    
Federal income tax rate 35.00%  
v3.10.0.1
Revision of Prior Year Financial Statements (Details) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Current Liabilities              
Accrued dividends $ 2,094,658   $ 2,094,658   $ 1,462,106 $ 1,387,068  
Total Current Liabilities 4,479,346   4,479,346   3,687,200 3,285,826  
Total Liabilities 10,101,703   10,101,703   7,544,739 3,287,034  
Stockholders' Equity              
Total Stockholders' Equity (9,914,938)   (9,914,938)   (7,367,307) (2,908,933) $ (360,464)
Statement of Operations              
Deemed dividend 65,823 $ 67,888 129,858 $ 131,867 297,323 247,128  
Net loss attributable to common stockholders $ (2,477,061) $ (1,534,545) $ (4,634,726) $ (3,087,776) $ (9,048,909) $ (7,639,035)  
Basic and diluted loss per share $ (0.06) $ (0.04) $ (0.12) $ (0.08) $ (0.23) $ (0.24)  
Statements of Cash Flows Supplementary Disclosure of Non-Cash Investing And Financing Activities              
Deemed dividend       $ 131,867 $ 297,323 $ 247,128  
As Previously Reported [Member]              
Current Liabilities              
Accrued dividends         472,444 259,170  
Total Current Liabilities         4,159,644 3,544,996  
Total Liabilities         8,017,183 3,546,204  
Stockholders' Equity              
Total Stockholders' Equity         7,839,751 3,168,103  
Statement of Operations              
Deemed dividend       247,128  
Net loss attributable to common stockholders       $ 2,955,909 $ 8,751,586 $ 247,128  
Basic and diluted loss per share       $ (0.08) $ (0.23) $ (0.01)  
Statements of Cash Flows Supplementary Disclosure of Non-Cash Investing And Financing Activities              
Deemed dividend       $ 101,385 $ 217,985 $ 69,894  
Adjustment [Member]              
Current Liabilities              
Accrued dividends         (472,444) (259,170)  
Total Current Liabilities         (472,444) (259,170)  
Total Liabilities         (472,444) (259,170)  
Stockholders' Equity              
Total Stockholders' Equity         (472,444) (259,170)  
Statement of Operations              
Deemed dividend       131,867 297,323  
Net loss attributable to common stockholders       $ 131,867 $ 297,323 $ (7,391,907)  
Basic and diluted loss per share       $ (0.00) $ (0.23)  
Statements of Cash Flows Supplementary Disclosure of Non-Cash Investing And Financing Activities              
Deemed dividend       $ 30,482 $ 79,338 $ 177,234  
v3.10.0.1
Subsequent Events (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Short-term Debt [Line Items]        
Proceeds from issuance of note payable - related party $ 245,000 $ 185,000 $ 529,000 $ 1,446,500
Investors [Member]        
Short-term Debt [Line Items]        
Gross proceeds issuance of notes payable $ 100,000   $ 50,000  
Warrant term 4 years   5 years  
Warrants purchase of common stock 300,000   100,000  
Warrant exercisable price, per share $ 0.20   $ 0.20  
Investors one [Member]        
Short-term Debt [Line Items]        
Gross proceeds issuance of notes payable $ 25,000      
Warrant term 4 years   5 years  
Warrants purchase of common stock 75,000   81,500  
Warrant exercisable price, per share $ 0.20   $ 0.20  
Proceeds from issuance of note payable - related party     $ 40,750  
Investors two [Member]        
Short-term Debt [Line Items]        
Warrant term     5 years  
Warrants purchase of common stock     35,000  
Warrant exercisable price, per share     $ 0.20  
Proceeds from issuance of note payable - related party     $ 135,000  
Investors three [Member]        
Short-term Debt [Line Items]        
Gross proceeds issuance of notes payable     1,780,750  
Short term debt     300,000  
Accrued unpaid interest     $ 41,442  
Warrant term     5 years  
Warrants purchase of common stock     10,488,708  
Warrant exercisable price, per share     $ 0.20  
Consultants [Member]        
Short-term Debt [Line Items]        
Common stock to consultants in exchange for services     628,750  
Placement Agent [Member]        
Short-term Debt [Line Items]        
Restricted common stock shares     375,000