JERRICK MEDIA HOLDINGS, INC., 10-Q filed on 8/20/2018
Quarterly Report
v3.10.0.1
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2018
Aug. 20, 2018
Document and Entity Information [Abstract]    
Entity Registrant Name Jerrick Media Holdings, Inc.  
Entity Central Index Key 0001357671  
Trading Symbol JMDA  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Type 10-Q  
Document Period End Date Jun. 30, 2018  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2018  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   40,524,432
v3.10.0.1
Condensed Consolidated Balance Sheet (Unaudited) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Current Assets    
Cash $ 22,422 $ 111,051
Prepaid expenses 86,274
Accounts receivable 9,170 1,325
Total Current Assets 117,866 112,376
Property and equipment, net 52,063 48,056
Security deposit 16,836 17,000
Total Assets 186,765 177,432
Current Liabilities    
Accounts payable and accrued liabilities 2,094,658 1,462,106
Demand loan 60,366 10,366
Convertible Notes - related party, net of debt discount 30,916
Current portion of Convertible Notes, net of debt discount 59,500 96,500
Current portion of capital lease payable 4,732 4,732
Note payable - related party, net of debt discount 1,305,907 1,249,000
Note payable, net of debt discount and issuance costs 791,467 689,500
Line of credit - related party 130,000 130,000
Line of credit 44,996
Current portion of deferred rent 1,800
Total Current Liabilities 4,479,346 3,687,200
Non-current Liabilities:    
Deferred rent 7,757
Current portion of 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
Total Liabilities 10,101,703 7,544,739
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
Additional paid in capital 16,343,480 14,387,247
Accumulated deficit (26,279,975) (21,775,107)
Less: Treasury stock, 220,000 and 220,000 shares, respectively (19,007) (19,007)
Total Stockholders' Deficit (9,914,938) (7,367,307)
Total Liabilities and Stockholders' Deficit 186,765 177,432
Series A Preferred stock    
Stockholders' Deficit    
Preferred stock value 31 31
Series B Preferred stock    
Stockholders' Deficit    
Preferred stock value 8 8
Series D Preferred stock    
Stockholders' Deficit    
Preferred stock value
v3.10.0.1
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - $ / shares
Jun. 30, 2018
Dec. 31, 2017
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 300,000,000 300,000,000
Common stock, shares issued 40,524,432 39,520,682
Common stock, shares outstanding 40,524,432 39,520,682
Treasury stock, shares 220,000 220,000
Series A Preferred stock    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares issued 31,581 31,581
Preferred stock, shares outstanding 31,581 31,581
Series B Preferred stock    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares issued 8,063 8,063
Preferred stock, shares outstanding 8,063 8,063
Series D Preferred stock    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
v3.10.0.1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Income Statement [Abstract]        
Net revenue $ 24,023 $ 52,259 $ 40,272 $ 94,101
Operating expenses        
Compensation 451,041 709,298 1,102,829 1,255,408
Consulting fees 350,804 37,565 446,603 177,570
General and administrative 787,881 253,015 1,380,120 636,753
Total operating expenses 1,589,726 999,878 2,929,552 2,069,731
Loss from operations (1,565,703) (947,619) (2,889,280) (1,975,630)
Other income (expenses)        
Interest expense (341,071) (87,318) (609,196) (144,705)
Accretion of debt discount and issuance cost (415,045) (431,720) (589,933) (724,900)
Settlement of vendor liabilities 1,875 (110,674)
Loss on extinguishment of debt (89,419) (431,786)
Gain on settlement of debt 13,452
Other income (expenses), net (845,535) (519,038) (1,615,588) (980,279)
Loss before income tax provision (2,411,238) (1,466,657) (4,504,868) (2,955,909)
Income tax provision
Net loss (2,411,238) (1,466,657) (4,504,868) (2,955,909)
Deemed dividend 65,823 67,888 129,858 131,867
Net loss attributable to common shareholders $ (2,477,061) $ (1,534,545) $ (4,634,726) $ (3,087,776)
Per-share data        
Basic and diluted loss per share $ (0.06) $ (0.04) $ (0.12) $ (0.08)
Weighted average number of common shares outstanding 40,524,432 38,014,509 40,230,654 37,247,125
v3.10.0.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (4,504,868) $ (2,955,909)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 21,439 18,704
Accretion of debt discount and issuance cost 589,933 128,900
Share-based compensation 285,821 596,000
Loss on settlement of vendor liabilities (1,875) 627,619
Gain on settlement of debt (13,452) 110,674
Loss on extinguishment of debt 431,786
Changes in operating assets and liabilities:    
Prepaid expenses (18,864) 10,000
Inventory
Accounts receivable (7,845)
Security deposit 164
Accounts payable and accrued expenses 900,595 77,642
Deferred rent 707
Net Cash Used In Operating Activities (2,316,459) (1,386,370)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Cash paid for property and equipment (16,446)
Net Cash Used In Investing Activities (16,446)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net proceeds from issuance of notes 658,500 1,041,585
Repayment of notes (85,675)
Proceeds from issuance of demand loan 50,000
Proceeds from issuance of convertible note 1,525,154 71,500
Repayment of convertible notes (76,798)
Proceeds from issuance of convertible notes - related party 299,852 50,000
Proceeds from issuance of note payable - related party 245,000 185,000
Repayment of note payable - related party (160,000) (120,000)
Proceeds from issuance of line of credit - related party 130,000
Repayment of line of credit (44,996) (41,706)
Cash paid for debt issuance costs (166,761) (99,226)
Net Cash Provided By Financing Activities 2,244,276 1,217,153
Net Change in Cash (88,629) (169,217)
Cash - Beginning of Year 111,051 174,494
Cash - End of Year 22,422 5,277
Cash Paid During the Year for:    
Income taxes
Interest 64,892 3,534
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Settlement of vendor liabilities 3,750 353,732
Beneficial conversion feature on convertible notes 38,413
Deemed dividends 127,795 131,867
Warrants issued with debt 1,085,221 620,714
Issuance of common stock for prepaid services 116,300
Conversion of note payable and interest into convertible notes 341,442
Warrants issued with amendment to notes payable $ 135,596
v3.10.0.1
Organization and Operations
6 Months Ended
Jun. 30, 2018
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.

v3.10.0.1
Significant and Critical Accounting Policies and Practices
6 Months Ended
Jun. 30, 2018
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.

v3.10.0.1
Going Concern
6 Months Ended
Jun. 30, 2018
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. 

v3.10.0.1
Property and Equipment
6 Months Ended
Jun. 30, 2018
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.

v3.10.0.1
Line of Credit
6 Months Ended
Jun. 30, 2018
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.

v3.10.0.1
Notes Payable
6 Months Ended
Jun. 30, 2018
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 $658,500.

 

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.

v3.10.0.1
Convertible Note Payable
6 Months Ended
Jun. 30, 2018
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.

v3.10.0.1
Related Party Loans
6 Months Ended
Jun. 30, 2018
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.

v3.10.0.1
Capital Leases Payable
6 Months Ended
Jun. 30, 2018
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 
v3.10.0.1
Stockholders' Deficit
6 Months Ended
Jun. 30, 2018
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.

v3.10.0.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies [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
Revision of Prior Year Financial Statements
6 Months Ended
Jun. 30, 2018
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

v3.10.0.1
Subsequent Events
6 Months Ended
Jun. 30, 2018
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.

v3.10.0.1
Significant and Critical Accounting Policies and Practices (Policies)
6 Months Ended
Jun. 30, 2018
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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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. 

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
Reclassifications

Reclassifications

 

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

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)
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.

v3.10.0.1
Significant and Critical Accounting Policies and Practices (Tables)
6 Months Ended
Jun. 30, 2018
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% 
Schedule of property and equipment estimated useful life
  Estimated Useful
Life
(Years)
 
    
Computer equipment and software  3 
Furniture and fixture  5 
Leasehold improvement  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 

 

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
Jun. 30, 2018
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 
v3.10.0.1
Line of Credit (Tables)
6 Months Ended
Jun. 30, 2018
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 
v3.10.0.1
Notes Payable (Tables)
6 Months Ended
Jun. 30, 2018
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
v3.10.0.1
Convertible Note Payable (Tables)
6 Months Ended
Jun. 30, 2018
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

v3.10.0.1
Related Party Loans (Tables)
6 Months Ended
Jun. 30, 2018
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
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
v3.10.0.1
Capital Leases Payable (Tables)
6 Months Ended
Jun. 30, 2018
Capital Leases Payable [Abstract]  
Schedule 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
Schedule of capital leases maturity
2018: $4,732  $4,732 
v3.10.0.1
Stockholders' Deficit (Tables) - Warrants [Member]
6 Months Ended
Jun. 30, 2018
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Summary of assumptions used for 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 
Summary of 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 
Summary of warrants outstanding and exercisable
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 

v3.10.0.1
Commitments and Contingencies (Tables)
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies [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
Revision of Prior Year Financial Statements (Tables)
6 Months Ended
Jun. 30, 2018
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

v3.10.0.1
Organization and Operations (Details)
Feb. 05, 2016
shares
Kent Campbell [Member]  
Organization and Operations (Textual)  
Issuance of common shares for cash 28,500,000
Cancelled of common stock 781,818
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
Jun. 30, 2018
Jerrick Ventures LLC [Member]  
Name of combined affiliate Jerrick Ventures LLC
State or other jurisdiction of incorporation or organization The State of Delaware
Company interest 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
Jun. 30, 2018
Computer equipment and software [Member]  
Property and Equipment, Estimated Useful Life (Years) 3 years
Furniture and fixture [Member]  
Property and Equipment, Estimated Useful Life (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
Jun. 30, 2018
Jun. 30, 2017
Loss Per Share [Line Items]    
Common stock equivalents, total 145,543,971 69,621,699
Series A Preferred stock [Member]    
Loss Per Share [Line Items]    
Common stock equivalents, total 23,135,935 21,654,614
Series B Preferred stock [Member]    
Loss Per Share [Line Items]    
Common stock equivalents, total 4,697,906 4,431,987
Convertible notes [Member]    
Loss Per Share [Line Items]    
Common stock equivalents, total 28,015,838 2,929,127
Convertible notes - related party [Member]    
Loss Per Share [Line Items]    
Common stock equivalents, total 10,027,507 250,000
Options [Member]    
Loss Per Share [Line Items]    
Common stock equivalents, total 17,649,990 17,549,990
Warrants [Member]    
Loss Per Share [Line Items]    
Common stock equivalents, total 62,016,795 22,805,981
v3.10.0.1
Significant and Critical Accounting Policies and Practices (Details 3) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Accretion of debt discount and issuance cost $ (415,045) $ (431,720) $ (589,933) $ (724,900)
Derivative expense      
Change in fair value of derivative liabilities      
Net loss $ (2,411,238) $ (1,466,657) $ (4,504,868) $ (2,955,909)
Net loss per ordinary share:        
Basic and diluted loss per share $ (0.06) $ (0.04) $ (0.12) $ (0.08)
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)
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
v3.10.0.1
Significant and Critical Accounting Policies and Practices (Details Textual) - Securities purchase agreement [Member]
12 Months Ended
Dec. 31, 2017
$ / shares
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
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 321,563 $ 296,118
Less: Accumulated Depreciation (269,500) (248,062)
Property and equipment, net 52,063 48,056
Computer Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 234,315 234,315
Furniture and Fixtures [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 61,803 61,083
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
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Property and Equipment (Textual)        
Depreciation $ 10,423 $ 9,404 $ 21,439 $ 18,704
v3.10.0.1
Line of Credit (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Line of Credit Facility [Line Items]    
Line of credit $ 44,996
Revolving Note [Member]    
Line of Credit Facility [Line Items]    
Line of credit $ 0 $ 44,996
v3.10.0.1
Line of Credit (Details Textual) - USD ($)
1 Months Ended
Mar. 19, 2009
Jun. 30, 2018
Dec. 31, 2017
Line of Credit (Textual)      
Line of credit   $ 44,996
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   $ 0 $ 44,996
v3.10.0.1
Notes Payable (Details) - USD ($)
6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Note payable, Outstanding Principal $ 791,467 $ 689,500
Less: Debt Discount (180,950) (10,500)
Less: Debt Issuance Costs (408)  
Notes Payable 791,467 689,500
The February 2017 Offering [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Note payable, Outstanding Principal $ 364,325 400,000
Interest Rate 12.00%  
Maturity date Sep. 01, 2017  
Warrants, Quantity 2,450,000  
Warrants, Exercise Price $ 0.20  
The June 2017 Loan Agreement [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Note payable, Outstanding Principal 50,000
Interest Rate 12.00%  
Maturity date Sep. 01, 2017  
Warrants, Quantity 35,000  
Warrants, Exercise Price $ 0.20  
The First November 2017 Loan Agreement [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Note payable, Outstanding Principal 100,000
Interest Rate 15.00%  
Maturity date Jan. 12, 2018  
Warrants, Quantity  
Warrants, Exercise Price  
The Second November 2017 Loan Agreement [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Note payable, Outstanding Principal 50,000
Interest Rate 15.00%  
Maturity date Jan. 13, 2018  
Warrants, Quantity  
Warrants, Exercise Price  
The Third November 2017 Loan Agreement [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Note payable, Outstanding Principal 100,000
Interest Rate 15.00%  
Maturity date Jan. 13, 2018  
Warrants, Quantity  
Warrants, Exercise Price  
May 2018 Offering [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Note payable, Outstanding Principal $ 608,500
Interest Rate 13.00%  
Maturity date Mar. 31, 2019  
Warrants, Quantity 1,825,500  
Warrants, Exercise Price  
v3.10.0.1
Notes Payable (Details Textual) - USD ($)
1 Months Ended 6 Months Ended
Mar. 14, 2018
Jun. 12, 2017
May 31, 2018
Nov. 29, 2017
Nov. 28, 2017
Mar. 17, 2017
Feb. 28, 2017
Jun. 30, 2018
Dec. 31, 2017
Nov. 30, 2017
Notes Payable (Textual)                    
Debt discount               $ 180,950 $ 10,500  
May 2018 Offering [Member]                    
Notes Payable (Textual)                    
Maturity date               Mar. 31, 2019    
Interest rate               13.00%    
Warrants purchase of common stock               1,825,500    
Warrant exercisable price, per share                  
Subscription Agreements [Member] | May 2018 Offering [Member]                    
Notes Payable (Textual)                    
Interest rate     13.00%              
Warrant exercisable price, per share     $ 0.20              
Warrant term     4 years              
Aggregate principal amount     $ 1,200,000              
Aggregate gross proceeds of common stock     $ 658,500         $ 658,500    
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    
Private Placement Offerings [Member] | Subscription Agreements [Member]                    
Notes Payable (Textual)                    
Interest rate           6.00%        
Aggregate principal amount           $ 975,511        
Aggregate gross proceeds of common stock           $ 916,585        
Loan Agreement [Member]                    
Notes Payable (Textual)                    
Promissory note   $ 50,000                
Maturity date   Sep. 01, 2017                
Interest rate   10.00%                
Warrants purchase of common stock   35,000                
Warrant exercisable price, per share   $ 0.20                
Warrant term   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
February 2017 Offering Note [Member]                    
Notes Payable (Textual)                    
Interest rate             15.00%      
Warrant exercisable price, per share             $ 0.20 $ 0.20    
Aggregate principal amount             $ 575,511      
Aggregate gross proceeds of common stock               $ 400,000    
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. 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.    
Interest paid               $ 26,375    
Repayment of principal               $ 26,500    
First November 2017 Loan Agreement [Member]                    
Notes Payable (Textual)                    
Promissory note         $ 100,000          
Notes conversion, description         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.          
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 ). 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). 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                  
v3.10.0.1
Convertible Note Payable (Details) - USD ($)
6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Short-term Debt [Line Items]    
Outstanding Principal $ 5,150,138 $ 3,140,384
Less: Debt Discount (828,627) (452,022)
Less: Debt Issuance Costs (219,204) (79,569)
Total 4,102,307 2,608,793
Less: Current Debt (59,500) (96,500)
Total Long-Term Debt 4,042,808 2,512,293
The November 2016 Convertible Note Offering [Member]    
Short-term Debt [Line Items]    
Outstanding Principal $ 25,000 25,000
Interest Rate 10.00%  
Conversion Price $ 0.30  
Maturity Date Nov. 01, 2017  
Warrants, Quantity 400,000  
Warrants, Exercise Price $ 0.30  
The June, 2017 Convertible Note Offering [Member]    
Short-term Debt [Line Items]    
Outstanding Principal 71,500
Interest Rate 12.00%  
Conversion Price, description Not Applicable  
Maturity Date Sep. 01, 2017  
Warrants, Quantity 114,700  
Warrants, Exercise Price $ 0.20  
The August Convertible Note Offering [Member]    
Short-term Debt [Line Items]    
Outstanding Principal $ 2,943,884 2,943,884
Interest Rate 15.00%  
Conversion Price [1] $ 0.20  
Warrants, Quantity 14,716,419  
Warrants, Exercise Price $ 0.20  
The August Convertible Note Offering [Member] | Minimum [Member]    
Short-term Debt [Line Items]    
Maturity Date Aug. 31, 2019  
The August Convertible Note Offering [Member] | Maximum [Member]    
Short-term Debt [Line Items]    
Maturity Date Nov. 30, 2019  
The First December 2017 Note [Member]    
Short-term Debt [Line Items]    
Outstanding Principal $ 100,000 100,000
Interest Rate 15.00%  
Conversion Price [1] $ 0.20  
Maturity Date Dec. 21, 2019  
Warrants, Quantity 500,000.00  
Warrants, Exercise Price $ 0.20  
The February 2018 Convertible Note Offering [Member]    
Short-term Debt [Line Items]    
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]    
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]    
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]    
Outstanding Principal $ 961,367
Interest Rate 14.00%  
Conversion Price [1] $ 0.20  
Maturity Date Mar. 31, 2020  
Warrants, Quantity 4,806,333  
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  
[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
Jun. 30, 2017
Dec. 27, 2017
Nov. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2018
Convertible Note Payable (Textual)                    
Convertible notes payable outstanding balance           $ 5,150,138   $ 3,140,384    
Debt discount           828,627   452,022    
Debt issuance costs           (408)        
Proceeds from issuance of convertible notes           299,852 $ 50,000      
Placement fees           90,508        
Derivative liability                
Convertible Note to Third Party Lender [Member]                    
Convertible Note Payable (Textual)                    
Convertible note     $ 71,500       $ 71,500   $ 400,000  
Note accrues interest rate     12.00%       12.00%   10.00%  
Maturity date     Sep. 01, 2017           Dec. 29, 2017  
Warrant term     5 years           5 years  
Issuance of warrants     67,550           400,000  
Warrants, exercise price     $ 0.20       $ 0.20   $ 0.30  
Principal amount of convertible notes                 $ 375,000  
Interest amount of convertible notes                 $ 30,719  
Offering discount percentage     15.00%              
Convertible Note to Third Party Lender [Member] | Subsequent Event [Member]                    
Convertible Note Payable (Textual)                    
Current default principal amount                   $ 71,500
August 2017 Convertible Note Offering [Member]                    
Convertible Note Payable (Textual)                    
Debt issuance costs         $ 101,561          
Issuance of warrants         6,791,419     4,555,129    
Interest amount of convertible notes         $ 40,146          
Conversion feature of debt instrument         583,681          
Fair value derivative liability               $ 440,157    
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          
August 2017 Convertible Note Offering [Member] | Warrants [Member]                    
Convertible Note Payable (Textual)                    
Debt discount           $ 472,675        
Issuance of warrants           7,925,000        
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                  
Aggregate gross proceeds           $ 725,000        
Warrant term 5 years                  
Repayment of principal           $ 5,298        
Debt discount $ 7,963                  
Issuance of warrants 81,500         1,453,375        
Warrants, exercise price $ 0.20                  
Interest amount of convertible notes           $ 40,675        
Conversion feature of debt instrument $ 5,298         37,350        
Placement fees           $ 94,250        
Convertible redeemable debentures, percentage           13.00%        
Fair value derivative liability           $ 181,139        
Secured debt           $ 250,000        
Convertible secured promissory note, 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 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        
Issuance of warrants           3,625,000        
March 2018 Convertible Note Offering [Member]                    
Convertible Note Payable (Textual)                    
Aggregate gross proceeds           $ 770,000        
Issuance of warrants           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.        
Unpaid interest           $ 140,600        
March 2018 Convertible Note Offering [Member] | Warrants [Member]                    
Convertible Note Payable (Textual)                    
Debt discount           $ 254,788        
Issuance of warrants           4,806,833        
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            
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                
Issuance of warrants   343,806                
Fair value derivative liability   $ 42,850                
Convertible secured promissory note, 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 $0.20 per share, subject to adjustment.                
v3.10.0.1
Related Party Loans (Details) - USD ($)
6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
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  
Second December 2017 Note [Member]    
Related Party Transaction [Line Items]    
Convertible notes payable - related parties, gross $ 100,000 100,000
Interest Rate 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  
v3.10.0.1
Related Party Loans (Details 1) - USD ($)
6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Related Party Transaction [Line Items]    
Notes payable - related party, gross $ 1,334,000 $ 1,249,000
Less: Current Debt (28,093)
Notes payable - related party, net 1,305,907 1,249,000
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  
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. 08, 2018
Nov. 13, 2017
Sep. 08, 2017
Sep. 07, 2017
May 09, 2017
Jun. 29, 2018
Feb. 20, 2018
Jan. 16, 2018
Dec. 21, 2017
May 26, 2016
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Nov. 20, 2017
Related Party Loan (Textual)                                    
Repaid principal                             $ 85,675    
Line of Credit [Member]                                    
Related Party Loan (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                  
February 2018 Convertible Note Offering [Member]                                    
Related Party Loan (Textual)                                    
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      
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.      
March 2018 Convertible Note Offering [Member] | Over-Allotment Option [Member]                                    
Related Party Loan (Textual)                                    
Units of securities                             $ 300,000      
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").      
Maturity date, description                             The Notes mature on the second (2nd) anniversary of their issuance dates.      
Convertible note                             $ 900,000      
May 2016 Rosen Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
Unpaid interest               $ 150,128                    
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.        
Warrants, exercise price                           $ 0.40        
Warrant term                           5 years        
Interest rate                           12.50%        
Interest and principal both due date                           Nov. 26, 2017        
Warrants issued to purchase shares                           1,000,000        
Secured term loan                           $ 1,000,000        
September 2017 Rosen Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
Loss on extinguishment of debt                     $ 65,378              
Warrants, exercise price           $ 0.20 $ 0.20       $ 0.20              
Warrant term           5 years 5 years       5 years              
Interest and principal both due date                     Sep. 08, 2018              
Warrants issued to purchase shares           100,000 25,000       448,000              
Promissory note             $ 224,000                      
November 2017 Schiller Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
Interest rate                                   15.00%
Promissory note                                   $ 25,000
Repaid principal                             25,000      
Repaid of interest                             637      
January 2018 Rosen Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
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.            
Interest rate                       6.00%            
Interest and principal both due date                       Jan. 31, 2018            
Promissory note                       $ 60,000            
Repaid principal                             60,000      
Repaid of interest                             200      
January 2018 Gordon Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
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.            
Interest rate                       6.00%            
Interest and principal both due date                       Jan. 31, 2018            
Promissory note                       $ 40,000            
Repaid principal                             40,000      
Repaid of interest                             105      
First March 2018 Rosen Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
Warrants, exercise price       $ 0.20                            
Warrant term       5 years                            
Interest rate       12.00%                            
Interest and principal both due date       Mar. 19, 2018                            
Warrants issued to purchase shares       10,000                            
Promissory note       $ 10,000                            
Repaid principal                             10,000      
Repaid of interest                             260      
Second March 2018 Rosen Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
Warrants, exercise price     $ 0.20                              
Warrant term     5 years                              
Interest rate     12.00%                              
Interest and principal both due date     Mar. 24, 2018                              
Warrants issued to purchase shares     15,000                              
Promissory note     $ 15,000                              
Repaid principal                             15,000      
Repaid of interest                             365      
Third March 2018 Rosen Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
Warrants, exercise price   $ 0.20                                
Warrant term   5 years                                
Interest rate   12.00%                                
Interest and principal both due date   Mar. 28, 2018                                
Warrants issued to purchase shares   10,000                                
Promissory note   $ 10,000                                
Repaid principal                             10,000      
Repaid of interest                             230      
February 2018 Convertible Note Offering [Member]                                    
Related Party Loan (Textual)                                    
Repayment of principal                             5,298,000      
May 2018 Schiller Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
Warrants, exercise price $ 0.20                                  
Warrant term 4 years                                  
Interest rate 13.00%                                  
Interest and principal both due date Feb. 02, 2019                                  
Warrants issued to purchase shares 300,000                                  
Promissory note $ 100,000                                  
June 2018 Frommer Loan Agreement [Member]                                    
Related Party Loan (Textual)                                    
Warrants, exercise price                   $ 0.20                
Warrant term                   4 years                
Interest rate                   6.00%                
Interest and principal both due date                   Aug. 17, 2018                
Warrants issued to purchase shares                   30,000                
Promissory note                   $ 10,000                
Investor [Member] | August 2017 Convertible Note Offering - Related Party [Member]                                    
Related Party Loan (Textual)                                    
Gross proceeds of private placement offering                                 $ 505,000  
Short term debt                                 645,000  
Unpaid interest                                 $ 206,026  
Issuance of warrants                                 4,555,129  
Fair value of warrants                                 $ 440,157  
Increase of principal amount                                 60,000  
Loss on extinguishment of debt                                 500,157  
Units of securities                                 $ 6,000,000  
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").  
Conversion price per share                                 $ 0.20  
Maturity date, description                                 The Notes mature on the second (2nd) anniversary of their issuance dates.  
Warrants, exercise price                                 $ 0.20  
Warrant term                                 5 years  
Debt discount                                 $ 160,700  
Warrants issued to purchase shares                                 2,525,000  
Investor [Member] | February 2018 Convertible Note Offering [Member]                                    
Related Party Loan (Textual)                                    
Gross proceeds of private placement offering                             $ 25,000      
Issuance of warrants                             125,000      
Units of securities                             $ 750,000      
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").      
Conversion price per share                             $ 0.20      
Warrants, exercise price                             $ 0.20      
Warrant term                             5 years      
Debt discount                             $ 11,054      
BCF and related debt discount                             1,063      
Investor [Member] | March 2018 Convertible Note Offering [Member]                                    
Related Party Loan (Textual)                                    
Gross proceeds of private placement offering                             $ 239,400      
Issuance of warrants                             1,197,000      
Debt discount                             $ 84,854      
Third Party Lender [Member] | Second December 2017 Note [Member]                                    
Related Party Loan (Textual)                                    
Conversion price per share                         $ 0.20          
Warrants, exercise price                         $ 0.20          
Warrant term                         5 years          
Debt discount                         $ 36,722          
Convertible note                         $ 100,000          
Interest rate                         15.00%          
Interest and principal both due date                         Dec. 27, 2019          
Warrants issued to purchase shares                         500,000          
Third Party Lender [Member] | Second February 2018 Note [Member]                                    
Related Party Loan (Textual)                                    
Repayment of principal                             $ 5,298      
Conversion price per share         $ 0.20                          
Warrants, exercise price         $ 0.20                          
Warrant term         5 years                          
Debt discount         $ 7,963                          
Convertible note         $ 40,750                          
Interest rate         18.00%                          
Interest and principal both due date         Sep. 30, 2018                          
Warrants issued to purchase shares         81,500                          
Original issue discount         $ 5,298                          
v3.10.0.1
Capital Leases Payable (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
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
Less current maturities (4,732) (4,732)
Capital lease obligation, net of current maturities
TOTAL CAPITAL LEASE OBLIGATION $ 4,732 $ 4,732
v3.10.0.1
Capital Leases Payable (Details 1) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Capital Leases Payable [Abstract]    
2018: $ 4,732 $ 4,732
v3.10.0.1
Capital Leases Payable (Details Textual)
6 Months Ended
Jun. 30, 2018
USD ($)
Capital Leases Payable (Textual)  
Capital leases due amount $ 383.10
Capital leases interest per annum 10.00%
Capital lease obligation term 5 years
v3.10.0.1
Stockholders' Deficit (Details) - Warrants [Member]
6 Months Ended
Jun. 30, 2018
$ / shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Exercise price $ 0.20
Expected dividends 0.00%
Minimum [Member]  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Expected volatility 92.14%
Risk free interest rate 1.64%
Expected life of warrant 4 years
Maximum [Member]  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Expected volatility 100.56%
Risk free interest rate 2.69%
Expected life of warrant 5 years
v3.10.0.1
Stockholders' Deficit (Details 1) - Warrant Activities [Member]
6 Months Ended
Jun. 30, 2018
$ / shares
shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Warrants, Outstanding, Beginning | shares 46,193,779
Warrants, Granted | shares 15,873,016
Warrants, Exercised | shares (50,000)
Warrants, Forfeited/Cancelled | shares
Warrants, Outstanding and Exercisable, Ending | shares 62,016,795
Weighted Average Exercise Price, Outstanding, Beginning | $ / shares $ 0.24
Weighted Average Exercise Price, Granted | $ / shares 0.20
Weighted Average Exercise Price, Exercised | $ / shares 0.40
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares
Weighted Average Exercise Price, Outstanding and Exercisable, Ending | $ / shares $ 0.24
v3.10.0.1
Stockholders' Deficit (Details 2) - Warrants [Member]
6 Months Ended
Jun. 30, 2018
$ / shares
shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Warrants Outstanding, Exercise price $ 0.20
Warrants Outstanding, Number Outstanding | shares 62,016,795
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) 3 years 7 months 28 days
Warrants Exercisable, Weighted Average Exercise Price $ 0.24
Warrants Exercisable , Number Exercisable | shares 62,016,795
Warrants Exercisable, Weighted Average Exercise Price $ 0.24
v3.10.0.1
Stockholders' Deficit (Details Textual) - USD ($)
1 Months Ended 6 Months Ended
Jan. 31, 2018
Dec. 21, 2015
Feb. 13, 2015
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Stockholders' Deficit (Textual)              
Number of shares authorized to issue       320,000,000      
Common stock, par value       $ 0.001   $ 0.001  
Common stock, shares authorized       300,000,000   300,000,000  
Share based payments       $ 285,821 $ 596,000    
Series A Cumulative Convertible Preferred Stock [Member]              
Stockholders' Deficit (Textual)              
Convertible preferred stock     100,000        
Shares of Series A stated value     $ 100        
Dividend payments, 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.      
Conversion price       $ 0.25     $ 0.164
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.      
Accrued dividends       $ 636,772      
Series B Cumulative Convertible Preferred Stock [Member]              
Stockholders' Deficit (Textual)              
Convertible preferred stock   20,000          
Shares of Series A stated value   $ 100.00          
Preferential dividends rate       6.00%      
Dividend payments, 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.      
Conversion price       $ 0.30     $ 0.197
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.      
Accrued dividends       $ 118,289      
Stock Options [Member]              
Stockholders' Deficit (Textual)              
Aggregate intrinsic value of options outstanding and exercisable       0 0    
Share based payments       $ 232,129 $ 463,619    
Common Stock [Member]              
Stockholders' Deficit (Textual)              
Stock issued to consultants for services, shares       610,000      
Stock issued to consultants for services, value       $ 116,300      
Share based payments       $ 48,889      
Common Stock [Member] | Vendor [Member]              
Stockholders' Deficit (Textual)              
Restricted common stock issued, shares 18,750            
Restricted common stock issued to settle liabilities, value $ 3,750            
Gain on settlement of vendor liabilities $ 375            
Warrant [Member] | Promissory note [Member]              
Stockholders' Deficit (Textual)              
Warrants issued       2,425,500      
Fair value of warrants       $ 420,456      
Warrant [Member] | Convertible notes [Member]              
Stockholders' Deficit (Textual)              
Warrants issued       10,481,016      
Fair value of warrants       $ 1,284,683      
Warrant [Member] | Notes payable - related party [Member]              
Stockholders' Deficit (Textual)              
Warrants issued       1,563,000      
Fair value of warrants       $ 307,808      
Warrant [Member] | Convertible notes payable - related party [Member]              
Stockholders' Deficit (Textual)              
Warrants issued       1,403,500      
Fair value of warrants       $ 162,834      
Preferred Stock [Member]              
Stockholders' Deficit (Textual)              
Preferred stock, par value       $ 0.001      
Preferred stock, shares authorized       20,000,000      
v3.10.0.1
Commitments and Contingencies (Details)
Jun. 30, 2018
USD ($)
Commitments and Contingencies [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
Revision of Prior Year Financial Statements (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Current Liabilities          
Accrued dividends $ 2,094,658   $ 2,094,658   $ 1,462,106
Total Current Liabilities 4,479,346   4,479,346   3,687,200
Total Liabilities 10,101,703   10,101,703   7,544,739
Stockholders' Equity          
Total Stockholders' Equity (9,914,938)   (9,914,938)   (7,367,307)
Statement of Operations          
Deemed dividend 65,823 $ 67,888 129,858 $ 131,867  
Net loss attributable to common stockholders $ (2,477,061) $ (1,534,545) $ (4,634,726) $ (3,087,776)  
Basic and diluted loss per share $ (0.06) $ (0.04) $ (0.12) $ (0.08)  
Statements of Cash Flows Supplementary Disclosure of Non-Cash Investing And Financing Activities          
Deemed dividend     $ 127,795 $ 131,867  
As Previously Reported [Member]          
Current Liabilities          
Accrued dividends         472,444
Total Current Liabilities         4,159,644
Total Liabilities         8,017,183
Stockholders' Equity          
Total Stockholders' Equity         7,839,751
Statement of Operations          
Deemed dividend        
Net loss attributable to common stockholders       $ 2,955,909  
Basic and diluted loss per share       $ (0.08)  
Statements of Cash Flows Supplementary Disclosure of Non-Cash Investing And Financing Activities          
Deemed dividend       $ 101,385  
Adjustment [Member]          
Current Liabilities          
Accrued dividends         (472,444)
Total Current Liabilities         (472,444)
Total Liabilities         (472,444)
Stockholders' Equity          
Total Stockholders' Equity         $ (472,444)
Statement of Operations          
Deemed dividend       131,867  
Net loss attributable to common stockholders       $ 131,867  
Basic and diluted loss per share        
Statements of Cash Flows Supplementary Disclosure of Non-Cash Investing And Financing Activities          
Deemed dividend       $ 30,482  
v3.10.0.1
Subsequent Events (Details)
6 Months Ended
Jun. 30, 2018
USD ($)
$ / shares
shares
Investors [Member]  
Subsequent Events (Textual)  
Gross proceeds issuance of notes payable | $ $ 100,000
Warrant term 4 years
Warrants purchase of common stock | shares 300,000
Warrants, exercise price | $ / shares $ 0.20
Investors one [Member]  
Subsequent Events (Textual)  
Gross proceeds issuance of notes payable | $ $ 25,000
Warrant term 4 years
Warrants purchase of common stock | shares 75,000
Warrants, exercise price | $ / shares $ 0.20