Quarterly report pursuant to Section 13 or 15(d)

Significant Accounting Policies (Policies)

v3.10.0.1
Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Nature of Business [Policy Text Block]
Nature of Business
 
The Coretec Group Inc. (the “Group”) (formerly
3DIcon
Corporation) (
“3DIcon”
) was incorporated on
August 11, 1995,
under the laws of the State of Oklahoma as First Keating Corporation. The articles of incorporation were amended
August 1, 2003
to change the name to
3DIcon
Corporation. During
2001,
First Keating Corporation began to focus on the development of
360
-degree holographic technology. From
January 1, 2001,
3DIcon’s
primary activity has been the raising of capital in order to pursue its goal of becoming a significant participant in the development, commercialization and marketing of next generation
3D
display technologies.
 
Coretec Industries, LLC (“Coretec”), a wholly owned subsidiary of the Group (collectively the “Company”), was organized on
June 2, 2015
in the state of North Dakota. Coretec is currently developing, testing, and providing new and/or improved technologies, products, and service solutions for energy-related industries including, but
not
limited to oil/gas, renewable energy, and distributed energy industries. Many of these technologies and products also have application for medical, electronic, photonic, display, and lighting markets among others. Early adoption of these technologies and products is anticipated in markets for energy storage (Li-ion batteries), renewable energy (BIPV), and electronics (Asset Monitoring).
Business Combinations Policy [Policy Text Block]
Reverse Acquisition
 
On
May 31, 2016,
the Group entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Coretec and
four
Coretec members (the “Members”), which Members held all outstanding membership interests in Coretec. On
September 30, 2016 (
the “Closing Date”), the Group closed the transaction contemplated by the Share Exchange Agreement. Pursuant to the Share Exchange Agreement, the Members agreed to sell all their membership interests in Coretec to the Group in exchange for the Group’s issuance of an aggregate
4,760,872
shares of the Group’s Series B Convertible Preferred Stock to the Members (the “Exchange”). Coretec became a wholly-owned subsidiary of the Group and the former Members beneficially owned approximately
65%
of the Group’s common stock on a fully-diluted basis on the Closing Date. Upon the closing of the Share Exchange Agreement,
two
of the Group’s Directors resigned and
three
new Directors associated with Coretec were nominated and elected, giving control of the board of directors to former Coretec Members.
Authorization of Reverse Stock Split, Policy [Policy Text Block]
Authorization of Reverse Stock Split
 
On
February 21, 2017 (
the “Record Date”), the Board of Directors unanimously approved, and a majority of the Company’s stockholders, as of the Record Date, approved by written consent pursuant to Section 
18
-
1073
of the Oklahoma Act, to permit the Company’s Board of Directors, in its sole discretion, to effectuate
one
or more consolidations of the issued and outstanding shares of common stock at some future date
no
later than the
first
anniversary of the Record Date, pursuant to which the shares of common stock would be combined and reclassified into
one
validly issued fully paid and non-assessable share of common stock at a ratio (the “Reverse Split Ratio”) within the range of
1
-for-
50
and up to
1
-for-
300
(the “Reverse Split Range”), with each stockholder otherwise entitled to receive a fractional share of common stock as a result of the Reverse Stock Split. Effective
June 28, 2017,
a Reverse Stock Split pursuant to the maximum stated Reverse Split Ratio, each
300
shares of our issued and outstanding common stock was automatically converted into
1
share of common stock.
Basis of Accounting, Policy [Policy Text Block]
Basis of Presentation
 
The accompanying condensed consolidated financial statements of the Company have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures made are adequate to make the information presented
not
misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s year-end audited consolidated financial statements and related footnotes included in the previously filed Form
10
-K, and in the opinion of management, reflects all adjustments necessary to present fairly the condensed consolidated financial position of the Company. The condensed consolidated results of operations for interim periods
may
not
be indicative of the results which
may
be realized for the full year. 
Consolidation, Policy [Policy Text Block]
Principles of Consolidation
 
The condensed consolidated financial statements include the accounts of the Group and its wholly owned subsidiary, Coretec. Intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates, Policy [Policy Text Block]
Use of Estimates
 
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. Actual results could differ from the estimates and assumptions used.
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]
Long-Lived Assets
 
Long-lived assets, such as property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may
not
be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company
first
compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is
not
recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and
third
-party independent appraisals, as considered necessary.
Fair Value of Financial Instruments, Policy [Policy Text Block]
Fair Value of Financial Instruments
 
The following methods and assumptions were used to estimate the fair value of each class of financial instrument held by the Company:
 
Current assets and current liabilities
- The carrying value approximates fair value due to the short maturity of these items.
 
Notes payable -
The fair value of the Company’s notes payable has been estimated by the Company based upon the liability’s characteristics, including interest rate. The carrying value approximates fair value.
Debt, Policy [Policy Text Block]
Beneficial Conversion Feature of Convertible Notes Payable
 
The Company accounts for convertible notes payable in accordance with the guidelines established by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic
470
-
20,
Debt with Conversion and Other Options, Emerging Issues Task Force ("EITF")
98
-
5,
Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF
00
-
27,
Application of Issue
No
98
-
5
To Certain Convertible Instruments. The beneficial conversion feature of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a beneficial conversion feature related to the issuance of a convertible note when issued.
 
The beneficial conversion feature of a convertible note is credited to additional paid-in-capital.  The intrinsic value is recorded in the consolidated financial statements as a debt discount and such discount is amortized over the expected term of the convertible note and is charged to interest expense.
Earnings Per Share, Policy [Policy Text Block]
Basic and Diluted Loss Per Common Share
 
 
Basic loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. 
 
Basic and diluted loss per shares are calculated the same for all periods presented due to the net loss. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: 
 
   
September
30,
 
   
2018
   
2017
 
Options
   
2,883,379
     
284,166
 
Warrants
   
1,061
     
65,228
 
Series A convertible preferred stock
   
115,000
     
115,000
 
Series B convertible preferred stock
   
-
     
41,842,241
 
Convertible debentures
   
166,249,033
     
61,122,346
 
Total potentially dilutive shares
 
 
169,248,473
   
 
103,428,981
 
Subsequent Events, Policy [Policy Text Block]
Subsequent Events
 
The Company evaluates events that have occurred after the balance sheet date but before the condensed consolidated financial statements are issued. Based upon the evaluation, the Company did
not
identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed in Note
7.
 
New Accounting Pronouncements, Policy [Policy Text Block]
Recent Accounting Pronouncements
 
The following is a summary of recent accounting pronouncements that are relevant to the Company:
 
In
June 2018,
the Financial Accounting Standards Board (“FASB”) issued ASU
No.
2018
-
07
Compensation – Stock Compensation (Topic
718
): Improvements to Non-Employee Share-Based Payment Accounting
. The new guidance aligns the requirements for nonemployee share-based payments with the requirements for employee share-based payments. The Company does
not
expect the amendment, which is effective beginning with our
2019
fiscal year, to have a material impact on our consolidated financial statements. 
 
In
January 2016,
the FASB issued ASU
No.
 
2016
-
01,
Financial Instruments – Overall (Subtopic
825
-
10
): Recognition and Measurement of Financial Assets and Financial Liabilities
(“ASU
2016
-
01”
). ASU
2016
-
01
addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments, specifically equity investments and financial instruments measured at amortized cost. ASU
2016
-
01
is effective for public companies for annual and interim periods beginning after
December 15, 2017.
ASU
2016
-
01
did
not
have a material impact on the Company’s financial statements.
 
In
August 2016,
the FASB issued ASU
No.
 
2016
-
15,
Statement of Cash Flows (Topic
230
): Classification of Certain Cash Receipts and Cash Payments
(“ASU
2016
-
15”
). ASU
2016
-
15
will make
eight
targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU
2016
-
15
is effective for public companies for interim and annual periods beginning after
December 15, 2017,
with early adoption permitted. ASU
2016
-
15
did
not
have a material impact on the Company’s cash flows.
 
In
February 2016,
the FASB issued accounting standards update (ASU)
No.
2016
-
02,
 
Leases (Topic
842
)
 intended to increase transparency and comparability among companies by requiring most leases to be included on the balance sheet and by expanding disclosure requirements. This is effective for public business entities for fiscal years beginning after
December 15, 2018,
including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The Company is currently evaluating the impact that this new guidance
may
have on its consolidated results of operations, cash flows, financial position and disclosures.
  
The FASB has issued ASU
2014
-
09,
Revenue from Contracts with Customers
. This ASU supersedes the revenue recognition requirements in FASB ASC
605
- Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. On
July 9, 2015,
the FASB deferred the effective date of ASU
No.
2014
-
09
from annual periods beginning after
December 15, 2016
to annual periods beginning after
December 15, 2017.
The adoption of this standard did
not
have a material impact on the Company’s consolidated financial position and results of operations because the Company currently has
no
revenue.
 
In
January 2017,
the FASB issued ASU
2017
-
01,
Business Combinations (Topic
805
): Clarifying the Definition of a Business
. This ASU provides a screen to determine when a set is
not
a business. The screen requires that when substantially all of the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is
not
a business. The amendments in this ASU are effective beginning after
December 15, 2017,
including interim periods within those periods and should be applied prospectively. The adoption of this standard did
not
have a material impact on its consolidated financial position and results of operations.
 
In
January 2017,
the FASB issued ASU
2017
-
04,
Intangibles – Goodwill and Other (Topic
350
): Simplifying the Test for Goodwill Impairment
. This ASU simplifies the subsequent measurement of goodwill by eliminating Step
2
from the goodwill test. Under Step
2,
an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and labilities following the procedure that would be required in determining the fair value of assets acquired and labilities assumed in a business combination. Instead, an entity should perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendments in this ASU are effective beginning after
December 15, 2019,
however early adoption is permitted beginning
January 1, 2017
and should be applied on a prospective basis. The Company does
not
anticipate that the adoption of this standard will have a material impact on its consolidated financial position and results of operations.