10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549 

FORM 10-Q 

(Mark One)

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

For the quarterly period ended September 30, 2016

or

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

For the transition period from __________ to ____________

Commission File Number: 2-93277-D

MEDIZONE INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Nevada	87-0412648
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4000 Bridgeway, Suite 401, Sausalito, California 94965

(Address of principal executive offices, Zip Code)

(415) 331-0303

(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 ☑   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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller reporting company ☑

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

As of November 10, 2016, the registrant had 393,934,068 shares of common stock issued and outstanding.

MEDIZONE INTERNATIONAL, INC.

FORM 10-Q

TABLE OF CONTENTS

September 30, 2016

		Page No.
Part I — Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 (Unaudited)	3
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2016 and 2015 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September  30, 2016 and 2015 (Unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
Part II — Other Information
Item 1.	Legal Proceedings	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	18
Signatures		19

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Condensed Consolidated Balance Sheets (Unaudited)

	September 30,			December 31,
	2016			2015 (1)
ASSETS
Current Assets:
Cash	$	37,188		$	745,078
Inventory		106,332			277,823
Prepaid expenses		62,926			31,986
Total Current Assets		206,446			1,054,887
Property and equipment, net		104			415
Other Assets:
Trademark and patents, net		152,372			176,086
Lease deposit		4,272			4,272
Total Other Assets		156,644			180,358
Total Assets	$	363,194		$	1,235,660
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable	$	545,681		$	491,044
Accounts payable – related parties		-			233,109
Accrued expenses		587,222			554,834
Accrued expenses – related parties		604,365			1,928,659
Other payables		224,852			224,852
Notes payable		307,617			297,396
Notes payable – related parties		1,617,881			-
Total Current Liabilities		3,887,618			3,729,894
Notes payable, net of current portion		75,000			75,000
Total Liabilities		3,962,618			3,804,894
Stockholders’ Deficit:
Preferred stock, $0.00001 par value: 50,000,000 shares authorized;     no shares issued or outstanding		-			-
Common stock, $0.001 par value: 395,000,000 shares authorized;     373,934,068 and 369,434,068 shares outstanding, respectively		373,934			369,434
Additional paid-in capital		32,700,146			32,496,646
Accumulated other comprehensive loss		(42,475	)		(36,968	)
Accumulated deficit		(36,631,029	)		(35,398,346	)
Total Stockholders’ Deficit		(3,599,424	)		(2,569,234	)
Total Liabilities and Stockholders’ Deficit	$	363,194		$	1,235,660

__________ 

(1)   The condensed consolidated balance sheet as of December 31, 2015 has been prepared using information from the audited consolidated balance sheet as of that date.

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

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MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015
Revenues	$	237,000		$	167,000		$	237,000		$	167,000
Operating Expenses:
Cost of revenues		200,326			88,411			200,326			88,411
General and administrative		363,209			800,185			858,455			1,401,199
Research and development		75,332			56,263			343,368			210,336
Depreciation and amortization		14,152			13,457			41,966			39,760
Total Operating Expenses		653,019			958,316			1,444,115			1,739,706
Loss from Operations		(416,019	)		(791,316	)		(1,207,115	)		(1,572,706	)
Interest expense		(8,504	)		(6,820	)		(25,634	)		(19,438	)
Interest income		2			-			66			-
Net Loss		(424,521	)		(798,136	)		(1,232,683	)		(1,592,144	)
Other comprehensive (loss) gain on foreign currency translation		(4,021	)		(1,051	)		(5,507	)		18,611
Total Comprehensive Loss	$	(428,542	)	$	(799,187	)	$	(1,238,190	)	$	(1,573,533	)
Basic and Diluted Net Loss per Common Share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted Average Number of Common Shares Outstanding		371,151,459			358,036,242			370,333,703			352,368,867

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

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MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Condensed Consolidated Statements of Cash Flows (Unaudited)

	For the Nine Months Ended
	September 30,
	2016			2015
Cash Flows from Operating Activities:
Net loss	$	(1,232,683	)	$	(1,592,144	)
Adjustments to reconcile net loss to net cash  used in operating activities:
Depreciation and amortization		41,966			39,760
Stock-based compensation expense		48,000			722,090
Changes in operating assets and liabilities:
Prepaid expenses		35,815			7,838
Inventory		171,491			66,611
Accounts payable and accounts payable – related parties		49,637			(677	)
Accrued expenses and accrued expenses – related parties		97,866			25,086
Net Cash Used in Operating Activities		(787,908	)		(731,436	)
Cash Flows from Investing Activities:
Cost of registering patents		(17,941	)		(17,955	)
Net Cash Used in Investing Activities		(17,941	)		(17,955	)
Cash Flows from Financing Activities:
Issuance of common stock for cash		160,000			676,000
Issuance of notes payable		-			75,000
Principal payments on notes payable		(56,534	)		(40,516	)
Net Cash Provided by Financing Activities		103,466			710,484
Effect of Foreign Currency Exchange Rates		(5,507	)		18,611
Net decrease  in cash		(707,890	)		(20,296	)
Cash as of beginning of the period		745,078			140,496
Cash as of end of the period	$	37,188		$	120,200

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	8,246	$	1,006
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Settlement of accounts payable and accrued expenses with notes payable – related parties		1,617,881		-
Financing of insurance policies		66,755		49,964

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

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MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Notes to the Condensed Consolidated Financial Statements (Unaudited)

NOTE 1     BASIS OF PRESENTATION

The financial information of Medizone International, Inc., a Nevada corporation (the “Company”), included herein is unaudited and has been prepared consistent with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all information and notes required by US GAAP for complete financial statements. These notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2015. In the opinion of management, these financial statements contain all adjustments (consisting solely of normal recurring adjustments) which are necessary in the opinion of management for a fair presentation of results for the interim periods presented. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016.

NOTE 2    CANADIAN FOUNDATION FOR GLOBAL HEALTH

In late 2008, the Company assisted in the formation of the Canadian Foundation for Global Health (“CFGH”), a not-for-profit foundation based in Ottawa, Canada. The Company helped establish CFGH for two primary purposes: (1) to establish an independent not-for-profit foundation intended to have a continuing working relationship with the Company for research purposes that is best positioned to attract the finest scientific, medical and academic professionals possible to work on projects deemed to be of social benefit; and (2) to provide a means for the Company to use a tiered pricing structure for services and products in emerging economies and extend the reach of the Company’s technology to as many in need as possible.

Accounting standards require a variable interest entity (“VIE”) to be consolidated by a company if that company absorbs a majority of the VIE’s expected losses and/or receives a majority of the VIE’s expected residual returns as a result of holding variable interests, which are the ownership, contractual, or other financial interests in the VIE. In addition, a legal entity may be considered to be a VIE, if it does not have sufficient equity at risk to finance its own activities without relying on financial support from other parties. If the legal entity is a VIE, then the reporting entity determined to be the primary beneficiary of the VIE must consolidate its financial statements with those of the VIE. The Company determined that CFGH met the requirements of a VIE effective upon the first advance to CFGH on February 12, 2009. Accordingly, the financial statements of CFGH have been consolidated with those of the Company for all periods presented.

NOTE 3     BASIC AND DILUTED NET LOSS PER COMMON SHARE

The computations of basic and diluted net loss per common share are based on the weighted average number of common shares outstanding during the periods as follows:

	For the Three Months Ended
	September 30,
	2016				2015
Numerator: Net loss		$	(424,521	)		$	(798,136	)
Denominator: Weighted average number of common shares outstanding			371,151,459				358,036,242
Basic and diluted net loss per common share		$	(0.00	)		$	(0.00	)

	For the Nine Months Ended
	September 30,
	2016				2015
Numerator: Net loss		$	(1,232,683	)		$	(1,592,144	)
Denominator: Weighted average number of common shares outstanding			370,333,703				352,368,867
Basic and diluted net loss per common share		$	(0.00	)		$	(0.00	)

Common stock equivalents, consisting of options to purchase 20,865,000 shares and warrants to purchase up to $1,000,000 of common stock, with the number of shares determined based on a 20-day average stock price prior to the date of exercise, have not been included in the calculation as their effect is antidilutive for the periods presented.

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MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Notes to the Condensed Consolidated Financial Statements (Unaudited) Continued

NOTE 4     GOING CONCERN

The Company’s consolidated financial statements are prepared using US GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has incurred significant losses from its inception through September 30, 2016, which have resulted in an accumulated deficit of $36,631,029 as of September 30, 2016.  The Company believes that it will require funding of approximately $1,500,000 over the next 12 months, based on current operations, for: (1) continued production manufacturing and related activities; (2) research, development, and marketing activities; and (3) general corporate purposes.  The Company does not have funds sufficient to cover its operating costs for the next 12 months, has negative equity, and has a working capital deficit of $3,681,172 as of September 30, 2016. The Company has relied almost exclusively on debt and equity financing to sustain its operations.  Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon future revenues, obtaining additional capital and ultimately, upon the Company’s attaining profitable operations.  The Company will require substantial additional funds to complete the development of its products and product manufacturing, and to fund expected additional losses, until revenues are sufficient to cover the Company’s operating expenses.  If the Company is unsuccessful in obtaining the necessary additional funding, it will be forced to substantially reduce or cease its operations.

During the nine months ended September 30, 2016, the Company raised cash proceeds of $160,000 through the sale of 4,000,000 shares of common stock at a price of $0.04 per share.

In October 2016, the Company issued an aggregate of 20,000,000 common shares at $0.05 per share pursuant to the exercise of warrants, and received cash proceeds of $1,000,000.

The ability of the Company to continue as a going concern is dependent on its ability to successfully accomplish the plan described in the preceding paragraphs, including attaining profitable operations.  These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

NOTE 5     COMMITMENTS AND CONTINGENCIES

The Company is subject to certain claims and lawsuits arising in the normal course of business. In the opinion of management, uninsured losses, if any, resulting from the ultimate resolution of these matters will not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

Litigation

Rakas vs. Medizone International, Inc. - A former consultant brought this action against the Company claiming the Company had failed to pay consulting fees under a consulting agreement.  In September 2001, the parties agreed to settle the matter for $25,000.  The Company, however, did not have the funds to pay the settlement and the plaintiff moved the court to enter a default judgment in the amount of $143,000 in January 2002.  On May 8, 2002, the court vacated the default judgment and requested that the Company post a bond of $25,000 to cover the settlement previously entered into by the parties.  The Company has been unable to post the required bond amount as of the date of this report.  Therefore, the Company recorded the original default judgment in the amount of $143,000, plus fees totaling $21,308, as of September 30, 2016 and December 31, 2015 in accounts payable.  The Company intends to contest the judgment if and when it is able to do so in the future.

Employment Agreements

In July 2016, the Company entered into employment agreements (“Employment Agreements”) with two executives. The employment agreements set out the executives’ base annual salary, vacation benefits, and option to elect health insurance coverage.

Promissory Notes

In conjunction with the Company entering into these Employment Agreements, the Company settled in aggregate $1,617,881 in accounts payable and accrued expenses with related parties through the issuance of promissory notes payable (“Promissory Notes”) with three executives for unpaid expenses and wages (see Note 9 – Notes Payable – Related Parties).

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MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Notes to the Condensed Consolidated Financial Statements (Unaudited) Continued

Other Payables

As of September 30, 2016 and December 31, 2015, the Company had $224,852 of past due payables for which the Company has not received statements or demands for payment for over 19 years.  Although management of the Company does not believe that the amounts will be required to be paid, the amounts are recorded as other payables until such time as the Company is certain that no liability exists and until the statute of limitations has expired.

Operating Leases

The Company operates a certified laboratory located at Innovation Park, Queen’s University in Kingston, Ontario, Canada, which provides a primary research and development platform.  The lease term is month-to-month with a monthly lease payment of $1,537 Canadian dollars (“CD”) plus the applicable goods and services tax (“GST”).  Leases for a second laboratory space for full scale room testing and a storage unit are on a month-to-month basis with monthly lease payments of CD$1,537 and CD$475, respectively, plus the applicable GST.  The Company has a non-cancelable lease for office space located in California, with monthly payments of approximately $2,400 through December 31, 2016.

NOTE 6     COMMON STOCK OPTIONS

In August 2013, the Company granted options for the purchase of 250,000 shares of common stock to a consultant, of which 50,000 were immediately vested.  These options are exercisable at $0.10 per share for five years from the date of grant with 50,000 options vesting immediately and the other 200,000 options vesting upon the achievement of certain milestones, which were met in 2015.  The Company recognized expense of $17,659 during the nine months ended September 30, 2015, as milestones were achieved for the remaining 200,000 options.

On February 26, 2014, the Company granted to a new director options for the purchase of 2,000,000 shares of common stock, with an exercise price of $0.1095 per share.  Of these options, 1,000,000 vested on February 26, 2015, and the remaining 1,000,000 options will vest upon the successful achievement of certain milestones.  Unvested options vest immediately in the event of a change in control of the Company.  The options are exercisable for five years from the date of grant. The Company recognized $16,017 of expense in connection with these options during the nine months ended September 30, 2015. The Company will measure and begin recognizing the remaining expense when the achievement of the required milestones becomes probable.

On February 26, 2014, the Company granted options to six consultants and service providers for the purchase of a total of 250,000 shares of common stock at an exercise price of $0.1095 per share.  Options for 200,000 shares vested immediately upon grant and options for the remaining 50,000 shares vested January 9, 2015.  The options are exercisable for five years from the date of grant. The grant date fair value of these options was $24,023. The Company recognized expense of $800 in connection with these options during the nine months ended September 30, 2015.

On May 6, 2014, the Company granted options to a consultant for the purchase of 100,000 shares of common stock at an exercise price of $0.19 per share.  Options for 50,000 shares vested immediately upon grant and options for the remaining 50,000 shares vested during the nine months ended September 30, 2015, when certain milestones were achieved.  The options are exercisable for five years from the date of grant. The Company recognized expense of $8,342 in connection with these options during the nine months ended September 30, 2015.

On August 15, 2014, the Company granted options to a consultant for the purchase of 75,000 shares of common stock at an exercise price of $0.13 per share.  The shares will vest when certain required milestones are achieved.  The options are exercisable for five years from the date of grant.  The Company will measure and begin recognizing expense when the achievement of the required milestones becomes probable.

On October 7, 2014, the Company granted to a board member options for the purchase of 1,000,000 shares of common stock, with an exercise price of $0.16 per share.  These options were fully vested on October 7, 2015.  The options are exercisable for five years.  The grant date fair value of the options was $140,178.  The Company recognized $105,133 of expense in connection with these options during the nine months ended September 30, 2015.

On December 4, 2014, the Company granted options to four consultants for the purchase of 140,000 shares of common stock at an exercise price of $0.11 per share.  The options are fully vested and are exercisable for five years from the date of grant.  The Company recognized expense of $13,461 during the nine months ended September 30, 2015.

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MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Notes to the Condensed Consolidated Financial Statements (Unaudited) Continued

In August 2015, the Company granted options for the purchase of a total of 7,150,000 shares of common stock for services rendered, as follows: 6,000,000 shares total to five directors of the Company, 650,000 shares total to four consultants, and 500,000 shares to an employee of the Company. All options vested upon grant, have an exercise price of $0.088 per share, and are exercisable for up to five years from the date of grant.  The aggregate fair value of these options at the date of grant was $541,687, which the Company recognized as expense during the nine months ended September 30, 2015.

In August 2015, the Company granted options to a consultant for the purchase of a total of 250,000 shares of common stock at an exercise price of $0.085 per share. These options vested upon grant and are exercisable for up to five years. The aggregate fair value of these options at the date of grant was $18,990, which the Company recognized as expense during the nine months ended September 30, 2015.

On May 19, 2016, the Company granted options to an employee for the purchase of 150,000 shares of common stock at an exercise price of $0.05 per share.  The fair value of these options on the date of grant was $6,461. The options were forfeited upon the termination of the employee in October 2016.

The Company estimates the fair value of each stock option award by using the Black-Scholes option-pricing model, which model requires the use of exercise behavior data and the use of a number of assumptions including volatility of the Company’s stock price, the weighted average risk-free interest rate, and the weighted average expected life of the options. Because the Company does not pay dividends, the dividend rate variable used in the Black-Scholes option-pricing model is zero. Expense of $0 and $722,090 related to stock options was recorded for the nine months ended September 30, 2016 and 2015, respectively.  Excluding options whose performance condition is not yet deemed probable, as of September 30, 2016, the Company had unvested outstanding options with related unrecognized expense of $104,647.  The Company will recognize this expense over the service period or when the achievement of the required milestones becomes probable.

The Company estimated the fair value of the stock options described in the above paragraphs as of the date of the grant or date of re-measurement, based on the following weighted-average assumptions:

Risk-free interest rate		1.50% to 1.69		%
Expected life	5 years
Expected volatility		130.31% to 136.34		%
Dividend yield			0.00	%

A summary of the status of the Company’s outstanding options as of September 30, 2016 and changes during the nine months then ended, is presented below:

	Shares			Weighted Average Exercise Price
Outstanding, beginning of the period		20,965,000		$	0.145
Granted		150,000			-
Expired/Canceled		(250,000	)		0.103
Exercised		-			-
Outstanding, end of the period		20,865,000			0.142
Exercisable		19,640,000			0.145

NOTE 7     STOCK TRANSACTIONS AND SIGNIFICANT CONTRACTS

In September 2016, the Company sold 4,000,000 shares of common stock to three accredited investors for gross proceeds of $160,000.

During January 2016, the Company issued 500,000 restricted shares of common stock to a consultant. The fair value of the shares on the date of grant was $48,000, or $0.096 per share.  The Company recorded compensation expense of $48,000 in connection with the issuance of the shares.

During April, May, and June 2015, the Company sold an aggregate of 7,500,000 restricted shares of common stock to eight accredited investors for cash proceeds totaling $375,000, or $0.05 per share.

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MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Notes to the Condensed Consolidated Financial Statements (Unaudited) Continued

During February and March 2015, the Company sold an aggregate of 3,000,000 restricted shares of common stock to seven accredited investors for cash proceeds totaling $150,000, or $0.05 per share.

During February 2015, the Company sold 300,000 restricted shares of common stock to an accredited investor for cash proceeds totaling $21,000, or $0.07 per share.

NOTE 8     ACCOUNTS PAYABLE – RELATED PARTIES

As of September 30, 2016 and December 31, 2015, the Company owed $0 and $233,109, respectively, to certain consultants for services.  These consultants are stockholders of the Company and are related parties.

NOTE 9   NOTES PAYABLE – RELATED PARTIES

In July 2016, the Company settled an aggregate $1,617,881 of accounts payable and accrued expenses for unpaid expenses and wages by issuing Promissory Notes to those related parties, all of which are executives of the Company. The notes become payable upon a trigger event (“Trigger Event”) which is defined as a change in control, death, disability or failure to pay the employee’s base salary as described in their Employment Agreements. Upon a Trigger Event, interest will be calculated at 2% per annum until the balance is paid in full. In the event of default by the Company, the interest rate increases to 5%.

NOTE 10     RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under US GAAP.  The core principle of ASU No. 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services.  ASU No. 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing US GAAP.  The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein.  Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU No. 2014-15 sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the entity’s ability to continue as a going concern, and if so, to provide related disclosures in the financial statements.  ASU No. 2014-15 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on the Company’s financial statement presentation.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), simplifying the presentation of deferred income taxes on the balance sheet by requiring companies to classify everything as either a non-current asset or non-current liability. ASU No. 2015-17 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on the Company’s financial statement presentation.

In February 2016, the FASB released ASU No. 2016-02, Leases (Topic 842), to bring transparency to lessee balance sheets. ASU No. 2016-02 will require organizations that lease assets (lessees) to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU No. 2016-02 will apply to both types of leases; capital (or finance) leases and operating leases. Previously, US GAAP has required only capital leases to be recognized on lessee balance sheets. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted. The Company is assessing the impact of ASU No. 2016-02 may have on its future financial position, results of operations and liquidity.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU No. 2016-09 is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows, and forfeitures. ASU No. 2016-09 is effective for years ending after December 31, 2016, and the Company is assessing the impact of ASU No. 2016-09 may have on its future financial position, results of operations and liquidity.

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MEDIZONE INTERNATIONAL, INC. AND AFFILIATE

Notes to the Condensed Consolidated Financial Statements (Unaudited) Continued

In October 2016, the FASB issued ASU No. 2016-17,  Interests held Through Related Parties That are Under Common Control. ASU No. 2016-17 clarifies the consolidation process for the primary beneficiary of a Variable Interest Entity (VIE) should that related party have indirect interests under common control with the reporting entity. ASU No. 2016-17 is effective for years ending after December 31, 2016, and the Company is assessing the impact of ASU No. 2016-17 may have on its consolidated financial statements.

NOTE 11     SUBSEQUENT EVENTS

In October 2016, the Company issued an aggregate of 20,000,000 common shares at $0.05 per share pursuant to the exercise of previously issued and outstanding warrants, and received cash proceeds of $1,000,000. The shares were issued without registration under the Securities Act of 1933, as amended (the Securities Act), in reliance upon exemptions from registration for securities sold in transactions under Section 4(a)(2) of the Securities Act. The warrants were originally issued to these stockholders in connection with the negotiation and execution of a Distribution and License Agreement dated November 2015, which provided exclusive distribution rights to the Company’s proprietary hospital disinfection technology in certain territories in South America (the Distribution Agreement).

In connection with an amendment to the Distribution Agreement, the Company granted warrants for the purchase of up to $1,000,000 of shares of common stock of the Company, exercisable for one year, commencing January 31, 2017 and expiring January 30, 2018, with the number of shares to be determined based on a 20-day average stock price prior to the date of exercise with the average stock price discounted by 40%. 

11

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Medizone International, Inc., a Nevada corporation (collectively with its affiliate, “Medizone,” the “Company,” “we,” “us,” or “our”) is engaged in conducting research into the use of ozone in the disinfection of surgical and other medical treatment facilities and in other applications.  During 2012, we began to sell our patented ozone disinfection system, AsepticSure®.  The Company is currently focused in the field of hospital disinfection, rather than human therapies.  We cannot predict when or if we will generate sufficient cash flows from operating activities to fund continuing or planned operations.  If we fail to obtain additional funding, we will be forced to suspend or permanently cease operations, and may need to seek protection under U.S. bankruptcy laws.

Recent Developments

As of September 30, 2016, we sold and shipped three Generation III AsepticSure® systems under our agreement with our South American distributor GYD S.A.  The units sold to the distributor were Generation II AsepticSure® systems that were converted to Generation III systems, and the price was not reflective of standard pricing.  In October 2016, we entered into an amended and restated Distribution Agreement with GYD S.A., adding Argentina to its exclusive territories.

In October 2016, we received additional patent protection for the AsepticSure ® system from the European Union Patent and Trademark Office (EU) for our patent application, “Healthcare Facility Disinfecting Process and System With Oxygen/Ozone Mixture”. With this EU patent, we secured patent protection in the United Kingdom, Germany, and France.

Results of Operations

Three Months Ended September 30, 2016 and 2015

During the quarter ended September 30, 2016, we continued our primary focus of expanding of our distribution channels, obtaining approval from the U.S. Environmental Protection Agency (“EPA”), and developing a computer control feature for the AsepticSure® system.

For the quarters ended September 30, 2016 and 2015, revenues were $237,000 and $167,000, respectively.  For the quarters ended September 30, 2016 and 2015, cost of revenues was $200,326 and $88,411, respectively. The increase in revenue and cost of revenues for the quarter ended September 30, 2016 compared to the same period in 2015 is due to the sale of three AsepticSure® Systems in 2016.

For the quarter ended September 30, 2016, we had a net loss of $424,521, compared with a net loss of $798,136 for the quarter ended September 30, 2015.  Our primary expenses are payroll and consulting fees, research and development costs, office expenses, and interest expense.  The decrease in net loss for the quarter ended September 30, 2016, compared to the corresponding quarter of 2015 was primarily due to reduced general and administrative expenses from less stock-based compensation expense related to option grants, offset slightly by increased research and development expenses.

For the quarters ended September 30, 2016 and 2015, we incurred $363,209 and $800,185, respectively, in general and administrative expenses. The majority of these expenses were payroll, consulting fees and professional fees. The decrease for the quarter ended September 30, 2016 compared to the corresponding quarter of 2015 was due to less stock-based compensation expense related to option grants to directors and consultants.

For the quarters ended September 30, 2016 and 2015, we incurred $75,332 and $56,263, respectively, in research and development expenses.  Research and development expenses include consulting fees, interface development costs, prototypes, and research stage ozone generator and instrument development.  The increase for the quarter ended September 30, 2016 compared to the corresponding quarter of 2015 was due to increased consulting costs which were partially offset by lower stock-based compensation expense related to option grants to a consultant and an employee in 2015.

Principal amounts owed on notes payable totaled $307,617 and $297,396 as of September 30, 2016 and December 31, 2015, respectively. Principal amounts owed on notes payable, net of current portion totaled $75,000 as of September 30, 2016 and December 31, 2015. Interest expense on these obligations for the quarters ended September 30, 2016 and 2015, was $8,504 and $6,820, respectively. The annual interest rates on this debt range from 4.88% to 12.00%.

12

Nine Months Ended September 30, 2016 and 2015

For the nine months ended September 30, 2016 and 2015, revenues were $237,000 and $167,000, respectively.  For the nine months ended September 30, 2016 and 2015, cost of revenues was $200,326 and $88,411, respectively. The increase in revenue and cost of revenues for the nine months ended September 30, 2016 compared to the corresponding period in 2015 is due to the sale of three AsepticSure® Systems in 2016.

For the nine months ended September 30, 2016, we had a net loss of $1,232,683, compared with a net loss of $1,592,144 for the nine months ended September 30, 2015. Our primary expenses are payroll, consulting fees, research and development costs, and office expenses, together with interest expense and stock-based compensation expense recorded as a result of option grants to directors, employees and consultants.  The decrease in net loss for the nine months ended September 30, 2016, compared to the corresponding period in 2015, was due to a decrease in stock-based compensation expense for option grants to directors, employees and consultants, offset, in part, by an increase in research and development expenses.

For the nine months ended September 30, 2016 and 2015, we incurred $858,455 and $1,401,199, respectively, in general and administrative expenses. The primary reason for the decrease for the nine months ended September 30, 2016, compared to the corresponding period in 2015, was decreased stock-based compensation expense.  The number of option grants and vesting for directors, employees and consultants resulting in compensation expense in 2016 was lower than in 2015.  Our primary expenses are payroll, consulting fees, and professional fees. The remaining general and administrative expenses include rent, office expenses and travel expenses.

For the nine months ended September 30, 2016 and 2015, we incurred $343,368 and $210,336, respectively, in research and development expenses as a result of prototype development expenses, consulting, and other research activities. The primary reason for the increase for the nine months ended September 30, 2016, compared to the corresponding period in 2015, was increased expenses for development software, supplies, and consulting, including stock-based compensation expense related to restricted common shares issued in January 2016.

Interest expense on the notes payable for the nine months ended September 30, 2016 and 2015, was $25,634 and $19,438, respectively. Principal amounts owed on notes payable, net of current portion totaled $75,000 as of September 30, 2016 and December 31, 2015. The annual interest rates on this debt range from 4.88% to 12.00%.

Liquidity and Capital Resources

As of September 30, 2016, our working capital deficiency was $3,681,172, compared to a working capital deficiency of $2,675,007 as of December 31, 2015. As of September 30, 2016, we had approximately $37,000 of available cash. In October 2016, the Company issued an aggregate of 20,000,000 common shares at $0.05 per share pursuant to the exercise of warrants, and received cash proceeds of $1,000,000.

We have incurred significant losses from inception through September 30, 2016, which have resulted in an accumulated deficit of $36,631,029.  The stockholders’ deficit as of September 30, 2016 was $3,599,424, compared to $2,596,234 as of December 31, 2015.  This change is due to proceeds from the sale of restricted shares of common stock being less than the net loss for the nine months ended September 30, 2016.

We will continue to require additional financing to fund operations and to continue to test and market our hospital and medical disinfection system.  We believe we will require funding of approximately $1,500,000 over the next 12 months, based on current operations, for: (1) continued production manufacturing and related activities; (2) research, development, and marketing activities; and (3) general corporate purposes.  

During the nine months ended September 30, 2015, we generated cash of $160,000 through the sale of 4,000,000 shares of common stock to three accredited investors at a price of $0.04 per share.  We anticipate that we will be able to raise additional funds, as needed, from certain of the accredited investors who have purchased shares during previous years, although we have no agreements at this time with any of these investors to purchase our securities, and there can be no assurance that these investors will purchase additional shares.

13

Going Concern

Our unaudited condensed interim consolidated financial statements included in this report on Form 10-Q have been prepared with the assumption that we will continue as a going concern. There is substantial doubt that we will be able to continue as a going concern.  Through the date of this report on Form 10-Q, we have relied almost exclusively upon financing from the sale of our equity securities to sustain operations. Additional financing will be required if we are to continue as a going concern. If additional financing is not obtained in the near term, we will be required to curtail or discontinue operations, or seek protection under U.S. bankruptcy laws. Even if additional financing becomes available, there can be no assurance that it will be on terms favorable to us. In any event, this additional financing will likely result in immediate and possibly substantial dilution to existing stockholders.

Forward-Looking Statements and Risks

The statements contained in this report on Form 10-Q that are not historical are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements discuss our expectations, hopes, beliefs, anticipations, commitments, intentions and strategies regarding the future. They may be identified by the use of the words or phrases that include “believes,” “expects,” “anticipates,” “should,” “plans,” “estimates,” and “potential,” among others. Forward-looking statements include, but are not limited to, statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial performance, revenue and expense levels in the future and the sufficiency of existing liquidity to fund future operations and capital spending needs. Actual results could differ materially from the anticipated results or other expectations expressed in such forward-looking statements for the reasons detailed in our Annual Report on Form 10-K for the year ended December 31, 2015.

We believe that many of the risks discussed in our previously issued SEC filings are part of doing business in the industry in which we operate and will likely be present in all periods reported. The fact that certain risks are endemic to the industry does not lessen their significance. The forward-looking statements contained in this report are made as of the date of this report and we assume no obligation to update them or to update the reasons why actual results could differ from those projected in such forward-looking statements. Among others, risks and uncertainties that may affect our business, financial condition, performance, development, and results of operations include:

· Rigorous government scrutiny and regulation of our products and planned products;

· Potential effects of adverse publicity regarding ozone and related technologies or industries;

· Failure to sustain or manage growth including the failure to continue to develop new products; and

· The potential inability to obtain needed financing or to obtain funding on terms favorable to us.

Critical Accounting Policies and Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The preparation of such statements requires our management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, we evaluate these estimates, including those related to intangible assets, expenses, and income taxes. We base our estimates on historical experience and other facts and circumstances that are believed to be reasonable, and the results form the basis for making judgments about the carrying values of assets and liabilities. The actual results may differ from these estimates under different assumptions or conditions. 

We recognize revenue when a contractual arrangement exists, product is shipped, payment from the customer is reasonably assured, and the price is fixed or determinable.  We record customer deposits that have not yet been earned as unearned revenue. Revenue is recognized only when title and risk of loss passes to the customer.

Our inventory consists of our AsepticSure® product and is valued on a specific identification basis.  We purchase our inventory as a finished product from unrelated manufacturing companies. We write off 100% of the cost of inventory that we specifically identify and consider obsolete or excessive to fulfill future sales estimates. No inventory was obsolete or excessive as of September 30, 2016.

We record compensation expense in connection with the granting of stock options and their vesting periods based on their fair values. We estimate the fair values of stock option awards issued to employees, consultants and other non-employees at the grant date by using the Black-Scholes option-pricing model. For stock options with a service condition, the expense is measured at the grant date and expensed over the vesting period. For stock options with a performance condition, the expense is measured when it is probable that the performance condition will be met, subsequently re-measured at each reporting date, and trued up upon the final completion of the performance condition.

14

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under US GAAP.  The core principle of ASU No. 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services.  ASU No. 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing US GAAP.  The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein.  Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU No. 2014-15 sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the entity’s ability to continue as a going concern, and if so, to provide related disclosures in the financial statements.  ASU No. 2014-15 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on the Company’s financial statement presentation.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), simplifying the presentation of deferred income taxes on the balance sheet by requiring companies to classify everything as either a non-current asset or non-current liability. ASU No. 2015-17 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on the Company’s financial statement presentation.

In February 2016, the FASB released ASU No. 2016-02, Leases (Topic 842), to bring transparency to lessee balance sheets. ASU No. 2016-02 will require organizations that lease assets (lessees) to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU No. 2016-02 will apply to both types of leases; capital (or finance) leases and operating leases. Previously, US GAAP has required only capital leases to be recognized on lessee balance sheets. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted. The Company is assessing the impact that ASU No. 2016-02 may have on its future financial position, results of operations and liquidity.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU No. 2016-09 is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU No. 2016-09 is effective for years ending after December 31, 2016, and the Company is assessing the impact ASU No. 2016-09 may have on its future financial position, results of operations and liquidity.

In October 2016, the FASB issued ASU No. 2016-17, Interests held Through Related Parties That are Under Common Control. ASU No. 2016-17 clarifies the consolidation process for the primary beneficiary of a Variable Interest Entity (VIE) should that related party have indirect interests under common control with a reporting entity. ASU No. 2016-17 is effective for years ending after December 31, 2016, and the Company is assessing the impact ASU No. 2016-17 may have on its consolidated financial statements.

15

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

None.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information that is required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods that are specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding any required disclosure.  In designing and evaluating these disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As of the end of the period covered by this report, our Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a- 15(e) under the Exchange Act).  Based on this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2016.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

16

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

There were no material developments during the quarter ended September 30, 2016 relative to the legal matters previously disclosed by the Company.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

In October 2016, the Company issued an aggregate of 20,000,000 common shares at $0.05 per share pursuant to the exercise of warrants, for aggregate cash consideration of $1,000,000. The shares were issued without registration under the Securities Act of 1933, as amended (the Securities Act), in reliance upon exemptions from registration for securities sold in transactions under Section 4(a)(2) of the Securities Act and regulations promulgated thereunder.

In addition, in connection with the amendment and restatement of a distribution agreement for certain territories in South America on October 21, 2016, we granted warrants (the “New Warrants”) to the distributor exercisable for one year, commencing January 31, 2017 and expiring January 30, 2018, for the purchase of shares of common stock for an aggregated purchase price of $1,000,000.  The per-share purchase price and number of shares issuable upon exercise of the New Warrants will be determined based upon the market price of the Company’s common stock for the 20 trading days immediately preceding the date of exercise of the New Warrants with the average stock price discounted by 40%.

Our Articles of Incorporation authorize us to issue up to 395,000,000 shares of common stock.  As of November 4, 2016, there are approximately 394,000,000 common shares issued and outstanding, and approximately 41,000,000 shares subject to future issuance upon the exercise of outstanding options and warrants, including the shares issuable upon the exercise of the New Warrants when they become exercisable.  Our ability to raise additional financing will be limited unless we increase the number of shares of  authorized common stock.  Without additional authorized common shares, we will be unable to satisfy our commitments to issue common stock upon exercise of outstanding options and warrants.  We will also be forced to limit or slow the pace of our development activities, including efforts to identify and pursue potential strategic transactions and other opportunities.

At our Annual Meeting of Shareholders on December 15, 2016, we are seeking shareholder approval to increase the number of shares of common stock we are authorized to issue from 395,000,000 shares to 500,000,000 shares, in order to provide the Company with sufficient authorized shares to accomplish our objectives. The increase in the number of authorized shares requires an amendment to our articles of incorporation approved by a majority of our stockholders. There is no assurance we will obtain the approval required to adopt this amendment to increase the number of authorized common shares.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

17

Item 6.  Exhibits

Exhibit 31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

18

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MEDIZONE INTERNATIONAL, INC.

(Registrant)

/s/ Edwin G. Marshall                                      

Edwin G. Marshall, Chairman and Chief Executive

Officer (Principal Executive Officer)

/s/ Stephanie L. Sorensen                       

Stephanie L. Sorensen, Chief Financial Officer

(Principal Financial and Accounting Officer)

November 10, 2016

19

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Edwin G. Marshall, certify that:

(1)I have reviewed this quarterly report on Form 10-Q of Medizone International, Inc. for the nine months ended September 30, 2016;

(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)The registrant’s other certifying officer(s) and I are 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 registrant’s 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;

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

(5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the 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;

(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: November 10, 2016

/s/ Edwin G. Marshall                                                     

Edwin G. Marshall

Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Stephanie L. Sorensen, certify that:

(1)I have reviewed this quarterly report on Form 10-Q of Medizone International, Inc. for the nine months ended September 30, 2016;

(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)The registrant’s other certifying officer(s) and I are 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 registrant’s 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;

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

(5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the 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;

(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: November 10, 2016

/s/ Stephanie L. Sorensen                                                           

Stephanie L. Sorensen

Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code

I, Edwin G. Marshall, the Chief Executive Officer of Medizone International, Inc. (“Medizone”), certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(i)the accompanying Form 10-Q of Medizone for the three and nine months ended September 30, 2016 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii)the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Medizone.

/s/ Edwin G. Marshall                                                  

Edwin G. Marshall

Chief Executive Officer (Principal Executive Officer)

November 10, 2016

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 1350 of Chapter 63

of Title 18 of the United States Code

I, Stephanie L. Sorensen, the Chief Financial Officer of Medizone International, Inc. (“Medizone”), certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(i)the accompanying Form 10-Q of Medizone for the three and nine months ended September 30, 2016 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii)the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Medizone.

/s/ Stephanie L. Sorensen

Stephanie L. Sorensen

Chief Financial Officer

(Principal Financial and Accounting Officer)

November 10, 2016

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 10, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Medizone International Inc
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		393,934,068
Amendment Flag	false
Entity Central Index Key	0000753772
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	[1]
Current Assets:
Cash	$ 37,188	$ 745,078
Inventory	106,332	277,823
Prepaid expenses	62,926	31,986
Total Current Assets	206,446	1,054,887
Property and equipment, net	104	415
Other Assets:
Trademark and patents, net	152,372	176,086
Lease deposit	4,272	4,272
Total Other Assets	156,644	180,358
Total Assets	363,194	1,235,660
Current Liabilities:
Accounts payable	545,681	491,044
Accounts payable – related parties	0	233,109
Accrued expenses	587,222	554,834
Accrued expenses – related parties	604,365	1,928,659
Other payables	224,852	224,852
Notes payable	307,617	297,396
Notes payable – related parties	1,617,881	0
Total Current Liabilities	3,887,618	3,729,894
Notes payable, net of current portion	75,000	75,000
Total Liabilities	3,962,618	3,804,894
Stockholders’ Deficit:
Preferred stock, $0.00001 par value: 50,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock, $0.001 par value: 395,000,000 shares authorized; 373,934,068 and 369,434,068 shares outstanding, respectively	373,934	369,434
Additional paid-in capital	32,700,146	32,496,646
Accumulated other comprehensive loss	(42,475)	(36,968)
Accumulated deficit	(36,631,029)	(35,398,346)
Total Stockholders’ Deficit	(3,599,424)	(2,569,234)
Total Liabilities and Stockholders’ Deficit	$ 363,194	$ 1,235,660

[1] The condensed consolidated balance sheet as of December 31, 2015 has been prepared using information from the audited consolidated balance sheet as of that date.

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2016	Dec. 31, 2015	[1]
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	395,000,000	395,000,000
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares outstanding	373,934,068	369,434,068

[1] The condensed consolidated balance sheet as of December 31, 2015 has been prepared using information from the audited consolidated balance sheet as of that date.

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues	$ 237,000	$ 167,000	$ 237,000	$ 167,000
Operating Expenses:
Cost of revenues	200,326	88,411	200,326	88,411
General and administrative	363,209	800,185	858,455	1,401,199
Research and development	75,332	56,263	343,368	210,336
Depreciation and amortization	14,152	13,457	41,966	39,760
Total Operating Expenses	653,019	958,316	1,444,115	1,739,706
Loss from Operations	(416,019)	(791,316)	(1,207,115)	(1,572,706)
Interest expense	(8,504)	(6,820)	(25,634)	(19,438)
Interest income	2	0	66	0
Net Loss	(424,521)	(798,136)	(1,232,683)	(1,592,144)
Other comprehensive (loss) gain on foreign currency translation	(4,021)	(1,051)	(5,507)	18,611
Total Comprehensive Loss	$ (428,542)	$ (799,187)	$ (1,238,190)	$ (1,573,533)
Basic and Diluted Net Loss per Common Share (in Dollars per share)	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted Average Number of Common Shares Outstanding (in Shares)	371,151,459	358,036,242	370,333,703	352,368,867

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016		Sep. 30, 2015
Cash Flows from Operating Activities:
Net loss	$ (1,232,683)		$ (1,592,144)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	41,966		39,760
Stock-based compensation expense	48,000		722,090
Changes in operating assets and liabilities:
Prepaid expenses	35,815		7,838
Inventory	171,491		66,611
Accounts payable and accounts payable – related parties	49,637		(677)
Accrued expenses and accrued expenses – related parties	97,866		25,086
Net Cash Used in Operating Activities	(787,908)		(731,436)
Cash Flows from Investing Activities:
Cost of registering patents	(17,941)		(17,955)
Net Cash Used in Investing Activities	(17,941)		(17,955)
Cash Flows from Financing Activities:
Issuance of common stock for cash	160,000		676,000
Issuance of notes payable	0		75,000
Principal payments on notes payable	(56,534)		(40,516)
Net Cash Provided by Financing Activities	103,466		710,484
Effect of Foreign Currency Exchange Rates	(5,507)		18,611
Net decrease in cash	(707,890)		(20,296)
Cash as of beginning of the period	745,078	[1]	140,496
Cash as of end of the period	37,188		120,200
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	8,246		1,006
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Settlement of accounts payable and accrued expenses with notes payable – related parties	1,617,881
Financing of insurance policies	$ 66,755		$ 49,964

[1] The condensed consolidated balance sheet as of December 31, 2015 has been prepared using information from the audited consolidated balance sheet as of that date.

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NOTE 1 BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2016

Disclosure Text Block [Abstract]

Business Description and Basis of Presentation [Text Block]

NOTE 1     BASIS OF PRESENTATION

The financial information of Medizone International, Inc., a Nevada corporation (the “Company”), included herein is unaudited and has been prepared consistent with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all information and notes required by US GAAP for complete financial statements. These notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2015. In the opinion of management, these financial statements contain all adjustments (consisting solely of normal recurring adjustments) which are necessary in the opinion of management for a fair presentation of results for the interim periods presented. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016.

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NOTE 2 CANADIAN FOUNDATION FOR GLOBAL HEALTH

9 Months Ended

Sep. 30, 2016

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 2    CANADIAN FOUNDATION FOR GLOBAL HEALTH

In late 2008, the Company assisted in the formation of the Canadian Foundation for Global Health (“CFGH”), a not-for-profit foundation based in Ottawa, Canada. The Company helped establish CFGH for two primary purposes: (1) to establish an independent not-for-profit foundation intended to have a continuing working relationship with the Company for research purposes that is best positioned to attract the finest scientific, medical and academic professionals possible to work on projects deemed to be of social benefit; and (2) to provide a means for the Company to use a tiered pricing structure for services and products in emerging economies and extend the reach of the Company’s technology to as many in need as possible.

Accounting standards require a variable interest entity (“VIE”) to be consolidated by a company if that company absorbs a majority of the VIE’s expected losses and/or receives a majority of the VIE’s expected residual returns as a result of holding variable interests, which are the ownership, contractual, or other financial interests in the VIE. In addition, a legal entity may be considered to be a VIE, if it does not have sufficient equity at risk to finance its own activities without relying on financial support from other parties. If the legal entity is a VIE, then the reporting entity determined to be the primary beneficiary of the VIE must consolidate its financial statements with those of the VIE. The Company determined that CFGH met the requirements of a VIE effective upon the first advance to CFGH on February 12, 2009. Accordingly, the financial statements of CFGH have been consolidated with those of the Company for all periods presented.

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NOTE 3 BASIC AND DILUTED NET LOSS PER COMMON SHARE

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE 3     BASIC AND DILUTED NET LOSS PER COMMON SHARE

The computations of basic and diluted net loss per common share are based on the weighted average number of common shares outstanding during the periods as follows:

	For the Three Months Ended
	September 30,
	2016				2015
Numerator: Net loss		$	(424,521	)		$	(798,136	)
Denominator: Weighted average number of common shares outstanding			371,151,459				358,036,242
Basic and diluted net loss per common share		$	(0.00	)		$	(0.00	)

	For the Nine Months Ended
	September 30,
	2016				2015
Numerator: Net loss		$	(1,232,683	)		$	(1,592,144	)
Denominator: Weighted average number of common shares outstanding			370,333,703				352,368,867
Basic and diluted net loss per common share		$	(0.00	)		$	(0.00	)

Common stock equivalents, consisting of options to purchase 20,865,000 shares and warrants to purchase up to $1,000,000 of common stock, with the number of shares determined based on a 20-day average stock price prior to the date of exercise, have not been included in the calculation as their effect is antidilutive for the periods presented.

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NOTE 4 GOING CONCERN

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Substantial Doubt about Going Concern [Text Block]

NOTE 4     GOING CONCERN

The Company’s consolidated financial statements are prepared using US GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has incurred significant losses from its inception through September 30, 2016, which have resulted in an accumulated deficit of $36,631,029 as of September 30, 2016.  The Company believes that it will require funding of approximately $1,500,000 over the next 12 months, based on current operations, for: (1) continued production manufacturing and related activities; (2) research, development, and marketing activities; and (3) general corporate purposes.  The Company does not have funds sufficient to cover its operating costs for the next 12 months, has negative equity, and has a working capital deficit of $3,681,172 as of September 30, 2016. The Company has relied almost exclusively on debt and equity financing to sustain its operations.  Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon future revenues, obtaining additional capital and ultimately, upon the Company’s attaining profitable operations.  The Company will require substantial additional funds to complete the development of its products and product manufacturing, and to fund expected additional losses, until revenues are sufficient to cover the Company’s operating expenses.  If the Company is unsuccessful in obtaining the necessary additional funding, it will be forced to substantially reduce or cease its operations.

During the nine months ended September 30, 2016, the Company raised cash proceeds of $160,000 through the sale of 4,000,000 shares of common stock at a price of $0.04 per share.

In October 2016, the Company issued an aggregate of 20,000,000 common shares at $0.05 per share pursuant to the exercise of warrants, and received cash proceeds of $1,000,000.

The ability of the Company to continue as a going concern is dependent on its ability to successfully accomplish the plan described in the preceding paragraphs, including attaining profitable operations.  These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

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NOTE 5 COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 5     COMMITMENTS AND CONTINGENCIES

The Company is subject to certain claims and lawsuits arising in the normal course of business. In the opinion of management, uninsured losses, if any, resulting from the ultimate resolution of these matters will not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

Litigation

Rakas vs. Medizone International, Inc. - A former consultant brought this action against the Company claiming the Company had failed to pay consulting fees under a consulting agreement.  In September 2001, the parties agreed to settle the matter for $25,000.  The Company, however, did not have the funds to pay the settlement and the plaintiff moved the court to enter a default judgment in the amount of $143,000 in January 2002.  On May 8, 2002, the court vacated the default judgment and requested that the Company post a bond of $25,000 to cover the settlement previously entered into by the parties.  The Company has been unable to post the required bond amount as of the date of this report.  Therefore, the Company recorded the original default judgment in the amount of $143,000, plus fees totaling $21,308, as of September 30, 2016 and December 31, 2015 in accounts payable.  The Company intends to contest the judgment if and when it is able to do so in the future.

Employment Agreements

In July 2016, the Company entered into employment agreements (“Employment Agreements”) with two executives. The employment agreements set out the executives’ base annual salary, vacation benefits, and option to elect health insurance coverage.

Promissory Notes

In conjunction with the Company entering into these Employment Agreements, the Company settled in aggregate $1,617,881 in accounts payable and accrued expenses with related parties through the issuance of promissory notes payable (“Promissory Notes”) with three executives for unpaid expenses and wages (see Note 9 – Notes Payable – Related Parties).

Other Payables

As of September 30, 2016 and December 31, 2015, the Company had $224,852 of past due payables for which the Company has not received statements or demands for payment for over 19 years.  Although management of the Company does not believe that the amounts will be required to be paid, the amounts are recorded as other payables until such time as the Company is certain that no liability exists and until the statute of limitations has expired.

Operating Leases

The Company operates a certified laboratory located at Innovation Park, Queen’s University in Kingston, Ontario, Canada, which provides a primary research and development platform.  The lease term is month-to-month with a monthly lease payment of $1,537 Canadian dollars (“CD”) plus the applicable goods and services tax (“GST”).  Leases for a second laboratory space for full scale room testing and a storage unit are on a month-to-month basis with monthly lease payments of CD$1,537 and CD$475, respectively, plus the applicable GST.  The Company has a non-cancelable lease for office space located in California, with monthly payments of approximately $2,400 through December 31, 2016.

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NOTE 6 COMMON STOCK OPTIONS

9 Months Ended

Sep. 30, 2016

Disclosure Text Block Supplement [Abstract]

Shareholders' Equity and Share-based Payments [Text Block]

NOTE 6     COMMON STOCK OPTIONS

In August 2013, the Company granted options for the purchase of 250,000 shares of common stock to a consultant, of which 50,000 were immediately vested.  These options are exercisable at $0.10 per share for five years from the date of grant with 50,000 options vesting immediately and the other 200,000 options vesting upon the achievement of certain milestones, which were met in 2015.  The Company recognized expense of $17,659 during the nine months ended September 30, 2015, as milestones were achieved for the remaining 200,000 options.

On February 26, 2014, the Company granted to a new director options for the purchase of 2,000,000 shares of common stock, with an exercise price of $0.1095 per share.  Of these options, 1,000,000 vested on February 26, 2015, and the remaining 1,000,000 options will vest upon the successful achievement of certain milestones.  Unvested options vest immediately in the event of a change in control of the Company.  The options are exercisable for five years from the date of grant. The Company recognized $16,017 of expense in connection with these options during the nine months ended September 30, 2015. The Company will measure and begin recognizing the remaining expense when the achievement of the required milestones becomes probable.

On February 26, 2014, the Company granted options to six consultants and service providers for the purchase of a total of 250,000 shares of common stock at an exercise price of $0.1095 per share.  Options for 200,000 shares vested immediately upon grant and options for the remaining 50,000 shares vested January 9, 2015.  The options are exercisable for five years from the date of grant. The grant date fair value of these options was $24,023. The Company recognized expense of $800 in connection with these options during the nine months ended September 30, 2015.

On May 6, 2014, the Company granted options to a consultant for the purchase of 100,000 shares of common stock at an exercise price of $0.19 per share.  Options for 50,000 shares vested immediately upon grant and options for the remaining 50,000 shares vested during the nine months ended September 30, 2015, when certain milestones were achieved.  The options are exercisable for five years from the date of grant. The Company recognized expense of $8,342 in connection with these options during the nine months ended September 30, 2015.

On August 15, 2014, the Company granted options to a consultant for the purchase of 75,000 shares of common stock at an exercise price of $0.13 per share.  The shares will vest when certain required milestones are achieved.  The options are exercisable for five years from the date of grant.  The Company will measure and begin recognizing expense when the achievement of the required milestones becomes probable.

On October 7, 2014, the Company granted to a board member options for the purchase of 1,000,000 shares of common stock, with an exercise price of $0.16 per share.  These options were fully vested on October 7, 2015.  The options are exercisable for five years.  The grant date fair value of the options was $140,178.  The Company recognized $105,133 of expense in connection with these options during the nine months ended September 30, 2015.

On December 4, 2014, the Company granted options to four consultants for the purchase of 140,000 shares of common stock at an exercise price of $0.11 per share.  The options are fully vested and are exercisable for five years from the date of grant.  The Company recognized expense of $13,461 during the nine months ended September 30, 2015.

In August 2015, the Company granted options for the purchase of a total of 7,150,000 shares of common stock for services rendered, as follows: 6,000,000 shares total to five directors of the Company, 650,000 shares total to four consultants, and 500,000 shares to an employee of the Company. All options vested upon grant, have an exercise price of $0.088 per share, and are exercisable for up to five years from the date of grant.  The aggregate fair value of these options at the date of grant was $541,687, which the Company recognized as expense during the nine months ended September 30, 2015.

In August 2015, the Company granted options to a consultant for the purchase of a total of 250,000 shares of common stock at an exercise price of $0.085 per share. These options vested upon grant and are exercisable for up to five years. The aggregate fair value of these options at the date of grant was $18,990, which the Company recognized as expense during the nine months ended September 30, 2015.

On May 19, 2016, the Company granted options to an employee for the purchase of 150,000 shares of common stock at an exercise price of $0.05 per share.  The fair value of these options on the date of grant was $6,461. The options were forfeited upon the termination of the employee in October 2016.

The Company estimates the fair value of each stock option award by using the Black-Scholes option-pricing model, which model requires the use of exercise behavior data and the use of a number of assumptions including volatility of the Company’s stock price, the weighted average risk-free interest rate, and the weighted average expected life of the options. Because the Company does not pay dividends, the dividend rate variable used in the Black-Scholes option-pricing model is zero. Expense of $0 and $722,090 related to stock options was recorded for the nine months ended September 30, 2016 and 2015, respectively.  Excluding options whose performance condition is not yet deemed probable, as of September 30, 2016, the Company had unvested outstanding options with related unrecognized expense of $104,647.  The Company will recognize this expense over the service period or when the achievement of the required milestones becomes probable.

The Company estimated the fair value of the stock options described in the above paragraphs as of the date of the grant or date of re-measurement, based on the following weighted-average assumptions:

Risk-free interest rate		1.50% to 1.69		%
Expected life	5 years
Expected volatility		130.31% to 136.34		%
Dividend yield			0.00	%

A summary of the status of the Company’s outstanding options as of September 30, 2016 and changes during the nine months then ended, is presented below:

	Shares			Weighted Average Exercise Price
Outstanding, beginning of the period		20,965,000		$	0.145
Granted		150,000			-
Expired/Canceled		(250,000	)		0.103
Exercised		-			-
Outstanding, end of the period		20,865,000			0.142
Exercisable		19,640,000			0.145

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NOTE 7 STOCK TRANSACTIONS AND SIGNIFICANT CONTRACTS

9 Months Ended

Sep. 30, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 7     STOCK TRANSACTIONS AND SIGNIFICANT CONTRACTS

In September 2016, the Company sold 4,000,000 shares of common stock to three accredited investors for gross proceeds of $160,000.

During January 2016, the Company issued 500,000 restricted shares of common stock to a consultant. The fair value of the shares on the date of grant was $48,000, or $0.096 per share.  The Company recorded compensation expense of $48,000 in connection with the issuance of the shares.

During April, May, and June 2015, the Company sold an aggregate of 7,500,000 restricted shares of common stock to eight accredited investors for cash proceeds totaling $375,000, or $0.05 per share.

During February and March 2015, the Company sold an aggregate of 3,000,000 restricted shares of common stock to seven accredited investors for cash proceeds totaling $150,000, or $0.05 per share.

During February 2015, the Company sold 300,000 restricted shares of common stock to an accredited investor for cash proceeds totaling $21,000, or $0.07 per share.

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NOTE 8 ACCOUNTS PAYABLE - RELATED PARTIES

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 8     ACCOUNTS PAYABLE – RELATED PARTIES

As of September 30, 2016 and December 31, 2015, the Company owed $0 and $233,109, respectively, to certain consultants for services.  These consultants are stockholders of the Company and are related parties.

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NOTE 9 NOTES PAYABLE - RELATED PARTIES

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE 9   NOTES PAYABLE – RELATED PARTIES

In July 2016, the Company settled an aggregate $1,617,881 of accounts payable and accrued expenses for unpaid expenses and wages by issuing Promissory Notes to those related parties, all of which are executives of the Company. The notes become payable upon a trigger event (“Trigger Event”) which is defined as a change in control, death, disability or failure to pay the employee’s base salary as described in their Employment Agreements. Upon a Trigger Event, interest will be calculated at 2% per annum until the balance is paid in full. In the event of default by the Company, the interest rate increases to 5%.

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NOTE 10 RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

NOTE 10     RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under US GAAP.  The core principle of ASU No. 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services.  ASU No. 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing US GAAP.  The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein.  Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU No. 2014-15 sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about the entity’s ability to continue as a going concern, and if so, to provide related disclosures in the financial statements.  ASU No. 2014-15 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on the Company’s financial statement presentation.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), simplifying the presentation of deferred income taxes on the balance sheet by requiring companies to classify everything as either a non-current asset or non-current liability. ASU No. 2015-17 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within annual periods ending after December 15, 2016.  The Company is assessing the impact, if any, of implementing this guidance on the Company’s financial statement presentation.

In February 2016, the FASB released ASU No. 2016-02, Leases (Topic 842), to bring transparency to lessee balance sheets. ASU No. 2016-02 will require organizations that lease assets (lessees) to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU No. 2016-02 will apply to both types of leases; capital (or finance) leases and operating leases. Previously, US GAAP has required only capital leases to be recognized on lessee balance sheets. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted. The Company is assessing the impact of ASU No. 2016-02 may have on its future financial position, results of operations and liquidity.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU No. 2016-09 is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows, and forfeitures. ASU No. 2016-09 is effective for years ending after December 31, 2016, and the Company is assessing the impact of ASU No. 2016-09 may have on its future financial position, results of operations and liquidity.

In October 2016, the FASB issued ASU No. 2016-17,  Interests held Through Related Parties That are Under Common Control. ASU No. 2016-17 clarifies the consolidation process for the primary beneficiary of a Variable Interest Entity (VIE) should that related party have indirect interests under common control with the reporting entity. ASU No. 2016-17 is effective for years ending after December 31, 2016, and the Company is assessing the impact of ASU No. 2016-17 may have on its consolidated financial statements.

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NOTE 11 SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 11     SUBSEQUENT EVENTS

In October 2016, the Company issued an aggregate of 20,000,000 common shares at $0.05 per share pursuant to the exercise of previously issued and outstanding warrants, and received cash proceeds of $1,000,000. The shares were issued without registration under the Securities Act of 1933, as amended (the Securities Act), in reliance upon exemptions from registration for securities sold in transactions under Section 4(a)(2) of the Securities Act. The warrants were originally issued to these stockholders in connection with the negotiation and execution of a Distribution and License Agreement dated November 2015, which provided exclusive distribution rights to the Company’s proprietary hospital disinfection technology in certain territories in South America (the Distribution Agreement).

In connection with an amendment to the Distribution Agreement, the Company granted warrants for the purchase of up to $1,000,000 of shares of common stock of the Company, exercisable for one year, commencing January 31, 2017 and expiring January 30, 2018, with the number of shares to be determined based on a 20-day average stock price prior to the date of exercise with the average stock price discounted by 40%. 

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NOTE 3 BASIC AND DILUTED NET LOSS PER COMMON SHARE (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The computations of basic and diluted net loss per common share are based on the weighted average number of common shares outstanding during the periods as follows:

	For the Three Months Ended
	September 30,
	2016				2015
Numerator: Net loss		$	(424,521	)		$	(798,136	)
Denominator: Weighted average number of common shares outstanding			371,151,459				358,036,242
Basic and diluted net loss per common share		$	(0.00	)		$	(0.00	)

	For the Nine Months Ended
	September 30,
	2016				2015
Numerator: Net loss		$	(1,232,683	)		$	(1,592,144	)
Denominator: Weighted average number of common shares outstanding			370,333,703				352,368,867
Basic and diluted net loss per common share		$	(0.00	)		$	(0.00	)

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NOTE 6 COMMON STOCK OPTIONS (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure Text Block Supplement [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The Company estimated the fair value of the stock options described in the above paragraphs as of the date of the grant or date of re-measurement, based on the following weighted-average assumptions:

Risk-free interest rate		1.50% to 1.69		%
Expected life	5 years
Expected volatility		130.31% to 136.34		%
Dividend yield			0.00	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of the status of the Company’s outstanding options as of September 30, 2016 and changes during the nine months then ended, is presented below:

	Shares			Weighted Average Exercise Price
Outstanding, beginning of the period		20,965,000		$	0.145
Granted		150,000			-
Expired/Canceled		(250,000	)		0.103
Exercised		-			-
Outstanding, end of the period		20,865,000			0.142
Exercisable		19,640,000			0.145

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NOTE 2 CANADIAN FOUNDATION FOR GLOBAL HEALTH (Details)	12 Months Ended
	Dec. 31, 2008
Disclosure Text Block [Abstract]
Variable Interest Entity, Qualitative or Quantitative Information, Purpose of VIE	(1) to establish an independent not-for-profit foundation intended to have a continuing working relationship with the Company for research purposes that is best positioned to attract the finest scientific, medical and academic professionals possible to work on projects deemed to be of social benefit; and (2) to provide a means for the Company to use a tiered pricing structure for services and products in emerging economies and extend the reach of the Company’s technology to as many in need as possible.

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NOTE 3 BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details)	9 Months Ended
	Sep. 30, 2016 shares
Employee Stock Option [Member]
NOTE 3 BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	20,865,000
Warrant [Member]
NOTE 3 BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,000,000

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NOTE 3 BASIC AND DILUTED NET LOSS PER COMMON SHARE (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Schedule of Earnings Per Share, Basic and Diluted [Abstract]
Numerator: Net loss	$ (424,521)	$ (798,136)	$ (1,232,683)	$ (1,592,144)
Denominator: Weighted average number of common shares outstanding	371,151,459	358,036,242	370,333,703	352,368,867
Basic and diluted net loss per common share	$ 0.00	$ 0.00	$ 0.00	$ 0.00

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NOTE 4 GOING CONCERN (Details) - USD ($)	1 Months Ended		3 Months Ended	9 Months Ended
	Oct. 31, 2016	Sep. 30, 2016	Jun. 30, 2015	Sep. 30, 2016	Dec. 31, 2015	[1]
NOTE 4 GOING CONCERN (Details) [Line Items]
Retained Earnings (Accumulated Deficit)		$ (36,631,029)		$ (36,631,029)	$ (35,398,346)
Substantial Doubt about Going Concern, Conditions or Events				The Company believes that it will require funding of approximately $1,500,000 over the next 12 months, based on current operations, for: (1) continued production manufacturing and related activities; (2) research, development, and marketing activities; and (3) general corporate purposes.
Working capital (deficit)		(3,681,172)		$ (3,681,172)
Proceeds from Issuance or Sale of Equity		$ 160,000	$ 375,000	$ 160,000
Stock Issued During Period, Shares, New Issues (in Shares)		4,000,000	7,500,000	4,000,000
Shares Issued, Price Per Share (in Dollars per share)		$ 0.04		$ 0.04
Subsequent Event [Member]
NOTE 4 GOING CONCERN (Details) [Line Items]
Proceeds from Issuance or Sale of Equity	$ 1,000,000
Stock Issued During Period, Shares, New Issues (in Shares)	20,000,000
Shares Issued, Price Per Share (in Dollars per share)	$ 0.05

[1] The condensed consolidated balance sheet as of December 31, 2015 has been prepared using information from the audited consolidated balance sheet as of that date.

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NOTE 5 COMMITMENTS AND CONTINGENCIES (Details)	1 Months Ended	9 Months Ended		12 Months Ended
	Jul. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2016 CAD	Dec. 31, 2002 USD ($)	Dec. 31, 2001 USD ($)	Dec. 31, 2015 USD ($)
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Accounts Payable, Current		$ 545,681				$ 491,044	[1]
Number of Executives	2
Accounts Payable, Other, Current		224,852				224,852	[1]
Building [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals		2,400
Building [Member] | Certified Laboratory Space [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals | CAD			CAD 1,537
Building [Member] | Second Laboratory for Full Scale Room Testing [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals | CAD			1,537
Building [Member] | Full Scale Room Testing [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals | CAD			CAD 475
Officer [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Number of Executives	3
Debt Instrument, Face Amount	$ 1,617,881
Default Judgement [Member] | Rakas Litigation [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Accounts Payable, Current		143,000				143,000
Litigation Fees [Member] | Rakas Litigation [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Accounts Payable, Current		$ 21,308				$ 21,308
Settlement Amount, September 2001 [Member] | Rakas Litigation [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Litigation Settlement, Amount					$ 25,000
Settlement Amount, January 2002 [Member] | Default Judgement [Member] | Rakas Litigation [Member]
NOTE 5 COMMITMENTS AND CONTINGENCIES (Details) [Line Items]
Loss Contingency, Damages Sought, Value				$ 143,000

[1] The condensed consolidated balance sheet as of December 31, 2015 has been prepared using information from the audited consolidated balance sheet as of that date.

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NOTE 6 COMMON STOCK OPTIONS (Details)							1 Months Ended		9 Months Ended
	May 19, 2016 USD ($) $ / shares shares	Dec. 04, 2014 $ / shares shares	Oct. 07, 2014 USD ($) $ / shares shares	Aug. 15, 2014 $ / shares shares	May 06, 2014 $ / shares shares	Feb. 26, 2014 USD ($) $ / shares shares	Aug. 31, 2015 $ / shares shares	Aug. 31, 2013 $ / shares shares	Sep. 30, 2016 USD ($) shares	Sep. 30, 2015 USD ($) shares
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	150,000								150,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares	$ 0.05
Share-based Compensation (in Dollars) | $	$ 6,461								$ 48,000	$ 722,090
August 2015 [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							7,150,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period							5 years
Share-based Compensation (in Dollars) | $										541,687
Director [Member] | October 7, 2014 [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			1,000,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares			$ 0.16
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			5 years
Share-based Compensation (in Dollars) | $										105,133
Share-based Compensation Arrangement by Share-based Payment Award, Options, Fair Value Grants in Period (in Dollars) | $			$ 140,178
Non-Employee Stock Option [Member] | August 2013 [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross								250,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares								$ 0.10
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period								5 years
Share-based Compensation (in Dollars) | $										$ 17,659
Non-Employee Stock Option [Member] | August 2013 [Member] | Share-based Compensation Award, Tranche One [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares								50,000
Non-Employee Stock Option [Member] | August 2013 [Member] | Share-based Compensation Award, Tranche Two [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares								200,000
Non-Employee Stock Option [Member] | February 2014 [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross						250,000				800
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares						$ 0.1095
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period						5 years
Number of consultants and service providers issued options						6
Share-based Compensation Arrangement by Share-based Payment Award, Options, Fair Value Grants in Period (in Dollars) | $						$ 24,023
Non-Employee Stock Option [Member] | February 2014 [Member] | Share-based Compensation Award, Tranche One [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares						200,000
Non-Employee Stock Option [Member] | February 2014 [Member] | Share-based Compensation Award, Tranche Two [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares						50,000
Non-Employee Stock Option [Member] | May 6, 2014 [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					100,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares					$ 0.19
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period					5 years
Share-based Compensation (in Dollars) | $										$ 8,342
Non-Employee Stock Option [Member] | May 6, 2014 [Member] | Share-based Compensation Award, Tranche One [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares					50,000
Non-Employee Stock Option [Member] | May 6, 2014 [Member] | Share-based Compensation Award, Tranche Two [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares					50,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights					vested immediately upon grant and options for the remaining 50,000 shares vested during the nine months ended September 30, 2015, when certain milestones were achieved.
Non-Employee Stock Option [Member] | August 15, 2014 [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				75,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares				$ 0.13
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				5 years
Non-Employee Stock Option [Member] | December 4, 2014 [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		140,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares		$ 0.11
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		5 years
Share-based Compensation (in Dollars) | $										13,461
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights		The shares will vest when certain required milestones are achieved.
Number of consultants and service providers issued options		4
Non-Employee Stock Option [Member] | August 2015 [Member] | Options Granted for Consulting Services [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							250,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares							$ 0.085
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period							5 years
Share-based Compensation (in Dollars) | $										18,990
Non-Employee Stock Option [Member] | August 2015 [Member] | Options Granted to Four Consultants [Member[
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							650,000
Number of consultants and service providers issued options							4
Employee Stock Option [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation (in Dollars) | $									0	722,090
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars) | $									$ 104,647
Employee Stock Option [Member] | August 2015 [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							500,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares							$ 0.088
Employee Stock Option [Member] | Director [Member] | February 2014 [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross						2,000,000
Share-based Compensation by Share-based Payment Award, Options, Exercise Price of Options (in Dollars per share) | $ / shares						$ 0.1095
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period						5 years
Share-based Compensation (in Dollars) | $										$ 16,017
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights						Unvested options vest immediately in the event of a change in control of the Company
Employee Stock Option [Member] | Director [Member] | February 2014 [Member] | Share-based Compensation Award, Tranche One [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares						1,000,000
Employee Stock Option [Member] | Director [Member] | February 2014 [Member] | Share-based Compensation Award, Tranche Two [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares						1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights						vest upon the successful achievement of certain milestones
Employee Stock Option [Member] | Director [Member] | August 2015 [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							6,000,000
Number of directors issued options							5

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NOTE 6 COMMON STOCK OPTIONS (Details) - Schedule of Fair Value Assumptions of Stock Options	9 Months Ended
	Sep. 30, 2016
NOTE 6 COMMON STOCK OPTIONS (Details) - Schedule of Fair Value Assumptions of Stock Options [Line Items]
Expected life	5 years
Dividend yield	0.00%
Minimum [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) - Schedule of Fair Value Assumptions of Stock Options [Line Items]
Risk-free interest rate	1.50%
Expected volatility	130.31%
Maximum [Member]
NOTE 6 COMMON STOCK OPTIONS (Details) - Schedule of Fair Value Assumptions of Stock Options [Line Items]
Risk-free interest rate	1.69%
Expected volatility	136.34%

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NOTE 6 COMMON STOCK OPTIONS (Details) - Schedule of Share-Based Compensation, Stock Options, Activity - $ / shares		9 Months Ended
	May 19, 2016	Sep. 30, 2016
Schedule of Share-Based Compensation, Stock Options, Activity [Abstract]
Outstanding, beginning of the period		20,965,000
Outstanding, beginning of the period		$ 0.145
Granted	150,000	150,000
Granted		$ 0
Expired/Canceled		(250,000)
Expired/Canceled		$ 0.103
Exercised		0
Exercised		$ 0
Outstanding, end of the period		20,865,000
Outstanding, end of the period		$ 0.142
Exercisable		19,640,000
Exercisable		$ 0.145

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NOTE 7 STOCK TRANSACTIONS AND SIGNIFICANT CONTRACTS (Details)		1 Months Ended			2 Months Ended	3 Months Ended	9 Months Ended
	May 19, 2016 USD ($)	Sep. 30, 2016 USD ($) $ / shares shares	Jan. 31, 2016 USD ($) $ / shares shares	Feb. 28, 2015 USD ($) $ / shares shares	Mar. 31, 2015 USD ($) $ / shares shares	Jun. 30, 2015 USD ($) $ / shares shares	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2015 USD ($)
NOTE 7 STOCK TRANSACTIONS AND SIGNIFICANT CONTRACTS (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares) | shares		4,000,000				7,500,000	4,000,000
Number of Investors		3				8
Proceeds from Issuance or Sale of Equity		$ 160,000				$ 375,000	$ 160,000
Shares Issued, Price Per Share (in Dollars per share) | $ / shares		$ 0.04					$ 0.04
Share-based Compensation	$ 6,461						$ 48,000	$ 722,090
Sale of Stock, Price Per Share (in Dollars per share) | $ / shares						$ 0.05
Restricted Stock [Member]
NOTE 7 STOCK TRANSACTIONS AND SIGNIFICANT CONTRACTS (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares) | shares				300,000	3,000,000
Number of Investors					7
Proceeds from Issuance or Sale of Equity					$ 150,000
Stock Issued During Period, Shares, Issued for Services (in Shares) | shares			500,000
Stock Issued During Period, Value, Issued for Services			$ 48,000
Shares Issued, Price Per Share (in Dollars per share) | $ / shares			$ 0.096
Share-based Compensation			$ 48,000
Sale of Stock, Price Per Share (in Dollars per share) | $ / shares				$ 0.07	$ 0.05
Stock Issued During Period, Value, New Issues				$ 21,000

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NOTE 8 ACCOUNTS PAYABLE - RELATED PARTIES (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Related Party Transactions [Abstract]
Accounts Payable, Related Parties, Current	$ 0	$ 233,109	[1]

[1] The condensed consolidated balance sheet as of December 31, 2015 has been prepared using information from the audited consolidated balance sheet as of that date.

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NOTE 9 NOTES PAYABLE - RELATED PARTIES (Details) - Officer [Member]	1 Months Ended
	Jul. 31, 2016 USD ($)
NOTE 9 NOTES PAYABLE - RELATED PARTIES (Details) [Line Items]
Debt Instrument, Face Amount	$ 1,617,881
Debt Instrument, Interest Rate Terms	Upon a Trigger Event, interest will be calculated at 2% per annum until the balance is paid in full. In the event of default by the Company, the interest rate increases to 5%
Maximum [Member]
NOTE 9 NOTES PAYABLE - RELATED PARTIES (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.00%

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NOTE 11 SUBSEQUENT EVENTS (Details) - USD ($)	1 Months Ended		3 Months Ended	9 Months Ended
	Oct. 31, 2016	Sep. 30, 2016	Jun. 30, 2015	Sep. 30, 2016
NOTE 11 SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, New Issues		4,000,000	7,500,000	4,000,000
Shares Issued, Price Per Share		$ 0.04		$ 0.04
Proceeds from Issuance or Sale of Equity		$ 160,000	$ 375,000	$ 160,000
Subsequent Event [Member]
NOTE 11 SUBSEQUENT EVENTS (Details) [Line Items]
Stock Issued During Period, Shares, New Issues	20,000,000
Shares Issued, Price Per Share	$ 0.05
Proceeds from Issuance or Sale of Equity	$ 1,000,000
Class of Warrant or Right, Granted, Value of Underlying Common Stock	$ 1,000,000
Class of Warrant or Right, Term	1 year
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Jan. 31, 2017
Class of Warrant or Right, Exercise Price of Warrants or Rights, Description	a 20-day average stock price prior to the date of exercise with the average stock price discounted by 40%