10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q

 ☑ QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2017

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

Commission file number 000-30178

VIEW SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Colorado	59-2928366
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6 Park Center Court, Owings Mills,  Baltimore, Maryland  21117

(Address of principal executive offices) (Zip Code)

(410) 242-8439

(Registrant's telephone number, including area code)

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 past 90 days.

Yes R   No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 registrant 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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer £	Accelerated filer £	Non-accelerated filer £	Smaller reporting company R
		(Do not check if a 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 o No ☑

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

Class	August 14, 2017
Common Stock, $.001 par value per share	326,705,526

1

VIEW SYSTEMS, INC.

FORM 10-Q

FOR THE PERIOD ENDED JUNE 30, 2017

INDEX

			Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
PART I. FINANCIAL INFORMATION			4
Item 1.	Financial Statements		4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3.	Qualitative and Quantitative Disclosures About Market Risk		31
Item 4.	Controls and Procedures		31
PART II. OTHER INFORMATION			32
Item 1.		Legal Proceedings	32
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.		Defaults Upon Senior Securities	32
Item 4.		[Removed and Reserved]	32
Item 5.		Other information	32
Item 6.		Exhibits	32
SIGNATURES			33

2

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of View Systems, Inc. (the "Company"), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

3

View Systems, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
ASSETS
	June 30,			December 31,
	2017			2016
Current Assets
Cash	$	3,308		$	94
Accounts receivable		3,859			3,859
Inventory		1,088			1,088
Total current assets		8,255			5,041
Property and Equipment (Net)		1,797			2,197
Other Assets
Deposits		1,595			1,595
Total other assets		1,595			1,595
Total assets	$	11,647		$	8,833
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$	432,837		$	432,841
Deferred compensation		206,284			149,170
Accrued and withheld payroll taxes payable		190,342			187,030
Accrued interest payable		140,625			125,625
Accrued royalties payable		225,000			225,000
Loans from stockholders		632,388			591,208
Notes payable		50,000			50,000
Deferred revenue		57,998			66,148
Total current liabilities		1,935,474			1,827,022
Non-current Liabilities
Notes payable (non-current portion)		-			-
Total liabilities		1,935,474			1,827,022
Stockholders' Deficit
Convertible preferred stock, authorized 10,000,000 shares, $.001 par value,
Issued and outstanding 5,589,647		5,590			-
Issued and outstanding 5,589,647		-			5,590
Common stock, authorized 950,000,000 shares, $.001 par value,
Issued and outstanding 326,705,526		326,705			-
Issued and outstanding 326,705,526		-			326,705
Common stock issuable		16,000			16,000
Additional paid in capital		27,392,125			27,392,125
Accumulated deficit		(29,664,247	)		(29,558,609	)
Total stockholders' deficit		(1,923,827	)		(1,818,189	)
Total liabilities and stockholders' deficit	$	11,647		$	8,833

 

The accompanying notes are an integral part of these consolidated financial statements

4

View Systems, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited) a
	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Revenues
Product sales and Installation	$	1,398		$	575		$	1,987		$	5,565
Extended warranties		10,975			18,950			19,150			38,575
Service income		11,279			-			11,279			-
Total revenue		23,652			19,525			32,416			44,140
Cost of sales		7,828			-			7,828			734
Gross profit		15,824			19,525			24,588			43,406
Operating expenses
General and administrative		42,902			10,351			43,213			22,855
Professional fees		8,148			-			8,148			5,000
Salaries and benefits		30,553			28,367			60,553			84,035
Total operating expenses		81,603			38,718			111,914			111,890
Loss from operations		(65,779	)		(19,193	)		(87,326	)		(68,484	)
Other Income (expense)
Interest expense		(9,156	)		(9,256	)		(18,312	)		(35,444	)
Total other income (expense)		(9,156	)		(9,256	)		(18,312	)		(35,444	)
Net loss	$	(74,935	)	$	(28,449	)	$	(105,638	)	$	(103,928	)
Net loss per share (basic and diluted)	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding
(basic and diluted)		326,705,526			319,679,601			326,705,526			326,705,526

The accompanying notes are an integral part of these consolidated financial statements

5

View Systems, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
	For the Six Months Ended
	June 30,
	2017			2016
Cash flows from operating activities:
Net loss	$	(105,638	)	$	(103,928	)
Adjustments to reconcile net loss to
Net cash used in operations:
Depreciation and amortization		400			400
Common stock issued in payment of services		-			16,800
Change in operating assets and liabilities:
(Increase) decrease in cash from:
Accounts receivable		-			(5,659	)
Deposits		-			-
Increase (decrease) in cash from:
Accounts payable		(4	)		24,499
Deferred compensation		57,114			60,000
Accrued interest		15,000			15,000
Payroll taxes accrued and withheld		3,312			6,941
Deferred revenue		(8,150	)		(31,975	)
Net cash used in operating activities		(37,966	)		(17,922	)
Cash flows from financing activities:
Principal payments on notes payable		-			(11,095	)
Loans to/from stockholders		41,180			26,505
Net cash provided by financing activities		41,180			15,410
Increase (Decrease) in cash		3,214			(2,512	)
Cash at beginning of period		94			2,617
Cash at end of period	$	3,308		$	105

The accompanying notes are an integral part of these consolidated financial statements

6

View Systems, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited) (Continued)
	For the Six Months Ended
	June 30,
	2017		2016
Non cash investing and financing activities:
Expenses paid with common stock	$	-	$	16,800
Notes payable paid by shareholders	$	-	$	11,095
Cash paid for:
Interest	$	-	$	-
Income taxes	$	-	$	-

The accompanying notes are an integral part of these consolidated financial statements

7

VIEW SYSTEMS, INC.and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

View Systems, Inc. and Subsidiaries (the "Company") designs, develops and sells computer software and hardware used in conjunction with surveillance capabilities.  The technology utilizes the compression and decompression of digital inputs.  In March 2002, the Company acquired Milestone Technology, Inc., which has developed a concealed weapons detection portal.  In July 2009, the Company acquired FibreXpress, Inc., which is a company that specializes in developing and selling equipment and components for the fiber optic and communication cable industries.  During the second quarter of 2017, the Company established a new business line in the Erectile Dysfunction Medical market by opening one clinic within its' Medical Therapeutics subsidiary.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Milestone Technology, Inc.,  FibreXpress, Inc. and Medical Therapeutics.  All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could differ from the estimates that were used.

Cash and Cash Equivalents 

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less

Accounts Receivable

Accounts receivable consists of amounts due from customers.  Management periodically reviews the open accounts and makes a determination as to the ultimate collectability of each account.  Once it is determined that collection is in doubt the account is written off as a bad debt.  In order to provide for accounts that may become uncollectible in the future, the Company has established an allowance for doubtful accounts.  The balance of the allowance for doubtful accounts is based on management's judgment and the Company's prior experience with managing accounts receivable.

Management's determination is that the remaining balance is collectible and therefore no allowance for possible uncollectible accounts receivable has been recorded for the periods ended June 30, 2017 and 2016, respectively.

8

VIEW SYSTEMS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

The Company has three main products, namely the concealed weapons detection system, the visual first responder system and the Viewmaxx digital video system.  In all cases revenue is considered earned when the product is shipped to the customer, installed (if necessary) and accepted by the customer as a completed sale.  The concealed weapons detection system and the digital video system each require installation and training.  The customer can engage us for installation and training, which is a revenue source separate and apart from the sale of the product.  In those cases revenue is recognized at the completion of the installation and training and acceptance by the customer.  However, the customer can also self-install or can engage another firm to provide installation and training.  Each product has an unconditional 30 day warranty, during which time the product can be returned for a complete refund.  Customers can purchase extended warranties, which provide for replacement or repair of the unit beyond the period provided by the unconditional warranty.  Warranties can be purchased for various periods but generally they are for one year period that begins after any other warranties expire.  The revenue from warranties is recognized on a straight line basis over the period covered by the warranty.  Prior to the issuance of financial statements management reviews any returns subsequent to the end of the accounting period which are from sales recognized during the accounting period, and makes appropriate adjustments as necessary.  Product prices are fixed or determinable and products are only shipped when collectability is reasonably assured.  For our Medical Business, service revenue is considered earned when the service is provided.

Inventories

Inventories stated at the lower of cost or market.  Cost is determined by the first-in-first-out method (FIFO).  As of June 30, 2017 and December 31, 2016 the Company's inventory consisted of unassembled parts of the product.

Property and Equipment

Property and equipment is recorded at cost and depreciated over their useful lives, using the straight-line and accelerated depreciation methods.  Upon sale or retirement, the cost and related accumulated depreciation are eliminated from the respective accounts, and the resulting gain or loss is included in the results of operations.  The useful lives of property and equipment for purposes of computing depreciation are as follows:

Equipment                                 5-7 years

Software tools                              3 years

Repairs and maintenance charges which do not increase the useful lives of assets are charged to operations as incurred.  Depreciation expense for the periods ended June 30, 2017 and 2016 amounted to $400 and $400, respectively.

9

VIEW SYSTEMS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income Taxes

Income taxes are recorded under the assets and liabilities method whereby deferred tax assets and liabilities are recognized for the future tax consequences, measured by enacted tax rates, attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the rate change becomes effective.  Valuation allowances are recorded for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.

The Company files income tax returns in the U.S. federal jurisdictions, and in various state jurisdictions.  The Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years prior to 2010.  TheCompany policy is to recognize interest related to unrecognized tax benefits as income tax expense.  The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.

Research and Development

Research and development costs are expensed as incurred.

Advertising

Advertising costs are charged to operations as incurred.  Advertising costs for the six months ended June 30, 2017 and 2016 were $3,072 and $0, respectively.

Nonmonetary Transactions

Nonmonetary transactions are accounted for in accordance with ASC 845 " Nonmonetary Transactions" which requires the transfer or distribution of a nonmonetary asset or liability to be based generally, on the fair value of the asset or liability that is received or surrendered, whichever is more clearly evident.

Financial Instruments

For most financial instruments, including cash, accounts receivable, accounts payable and accruals, management believes that the carrying amount approximates fair value, as the majority of these instruments are short-term in nature.

Stock-Based Compensation

The Company accounts for share-based compensation at fair value.  Share-based compensation cost for stock options granted to employees, board members and service providers is determined at the grant date using an option pricing model that uses level 3 unobservable inputs.  The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period.

10

VIEW SYSTEMS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss available to common stockholder by the weighted average number of common shares outstanding.  Diluted net loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding.  Potential common shares consist of shares issuable upon the exercise of stock options and warrants in addition to shares that may be issued in the event that convertible debt is exchanged for shares of common stock.  The calculation of the net loss per share available to common stockholders for the periods ended June 30, 2017 and 2016 does not include potential shares of common stock equivalents, as their impact would be antidilutive.  The following reconciles amounts reported in the financial statements:

				Weighted Average
	(Loss)			Shares		Per-share
	(Numerator)			(Denominator)		Amount
Period ended June 30, 2017
Loss from operations which is the amount
that is available to common stockholders	$	(105,638	)		326,705,526	$	(0.00	)
Period ended June 30, 2016
Loss from operations which is the amount
that is available to common stockholders	$	(103,928	)		326,705,526	$	(0.00	)

11

VIEW SYSTEMS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.GOING CONCERN

The Company has incurred and continues to incur, losses from operations.  For the periods ended June 30, 2017 and 2016, the Company incurred net losses of $105,638 and $103,928, respectively, and has a working capital deficiency of $1,927,219 at June 30, 2017.  In addition, certain notes payable have come due and the note holders are demanding payment.

Management is very actively working to cure these situations and has implemented major plans to for the future growth and development of the Company.  Management is in the process of renegotiating more favorable repayment terms on the notes payable and the Company anticipates that these negotiations will result in extended payment plans.

Historically, the Company has financed its operations primarily through private financing.  It is management's intention to finance operations during the remainder of 2017 primarily through increased sales although there will still be a need for additional equity financing.  In addition, management is actively seeking out mergers and acquisitions which would be beneficial to the future growth of the Company.  There can be no assurance, however, that this financing will be successful and the Company may be required to further reduce expenses and scale back operations.

As described in Note 4, the Company is currently in default on a $50,000 loan from a stockholder.

The consolidated financial statements presented above and the accompanying Notes have been prepared on a going concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future, and does not include any adjustments to reflect possible future effects on the recoverability  and classification of assets, or the amounts and classification of liabilities that may result from the outcome of any extraordinary regulatory action, which would affect our ability to continue as a going concern.

Due to the conditions and events discussed above, there is substantial doubt about the Company's ability to continue as a going concern.

3.NEW ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued new guidance on the accounting for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. The Company is currently evaluating the impact of this guidance on its consolidated balance sheets. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.

In May 2014, the FASB issued guidance on the recognition of revenues which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. The Company is currently evaluating the impact of this guidance on its consolidated balance sheets and statement of operations. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016.

12

VIEW SYSTEMS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.NOTES PAYABLE

Notes payable as of June 30, 2017 and December 31, 2016 consists of the following:

	2017		2016
Stockholder Demand loan payable with interest at 5% per month dated September 18, 2009. The loan is secured by the Company's accounts receivable.  The note was payable in full  on December 17, 2009 and is currently in default		50,000		50,000
TOTAL	$	50,000	$	50,000
Less current portion		50,000		50,000
Non-current portion	$	-	$	-

5.INCOME TAXES

               For income tax purposes the Company has net operating loss carry forwards of $28,105,000 as of December 31, 2016 that may be used to offset future taxable income.  In the instance of future corporate acquisitions, the net operating losses may be used to offset the future taxable income of a qualifying subsidiary corporation which meets IRS regulations governing such situations.  The losses have accumulated since 1998 and they will start to expire in 2018.  IRS regulations also provide that significant changes in ownership (greater than 50%) could result in the expiration of some of the net operating loss carry forwards.  As of the date of this report the Company has not made an analysis of the changes in ownership to determine if any of these losses have expired. Net income tax benefit is not recognized at this time because there is no reasonable expectation that the benefit will be realized in the future.Due to continuous losses from operations the Company has assigned a full valuation allowance against its deferred tax assets.

13

VIEW SYSTEMS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. CONVERTIBLE PREFERRED STOCK

In July 2005 the Company issued 7,171,725 shares of Series A Preferred Stock in payment of services.  The issuance had been previously authorized by the Board of Directors.  Each share of Series A Preferred Stock has a liquidation preference, in the event of liquidation of the Company, of $0.001 per share before any payment or distribution is made to the holders of common stock.

During 2008 the Board of Directors approved a reverse split of the stock in which one new share of preferred stock was issued in exchange for each 80 shares of stock outstanding.  Accordingly, the total issued of preferred stock was adjusted from 7,171,725 shares to 89,647 shares.  The par value and the total authorized shares did not change.

Effective in 2010 the initial issuance of  Series A Preferred can be converted into common stock in the ratio of 15:1.  During 2011 the Board of Directors authorized the issuance of an additional 1,400,000 shares of Series A Preferred Stock in payment of a loan from a shareholder in the amount of $64,000 and also in payment of services in the amount of $34,000. These additional shares can be converted to common stock beginning in 2013. Each share is entitled to fifteen votes and shall be entitled to vote on any matters brought to a vote on the common stock shareholder.

During 2012 the Board of Directors authorized the issuance of an additional 1,500,000 shares of Series A Preferred Stock in payment of deferred compensation and current compensation in the amount of $161,463.

During 2013 the Board of Directors authorized the issuance of an additional 500,000 shares of Series A Preferred Stock in payment of professional services in the amount of $225,000.

During 2014 the Board of Directors authorized the issuance of an additional 2,000,000 shares of Series A Preferred Stock in payment of deferred and current compensation in the amount of $480,000.

During 2015 an owner of preferred stock elected to convert 1,400,000 shares of his preferred stock into 21,000,000 shares of the Company's common stock.

During 2015 the Board of Directors authorized the issuance of an additional 1,000,000 shares of Series A Preferred Stock in payment of deferred compensation of $37,500 and current compensation of $37,500.

During 2016 an owner of preferred stock elected to convert 500,000 shares of preferred stock into 7,500,000 shares of the Company's common stock.

7.OPERATING LEASE

In 2015 the Company leased 1,500 sq. ft. of office space under a non-cancellable lease at 1900 Lansdowne Road, Baltimore Maryland with a monthly rent of $1,595 for a period of 3 years.  Effective July 31, 2016 the lease was terminated by mutual agreement with the landlord.  In 2017, the Company leased office space at 6 Park Center Court, Owings Mills,  Baltimore, Maryland  for use as its' Medical Clinic and Corporate Office.  The monthly rent of $2,037 is through September 2017 and is renewable, automatically for one year terms.  Rent expense was $8,663 and $8,918 for the periods ended June 30, 2017 and 2016, respectively.

14

VIEW SYSTEMS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.STOCK BASED COMPENSATION

On April 2, 2010 the Company adopted its 2010 Equity Incentive Plan.  Reserved for equity issuances under the Equity Incentive Plan are 50,000,000 shares of our common stock.  During 2011 14,116,433 shares of common stock were issued under the provisions of the 2010 Equity Incentive Plan for which $92,065 of expenses were recognized.

On June 1, 2010 the Company adopted its 2010 Service Provider Stock Compensation Plan.  Reserved for equity issuances under the Service Provider Stock Compensation Plan are 50,000,000 shares of our common stock.  No equity issuances were made during the reporting period from the 2010 Service Provider Stock Compensation Plan.

During the period ended June 30, 2016 the Company issued the following compensatory shares outside of its existing Stock Option and Restricted Share Plans at the discretion of the Board of Directors:

For the six month period ended June 30, 2016 the Board authorized the issuance of 7,000,000 shares of common stock in payment of interest expense amounting to $16,800.

Independent contractors and consultants' expense was based on the estimated value of services rendered or the value of the common stock issued, if more reliably determined.

Stock Options and Warrants

On April 2, 2010, the Company adopted its 2010 Equity Incentive Plan, which authorized, among other forms of incentives, the issuance of stock options.  Reserved for equity issuances under the 2010 Equity Incentive Plan are 50,000,000 shares of our common stock.  No equity issuances have been made from the 2010 Equity Incentive Plan.  Stock options, which may be tax qualified and non-qualified, are exercisable for a period of up to ten years at prices at or above market prices as established on the date of the grant.

Stock Options

Certain nonqualified stock options were issued during the period ended June 30, 2013 to a member of the board of directors as compensation for services performed.

                      Weighted            Weighted Average    Aggregate

                                                                  Number of               Average Exercise            Remaining              Intrinsic

Options Price                                                                                                                ContractualLife           Value

Outstanding at Dec 31, 2016                10,000,000                          $0.03                          1.24                          $     -

Granted                                                         -                                          -                                 -                                  -

Exercised                                                      -                                          -                                 -                                  -

Forfeited                                                       -                                          -                                 -                                 -

Outstanding at June 30, 2017             10,000,000                           $0.03                            .52                         $      -

Exercisable at June 30, 2017               10,000,000                            $0.03                            .52                        $      -

The Company uses the Black-Scholes option pricing model to calculate the fair value of options.  Significant assumptions used in this model include:

Annual Dividend                                                                                           -

Expected Life (in years)                                                                                 5.00

Risk Free Interest Rate                                                                                  0.78%

Expected Volatility                                                                                    325.25%

15

VIEW SYSTEMS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.     RELATED PARTY TRANSACTIONS

Certain stockholders made cash advances to the Company to help with short-term working capital needs.  The net proceeds (payments) from stockholders with unstructured payment plans amounted to $41,180 and $26,505 for thesix months ended June 30, 2017 and 2016, respectively.  The total balance due on unstructured loans from stockholders amounted to $632,388 as of June 30, 2017 and $591,208 at December 31, 2016.

10.      ISSUABLE COMMON STOCK

              As of June 30, 2017 and December 31, 2016 740,000 shares of the authorized shares of common stock amounting to $16,000, had not been issued.

11.  CONTINGENT LIABILITY

               Effective January 1, 2015 the Board of Directors authorized a new employment contract with Gunther Than, CEO of View Systems, Inc.  That employment contract provides that in the event of a change in control of the Board of Directors or a buyout or takeover or substantial change of management structure Mr. Than will receive a minimum of three year's salary plus 4.8 million shares of unrestricted stock of the equivalent in cash at Mr. Than's direction.  Mr. Than's current base salary is $120,000 per annum.

12.  OPERATING SEGMENTS

The Company operates in two segments: (1) the design, development and sale of computer software and hardware used in conjunction with surveillance capabilities and (2) a newly established business line in the Erectile Dysfunction Medical field. The following table details net revenue and income before income taxes by segment:

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Revenues
Security Systems	$	12,373		$	19,525		$	21,137		$	44,140
Medical		11,279			-			11,279			-
	$	23,652		$	19,525		$	32,416		$	44,140
Loss Before Taxes
Security Systems	$	(29,789	)	$	(28,449	)	$	(60,492	)	$	(103,928	)
Medical		(45,146	)		-			(45,146	)		-
	$	(74,935	)	$	(28,449	)	$	(105,638	)	$	(103,928	)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

EXECUTIVE OVERVIEW

The following analysis of our consolidated financial condition and results of operations for the three and six-month period ended June 30, 2017 and June 30, 2016 should be read in conjunction with the Consolidated Financial Statements and other information presented elsewhere in this quarterly report.

Overview

View Systems, Inc. has developed, produced and marketed computer software and hardware systems for security and surveillance applications. In 1998 digital video recorder technology was our first developed product and we enhanced this product line by developing interfaces with other various technologies, such as facial recognition, access control cards and control devices such as magnetic locks, alarms and other common security devices.

We expanded our product line in 2002 to include a concealed weapons detection system we call ViewScan. Until 2005 we assembled all of our products in-house.  Unfortunately, the rising costs of manufacturing equipment and the large quantities required to become cost competitive has forced us to quit manufacturing our own products.  Our strategy for 2017 for ViewScan is to continue our extended warranty offerings and service provisions to the various installations we have.

In the short term, management continues to provide parts and repair service work to our current installations. Then, the next phase of our business plan will be to raise additional funds through common stock offerings to provide working capital to finance our new business, in the medical arena called Medical Therapeutics

Products and Services

Our current principal products and services have included:

ViewScan Concealed Weapons Detection System

ViewScan, which has also been sold under the name "Secure Scan", is a walk-through concealed weapons detector which uses data sensing technology to accurately pinpoint the location, size and number of concealed weapons. This walk-through portal is controlled by a master processing board and a personal computer based unit which receives magnetic and video information and combines it in a manner that allows the suspected locations of the concealed weapon(s) to be displayed and stored electronically.

RESULTS OF OPERATIONS

The following discussions are based on our consolidated financial statements, including our subsidiaries.  These charts and discussions summarize our financial statements for the six months ended June 30, 2017 and June 30, 2016 and should be read in conjunction with the financial statements, and notes thereto, included with our most recent Form 10-K for fiscal year ended December 31, 2016.

SUMMARY COMPARISON OF OPERATING RESULTS*
	Six months ended June 30,
	2017			2016
Revenues, net	$	32,416		$	44,140
Cost of sales		7,828			734
Gross profit		24,588			43,406
Total operating expenses		111,914			111,890
Profit (Loss) from operations		(87,326	)		(68,484	)
Total other income (expense)		(18,312	)		(35,444	)
Net income (loss)		(105,638	)		(103,928	)
Net income (loss) per share	$	(0.00	)	$	(0.00	)

16

Six Month Period Ended June 30, 2017 Compared to Six Month Period Ended June 30, 2016.

Our net loss for the six month period ended June, 30 2017 was ($105,638) compared to a net loss of ($103,928) during the six month period ended June 30, 2016 (a increase in net loss of $1,710). We generated net revenues of $32,416 during the six month period ended June 30, 2017 compared to $44,140 during the six month period ended June 30, 2016 (a decrease in net revenue of $11,724). Net revenues related to View Scan consisted of $21,137 during the six month period ended June 30, 2017 compared to $44,140 during the six month period ended June 30, 2016 (a decrease in net revenue of $23,003). This was offset by net revenues from our new Medical Business of $11,279 during the six month period ended June 30, 2017.  For our Viewscan, revenue is considered earned when the product is shipped to the customer. Service is a revenue source separate and apart from the sale of the product.  Generally, revenue is recognized at the completion of the installation. We measure backlog as orders for which a purchase order has been made. For our Medical Business, service revenue is considered earned when the service is provided.

We have experienced a decrease in sales of our products which resulted in decreased revenues for the six month period ended June 30, 2017 compared to the six month period ended June 30, 2016. The decreased revenue is the result of the cessation of the manufacturing of our product.

Cost of goods sold increased during the six month period ended June 30, 2017 to $7,828 from $734 incurred during the six month period ended June 30, 2016, resulting in a gross profit of $24,588 for the six month period ended June 30, 2017 compared to a gross profit of $43,406 for the six month period ended June 30, 2016. During the six month period ended June 30, 2017, the increasing cost of goods sold was due to the sale of our demonstration product in our Medical Business.

During the six month period ended June 30, 2017, we incurred operating expenses of $111,914 compared to $111,890 incurred during the six month period ended June 30, 2016 (an increase of $24).  Operating expenses were practically unchanged.

Our net operating loss during the six month period ended June 30, 2017 was ($105,638) compared to a net operating loss of ($103,928) during the six month period ended June 30, 2017.

During the six month period ended June 30, 2017, interest expense in the amount of ($18,312) (2016: ($35,444) was incurred. The decrease in interest expense was due to payoff of a loan from a stockholder.

The weighted average number of shares outstanding was 326,705,526 for the six month period ended June 30, 2017 compared to 326,705,526 for the six month period ended June 30, 2016.

Three Month Period Ended June 30, 2017 Compared to Three Month Period Ended June 30, 2016.

Our net loss for the three month period ended June 30, 2016 was ($74,935) compared to a net loss of ($28,449) during the three month period ended June 30, 2016, a increase in net loss of ($46,486). We generated net revenues of $23,652 during the three month period ended June 30, 2017 compared to $19,193 during the three month period ended June 30, 2016 (an increase in net revenue of $4,127). Net revenues related to View Scan consisted of $12,373 during the three month period ended June 30, 2017 compared to $19,525 during the three month period ended June 30, 2016 (a decrease in net revenue of $7,152). This was offset by net revenues from our new Medical Business of $11,279 during the three month period ended June 30, 2017.

We have experienced a continuation of revenue from extended warranties and the revenue generated from our new venture the male therapies services we deliver.. The increase in total revenues was due to the launch of our Medical Business unit during the three months ended June 30, 2017, offseting a decrease in the demand for our security products and or warranties.

Cost of goods sold increased during the three month period ended June 30, 2017 to $(0) to $7,828 incurred during the three month period ended June 30, 2016 resulting in a gross profit of $15,824 for the three month period ended June 30, 2017 compared to a gross profit of $19,525 for the three month period ended June 30, 2016.

17

During the three month period ended June 30, 2017, we incurred operating expenses of $81,603 compared to $38,718 incurred during the three month period ended June 30, 2016 (a decrease of $43,085).

Operating expenses incurred during the three month period ended June 30, 2017 increased  compared to the three month period ended June 30, 2016 primarily due to a our efforts to start the medical clinic and consisted of advertising ,supplies and acquisition of software and materials related to the nature of the medical business.

Our loss from operations during the three month period ended June 30, 2017 was ($65,779) compared to a loss from operations of ($19,193) during the three month period ended June 30, 2016.

During the three month period ended June 30, 2017, we incurred other expenses in the form of interest expense of $9,156 (2016: $9,256).

After deducting other expense, we realized a net loss of ($74,935) for the three month period ended June 30, 2017 compared to a net loss of ($28,449) for the three month period ended June 30, 2016. The weighted average number of shares outstanding was 326,705,526 for the three month period ended June 30, 2017 compared to 326,705,526 for the three month period ended June 30, 2016.

LIQUIDITY AND CAPITAL RESOURCES

Six Month Period Ended June 30, 2017

As of June 30, 2017, our current assets were $11,647 and our current liabilities were $1,935,477, which resulted in a working capital deficit of $1,935,474. As of June 30, 2017, current assets were comprised of: (i) $3,308 in cash; (ii) $3,859 in accounts receivable; and (iii) $1,088 in inventory.

As of June 30, 2017, current liabilities were comprised of: (i) $432,837 in accounts payable and accrued expenses; (ii) $206,284 in deferred compensation; (iii) $190,342 in accrued and withheld payroll taxes payable; (iv) $140,625 in accrued interest payable; (v) $225,000 in accrued royalties payable; (vi) $632,338 in loans from stockholders; (vii) $50,000 in notes payable; and (viii) deferred revenue of $57,998.

As of June 30, 2017, our total assets were $11,647.

As of June 30, 2017, our total liabilities were $1,935,474 comprised of: (i) $9,35,474 in current liabilities; and (ii) $0 in long term portion of notes payable.

Stockholders' deficit increased from ($1,818,189) as of December 31, 2016 to ($1,923,827) as of June 30, 2017.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the six month period ended June 30, 2017, net cash flows used in operating activities was ($37,966) compared to net cash flows used in operating activities of ($17,922) for the six month period ended June 30, 2016.

Cash Flows from Investing Activities

For the six month periods ended June 30, 2017 and June 30, 2016, net cash flows provided by investing activities was -0-.

Cash Flows from Financing Activities

We have financed our operations primarily from debt or the issuance of equity instruments. For the six month period ended June 30, 2017, net cash flows provided from financing activities was $41,180 compared to $15,410 for the six month period ended June 30, 2016. Cash flows from financing activities for the six month period ended June 30, 2017 consisted of: (i) $0 in proceeds from sales of common stock; and (ii) $41,180 in loans received from stockholders.

18

PLAN OF OPERATION AND FUNDING

We have incurred losses for the past three fiscal years and had a net loss of $105,638 at June 30, 2017 and $103,928 at June 30, 2016. We had insufficient funds to deliver our backlog in the last half of 2016 through the present. Our revenues from product sales have been insufficient to cover our operating expenses. Our auditors have expressed substantial doubt that we can continue as a going concern. We have continued to push service contracts and control costs but the large overwhelming marketing budgets of our competitors in spite of our superior technology has diminished our ability to compete.

Our Board of Directors has decided to broaden our perspective and add additional business related or unrelated to the current security product market.  Two of our directors are physicians and both have investigated the Erectile Dysfunction market.  Our Board of Directors has decided to pursue the Erectile Dysfunction Medical market.

According to Pew Research, 10,000 Baby Boomers turn 65 every day, of which 49% are men. This ensures that we will have an expanding pool of prospective clients, and thus make possible the exponential growth of patients each year until 2030.  We have announced on January 6^th the acquisition of a company called Y.M. Advantage, Inc.  This company is a private entity engaged in the acquisition, development and management of medical clinics specializing in boutique procedures such as treatment for erectile dysfunction, hair restoration and a variety of specialized men's health therapeutic procedures.  The current US market estimates for erectile dysfunction therapies is upwards of $6 Billion.

The business strategy will be to establish multiple concierge, all-inclusive medical practices, providing a "one-stop shop" for most issues relating to male sexual dysfunction, including erectile dysfunction, testosterone replacement therapy, and premature ejaculation. By establishing or acquiring "men's clinics" in select geographic areas, View's business strategy is to capitalize on two irrefutable trends that are currently at play in the marketplace: an aging population and the rising prevalence of certain medical conditions cause erectile dysfunction such as diabetes, high blood pressure, smoking, obesity prostate issues etc.

We have decided to call the wholly owned sub of View Systems Medical Therapeutics.  We operate one clinic so far and plan to open in multiple cities where the population density is in excess of 300,000.

Going Concern

If the market price of our common stock falls below the fixed price of our registered stock offering, as in prior years we may again have insufficient financing commitments in place to meet our expected cash requirements for 2017. We cannot assure you that we will be able to obtain financing on favorable terms. If we cannot obtain financing to fund our operations in 2017, then we may be required to reduce our expenses and scale back our operations. These factors raise substantial doubt of our ability to continue as a going concern. Footnote 2 to our financial statements provides additional explanation of Management's views on our status as a going concern. The audited financial statements contained in this Annual Report do not include any adjustments to reflect the possible future effects on the recoverability of assets or the amounts of liabilities that may result should we be unable to continue as a going concern.

Our independent registered accounting firm included an explanatory paragraph in their reports on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

COMMITMENTS AND CONTINGENT LIABILITIES

Our total current liabilities increased to $1,935,474 at the six month period ended June 30, 2017 compared to $1,827,022 at fiscal year ended December 31, 2016. As of June 30, 2017, our short and long term notes payable consist of the following:

● We are in default of a September 18, 2009 demand loan payable to an investor which was due December 17, 2009 in the amount of $50,000. Interest has accrued at 5% per month since December 17, 2009. The loan is secured by our accounts receivable. Effective July 1, 2012 the accrual of interest was halted by agreement with the lender.

19

OFF BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

CONTRACTUAL OBLIGATIONS

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

CRITICAL ACCOUNTING POLICIES

Customers can purchase service contracts or extended warranties, which provide for replacement or repair of installed units beyond the period provided by the unconditional warranty. Service contracts can be purchased for various periods but generally they are for one year period that begins after any other warranties expire. The revenue from warranties is recognized on a straight line bases over the period covered by the warranty. Prior to the issuance of financial statements management reviews any returns subsequent to the end of the accounting period which are from sales recognized during the accounting period, and makes appropriate adjustments as necessary.

Going Concern Opinion

You should carefully consider the risks, uncertainties and other factors identified below because they could materially and adversely affect our business, financial condition, operating results and prospects and could negatively affect the market price of our Common Stock. Also, you should be aware that the risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we do not yet know of, or that we currently believe are immaterial, may also impair our business operations and financial results. Our business, financial condition or results of operations could be harmed by any of these risks. The trading price of our Common Stock could decline due to any of these risks, and you may lose all or part of your investment.   In assessing these risks you should also refer to the information contained in or incorporated by reference to our Form 10-K for the year ended December 31, 2016, including our financial statements and the related notes thereto.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer/Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of June 30, 2016. Based on such evaluation, we have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer/Principal Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining internal control over our financial reporting. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over our financial reporting includes those policies and procedures that:

20

(1) pertain to the maintenance of records that in reasonable detail accurately and fairy reflect our transactions.

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on our financial statements.

All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error or circumvention through collusion of improper overriding of controls. Therefore, even those internal control systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time.

Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2017. In making its assessment of internal control over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSD) in Internal-Control-Integrated Framework and implemented a process to monitor and assess both the design and operating effectiveness of our internal controls. Based on this assessment, management believes that as of June 30, 2017, our internal control over financial reporting was effective.

This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this quarterly report .

Changes in Internal Control Over Financial Reporting

Our management has evaluated, with the participation of our Chief Executive Officer/Chief Financial Officer, changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the period ended June 30, 2017. In connection with such evaluation, there have been no changes to our internal control over financial reporting that occurred since the beginning of our six month period ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  [REMOVED AND RESERVED]

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed as part of this Form 10-Q:

21

The following exhibits are filed as part of this Form 10-K:

10.1	View Systems, Inc. 2010 Equity Incentive Plan (Incorporated by reference to exhibit 10.1 to Form 10-Q filed May 14, 2010)
10.2	View Systems, Inc. 2010 Service Provider Stock Compensation Plan (Incorporated by reference to exhibit 10.4 to Form 10-Q filed August 19, 2010)
10.3	Employment agreement between View Systems and Gunther Than, dated December 1, 2009 (Incorporated by reference to exhibit 10.1 to Form 8-K, filed January 11, 2010)
10.4	Subcontractor Agreement dated March 9, 2009 between MasTec North America, Inc. and View Systems, Inc. (Incorporated by reference to exhibit 10.3 for Form 10-Q, Amendment No. 1, for the period ended March 31, 2009)
10.3	Purchase Agreement, dated June 1, 2012 (Incorporated by reference to exhibit 10.1 to Form 8-K, filed July 3, 2012)
10.4	Amendment to Purchase Agreement, dated June 28, 2012 (Incorporated by reference to exhibit 10.2 to Form 8-K, filed July 3, 2012)
21.1	List of Subsidiaries
31.1	Rule 13a-15(e)/15d-15(e) Certification by the Chief Executive Officer and Chief Financial Officer *
32.1	Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

SIGNATURES

Pursuant to the requirements 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. 

	VIEW SYSTEMS, INC.
Date: August 15, 2017	By:	/s/ Gunther Than
		Gunther Than
		Chief Executive Officer (Principal executive officer, principal financial officer, and principal accounting officer)

22

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13A-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION

302 OF THE SARBANES OXLEY ACT OF 2002

I, Gunther Than, certify that

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2017 of View Systems Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 15, 2017	By:	/s/ Gunther Than
		Gunther Than
		Chief Executive Officer/Principal Financial Officer

EX-32.1

 

Exhibit 32.1

Certification of Principal Executive Officer

Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of View Systems Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Gunther Than, Chief Executive Officer of the Company, certifies to the best of his knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company, and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

By /s/ Gunther Than

Gunther Than

Director, Chief Executive Officer and Chief Financial Officer

August 15, 2017

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 ("Section 906"), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to View System, Inc., and will be retained by View Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 14, 2017
Document And Entity Information
Entity Registrant Name	VIEW SYSTEMS INC
Entity Central Index Key	0001075857
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		326,705,526
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current Assets
Cash	$ 3,308	$ 94
Accounts receivable	3,859	3,859
Inventory	1,088	1,088
Total current assets	8,255	5,041
Property and Equipment (Net)	1,797	2,197
Other Assets
Deposits	1,595	1,595
Total other assets	1,595	1,595
Total assets	11,647	8,833
Current Liabilities
Accounts payable and accrued expenses	432,837	432,841
Deferred compensation	206,284	149,170
Accrued and withheld payroll taxes payable	190,342	187,030
Accrued interest payable	140,625	125,625
Accrued royalties payable	225,000	225,000
Loans from stockholders	632,388	591,208
Notes payable	50,000	50,000
Deferred revenue	57,998	66,148
Total current liabilities	1,935,474	1,827,022
Stockholders' Deficit
Convertible preferred stock, authorized 10,000,000 shares, $.001 par value, Issued and outstanding 5,589,647; Issued and outstanding 5,589,647	5,590	5,590
Common stock, authorized 950,000,000 shares, $.001 par value, Issued and outstanding 326,705,526; Issued and outstanding 326,705,526	326,705	326,705
Common stock issuable	16,000	16,000
Additional paid in capital	27,392,125	27,392,125
Accumulated deficit	(29,664,247)	(29,558,609)
Total stockholders' deficit	(1,923,827)	(1,818,189)
Total Liabilities and Stockholders' Deficit	$ 11,647	$ 8,833

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred Stock Shares Par Value	$ 0.001	$ 0.001
Preferred Stock Shares Authorized	10,000,000	10,000,000
Preferred Stock Shares Issued	5,589,647	5,589,647
Preferred Stock Shares Outstanding	5,589,647	5,589,647
Common Stock Shares Par Value	$ 0.001	$ 0.001
Common Stock Shares Authorized	950,000,000	950,000,000
Common Stock Shares Issued	326,705,526	326,705,526
Common Stock Shares Outstanding	326,705,526	326,705,526

XML

Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues
Product sales and Installation	$ 1,398	$ 575	$ 1,987	$ 5,565
Revenue from Extended warranties	10,975	18,950	19,150	38,575
Service income	11,279		11,279
Total revenue	23,652	19,525	32,416	44,140
Cost of sales	7,828		7,828	734
Gross profit	15,824	19,525	24,588	43,406
Operating expenses
General and administrative	42,902	10,351	43,213	22,855
Professional fees	8,148		8,148	5,000
Salaries and benefits	30,553	28,367	60,553	84,035
Total operating expenses	81,603	38,718	111,914	111,890
Loss from operations	(65,779)	(19,193)	(87,326)	(68,484)
Other Income (expense)
Interest expense	(9,156)	(9,256)	(18,312)	(35,444)
Total other income (expense)	(9,156)	(9,256)	(18,312)	(35,444)
Net loss	$ (74,935)	$ (28,449)	$ (105,638)	$ (103,928)
Net loss per share (basic and diluted)	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Weighted average shares outstanding (basic and diluted)	326,705,526	319,679,601	326,705,526	326,705,526

XML

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net loss	$ (105,638)	$ (103,928)
Adjustments to reconcile net loss to Net cash used in operations:
Depreciation and amortization	400	400
Common stock issued in payment of interest expense		16,800
Common stock issued in payment of services		16,800
(Increase) decrease in cash from:
Accounts receivable		(5,659)
Deposits
Increase (decrease) in cash from:
Accounts payable	(4)	24,499
Deferred compensation	57,114	60,000
Payroll taxes accrued and withheld	15,000	15,000
Accrued interest payable	3,312	6,941
Deferred revenue	(8,150)	(31,975)
Net cash used in operating activities	(37,966)	(17,922)
Cash flows from financing activities:
Principal payments on notes payable		(11,095)
Loans to/from stockholders	41,180	26,505
Net cash provided by financing activities	41,180	15,410
Increase (Decrease) in cash	3,214	(2,512)
Cash at beginning of year	94	2,617
Cash at end of year	3,308	105
Non cash investing and financing activities:
Expenses paid with common stock		16,800
Notes payable paid by shareholders		11,095
Cash paid for:
Interest
Income taxes

XML

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

View Systems, Inc. and Subsidiaries (the "Company") designs, develops and sells computer software and hardware used in conjunction with surveillance capabilities.  The technology utilizes the compression and decompression of digital inputs.  In March 2002, the Company acquired Milestone Technology, Inc., which has developed a concealed weapons detection portal.  In July 2009, the Company acquired FibreXpress, Inc., which is a company that specializes in developing and selling equipment and components for the fiber optic and communication cable industries.  During the second quarter of 2017, the Company established a new business line in the Erectile Dysfunction Medical market by opening one clinic within its' Medical Therapeutics subsidiary.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Milestone Technology, Inc.,  FibreXpress, Inc. and Medical Therapeutics.  All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could differ from the estimates that were used.

Cash and Cash Equivalents 

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less

Accounts Receivable

Accounts receivable consists of amounts due from customers.  Management periodically reviews the open accounts and makes a determination as to the ultimate collectability of each account.  Once it is determined that collection is in doubt the account is written off as a bad debt.  In order to provide for accounts that may become uncollectible in the future, the Company has established an allowance for doubtful accounts.  The balance of the allowance for doubtful accounts is based on management's judgment and the Company's prior experience with managing accounts receivable.

Management's determination is that the remaining balance is collectible and therefore no allowance for possible uncollectible accounts receivable has been recorded for the periods ended June 30, 2017 and 2016, respectively.

Revenue Recognition

The Company has three main products, namely the concealed weapons detection system, the visual first responder system and the Viewmaxx digital video system.  In all cases revenue is considered earned when the product is shipped to the customer, installed (if necessary) and accepted by the customer as a completed sale.  The concealed weapons detection system and the digital video system each require installation and training.  The customer can engage us for installation and training, which is a revenue source separate and apart from the sale of the product.  In those cases revenue is recognized at the completion of the installation and training and acceptance by the customer.  However, the customer can also self-install or can engage another firm to provide installation and training.  Each product has an unconditional 30 day warranty, during which time the product can be returned for a complete refund.  Customers can purchase extended warranties, which provide for replacement or repair of the unit beyond the period provided by the unconditional warranty.  Warranties can be purchased for various periods but generally they are for one year period that begins after any other warranties expire.  The revenue from warranties is recognized on a straight line basis over the period covered by the warranty.  Prior to the issuance of financial statements management reviews any returns subsequent to the end of the accounting period which are from sales recognized during the accounting period, and makes appropriate adjustments as necessary.  Product prices are fixed or determinable and products are only shipped when collectability is reasonably assured.  For our Medical Business, service revenue is considered earned when the service is provided.

Inventories

Inventories stated at the lower of cost or market.  Cost is determined by the first-in-first-out method (FIFO).  As of June 30, 2017 and December 31, 2016 the Company's inventory consisted of unassembled parts of the product.

Property and Equipment

Property and equipment is recorded at cost and depreciated over their useful lives, using the straight-line and accelerated depreciation methods.  Upon sale or retirement, the cost and related accumulated depreciation are eliminated from the respective accounts, and the resulting gain or loss is included in the results of operations.  The useful lives of property and equipment for purposes of computing depreciation are as follows:

Equipment                                 5-7 years

Software tools                              3 years

Repairs and maintenance charges which do not increase the useful lives of assets are charged to operations as incurred.  Depreciation expense for the periods ended June 30, 2017 and 2016 amounted to $400 and $400, respectively.

Income Taxes

Income taxes are recorded under the assets and liabilities method whereby deferred tax assets and liabilities are recognized for the future tax consequences, measured by enacted tax rates, attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the rate change becomes effective.  Valuation allowances are recorded for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.

The Company files income tax returns in the U.S. federal jurisdictions, and in various state jurisdictions.  The Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years prior to 2010.  TheCompany policy is to recognize interest related to unrecognized tax benefits as income tax expense.  The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.

Research and Development

Research and development costs are expensed as incurred.

Advertising

Advertising costs are charged to operations as incurred.  Advertising costs for the six months ended June 30, 2017 and 2016 were $3,072 and $0, respectively.

Nonmonetary Transactions

Nonmonetary transactions are accounted for in accordance with ASC 845 " Nonmonetary Transactions" which requires the transfer or distribution of a nonmonetary asset or liability to be based generally, on the fair value of the asset or liability that is received or surrendered, whichever is more clearly evident.

Financial Instruments

For most financial instruments, including cash, accounts receivable, accounts payable and accruals, management believes that the carrying amount approximates fair value, as the majority of these instruments are short-term in nature.

Stock-Based Compensation

The Company accounts for share-based compensation at fair value.  Share-based compensation cost for stock options granted to employees, board members and service providers is determined at the grant date using an option pricing model that uses level 3 unobservable inputs.  The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss available to common stockholder by the weighted average number of common shares outstanding.  Diluted net loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding.  Potential common shares consist of shares issuable upon the exercise of stock options and warrants in addition to shares that may be issued in the event that convertible debt is exchanged for shares of common stock.  The calculation of the net loss per share available to common stockholders for the periods ended June 30, 2017 and 2016 does not include potential shares of common stock equivalents, as their impact would be antidilutive.  The following reconciles amounts reported in the financial statements:

				Weighted Average
	(Loss)			Shares		Per-share
	(Numerator)			(Denominator)		Amount
Period ended June 30, 2017
Loss from operations which is the amount
that is available to common stockholders	$	(105,638	)		326,705,526	$	(0.00	)
Period ended June 30, 2016
Loss from operations which is the amount
that is available to common stockholders	$	(103,928	)		326,705,526	$	(0.00	)

XML

2. GOING CONCERN

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

2. GOING CONCERN

2.GOING CONCERN

The Company has incurred and continues to incur, losses from operations.  For the periods ended June 30, 2017 and 2016, the Company incurred net losses of $105,638 and $103,928, respectively, and has a working capital deficiency of $1,927,219 at June 30, 2017.  In addition, certain notes payable have come due and the note holders are demanding payment.

Management is very actively working to cure these situations and has implemented major plans to for the future growth and development of the Company.  Management is in the process of renegotiating more favorable repayment terms on the notes payable and the Company anticipates that these negotiations will result in extended payment plans.

Historically, the Company has financed its operations primarily through private financing.  It is management's intention to finance operations during the remainder of 2017 primarily through increased sales although there will still be a need for additional equity financing.  In addition, management is actively seeking out mergers and acquisitions which would be beneficial to the future growth of the Company.  There can be no assurance, however, that this financing will be successful and the Company may be required to further reduce expenses and scale back operations.

As described in Note 4, the Company is currently in default on a $50,000 loan from a stockholder.

The consolidated financial statements presented above and the accompanying Notes have been prepared on a going concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future, and does not include any adjustments to reflect possible future effects on the recoverability  and classification of assets, or the amounts and classification of liabilities that may result from the outcome of any extraordinary regulatory action, which would affect our ability to continue as a going concern.

Due to the conditions and events discussed above, there is substantial doubt about the Company's ability to continue as a going concern.

XML

3. NEW ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

3. NEW ACCOUNTING PRONOUNCEMENTS

3.NEW ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued new guidance on the accounting for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. The Company is currently evaluating the impact of this guidance on its consolidated balance sheets. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.

In May 2014, the FASB issued guidance on the recognition of revenues which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. The Company is currently evaluating the impact of this guidance on its consolidated balance sheets and statement of operations. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016.

XML

4. NOTES PAYABLE

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

4. NOTES PAYABLE

4.NOTES PAYABLE

Notes payable as of June 30, 2017 and December 31, 2016 consists of the following:

	2017		2016
Stockholder Demand loan payable with interest at 5% per month dated September 18, 2009. The loan is secured by the Company's accounts receivable.  The note was payable in full  on December 17, 2009 and is currently in default		50,000		50,000
TOTAL	$	50,000	$	50,000
Less current portion		50,000		50,000
Non-current portion	$	-	$	-

XML

5. INCOME TAXES

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

5. INCOME TAXES

5.INCOME TAXES

               For income tax purposes the Company has net operating loss carry forwards of $28,105,000 as of December 31, 2016 that may be used to offset future taxable income.  In the instance of future corporate acquisitions, the net operating losses may be used to offset the future taxable income of a qualifying subsidiary corporation which meets IRS regulations governing such situations.  The losses have accumulated since 1998 and they will start to expire in 2018.  IRS regulations also provide that significant changes in ownership (greater than 50%) could result in the expiration of some of the net operating loss carry forwards.  As of the date of this report the Company has not made an analysis of the changes in ownership to determine if any of these losses have expired. Net income tax benefit is not recognized at this time because there is no reasonable expectation that the benefit will be realized in the future.Due to continuous losses from operations the Company has assigned a full valuation allowance against its deferred tax assets.

XML

6.  CONVERTIBLE PREFERRED STOCK

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

6.  CONVERTIBLE PREFERRED STOCK

6. CONVERTIBLE PREFERRED STOCK

In July 2005 the Company issued 7,171,725 shares of Series A Preferred Stock in payment of services.  The issuance had been previously authorized by the Board of Directors.  Each share of Series A Preferred Stock has a liquidation preference, in the event of liquidation of the Company, of $0.001 per share before any payment or distribution is made to the holders of common stock.

During 2008 the Board of Directors approved a reverse split of the stock in which one new share of preferred stock was issued in exchange for each 80 shares of stock outstanding.  Accordingly, the total issued of preferred stock was adjusted from 7,171,725 shares to 89,647 shares.  The par value and the total authorized shares did not change.

Effective in 2010 the initial issuance of  Series A Preferred can be converted into common stock in the ratio of 15:1.  During 2011 the Board of Directors authorized the issuance of an additional 1,400,000 shares of Series A Preferred Stock in payment of a loan from a shareholder in the amount of $64,000 and also in payment of services in the amount of $34,000. These additional shares can be converted to common stock beginning in 2013. Each share is entitled to fifteen votes and shall be entitled to vote on any matters brought to a vote on the common stock shareholder.

During 2012 the Board of Directors authorized the issuance of an additional 1,500,000 shares of Series A Preferred Stock in payment of deferred compensation and current compensation in the amount of $161,463.

During 2013 the Board of Directors authorized the issuance of an additional 500,000 shares of Series A Preferred Stock in payment of professional services in the amount of $225,000.

During 2014 the Board of Directors authorized the issuance of an additional 2,000,000 shares of Series A Preferred Stock in payment of deferred and current compensation in the amount of $480,000.

During 2015 an owner of preferred stock elected to convert 1,400,000 shares of his preferred stock into 21,000,000 shares of the Company's common stock.

During 2015 the Board of Directors authorized the issuance of an additional 1,000,000 shares of Series A Preferred Stock in payment of deferred compensation of $37,500 and current compensation of $37,500.

During 2016 an owner of preferred stock elected to convert 500,000 shares of preferred stock into 7,500,000 shares of the Company's common stock.

XML

7. OPERATING LEASE

6 Months Ended

Jun. 30, 2017

Leases [Abstract]

7. OPERATING LEASE

7.OPERATING LEASE

In 2015 the Company leased 1,500 sq. ft. of office space under a non-cancellable lease at 1900 Lansdowne Road, Baltimore Maryland with a monthly rent of $1,595 for a period of 3 years.  Effective July 31, 2016 the lease was terminated by mutual agreement with the landlord.  In 2017, the Company leased office space at 6 Park Center Court, Owings Mills,  Baltimore, Maryland  for use as its' Medical Clinic and Corporate Office.  The monthly rent of $2,037 is through September 2017 and is renewable, automatically for one year terms.  Rent expense was $8,663 and $8,918 for the periods ended June 30, 2017 and 2016, respectively.

XML

8. STOCK BASED COMPENSATION

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

8. STOCK BASED COMPENSATION

8.STOCK BASED COMPENSATION

On April 2, 2010 the Company adopted its 2010 Equity Incentive Plan.  Reserved for equity issuances under the Equity Incentive Plan are 50,000,000 shares of our common stock.  During 2011 14,116,433 shares of common stock were issued under the provisions of the 2010 Equity Incentive Plan for which $92,065 of expenses were recognized.

On June 1, 2010 the Company adopted its 2010 Service Provider Stock Compensation Plan.  Reserved for equity issuances under the Service Provider Stock Compensation Plan are 50,000,000 shares of our common stock.  No equity issuances were made during the reporting period from the 2010 Service Provider Stock Compensation Plan.

During the period ended June 30, 2016 the Company issued the following compensatory shares outside of its existing Stock Option and Restricted Share Plans at the discretion of the Board of Directors:

For the six month period ended June 30, 2016 the Board authorized the issuance of 7,000,000 shares of common stock in payment of interest expense amounting to $16,800.

Independent contractors and consultants' expense was based on the estimated value of services rendered or the value of the common stock issued, if more reliably determined.

Stock Options and Warrants

On April 2, 2010, the Company adopted its 2010 Equity Incentive Plan, which authorized, among other forms of incentives, the issuance of stock options.  Reserved for equity issuances under the 2010 Equity Incentive Plan are 50,000,000 shares of our common stock.  No equity issuances have been made from the 2010 Equity Incentive Plan.  Stock options, which may be tax qualified and non-qualified, are exercisable for a period of up to ten years at prices at or above market prices as established on the date of the grant.

Stock Options

Certain nonqualified stock options were issued during the period ended June 30, 2013 to a member of the board of directors as compensation for services performed.

                      Weighted            Weighted Average    Aggregate

                                                                  Number of               Average Exercise            Remaining              Intrinsic

Options Price                                                                                                                ContractualLife           Value

Outstanding at Dec 31, 2016                10,000,000                          $0.03                          1.24                          $     -

Granted                                                         -                                          -                                 -                                  -

Exercised                                                      -                                          -                                 -                                  -

Forfeited                                                       -                                          -                                 -                                 -

Outstanding at June 30, 2017             10,000,000                           $0.03                            .52                         $      -

Exercisable at June 30, 2017               10,000,000                            $0.03                            .52                        $      -

The Company uses the Black-Scholes option pricing model to calculate the fair value of options.  Significant assumptions used in this model include:

Annual Dividend                                                                                           -

Expected Life (in years)                                                                                 5.00

Risk Free Interest Rate                                                                                  0.78%

Expected Volatility                                                                                    325.25%

XML

9. RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

9. RELATED PARTY TRANSACTIONS

9.     RELATED PARTY TRANSACTIONS

Certain stockholders made cash advances to the Company to help with short-term working capital needs.  The net proceeds (payments) from stockholders with unstructured payment plans amounted to $41,180 and $26,505 for the six months ended June 30, 2017 and 2016, respectively.  The total balance due on unstructured loans from stockholders amounted to $632,388 as of June 30, 2017 and $591,208 at December 31, 2016.

XML

10. ISSUABLE COMMON STOCK

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

10. ISSUABLE COMMON STOCK

10.      ISSUABLE COMMON STOCK

              As of June 30, 2017 and December 31, 2016 740,000 shares of the authorized shares of common stock amounting to $16,000, had not been issued.

XML

11. CONTINGENT LIABILITY

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

11. CONTINGENT LIABILITY

11.  CONTINGENT LIABILITY

               Effective January 1, 2015 the Board of Directors authorized a new employment contract with Gunther Than, CEO of View Systems, Inc.  That employment contract provides that in the event of a change in control of the Board of Directors or a buyout or takeover or substantial change of management structure Mr. Than will receive a minimum of three year's salary plus 4.8 million shares of unrestricted stock of the equivalent in cash at Mr. Than's direction.  Mr. Than's current base salary is $120,000 per annum.

XML

12.  OPERATING SEGMENTS

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

12.  OPERATING SEGMENTS

12.  OPERATING SEGMENTS

The Company operates in two segments: (1) the design, development and sale of computer software and hardware used in conjunction with surveillance capabilities and (2) a newly established business line in the Erectile Dysfunction Medical field. The following table details net revenue and income before income taxes by segment:

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Revenues
Security Systems	$	12,373		$	19,525		$	21,137		$	44,140
Medical		11,279			-			11,279			-
	$	23,652		$	19,525		$	32,416		$	44,140
Loss Before Taxes
Security Systems	$	(29,789	)	$	(28,449	)	$	(60,492	)	$	(103,928	)
Medical		(45,146	)		-			(45,146	)		-
	$	(74,935	)	$	(28,449	)	$	(105,638	)	$	(103,928	)

XML

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations

View Systems, Inc. and Subsidiaries (the "Company") designs, develops and sells computer software and hardware used in conjunction with surveillance capabilities.  The technology utilizes the compression and decompression of digital inputs.  In March 2002, the Company acquired Milestone Technology, Inc., which has developed a concealed weapons detection portal.  In July 2009, the Company acquired FibreXpress, Inc., which is a company that specializes in developing and selling equipment and components for the fiber optic and communication cable industries.  During the second quarter of 2017, the Company established a new business line in the Erectile Dysfunction Medical market by opening one clinic within its' Medical Therapeutics subsidiary.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016

Basis of Consolidation

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Milestone Technology, Inc.,  FibreXpress, Inc. and Medical Therapeutics.  All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could differ from the estimates that were used.

Cash and Cash Equivalents

Cash and Cash Equivalents 

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less

Accounts Receivable

Accounts Receivable

Accounts receivable consists of amounts due from customers.  Management periodically reviews the open accounts and makes a determination as to the ultimate collectability of each account.  Once it is determined that collection is in doubt the account is written off as a bad debt.  In order to provide for accounts that may become uncollectible in the future, the Company has established an allowance for doubtful accounts.  The balance of the allowance for doubtful accounts is based on management's judgment and the Company's prior experience with managing accounts receivable.

Management's determination is that the remaining balance is collectible and therefore no allowance for possible uncollectible accounts receivable has been recorded for the periods ended June 30, 2017 and 2016, respectively.

Revenue Recognition

Revenue Recognition

The Company has three main products, namely the concealed weapons detection system, the visual first responder system and the Viewmaxx digital video system.  In all cases revenue is considered earned when the product is shipped to the customer, installed (if necessary) and accepted by the customer as a completed sale.  The concealed weapons detection system and the digital video system each require installation and training.  The customer can engage us for installation and training, which is a revenue source separate and apart from the sale of the product.  In those cases revenue is recognized at the completion of the installation and training and acceptance by the customer.  However, the customer can also self-install or can engage another firm to provide installation and training.  Each product has an unconditional 30 day warranty, during which time the product can be returned for a complete refund.  Customers can purchase extended warranties, which provide for replacement or repair of the unit beyond the period provided by the unconditional warranty.  Warranties can be purchased for various periods but generally they are for one year period that begins after any other warranties expire.  The revenue from warranties is recognized on a straight line basis over the period covered by the warranty.  Prior to the issuance of financial statements management reviews any returns subsequent to the end of the accounting period which are from sales recognized during the accounting period, and makes appropriate adjustments as necessary.  Product prices are fixed or determinable and products are only shipped when collectability is reasonably assured.  For our Medical Business, service revenue is considered earned when the service is provided.

Inventories

Inventories

Inventories stated at the lower of cost or market.  Cost is determined by the first-in-first-out method (FIFO).  As of June 30, 2017 and December 31, 2016 the Company's inventory consisted of unassembled parts of the product.

Property and Equipment

Property and Equipment

Property and equipment is recorded at cost and depreciated over their useful lives, using the straight-line and accelerated depreciation methods.  Upon sale or retirement, the cost and related accumulated depreciation are eliminated from the respective accounts, and the resulting gain or loss is included in the results of operations.  The useful lives of property and equipment for purposes of computing depreciation are as follows:

Equipment                                 5-7 years

Software tools                              3 years

Repairs and maintenance charges which do not increase the useful lives of assets are charged to operations as incurred.  Depreciation expense for the periods ended June 30, 2017 and 2016 amounted to $400 and $400, respectively.

Income Taxes

Income Taxes

Income taxes are recorded under the assets and liabilities method whereby deferred tax assets and liabilities are recognized for the future tax consequences, measured by enacted tax rates, attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the rate change becomes effective.  Valuation allowances are recorded for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.

The Company files income tax returns in the U.S. federal jurisdictions, and in various state jurisdictions.  The Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years prior to 2010.  The Company policy is to recognize interest related to unrecognized tax benefits as income tax expense.  The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.

Research and Development

Research and Development

Research and development costs are expensed as incurred.

Advertising

Advertising

Advertising costs are charged to operations as incurred.  Advertising costs for the six months ended June 30, 2017 and 2016 were $3,072 and $0, respectively.

Nonmonetary Transactions

Nonmonetary Transactions

Nonmonetary transactions are accounted for in accordance with ASC 845 " Nonmonetary Transactions" which requires the transfer or distribution of a nonmonetary asset or liability to be based generally, on the fair value of the asset or liability that is received or surrendered, whichever is more clearly evident.

Financial Instruments

Financial Instruments

For most financial instruments, including cash, accounts receivable, accounts payable and accruals, management believes that the carrying amount approximates fair value, as the majority of these instruments are short-term in nature.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for share-based compensation at fair value.  Share-based compensation cost for stock options granted to employees, board members and service providers is determined at the grant date using an option pricing model that uses level 3 unobservable inputs.  The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period.

Net Loss Per Common Share

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss available to common stockholder by the weighted average number of common shares outstanding.  Diluted net loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding.  Potential common shares consist of shares issuable upon the exercise of stock options and warrants in addition to shares that may be issued in the event that convertible debt is exchanged for shares of common stock.  The calculation of the net loss per share available to common stockholders for the periods ended June 30, 2017 and 2016 does not include potential shares of common stock equivalents, as their impact would be antidilutive.  The following reconciles amounts reported in the financial statements:

				Weighted Average
	(Loss)			Shares		Per-share
	(Numerator)			(Denominator)		Amount
Period ended June 30, 2017
Loss from operations which is the amount
that is available to common stockholders	$	(105,638	)		326,705,526	$	(0.00	)
Period ended June 30, 2016
Loss from operations which is the amount
that is available to common stockholders	$	(103,928	)		326,705,526	$	(0.00	)

XML

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Net Loss Per Common Share

				Weighted Average
	(Loss)			Shares		Per-share
	(Numerator)			(Denominator)		Amount
Period ended June 30, 2017
Loss from operations which is the amount
that is available to common stockholders	$	(105,638	)		326,705,526	$	(0.00	)
Period ended June 30, 2016
Loss from operations which is the amount
that is available to common stockholders	$	(103,928	)		326,705,526	$	(0.00	)

XML

4. NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Notes Payable

	2017		2016
Stockholder Demand loan payable with interest at 5% per month dated September 18, 2009. The loan is secured by the Company's accounts receivable.  The note was payable in full  on December 17, 2009 and is currently in default		50,000		50,000
TOTAL	$	50,000	$	50,000
Less current portion		50,000		50,000
Non-current portion	$	-	$	-

XML

8. STOCK BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Options

                      Weighted            Weighted Average    Aggregate

                                                                  Number of               Average Exercise            Remaining              Intrinsic

Options Price                                                                                                                ContractualLife           Value

Outstanding at Dec 31, 2016                10,000,000                          $0.03                          1.24                          $     -

Granted                                                         -                                          -                                 -                                  -

Exercised                                                      -                                          -                                 -                                  -

Forfeited                                                       -                                          -                                 -                                 -

Outstanding at June 30, 2017             10,000,000                           $0.03                            .52                         $      -

Exercisable at June 30, 2017               10,000,000                            $0.03                            .52                        $      -

Assumptions Used

Annual Dividend                                                                                           -

Expected Life (in years)                                                                                5.00

Risk Free Interest Rate                                                                                  0.78%

Expected Volatility                                                                                    325.25%

XML

12.  OPERATING SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Operating Segments

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Revenues
Security Systems	$	12,373		$	19,525		$	21,137		$	44,140
Medical		11,279			-			11,279			-
	$	23,652		$	19,525		$	32,416		$	44,140
Loss Before Taxes
Security Systems	$	(29,789	)	$	(28,449	)	$	(60,492	)	$	(103,928	)
Medical		(45,146	)		-			(45,146	)		-
	$	(74,935	)	$	(28,449	)	$	(105,638	)	$	(103,928	)

XML

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Accounting Policies [Abstract]
Depreciation Expense	$ 400	$ 400
Advertising Costs	$ 3,072	$ 0

XML

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Loss Per Common Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accounting Policies [Abstract]
Net Loss	$ (74,935)	$ (28,449)	$ (105,638)	$ (103,928)
Shares	326,705,526	319,679,601	326,705,526	326,705,526
Per-share			$ 0.00	$ 0.00

XML

2. GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net Loss	$ (74,935)	$ (28,449)	$ (105,638)	$ (103,928)
Working Capital Defeciency	1,927,219		1,927,219
Debt in Default	$ 50,000		$ 50,000

XML

4. NOTES PAYABLE (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
TOTAL	$ 50,000	$ 50,000
Less current portion	50,000	50,000
Stockholder [Member]
TOTAL	$ 50,000	$ 50,000
Due date	Dec. 17, 2009
Interest rate	5.00%

XML

5. INCOME TAXES (Details Narrative)	6 Months Ended
	Jun. 30, 2017 USD ($)
Income Tax Disclosure [Abstract]
Net operating loss carryforwards	$ 28,105,000
Expiration date	Dec. 31, 2018

XML

6. CONVERTIBLE PREFERRED STOCK (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2008	Dec. 31, 2005
Stock Issued for Service, Shares					2,000,000
Stock issued in payment of services		$ 16,800
Preferred Stock Outstanding Beginning	5,589,647
Preferred Shares Outstanding Ending	5,589,647		5,589,647
Amount of current and noncurrent compensation					$ 480,000
Conversion of Preferred Shares			500,000	1,400,000
Conversion of Preferred Shares, Common Shares Issued			7,500,000	2,100,000
Preferred Stock
Stock Issued for Service, Shares						500,000	1,500,000				7,171,725
Stock issued in payment of services						$ 225,000	$ 161,463
Preferred stock issued in payment of deferred compensation, Shares				1,000,000
Preferred stock issued in payment of deferred compensation, Value				$ 37,500
Value per share											$ 0.001
Preferred Stock Outstanding Beginning										7,171,725
Preferred Shares Outstanding Ending										89,647
Conversion Ratio									15:1	80:1
Additional Shares Authorized								1,400,000
Common Stock Issued for Payment value								$ 64,000
Amount of current and noncurrent compensation								$ 34,000

XML

7. OPERATING LEASE (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Leases [Abstract]
Monthly Rent	$ 2,037		$ 1,595
Rent Expense	$ 8,663	$ 8,918

XML

8. STOCK BASED COMPENSATION (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2011	Dec. 31, 2010
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Shares for Equity Incentive Plan				50,000,000
Shares issued For Expenses and Liabilitites	7,000,000	4,100,000	14,116,433
Amount of Expenses and Liabilities	$ 16,800	$ 26,750	$ 92,065

XML

8. STOCK BASED COMPENSATION - Stock Options (Details)	6 Months Ended
	Jun. 30, 2017 $ / shares shares
Stock Based Compensation - Stock Options Details
Stock options, outstanding, beginning | shares	10,000,000
Stock options, outstanding, ending | shares	10,000,000
Stock options, exercisable | shares	10,000,000
Stock options per share, outstanding, beginning | $ / shares	$ 0.03
Stock options per share, outstanding, ending | $ / shares	0.03
Stock options per share, exercisable | $ / shares	$ 0.03
Stock options contractual life, outstanding, beginning	1 year 2 months 4 days
Stock options contractual life,outstanding, ending	5 months 2 days
Exercisable	5 months 2 days

XML

8. STOCK BASED COMPENSATION - Assumptions Used (Details)	6 Months Ended
	Jun. 30, 2017
Share-based Compensation [Abstract]
Expected Life (in years)	5 years
Risk Free Interest Rate	0.78%
Expected Volatility	325.25%

XML

9. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Related Party Transactions [Abstract]
Due to Shareholders	$ 632,388		$ 591,208
Net Proceeds from Stockholders	$ 41,180	$ 26,505

XML

10. ISSUABLE COMMON STOCK (Details Narrative)	Jun. 30, 2017 USD ($) shares
Equity [Abstract]
Stock unissued, shares | shares	740,000
Stock unissued, value | $	$ 16,000

XML

11. CONTINGENT LIABILITY (Details Narrative)	6 Months Ended
	Jun. 30, 2017 USD ($) shares
Contingent Liability Details Narrative
Base Salary | $	$ 120,000
Shares Issued as Salary | shares	4,800,000

XML

12.  OPERATING SEGMENTS - Operating Segments (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Total revenue	$ 23,652	$ 19,525	$ 32,416	$ 44,140
Net loss	(74,935)	(28,449)	(105,638)	(103,928)
Security Systems [Member]
Total revenue	12,373	19,525	21,137	44,140
Net loss	(29,789)	(28,449)	(60,492)	(103,928)
Medical [Member]
Total revenue	11,279		11,279
Net loss	$ (45,146)		$ (45,146)