10-Q/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q/A

(Mark One)

☑  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

or

o   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________ to _________

Commission File Number 000-52534

 

PARALLAX HEALTH SCIENCES, INC.

(Exact name of registrant as specified in its charter)

Nevada	46-4733512
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1327 Ocean Avenue, Suite B, Santa Monica, CA	90401
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code:	(310) 899-4442

Copy of all Communications to:

Peter Hogan, Esq.

Buchalter

1000 Wilshire Blvd., Suite 1500

Los Angeles, CA 90017

(213) 891-0700

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 90 days.	Yes ☑ No☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registration statement was required to submit and post such files).	Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

152,178,141 common shares issued and outstanding as of November 14, 2018

EXPLANATORY NOTE

This Amendment No. 1 to the Annual Report on Form 10-Q/A for the quarterly period ending September 30, 2018, is being filed solely to furnish the Interactive Data files as Exhibit 101, in accordance with Rule 405 of Regulation S-T. No other changes have been made to the Form 10-K, as originally filed on November 14, 2018.

ITEM 6. EXHIBITS

Exhibits required by Item 601 of Regulation S-B

Exhibit Number	Description of Exhibit	Filing Reference
(100)	XBRL Related Documents
101.INS**	XBRL Instance Document	Filed herewith.
101.SCH**	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.LAB**	XBRL Taxonomy Extension Labels Linkbase Document	Filed herewith.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

*Filed herewith. 

**Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PARALLAX HEALTH SCIENCES, INC.
Dated: November 15, 2018	/s/ Paul R. Arena
	Paul R. Arena
	Chief Executive Officer
Dated: November 15, 2018	/s/ Calli R. Bucci
	Calli R. Bucci
	Chief Financial Officer

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 14, 2018
Details
Registrant Name	PARALLAX HEALTH SCIENCES, INC.
Registrant CIK	0001388410
SEC Form	10-Q/A
Period End date	Sep. 30, 2018
Fiscal Year End	--12-31
Trading Symbol	prlx
Tax Identification Number (TIN)	464733512
Number of common stock shares outstanding		152,178,141
Filer Category	Smaller Reporting Company
Current with reporting	Yes
Amendment Description	To submit XBRL files for quarterly period
Amendment Flag	true
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Incorporation, State Country Name	Nevada

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CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 315	$ 183
Accounts receivable, net	0	3,275
Total current assets	315	55,419
Current assets held for sale	0	51,961
Intangible assets, net	609,190	709,655
Goodwill	785,060	785,060
Noncurrent assets held for sale	0	201,902
TOTAL ASSETS	1,394,565	1,752,036
Current liabilities
Accounts payable and accrued expenses	2,015,789	3,048,348
Notes payable, convertible	1,241,000	741,000
Related party payables	780,449	629,567
Total current liabilities	4,037,238	4,418,915
Long-term liabilities
License fees payable, net of unamortized discount	410,000	890,000
Royalties payable	300,000	200,000
Notes and loans payable, unsecured	0	95,975
Notes payable, convertible	720,154	144,000
Notes payable, convertible, related party	628,850	1,167,254
Notes payable, secured, net of unamortized discount	32,789	17,393,240
Total long-term liabilities	2,091,793	19,890,469
Liabilities subject to compromise	0	4,620,735
Total liabilities	6,129,031	28,930,119
Stockholders' deficit
Preferred stock, $.001 par, 10,000,000 shares authorized,	1,014	864
Common stock, $.001 par, 250,000,000 shares authorized,	152,077	136,754
Additional paid in capital-preferred	1,415,653	665,803
Additional paid in capital-common	9,005,599	5,580,668
Subscriptions receivable	(92)	(592)
Accumulated deficit	(15,308,717)	(33,561,580)
Total stockholders' deficit	(4,734,466)	(27,178,083)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 1,394,565	$ 1,752,036

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CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Details
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Outstanding	1,013,691	863,691
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Shares, Outstanding	152,078,141	136,754,530

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net Income (Loss) Available to Common Stockholders, Basic
Revenue	$ 990	$ 30,139	$ 10,749	$ 70,641
Cost of sales	5,230	41,374	15,507	110,127
Gross profit (loss)	(4,240)	(11,235)	(4,758)	(39,486)
General and administrative expenses	2,102,712	2,319,992	5,202,944	3,161,740
Operating loss	(2,106,952)	(2,331,227)	(5,207,702)	(3,201,226)
Other income (expenses)
Gain on disposal of subsidiary	5,079,416	0	5,079,416	0
Gain on extinguishment of debt	22,931,148		22,931,148
Discount amortization	(35,000)	(1,315,000)	(2,775,000)	(3,935,000)
Interest expense	(231,676)	(265,946)	(950,601)	(713,510)
Total other income (expenses)	27,743,888	(1,580,946)	24,284,963	(4,648,510)
Net income (loss) - continuing operations	25,636,936	(3,912,173)	19,077,261	(7,849,736)
Net income (loss) - discontinued operations	93,773	(794,440)	(824,398)	(2,271,269)
Net income (loss)	$ 25,730,709	$ (4,706,613)	$ 18,252,863	$ (10,121,005)
Continuing operations	$ 0.172	$ (0.036)	$ 0.125	$ (0.060)
Discontinued operations	0.001	(0.006)	(0.006)	(0.020)
Continuing operations	0.124	(0.026)	0.089	(0.060)
Discontinued operations	$ 0.000	$ (0.004)	$ (0.004)	$ (0.013)
Weighted average common shares outstanding - basic	149,431,153	129,822,471	146,294,981	116,254,776
Weighted average common shares outstanding - diluted	208,254,652	183,520,865	205,118,481	169,953,170

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income (loss)	$ 19,077,261	$ (7,849,736)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization	90,465	52,733
Stock compensation/stock option amortization	3,103,390	2,177,608
Discount amortization	2,775,000	3,935,000
Allowance for bad debt	236	0
Gain on disposal of subsidairy	(5,079,416)	0
Gain on extinguishment of debt	(22,931,148)	0
Changes in operating assets and liabilities:
(Increase) decrease in trade and other receivables	3,039	(7,833)
Increase in employee advances	0	(2,000)
Decrease in prepaid expenses	0	2,690
Increase in accounts payable and accrued expenses	2,182,548	1,219,585
Increase (decrease) in related party payables	492,356	(630,334)
Net cash used by operating activities	(286,269)	(1,102,287)
Cash flows from financing activities:
Repayments of notes payable	(5,451)	(57,623)
Proceeds from convertible notes payable	825,000	696,000
Repayments of convertible notes payable	(50,000)	0
Proceeds from convertible notes payable, related party	0	300,000
Proceeds from issuance of preferred shares	300,000	150,000
Proceeds from issuance of common shares	41,250	1,500
Proceeds from issuance of common shares for acquisition of intangible asset	0	2,500
Net cash provided by financing activities	1,110,799	1,092,377
Net cash provided (used) by continuing operations	824,530	(9,910)
Cash flows from discontinued operations:
Net cash used by operating activities	(824,398)	1,066
Net cash provided by financing activities	0	(39,400)
Net cash used by discontinued operations	(824,398)	(38,334)
Net increase (decrease) in cash	132	(48,244)
Cash - beginning of period	183	63,363
Cash - end of period	315	15,119
NON-CASH ACTIVITIES
Discounts on long-term liabilities	2,775,000	3,935,000
Conversion of accounts payable to convertible notes payable	37,500	0
Conversion of related party payables to preferred stock	450,000	0
Conversion of convertible related party notes payable to common stock	0	485,733
Conversion of convertible notes payable to common stock	296,114	0
Conversion of related party convertible note payable to non-related party convertible note payable	576,154	0
Conversion of related party payables to non-related party payables	42,356	0
Common stock issued for acquisition of intangible assets	0	622,500
Subscriptions receivable	(92)	(342)
Interest paid
Continuing operations	61,088	56,878
Discontinued operations	106	162,455
Income taxes paid	$ 0	$ 0

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Overview and Nature of Business

9 Months Ended

Sep. 30, 2018

Notes

Overview and Nature of Business

NOTE 1. OVERVIEW AND NATURE OF BUSINESS

These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2017. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements have been omitted.

Parallax Health Sciences, Inc. (the “Company”) was incorporated in the State of Nevada on July 6, 2005.  The Company’s principal focus is to build and expand an integrated digital healthcare network with products and services that can provide remote communication, diagnosis, treatment, and monitoring of patients on a proprietary platform. Parallax’s technology-enabled digital healthcare companies include:

      Parallax Diagnostics Inc. (“PDI”), with its medical diagnostic testing platform capable of diagnosing and monitoring several health issues.

      Parallax Health Management, Inc. (“PHM”), which provides personalized patient care through remote health care services.

      Parallax Behavioral Health, Inc. (“PBH”), which provides behavioral health solutions through patented information technology.

      Parallax Communications, Inc (“PCI”), which provides digitally connected health solutions via Internet of Things, (“IoT”) devices over partner mobile networks.

Business Overview

On January 20, 2017, the Company changed the name of its wholly-owned subsidiary, Qolpom, Inc., to Parallax Health Management, Inc.

On March 22, 2017, the Company formed a wholly-owned subsidiary, Parallax Behavioral Health, Inc. ("PBH"), a Delaware corporation.

On April 26, 2017, pursuant to a resolution of the Board of Directors, the Company, through its wholly-owned subsidiary, Parallax Behavioral Health, Inc., completed the asset acquisition of 100% of certain intellectual property (“Intellectual Property”) from ProEventa Inc., a Virginia Corporation (“ProEventa”), in accordance with the Intellectual Property Purchase Agreement between the Company, PBH and ProEventa (the “ProEventa Agreement”). ProEventa has an expertise in the development of behavioral health technologies, and is the wholly-owned subsidiary of Grafton Integrated Health Network, Inc., a non-profit Virginia corporation (“Grafton”). Pursuant to the ProEventa Agreement, the initial consideration for the Intellectual Property was paid to ProEventa in the form of a stock purchase agreement to purchase 2,500,000 shares of the Company’s common stock for $2,500, resulting in a net cost for the Intellectual Property of $622,500.  In addition, the Agreement included the following conditional contingent liabilities (the “Revenue Share and Royalties”):

         a revenue sharing agreement, providing for a cash earn-out to be paid to the ProEventa shareholders of up to $3,000,000, to be derived from certain net revenue generated by the Company, as defined in the agreement; and

         a royalty agreement, providing for a royalty of 3% of the revenues generated from the intellectual property, ending at such time as Parallax has paid ProEventa $25,000,000; and

         a limited license to ProEventa for the use of certain of the Intellectual Property's technology at Grafton Schools.

On April 26, 2017, in conjunction with the ProEventa Agreement, the Company entered into a consulting agreement with James Gaynor, founder of ProEventa, that, among other things, provides for consideration to Mr. Gaynor as follows:

         a stock purchase agreement to purchase 500,000 shares of the Company’s common stock at $0.001 per share; and

         a grant of options to purchase 1,000,000 shares of the Company's common stock at a price of $0.25 per share, vesting annually over a three (3) year period beginning September 1, 2017.

On July 6, 2017, Mr. J. Michael Redmond was terminated as Chief Executive Officer and President of the Company and resigned as chairman and member of the board of directors, pursuant to his employment agreement.  Effective July 7, 2017, Mr. Paul R. Arena was appointed as Chief Executive Officer and President of the Company and elected as a member of the board of directors.

On September 20, 2018, the Company formed Parallax Communications, Inc., a Delaware corporation and wholly-owned subsidiary of Parallax Health Management, Inc.

Business Segments

The Company’s current operations include the following business segments: Remote Care Services (RCS), Behavioral Health Services (BHS), and Diagnostics/Corporate (DCS).

         Remote Care Systems Services (RCS)

PHM provides the health care industry’s first comprehensive remote patient monitoring system, which utilizes proprietary software and technology to bridge clinical behavioral science with technology and logistics across a variety of wellness and clinical devices, including both fitness and clinical applications, for payers, providers and clinical professionals.

PHM generates revenues primarily through the licensing, installation and maintenance of its patented Qolpom Hub, an integrated, secure and scalable platform for collecting, transmitting and analyzing biometric data, as well as the sale of wireless medical devices and home monitoring kits.

         Behavioral Health Services (BHS)

In April 2017, the Company through its wholly-owned subsidiary, Parallax Behavioral Health, Inc., acquired the intellectual property known as REBOOT, the acronym for Reliable Evidence-Based Outcomes Optimization Technologies.  In 2018, the Company rebranded the technology as Intrinsic Code (“Intrinsic Code”), a software platform specifically designed to improve health treatment outcomes using proprietary behavioral technology systems, that enables its users and user groups to more effectively achieve goals within a prescribed timeline. Through a proprietary behavioral health technology, Intrinsic Code powers decision support that can also be delivered securely to any internet connected device. The software can be used by an individual or an organization of any size. 

PBH generates revenues primarily through licensing and subscription of the Intrinsic Code software and systems. As of September 30, 2018, the BHS segment had not yet begun full operations, generating limited test market sales.

         Diagnostics/Corporate (DCS)

The Diagnostics Segment supports the costs and operating expenses related to the continued development and exploitation of the Company's proprietary medical diagnostic and monitoring platform and processes, which remains the Company's primary focus.  In addition, the Diagnostics Segment provides management and administrative services to support the Company, and consists of certain aspects of the Company’s executive management, corporate relations, legal, compliance, human resources, and corporate information technology and finance departments.

RoxSan Pharmacy, Inc.

On August 13, 2015, the Company entered into an agreement with RoxSan Pharmacy, Inc., a California corporation, and its sole shareholder, Shahla Melamed, to purchase 100% of the issued and outstanding shares of RoxSan's common stock and its assets and inventory. Pursuant to the agreement , the Company, among other things, issued the Seller a Secured Promissory Note in the amount of $20.5 million.  As a result, effective August 13, 2015, RoxSan became the Company's wholly-owned subsidiary.  Concurrently, Mrs. Melamed resigned from all positions within RoxSan, and Mr. J. Michael Redmond was appointed RoxSan's President and Chief Executive Officer, and Ms. Calli R. Bucci its Chief Financial Officer. Mr. Redmond and Ms. Bucci were also appointed as Chairman and member, respectively, of RoxSan’s board of directors.

RoxSan provided a full range of pharmacy services including retail, compounding and fertility medications, and generated revenues primarily by dispensing prescription drugs, both through local channels by direct delivery as well as mail order. RoxSan also sold a wide assortment of general merchandise, including over-the-counter drugs, beauty products and cosmetics, seasonal merchandise and convenience foods, through the Company’s pharmacy.  The pharmacy was fully licensed and qualified to conduct business in over 40 US States. 

Since the Company’s acquisition of RoxSan, the deleterious actions against the pharmacy by the former owner, including, among other things, interference with management and operations, and attempts to damage and/or divert customer and vendor relationships, had a significant adverse impact on the pharmacy. Furthermore, the discovery of the former owner’s alleged involvement in suspected insurance fraud caused RoxSan’s contract with its primary In Vitro Fertilization (“IVF”) drug rebate program to be terminated in August 2016. As a result, RoxSan was no longer eligible to receive incentive rebates for the majority of its IVF drug purchases, which were key to the profitability of the IVF drug sales; and for which without the rebates, RoxSan was unable to provide its customers with comparably priced IVF drugs.   This, among other things, caused a precipitous drop of over 90% in RoxSan’s IVF revenues, and ultimate exit from the IVF market in mid-2017.  Soon thereafter, in July 2017, RoxSan’s contract with its primary drug supplier was terminated for similar reasons connected to the former owner and alleged criminal activities associated with the Melamed family name, despite the Company’s new ownership and management. After careful consideration, the Company determined that RoxSan was unable to generate enough profits to sustain its pharmacy business, and on December 22, 2017, the pharmacy ceased operations and closed the business location in Beverly Hills, CA; however, some residual operations were still ongoing during 2018 to wind down the business. 

On May 14, 2018, pursuant to a unanimous resolution of the Boards of Directors of RoxSan Pharmacy, Inc. and Parallax Health Sciences, Inc., RoxSan filed a Chapter 7 petition in the United States Bankruptcy Court for the Central District of California.  Mr. Timothy Yoo was appointed trustee on May 15, 2018.  In connection with this filing, RoxSan sought to discharge approximately $5 million of liabilities owed to various parties, and intercompany loans in excess of $1 million owed to the Company.  As a result of the loss of financial control of RoxSan, the Company has derecognized the subsidiary as of  September30, 2018 (Note 15). The deconsolidation resulted in a gain of $5,079,416. The Company also extinguished $22,778,281 in debt and accrued interest related to the acquisition of RoxSan.

Going Concern

The Company has incurred losses since inception resulting in an accumulated deficit of $15,308,717, and a working capital deficit of $4,036,923, and further losses are anticipated. The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, which may not be available at commercially reasonable terms.  There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations and the Company may cease operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The Company will require additional financing in order to proceed with its plan of operations, including approximately $3,000,000 over the next 12 months to pay for its ongoing expenses. These cash requirements include working capital, general and administrative expenses, the development of the Company’s product line, and the pursuit of acquisitions. These cash requirements are in excess of the Company’s current cash and working capital resources. Accordingly, the Company will require additional financing in order to continue operations and to repay its liabilities. There is no assurance that the financing will be completed as planned or at all. If the Company is unable to secure adequate capital to continue the Company’s planned operations, the Company’s shareholders may lose some or all of their investment and the Company’s business may fail.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”).  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The unaudited interim consolidated financial statements reflect all adjustments consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. The unaudited interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

NOTE: The following notes and any further reference made to “the Company”, "we", "us", "our" and "Parallax" shall mean Parallax Health Sciences, Inc., and its wholly-owned subsidiaries, Parallax Diagnostics, Inc., Parallax Health Management, Inc., and Parallax Behavioral Health, Inc.  unless otherwise indicated.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Notes

Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements.  These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

The Company’s fiscal year-end is December 31.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. When the Company loses control of a subsidiary, a gain or loss is recognized and is calculated as the difference between:

         the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost;

and

         the carrying amount of the net assets (liabilities) of the subsidiary and any noncontrolling interest.

Upon deconsolidation of a subsidiary, any loans to the former subsidiary made by the Company are measured at fair value at the deconsolidation date.  Any difference between the carrying amount of the loan to the subsidiary and its fair value is included as part of the gain or loss calculation upon deconsolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Fair Value Hierarchy

The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following:

Level 1:  Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2:  Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3:  Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of nine months or less at the time of issuance to be cash equivalents. As of September 30, 2018, and December 31, 2017, the Company had no cash equivalents.

Fair Value of Financial Instruments

As of September 30, 2018, and December 31, 2017, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation. See Note 6 for additional information about long-term debt.

There were no outstanding derivative financial instruments held by the Company as of September 30, 2018, and December 31, 2017.

Accounts Receivable

Accounts receivable are stated net of an allowance for doubtful accounts. The accounts receivable balance primarily includes amounts due from customers.  Charges to bad debt are based on both historical write-offs and specifically identified receivables.

The activity in the allowance for doubtful accounts receivable for the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, is as follows:

	September 30, 2018			December 31, 2017
Beginning balance	$	4,000		$	––
Additions charged to bad debt expense		236			4,000
Write off of allowance for doubtful collections		(4,236	)		––
Ending balance	$	––		$	4,000

During the nine months and the year ended September 30, 2018, and December 31, 2017, the allowance for doubtful collections increased by $236 and $4,000, respectively. 

As of September 30, 2018, and December 31, 2017, the allowance for doubtful collections was $0 and $4,000, respectively.

Property and Equipment

Property and equipment is comprised of office and computer equipment and software, furniture and fixtures, leasehold improvements, and vehicles, recorded at cost and depreciated using the double declining balance method over the estimated useful lives of 5 to 7 years. Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. Application development stage costs for significant internally developed software projects are capitalized and depreciated.

Intangible Assets

Product processes, patents and customer lists are amortized on a straight-line basis over their estimated useful lives between 4 and 20 years. Costs to extend and maintain patents and trademarks are charged directly to expense as incurred. See Note 4 for additional information about intangible assets.

Goodwill and Other Indefinitely-Lived Assets

Goodwill and other indefinitely-lived assets are not amortized, but are subject to impairment reviews annually, or more frequently if necessary.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.  When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.  Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

The Company believes that future projected cash flows are sufficient for the recoverability of its long-lived assets, and no impairment exists.  There can be no assurance, however, that market conditions will not change or demand for the Company’s products and products under development will continue.  Either of these could result in future impairment losses.

Convertible Debt

The Company recognizes the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert debt into common stock at a price per share that is less than the trading price to the public on the date of the debt. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debt, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the interest method.

Net Loss Per Common Share

Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible debt, convertible preferred shares and the exercise of the Company’s stock options and warrants.

Comprehensive Loss

As of September 30, 2018, and December 31, 2017, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

Revenue Recognition

Revenue is recognized when: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller’s price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

The Company may have net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that the Company will not realize a future tax benefit, a valuation allowance is established.

As of September 30, 2018, the Company has not yet filed its 2012 through 2017 annual corporate income tax returns.  Due to the Company’s recurring losses,it is anticipated that no corporate income taxes are due for these periods.

Stock-Based Compensation

The Company records stock-based compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Recently Adopted Accounting Standards 

The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company. The Company has recently adopted the following new accounting standards:

Adopted:

In January 2017, the FASB issued ASU No. 2017-01 (“ASU 2017-01”), Business Combinations (Topic 805), Clarifying the Definition of a Business.  ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation.  ASU 2017-01 will be effective for the Company for annual periods beginning after December 15, 2017, and interim periods.  Early adoption is permitted under certain conditions.

In January 2017, the FASB issued ASU No. 2017-04 (“ASU 2017-04”), Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment.  ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test, which should reduce the cost and complexity of evaluating goodwill for impairment. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.  ASU 2017-04 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods.  Early adoption is permitted for testing performed after January 1, 2017.

In May 2017, the FASB issued ASU No. 2017-09 (“ASU 2017-09”), Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting.  ASU 2017-09 clarifies and reduces both the (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. ASU 2017-09 will be effective for the Company for annual periods beginning after December 15, 2017, and interim periods.  Early adoption is permitted.

Not yet adopted:

In June 2018, the FASB issued ASU No 2018-07 (“ASU 2018-07”), Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting.  ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 will be effective for the Company for annual periods beginning after December 15, 2018, and interim periods.  Early adoption is permitted.  The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

In August 2018, the FASB issued ASJ No. 2018-15 (“ASU 2018-15”), Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40).  ASJ 2018-15 was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license.  ASU 2018-15 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods.  Early adoption is permitted.  The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

Recently Issued Accounting Standards Updates: 

There were other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

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Accounts Receivable, Net

9 Months Ended

Sep. 30, 2018

Notes

Accounts Receivable, Net

NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net, consists of the following:

	September 30, 2018		December 31, 2017
Customer receivables	$	––	$	7,275
Less: allowance for doubtful accounts		––		(4,000	)
Accounts receivable, net	$	––	$	3,275

As of September 30, 2018, and December 31, 2017, respectively, the Company was owed $0 and $7,275 in accounts receivable due from customers.

During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, the allowance for doubtful collections increased by $236 and $4,000, respectively.  As of September 30, 2018, and December 31, 2017, the allowance for doubtful collection was $0 and $4,000, respectively.

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Intangible Assets

9 Months Ended

Sep. 30, 2018

Notes

Intangible Assets

NOTE 4. INTANGIBLE ASSETS

The following are the components of finite-lived intangible assets:

	September 30, 2018			December 31, 2017
Products and processes	$	12,500		$	12,500
Trademarks and patents / technology		150,700			150,700
Customer lists / relationships		30,000			30,000
Non-compete agreement		30,000			40,000
Marketing related		64,000			64,000
Software		510,300			510,300
Sub-total		797,500			807,500
Accumulated amortization		(188,310	)		(97,845	)
Intangible assets, net	$	609,190		$	709,655

Amortization expense from continuing operations for the nine months ended September 30, 2018 and 2017, was $90,465 and $52,733, respectively.

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Accounts Payable and Accrued Expenses

9 Months Ended

Sep. 30, 2018

Notes

Accounts Payable and Accrued Expenses

NOTE 5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

	September 30, 2018		December 31, 2017
Accounts payable-vendors	$	917,694	$	865,569
Credit cards payable		41,969		39,841
Payroll taxes payable		82,517		75,637
Accrued interest		469,624		1,894,694
Accrued payroll and payroll taxes		253,984		172,607
		1,765,789		3,048,348
Reserve-legal fees		250,000		–
Total accounts payable and accrued expenses	$	2,015,789	$	3,048,348

Payroll taxes payable includes $17,476 and $5,485 in penalties, and $3,438 and $634 in interest, related to unpaid payroll taxes as of September 30, 2018, and December 31, 2017, respectively.

The Company has established an estimated reserve of $250,000 and $0 at September 30, 2018, and December 31, 2017, respectively, for future legal fees to be incurred in connection with pending legal actions (Note 17).

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Notes and Loans Payable

9 Months Ended

Sep. 30, 2018

Notes

Notes and Loans Payable

NOTE 6. NOTES AND LOANS PAYABLE

Notes and loans payable consists of the following:

	September 30, 2018			December 31, 2017
Short-term:
Notes payable, convertible	$	1,241,000		$	741,000
Total short-term notes payable		1,241,000			741,000
Long-term:
Notes and loans payable, unsecured
Loans payable		––			11,900
Notes payable		––			84,075
Total notes and loans payable, unsecured		––			95,975
Note payable, convertible		720,154	[1]		144,000
Notes payable, secured, net of unamortized discount:
Note payable-bank		32,789			38,240
Note payable		––			20,500,000
Less: unamortized discount		––			(3,145,000	)
Note payable, net of unamortized discount		––			17,355,000
Total notes payable, secured, net of unamortized discount		––			17,393,240
Total long-term notes and loans payable		752,943			17,633,215
Total notes and loans payable	$	1,993,943		$	18,374,215

[1]   At September 30, 2018, $576,154 in convertible notes payable and related accrued interest of $90,742 was reclassified from related party to non-related party, resulting from a change in related parties (Note 7).

Between July 14, 2017, and January 25, 2018, the Company issued convertible promissory notes (“Convertible Notes”) for financing in the amount of $746,000 (“Investor Group A”).  The Convertible Notes accrue interest at a rate of 10% per annum, mature in one (1) year, and are convertible into restricted shares of the Company’s common stock at a conversion rate of $0.10 per share.  The common shares were issued with 50% warrant coverage for a period of three (3) years at an exercise price of $0.25 per common share.  During the nine months ended September 30, 2018, five (5) noteholders of Investor Group A elected to convert their notes in the aggregate principal sum of $225,000 and accrued interest of $21,114.  As a result, the noteholders were issued an aggregate of 2,461,129 shares of the Company’s restricted common stock.  As of  September 30, 2018, principal in the amount of $521,000 remains.

In February 2018, the Company issued senior secured convertible notes (the “CV Note(s)”) in the aggregate principal sum of $220,000 to two lenders (“Lender Group A”).  The CV Notes are convertible into restricted shares of the Company’s common stock at a conversion rate of $0.10 per share. Two (2) of the CV Notes in the aggregate principal sum of $145,000 bear interest at a rate of twelve percent (12%) plus 290,000 shares of the Company’s restricted common stock for each ninety (90) day period. The CV Note in the principal sum of $75,000 bears interest at a rate of twenty percent (20%) plus 150,000 shares of the Company’s restricted common stock for each thirty (30) day period.  In addition to interest, the note holders have been issued an aggregate of 2,820,000 shares of the Company’s restricted common stock through September 30, 2018, valued at $282,000. During the nine months ended September 30, 2018, principal repayments in the amount of $100,000 have been made.  As of September 30, 2018, principal in the amount of $120,000 remains.

Between April 24, 2018, and June 18, 2018, the Company issued senior secured convertible promissory notes (the “Notes”) to four accredited investors (“Investor Group B”) in the aggregate principal sum of $600,000.  The Notes bear interest at rate of 12% per annum, mature December 15, 2018, or earlier, contingent upon certain financing conditions, and contain a repayment provision to convert the Notes into restricted shares of the Company’s common stock at a price of $0.10 per share.  The Notes are secured by all of the Company’s personal property, and include warrant coverage for a period of three (3) years to purchase shares of the Company’s common stock at a purchase price of $0.20 per share, with a provision for the price to be reduced to $0.10 per share if certain conditions are not met by the Company.

On July 31, 2018, the unsecured convertible promissory note issued to The Kasper Group, Ltd. in the principal sum of $144,000 was modified 1) to extend the note’s maturity to October 1, 2019 and 2) to change the conversion price from $0.25 to $0.10 per share.

Non-related party convertible notes payable consist of the following:

Note Holder	Principal			APR	Accrued Interest			Conversion Price	Term/Due
Lender Group A	$	120,000		12-20%	$	121,740		$0.10	05/2018
Investor Group A		521,000		10%		55,499		$0.10	07/2018-09/2018
Investor Group B		600,000		12%		25,630		$0.10	12/2018
The Kasper Group, Ltd.		144,000		7%		68,047		$0.10	10/01/2019
Joseph M. Redmond		576,154	[1]	5%		112,289	[1]	$0.10	07/31/2017
	$	1,961,154			$	383,205

As of September 30, 2018, and December 31, 2017, respectively, short-term non-related party convertible promissory notes in the amount of $1,241,000 and $741,000 are owed by the Company.  During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, interest in the amount of $197,142 and $26,840 was expensed.  As of September 30, 2018, and December 31, 2017, respectively, a total of $202,869 and $26,840 in interest has been accrued, and is included as an accrued expense on the accompanying consolidated balance sheet.

As of September 30, 2018, and December 31, 2017, respectively, long-term non-related party convertible promissory notes in the amount of $720,154 [1] and $144,000 are owed by the Company. During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, interest in the amount of $29,087 and $10,080 was expensed.  As of September 30, 2018, and December 31, 2017, respectively, a total of $180,336 [1] and $60,507 in interest has been accrued, and is included as an accrued expense on the accompanying consolidated balance sheet.

As of September 30, 2018 and December 31, 2017, long-term unsecured non-related party loans and promissory notes consists of $0 and $95,975, respectively.  During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, interest in the amount of $5,460 and $1,800 was expensed.  On September 30, 2018, $95,975 in principal and $56,892 in accrued interest was extinguished, resulting in a gain of $152,867. As of September 30, 2018, and December 31, 2017, respectively, a total of $0 and $51,432 in interest has been accrued and is included as an accrued expense on the accompanying consolidated balance sheet.

As of September 30, 2018, and December 31, 2017, respectively, long-term secured non-related party promissory notes consists of $32,789 and $17,393,240, net of unamortized discount of $0 and $3,145,000.  During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, interest in the amount of $694,450 and $880,242 was expensed.  As of September 30, 2018, in connection with RoxSan’s Chapter 7 petition filed in May 2018 (Note 17), $20,500,000 in principal and $2,278,281 in accrued interest has been extinguished and recharacterized as a contingent liability (Note 8), resulting in a gain of $22,778,281.  As of September 30, 2018, and December 31, 2017, respectively, a total of $296 and $1,585,714 in interest has been accrued, and is included as an accrued expense on the accompanying consolidated balance sheet.

The future maturities of notes payable are summarized as follows:

2018	$	576,154
2019		176,789
Total	$	752,943

During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, interest on non-related party notes and loans payable in the amount of $926,139 and $924,462 has been expensed.  As of September 30, 2018, and December 31, 2017, respectively, a total of $383,501 [1] and $1,724,093 in interest, net of extinguishments of $2,335,173 and $0, has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Notes

Related Party Transactions

NOTE 7. RELATED PARTY TRANSACTIONS

Related party transactions consist of the following:

	September 30, 2018			December 31, 2017
Related party payables
Accrued compensation	$	607,802		$	501,269
Cash advances		172,647			128,298
Total related party payables		780,449			629,567
Notes payable, convertible, related party		628,850	[1]		1,167,254
Total related party transactions	$	1,409,299		$	1,796,821

[1]   As of January 1, 2018, Mr. Joseph M. Redmond, former President and member of the board of directors, is no longer a related party.  As a result, related party transactions was reduced by $618,510, representing $42,356 in accrued compensation, and $576,154 in convertible promissory notes. As of September 30, 2018, $42,356 is included as part of accounts payable and accrued expenses (Note 5), and $576,154 is included as part of long-term convertible notes payable (Note 6), on the accompanying consolidated balance sheets. In addition, accrued interest of $90,742 related to the convertible promissory notes was reclassified from related party to non-related party accrued interest. See Note 17 for additional information and legal proceedings related to Mr. Redmond.

Related party convertible notes payable consist of the following:

Note Holder	Principal		APR	Accrued Interest		Conversion Price	Term/Due
Huntington Chase, Beneficial Owner	$	291,100	7%	$	68,924	$0.10	12/31/2015
AvantGarde, LLC, Beneficial Owner		281,500	12%		14,517	$0.20	10/26/2018
Hamburg Investment Co., Beneficial Owner		56,250	12%		2,682	$0.20	11/08/2018
Total	$	628,850		$	86,123

On April 26, 2018, the Company extended and amended the subordinate secured convertible promissory note dated April 26, 2017, in the principal sum of $250,000.  The amended note was issued for the principal sum of $281,500 to include accrued interest to date (the “Amended Note”). The Amended Note bears interest at rate of 12% per annum, matures October 26, 2018, or earlier, contingent upon certain financing conditions, and contains a repayment provision to convert the note into restricted shares of the Company’s common stock at a price of $0.10 per share.  The Amended Note is secured by all of the Company’s personal property, and includes warrant coverage for a period of three (3) years to purchase shares of the Company’s common stock at a purchase price of $0.20 per share, with a provision for the price to be reduced to $0.10 per share if certain conditions are not met by the Company.

On May 8, 2018, the Company extended and amended the subordinate secured convertible promissory note dated May 8, 2017, in the principal sum of $50,000. The amended note was issued for the principal sum of $56,250 to include accrued interest to date (the “Amended Note”). The Amended Note bears interest at rate of 12% per annum, matures November 8, 2018, or earlier, contingent upon certain financing conditions, and contains a repayment provision to convert the note into restricted shares of the Company’s common stock at a price of $0.10 per share.  The Amended Note is secured by all of the Company’s personal property, and includes warrant coverage for a period of three (3) years to purchase shares of the Company’s common stock at a purchase price of $0.20 per share, with a provision for the price to be reduced to $0.10 per share if certain conditions are not met by the Company.

As of September 30, 2018, and December 31, 2017, respectively, related parties are due a total of $1,409,299 and $1,796,821, consisting of $607,802 and $501,269 in accrued compensation owed to officers; $172,647 and $128,298 in cash advances from officers and beneficial owners to the Company for operating expenses; and $628,850 and $1,167,254 in convertible promissory notes.

As of September 30, 2018, and December 31, 2017, respectively, convertible promissory notes in the aggregate sum of $628,850 and $1,167,254 are owed by the Company.  During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, interest in the amount of $44,814 and $86,712 was expensed, of which $798 and $16,833 was paid to the note holders in cash, and $37,750 and $0 was converted to principal.  As of September 30, 2018, and December 31, 2017, respectively, a total of $86,123 and $170,600 in interest has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets.

On January 1, 2018, the Company entered into an Executive Agreement with its Chief Financial Officer.  The agreement replaces any other written agreement with the Company, is for a term of one (1) year, with the option to extend, and includes annual compensation of $216,000 in year 1, as well as a bonus plan and customary executive benefits.  In addition, the agreement provides for a non-refundable, fully-vested signing bonus of $100,000, as well as a grant of stock options to purchase 1,000,000 shares of the Company's common stock at an exercise price of $0.25 per share. The options are for a period of five (5) years, and vest quarterly over a one (1) year period.

On January 1, 2018, the Company entered into a Consulting Agreement with Huntington Chase Financial Group, LLC, whose principal is a related party. The agreement replaces any other written agreement with the Company, is for a term of three (3) years, and includes monthly compensation of $25,000 in year 1; $30,000 in year 2 and $35,000 in year 3, of which the year 2 and 3 increases are deferred until completion of certain development projects, as well as customary expense allowances.  In addition, the agreement provides for a grant of stock options to purchase 4,000,000 shares of the Company's common stock at an exercise price of $0.25 per share. The options are for a period of five (5) years, of which 25% vest immediately, and the remainder vest when certain market share prices of the Company’s common stock are met.

On September 30, 2018, in connection with the Series C Convertible Preferred Stock equity offering (Note 9), three officers of the Company were issued an aggregate of 90,000 Series C Shares at a price of $5.00 per share in exchange for accrued compensation in the aggregate of $450,000. In connection with the Series C Shares, the officers were issued an aggregate of 1,250,000 warrants, which are exercisable for a period of three (3) years at an exercise price of $0.25 per share.

During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, interest on related party notes payable in the amount of $44,814 and $86,712 was expensed. As of September 30, 2018, and December 31, 2017, respectively, a total of $86,123 and $170,600 in interest has been accrued and is included as part of accrued expenses on the accompanying consolidated balance sheets.

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2018

Notes

Commitments And Contingencies

NOTE 8. COMMITMENTS AND CONTINGENCIES

On August 13, 2015, the Company issued a secured promissory note in the amount of $20,500,000 (the “Promissory Note”) in connection with the acquisition of RoxSan Pharmacy, Inc. (“RoxSan”).  The Promissory Note bore interest at a rate of 6% per annum, and matured August 13, 2018 ("Maturity").  At the time of issuance, Management determined that the Promissory Note did not fairly represent the fair market value for the related acquisition.  As a result, a discount of $15,300,000, representing the difference between the face value and the estimated fair market value of the Promissory Note was recorded. During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, the Company expensed $3,145,000 and $5,100,000 in discount amortization.  As of September 30, 2018, and December 31, 2017, respectively, $0 and $3,145,000 in unamortized discount remained.  During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, interest in the amount of $692,967 and $876,214 was expensed. As of September 30, 2018 and December 31, 2017, respectively, a total of $2,278,281 and $1,585,314 in interest was accrued.

As part of the deconsolidation of RoxSan resulting from its Chapter 7 petition filed on May 14, 2018 (Note 15), management reevaluated the characteristics of the Promissory Note.  Included in the evaluation were the following considerations: 1) the related asset is no longer a part of the parent financial statements due to a loss of financial control; 2) the Company is currently in litigation as a result of material breaches by the note holder;  3) the Company has claims against the note holder for losses and damages directly related to the Promissory Note and its underlying assets; 4) there is a high likelihood that no obligation exists. After careful consideration, management has determined that  the current characteristics of the liability are contingent in nature, and the debt of $20,500,000 and related $2,278,281 in accrued interest has been extinguished as of September 30, 2018, resulting in a gain of $22,778,281.

On April 26, 2017, pursuant to a resolution of the Board of Directors, the Company, through its wholly-owned subsidiary, Parallax Behavioral Health, Inc., completed the asset acquisition of 100% of certain intellectual property (“Intellectual Property”) from ProEventa Inc., a Virginia Corporation (“ProEventa”), in accordance with the Intellectual Property Purchase Agreement between the Company, PBH and ProEventa (the “ProEventa Agreement”). ProEventa has an expertise in the development of behavioral health technologies, and is the wholly-owned subsidiary of Grafton Integrated Health Network, Inc., a non-profit Virginia corporation (“Grafton”). Pursuant to the ProEventa Agreement, the initial consideration for the Intellectual Property was paid to ProEventa in the form of a stock purchase agreement to purchase 2,500,000 shares of the Company’s common stock for $2,500, resulting in a net cost for the Intellectual Property of $622,500.  In addition, the Agreement included the following conditional contingent liabilities (the “Revenue Share and Royalties”):

         a revenue sharing agreement, providing for a cash earn-out to be paid to the ProEventa shareholders of up to $3,000,000, to be derived from certain net revenue generated by the Company, as defined in the agreement; and

         a royalty agreement, providing for a royalty of 3% of the revenues generated from the intellectual property, ending at such time as Parallax has paid ProEventa $25,000,000; and

         a limited license to ProEventa for the use of certain of the Intellectual Property's technology at Grafton Schools.

During the nine months and the year ended September 30, 2018, and December 31, 2017, no Revenue Share and Royalties were recognized. As of September 30, 2018, and December 31, 2017, no Revenue Share and Royalties are payable.

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Convertible Preferred Stock

9 Months Ended

Sep. 30, 2018

Notes

Convertible Preferred Stock

NOTE 9. CONVERTIBLE PREFERRED STOCK

The total number of authorized shares of preferred stock that may be issued by the Company is 10,000,000 with a par value of $0.001 per share.

On or about August 1, 2018, the Company established a private placement equity offering for the purchase of Series C convertible preferred stock (the “Series C Shares”).  The offering provides for, among other thing, the purchase of Series C Shares at a price of $5.00 per share, with a minimum unit of 20,000 shares, or $100,000.  All Series C Shares are convertible into common stock under the following terms: if converted in the first year, the Series C Shares are convertible into common stock at a conversion rate of $0.12 per share, or a ratio of 41.67 shares of common stock for each Series C Share held (41.67:1) (“Conversion Ratio”).  The shares also include warrants to purchase common stock for a period of 3 years at an exercise price of $0.25 per share, the number of warrants of which is determined at 50% of the prevailing Conversion Ratio. The holders of Series C Shares will be entitled, but not obligated, to convert any or all of their Series C Shares including accrued dividends into the following at the lower of either $0.12 per share or a 33% discount; (a) the company’s next primary offering or (b) any new equity linked financing within the next 24 months of the closing date of the offering.

On August 10, 2018, in connection with the Series C Shares equity offering, an accredited investor was issued 20,000 Series C Shares at a price of $5.00 per share, for cash in the amount of $100,000.  As a result, $99,980 was recorded to preferred paid in capital.

On August 11, 2018, in connection with the Series C Shares equity offering, an accredited investor was issued 40,000 Series C Shares at a price of $5.00 per share, for cash in the amount of $200,000.  As a result, $199,960 was recorded to preferred paid in capital. 

On September 30, 2018, in connection with the Series C Shares equity offering, three officers of the Company were issued an aggregate of 90,000 Series C Shares at a price of $5.00 per share, in exchange for debt in the principal sum of $450,000.  As a result, $449,910 was recorded to preferred paid in capital. 

As of September 30, 2018, and December 31, 2017, respectively, the Company had 1,013,691 and 863,691 shares of preferred stock issued and outstanding.

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Common Stock

9 Months Ended

Sep. 30, 2018

Notes

Common Stock

NOTE 10. COMMON STOCK

The total number of authorized shares of common stock that may be issued by the Company is 250,000,000 with a par value of $0.001 per share. 

On January 11, 2018, pursuant to a resolution of the Board of Directors, the Company issued 6,000,000 shares of its restricted common stock to certain officers and directors.  The shares were purchased at par, or $0.001 per share, for  $6,000, of which $1,000 was cash and $5,000 was stock compensation.

On January 19, 2018, in connection with an equity offering, the Company issued 1,000,000 shares of its restricted common stock at a price of $0.04 per share, for cash in the amount of $40,000.  As a result, $39,000 was recorded to paid in capital.

On January 29, 2018, in connection with a certain consulting agreement, the Company issued 250,000 shares of its restricted common stock to the consultant for services to be provided over a twelve (12) month period.  The shares were valued at $67,500, of which 25% vest immediately, and the remainder vest periodically over the term of the agreement.  As a result, $16,875 was expensed, $50,625 was deferred, to be amortized over the next twelve (12) months, and $67,250 was recorded to paid in capital. 

In February 2018, in connection with certain senior secured promissory notes, the Company issued 440,000 shares of its restricted common stock to the note holders as a form of interest.  The shares were valued at $44,000, of which $22,211 was expensed, $21,789 was deferred, to be amortized over the term of the notes, and $43,560 was recorded to paid in capital.

On April 5, 2018, in connection with a stock purchase agreement, the Company granted a key employee the right to purchase 1,000,000 shares of its restricted common stock at a price of $0.001 per share.  The shares, valued at $200,000, were issued for cash in the amount of $1,000.  As a result, $199,000 was recorded to paid in capital.

On April 8, 2018, in connection with certain convertible debt in the amount of $45,000 and accrued interest of $3,114, the Company issued 481,130 shares of its restricted common stock at a conversion rate of $0.10 per share.  As a result, $47,633 was recorded to paid in capital.

In May 2018, in connection with certain senior secured promissory notes, the Company issued 890,000 shares of its restricted common stock to the note holders as a form of interest.  The shares were valued at $89,000, of which $62,583 was expensed, $11,417 was deferred, to be amortized over the term of the notes, and $88,110 was recorded to paid in capital.

On June 30, 2018, in connection with the exercise of certain employee stock options, the Company issued 846,051 shares of its restricted common stock at a conversion rate of $0.05 per share.  The shares were issued on a cashless basis, resulting in a net value of $269,325.  As a result, $268,479 was recorded to paid in capital.

On July 28 2018, in connection with certain senior secured promissory notes, the Company issued 150,000 shares of its restricted common stock to the note holders as a form of interest.  The shares were valued at $15,000. As a result, $14,850 was recorded to paid in capital.

In August 2018, in connection with certain senior secured promissory notes, the Company issued 440,000 shares of its restricted common stock to the note holders as a form of interest.  The shares were valued at $44,000, of which $33,011 was expensed, $10,989 was deferred, to be amortized over the term of the notes, and $43,560 was recorded to paid in capital.

On August 12, 2018, in connection with certain convertible debt in the amount of $10,000 and accrued interest of $1,000, the Company issued 110,000 shares of its restricted common stock at a conversion rate of $0.10 per share.  As a result, $10,890 was recorded to paid in capital.

On August 13, 2018, in connection with the exercise of certain employee stock options, the Company issued 1,071,430 shares of its restricted common stock at a conversion rate of $0.05 per share.  The shares were issued on a cashless basis, resulting in a net value of $187,500.  As a result, $186,429 was recorded to paid in capital.

On August 20, 2018, in connection with certain convertible debt in the amount of $150,000 and accrued interest of $15,000, the Company issued 1,650,000 shares of its restricted common stock at a conversion rate of $0.10 per share.  As a result, $164,835 was recorded to paid in capital.

On August 28, 2018, in connection with certain convertible debt in the amount of $20,000 and accrued interest of $2,000, the Company issued 220,000 shares of its restricted common stock at a conversion rate of $0.10 per share.  As a result, $21,780 was recorded to paid in capital.

On September 28, 2018, in connection with certain senior secured promissory notes, the Company issued 150,000 shares of its restricted common stock to the note holders as a form of interest.  The shares were valued at $15,000. As a result, $14,850 was recorded to paid in capital.

On September 30, 2018, in connection with certain convertible debt in the amount of $50,000, the Company issued 625,000 shares of its restricted common stock at a conversion rate of $0.08 per share.  As a result, $49,375 was recorded to paid in capital.

During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, a total of $274,500 and $2,838,500 in deferred stock compensation was recorded, and $973,925 and $1,028,498 was expensed. As of September 30, 2018, and December 31, 2017, respectively, there remains $1,110,577 and $1,810,002 in deferred stock compensation to be expensed over the next 24 months.

As of September 30, 2018, and December 31, 2017, respectively, the Company had 152,078,141 and 136,734,530 common shares issued and outstanding.

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Warrants And Options

9 Months Ended

Sep. 30, 2018

Notes

Warrants And Options

NOTE 11. WARRANTS AND OPTIONS

As of September 30, 2018, and December 31, 2017, respectively, the Company had 18,217,500 and 7,205,000 warrants, and 18,060,000 and 20,675,000 options, issued and outstanding.

On January 25, 2018, in connection with a certain convertible promissory note, 25,000 warrants were issued.  The warrants vest periodically over the term of the agreement, and are exercisable for a period of three (3) years at an exercise price of $0.25 per share.

On January 29, 2018, in connection with a certain consulting agreement, 250,000 warrants were issued.  The warrants vest periodically over the term of the agreement, and are exercisable for a period of three (3) years at an exercise price of $0.25 per share.

On February 13, 2018, in connection with a certain consulting agreement, 200,000 warrants were issued.  The warrants vest periodically over the term of the agreement, and are exercisable for a period of three (3) years at an exercise price of $0.25 per share.

Between April 24, 2018 and June 14, 2018, in connection with certain convertible promissory notes, 7,687,500 warrants were issued.  The warrants and are exercisable for a period of three (3) years at an exercise price of $0.20 per share, with a provision for the exercise price to be reduced to $0.10 per share if certain conditions are not met by the Company.

On June 28, 2018, in connection with a certain advisory agreement, 300,000 warrants were issued.  The warrants are exercisable for a period of five (5) years, at an exercise price of $0.001 per share.

On August 10, 2018, in connection with the Series C Shares equity offering, 416,667 warrants were issued.  The warrants and are exercisable for a period of three (3) years at an exercise price of $0.25 per share.

On August 11, 2018, in connection with the Series C Shares equity offering, 833,333 warrants were issued.  The warrants and are exercisable for a period of three (3) years at an exercise price of $0.25 per share.

On September 30, 2018, in connection with the Series C Shares equity offering, 1,250,000 warrants were issued to three officers of the Company.  The warrants and are exercisable for a period of three (3) years at an exercise price of $0.25 per share.

Warrants Outstanding
	Number of	Remaining	Exercise Price		Weighted
	Common	Contractual Life	Times Number		Average
Exercise Price	Shares	(in years)	Of Shares		Exercise Price
$0.001	300,000	4.75	$	300	$0.22
$0.10	62,500	4.50		6,250	$0.27
$0.10	250,000	2.00		25,000	$0.29
$0.15	1,000,000	2.25		150,000	$0.26
$0.17	62,500	4.50		10,625	$0.27
$0.18	62,500	4.50		11,250	$0.27
$0.20	3,000,000	2.75		600,000	$0.23
$0.20	4,687,500	2.50		937,500	$0.24
$0.21	62,500	4.50		13,125	$0.27
$0.21	100,000	2.00		21,000	$0.31
$0.25	2,500,000	3.00		625,000	$0.23
$0.25	475,000	2.25		118,750	$0.25
$0.25	3,255,000	2.00		813,750	$0.29
$0.25	1,500,000	1.75		375,000	$0.34
$0.35	250,000	2.00		87,500	$0.29
$0.60	250,000	2.00		150,000	$0.31
$0.75	300,000	0.50		225,000	$0.29
$0.75	100,000	0.25		75,000	$0.28
	18,217,500		$	4,245,050	$0.23

Warrant Activity			Weighted
	Number of		Average
	Shares		Exercise Price
Outstanding at December 31, 2017		7,205,000	$0.26
Issued		11,012,500	$0.24
Exercised		––	––
Expired / Forfeited		––	––
Outstanding at September 30, 2018		18,217,500	$0.23

On January 1, 2018, in connection with an executive agreement, the Company granted the executive 1,000,000 options to purchase common shares at $0.25 for a period of five (5) years.  The options vest annually over a one (1) year period, and were valued at $134,500 using the Black-Scholes method.  The assumptions used in valuing the options were: expected term 3.75 years, expected volatility 1.78, risk free interest rate 2.25%, and dividend yield 0%.

On January 1, 2018, in connection with a consulting agreement, the Company granted the consultant 4,000,000 options to purchase common shares at $0.25 for a period of five (5) years.  The options vest annually over a three (3) year period, and were valued at $539,200 using the Black-Scholes method.  The assumptions used in valuing the options were: expected term 3.5 years, expected volatility 1.86, risk free interest rate 2.25%, and dividend yield 0%.

On August 1, 2018, in connection with an employment agreement, the Company granted the employee 1,000,000 options to purchase common shares at $0.25 for a period of five (5) years.  Of the options granted, 50% vest immediately, and the remaining vest annually over a two (2) year period.  The options were valued at $160,000 using the Black-Scholes method.  The assumptions used in valuing the options were: expected term 3 years, expected volatility 2.06, risk free interest rate 2.78%, and dividend yield 0%

Options Outstanding
	Number of	Remaining	Exercise Price		Weighted
	Common	Contractual Life	Times Number		Average
Exercise Price	Shares	(in years)	Of Shares		Exercise Price
$0.05	90,000	3.75	$	4,500	$0.14
$0.05	1,140,000	3.50		57,000	$0.09
$0.05	100,000	3.00		5,000	$0.08
$0.05	60,000	2.25		3,000	$0.06
$0.05	170,000	2.00		8,500	$0.12
$0.10	500,000	2.00		50,000	$0.14
$0.10	250,000	1.00		25,000	$0.06
$0.15	1,000,000	2.00		150,000	$0.14
$0.25	5,000,000	4.50		1,250,000	$0.19
$0.25	7,000,000	3.75		1,750,000	$0.16
$0.25	1,000,000	2.00		250,000	$0.15
$0.25	1,000,000	1.50		250,000	$0.10
$0.25	250,000	1.00		62,500	$0.06
$0.35	250,000	1.00		87,500	$0.07
$0.60	250,000	1.00		150,000	$0.08
	18,060,000		$	4,103,000	$0.23

Options Activity				Weighted
	Number of			Average
	Shares			Exercise Price
Outstanding at December 31, 2017		20,675,000		$0.14
Issued		6,000,000		$0.17
Exercised		(1,973,189	)	$0.16
Expired / Forfeited		(6,641,811	)	$0.16
Outstanding at September 30, 2018		18,060,000		$0.18

During the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, 6,000,000 and 11,570,000 options were issued, 1,973,189 and 300,000 options were exercised, 1,000,000 and 0 options expired, and 5,641,811 and 1,730,000 options were forfeited. A total of $649,327 and $1,679,765 in deferred stock option compensation was recorded, net of forfeitures, and $483,391 and $589,679 was expensed during the nine months and the year ended September 30, 2018, and December 31, 2017, respectively.  There remains $1,484,945 and $1,319,010 in deferred compensation as of September 30, 2018, and December 31, 2017, respectively, to be expensed over the next 27 months.

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Leases

9 Months Ended

Sep. 30, 2018

Notes

Leases

NOTE 12. LEASES

The Company sub-leases office space for its headquarters in Santa Monica, California, for $5,600 per month, on a month-to-month basis.

Rent expense for the nine months and the year ended September 30, 2018, and December 31, 2017, was $53,557 and $68,880, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2018

Notes

Income Taxes

NOTE 13. INCOME TAXES

A reconciliation of the expected statutory federal and state taxes and the total income tax expense (benefit) at September 30, 2018, and December 31, 2017, was as follows:

	September 30, 2018			December 31, 2017
Income (loss) before taxes	$	18,252,863		$	(10,511,392	) [1]
Statutory rate (Fed & State(s))		30%			30%
Computed expected tax payable (recovery)		5,301,700			(3,160,100	)
Effect of the U.S. tax law change		––			805,200
Effect of release of net operating loss carryforwards		3,297,400
Tax effect of non-taxable income and non-deductible expenses:
Gain on extinguishment of debt-principal		(6,145,800	)		––
Stock compensation/amortization of stock options		926,000			738,100
Discount amortization		828,000			1,626,300
Other		5,800			6,200
Total tax effect of non-taxable income and non-deductible expenses		(4,386,000	)		2,370,600
Change in valuation allowance		(2,091,800	)		(15,700	)
Income tax expense	$	––		$	––
Reported income taxes:
Federal	$	––		$	––
State		––			––
Total	$	––		$	––

The significant components of deferred income tax assets and liabilities at September 30, 2018, and December 31, 2017, are as follows:

	September 30, 2018			December 31, 2017
Net operating loss carried forward	$	––		$	2,262,600	[1]
Bad debt allowance		––			1,100
Officers’ accrued compensation		242,800			140,300
Accrued related party interest		24,100			47,700
Valuation allowance		(266,900	)		(2,451,700	)
Net deferred income tax asset	$	––		$	––

On September 30, 2018, the company realized extinguishment of debt principal in the amount of $20,595,975.  Per Internal Revenue Code (“IRC”) Section 108(a) (1) (A) the extinguishment of debt principal is excluded from taxable income for the company; however, any available tax attributes must be release up and to the amount of the extinguishment.  Therefore, net operating loss carryforwards were released with no remaining net operating losses available to use toward future taxable income as of September 30, 2018. 

The Company is open to examinations for the tax year 2011 through the current tax year.

[1] As adjusted, due to correction of error (Note 14).

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Change in Estimate and Correction of Error

9 Months Ended

Sep. 30, 2018

Notes

Change in Estimate and Correction of Error

NOTE 14. CHANGE IN ESTIMATE AND CORRECTION OF ERROR

Change in Estimate:

On July 18, 2018, an amendment (the “Amendment”) was made to the Agreement to Purchase and Sell One Hundred Percent (100%) of the Issued and Outstanding Shares of Qolpom, Inc. and its Assets, Intellectual Property and Inventory dated August 31, 2016 (the “Agreement”). The Amendment modifies the Agreement’s Earn-Out consideration by basing any monies due under the Earn Out solely upon revenues generated, with no guaranteed minimum payment owed, thereby eliminating the $2,000,000 guaranteed payment previously owed by the Company.  The Amendment resulted in a change in the value of certain assets acquired and liabilities assumed as follows:

	As Previously Reported						Revised Value
	December 31, 2017			Adjustments			July 18, 2018
Assets
Cash	$	5,000		$	––		$	5,000
Intellectual property		160,000			(10,000	)		150,000
Loans receivable		87,008			––			87,008
Total assets		252,008			(10,000	)		242,008
Liabilities
Accounts payable		7,068			––			7,068
License fees payable		2,000,000			(1,740,000	)		260,000
License fees payable, unamortized discount		(1,460,000	)		1,460,000			––
Royalties payable		200,000			––			200,000
Total liabilities		747,068			280,000			467,068
Goodwill		785,060			––			785,060
Fair market value of consideration	$	290,000			––			290,000
Net effect-current period adjustment				$	270,000		$	270,000

Correction of Error:

During 2018, the Company discovered that the April 26, 2017, asset acquisition of intellectual property from ProEventa, Inc. (Note 8) erroneously included certain conditional contingent consideration as a part of the purchase price.  As a result, certain liabilities contingent in nature were erroneously recorded.  The errors have been corrected by restating each of the affected financial statement line items for the year ended December 31, 2017. The following tables summarize the impacts on the Company’s consolidated financial statements prior to deconsolidation:

	As Previously Reported						Restated
	December 31, 2017			Adjustments			December 31, 2017
CONSOLIDATED BALANCE SHEETS
Assets
Current assets	$	55,419		$	––		$	55,419
Intangible assets, net		2,298,094			(1,588,439	)		709,655
Other non-current assets		986,962			––			986,962
Total assets		3,340,475			(1,588,439	)		1,752,036
Liabilities
Current liabilities		4,418,915			––			4,418,915
Long-term liabilities
License fees payable		1,890,000			(1,000,000	)		890,000
Royalties payable		1,000,000			(800,000	)		200,000
Other long-term liabilities		23,421,204			––			23,421,204
Total long-term liabilities		26,311,204			(1,800,000	)		24,511,204
Liabilities subject to compromise		4,620,735			––			4,620,735
Total liabilities		30,730,119			(1,800,000	)		28,930,119
Stockholders' deficit
Accumulated deficit		(33,773,141	)		211,561			(33,561,580	)
Other equity		6,383,497			––			6,383,497
Total stockholders' deficit		(27,389,644	)		211,561			(27,178,083	)
Total liabilities and stockholders' deficit	$	3,340,475		$	(1,588,439	)	$	1,752,036
CONSOLIDATED STATEMENTS OF OPERATIONS
Gross profit (loss)	$	(47,107	)	$	––		$	(47,107	)
General and administrative expenses		4,209,073			(211,561	)		3,997,512
Operating loss		(4,256,180	)		211,561			(4,044,619	)
Other income and expenses		(6,466,773	)		––			(6,466,773	)
Net loss – continuing operatios		(10,722,953	)		211,561			(10,511,392	)
Net loss – discontinued operations		(3,153,553	)		––			(3,153,553	)
Net loss	$	(13,876,506	)	$	211,561		$	(13,664,995	)
Net loss per common share – basic – continuing operations	$	(0.089	)	$	0.002		$	(0.087	)
Net loss per common share – diluted – continuing operation	$	(0.062	)	$	0.001		$	(0.061	)

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Discontinued Operations

9 Months Ended

Sep. 30, 2018

Notes

Discontinued Operations

NOTE 15. DISCONTINUED OPERATIONS

In December 2017, the Company discontinued all operations related to the Retail Pharmacy Segment (RPS) involving the Company’s wholly-owned subsidiary, RoxSan Pharmacy, Inc.  On May 14, 2018, pursuant to a unanimous resolution of the Boards of Directors of RoxSan Pharmacy, Inc. (“RoxSan”) and Parallax Health Sciences, Inc., RoxSan filed a Chapter 7 petition in the United States Bankruptcy Court for the Central District of California.  Mr. Timothy Yoo was appointed trustee on May 15, 2018.

The pharmacy operations resulted in an accumulated deficit of $11,582,906 and $10,758,507 as of May 14, 2018 and December 31, 2017, respectively. In addition, certain advances were made to RoxSan Pharmacy, Inc. for the purpose of overhead expenses for which a secured promissory note was issued to the Company. As of May 14, 2018, and December 31, 2017, respectively, principal in the amount of $1,280,692 and $1,153,395 has been disbursed, and interest in the amount of $22,797 and $10,395 has been accrued in connection with the note.

As of May 14, 2018 and December 31, 2017, respectively, the assets and liabilities relating to the discontinued operations of RoxSan Pharmacy, Inc. are as follows:

	May 14, 2018			December 31, 2017
Current assets held for sale
Cash and cash equivalents	$	––		$	2,421
Accounts receivable, net		––			40,856
Employee advances		––			1,800
Prepaid expenses		––			6,884
Total current assets held for sale		––			51,961
Noncurrent assets held for sale:
Loans receivable - long term		––			169,902
Property and equipment, net		––			10,000
Deposits		––			22,000
Total noncurrent assets held for sale	$	––			201,902
Total asset held for sale		––			253,863
Liabilities subject to compromise
Accounts payable and accrued expenses		3,543,160	[2]		2,979,132	[1]
Pension plan contribution payable		––			12,570
Note payable, related party		––			185,000
Related party payables		376,430	[2]		469,207
Note payable		185,000	[2]		––
Note payable-merchant		974,826			974,826
Total liabilities subject to compromise		5,079,416			4,620,735
Net liabilities of discontinued operations	$	5,079,416		$	4,366,872

[1]   As of January 1, 2017, Mr. Dave Engert, former Executive Chairman of the board of directors, is no longer a related party.  As a result, related party payables was reduced by $105,746, representing $105,000 in accrued compensation and $746 in cash advances. As of December 31, 2017, $105,746 is included in accounts payable and accrued expenses as part of liabilities subject to compromise. See Note 17 for additional information and legal proceedings related to Mr. Engert.

[2]   As of January 1, 2018, Mr. Joseph M. Redmond, former President and member of the board of directors, is no longer a related party.  As a result, related party payables was reduced by $307,997, representing $185,000 in promissory notes, $119,270 in accrued compensation, and $3,727 in expense advances. As of May 14, 2018, $185,000 is reflected as a note payable, and $122,997 is included in accounts payable and accrued expenses as part of liabilities subject to compromise. In addition, accrued interest of $11,823 related to the promissory note was reclassified from related party to non-related party accrued interest, and is included in accounts payable and accrued expenses as part of liabilities subject to compromise. See Note 17 for additional information and legal proceedings related to Mr. Redmond.

Payroll taxes payable includes $296,959 and $283,058 in penalties, and $67,532 and $33,860 in interest, related to unpaid payroll taxes as of May 14, 2018, and December 31, 2017, respectively.

The results of the discontinued operations of RoxSan Pharmacy, Inc. are summarized as follows:

	May 14, 2018
Revenue	$	––
Cost of sales		––
Gross profit		––
Sales, marketing and pharmacy expenses		170,630
General and administrative expenses		586,993
Operating loss		(757,623	)
Interest expense		(56,775	)
Loss on disposal of equipment		(10,000	)
Net loss from discontinued operations	$	(824,398	)

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Segment Reporting

9 Months Ended

Sep. 30, 2018

Notes

Segment Reporting

NOTE 16. SEGMENT REPORTING

The Company has the following business segments: Remote Care Services (RCS), Behavioral Health Services (BHS), and Diagnostics/Corporate (DCS).  See Note 1 and 2 for a description of each segment and related significant accounting policies.

The following table is a reconciliation of the Company’s business segments to the consolidated financial statements:

.

	Remote Care Segment			Behavioral [1] Health Segment			Diagnostics/Corporate Segment			Consolidated Totals
September 30, 2018
Revenue	$	9,399		$	1,350		$	––		$	10,749
Gross profit (loss)		(6,108	)		1,350			––			(4,758	)
Operating loss		(277,261	)		(144,218	)		(4,786,223	)		(5,207,702	)
Depreciation and amortization		6,897			82,320			1,248			90,465
Interest expense		2,206			––			948,395			950,601
Gain on disposal of subsidiary		––			––			5,079,416			5,079,416
Gain on extinguishment of debt		––			––			22,931,148			22,931,148
Discount amortization		(370,000	)		––			3,145,000			2,775,000
Total assets		915,652			467,007			11,906			1,394,565
Goodwill		785,060			––			––			785,060
Additions to property and equipment		––			––			––			––

September 30, 2017
Revenue	$	70,641		$	––		$	––		$	70,641
Gross profit (loss)		(39,486	)		––			––			(39,486	)
Operating loss		(489,744	)		(69,023	)		(2,642,459	)		(3,201,226	)
Depreciation and amortization		5,752			45,733			1,248			52,733
Interest expense		597			––			712,913			713,510
Discount amortization		110,000			––			3,825,000			3,935,000
Total assets		941,523			576,767			23,308			1,541,598
Goodwill		785,060			––			––			785,060
Additions to property and equipment		––			––			––			––

[1]       Behavioral Health Segment commenced March 22, 2017.

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Legal Matters

9 Months Ended

Sep. 30, 2018

Notes

Legal Matters

NOTE 17. LEGAL MATTERS

Dispute with Former Owner of RoxSan

In October 2015, shortly following the Company's acquisition of RoxSan, Shahla Melamed (“Melamed”), initiated two (2) legal actions against the Company in the Superior Court of the State of California, County of Los Angeles, West District, Shahla Melamed v. Parallax Health Sciences, Inc., action numbers SC 124873 and SC 125702. 

In the matter, action No. SC 124873, Melamed sought rescission of the August 13, 2015, Purchase Agreement. During the proceedings, Melamed also contended that the Company owed Melamed monies for, among other things, expenses paid by Melamed on behalf of the Company.  As a result, the Court split the action into two separate rulings: (1) Rescission Phase and (2) Accounting Phase.

Action No. SC 124873-Rescission Phase:

In the Matter, action no. SC 124873, rescission was sought by Melamed on the basis that, allegedly, in order to acquire the Pharmacy, the Company and its principals had allegedly defrauded Melamed, there had allegedly been a complete failure of consideration, and a unilateral mistake was allegedly made on the part of Melamed.Subsequently filed pleadings by the Company and RoxSan in action no. SC 124873 allege, among other things, that Melamed misrepresented the true earnings and source of income for the pharmacy business and had engaged in a fraudulent and illegal scheme to ship medications to states where her pharmacy was not licensed prior to the sale of the Pharmacy.

Final Ruling:  On March 17, 2017, the Court ruled in favor of the Company, and issued that Melamed is not entitled to rescission of the Purchase Agreement.  The ruling of the Court stated that no fraud on the part of the Company or its principals had been demonstrated.  The Court further ruled that there had been no failure of consideration, and that Melamed’s entry into the Agreement was not a result of a unilateral mistake on the part of Melamed.  The Minutes of the Ruling were entered by the County Clerk on March 17, 2017.

Action No. SC 124873-Accounting Phase:

In the Matter, action No. SC 124873, Melamed contended that the Company owed Melamed monies for, among other things, expenses paid by Melamed post-Closing.  An accounting was presented by Melamed’s expert, BDO Seidman (“BDO”), alleging that the Company owed Melamed in excess of $500,000.  The Company disputed this vigorously and prepared a 400+ page analysis (the “Analysis Report”) of the BDO reconciliation report.  The Analysis Report identified errors in the BDO report in excess of $900,000 and found that Melamed owed the Company over $400,000.  Melamed argued the findings in the Analysis Report. Consequently, due to the complexities of the accountings, the Court ordered a third-party adjudicator with an accounting background to review both the BDO report and the Company’s Analysis Report.

Draft Ruling: On July 24, 2017, in the Matter, action No. SC124873, the Company was notified that the results of the reconciliation review performed by third-party adjudicator were in favor of the Company in the amount of $412,948.  Melamed objected to the adjudicator’s findings, and a final hearing was held in January 2018.  A final judgment is pending for the Court’s decision on the exact monies owed by Melamed to the Company.

Action No. SC125702:

In the Matter, action No. SC125702, Melamed alleges that the Company is in default under the terms of the Purchase Agreement and Secured Note, and the Company’s termination of Melamed’s employment agreement.  The Company firmly believes that it had adequate grounds to justify the termination of the employment, that it acted within its rights, and shall prevail in these proceedings.  A trial date is currently set for December 2018.

Action No. SC 124898:

The Company has initiated legal action against Melamed and filed a complaint, action number SC 124898, in the Superior Court of the State of California, County of Los Angeles, West District, Parallax Health Sciences, et al. v. Shahla Melamed, et al.  The Complaint in that action alleges that Melamed has breached several obligations under the Purchase Agreement, and the Company is seeking to reduce the Secured Note due to undisclosed material changes in the business. A trial date is currently set for December 2018.

As part of the Company’s pleadings to the courts, the Company has presented the following matters:

Purchase Price Dispute

Included in the Acquisition Agreement for RoxSan Pharmacy, Inc., and as part of the negotiated purchase price, were representations and warranties made by the former owner involving certain primary revenue streams and related contracts.  Shortly after the closing, however, management discovered that these representations were substantially inaccurate and/or completely false.  These inaccuracies, and the improper disclosures and/or omissions made by the former owner during negotiations, would have significantly affected the purchase price and related note payable.  As a result, among other things, management has initiated legal action against the former owner to seek a reduction in the purchase price.  

Included in the false representations made by the former owner were prescription revenues in excess of $8 million (and approximately $16 million prior to the change in ownership) related to workers compensation claims that the former owner warranted as collectible.  The insurance claims related to these prescriptions, which originated from and were provided to the pharmacy by the former owner's direct family members, were investigated by a third-party expert retained by the Company, and the claims were substantially identified as fraudulent.  The former owner's family member has been indicted by the Department of Justice for among other things, insurance fraud.

In addition, management engaged a third-party to perform a valuation of the Pharmacy, utilizing revised inputs that more accurately reflected the Pharmacy's revenue streams as of the date of Acquisition.  The valuation performed resulted in a fair market value of $4.7 to $5.2 million. After careful consideration, and based upon these significant differences, management has determined that the purchase price and related promissory note of $20.5 million does not fairly represent the fair market value at the date of purchase.  The Company, therefore, applied a discount to the note of $15.3 million, to reduce the purchase price and related note to its estimated fair market value of $5.2 million, utilizing the higher value on the range as a conservative measure.  The discount was amortized over the term of the promissory note.

The valuation performed does not include the effects of any liabilities the former owner omitted or damages caused to the Company as a result of the former owner and her immediate family members connected to the Pharmacy.

         Control of Funds Dispute / US Postal Interference

For a period of time immediately after the closing of the Acquisition, the Melamed would not relinquish control of the Pharmacy's bank accounts, and collected the Pharmacy's incoming cash revenues, refusing to transfer the funds to the new ownership. Furthermore, when the Company attempted to change the corporate records and signatories on the existing bank accounts, the former owner disputed the changes, resulting in approximately $180,000 in corporate funds being frozen and held for adjudication. During this period, the Company was forced to request that the former owner pay the Pharmacy's operating expenses.  At no time after the Company opened new accounts did the former owner cooperate with the transference or willingly relinquish control of the Pharmacy's operating cash flow or incoming cash revenues.

The former owner continued to interfere in the transference of control of the Pharmacy by submitting change of address forms to the US Postal Service, wherein the former owner diverted the Pharmacy mail to her home address.  Once this was discovered and rectified with the post office, the former owner filed another change of address to divert mail to a post office box.  During these periods of time, the former owner received check payments and negotiated the checks by opening up a bank account utilizing a DBA, "Roxsan Pharmacy."  The Company was able to identify some of the checks the former owner negotiated by directly contacting the payer and receiving copies of the cancelled checks, with the former owner's signature endorsement and account number on the check.

Disputes with Former Executives

Action No. CV2017-052804

On March 9, 2017, Dave Engertformer Executive Chairman and director of the Company filed a lawsuit in Arizona and then on or about May 5, 2017, Mr. Engert, changed the venue and filed suit against the Company and RoxSan Pharmacy, Inc. in the United States District Court, Central District of California for an amount exceeding $75,000.  The Company intends to vigorously defend against this action, and on October 23, 2017, filed an answer and counterclaims against Mr. Engert for an amount exceeding $100,000.  The counterclaims include possible fraud and negligence committed by Mr. Engert and Mr. J. Michael Redmond, former successor Chairman of Mr. Engert, director, President and Chief Executive Officer of the Company and former President, Chief Executive Officer, Chairman and director of RoxSan Pharmacy, Inc.

         Action No. BC700070

On March 28, 2018, Mr. J. Michael Redmond filed a lawsuit against the Company and RoxSan Pharmacy, Inc. in the United States District Court, Central District of California for an amount exceeding $75,000. The Company intends to vigorously defend against this action. There are counterclaims that include possible fraud and negligence committed by Mr. Redmond, former successor Chairman of Mr. Engert, director, President and Chief Executive Officer of the Company and former President, Chief Executive Officer, Chairman and director of RoxSan Pharmacy, Inc.

Disputes with Creditors/Vendors

         Action No. SC127712

On or about June 20, 2017, American Express Bank, FSB filed suit against RoxSan Pharmacy, Inc. in the Superior Court of California, County of Los Angeles for an amount of $996,622 in connection with RoxSan’s merchant financing loan.  On or about June 27, 2017, American Express Travel Related Services Company, Inc. filed suit against RoxSan Pharmacy, Inc. in the Supreme Court of New York, County of New York in the amounts of $153,500 and $273,500 in connection with RoxSan’s credit card obligations.  On July 31, 2017, and August 16, 2017, the Company entered into stipulation and settlement agreements for these matters to make payments in lieu of further litigation.  On May 10, 2018, American Express received a final judgement for the credit card obligations from the Supreme Court of New York in the amount of $387,245 representing the $427,000 balance plus court costs of $245, less $40,000 in payments made by the Company under the 2017 stipulation and settlement agreements.

There are five (5) legal matters currently pending at this time.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Notes

Subsequent Events

NOTE 18. SUBSEQUENT EVENTS

The Company has evaluated the events and transactions for recognition or disclosure subsequent to September 30, 2018, through the date of the issuance of the financial statements, and has determined that there have been no events that would require disclosure.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Basis of Presentation

Basis of Presentation

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements.  These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

The Company’s fiscal year-end is December 31.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. When the Company loses control of a subsidiary, a gain or loss is recognized and is calculated as the difference between:

         the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost;

and

         the carrying amount of the net assets (liabilities) of the subsidiary and any noncontrolling interest.

Upon deconsolidation of a subsidiary, any loans to the former subsidiary made by the Company are measured at fair value at the deconsolidation date.  Any difference between the carrying amount of the loan to the subsidiary and its fair value is included as part of the gain or loss calculation upon deconsolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Fair Value Hierarchy

Fair Value Hierarchy

The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following:

Level 1:  Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2:  Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3:  Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of nine months or less at the time of issuance to be cash equivalents. As of September 30, 2018, and December 31, 2017, the Company had no cash equivalents.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

As of September 30, 2018, and December 31, 2017, respectively, the carrying values of Company’s Level 1 financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximate fair value. The fair value of Level 3 instruments is calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 instruments may also be based on sales prices of similar assets. The Company’s fair value calculations take into consideration the credit risk of both the Company and its counterparties as of the date of valuation. See Note 6 for additional information about long-term debt.

There were no outstanding derivative financial instruments held by the Company as of September 30, 2018, and December 31, 2017.

Accounts Receivable

Accounts Receivable

Accounts receivable are stated net of an allowance for doubtful accounts. The accounts receivable balance primarily includes amounts due from customers.  Charges to bad debt are based on both historical write-offs and specifically identified receivables.

The activity in the allowance for doubtful accounts receivable for the nine months and the year ended September 30, 2018, and December 31, 2017, respectively, is as follows:

	September 30, 2018			December 31, 2017
Beginning balance	$	4,000		$	––
Additions charged to bad debt expense		236			4,000
Write off of allowance for doubtful collections		(4,236	)		––
Ending balance	$	––		$	4,000

During the nine months and the year ended September 30, 2018, and December 31, 2017, the allowance for doubtful collections increased by $236 and $4,000, respectively. 

As of September 30, 2018, and December 31, 2017, the allowance for doubtful collections was $0 and $4,000, respectively.

Property and Equipment

Property and Equipment

Property and equipment is comprised of office and computer equipment and software, furniture and fixtures, leasehold improvements, and vehicles, recorded at cost and depreciated using the double declining balance method over the estimated useful lives of 5 to 7 years. Repairs and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. Application development stage costs for significant internally developed software projects are capitalized and depreciated.

Intangible Assets

Intangible Assets

Product processes, patents and customer lists are amortized on a straight-line basis over their estimated useful lives between 4 and 20 years. Costs to extend and maintain patents and trademarks are charged directly to expense as incurred. See Note 4 for additional information about intangible assets.

Goodwill and Other Indefinitely-lived Assets

Goodwill and Other Indefinitely-Lived Assets

Goodwill and other indefinitely-lived assets are not amortized, but are subject to impairment reviews annually, or more frequently if necessary.

Impairment of Long-lived Assets

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.  When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount.  Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

The Company believes that future projected cash flows are sufficient for the recoverability of its long-lived assets, and no impairment exists.  There can be no assurance, however, that market conditions will not change or demand for the Company’s products and products under development will continue.  Either of these could result in future impairment losses.

Convertible Debt

Convertible Debt

The Company recognizes the advantageous value of conversion rights attached to convertible debt. Such rights give the debt holder the ability to convert debt into common stock at a price per share that is less than the trading price to the public on the date of the debt. The beneficial value is calculated as the intrinsic value (the market price of the stock at the commitment date in excess of the conversion rate) of the beneficial conversion feature of the debt, and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized over the remaining outstanding period of related debt using the interest method.

Net Income (loss) Per Common Share

Net Loss Per Common Share

Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible debt, convertible preferred shares and the exercise of the Company’s stock options and warrants.

Comprehensive Loss

Comprehensive Loss

As of September 30, 2018, and December 31, 2017, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

Revenue Recognition

Revenue Recognition

Revenue is recognized when: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller’s price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

The Company may have net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that the Company will not realize a future tax benefit, a valuation allowance is established.

As of September 30, 2018, the Company has not yet filed its 2012 through 2017 annual corporate income tax returns.  Due to the Company’s recurring losses,it is anticipated that no corporate income taxes are due for these periods.

Stock-based Compensation

Stock-Based Compensation

The Company records stock-based compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards 

The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company. The Company has recently adopted the following new accounting standards:

Adopted:

In January 2017, the FASB issued ASU No. 2017-01 (“ASU 2017-01”), Business Combinations (Topic 805), Clarifying the Definition of a Business.  ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation.  ASU 2017-01 will be effective for the Company for annual periods beginning after December 15, 2017, and interim periods.  Early adoption is permitted under certain conditions.

In January 2017, the FASB issued ASU No. 2017-04 (“ASU 2017-04”), Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment.  ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test, which should reduce the cost and complexity of evaluating goodwill for impairment. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.  ASU 2017-04 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods.  Early adoption is permitted for testing performed after January 1, 2017.

In May 2017, the FASB issued ASU No. 2017-09 (“ASU 2017-09”), Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting.  ASU 2017-09 clarifies and reduces both the (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. ASU 2017-09 will be effective for the Company for annual periods beginning after December 15, 2017, and interim periods.  Early adoption is permitted.

Not yet adopted:

In June 2018, the FASB issued ASU No 2018-07 (“ASU 2018-07”), Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting.  ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 will be effective for the Company for annual periods beginning after December 15, 2018, and interim periods.  Early adoption is permitted.  The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

In August 2018, the FASB issued ASJ No. 2018-15 (“ASU 2018-15”), Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40).  ASJ 2018-15 was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license.  ASU 2018-15 will be effective for the Company for annual periods beginning after December 15, 2019, and interim periods.  Early adoption is permitted.  The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures.

Recently Issued Accounting Standards Updates: 

There were other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

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Significant Accounting Policies: Accounts Receivable: Allowance for Doubtful Accounts (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Allowance for Doubtful Accounts

	September 30, 2018			December 31, 2017
Beginning balance	$	4,000		$	––
Additions charged to bad debt expense		236			4,000
Write off of allowance for doubtful collections		(4,236	)		––
Ending balance	$	––		$	4,000

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Accounts Receivable, Net: Schedule of Accounts Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Accounts Receivable, Net

	September 30, 2018		December 31, 2017
Customer receivables	$	––	$	7,275
Less: allowance for doubtful accounts		––		(4,000	)
Accounts receivable, net	$	––	$	3,275

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Intangible Assets: Schedule of Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Intangible Assets, Net

	September 30, 2018			December 31, 2017
Products and processes	$	12,500		$	12,500
Trademarks and patents / technology		150,700			150,700
Customer lists / relationships		30,000			30,000
Non-compete agreement		30,000			40,000
Marketing related		64,000			64,000
Software		510,300			510,300
Sub-total		797,500			807,500
Accumulated amortization		(188,310	)		(97,845	)
Intangible assets, net	$	609,190		$	709,655

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Accounts Payable and Accrued Expenses: Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Accounts Payable and Accrued Expenses

	September 30, 2018		December 31, 2017
Accounts payable-vendors	$	917,694	$	865,569
Credit cards payable		41,969		39,841
Payroll taxes payable		82,517		75,637
Accrued interest		469,624		1,894,694
Accrued payroll and payroll taxes		253,984		172,607
		1,765,789		3,048,348
Reserve-legal fees		250,000		–
Total accounts payable and accrued expenses	$	2,015,789	$	3,048,348

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Notes and Loans Payable: Schedule of Notes and Loans Payable (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Notes and Loans Payable

	September 30, 2018			December 31, 2017
Short-term:
Notes payable, convertible	$	1,241,000		$	741,000
Total short-term notes payable		1,241,000			741,000
Long-term:
Notes and loans payable, unsecured
Loans payable		––			11,900
Notes payable		––			84,075
Total notes and loans payable, unsecured		––			95,975
Note payable, convertible		720,154	[1]		144,000
Notes payable, secured, net of unamortized discount:
Note payable-bank		32,789			38,240
Note payable		––			20,500,000
Less: unamortized discount		––			(3,145,000	)
Note payable, net of unamortized discount		––			17,355,000
Total notes payable, secured, net of unamortized discount		––			17,393,240
Total long-term notes and loans payable		752,943			17,633,215
Total notes and loans payable	$	1,993,943		$	18,374,215

[1]   At September 30, 2018, $576,154 in convertible notes payable and related accrued interest of $90,742 was reclassified from related party to non-related party, resulting from a change in related parties (Note 7).

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Notes and Loans Payable: Non-Related Party Convertible Notes Payable (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Non-Related Party Convertible Notes Payable

Note Holder	Principal			APR	Accrued Interest			Conversion Price	Term/Due
Lender Group A	$	120,000		12-20%	$	121,740		$0.10	05/2018
Investor Group A		521,000		10%		55,499		$0.10	07/2018-09/2018
Investor Group B		600,000		12%		25,630		$0.10	12/2018
The Kasper Group, Ltd.		144,000		7%		68,047		$0.10	10/01/2019
Joseph M. Redmond		576,154	[1]	5%		112,289	[1]	$0.10	07/31/2017
	$	1,961,154			$	383,205

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Related Party Transactions: Summary (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Summary

	September 30, 2018			December 31, 2017
Related party payables
Accrued compensation	$	607,802		$	501,269
Cash advances		172,647			128,298
Total related party payables		780,449			629,567
Notes payable, convertible, related party		628,850	[1]		1,167,254
Total related party transactions	$	1,409,299		$	1,796,821

[1]   As of January 1, 2018, Mr. Joseph M. Redmond, former President and member of the board of directors, is no longer a related party.  As a result, related party transactions was reduced by $618,510, representing $42,356 in accrued compensation, and $576,154 in convertible promissory notes. As of September 30, 2018, $42,356 is included as part of accounts payable and accrued expenses (Note 5), and $576,154 is included as part of long-term convertible notes payable (Note 6), on the accompanying consolidated balance sheets. In addition, accrued interest of $90,742 related to the convertible promissory notes was reclassified from related party to non-related party accrued interest. See Note 17 for additional information and legal proceedings related to Mr. Redmond.

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Related Party Transactions: Related Party Convertible Debt, By Related Party (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Related Party Convertible Debt, By Related Party

Note Holder	Principal		APR	Accrued Interest		Conversion Price	Term/Due
Huntington Chase, Beneficial Owner	$	291,100	7%	$	68,924	$0.10	12/31/2015
AvantGarde, LLC, Beneficial Owner		281,500	12%		14,517	$0.20	10/26/2018
Hamburg Investment Co., Beneficial Owner		56,250	12%		2,682	$0.20	11/08/2018
Total	$	628,850		$	86,123

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Warrants And Options: Warrants Outstanding (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Warrants Outstanding

Warrants Outstanding
	Number of	Remaining	Exercise Price		Weighted
	Common	Contractual Life	Times Number		Average
Exercise Price	Shares	(in years)	Of Shares		Exercise Price
$0.001	300,000	4.75	$	300	$0.22
$0.10	62,500	4.50		6,250	$0.27
$0.10	250,000	2.00		25,000	$0.29
$0.15	1,000,000	2.25		150,000	$0.26
$0.17	62,500	4.50		10,625	$0.27
$0.18	62,500	4.50		11,250	$0.27
$0.20	3,000,000	2.75		600,000	$0.23
$0.20	4,687,500	2.50		937,500	$0.24
$0.21	62,500	4.50		13,125	$0.27
$0.21	100,000	2.00		21,000	$0.31
$0.25	2,500,000	3.00		625,000	$0.23
$0.25	475,000	2.25		118,750	$0.25
$0.25	3,255,000	2.00		813,750	$0.29
$0.25	1,500,000	1.75		375,000	$0.34
$0.35	250,000	2.00		87,500	$0.29
$0.60	250,000	2.00		150,000	$0.31
$0.75	300,000	0.50		225,000	$0.29
$0.75	100,000	0.25		75,000	$0.28
	18,217,500		$	4,245,050	$0.23

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Warrants And Options: Warrant Activity (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Warrant Activity

Warrant Activity			Weighted
	Number of		Average
	Shares		Exercise Price
Outstanding at December 31, 2017		7,205,000	$0.26
Issued		11,012,500	$0.24
Exercised		––	––
Expired / Forfeited		––	––
Outstanding at September 30, 2018		18,217,500	$0.23

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Warrants And Options: Options Outstanding (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Options Outstanding

Options Outstanding
	Number of	Remaining	Exercise Price		Weighted
	Common	Contractual Life	Times Number		Average
Exercise Price	Shares	(in years)	Of Shares		Exercise Price
$0.05	90,000	3.75	$	4,500	$0.14
$0.05	1,140,000	3.50		57,000	$0.09
$0.05	100,000	3.00		5,000	$0.08
$0.05	60,000	2.25		3,000	$0.06
$0.05	170,000	2.00		8,500	$0.12
$0.10	500,000	2.00		50,000	$0.14
$0.10	250,000	1.00		25,000	$0.06
$0.15	1,000,000	2.00		150,000	$0.14
$0.25	5,000,000	4.50		1,250,000	$0.19
$0.25	7,000,000	3.75		1,750,000	$0.16
$0.25	1,000,000	2.00		250,000	$0.15
$0.25	1,000,000	1.50		250,000	$0.10
$0.25	250,000	1.00		62,500	$0.06
$0.35	250,000	1.00		87,500	$0.07
$0.60	250,000	1.00		150,000	$0.08
	18,060,000		$	4,103,000	$0.23

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Warrants And Options: Options Activity (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Options Activity

Options Activity				Weighted
	Number of			Average
	Shares			Exercise Price
Outstanding at December 31, 2017		20,675,000		$0.14
Issued		6,000,000		$0.17
Exercised		(1,973,189	)	$0.16
Expired / Forfeited		(6,641,811	)	$0.16
Outstanding at September 30, 2018		18,060,000		$0.18

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Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Components of Income Tax Expense (Benefit)

	September 30, 2018			December 31, 2017
Income (loss) before taxes	$	18,252,863		$	(10,511,392	) [1]
Statutory rate (Fed & State(s))		30%			30%
Computed expected tax payable (recovery)		5,301,700			(3,160,100	)
Effect of the U.S. tax law change		––			805,200
Effect of release of net operating loss carryforwards		3,297,400
Tax effect of non-taxable income and non-deductible expenses:
Gain on extinguishment of debt-principal		(6,145,800	)		––
Stock compensation/amortization of stock options		926,000			738,100
Discount amortization		828,000			1,626,300
Other		5,800			6,200
Total tax effect of non-taxable income and non-deductible expenses		(4,386,000	)		2,370,600
Change in valuation allowance		(2,091,800	)		(15,700	)
Income tax expense	$	––		$	––
Reported income taxes:
Federal	$	––		$	––
State		––			––
Total	$	––		$	––

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Income Taxes: Schedule of Deferred Tax Asset (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Deferred Tax Asset

	September 30, 2018			December 31, 2017
Net operating loss carried forward	$	––		$	2,262,600	[1]
Bad debt allowance		––			1,100
Officers’ accrued compensation		242,800			140,300
Accrued related party interest		24,100			47,700
Valuation allowance		(266,900	)		(2,451,700	)
Net deferred income tax asset	$	––		$	––

On September 30, 2018, the company realized extinguishment of debt principal in the amount of $20,595,975.  Per Internal Revenue Code (“IRC”) Section 108(a) (1) (A) the extinguishment of debt principal is excluded from taxable income for the company; however, any available tax attributes must be release up and to the amount of the extinguishment.  Therefore, net operating loss carryforwards were released with no remaining net operating losses available to use toward future taxable income as of September 30, 2018. 

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Change in Estimate and Correction of Error: Schedule of Effects of Change in Estimate (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Effects of Change in Estimate

	As Previously Reported						Revised Value
	December 31, 2017			Adjustments			July 18, 2018
Assets
Cash	$	5,000		$	––		$	5,000
Intellectual property		160,000			(10,000	)		150,000
Loans receivable		87,008			––			87,008
Total assets		252,008			(10,000	)		242,008
Liabilities
Accounts payable		7,068			––			7,068
License fees payable		2,000,000			(1,740,000	)		260,000
License fees payable, unamortized discount		(1,460,000	)		1,460,000			––
Royalties payable		200,000			––			200,000
Total liabilities		747,068			280,000			467,068
Goodwill		785,060			––			785,060
Fair market value of consideration	$	290,000			––			290,000
Net effect-current period adjustment				$	270,000		$	270,000

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Change in Estimate and Correction of Error: Schedule of Error Corrections (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Error Corrections

	As Previously Reported						Restated
	December 31, 2017			Adjustments			December 31, 2017
CONSOLIDATED BALANCE SHEETS
Assets
Current assets	$	55,419		$	––		$	55,419
Intangible assets, net		2,298,094			(1,588,439	)		709,655
Other non-current assets		986,962			––			986,962
Total assets		3,340,475			(1,588,439	)		1,752,036
Liabilities
Current liabilities		4,418,915			––			4,418,915
Long-term liabilities
License fees payable		1,890,000			(1,000,000	)		890,000
Royalties payable		1,000,000			(800,000	)		200,000
Other long-term liabilities		23,421,204			––			23,421,204
Total long-term liabilities		26,311,204			(1,800,000	)		24,511,204
Liabilities subject to compromise		4,620,735			––			4,620,735
Total liabilities		30,730,119			(1,800,000	)		28,930,119
Stockholders' deficit
Accumulated deficit		(33,773,141	)		211,561			(33,561,580	)
Other equity		6,383,497			––			6,383,497
Total stockholders' deficit		(27,389,644	)		211,561			(27,178,083	)
Total liabilities and stockholders' deficit	$	3,340,475		$	(1,588,439	)	$	1,752,036
CONSOLIDATED STATEMENTS OF OPERATIONS
Gross profit (loss)	$	(47,107	)	$	––		$	(47,107	)
General and administrative expenses		4,209,073			(211,561	)		3,997,512
Operating loss		(4,256,180	)		211,561			(4,044,619	)
Other income and expenses		(6,466,773	)		––			(6,466,773	)
Net loss – continuing operatios		(10,722,953	)		211,561			(10,511,392	)
Net loss – discontinued operations		(3,153,553	)		––			(3,153,553	)
Net loss	$	(13,876,506	)	$	211,561		$	(13,664,995	)
Net loss per common share – basic – continuing operations	$	(0.089	)	$	0.002		$	(0.087	)
Net loss per common share – diluted – continuing operation	$	(0.062	)	$	0.001		$	(0.061	)

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Discontinued Operations: Schedule of Discontinued Operations, Balance Sheet (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Discontinued Operations, Balance Sheet

	May 14, 2018			December 31, 2017
Current assets held for sale
Cash and cash equivalents	$	––		$	2,421
Accounts receivable, net		––			40,856
Employee advances		––			1,800
Prepaid expenses		––			6,884
Total current assets held for sale		––			51,961
Noncurrent assets held for sale:
Loans receivable - long term		––			169,902
Property and equipment, net		––			10,000
Deposits		––			22,000
Total noncurrent assets held for sale	$	––			201,902
Total asset held for sale		––			253,863
Liabilities subject to compromise
Accounts payable and accrued expenses		3,543,160	[2]		2,979,132	[1]
Pension plan contribution payable		––			12,570
Note payable, related party		––			185,000
Related party payables		376,430	[2]		469,207
Note payable		185,000	[2]		––
Note payable-merchant		974,826			974,826
Total liabilities subject to compromise		5,079,416			4,620,735
Net liabilities of discontinued operations	$	5,079,416		$	4,366,872

[1]   As of January 1, 2017, Mr. Dave Engert, former Executive Chairman of the board of directors, is no longer a related party.  As a result, related party payables was reduced by $105,746, representing $105,000 in accrued compensation and $746 in cash advances. As of December 31, 2017, $105,746 is included in accounts payable and accrued expenses as part of liabilities subject to compromise. See Note 17 for additional information and legal proceedings related to Mr. Engert.

[2]   As of January 1, 2018, Mr. Joseph M. Redmond, former President and member of the board of directors, is no longer a related party.  As a result, related party payables was reduced by $307,997, representing $185,000 in promissory notes, $119,270 in accrued compensation, and $3,727 in expense advances. As of May 14, 2018, $185,000 is reflected as a note payable, and $122,997 is included in accounts payable and accrued expenses as part of liabilities subject to compromise. In addition, accrued interest of $11,823 related to the promissory note was reclassified from related party to non-related party accrued interest, and is included in accounts payable and accrued expenses as part of liabilities subject to compromise. See Note 17 for additional information and legal proceedings related to Mr. Redmond.

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Discontinued Operations: Schedule of Discontinued Operations, Income Statement (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Discontinued Operations, Income Statement

	May 14, 2018
Revenue	$	––
Cost of sales		––
Gross profit		––
Sales, marketing and pharmacy expenses		170,630
General and administrative expenses		586,993
Operating loss		(757,623	)
Interest expense		(56,775	)
Loss on disposal of equipment		(10,000	)
Net loss from discontinued operations	$	(824,398	)

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Segment Reporting: Schedule of Segment Reporting Information, by Segment (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Segment Reporting Information, by Segment

.

	Remote Care Segment			Behavioral [1] Health Segment			Diagnostics/Corporate Segment			Consolidated Totals
September 30, 2018
Revenue	$	9,399		$	1,350		$	––		$	10,749
Gross profit (loss)		(6,108	)		1,350			––			(4,758	)
Operating loss		(277,261	)		(144,218	)		(4,786,223	)		(5,207,702	)
Depreciation and amortization		6,897			82,320			1,248			90,465
Interest expense		2,206			––			948,395			950,601
Gain on disposal of subsidiary		––			––			5,079,416			5,079,416
Gain on extinguishment of debt		––			––			22,931,148			22,931,148
Discount amortization		(370,000	)		––			3,145,000			2,775,000
Total assets		915,652			467,007			11,906			1,394,565
Goodwill		785,060			––			––			785,060
Additions to property and equipment		––			––			––			––

September 30, 2017
Revenue	$	70,641		$	––		$	––		$	70,641
Gross profit (loss)		(39,486	)		––			––			(39,486	)
Operating loss		(489,744	)		(69,023	)		(2,642,459	)		(3,201,226	)
Depreciation and amortization		5,752			45,733			1,248			52,733
Interest expense		597			––			712,913			713,510
Discount amortization		110,000			––			3,825,000			3,935,000
Total assets		941,523			576,767			23,308			1,541,598
Goodwill		785,060			––			––			785,060
Additions to property and equipment		––			––			––			––

[1]       Behavioral Health Segment commenced March 22, 2017.

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Overview and Nature of Business: Deconsolidation (Details)	9 Months Ended
	Sep. 30, 2018 USD ($)
Details
Deconsolidation, RoxSan Pharmacy, Gain	$ 5,079,416

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Overview and Nature of Business: Going Concern (Details)	Sep. 30, 2018 USD ($)
Details
Cumulative Earnings (Deficit)	$ 15,308,717
Working Capital Deficit	$ 4,036,923

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Significant Accounting Policies: Accounts Receivable: Allowance for Doubtful Accounts (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Details
Allowance, Beginning Balance	$ 4,000	$ 0
Additions charged to bad debt expense	236	4,000
Write off of allowance for doubtful collections	(4,236)	0
Allowance, Ending Balance	$ 0	$ 4,000

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Significant Accounting Policies: Accounts Receivable (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Details
Allowance for Doubtful Accounts, Increase	$ 236	$ 4,000
Allowance for Doubtful Accounts	$ 0	$ 4,000	$ 0

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Significant Accounting Policies: Property and Equipment: Useful Life (Details)	9 Months Ended
	Sep. 30, 2018
Office Equipment | Minimum
Property, Plant and Equipment, Useful Life	5 years
Office Equipment | Maximum
Property, Plant and Equipment, Useful Life	7 years
Medical Devices and Instruments | Minimum
Property, Plant and Equipment, Useful Life	5 years
Medical Devices and Instruments | Maximum
Property, Plant and Equipment, Useful Life	7 years

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Accounts Receivable, Net: Schedule of Accounts Receivable, Net (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Details
Accounts Receivable, Gross	$ 0	$ 7,275
Less: Allowance for Doubtful Accounts	0	(4,000)	$ 0
Total Accounts Receivable, Net	$ 0	$ 3,275

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Accounts Receivable, Net: Allowance For Doubtful Accounts (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Details
Allowance, Increase (decrease)	$ 236	$ 4,000
Allowance, Total	$ 0	$ 4,000

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Intangible Assets: Schedule of Intangible Assets, Net (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Details
Products and processes	$ 12,500	$ 12,500
Trademarks, patents and technology	150,700	150,700
Customer lists/relationships	30,000	30,000
Non-compete agreement	30,000	40,000
Marketing related intangibles	64,000	64,000
Software	510,300	510,300
Total Intangible Assets, Gross	797,500	807,500
Accumulated amortization	(188,310)	(97,845)
Intangible Assets, Net	$ 609,190	$ 709,655

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Intangible Assets: Amortization Expense (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Details
Amortization Expense	$ 90,465	$ 52,733

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Accounts Payable and Accrued Expenses: Summary (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Details
Accounts Payable, Vendors	$ 917,694	$ 865,569
Credit cards payable	41,969	39,841
Payroll taxes payable	82,517	75,637
Accrued Interest	469,624	1,894,694
Accrued payroll and payroll taxes	253,984	172,607
Reserve-Legal Fees	250,000	0
Total accounts payable and accrued expenses	$ 2,015,789	$ 3,048,348

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Accounts Payable and Accrued Expenses: Payroll Taxes Payable (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Details
Payroll Taxes Payable, Penalties	$ 17,476	$ 5,485
Payroll Taxes Payable, Interest	$ 3,438	$ 634

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Accounts Payable and Accrued Expenses (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Details
Reserve-Legal Fees	$ 250,000	$ 0

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Notes and Loans Payable: Summary (Details) - USD ($)		Sep. 30, 2018	Dec. 31, 2017
Details
Convertible Notes Payable, Current		$ 1,241,000	$ 741,000
Notes Payable, Short Term, Total		1,241,000	741,000
Loans Payable		0	11,900
Notes Payable		0	84,075
Notes and Loans Payable, Unsecured, Total		0	95,975
Note payable, convertible	[1]	720,154	144,000
Note Payable-Bank		32,789	38,240
Note Payable		0	20,500,000
Less: Unamortized Discount		0	(3,145,000)
Note Payable, Net of Unamortized Discount		0	17,355,000
Notes Payalbe, Secured, Total, Net of Unamortized Discount		0	17,393,240
Notes Payable, Long Term, Total		752,943	17,633,215
Notes Payable, Total		$ 1,993,943	$ 18,374,215

[1] At September 30, 2018, $576,154 in convertible notes payable and related accrued interest of $90,742 was reclassified from related party to non-related party, resulting from a change in related parties (Note 7).

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Notes and Loans Payable: Notes Payable-Current Activity (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
The Kasper Group, Ltd
Convertible Promissory Notes, Date, Amendment	Jul. 31, 2018
Convertible Promissory Notes, Principal	$ 144,000
Convertible Promissory Notes, Maturity, Extended	Oct. 01, 2019
Convertible Promissory Notes, Conversion Rate, Original | $ / shares	$ 0.25
Convertible Promissory Notes, Conversion Rate, Revised | $ / shares	$ 0.10
Notes Payable, Convertible, Investor Group A
Convertible Promissory Notes, Date (From)	Jul. 14, 2017
Convertible Promissory Notes, Date (To)	Jan. 25, 2018
Convertible Promissory Notes, Principal (Aggregate)	$ 746,000
Convertible Promissory Notes, Interest Rate	10.00%
Convertible Promissory Notes, Term (Years)	1
Convertible Promissory Notes, Conversion Rate | $ / shares	$ 0.10
Convertible Promissory Notes, Warrants (%)	50.00%
Convertible Promissory Notes, Warrants, Term	3
Convertible Promissory Notes, Warrants, Exercise Price | $ / shares	$ 0.25
Convertible Promissory Notes, Principal, Remaining	$ 521,000
Notes Payable, Convertible, Investor Group B
Convertible Promissory Notes, Principal (Aggregate)	$ 600,000
Convertible Promissory Notes, Interest Rate	12.00%
Convertible Promissory Notes, Conversion Rate | $ / shares	$ 0.10
Convertible Promissory Notes, Warrants, Term	3
Convertible Promissory Notes, Warrants, Exercise Price | $ / shares	$ 0.20
Convertible Promissory Notes, Conversion, Principal	$ 225,000
Convertible Promissory Notes, Conversion, Interest	21,114
Convertible Promissory Notes, Conversion, Shares Issued	$ 2,461,129
Convertible Promissory Notes, Date (From)	Apr. 24, 2018
Convertible Promissory Notes, Date (To)	Jun. 18, 2018
Convertible Promissory Notes, Warrants, Exercise Price (Contingent) | $ / shares	$ 0.10
Notes Payable, Convertible, Lender Group A
Convertible Promissory Notes, Principal (Aggregate)	$ 220,000
Convertible Promissory Notes, Conversion Rate | $ / shares	$ 0.10
Convertible Promissory Notes, Principal, Group 1	145,000
Convertible Promissory Notes, Interest Rate, Group 1	12.00%
Convertible Promissory Notes, Common Stock, Shares Issued | shares	290,000
Convertible Promissory Notes, Term (Days), Group 1	90
Convertible Promissory Notes, Principal, Group 2	75,000
Convertible Promissory Notes, Interest Rate, Group2	20.00%
Convertible Promissory Notes, Common Stock, Shares Issued | shares	150,000
Convertible Promissory Notes, Term (Days), Group 2	30
Convertible Promissory Notes, Common Stock, Shares Issued	2,820,000
Convertible Promissory Notes, Common Stock, Shares Issued, Value	$ 282,000
Convertible Promissory Notes, Principal Repayments	100,000
Convertible Promissory Notes, Principal Balance	$ 120,000

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Notes and Loans Payable: Short-Term (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Convertible Notes Payable, Current	$ 1,241,000	$ 741,000
Accrued Interest, Total	469,624	1,894,694
Convertible Promissory Notes
Convertible Notes Payable, Current	1,241,000	741,000
Accrued Interest, Current Period	197,142	26,840
Accrued Interest, Total	$ 202,869	$ 26,840

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Notes and Loans Payable: Long-Term (Details) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2018		Dec. 31, 2017
Unsecured Debt
Extinguishment of Debt, Principal	$ 95,975
Extinguishment of Debt, Accrued Interest	56,892
Gain (Loss) on Extinguishment of Debt	152,867
Secured Debt
Gain Contingency, Promissory Note, Principal	20,500,000
Gain Contingency, Promissory Note, Accrued Interest	2,278,281
Gain Contingency, Promissory Note, Total	22,778,281
Convertible Promissory Notes
Convertible Notes Payable, Long-Term	720,154	[1]	$ 144,000
Accrued Interest, Current Period	29,087		10,080
Accrued Interest, Total	180,336	[1]	60,507
Unsecured Debt
Accrued Interest, Current Period	5,460		1,800
Notes and Loans Payable, Unsecured	0		95,975
Accrued Interest, Total	0		51,432
Secured Debt
Accrued Interest, Current Period	694,450		880,242
Accrued Interest, Total	296		1,585,714
Notes Payable, Secured, Net of Unamortized Discount	32,789		17,393,240
Unamortized Discount	$ 0		$ 3,145,000

[1] At September 30, 2018, $576,154 in convertible notes payable and related accrued interest of $90,742 was reclassified from related party to non-related party, resulting from a change in related parties (Note 7).

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Notes and Loans Payable: Future Maturities (Details)	Sep. 30, 2018 USD ($)
Details
Notes Payable, Long-Term, Maturities in Next Twelve Months	$ 576,154
Notes Payable, Long-Term, Maturities in Year Two	176,789
Notes Payable, Long-Term Maturities, Total	$ 752,943

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Notes and Loans Payable: Accrued Interest (Details) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2018		Dec. 31, 2017
Details
Note Payable, Accrued Interest, Current Period	$ 926,139		$ 924,462
Note Payable, Accrued Interest, Total	$ 383,501	[1]	$ 1,724,093

[1] At September 30, 2018, $576,154 in convertible notes payable and related accrued interest of $90,742 was reclassified from related party to non-related party, resulting from a change in related parties (Note 7).

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Related Party Transactions: Summary (Details) - USD ($)		Sep. 30, 2018	Dec. 31, 2017
Related party payables
Related Party, Accrued Compensation		$ 607,802	$ 501,269
Related Party, Cash Advances		172,647	128,298
Related Party, Total Payables		780,449	629,567
Notes payable, convertible, related party	[1]	628,850	1,167,254
Total Related Party Trasactions		$ 1,409,299	$ 1,796,821

[1] As of January 1, 2018, Mr. Joseph M. Redmond, former President and member of the board of directors, is no longer a related party. As a result, related party transactions was reduced by $618,510, representing $42,356 in accrued compensation, and $576,154 in convertible promissory notes. As of September 30, 2018, $42,356 is included as part of accounts payable and accrued expenses (Note 5), and $576,154 is included as part of long-term convertible notes payable (Note 6), on the accompanying consolidated balance sheets. In addition, accrued interest of $90,742 related to the convertible promissory notes was reclassified from related party to non-related party accrued interest. See Note 17 for additional information and legal proceedings related to Mr. Redmond.

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Related Party Transactions: Convertible Debt (Details) - Beneficial Owner	9 Months Ended
	Sep. 30, 2018 USD ($)
Note Payable, Convertible, Related Party, Principal	$ 291,100
Note Payable, Convertible, Related Party, Interest Rate	7.00%
Note Payable, Convertible, Related Party, Accrued Interest	$ 68,924
Note Payable, Convertible, Related Party, Conversion Price	$ 0.10
Note Payable, Convertible, Related Party, Maturity Date	Dec. 31, 2015
Note Payable, Convertible, Related Party, Principal	$ 281,500
Note Payable, Convertible, Related Party, Interest Rate	12.00%
Note Payable, Convertible, Related Party, Accrued Interest	$ 14,517
Note Payable, Convertible, Related Party, Conversion Price	$ 0.20
Note Payable, Convertible, Related Party, Maturity Date	Oct. 26, 2018
Note Payable, Convertible, Related Party, Principal	$ 56,250
Note Payable, Convertible, Related Party, Interest Rate	12.00%
Note Payable, Convertible, Related Party, Accrued Interest	$ 2,682
Note Payable, Convertible, Related Party, Conversion Price	$ 0.20
Note Payable, Convertible, Related Party, Maturity Date	Nov. 08, 2018

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Related Party Transactions: Current Activity (Details) - Note Payable, Convertible, Amended	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares
Note Payable, Convertible, Related Party, Date (Amended)	Apr. 26, 2018
Note Payable, Convertible, Related Party, Date (Original)	Apr. 26, 2017
Note Payable, Convertible, Related Party, Principal (Original)	$ 250,000
Note Payable, Convertible, Related Party, Principal (Amendedl)	$ 281,500
Note Payable, Convertible, Related Party, Interest Rate	12.00%
Note Payable, Convertible, Related Party, Maturity Date	Oct. 26, 2018
Note Payable, Convertible, Related Party, Conversion Price	$ 0.10
Note Payable, Convertible, Related Party, Warrants, Term (Years)	3
Note Payable, Convertible, Related Party, Warrants, Exercise Price | $ / shares	$ 0.20
Note Payable, Convertible, Related Party, Warrants, Exercise Price (Contingent) | $ / shares	$ 0.10
Note Payable, Convertible, Related Party, Date (Amended)	May 08, 2018
Note Payable, Convertible, Related Party, Date (Original)	May 08, 2017
Note Payable, Convertible, Related Party, Principal (Original)	$ 50,000
Note Payable, Convertible, Related Party, Principal (Amendedl)	$ 56,250
Note Payable, Convertible, Related Party, Interest Rate	12.00%
Note Payable, Convertible, Related Party, Maturity Date	Nov. 08, 2018
Note Payable, Convertible, Related Party, Conversion Price	$ 0.10
Note Payable, Convertible, Related Party, Warrants, Term (Years)	3
Note Payable, Convertible, Related Party, Warrants, Exercise Price | $ / shares	$ 0.20
Note Payable, Convertible, Related Party, Warrants, Exercise Price (Contingent) | $ / shares	$ 0.10

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Related Party Transactions: Summary Totals (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Convertible Promissory Notes, Related Party	$ 628,850	$ 1,167,254
Convertible Promissory Notes, Related Party, Accrued Interest	44,814	86,712
Notes Payable, Convertible
Convertible Promissory Notes, Related Party	628,850	1,167,254
Convertible Promissory Notes, Related Party, Accrued Interest	44,814	86,712
Convertible Promissory Notes, Interest, Paid	798	16,833
Convertible Promissory Notes, Accrued Interest, Total	$ 86,123	$ 170,600

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Related Party Transactions: Recent Agreements (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
Chief Financial Officer
Executive Agreement, Date	Jan. 01, 2018
Executive Agreement, Term (Years)	1
Executive Agreement, Compensation, Year 1	$ 216,000
Executive Agreement, Compensation, Signing Bonus	$ 100,000
Executive Agreement, Compensation, Stock Options | shares	1,000,000
Executive Agreement, Compensation, Stock Options, Price Per Share | $ / shares	$ 0.25
Executive Agreement, Compensation, Stock Options, Life (Years)	5
Executive Agreement, Compensation, Stock Options, Vesting Period (Years)	1
Beneficial Owner
Consulting Agreement, Date	Jan. 01, 2018
Consulting Agreement, Term	3
Consulting Agreement, Monthly Fee, Year 1	$ 25,000
Consulting Agreement, Monthly Fee, Year 2	30,000
Consulting Agreement, Monthly Fee, Year 3	$ 35,000
Consulting Agreement, Stock Options | shares	4,000,000
Consulting Agreement, Stock Options, Exercise Price | $ / shares	$ 0.25
Consulting Agreement, Stock Options, Life (Years)	5
Consulting Agreement, Stock Options, Immediiate Vesting, Pct	25.00%

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Related Party Transactions: Preferred Stock Issuance (Details) - Preferred Stock Issuance, Series C	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
Preferred Stock, Shares Issued. Date	Sep. 30, 2018
Preferred Stock, Shares Issued | shares	90,000
Preferred Stock, Shares Issued. Price Per Share | $ / shares	$ 5.00
Preferred Stock, Shares Issued. Proceeds | $	$ 450,000
Preferred Stock, Shares Issued. Warrants Issued | shares	1,250,000
Preferred Stock, Shares Issued. Warrants Issued, Term (Years)	3
Preferred Stock, Shares Issued. Warrants Issued, Exercise Price | $ / shares	$ 0.25

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Related Party Transactions: Accrued Interest (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Details
Accrued Interest, Related Party, Current Period	$ 44,814	$ 86,712
Accrued Interest, Related Party, Total	$ 86,123	$ 170,600

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Commitments And Contingencies: Promissory Note (Details) - Secured Debt, In Litigation - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Note Payable, Date	Aug. 13, 2015
Note Payable, Principal	$ 20,500,000
Note Payable, Interest Rate	6.00%
Note Payable, Maturity Date	Aug. 13, 2018
Note Payable, Discount, Total	$ 15,300,000
Note Payable, Discount, Current Period	3,145,000	$ 5,100,000
Note Payable, Discount, Unamortized	0	3,145,000
Note Payable, Accrued Interest, Current Period	692,967	876,214
Note Payable, Accrued Interest, Total	$ 2,278,281	$ 1,585,314

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Commitments And Contingencies: Description (Details)	9 Months Ended
	Sep. 30, 2018
Pending Litigation
Note Payable, Contingent Nature	As part of the deconsolidation of RoxSan resulting from its Chapter 7 petition filed on May 14, 2018 (Note 15), management reevaluated the characteristics of the Promissory Note. Included in the evaluation were the following considerations: 1) the related asset is no longer a part of the parent financial statements due to a loss of financial control; 2) the Company is currently in litigation as a result of material breaches by the note holder; 3) the Company has claims against the note holder for losses and damages directly related to the Promissory Note and its underlying assets; 4) there is a high likelihood that no obligation exists.

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Commitments And Contingencies (Details) - Pending Litigation	9 Months Ended
	Sep. 30, 2018 USD ($)
Gain Contingency, Promissory Note, Principal	$ 20,500,000
Gain Contingency, Promissory Note, Accrued Interest	2,278,281
Gain Contingency, Promissory Note, Total	$ 22,778,281

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Commitments And Contingencies: Revenue Share & Royalties (Details)	9 Months Ended
	Sep. 30, 2018 USD ($)
Revenue Share Agreement
Contingency, Revenue Share, Maximum Payment	$ 3,000,000
Royalty Agreement
Contingency, Royalty, Percent	3.00%
Contingency, Royalty, Maximum Payment	$ 25,000,000

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Convertible Preferred Stock: Authorized and Issued Shares (Details) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Outstanding	1,013,691	863,691
Preferred Stock
Preferred Stock, Shares Outstanding	1,013,691	863,691

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Convertible Preferred Stock: Series C Convertible Preferred Offering Details (Details) - Preferred Stock, Series C	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
Preferred Shares, Equity Offering, Date	Aug. 01, 2018
Preferred Shares, Price Per Share	$ 5.00
Preferred Shares, Minimum Shares | shares	20,000
Preferred Shares, Minimum ($) | $	$ 100,000
Preferred Shares, Conversion Rate ($)	$ 0.12
Preferred Shares, Conversion Ratio | shares	41.67
Preferred Shares, Warrants, Term (Years)	3
Preferred Shares, Warrants, Exercise Price	$ 0.25
Preferred Shares, Warrants, Percent	50.00%

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Convertible Preferred Stock: Current Issuances (Details)	Sep. 30, 2018	Aug. 11, 2018	Aug. 10, 2018
Preferred Stock, Shares, Issued
Preferred Stock, Issued	90,000	40,000	20,000
Preferred Stock, Price Per Share
Preferred Stock, Issued	5.00	5.00	5.00
Preferred Stock, Proceeds, Cash
Preferred Stock, Issued		200,000	100,000
Preferred Stock, APIC
Preferred Stock, Issued	449,910	199,960	99,980
Preferred Stock, Proceeds, Debt Conversion
Preferred Stock, Issued	450,000

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Common Stock: Authorized and Issued Shares (Details) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares, Outstanding	152,078,141	136,754,530
Common Class A
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares, Outstanding	152,078,141	136,734,530

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Common Stock: Current Issuances (Details)													1 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 28, 2018 shares	Aug. 28, 2018 USD ($)	Aug. 20, 2018 USD ($)	Aug. 13, 2018 USD ($)	Aug. 12, 2018 USD ($)	Jun. 30, 2018 USD ($)	Apr. 08, 2018 USD ($)	Apr. 05, 2018 USD ($)	Jan. 29, 2018 USD ($)	Jan. 19, 2018	Jan. 11, 2018	Aug. 31, 2018 shares	Jul. 28, 2018 shares	May 31, 2018 shares	Feb. 28, 2018 shares
Common Stock, Shares, Issued
Common Stock Issued, To Officers/Directors												6,000,000
Common Stock, Issued, Equiy Offering											1,000,000
Common Stock Issued, For Services										$ 250,000
Common Stock Issued, For Debt Service | shares		150,000											440,000	150,000	890,000	440,000
Common Stock Issued, Key Employee									$ 1,000,000
Common Stock Issued, Conversion of Debt	$ 625,000		$ 220,000	$ 1,650,000		$ 110,000		$ 481,130
Common Stock Issued, For Exercise of Stock Options					$ 1,071,430		$ 846,051
Common Stock, Price Per Share
Common Stock Issued, To Officers/Directors												0.001
Common Stock, Issued, Equiy Offering											0.04
Common Stock Issued, Key Employee									0.001
Common Stock Issued, Conversion of Debt	0.08		0.10	0.10		0.10		0.10
Common Stock Issued, For Exercise of Stock Options					0.05		0.05
Common Stock, Proceeds, Cash
Common Stock Issued, To Officers/Directors												1,000
Common Stock, Issued, Equiy Offering											40,000
Common Stock Issued, Key Employee									1,000
Common Stock, Proceeds, Stock Compensation
Common Stock Issued, To Officers/Directors												5,000
Common Stock, APIC
Common Stock, Issued, Equiy Offering											39,000
Common Stock Issued, For Services										67,250
Common Stock Issued, For Debt Service | shares		14,850											43,560	14,850	88,110	43,560
Common Stock Issued, Key Employee									199,000
Common Stock Issued, Conversion of Debt	49,375		21,780	164,835		10,890		47,633
Common Stock Issued, For Exercise of Stock Options					186,429		268,479
Common Stock, Shares, Vest Period (Months)
Common Stock Issued, For Services										12
Common Stock, Shares, Value
Common Stock Issued, For Services										67,500
Common Stock Issued, For Debt Service | shares		15,000											44,000	15,000	89,000	44,000
Common Stock Issued, Key Employee									$ 200,000
Common Stock Issued, Conversion of Debt	$ 50,000		$ 20,000	$ 150,000		$ 10,000		$ 45,000
Common Stock Issued, For Exercise of Stock Options					$ 187,500		$ 269,325
Common Stock, Shares, Vested (Pct)
Common Stock Issued, For Services										0.2500
Deferred Compensation, Current Expense
Common Stock Issued, For Services										16,875
Common Stock Issued, For Debt Service | shares													33,011		62,583	22,211
Deferred Compensation, Future Expense
Common Stock Issued, For Services										50,625
Common Stock Issued, For Debt Service | shares													10,989		11,417	21,789
Deferred Compensation, Future Expense, Term (Months)
Common Stock Issued, For Services										$ 12

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Common Stock: Deferred Stock Compensation (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Details
Deferred Compensation, Additions	$ 274,500	$ 2,838,500
Deferred Compensation, Current Expense	973,925	1,028,498
Deferred Compensation, Future Expense	$ 1,110,577	$ 1,810,002
Deferred Compensation, Future Expense, Term (Months)	24

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Warrants And Options: Outstanding (Details) - shares	Sep. 30, 2018	Dec. 31, 2017
Details
Warrants, Number of Shares	18,217,500	7,205,000
Stock Options, Number of Shares	18,060,000	20,675,000

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Warrants And Options: Warrants, Current Period Grants (Details)	Sep. 30, 2018 $ / shares	Aug. 11, 2018 $ / shares	Aug. 10, 2018 $ / shares	Jun. 28, 2018 $ / shares	Jun. 14, 2018 $ / shares	Feb. 13, 2018 $ / shares	Jan. 29, 2018 $ / shares	Jan. 25, 2018 $ / shares
Details
Warrants Granted	1,250,000	833,333	416,667	300,000	7,687,500	200,000	250,000	25,000
Warrants Granted, Exercise Period (Years)	3	3	3	5	3	3	3	3
Warrants Granted, Exercise Priice	$ 0.25	$ 0.25	$ 0.25	$ 0.001	$ 0.20	$ 0.25	$ 0.25	$ 0.25
Warrants Granted, Exercise Price (Contingent)					$ 0.10

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Warrants And Options: Schedule of Warrants Outstanding (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
$0.001
Warrants, Number of Shares | shares	300,000
Warrants, Remaining Life (Years)	4 years 9 months
Warrants, Exercise Price X Number Of Shares | $	$ 300
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.22
$0.10
Warrants, Number of Shares | shares	62,500
Warrants, Remaining Life (Years)	4 years 6 months
Warrants, Exercise Price X Number Of Shares | $	$ 6,250
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.27
$0.10
Warrants, Number of Shares | shares	250,000
Warrants, Remaining Life (Years)	2 years
Warrants, Exercise Price X Number Of Shares | $	$ 25,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.29
$0.15
Warrants, Number of Shares | shares	1,000,000
Warrants, Remaining Life (Years)	2 years 3 months
Warrants, Exercise Price X Number Of Shares | $	$ 150,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.26
$0.17
Warrants, Number of Shares | shares	62,500
Warrants, Remaining Life (Years)	4 years 6 months
Warrants, Exercise Price X Number Of Shares | $	$ 10,625
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.27
$0.18
Warrants, Number of Shares | shares	62,500
Warrants, Remaining Life (Years)	4 years 6 months
Warrants, Exercise Price X Number Of Shares | $	$ 11,250
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.27
$0.20
Warrants, Number of Shares | shares	3,000,000
Warrants, Remaining Life (Years)	2 years 9 months
Warrants, Exercise Price X Number Of Shares | $	$ 600,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.23
$0.20
Warrants, Number of Shares | shares	4,687,500
Warrants, Remaining Life (Years)	2 years 6 months
Warrants, Exercise Price X Number Of Shares | $	$ 937,500
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.24
$0.21
Warrants, Number of Shares | shares	62,500
Warrants, Remaining Life (Years)	4 years 6 months
Warrants, Exercise Price X Number Of Shares | $	$ 13,125
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.27
$0.21
Warrants, Number of Shares | shares	100,000
Warrants, Remaining Life (Years)	2 years
Warrants, Exercise Price X Number Of Shares | $	$ 21,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.31
$0.25
Warrants, Number of Shares | shares	2,500,000
Warrants, Remaining Life (Years)	3 years
Warrants, Exercise Price X Number Of Shares | $	$ 625,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.23
$0.25
Warrants, Number of Shares | shares	475,000
Warrants, Remaining Life (Years)	2 years 3 months
Warrants, Exercise Price X Number Of Shares | $	$ 118,750
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.25
$0.25
Warrants, Number of Shares | shares	3,255,000
Warrants, Remaining Life (Years)	2 years
Warrants, Exercise Price X Number Of Shares | $	$ 813,750
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.29
$0.25
Warrants, Number of Shares | shares	1,500,000
Warrants, Remaining Life (Years)	1 year 9 months
Warrants, Exercise Price X Number Of Shares | $	$ 375,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.34
$0.35
Warrants, Number of Shares | shares	250,000
Warrants, Remaining Life (Years)	2 years
Warrants, Exercise Price X Number Of Shares | $	$ 87,500
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.29
$0.60
Warrants, Number of Shares | shares	250,000
Warrants, Remaining Life (Years)	2 years
Warrants, Exercise Price X Number Of Shares | $	$ 150,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.31
$0.75
Warrants, Number of Shares | shares	300,000
Warrants, Remaining Life (Years)	6 months
Warrants, Exercise Price X Number Of Shares | $	$ 225,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.29
$0.75
Warrants, Number of Shares | shares	100,000
Warrants, Remaining Life (Years)	3 months
Warrants, Exercise Price X Number Of Shares | $	$ 75,000
Warrants, Weighted Average Exercise Price | $ / shares	$ 0.28

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Warrants And Options: Warrant Rollforward (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
Details
Warrants, Outstanding, Beginnning	7,205,000
Warrants, Outstanding, Beginning, Weighted Avg Exercise Price | $ / shares	$ 0.26
Warrants, Issued in Period	11,012,500
Warrants, Issued in Period, Weighted Avg Exercise Price | $ / shares	$ 0.24
Warrants, Exercised in Period	0
Warrants, Exercised in Period, Weighted Avg Exercise Price | $ / shares	$ 0
Warrants, Expired/Cancelled in Period	0
Warrants, Expired/Cancelled in Period, Weighted Avg Exercise Price | $ / shares	$ 0
Warrants, Outstanding, Ending	18,217,500
Warrants, Outstanding, Ending, Weighted Avg Exercise Price | $	$ 0.23

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Warrants And Options: Options, Current Period Grants (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
01/01/2018
Stock Options Granted | shares	1,000,000
Stock Options Granted, Exercise Price | $ / shares	$ 0.25
Stock Options Granted, Life (Years)	5 years
Stock Options Granted, Value | $	$ 134,500
Stock Options Granted, Expected Term	3 years 9 months
Stock Options Granted, Expected Volatility	1.78%
Stock Options Granted, Risk Free Interest Rate	2.25%
Stock Options Granted, Dividend Yield	0.00%
01/01/2018
Stock Options Granted | shares	4,000,000
Stock Options Granted, Exercise Price | $ / shares	$ 0.25
Stock Options Granted, Life (Years)	5 years
Stock Options Granted, Value | $	$ 539,200
Stock Options Granted, Expected Term	3 years 6 months
Stock Options Granted, Expected Volatility	1.86%
Stock Options Granted, Risk Free Interest Rate	2.25%
Stock Options Granted, Dividend Yield	0.00%
Stock Options Granted, Vesting Period (Years)	3 years
08/01/2018
Stock Options Granted | shares	1,000,000
Stock Options Granted, Exercise Price | $ / shares	$ 0.25
Stock Options Granted, Life (Years)	5 years
Stock Options Granted, Value | $	$ 160,000
Stock Options Granted, Expected Term	3 years
Stock Options Granted, Expected Volatility	2.06%
Stock Options Granted, Risk Free Interest Rate	2.78%
Stock Options Granted, Dividend Yield	0.00%

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Warrants And Options: Options Outstanding (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares shares
$0.05
Stock Options, Number of Shares | shares	90,000
Stock Options, Remaining Life (Years)	3 years 9 months
Stock Options, Exercise Price x Number of Shares | $	$ 4,500
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.14
$0.05
Stock Options, Number of Shares | shares	1,140,000
Stock Options, Remaining Life (Years)	3 years 6 months
Stock Options, Exercise Price x Number of Shares | $	$ 57,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.09
$0.05
Stock Options, Number of Shares | shares	100,000
Stock Options, Remaining Life (Years)	3 years
Stock Options, Exercise Price x Number of Shares | $	$ 5,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.08
$0.05
Stock Options, Number of Shares | shares	60,000
Stock Options, Remaining Life (Years)	2 years 3 months
Stock Options, Exercise Price x Number of Shares | $	$ 3,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.06
$0.05
Stock Options, Number of Shares | shares	170,000
Stock Options, Remaining Life (Years)	2 years
Stock Options, Exercise Price x Number of Shares | $	$ 8,500
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.12
$0.10
Stock Options, Number of Shares | shares	500,000
Stock Options, Remaining Life (Years)	2 years
Stock Options, Exercise Price x Number of Shares | $	$ 50,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.14
$0.10
Stock Options, Number of Shares | shares	250,000
Stock Options, Remaining Life (Years)	1 year
Stock Options, Exercise Price x Number of Shares | $	$ 25,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.06
$0.15
Stock Options, Number of Shares | shares	1,000,000
Stock Options, Remaining Life (Years)	2 years
Stock Options, Exercise Price x Number of Shares | $	$ 150,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.14
$0.25
Stock Options, Number of Shares | shares	5,000,000
Stock Options, Remaining Life (Years)	4 years 6 months
Stock Options, Exercise Price x Number of Shares | $	$ 1,250,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.19
$0.25
Stock Options, Number of Shares | shares	7,000,000
Stock Options, Remaining Life (Years)	3 years 9 months
Stock Options, Exercise Price x Number of Shares | $	$ 1,750,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.16
$0.25
Stock Options, Number of Shares | shares	1,000,000
Stock Options, Remaining Life (Years)	2 years
Stock Options, Exercise Price x Number of Shares | $	$ 250,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.15
$0.25
Stock Options, Number of Shares | shares	1,000,000
Stock Options, Remaining Life (Years)	1 year 6 months
Stock Options, Exercise Price x Number of Shares | $	$ 250,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.10
$0.25
Stock Options, Number of Shares | shares	250,000
Stock Options, Remaining Life (Years)	1 year
Stock Options, Exercise Price x Number of Shares | $	$ 62,500
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.06
$0.35
Stock Options, Number of Shares | shares	250,000
Stock Options, Remaining Life (Years)	1 year
Stock Options, Exercise Price x Number of Shares | $	$ 87,500
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.07
$0.60
Stock Options, Number of Shares | shares	250,000
Stock Options, Remaining Life (Years)	1 year
Stock Options, Exercise Price x Number of Shares | $	$ 150,000
Stock Options, Weighted Average Exercise Price | $ / shares	$ 0.08

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Warrants And Options: Options Summary (Details) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Details
Stock Options, Grants	6,000,000	11,570,000
Stock Options, Exercises	1,973,189	300,000
Stock Options, Expirations	1,000,000	0
Stock Options, Forfeitures	5,641,811	1,730,000

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Warrants And Options: Deferred Stock Option Compensation (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Details
Deferred Compensation, Total	$ 649,327	$ 1,679,765
Deferred Compensation, Current Period Expense	483,391	589,679
Deferred Compensation, Future Expense	$ 1,484,945	$ 1,319,010
Deferred Compensation, Future Expense, Term (Months)	27

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Leases (Details)	9 Months Ended
	Sep. 30, 2018 USD ($)
Santa Monica, CA
Office Lease, Rent Expense, Base, Monthly	$ 5,600

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Leases: Rent Expense (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Details
Office Lease, Rent Expense, Base	$ 53,557	$ 68,880

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Income Taxes: Components of Income Tax Expense (Benefit) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Details
Income (Loss) from Continuing Operations before Income Taxes, Domestic	$ 18,252,863	$ (10,511,392)
Statutory Rate (Fed & State(s))	30.00%	30.00%
Computed Expected Tax Payable (Recovery)	$ 5,301,700	$ (3,160,100)
Rate Adjustment	0	805,200
Effect of release of net operating loss carryforwards	3,297,400
Gain on extinguishment of debt-principal	(6,145,800)	0
Non-Deductible, Stock Option Amortization	926,000	738,100
Non-Deductible, Discount amortization	828,000	1,626,300
Non-Deductible, Other	5,800	6,200
Non-Deductible, Total	(4,386,000)	2,370,600
Change in Valuation Allowance	(2,091,800)	(15,700)
Current Income Tax Expense (Benefit)	0	0
Reported Income Taxes, Federal	0	0
Reported Income Taxes, State	0	0
Reported Income Taxes, Total	$ 0	$ 0

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Income Taxes: Deferred Tax Asset (Details) - USD ($)		Sep. 30, 2018	Dec. 31, 2017
Details
Deferred Tax Asset, Net Operating Losses	[1]	$ 0	$ 2,262,600
Deferred Tax Asset, Bad Debt Allowance		0	1,100
Deferred Tax Asset, Officers Accrued Compensation		242,800	140,300
Deferred Tax Asset, Related Party Interest		24,100	47,700
Deferred Tax Asset, Valuation Allowance		(266,900)	(2,451,700)
Deferred Tax Assets, Net of Valuation Allowance, Total		$ 0	$ 0

[1] As adjusted, due to correction of error (Note 14).

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Income Taxes: Tax Years Open to Examination (Details)	9 Months Ended
	Sep. 30, 2018
Details
Years Open to Examination, Beginning Year	2011

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Change in Estimate and Correction of Error: Summary of Effects of Change in Estimate (Details)	Jul. 18, 2018 USD ($)
Amendment, As Previously Reported
Assets
Cash	$ 5,000
Intellectual property	160,000
Loans receivable	87,008
Total assets	252,008
Liabilities
Accounts payable	7,068
License fees payable	2,000,000
License fees payable, unamortized discount	(1,460,000)
Royalties payable	200,000
Total liabilities	747,068
Goodwill	785,060
Fair market value of consideration	290,000
Amendment, Adjustments
Assets
Cash	0
Intellectual property	(10,000)
Loans receivable	0
Total assets	(10,000)
Liabilities
Accounts payable	0
License fees payable	(1,740,000)
License fees payable, unamortized discount	1,460,000
Royalties payable	0
Total liabilities	280,000
Goodwill	0
Fair market value of consideration	0
Net effect-current period adjustment	270,000
Amendment, Revised Values
Assets
Cash	5,000
Intellectual property	150,000
Loans receivable	87,008
Total assets	242,008
Liabilities
Accounts payable	7,068
License fees payable	260,000
License fees payable, unamortized discount	0
Royalties payable	200,000
Total liabilities	467,068
Goodwill	785,060
Fair market value of consideration	290,000
Net effect-current period adjustment	$ 270,000

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Change in Estimate and Correction of Error: Correction of Error (Details)	9 Months Ended
	Sep. 30, 2018
Details
Error Corrections and Prior Period Adjustments, Description	During 2018, the Company discovered that the April 26, 2017, asset acquisition of intellectual property from ProEventa, Inc. (Note 8) erroneously included certain conditional contingent consideration as a part of the purchase price. As a result, certain liabilities contingent in nature were erroneously recorded.

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Change in Estimate and Correction of Error: Summary of Effects of Error Corrections (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) $ / shares
Asset Acquisition, As Previously Reported
Assets
Current assets	$ 55,419
Intangible assets, net	2,298,094
Other non-current assets	986,962
Total assets	3,340,475
Liabilities
Current liabilities	4,418,915
Long-term liabilities
License fees payable	1,890,000
Royalties payable	1,000,000
Other long-term liabilities	23,421,204
Total long-term liabilities	26,311,204
Liabilities subject to compromise	4,620,735
Total liabilities	30,730,119
Stockholders' deficit
Accumulated deficit	(33,773,141)
Other equity	6,383,497
Total Stockholders' deficit	(27,389,644)
Total liabilities and stockholders' deficit	3,340,475
CONSOLIDATED STATEMENTS OF OPERATIONS
Gross profit (loss)	(47,107)
General and administrative expenses	4,209,073
Operating loss	(4,256,180)
Other income and expenses	(6,466,773)
Net loss - continuing operations	(10,722,953)
Net loss - discontinued operations	(3,153,553)
Net loss	$ (13,876,506)
Net loss per common share - basic | $ / shares	$ (0.089)
Net loss per common share - diluted | $ / shares	$ (0.062)
Asset Acquisition, Adjustments
Assets
Current assets	$ 0
Intangible assets, net	(1,588,439)
Other non-current assets	0
Total assets	(1,588,439)
Liabilities
Current liabilities	0
Long-term liabilities
License fees payable	(1,000,000)
Royalties payable	(800,000)
Other long-term liabilities	0
Total long-term liabilities	(1,800,000)
Liabilities subject to compromise	0
Total liabilities	(1,800,000)
Stockholders' deficit
Accumulated deficit	211,561
Other equity	0
Total Stockholders' deficit	211,561
Total liabilities and stockholders' deficit	(1,588,439)
CONSOLIDATED STATEMENTS OF OPERATIONS
Gross profit (loss)	0
General and administrative expenses	(211,561)
Operating loss	211,561
Other income and expenses	0
Net loss - continuing operations	211,561
Net loss - discontinued operations	0
Net loss	$ 211,561
Net loss per common share - basic | $ / shares	$ 0.002
Net loss per common share - diluted | $ / shares	$ 0.001
Asset Acquisition, Restated
Assets
Current assets	$ 55,419
Intangible assets, net	709,655
Other non-current assets	986,962
Total assets	1,752,036
Liabilities
Current liabilities	4,418,915
Long-term liabilities
License fees payable	890,000
Royalties payable	200,000
Other long-term liabilities	23,421,204
Total long-term liabilities	24,511,204
Liabilities subject to compromise	4,620,735
Total liabilities	28,930,119
Stockholders' deficit
Accumulated deficit	(33,561,580)
Other equity	6,383,497
Total Stockholders' deficit	(27,178,083)
Total liabilities and stockholders' deficit	1,752,036
CONSOLIDATED STATEMENTS OF OPERATIONS
Gross profit (loss)	(47,107)
General and administrative expenses	3,997,512
Operating loss	(4,044,619)
Other income and expenses	(6,466,773)
Net loss - continuing operations	(10,511,392)
Net loss - discontinued operations	(3,153,553)
Net loss	$ (13,664,995)
Net loss per common share - basic | $ / shares	$ (0.087)
Net loss per common share - diluted | $ / shares	$ (0.061)

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Discontinued Operations: Schedule of Discontinued Operations, Balance Sheet (Details) - RoxSan Pharamcy Inc - USD ($)		May 14, 2018	Dec. 31, 2017
Assets Held For Sale, Current
Cash and Cash Equivalents		$ 0	$ 2,421
Accounts Receivable, Net		0	40,856
Employee advances		0	1,800
Prepaid Expenses		0	6,884
Assets Held For Sale, Total, Current		0	51,961
Assets Held For Sale, Noncurrent
Loans Receivable - Long Term		0	169,902
Property & Equipment, Net		0	10,000
Deposits		0	22,000
Assets Held For Sale, Total, Noncurrent		0	201,902
Assets Held For Sale, Total		0	253,863
Liabilities Subject to Compromise
Accounts Payable and Accrued Expenses	[1]	3,543,160	2,979,132
Pension Plan Contribution Payable		0	12,570
Note Payable, Related Party	[2]	0	185,000
Related Party Payables	[2]	376,430	469,207
Note Payable	[2]	185,000	0
Note Payable-Merchant		974,826	974,826
Liabilities Subject to Compromise, Total		5,079,416	4,620,735
Liabilities Subject to Compromise, Total, Net of Assets Held For Sale		$ 5,079,416	$ 4,366,872

[1] As of January 1, 2017, Mr. Dave Engert, former Executive Chairman of the board of directors, is no longer a related party. As a result, related party payables was reduced by $105,746, representing $105,000 in accrued compensation and $746 in cash advances. As of December 31, 2017, $105,746 is included in accounts payable and accrued expenses as part of liabilities subject to compromise. See Note 17 for additional information and legal proceedings related to Mr. Engert

[2] As of January 1, 2018, Mr. Joseph M. Redmond, former President and member of the board of directors, is no longer a related party. As a result, related party payables was reduced by $307,997, representing $185,000 in promissory notes, $119,270 in accrued compensation, and $3,727 in expense advances. As of May 14, 2018, $185,000 is reflected as a note payable, and $122,997 is included in accounts payable and accrued expenses as part of liabilities subject to compromise. In addition, accrued interest of $11,823 related to the promissory note was reclassified from related party to non-related party accrued interest, and is included in accounts payable and accrued expenses as part of liabilities subject to compromise. See Note 17 for additional information and legal proceedings related to Mr. Redmond.

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Discontinued Operations: Schedule of Discontinued Operations, Income Statement (Details) - RoxSan Pharamcy Inc	4 Months Ended
	May 14, 2018 USD ($)
Revenue	$ 0
Cost of Goods Sold	0
Gross Profit	0
Sales, Marketing & Pharmacy Expenses	170,630
General & Administrative Expenses	586,993
Operating Loss	(757,623)
Interest Expense	(56,775)
Loss on disposal of equipment	(10,000)
Net Loss	$ (824,398)

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Segment Reporting: Schedule of Segment Reporting Information, by Segment (Details) - USD ($)		9 Months Ended
		Sep. 30, 2018	Sep. 30, 2017
Revenue		$ 10,749	$ 70,641
Gross Profit		(4,758)	(39,486)
Operating Income (loss)		(5,207,702)	(3,201,226)
Deprecation and amortization		90,465	52,733
Interest Expense		950,601	713,510
Loss on disposal of subsidiary		5,079,416
Gain on extinguishment of debt		22,931,148
Discount Amortization		2,775,000	3,935,000
Total Assets		1,394,565	1,541,598
Goodwill		785,060	785,060
Additions to Property and Equipment		0	0
Remote Care Segment
Revenue		9,399	70,641
Gross Profit		(6,108)	(39,486)
Operating Income (loss)		(277,261)	(489,744)
Deprecation and amortization		6,897	5,752
Interest Expense		2,206	597
Loss on disposal of subsidiary		0
Gain on extinguishment of debt		0
Discount Amortization		(370,000)	110,000
Total Assets		915,652	941,523
Goodwill		785,060	785,060
Additions to Property and Equipment		0	0
Behavioral Healthcare Segment
Revenue	[1]	1,350	0
Gross Profit	[1]	1,350	0
Operating Income (loss)	[1]	(144,218)	(69,023)
Deprecation and amortization	[1]	82,320	45,733
Interest Expense	[1]	0	0
Loss on disposal of subsidiary	[1]	0
Gain on extinguishment of debt	[1]	0
Discount Amortization	[1]	0	0
Total Assets	[1]	467,007	576,767
Goodwill	[1]	0	0
Additions to Property and Equipment	[1]	0	0
Diagnostics/Corporate Segment
Revenue		0	0
Gross Profit		0	0
Operating Income (loss)		(4,786,223)	(2,642,459)
Deprecation and amortization		1,248	1,248
Interest Expense		948,395	712,913
Loss on disposal of subsidiary		5,079,416
Gain on extinguishment of debt		22,931,148
Discount Amortization		3,145,000	3,825,000
Total Assets		11,906	23,308
Goodwill		0	0
Additions to Property and Equipment		$ 0	$ 0

[1] As of January 1, 2017, Mr. Dave Engert, former Executive Chairman of the board of directors, is no longer a related party. As a result, related party payables was reduced by $105,746, representing $105,000 in accrued compensation and $746 in cash advances. As of December 31, 2017, $105,746 is included in accounts payable and accrued expenses as part of liabilities subject to compromise. See Note 17 for additional information and legal proceedings related to Mr. Engert